EX-1.1
(Exhibit 1.1) Term and Revolving Credit Loan Agreements between the Company
and M&T Bank, dated December 15, 2003
TERM LOAN CREDIT AGREEMENT
Dated as of December 15, 2003
between
MANUFACTURERS AND TRADERS TRUST COMPANY ("M&T")
and
FINANCIAL INSTITUTIONS, INC. ("FII")
TABLE OF CONTENTS
Page
SECTION I DEFINITIONS ..................................................... 1
1.1 Definitions .................................................. 1
1.2. Accounting Terms ............................................. 4
SECTION II DESCRIPTION OF CREDIT .......................................... 4
2.1. The Term Loan ................................................ 4
2.2. Fees ......................................................... 4
2.3. The Term Note ................................................ 5
2.4. Duration of Interest Periods ................................. 5
2.5. Interest Rates and Payments of Interest ...................... 5
2.6. Changed Circumstances ........................................ 5
2.7. Illegality ................................................... 6
2.8. Prepayments of the Term Loan ................................. 6
2.9. Method of Payment ............................................ 6
2.10. Overdue Payments ............................................. 6
2.11. Computation of Interest and Fees ............................. 6
SECTION III CONDITIONS OF LOANS ........................................... 7
3.1. Conditions Precedent to Term Loan ............................ 7
3.2. Conditions Precedent to Conversion of Interest Rate .......... 7
SECTION IV REPRESENTATIONS AND WARRANTIES ................................. 8
4.1. Organization and Qualification ............................... 8
4.2. Corporate Authority .......................................... 8
4.3. Valid Obligations ............................................ 8
4.4. Consents or Approvals ........................................ 9
4.5. Title to Properties; Absence of Encumbrances ................. 9
4.6. Financial Statements ......................................... 9
4.7. Changes ...................................................... 9
4.8. Defaults ..................................................... 9
4.9. Taxes ........................................................ 9
4.10. Litigation ................................................... 10
4.11. Use of Proceeds .............................................. 10
4.12. Subsidiaries ................................................. 10
4.13. Investment Company Act, etc................................... 10
4.14. Compliance with ERISA ........................................ 10
4.15. Environmental Matters ........................................ 10
i
SECTION V AFFIRMATIVE COVENANTS ........................................... 11
5.1. Financial Statements and other Reporting Requirements ........ 11
5.2. Conduct of Business .......................................... 13
5.3. Maintenance and Insurance .................................... 13
5.4. Taxes ........................................................ 13
5.5. Inspection by the Bank ....................................... 13
5.6. Maintenance of Books and Records ............................. 14
5.7. Further Assurances ........................................... 14
SECTION VI NEGATIVE COVENANTS ............................................. 14
6.1. Encumbrances ................................................. 15
6.2. Merger; Consolidation; Sale or Lease of Assets ............... 16
6.3. Stock of Subsidiaries ........................................ 16
6.4. Investments .................................................. 17
6.5. Acquisitions ................................................. 17
6.6. ERISA ........................................................ 17
6.7. Nonperforming Assets to Total Loans and Other Real Estate
Ratio ...................................................... 17
6.8. Capitalization of Borrower and Material Subsidiaries ......... 17
6.9. Minimum Tangible Common Equity ............................... 17
6.10. Debt Service Coverage Ratio .................................. 17
SECTION VII DEFAULTS ...................................................... 18
7.1. Events of Default ............................................ 18
7.2. Remedies ..................................................... 20
SECTION VIII MISCELLANEOUS ................................................ 21
8.1. Notices ...................................................... 21
8.2. Expenses ..................................................... 22
8.3. Set-Off ...................................................... 22
8.4. Term of Agreement ............................................ 22
8.5. No Waivers ................................................... 22
8.6. Governing Law ................................................ 23
8.7. Amendments ................................................... 23
8.8. Binding Effect of Agreement .................................. 23
8.9. Counterparts ................................................. 23
8.10. Partial Invalidity ........................................... 23
8.11. Captions ..................................................... 23
8.12. Waiver Of Jury Trial ......................................... 23
8.13 Entire Agreement ............................................. 24
ii
EXHIBITS
EXHIBIT A - Form of Libor Term Note
EXHIBIT B - Encumbrances
EXHIBIT C - Litigation; Environmental Matters
EXHIBIT D - Material Subsidiaries
EXHIBIT E - Form of Report of Chief Financial Officer
EXHIBIT F - Form of Opinion of Counsel to the Borrower
EXHIBIT G - Form of Pledge Agreement
iii
TERM LOAN CREDIT AGREEMENT
Dated as of December 15, 2003
THIS TERM LOAN CREDIT AGREEMENT is made as of December 15, 2003, by and
between Financial Institutions, Inc. (the "Borrower"), a New York corporation
having its head office at 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxx Xxxx 00000 and
Manufacturers and Traders Trust Company (the "Bank"), a New York banking
corporation having its principal banking office at Xxx X&X Xxxxx, Xxxxxxx, Xxx
Xxxx 00000.
SECTION I
DEFINITIONS
1.1 Definitions
All capitalized terms used in this Agreement or in the Term Note or in any
certificate, report or other document made or delivered pursuant to this
Agreement (unless otherwise defined therein) shall have the meanings assigned to
them below:
Account. See Section 2.1.
Agreement. This Agreement, as the same may be supplemented or amended from
time to time.
Bank. See Preamble.
Base Rate. The Base Rate as defined in the Term Note.
Borrower. See Preamble.
Business Day. Shall have the meaning set forth in the Term Note.
Code. The Internal Revenue Code of 1986 and the rules and regulations
thereunder, collectively, as the same may from time to time be supplemented or
amended.
Consolidated, Consolidating or Consolidated Basis. The consolidation of
the accounts of Borrower and its Subsidiaries in accordance with generally
accepted accounting principles, consistently applied and maintained throughout
the relevant periods and from period to period, including principles of
consolidation.
1
Controlled Group. All trades or businesses (whether or not incorporated)
under common control that, together with the Borrower, are treated as a single
employer under Section 414(b) or 414(c) of the Code or Section 4001 of ERISA.
Controlled Subsidiary. Any corporation, association, joint stock company,
business trust or other similar organization of which more than 50% of the
ordinary voting power for the election of a majority of the members of the board
of directors or other governing body of such entity is held or controlled by the
Borrower; or any other such entity the management of which is directly or
indirectly controlled by the Borrower through the exercise of voting power or
otherwise; or any joint venture, whether incorporated or not, in which the
Borrower has an ownership interest of more than 50%.
Default. An Event of Default or event or condition that, but for the
requirement that time elapse or notice be given, or both, would constitute an
Event of Default.
Encumbrances. See Section 6.1.
ERISA. The Employee Retirement Income Security Act of 1974 and the rules
and regulations thereunder, collectively, as the same may from time to time be
supplemented or amended.
Environmental Laws. All applicable foreign, federal, state and local
environmental, health or safety statutes, laws, regulations, rules, ordinances,
policies and rules or common law whether now existing or hereafter enacted or
promulgated, relating to injury to, or the protection of, real or personal
property or human health or the environment.
Event of Default. Any event described in Section 7.1.
Federal Banking Agency - means any of the Federal Deposit Insurance
Corporation, Comptroller of Currency, Board of Governors of the Federal Reserve
System or Office of Thrift Supervision.
FFIEC. The Federal Financial Institutions Examination Council, or such
other regulatory agency or authority having jurisdiction over financial
reporting by banks and bank holding companies.
Fixed Rate. The Fixed Rate as defined in the Term Note.
Floating Rate. Either the Base Rate or the LIBOR Rate.
Hazardous Material. Any substance which is or becomes defined as a
"hazardous waste," "hazardous material," "hazardous substance," "controlled
industrial waste," "pollutant" or "contaminant" under any Environmental Law or
which is toxic, explosive, corrosive, flammable, infectious, radioactive,
carcinogenic, mutagenic or otherwise hazardous and is or becomes
-2-
regulated by any governmental authority or instrumentality or which contains
gasoline, diesel fuel or other petroleum products, asbestos or polychlorinated
biphenyls ('PCB's").
Interest Period. With respect to each period during which the Libor Rate
is in effect, the period defined in the Term Note.
Investment. The purchase or acquisition of any share of capital stock,
partnership interest, evidence of indebtedness or other equity security of any
other person or entity, any loan, advance or extension of credit to, or
contribution to the capital of, any other person or entity, any real estate held
for sale or investment, any commodities futures contracts held other than in
connection with bona fide hedging transactions, any other investment in any
other person or entity, and the making of any commitment or acquisition of any
option to make an Investment.
LIBOR Rate. The LIBOR Rate as defined in the Term Note.
Material Subsidiary. Those Subsidiaries listed on Exhibit D hereto, and
any other Subsidiary of the Borrower that is a federally-insured depository
institution (and collectively, the "Material Subsidiaries").
Maturity Date. December 14, 2008 or such earlier date on which the Loan is
terminated in accordance with the terms hereof.
Nonperforming Assets. As defined in Section 6.7.
Obligations. All obligations of the Borrower to the Bank hereunder of
every kind and description, direct or indirect, absolute or contingent, primary
or secondary, due or to become due, now existing or hereafter arising,
regardless of how they arise or by what agreement or instrument, if any, and
including obligations to perform acts and refrain from taking action as well as
obligations to pay money.
PBGC. The Pension Benefit Guaranty Corporation or any entity succeeding to
any or all of its actions under ERISA
Permitted Encumbrances. See Section 6.1.
Plan. An employee pension or other benefit plan that is subject to Title
IV of ERISA or subject to the minimum funding standards under Section 412 of the
Code and is either (i) maintained by the Borrower or any member of the
Controlled Group for employees of the Borrower or any member of the Controlled
Group or (ii) if such Plan is established, maintained pursuant to a collective
bargaining agreement or any other arrangement under which more than one employer
makes contributions and to which the Borrower or any member of the Controlled
Group is then making or accruing an obligation to make contributions or has
within the preceding five Plan years made contributions.
-3-
Pledge Agreement. A Pledge of Securities by the Borrower, substantially in
the form of Exhibit G hereto, evidencing the pledge of the stock held by the
Borrower of each of its Material Subsidiaries to the Bank as security for the
Term Loan (and collectively, the "Pledge Agreements").
Subsidiary. Any corporation, association, joint stock company, business
trust or other similar organization of which 50% or more of the ordinary voting
power for the election of a majority of the members of the board of directors or
other governing body of such entity is held or controlled by the Borrower or a
Subsidiary of the Borrower; or any other such entity the management of which is
directly or indirectly controlled by the Borrower or a Subsidiary of the
Borrower through the exercise of voting power or otherwise; or any joint
venture, whether incorporated or not, in which the Borrower has an ownership
interest of 50% or more (and, collectively, the "Subsidiaries").
Term Loan. The loan made to the Borrower by the Bank pursuant to Section
II of this Agreement.
Term Note. A Libor Term Note of the Borrower, substantially in the form of
Exhibit A hereto, evidencing the obligation of the Borrower to the Bank to repay
the Term Loan.
1.2. Accounting Terms. All terms of an accounting character shall have the
meanings assigned thereto by generally accepted accounting principles or
regulatory accounting principles, as applicable, as applied on a basis
consistent with the financial statements referred to in Section 4.6 of this
Agreement, but as herein specifically modified.
SECTION II
DESCRIPTION OF CREDIT
2.1. The Term Loan. (a) Subject to the terms and conditions hereof, and in
reliance upon the representations and warranties set forth in this Agreement,
the Bank shall loan to the Borrower Twenty-Five Million Dollars ($25,000,000.00)
on the date hereof (the "Term Loan"), and the Borrower shall borrow the Term
Loan from the Bank. The Term Loan shall be credited by the Bank to Account No.
8890769956 at the Bank, for the credit of the Borrower (the "Account").
(b) Provided that no Default shall have occurred and be continuing, the
Borrower may make and effectuate the conversion elections as described in
Section 3 of the Term Note by giving the Bank prior notice of each such
conversion (which notice shall be effective upon receipt) in accordance with the
provisions.
2.2. Fees. On or before the effective date of this Agreement, the Borrower
shall pay to the Bank a commitment fee of $135,000.
-4-
2.3. The Term Note. The Loan shall be evidenced by the Term Note, payable
to the order of the Bank and having a final maturity on the Maturity Date. The
Term Note shall be dated on or before the date of the Term Loan and shall have
the blanks therein appropriately completed. The Bank shall, and is hereby
irrevocably authorized by the Borrower to, enter on the schedule forming a part
of the Term Note or otherwise in its records appropriate notations evidencing
the date and the amount of the Term Loan, the applicable interest rate and the
date and amount of each payment of principal made by the Borrower with respect
thereto; and in the absence of manifest error, such notations shall constitute a
rebuttable presumption of the correctness thereof; provided that no failure on
the part of the Bank to make any such notation shall in any way affect the Term
Loan or the rights or obligations of the Bank or the Borrower with respect
thereto.
2.4 Duration of Interest Periods. (a) The duration of each Interest Period
applicable to the LIBOR Rate shall be as specified in the Term Note.
(b) Notwithstanding the foregoing, the Borrower may not select an Interest
Period that would end, but for the provisions of the definition of Interest
Period, after the Maturity Date.
2.5 Interest Rates and Payments of Interest. Each period during which the
Term Loan is accruing interest at the Fixed Rate or a Floating Rate shall bear
interest on the outstanding principal amount thereof at a rate per annum as
provided in the Term Note.
2.6. Changed Circumstances.
(a) If the Bank shall determine that, due to either (i) the introduction
of any change (other than any change by way of imposition of or increase in
reserve requirements included in the calculation of the LIBOR Rate) in or in the
interpretation of any requirement of law or (ii) the compliance with any
guideline or request from any central bank or other governmental authority
(whether or not having the force of law), there shall be any increase in the
cost to the Bank of agreeing to make or making, funding or maintaining any LIBOR
Rate, then Borrower shall be liable for, and shall from time to time, upon
demand therefor by the Bank and pay to the Bank such additional amounts as are
sufficient to compensate the Bank for such increased costs.
(b) If the Bank shall determine that for any reason adequate and
reasonable means do not exist for ascertaining the LIBOR Rate for any requested
Interest Period, the Bank will give notice of such determination to Borrower.
Thereafter, the Bank may not charge or maintain the LIBOR Rate, as the case may
be, hereunder until the Bank revokes such notice in writing. Upon receipt of
such notice, Borrower may revoke any request for a LIBOR Rate then submitted by
it. If Borrower does not revoke such notice the Bank may make, or continue the
Term Loan, as proposed by Borrower, but the Term Loan shall be made or continued
at the Base Rate instead of the LIBOR Rate, as the case may be, provided
Borrower may elect to convert the interest rate to the Fixed Rate in accordance
with Section 3 of the Term Note.
2.7. Illegality. If the Bank shall determine that the introduction of any
law (statutory or common), treaty, rule, regulation, guideline or determination
of an arbitrator or of a
-5-
governmental authority or in the interpretation or administration thereof, has
made it unlawful, or that any central bank or other governmental authority has
asserted that it is unlawful for the Bank to charge the LIBOR Rate, then, on
notice thereof by the Bank to Borrower, the Bank may suspend the charging of the
LIBOR Rate until the Bank shall have notified Borrower that the circumstances
giving rise to such determination shall no longer exist. If the Bank shall
determine that it is unlawful to maintain the LIBOR Rate, Borrower shall prepay
in full the Term Loan then outstanding, together with accrued interest, either
on the last date of the Interest Period thereof if the Bank may lawfully
continue to maintain the LIBOR Rate to such day, or immediately, if the Bank may
not lawfully continue to maintain the LIBOR Rate. If Borrower is required to
prepay the Term Loan as set forth in this subsection, then concurrently with
such prepayment, Borrower may re-borrow from the Bank, in the amount of such
repayment, the Term Loan at a annual rate of interest equal to the Base Rate,
provided Borrower may elect to convert the interest rate to the Fixed Rate in
accordance with Section 3 of the Term Note.
2.8. Prepayments of the Term Loan.
(a) The Term Loan, when subject to the Base Rate, may be prepaid at
any time, without premium or penalty, in minimum amounts of $100,000 but with
accrued interest to the date of payment.
(b) The Term Loan, when subject to the LIBOR Rate or the Fixed Rate,
may be prepaid in a manner consistent with and subject to provisions contained
in the Term Note.
2.9. Method of Payment. All payments and prepayments of principal and all
payments of interest, fees and other amounts payable hereunder shall be made by
the Borrower to the Bank at its head office in immediately available funds, on
or before 1:00 p.m. (Buffalo, New York time) on the due date thereof, free and
clear of, and without any deduction or withholding for, any taxes or other
payments. The Bank may, and the Borrower hereby authorizes the Bank to, debit
the amount of any payment not made by such time to the Account of the Borrower
with the Bank.
2.10. Overdue Payments. Overdue principal (whether at maturity, by reason
of acceleration or otherwise) and, to the extent permitted by applicable law,
overdue interest and fees or any other amounts payable hereunder or under the
Term Note shall bear interest from and including the due date until paid as set
forth in the Term Note.
2.11. Computation of Interest and Fees. Interest and all fees payable
hereunder shall be computed daily and paid for the actual number of days for
which due in a manner consistent with the terms and conditions of the Term Note.
-6-
SECTION III
CONDITIONS OF TERM LOAN
3.1. Conditions Precedent to Term Loan. The obligation of the Bank to make
the Term Loan is subject to the condition precedent that the Bank shall have
received, in form and substance satisfactory to the Bank and its counsel, the
following:
(a) this Agreement, the Term Note, the Pledge Agreements, and that certain
Second Amendment to Revolving Credit Agreement, of even date herewith, amending
that certain Revolving Credit Agreement, both by and between the Bank and the
Borrower (such Revolving Credit Agreement as so amended, the "Second
Amendment"), duly executed by the Borrower;
(b) a certificate of the Secretary or an Assistant Secretary of the
Borrower with respect to resolutions of the Board of Directors of the Borrower
authorizing the execution and delivery of this Agreement, the Term Note, and the
Pledge Agreements, and identifying the officer(s) authorized to execute, deliver
and take all other actions required under this Agreement, and providing specimen
signatures of such officers;
(c) the certificate of incorporation of the Borrower and all amendments
and supplements thereto, filed in the office of the Secretary of State of New
York, each certified by the Secretary or an Assistant Secretary of the Borrower
as being a true and correct copy thereof;
(d) the Bylaws of the Borrower and all amendments and supplements thereto,
certified by the Secretary or an Assistant Secretary as being a true and correct
copy thereof as currently in effect;
(e) a current Certificate of Good Standing showing Borrower to be a
corporation in good standing in the State of New York;
(f) an opinion addressed to it from Counsel of the Borrower, substantially
in the form of Exhibit F hereto; and
(g) such other documents, and completion of such other matters, as counsel
for the Bank may deem necessary or appropriate.
3.2. Conditions Precedent to Conversion of Interest Rate. The obligation
of the Bank to continue the Term Loan, or continue or convert the Base Rate or
LIBOR Rate, or fix or continue the Fixed Rate, applicable thereto, as the case
may be, is further subject to the following conditions:
(a) timely receipt by the Bank of the Borrower's request for a Notice of
Conversion as provided in the Term Note;
(b) the representations and warranties contained in Section IV shall be
true and accurate in all material respects on and as of the date of any request
for a conversion election as described in Section 3 of the Term Note and on the
effective date of the making, continuation or conversion of the Term Loan or
interest rate applicable thereto, as though made at and as of each such date
(except to the extent that such representations and warranties expressly relate
to an
-7-
earlier date), and no Default shall have occurred and be continuing, or would
result from such conversion;
(c) the resolutions referred to in Section 3.1(b) shall remain in full
force and effect; and
(d) no change shall have occurred in any law or regulation or
interpretation thereof that, in the opinion of counsel for the Bank, would make
it illegal or against the policy of any governmental agency or authority for the
Bank to make the Term Loan hereunder, provided that the Bank shall so advise the
Borrower in writing, setting forth the basis of such opinion (but only if the
Bank in its sole discretion believes that it may then disclose such
information). The making of the Term Loan or any conversion of the interest rate
applicable thereto shall be deemed to be a representation and warranty by the
Borrower on the date of the making, continuation or conversion of the Term Loan
as to the accuracy of the statements referred to in subsection (b) of this
Section 3.2.
SECTION IV
REPRESENTATIONS AND WARRANTIES
In order to induce the Bank to enter into this Agreement and to make the Term
Loan hereunder, the Borrower represents and warrants to the Bank that:
4.1. Organization and Qualification. Each of the Borrower and its
Subsidiaries (a) is (i) a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation; or (ii) a
trust duly created and properly organized under the laws of its jurisdiction of
formation, (b) has all requisite corporate or trust powers to own its property
and conduct its business as now conducted and as presently contemplated and (c)
is duly qualified and to the extent applicable in good standing as a foreign
corporation and is duly authorized to do business in each jurisdiction where the
nature of its properties or business requires such qualification.
4.2. Corporate Authority. The execution, delivery and performance of this
Agreement, the Term Note, the Pledge Agreements and the transactions
contemplated hereby are within the corporate power and authority of the Borrower
and have been authorized by all necessary corporate proceedings, and do not and
will not (a) require any consent or approval of the stockholders of the
Borrower, (b) contravene any provision of the charter documents or by-laws of
the Borrower or any law, rule or regulation applicable to the Borrower, (c)
contravene any provision of, or constitute an event of default or event that,
but for the requirement that time elapse or notice be given, or both, would
constitute an event of default under, any other agreement, instrument, order or
undertaking binding on the Borrower, or (d) result in or require the imposition
of any Encumbrance on any of the properties, assets or rights of the Borrower,
other than in favor of the Bank.
-8-
4.3. Valid Obligations. This Agreement, the Term Note, the Pledge
Agreements and all of their respective terms and provisions are the legal, valid
and binding obligations of the Borrower, enforceable in accordance with their
respective terms except as limited by bankruptcy, insolvency, reorganization,
moratorium or other laws affecting the enforcement of creditors' rights
generally, and except as the remedy of specific performance or of injunctive
relief is subject to the discretion of the court before which any proceeding
therefor may be brought.
4.4. Consents or Approvals. The execution, delivery and performance of
this Agreement, the Term Note, the Pledge Agreements and the transactions
contemplated herein do not require any approval or consent of, or filing or
registration with, any governmental or other agency or authority, or any other
party.
4.5. Title to Properties; Absence of Encumbrances. Each of the Borrower
and its Subsidiaries has good and marketable title to all of the properties,
assets and rights of every kind and nature now purported to be owned by it,
including, without limitation, such properties, assets and rights as are
reflected in the financial statements referred to in Section 4.6 (except such
properties, assets or rights as have been disposed of in the ordinary course of
business since the date thereof), free from all Encumbrances except Permitted
Encumbrances and, except for such Permitted Encumbrances, free from all defects
of title that might materially adversely affect such properties, assets or
rights, taken as a whole.
4.6. Financial Statements. The Borrower has furnished the Bank its
Consolidated balance sheet as of December 31, 2002 and its Consolidated
statements of income, changes in stockholders' equity and cash flow for the
fiscal year then ended, and related footnotes, audited and certified by KPMG,
LLP. All such financial statements were prepared in accordance with generally
accepted accounting principles or regulatory accounting principles, as
applicable, applied on a consistent basis throughout the periods specified and
present fairly the financial position of the Borrower and its Subsidiaries as of
such dates and the results of the operations of the Borrower and its
Subsidiaries for such periods. There are no liabilities, contingent or
otherwise, of the Borrower and its Subsidiaries not disclosed in such financial
statements that involve a material amount.
4.7. Changes. Since the date of the most recent financial statements
referred to in Section 4.6, there have been no changes in the assets,
liabilities, financial condition, business or prospects of the Borrower or any
of its Subsidiaries other than changes in the ordinary course of business, the
effect of which has not, in the aggregate, been materially adverse, or as have
been publicly disclosed in the Borrower's filings with the Securities and
Exchange Commission ("SEC") .
4.8. Defaults. As of the date of this Agreement, no Default exists.
4.9. Taxes. The Borrower and each Subsidiary have filed all federal, state
and other tax returns required to be filed, within the applicable filing due
dates (including any extensions of such dates); and all taxes, assessments and
other governmental charges due from the Borrower
-9-
and each Subsidiary have been fully paid. The Borrower and each Subsidiary have
established on their books reserves adequate for the payment of all federal,
state and other tax liabilities.
4.10. Litigation. Except as set forth on Exhibit C hereto, there is no
litigation, arbitration, proceeding or investigation pending, or, to the
knowledge of the Borrower's or any Subsidiary's officers, threatened, against
the Borrower or any Subsidiary that, if adversely determined, could, singly or
in the aggregate, result in a judgment in excess of $5,000,000.00 not adequately
covered by insurance or as to which adequate reserves are not being maintained,
could result in a forfeiture of all or any substantial part of the property of
the Borrower or its Subsidiaries, or could otherwise have a material adverse
effect on the assets, business or prospects of the Borrower or any Material
Subsidiary.
4.11. Use of Proceeds. No portion of the Term Loan is to be used for the
"purpose of purchasing or carrying" any "margin stock" as such terms are used in
Regulations U and X of the Board of Governors of the Federal Reserve System, 12
C.F.R. 221 and 224, as amended; and following the application of the proceeds of
the Term Loan, the value of all "margin stock" of the Borrower will not exceed
25% of the value of the total assets of the Borrower that are subject to the
restrictions set forth in Section 6.1 and 6.2.
4.12. Subsidiaries. As of the date of this Agreement, all the Material
Subsidiaries of the Borrower are listed on Exhibit D hereto. As of the date of
this Agreement, the Borrower or a Subsidiary of the Borrower is the owner, free
and clear of all liens and encumbrances, other than in favor of the Bank, of the
specified percentage of the issued and outstanding voting securities of each
Subsidiary as listed on Exhibit D hereto. All such voting securities have been
validly issued and are fully paid and nonassessable, and no rights to subscribe
to any additional voting securities have been granted, and no options, warrants
or similar rights are outstanding, except as listed on Exhibit D hereto.
4.13. Investment Company Act, etc. Neither the Borrower nor any of its
Subsidiaries is subject to regulation under the Investment Company Act of 1940,
as amended, the Public Utility Holding Company Act of 1935, as amended, or any
other statute or regulation that limits its ability to incur indebtedness for
money borrowed.
4.14. Compliance with ERISA. The Borrower and each member of the
Controlled Group have fulfilled their obligations under the minimum funding
standards of ERISA and the Code with respect to each Plan and are in compliance
in all material respects with the applicable provisions of ERISA and the Code,
and have not incurred any liability to the PBGC or a Plan under Title N of
ERISA; and no "prohibited transaction" or "reportable event" (as such terms are
defined in ERISA) has occurred with respect to any Plan which could have a
material adverse effect on the assets, business or prospects of the Borrower or
any Material Subsidiary.
4.15. Environmental Matters. The Borrower and each of its Subsidiaries are
in compliance, in all material respects, with all Environmental Laws. No demand,
claim, notice, suit, suit in equity, action, administrative action,
investigation or inquiry arising under, relating to or in connection with any
Environmental Laws is pending or threatened against the Borrower or any of its
Subsidiaries, any real property in which the Borrower or
-10-
any such Subsidiary holds or, to the Borrower's knowledge, has held, an interest
or any past or present operation of the Borrower or any such Subsidiary, other
than any such proceedings that will not, individually or in the aggregate, have
an adverse effect of more than $5,000,000.00, not covered by insurance, on the
financial condition, business, operations or prospects of the Borrower or the
Borrower and its Subsidiaries on a Consolidated Basis. Neither the Borrower nor
any of its Subsidiaries (i) is the subject of any federal or state investigation
evaluating whether any remedial action is needed to respond to a release of any
Hazardous Materials or other wastes into the environment, (ii) has received any
notice of any Hazardous Materials or other wastes in or upon any of its
properties in violation of any Environmental Laws, or (iii) knows of any basis
for any such investigation, notice or violation, except as disclosed to the Bank
on Exhibit C and as to such matters disclosed on such Exhibit, none will,
individually or in the aggregate, have an adverse effect of more than
$5,000,000.00, not covered by insurance, on the financial condition, business,
operations or prospects of the Borrower or the Borrower and its Subsidiaries on
a Consolidated Basis.
SECTION V
AFFIRMATIVE COVENANTS
So long as the Bank has any commitment to lend hereunder or any Loan or other
Obligation hereunder remains outstanding, the Borrower covenants as follows:
5.1. Financial Statements and other Reporting Requirements. The Borrower
shall furnish to the Bank:
(a) as soon as available to the Borrower, but in any event within 100 days
after the end of each of its fiscal years, a Consolidated balance sheet as of
the end of such year, and the related Consolidated and Consolidating statements
of income, changes in stockholders' equity and cash flow for such year, audited
and certified by KMPG, LLP, (or other independent certified public accountants
of national standing selected by the Borrower);
(b) as soon as available to the Borrower, but in any event within 55 days
after the end of each of its fiscal quarters, (i) the Consolidated balance sheet
as of the end of such quarter, and a related Consolidated statements of income
and cash flow for the period then ended, certified by the chief financial
officer of the Borrower but subject, however, to normal, recurring year-end
adjustments that shall not in the aggregate be material in amount, (ii) Forms
XXX-0, XXX-00 and a Call Report (as applicable) for the Borrower (on a parent
only basis) and for each of the Borrower's banking subsidiaries for the period
then ended, certified by the cashier or other authorized officer of each such
Subsidiary, in the forms required to be filed by the Borrower and each such
Subsidiary by the FFIEC; and (iii) SEC Forms 10K and 10Q, as applicable for the
Borrower on a Consolidated Basis.
(c) concurrently with the delivery of each financial statement pursuant to
subsections (a) and (b) of this Section 5.1, a report in substantially the form
of Exhibit E, hereto signed on behalf of the Borrower by its chief financial
officer;
-11-
(d) promptly after the same are available, copies of all proxy statements,
financial statements and reports as the Borrower shall send to its stockholders
or as the Borrower may file with the Securities and Exchange Commission;
(e) if and when the Borrower gives or is required to give notice to the
PBGC of any "Reportable Event" (as defined in Section 4043 of ERISA) with
respect to any Plan that might constitute grounds for a termination of such Plan
under Title IV of ERISA, or knows that any member of the Controlled Group or the
plan administrator of any Plan has given or is required to give notice of any
such Reportable Event, a copy of the notice of such Reportable Event given or
required to be given to the PBGC;
(f) within five (5) Business Days of the Chief Executive Officer or the
Chief Financial Officer of the Borrower becoming aware of the existence of any
condition or event that constitutes a Default, written notice thereof specifying
the nature and duration thereof and the action being or proposed to be taken
with respect thereto;
(g) promptly upon becoming aware of any litigation or of any investigative
proceedings by a governmental agency or authority commenced or threatened
against the Borrower or any of its Subsidiaries, the outcome of which, singly or
in the aggregate, could have an adverse effect of more than $5,000,000.00, not
covered by insurance, on the assets, business or prospects of the Borrower or
the Borrower and its Subsidiaries on a Consolidated Basis, written notice
thereof and the action being or proposed to be taken with respect thereto;
(h) promptly upon becoming aware of any investigative proceedings by a
governmental agency or authority commenced or threatened against the Borrower or
any of its Subsidiaries regarding any violation of Environmental Laws or any
spill, release, discharge or disposal of any Hazardous Material, the outcome of
which, singly or in the aggregate, could have an adverse effect of more than
$5,000,000.00, not covered by insurance, on the assets, business or prospects of
the Borrower or the Borrower and its Subsidiaries on a Consolidated Basis,
written notice thereof and the action being or proposed to be taken with respect
thereto; and
(i) from time to time, such other financial data and information about the
Borrower or its Subsidiaries as the Bank may reasonably request. Notwithstanding
the preceding, the Bank and the Borrower acknowledge that they are each engaged
in the business of banking and certain incidental activities, and that they
compete from time to time for, among other things, consumer and commercial loan
customers and depositors. As such, the Borrower and its Subsidiaries shall not
be obligated to furnish to the Bank any information that constitutes
confidential or proprietary information, a trade secret or any other form of
material non-public information, the absence of which would not have a material
adverse effect upon the Bank's ability to monitor or collect the indebtedness
evidenced by the Term Note ("Confidential Information"). In the event that the
Borrower or a Subsidiary does supply Confidential Information to the Bank, the
Bank shall maintain the Confidential Information in strict confidence and shall
only disclose Confidential Information to Permitted Transferees to the extent
permitted by Section 5.5 hereof. Moreover, the Bank hereby confirms that it is
aware, and that any Permitted Transferees of such
-12-
information shall be advised, that the United States securities laws prohibit
any person who has material non-public information about a company from
purchasing or selling securities of such company or tipping or advising others
regarding trading in such securities. Accordingly, the Bank agrees that it shall
not use, or knowingly cause or permit any Permitted Transferee or third party to
use, any Confidential Information in contravention of such securities laws or
any similar rules or regulations.
5.2. Conduct of Business. The Borrower shall and shall cause its Material
Subsidiaries to:
(a) duly observe and comply in all material respects with all applicable
laws and valid requirements of any governmental authorities relative to its
corporate existence, rights and franchises, to the conduct of its business and
to its property and assets (including without limitation all Environmental Laws
and ERISA), and shall maintain and keep in full force and effect all licenses
and permits necessary in any material respect to the proper conduct of its
business; and
(b) maintain its corporate or organizational existence, provided that
Borrower may, subject to the provisions of Sections 6.2 through 6.5, reorganize
its Subsidiaries provided that Borrower's ownership interest in its subsidiaries
or its subsidiaries' assets is not diluted; and
(c) engage only in business activities permitted for bank holding
companies and their subsidiaries under applicable law.
5.3. Maintenance and Insurance. Each of the Borrower and its Material
Subsidiaries shall maintain its properties in good repair, working order and
condition as required for the normal conduct of its business, and shall at all
times maintain liability and casualty insurance with financially sound and
reputable insurers in such amounts as the officers of the Borrower in the
exercise of their reasonable judgment deem to be adequate.
5.4. Taxes. The Borrower shall pay or cause to be paid all taxes,
assessments or governmental charges on or against it or any of its Subsidiaries
or its or their properties on or prior to the time when late charges or other
penalties accrue with respect thereto; provided that this covenant shall not
apply to any tax, assessment or charge that is being contested in good faith by
appropriate proceedings and with respect to which adequate reserves have been
established and are being maintained in accordance with generally accepted
accounting principles.
5.5. Inspection by the Bank. The Borrower shall permit the Bank or its
designees, at reasonable times and upon reasonable notice (or if an Event of
Default shall have occurred and is continuing, at any time and without prior
notice), to (i) visit and inspect the properties of the Borrower and its
Subsidiaries, (ii) examine and make copies of and take abstracts from the
financial records of the Borrower and its Subsidiaries, and (iii) discuss the
affairs, finances and accounts of the Borrower and its Subsidiaries, as the same
relate to Borrower's ability to repay the Term Loan, with their appropriate
officers, employees and accountants. Notwithstanding the
-13-
preceding, the Borrower and its Subsidiaries shall not be obligated to furnish
to the Bank any information that is Confidential Information (as defined in
Section 5.1(i)). In handling such Confidential Information that is disclosed and
identified as such by Borrower or any Subsidiary, the Bank shall exercise the
same degree of care that it exercises with respect to its own proprietary
information of the same types to maintain the confidentiality of any non-public
information thereby received or received pursuant to this Agreement except that
disclosure of such information may be made (i) to the subsidiaries or affiliates
of the Bank in connection with their present or prospective business relations
with the Borrower, subject to the same degree of care and confidentiality
required of the Bank by this Section 5.5, (ii) to prospective permitted
transferees or purchasers of an interest in the Term Loan, (iii) as required by
law, regulation, rule or order, subpoena, judicial order or similar order and
(iv) as may be required in connection with the examination, audit or similar
investigation of the Bank (any person or entity receiving such information
pursuant to the foregoing being referred to herein as a ("Permitted
Transferee"). Moreover, the Bank hereby confirms that it is aware, and that any
Permitted Transferees of such information shall be advised, that the United
States securities laws prohibit any person who has material non-public
information about a company from purchasing or selling securities of such
company or tipping or advising others regarding trading in such securities.
Accordingly, the Bank agrees that it shall not use, or knowingly cause or permit
any Permitted Transferee or third party to use, any Confidential Information in
contravention of such securities laws or any similar rules or regulations.
5.6. Maintenance of Books and Records. Each of the Borrower and its
Subsidiaries shall keep adequate books and records of account, in which true and
complete entries will be made reflecting all of its business and financial
transactions, and such entries will be made in accordance with generally
accepted accounting principles or regulatory accounting principles, as
applicable, consistently applied and applicable law.
5.7. Further Assurances. At any time and from time to time the Borrower
shall, and shall cause each of its Subsidiaries to, execute and deliver such
further instruments and take such further action as may reasonably be requested
by the Bank to effect the purposes of this Agreement, the Term Note and the
Pledge Agreements.
SECTION VI
NEGATIVE COVENANTS
So long as the Bank has any commitment to lend hereunder or the Term Loan or
other Obligation hereunder remains outstanding, the Borrower covenants as
follows:
6.1. Encumbrances. Neither the Borrower nor any of its Material
Subsidiaries shall create, incur, assume or suffer to exist any mortgage,
pledge, security interest, lien or other charge or encumbrance, including the
lien or retained security title of a conditional vendor upon or with respect to
any of its property or assets ("Encumbrances"), or assign or otherwise convey
any right to receive income, including the sale or discount of accounts
receivable with or without recourse, except the following ("Permitted
Encumbrances"):
-14-
(a) Encumbrances in favor of the Bank or any of its affiliates;
(b) Encumbrances existing as of the date of this Agreement, not otherwise
described in Section 6.1, and disclosed in Exhibit B hereto;
(c) liens for taxes, fees, assessments and other governmental charges to
the extent that payment of the same may be postponed or is not required in
accordance with the provisions of Section 5.4;
(d) landlords' and lessors' liens in respect of rent not in default or
liens in respect of pledges or deposits under workmen's compensation,
unemployment insurance, social security laws, or similar legislation (other than
ERISA) or in connection with appeal and similar bonds incidental to litigation;
mechanics', laborers' and materialmen's and similar liens, if the obligations
secured by such liens are not then delinquent; liens securing the performance of
bids, tenders, contracts (other than for the payment of money); and statutory
obligations incidental to the conduct of its business and that do not in the
aggregate materially detract from the value of its property or materially impair
the use thereof in the operation of its business;
(e) judgment and other similar liens, singly or in the aggregate in excess
of $5,000,000.00, arising in connection with court proceedings, provided that
the execution or other enforcement of such judgment or similar lien has been in
existence for less than 30 days or is effectively stayed and the claims secured
thereby are being actively contested in good faith and by appropriate
proceedings;
(f) rights of lessors under capitalized leases;
(g) Encumbrances securing indebtedness for borrowed money incurred in
connection with the purchase of real or personal property used in its business,
provided that any such Encumbrances shall not extend to assets of the Borrower
or any such Subsidiary not financed by such indebtedness;
(h) easements, rights of way, restrictions and other similar charges or
Encumbrances relating to real or personal property and not interfering in a
material way with the ordinary conduct of its business;
(i) other than as permitted in accordance with Section 6.1(j),
Encumbrances on its assets created in connection with the refinancing of
indebtedness secured by Permitted Encumbrances on such assets, provided that the
amount of indebtedness secured by any such Encumbrance shall not be increased as
a result of such refinancing and no such Encumbrance shall extend to property
and assets of the Borrower or any such Subsidiary not encumbered prior to any
such refinancing;
(j) Encumbrances incurred in connection with repurchase agreements; liens
incurred in connection with asset securitizations; Encumbrances incurred in
connection with the holding
-15-
of municipal deposits subject to the New York State Comptroller's guidelines for
collateralization; Encumbrances granted to a Federal Reserve Bank, a Federal
Home Loan Bank or the Federal Agricultural Mortgage Corporation to secure
advances or other transactions incidental to the conduct of the banking business
of the Borrower or any such Subsidiary, including loans to meet liquidity
requirements;
(k) Encumbrances securing obligations of a Subsidiary to the Borrower or
another Subsidiary; and
(l) other Encumbrances which are incidental to the conduct of its business
on an ongoing basis and that do not in the aggregate have a material adverse
effect on its assets, business or prospects.
6.2. Merger; Consolidation; Sale or Lease of Assets. The Borrower shall
not, in a single transaction or a series of transactions, sell or otherwise
dispose of all or any substantial part of its shares of the capital stock of any
of Borrower's Material Subsidiaries; neither the Borrower nor any of its
Material Subsidiaries shall sell, lease or otherwise dispose of all or any
portion of any other assets, , in a single transaction or a series of
transactions, in excess of $5,000,000.00, provided that with respect to a
Material Subsidiary such a sale will be permitted if it is in the ordinary
course of business and does not represent more than 10% of such Material
Subsidiary's assets; and neither the Borrower nor any of its Material
Subsidiaries shall liquidate, merge or consolidate with any other person or
entity; provided that the Borrower may merge or consolidate into or with another
person or entity if no Default has occurred and is continuing or would result
from such merger or consolidation and if the Borrower is the surviving company;
and provided, further, that any Subsidiary of the Borrower may merge or
consolidate into or with (i) the Borrower if the Borrower is the surviving
company, or (ii) any other Subsidiary of the Borrower; or (iii) any other person
if the Subsidiary is the surviving company in, and remains a Controlled
Subsidiary following, such merger or consolidation; and provided further, that
any Subsidiary that is not a Material Subsidiary may be liquidated, merged or
consolidated into or with another person or entity if the assets of such
Subsidiary do not represent more than 10% of the consolidated total assets of
the Borrower.
6.3. Stock of Subsidiaries. Neither the Borrower nor any of its Material
Subsidiaries shall sell, transfer or otherwise dispose of any of the capital
stock or other equity securities of a Material Subsidiary which contain general
voting powers, except (i) to the Borrower or any of its Material Subsidiaries,
(ii) in connection with a transaction permitted by Section 6.2; (iii) to an
officer, employee or director of the Borrower or any Material Subsidiary; or
(iv) to other persons or entities, provided that such dispositions do not,
singly or in the aggregate, constitute more than 10% of the total number of
shares of capital stock or other equity securities outstanding of such
Subsidiary which contain general voting powers.
6.4. Investments. Neither the Borrower nor any of its Material
Subsidiaries shall make or maintain any Investments other than (i) investments
permitted by applicable banking laws, regulations or regulatory pronouncements;
(ii) existing Investments in Subsidiaries and
-16-
new Investments in such Subsidiaries in the ordinary course of its business; and
(iii) acquisitions of new Subsidiaries permitted by Section 6.5.
6.5. Acquisitions. Neither the Borrower nor any of its Material
Subsidiaries shall acquire, in a single transaction or a series of transactions,
all or a majority of the voting shares or all or a substantial portion of the
assets of any person or entity unless (i) the Consolidated total assets of the
Borrower (as would be reported in the Borrower's financial statements prepared
in accordance with FFIEC requirements) before giving effect to such acquisition
would constitute at least 70% of the Consolidated total assets of the Borrower
after giving effect to such acquisition or (ii) the Consolidated total assets of
the Borrower before giving effect to such acquisition would constitute less than
70% but at least 50% of the Consolidated total assets of the Borrower and the
Borrower is able to demonstrate to the Bank's reasonable satisfaction that the
Consolidated total assets of the Borrower before giving effect to such
acquisition would constitute at least 70% of the Consolidated total assets of
the Borrower at any time within six months after giving effect to such
acquisition.
6.6. ERISA. Neither the Borrower nor any member of the Controlled Group
shall permit any Plan maintained by it to (i) engage in any non-exempt
"prohibited transaction" (as defined in Section 4975 of the Code in excess,
singly or in the aggregate, of $5,000,000.00, (ii) incur any "accumulated
funding deficiency" (as defined in Section 302 of ERISA) whether or not waived,
or (iii) terminate any Plan in a manner that could result in the imposition of a
lien or encumbrance on the assets of the Borrower or any of its Subsidiaries
pursuant to Section 4068 of ERISA
6.7. Nonperforming Assets to Total Loans and Other Real Estate Ratio. The
Borrower shall not permit its Nonperforming Assets to Total Loans and Other Real
Estate Ratio to be less than 6.00%. As used in this Section 6.7, "Nonperforming
Assets to Total Loans and Other Real Estate Ratio" means the ratio of (A)
"Nonperforming Assets" to (B) the sum of (i) "Total Loans", plus (ii) "Other
Real Estate"; "Nonperforming Assets" means the Consolidated loans, leases and
other assets of the Borrower that are not accruing interest or are 90 days or
more past due in the payment of principal or interest, plus Consolidated "other
real estate owned" by the Borrower ("Other Real Estate"); and "Total Loans"
means the Consolidated principal of loans made by Borrower to unrelated third
parties; in each case as shown on the Consolidated financial statements of
Borrower, prepared in accordance with FFIEC requirements.
6.8. Capitalization of Borrower and Material Subsidiaries. The Borrower
and its Material Subsidiaries, including any other federally-insured depository
institution that may be acquired after the date hereof and prior to the Maturity
Date, will maintain total "Risk-Based Capital Ratios", "Tier I Risk-Based
Capital Ratios", and "Leverage Ratios, as defined in applicable FDIC
regulations, as follows:
Leverage Ratio: not less than 5.00%;
Tier I Risk-Based Capital Ratio: not less than 8.75%; and
total Risk-Based Capital Ratio: not less than 10.00%.
-17-
6.9. Minimum Tangible Common Equity. The Borrower shall not permit its
Tangible Common Equity to be less than $100,000,000.00. As used in this Section
6.9, "Tangible Common Equity" means the difference between (A) the Consolidated
stockholder equity in the Borrower, including, but not limited to, accumulated
other comprehensive income accounted for under FASB 115 as gains or losses on
securities held for sale, minus (B) the sum of (i) the Consolidated preferred
stockholder equity in the Borrower, and (ii) the Consolidated goodwill and
intangibles of the Borrower; in each case as shown on the Consolidated financial
statements of Borrower, prepared in accordance with FFIEC requirements
6.10. Debt Service Coverage Ratio. The Borrower shall not permit, on a
"Rolling Four-Quarter Basis", the ratio of (A) the Consolidated net income of
the Borrower, during any such fiscal period, as shown on the Consolidated
financial statements of Borrower, prepared in accordance with FFIEC
requirements, to (B) the total of (i) the installments of all principal payable
by the Borrower in connection with any indebtedness or other obligation required
to be paid during the next four fiscal quarters and arising from the borrowing
of any money or the deferral of the purchase price of any asset and (ii) the
total interest expense of the Borrower thereon during such next four fiscal
quarters, calculated on the basis of the interest rate(s) applicable to such
principal obligations as of the end of the last fiscal quarter included in the
Rolling Four-Quarter Basis, in each case as shown on the financial statements of
Borrower, prepared in accordance with FFIEC requirements, to be less than 1.25
to 1.00. As used in this Section 6.10, "Rolling Four-Quarter Basis" means a
basis using the most recently completed four (4) full consecutive fiscal
quarters of Borrower which precede and include the date on which the Debt
Service Coverage Ratio is calculated.
SECTION VII
DEFAULTS
7.1. Events of Default. There shall be an Event of Default hereunder if
any of the following events occurs:
(a) the Borrower shall fail to pay within five days after the same becomes
due and payable (i) any amount of principal of the Term Loan, or (ii) any amount
of interest thereon or any fees or expenses payable hereunder or under the Term
Note; or
(b) The Borrower shall fail to perform any term, covenant or agreement
contained in Sections 5.1(f), 5.5, 6.2, 6.3, 6.5, 6.8, 6.9 or 6.10; or
(c) the Borrower shall fail to perform any covenant contained in Sections
5.1(e), 5.1(g), 5.1(h), 5.2, 6.1, 6.4, 6.6 or 6.7 and such failure shall
continue for 30 days; or
(d) the Borrower shall fail to perform any term, covenant or agreement
(other than in respect of subsections 7.1(a) through (c) hereof contained in
this Agreement or the Term Note
-18-
and such default shall continue for 60 days after notice thereof has been sent
to the Borrower by the Bank; or
(e) any representation or warranty of the Borrower made in this Agreement,
in the Term Note, in the Pledge Agreements or any other documents or agreements
executed in connection with the transactions contemplated by this Agreement or
in any certificate delivered hereunder shall prove to have been false in any
material respect upon the date when made or deemed to have been made; or
(f) the Borrower or any of its Material Subsidiaries shall fail to pay at
maturity (or upon demand, if a demand facility), or within any applicable period
of grace, any indebtedness, to a party other than the Bank, in excess, singly or
in the aggregate, of $5,000,000.00 for borrowed money or for the use of real or
personal property, or fail to observe or perform any term, covenant or agreement
evidencing or securing such indebtedness, or relating to such use of real or
personal property, the result of which failure is to permit the holder or
holders of such obligations to cause such indebtedness to become due prior to
its stated maturity upon delivery of required notice, if any; or
(g) the Borrower or any of its Material Subsidiaries shall (i) apply for
or consent to the appointment of, or the taking of possession by, a receiver,
custodian, trustee, liquidator or similar official of itself or of all or a
substantial part of its property, (ii) be generally not paying its debts as such
debts become due, (iii) make a general assignment for the benefit of its
creditors, (iv) commence a voluntary case under the Federal Bankruptcy Code (as
now or hereafter in effect), (v) take any action or commence any case or
proceeding under any law relating to bankruptcy, insolvency, reorganization,
winding-up or composition or adjustment of debts, or any other law providing for
the relief of debtors, (vi) fail to contest in a timely or appropriate manner,
or acquiesce in writing to, any petition filed against it in an involuntary case
under the Federal Bankruptcy Code or other law, (vii) take any action under the
laws of its jurisdiction of incorporation or organization similar to any of the
foregoing, or (viii) take any corporate action for the purpose of effecting any
of the foregoing; or
(h) a proceeding or case shall be commenced, without the application or
consent of the Borrower or any of its Material Subsidiaries in any court of
competent jurisdiction, seeking (i) the liquidation, reorganization,
dissolution, winding up, or composition or readjustment of its debts, (ii) the
appointment of a trustee, receiver, custodian, liquidator or the like of it or
of all or any substantial part of its assets, or (iii) similar relief in respect
of it, under any law relating to bankruptcy, insolvency, reorganization,
winding-up or composition or adjustment of debts or any other law providing for
the relief of debtors, and such proceeding or case shall continue undismissed,
or unstayed and in effect, for a period of 90 days; or an order for relief shall
be entered in an involuntary case under the Federal Bankruptcy Code, against the
Borrower or such Subsidiary; or action under the laws of the jurisdiction of
incorporation or organization of the Borrower or any of its Material
Subsidiaries similar to any of the foregoing shall be taken with respect to the
Borrower or such Subsidiary and shall continue unstayed and in effect for any
period of 90 days; or
-19-
(i) a judgment or order for the payment of money shall be entered against
the Borrower or any of its Subsidiaries by any court, or a warrant of attachment
or execution or similar process shall be issued or levied against property of
the Borrower or such Subsidiary, that, singly or in the aggregate, exceeds
$5,000,000.00 in value and such judgment, order, warrant or process shall
continue undischarged or unstayed for 30 days; or
(j) the Borrower or any member of the Controlled Group shall fail to pay
when due an amount, singly or in the aggregate, in excess of $5,000,000.00 that
it shall have become liable to pay to the PBGC or to a Plan under Title IV of
ERISA; or notice of intent to terminate a Plan or Plans shall be filed under
Title IV of ERISA by the Borrower, any member of the Controlled Group, any plan
administrator or any combination of the foregoing; or the PBGC shall institute
proceedings under Title IV of ERISA to terminate or to cause a trustee to be
appointed to administer any such Plan or Plans or a proceeding shall be
instituted by a fiduciary of any such Plan or Plans against the Borrower and
such proceedings shall not have been dismissed within 45 days thereafter; or a
condition shall exist by reason of which the PBGC would be entitled to obtain a
decree adjudicating that any such Plan or Plans must be terminated; or
(k) any banking Subsidiary shall cease to be insured under the Federal
Deposit Insurance Act and any rules and regulations issued thereunder, as from
time to time supplemented or amended; or a cease and desist order shall be
issued against the Borrower or any banking Subsidiary pursuant to 12 U.S.C.
1818(b) or (c) or any similar applicable provision of state law and any rules
and regulations issued thereunder, as from time to time supplemented or amended;
or
(l) the acquisition by any person or entity, or two or more persons or
entities acting in concert, of beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under the Securities Exchange
Act of 1934) of 25% or more of the outstanding shares of voting stock of the
Borrower; provided that this provision shall not apply to acquisitions of
beneficial ownership by any director, officer, employee or employee benefit plan
of the Borrower or any Subsidiary, nor to any of the foregoing who act in
concert with any other person or entity, or
(m) there occurs an Event of Default as defined in the Term Note, the
Pledge Agreements or the Second Amendment, or with respect to the promissory
note issued pursuant to the Second Amendment.
7.2. Remedies. Upon the occurrence of an Event of Default described in
subsections 7.1(g) and (h), immediately and automatically, and upon the
occurrence of any other Event of Default, at any time thereafter while such
Event of Default is continuing, at the Bank's option and upon the Bank's written
declaration:
(a) the unpaid principal amount of the Term Loan together with accrued
interest and all other Obligations hereunder shall become immediately due and
payable without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived; and
-20-
(b) the Bank may exercise any and all rights it has under this Agreement,
the Term Note , the Pledge Agreements, the Second Amendment or any other
documents or agreements executed in connection herewith, or at law or in equity,
and proceed to protect and enforce the Bank's rights by any action at law, in
equity or other appropriate proceeding.
SECTION VIII
MISCELLANEOUS
8.1. Notices. Unless otherwise specified herein, all notices hereunder to
any party hereto shall be in writing and shall be deemed to have been given when
given in a manner consistent with Section 9 of the Term Note, in each case
addressed to such party at its address indicated below:
If to the Borrower, at
FINANCIAL INSTITUTIONS, INC.
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Attention:........Xxxxxx X. Xxxxxx, Senior Vice President and
Chief Financial Officer
Telephone:........(000) 000-0000
Facsimile:........(000) 000-0000
If to the Bank, at
MANUFACTURERS AND TRADERS TRUST COMPANY
Financial Institutions Division
00xx Xxxxx, Xxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxx 00000
Attention:........Xxxxxxx X. Xxxxxxx, Vice President
Telephone:........000-000-0000
Facsimile:........000-000-0000
or at any other address specified by such party in writing.
8.2. Expenses. The Borrower will pay on demand the reasonably allocated
fees and costs of the Bank's outside legal counsel and all disbursements of said
legal counsel in connection with the preparation of this Agreement, the Term
Note, the Pledge Agreements or any other documents or agreements executed in
connection therewith. The Borrower will also pay on demand the reasonable
expenses of the Bank in connection with the waiver or amendment of this
Agreement, the Term Note, the Pledge Agreements or any other documents or
agreements executed in connection therewith, or the administration, default or
collection of the
-21-
Term Loan or other Obligations or in connection with the Bank's exercise,
preservation or enforcement of any of its rights, remedies or options
thereunder, including, without limitation, fees and expenses of outside legal
counsel, accounting, consulting, brokerage or other similar professional fees or
expenses, and any fees or expenses associated with any travel or other costs
relating to any appraisals or examinations conducted in connection with the
Obligations.
8.3. Set-Off..(a) Regardless of the adequacy of any collateral or other
means of obtaining repayment of the Obligations, any deposits, balances or other
sums credited by or due from the head office of the Bank or any of its branch
offices to the Borrower may, to the extent permitted by law, at any time and
from time to time after the occurrence of an Event of Default hereunder, without
notice to the Borrower or compliance with any other condition precedent now or
hereafter imposed by statute, rule of law, or otherwise (all of which are hereby
expressly waived) be set off, appropriated, and applied by the Bank against any
and all Obligations of the Borrower to the Bank in such manner as the head
office of the Bank or any of its branch offices in their sole discretion may
determine, and the Borrower hereby grants the bank a continuing security
interest in such deposits, balances or other sums for the payment and
performance of all such Obligations.
(b) In the event that the Bank is placed in receivership or enters a
similar proceeding, the Borrower may, to the extent permitted by law, make any
payment due to the Bank hereunder to the extent of finally collected
unrestricted deposits of the Borrower held by the Bank, by giving notice to the
Bank to apply such deposits to such Obligations. If the amount of such deposits
is insufficient to pay such Obligations in full, the Borrower shall pay the
balance of such deficiency in accordance with this Agreement.
8.4. Term of Agreement. This Agreement shall continue in full force and
effect so long as the Term Loan or any Obligation hereunder shall be
outstanding.
8.5. No Waivers. No failure or delay by the Bank in exercising any right,
power or privilege hereunder or under the Note or under any other documents or
agreements executed in connection herewith shall operate as a waiver thereof;
nor shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. The
rights and remedies provided herein, in the Term Note, in the Pledge Agreements
and such other documents and agreements are cumulative and not exclusive of any
rights or remedies otherwise provided by agreement or law.
8.6. Governing Law. This Agreement, the Term Note and the Pledge
Agreements shall be deemed to be contracts made under seal and shall be
construed in accordance with and governed by the laws of the State of New York
(without giving effect to any conflicts of laws provisions contained therein).
8.7. Amendments. Neither this Agreement, the Note, the Pledge Agreements
nor any provision hereof or thereof may be amended, waived, discharged or
terminated except by a written instrument signed by the Bank and, in the case of
amendments, by the Borrower.
-22-
8.8. Binding Effect of Agreement. This Agreement shall be binding upon and
inure to the benefit of the Borrower and the Bank and their respective
successors and assigns; provided that the Borrower may not assign or transfer
its rights or obligations hereunder. The Bank may sell or transfer its interests
hereunder, under the Term Note and under the Pledge Agreements without the
consent of the Borrower, or grant participations therein to participants without
such consent. In the case of any such participation, the Borrower agrees that
any such participant shall be entitled to the benefits of Sections 2.6, 2.7, and
8.3 to the same extent as if such transferee or participant were the Bank
hereunder, but only if the Bank would then be entitled to such benefits;
provided the Borrower may, for all purposes of this Agreement, treat the Bank as
the person entitled to exercise all rights hereunder and under the Note and to
receive all payments with respect thereto.
8.9. Counterparts. This Agreement may be signed in any number of
counterparts with the same effect as if the signatures hereto and thereto were
upon the same instrument.
8.10. Partial Invalidity. The invalidity or unenforceability of any one or
more phrases, clauses or sections of this Agreement shall not affect the
validity or enforceability of the remaining portions of it.
8.11. Captions. The captions and headings of the various sections and
subsections of this Agreement are provided for convenience only and shall not be
construed to modify the meaning of such sections or subsections.
8.12. WAIVER OF JURY TRIAL. THE BANK AND THE BORROWER AGREE THAT NEITHER
OF THEM NOR ANY ASSIGNEE OR SUCCESSOR SHALL (A) SEEK A JURY TRIAL IN ANY
LAWSUIT, PROCEEDING, COUNTERCLAIM OR ANY OTHER ACTION BASED UPON, OR ARISING OUT
OF, THIS AGREEMENT, THE NOTE, ANY RELATED DOCUMENTS OR AGREEMENTS OR THE
DEALINGS OR THE RELATIONS BETWEEN OR AMONG ANY OF THEM, OR (B) SEEK TO
CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT
BE OR HAS NOT BEEN WAIVED. NEITHER THE BANK NOR THE BORROWER HAS AGREED WITH OR
REPRESENTED TO THE OTHER THAT THE PROVISIONS OF THIS PARAGRAPH WILL NOT BE FULLY
ENFORCED IN ALL INSTANCES.
8.13 Entire Agreement. This Agreement, the Note and the documents and
agreements executed in connection herewith constitute the final agreement of the
parties hereto and supersede any prior agreement or understanding, written or
oral, with respect to the matters contained herein and therein.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized officers as of the day and year first above written.
-23-
FINANCIAL INSTITUTIONS, INC.
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Its: SVP & CFO
--------------------------------
MANUFACTURERS AND TRADERS
TRUST COMPANY
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------
Its: Vice President
--------------------------------
-24-
EXHIBIT A
LIBOR Term Note
See Attached Note
EXHIBIT B
FINANCIAL INSTITUTIONS, INC.
ENCUMBRANCES
NONE
-26-
EXHIBIT C
FINANCIAL INSTITUTIONS, INC.
LITIGATION
NONE
-27-
EXHIBIT D
FINANCIAL INSTITUTIONS, INC.
MATERIAL SUBSIDIARIES
Name Percentage of Ownership
---- -----------------------
Wyoming County Bank 99.66%
National Bank of Geneva 100.00%
Bath National Bank 100.00%
First Tier Bank & Trust 100.00%
-28-
EXHIBIT E
FINANCIAL INSTITUTIONS, INC. REPORT OF CHIEF FINANCIAL OFFICER
Financial Institutions, Inc. (the "Borrower") hereby certifies that:
This Report is furnished pursuant to Section 5.1(c) of the Term Loan
Credit Agreement dated as of December 15, 2003, and Section 5.1(c) of the
Revolving Credit Agreement dated as of December 15, 2003 (collectively, the
"Credit Agreements") between the Borrower and MANUFACTURERS AND TRADERS TRUST
COMPANY. Unless otherwise defined herein, the terms used in this Report have the
meanings given to them in the Credit Agreements.
As required by Section 5.1(a) and (b) of the Credit Agreements, the
Consolidated financial statements of the Borrower for the [year/quarter] ended
_________________, 200__ (the "Financial Statements"), prepared in accordance
with generally accepted accounting principles consistently applied, accompany
this Report. The Financial Statements present fairly the Consolidated financial
position of the Borrower as at the date thereof and the Consolidated results of
operations of the Borrower for the period covered thereby (subject only to
normal recurring year-end adjustments which will not in the aggregate be
material in amount).
The figures set forth in Schedule A for determining compliance by the
Borrower with the financial covenants contained in Sections 6.7, 6.9 and 6.10 of
the Credit Agreement are true and complete as of the date hereof.
As of the date hereof, Borrower and its Material Subsidiaries, including
any other federally-insured depository institution that was acquired after
December 15, 2003 and prior to the Maturity Date, have total "Risk-Based Capital
Ratios", "Tier I Risk-Based Capital Ratios", and "Leverage Ratios", as defined
in applicable FDIC regulations, as required by Section 6.8 of the Credit
Agreements.
The activities of the Borrower and its Subsidiaries during the period
covered by the Financial Statements have been reviewed by me as Borrower's Chief
Financial Officer or by employees or agents of Borrower under my immediate
supervision. Based on such review, to my best knowledge and belief, and as of
the date of this Report, no Default has occurred. *
WITNESS my hand this ___ day of_________ 200___.
FINANCIAL INSTITUTIONS, INC.
By:
-------------------------------
Chief Financial Officer
*If a Default has occurred, this paragraph is to be modified with an appropriate
statement as to the nature thereof, the period of existence thereof and what
action the Borrower has taken, is taking, or proposes to take with respect
thereto.
-29-
SCHEDULE A
to
EXHIBIT E
AFFIRMATIVE (FINANCIAL) COVENANTS
Nonperforming Assets to Total Loans and Other Real Estate Ratio (Section 6.7)
MAXIMUM PERMITTED: 6.0%
ACTUAL:
(i) Non accrual and other loans and
leases past due 90 days or more
and still accruing $
------------
(ii) Other real estate owned $
------------
(iii) Nonperforming Assets:
line (i) plus line(ii) $
------------
(iv) Total Loans $
------------
(v) Other real estate owned $
------------
(vi) Nonperforming Assets to Total Loans
and Other Real Estate Ratio:
[line (iii) divided by (line (iv) plus line (v)] times 100 %
-------
Minimum Tangible Common Equity (Section 6.9)
REQUIRED: $100,000,000
ACTUAL:
(i) Consolidated stockholders' equity $
------------
(ii) Consolidated stockholders' preferred equity $
------------
(iii) Consolidated goodwill and intangibles
(iv) Total Tangible Common Equity:
line (i) minus line (ii) minus line (iii) $
------------
-30-
Debt Service Coverage Ratio (Section 6.10)
MINIMUM PERMITTED: 1.25 : 1.00
ACTUAL:
(i) Consolidated net income on
Rolling-Four Quarter Basis $
------------
(ii) Total principal payable by Borrower
during next four fiscal quarters $
------------
(iii) Total interest accruing on total
principal payable by Borrower
during next four quarters $
------------
(iv) Debt Service Coverage Ratio:
line (i) divided by [line (ii)
plus line (iii)] : 1.00
----- ----
WITNESS my hand this ______ day of ____________, 20__.
FINANCIAL INSTITUTIONS, INC.
By:
--------------------------------------
Chief Financial Officer
-31-
EXHIBIT F
OPINION OF COUNSEL TO THE BORROWER
-32-
EXHIBIT G
Pledge Agreement
See attached Pledge Agreement
-33-
[LOGO] M&T Bank
Manufacturers and Traders Trust Company
LIBOR TERM NOTE
New York
Buffalo, New York December 15, 2003 $ 25,000,000.00
BORROWER: FINANCIAL INSTITUTIONS, INC.
a(n) individual(s) partnership |X| corporation trust __________ organized under
the laws of New York
Address of residence/chief executive office: 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxx
Xxxx 00000
BANK: MANUFACTURERS AND TRADERS TRUST COMPANY, a New York banking corporation
with its principal banking office at One M&T Plaza, Buffalo, New York
14240, Attention: Office of General Counsel
1. DEFINITIONS. As used in this Note, each capitalized term shall have the
meaning specified in the Note or as it appears in initial capitalization.
Additionally, the following terms shall have the indicated meanings:
a. "Authorized Person" shall mean, each individually, Xxxxxx X. Xxxxxx.
Mention of the Authorized Person's name is for reference purposes
only and the Bank may rely on a person's title to ascertain whether
someone is an Authorized Person.
b. "Applicable Rate" shall mean either the LIBOR Rate, the Base Rate,
or the Fixed Rate as the case may be.
c. "Adjustment Date" shall mean two (2) Business Days before the last
day of the Interest Period selected below (see LIBOR Rate
definition).
d. "Base Rate" shall mean 0 percentage points above the rate of
interest announced by the Bank as its prime rate of interest.
e. "Business Day" shall mean any day of the year on which banking
institutions in New York, New York are not authorized or required by
law or other governmental action to close and, in connection with
the LIBOR Rate, on which dealings are carried on in the London
interbank market.
f. "Continuation Date" shall mean the last day of each Interest Period.
g. "Conversion Date" shall mean the date on which Borrower's election
to convert the LIBOR Rate applicable to this Note to a Fixed Rate
becomes effective in accordance with this Note.
h. "Fixed Rate" shall mean 1.75 percentage points above the most recent
yield on the United States Treasury Obligations adjusted to a
constant maturity having a term most nearly corresponding to, but
not greater than, the unexpired portion of the term of this Note, in
effect two (2) Business Days prior to the Conversion Date, as
published by the Board of Governors of the Federal Reserve System in
the Federal Reserve Statistical Release H15(519), or by such other
quoting service, index or commonly available source utilized by the
Bank, plus the "ask" side of the swap spread most nearly
corresponding to, but not greater than, the unexpired portion of the
term of this Note, in effect two (2) Business Days prior to the
Conversion Date, as set forth in Bloomberg, L.P., or by such other
quoting service, index or commonly available source utilized by the
Bank.
i. "Interest Period" shall mean, as to the LIBOR Rate, the period
commencing on the date of this Note or Continuation Date (as the
case may be) and ending on, with respect thereto, the numerically
corresponding day (or, if there is no numerically corresponding day,
on the last day) of the calendar month that is one (1), two (2),
three (3) or six (6) months thereafter (as selected by Borrower
below); provided, however, that if an Interest Period would end on a
day that is not a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless such next
succeeding Business Day would fall in the next calendar month, in
which case such Interest Period shall end on the immediately
preceding Business Day.
j. "LIBOR" shall mean the rate obtained by dividing (i) the one, two,
three or six month interest period London Interbank Offered Rate (as
selected by Borrower), fixed by the British Bankers Association for
United States dollar deposits in the London Interbank Eurodollar
Market at approximately 11:00 a.m. London, England time (or as soon
thereafter as practicable) as determined by the Bank from any
broker, quoting service or commonly available source utilized by the
Bank by (ii) a percentage equal to 100% minus the stated maximum
rate of all reserves required to be maintained against "Eurocurrency
Liabilities" as specified in Regulation D (or against any other
category of liabilities which includes deposits by reference to
which the interest rate on LIBOR Rate loans is determined or any
category of extensions of credit or other assets which includes
loans by a non-United States' office of a bank to United States
residents) on such date to any member bank of the Federal Reserve
System.
k. "LIBOR Rate" shall mean 1.75 percentage points above LIBOR with an
Interest Period duration of one month, two months, three months or
six months. (Select applicable Interest Period. If no interest
period is selected, the one month interest period shall apply.)
l. "Maturity Date" is the Payment Due Day in December, 2008.
m. "Payment Due Day" shall mean the same day of the calendar month as
the date of this Note (or if there is no numerically corresponding
day in a month, on the last day of such month); provided, however,
if that day is not a Business Day, the Payment Due Day shall be
extended to the next succeeding Business Day unless such next
succeeding Business Day would fall in the next calendar month, in
which case such Payment Due Day shall end on the immediately
preceding Business Day.
n. "Principal Amount" shall mean Twenty-Five Million and 00/100 Dollars
($ 25,000,000.00).
1
2. PAYMENT OF PRINCIPAL, INTEREST AND EXPENSES.
a. Promise to Pay. For value received, and intending to be legally bound,
Borrower promises to pay to the order of the Bank on the dates set forth below,
the Principal Amount, plus interest as agreed below and all fees and costs
(including without limitation attorneys' fees and disbursements whether for
internal or outside counsel) the Bank incurs in order to collect any amount due
under this Note, to negotiate or document a workout or restructuring, or to
preserve its rights or realize upon any guaranty or other security for the
payment of this Note ("Expenses").
b. Initial Applicable Rate. The initial Applicable Rate shall be the LIBOR
Rate based on the Interest Period (with the duration selected by Borrower) in
effect two (2) Business Days before the date of this Note. The initial Interest
Period shall start on the date of this Note.
c. Interest. Interest shall accrue on the outstanding Principal Amount
calculated on the basis of a 360-day year for the actual number of days of each
year (365 or 366) at the Applicable Rate that on each day shall be:
i. If the LIBOR Rate is the Applicable Rate. Interest shall accrue on
the Principal Amount from and including the first day of the
Interest Period (with the duration selected by Borrower) until, but
not including, the last day of such Interest Period or the day the
Principal Amount is paid in full (if sooner) at a rate per annum
equal to the LIBOR Rate in effect on the each Adjustment Date.
ii. If the Base Rate is the Applicable Rate. Interest shall accrue on
the Principal Amount from and including the first date the Base Rate
is the Applicable Rate to but not including, the day such Principal
Amount is paid in full or the Applicable Rate is converted to the
LIBOR Rate or the Fixed Rate, at the rate per annum equal to the
Base Rate. Any change in the Base Rate resulting from a change in
the Bank's prime rate shall be effective on the date of such change.
iii. If the Fixed Rate is the Applicable Rate. Interest shall accrue on
the Principal Amount from and including the first date the Fixed
Rate is the Applicable Rate to but not including, the day such
Principal Amount is paid in full, at the rate per annum equal to the
Fixed Rate in effect on the Conversion Date.
d. Payment Schedule. Borrower shall pay the outstanding Principal Amount
in the following installments: (i) Five Million and 00/100 Dollars
($5,000,000.00) on December 15, 2006; (ii) Ten Million and 00/100 Dollars
($10,000,000.00) on December 15, 2007; and (iii) ONE (1) FINAL INSTALLMENT on
the Maturity Date in an amount equal to the outstanding Principal Amount at that
time together with all other amounts outstanding hereunder including, without
limitation, accrued interest, costs and Expense. In addition, until the
outstanding Principal Amount is paid in full, Borrower shall pay all accrued and
unpaid interest, in amounts which may vary, as follows: (i) if the LIBOR Rate is
the Applicable Rate, on the last day of each Interest Period; (ii) if the Base
Rate is the Applicable Rate, on the Payment Due Date for each month; (iii) if
the Fixed Rate is the Applicable Rate, on the Payment Due Date for each month;
and (iv) at maturity (whether by acceleration or otherwise) and, after such
maturity, on demand.
e. Maximum Legal Rate. It is the intent of the Bank and Borrower that in
no event shall interest be payable at a rate in excess of the maximum rate
permitted by applicable law (the "Maximum Legal Rate"). Solely to the extent
necessary to prevent interest under this Note from exceeding the Maximum Legal
Rate, any amount that would be treated as excessive under a final judicial
interpretation of applicable law shall be deemed to have been a mistake and
automatically canceled, and, if received by the Bank, shall be refunded to
Borrower.
f. Default Rate. If an Event of Default (defined below) occurs, the
interest rate on the unpaid Principal Amount shall immediately be automatically
increased to 5 percentage points per year above the higher of the LIBOR Rate or
the Base Rate, and any judgment entered hereon or otherwise in connection with
any suit to collect amounts due hereunder shall bear interest at such default
rate.
g. Repayment of Principal and Interest; Late Charge. Payments shall be
made in immediately available United States funds at any banking office of the
Bank. Interest will continue to accrue until payment is actually received. If
payment is not received within five days of its due date, Borrower shall pay a
late charge equal to the greatest of (a) $50.00, (b) 5% of the delinquent amount
or (c) the Bank's then current late charge as announced from time to time.
Payments may be applied in any order in the sole discretion of the Bank but,
prior to default, shall be applied first to past due interest, Expenses, late
charges and principal, then to current interest, Expenses, late charges and
principal, and last to remaining principal.
h. Prepayment.
i. Subject to the following, during the term of this Note, Borrower
shall have the option of paying the Principal Amount to the Bank in
advance of the Maturity Date, in whole or in part, at any time and
from time to time upon written notice received by the Bank at least
three (3) business days prior to making such payment.
(A) If (i) Borrower pays, in whole or in part, any Principal
Amount when the Applicable Rate is the LIBOR Rate, before the
expiration of its respective Interest Rate Period, (ii) fails
to draw down, in whole or in part, any Principal Amount when
the Applicable Rate is the LIBOR Rate after giving a request
therefor, (iii) otherwise tries to revoke any LIBOR Rate, in
whole or in part, or (iv) there occurs a "Bankruptcy Event "
as hereinafter defined, or the Applicable Rate is converted
from the LIBOR Rate to the Base Rate pursuant to Section 3(b),
then Borrower shall be liable for and shall pay the Bank, on
demand, the actual amount of the liabilities, expenses, costs
or funding losses that are a direct or indirect result of such
prepayment, failure to draw, early termination of an Interest
Period, revocation, bankruptcy or otherwise, whether such
liability, expense, cost or loss is by reason of (a) any
reduction in yield, by reason of the liquidation or
reemployment of any deposit or other funds acquired by the
Bank, or (b) the fixing of the interest rate payable on any
LIBOR Rate Loans. The determination by the Bank of the
foregoing amount shall, in the absence of manifest error, be
conclusive and binding upon Borrower.
2
(B) If Borrower prepays, in whole or in part, any Principal Amount
when the Applicable Rate is the Fixed Rate, then Borrower
shall be liable for and shall pay to the Bank, on demand, an
amount equal to the present value of the positive difference
between (i) the amount of interest that would have accrued on
the Principal Amount during the original remaining term of
this Note, at the Applicable Rate in effect on the date of
prepayment, minus 1.75 percentage points, and (ii) the amount
of interest that would have accrued on the Principal Amount
during the original remaining term of this Note at the Current
Market Rate. "Current Market Rate" shall mean the most recent
yield on United States Treasury Obligations adjusted to a
constant maturity having a term most nearly corresponding to,
but not greater than, the term remaining from the date of
prepayment to the original Maturity Date, in effect two (2)
business days prior to the date of prepayment as published by
the Board of Governors of the Federal Reserve System in the
Federal Reserve Statistical Release H.15 (519), or by such
other quoting service, index or commonly available source
utilized by the Bank, plus the "ask" side of the swap spread
most nearly corresponding to, but not greater than, the term
remaining form the date of prepayment to the original Maturity
Date, in effect two (2) Business Days prior to the date of
prepayment, as set forth in Bloomberg, L.P., or by such other
quoting service, index or commonly available source utilized
by the Bank. The present value calculation used herein shall
use the Current Market Rate as the discount rate and shall be
calculated as if each installment of the Principal Amount had
been made during the original remaining term of this Note.
Each partial prepayment of the Principal shall be applied in
inverse order of maturity.
ii. Upon making any prepayment of the Principal Amount in whole,
Borrower shall pay to the Bank all interest and Expenses owing
pursuant to the Note and remaining unpaid. Each partial prepayment
of the Principal Amount shall be applied in inverse order of
maturity to the principal included in the installments provided
herein.
iii. In the event the Maturity Date is accelerated following an Event of
Default by Borrower, any tender of payment of the amount necessary
to satisfy the entire indebtedness made after such Event of Default
shall be expressly deemed a voluntary prepayment. In such a case, to
the extent permitted by law, the Bank shall be entitled to the
amount necessary to satisfy the entire indebtedness, plus the
appropriate prepayment premium calculated in accordance with this
Section 2(h).
3. CONTINUATIONS AND CONVERSIONS.
a. Expiration of Interest Period. Subject to Section 3(b) and Section
3(c), upon the expiration of the first Interest Period and each Interest Period
thereafter, on the Continuation Date the LIBOR Rate will be automatically
continued with an Interest Period of the same duration as the Interest Period
duration initially selected by Borrower.
b. Conversion Upon Default. Unless the Bank shall otherwise consent in
writing, if (i) Borrower has failed to pay when due, in whole or in part, the
indebtedness under the Note (whether upon maturity, acceleration or otherwise),
or (ii) there exists a condition or event which with the passage of time, the
giving of notice or both shall constitute an Event of Default, the Bank, in its
sole discretion, may (i) permit the LIBOR Rate to continue until the last day of
the applicable Interest Period at which time such the Applicable Rate shall
automatically be converted to the Base Rate or (ii) convert the LIBOR Rate to
the Base Rate before the end of the applicable Interest Period. Notwithstanding
the foregoing, if Borrower commences, or has commenced against it, any
proceeding or request for relief under any bankruptcy, insolvency or similar
laws now or hereafter in effect in the United States of America or any state or
territory thereof or any foreign jurisdiction or any formal or informal
proceeding for the dissolution or liquidation of, settlement of claims against
or winding up of affairs of Borrower (a "Bankruptcy Event"), the Applicable Rate
shall be automatically converted to the Base Rate without further action by the
Bank and Borrower shall have no right to have the Applicable Rate converted from
the Base Rate to the LIBOR Rate. Nothing herein shall be construed to be a
waiver by the Bank to have the Principal Amount accrue interest at the Default
Rate or the right of the Bank to the amounts set forth in Section 2(h) of this
Note.
c. Conversion To Fixed Rate. During the term of this Note, Borrower shall
have a one (1) time option to convert the Applicable Rate to the Fixed Rate, for
the whole of the then remaining term of this Note and with respect to the then
total outstanding Principal Amount, subject to all of the following conditions:
i) an Authorized Person must deliver to the Bank by 2:00 p.m. (Eastern
Time) on a Business Day a Notice of Conversion ("Notice of
Conversion") for an election under this Section 3(c) .
ii) The Continuation Date shall be the later of (A) two (2) Business
Days from the Business Day the Bank receives the Notice of
Conversion in accordance with the foregoing Section or (B) the last
day of the relevant Interest Period if a Notice of Conversion is
received by the Bank more than two (2) Business Days before the last
day of an Interest Period. If a Notice of Conversion is received
after 2:00 p.m. (Eastern Time), the Notice of Conversion will be
deemed to have been received on the next Business Day. Notice of
Conversion received more than two (2) Business Days before the end
of an Interest Period shall be deemed to have been received two (2)
Business Days before the end of such Interest Period for purposes of
determining the Fixed Rate for the remaining term of this Note
pursuant to Section 1(h). Accordingly, if, for example, Borrower has
a LIBOR Rate Loan with a one month Interest Period ending on June 15
and wants to convert the LIBOR Rate to the Fixed Rate, Borrower must
deliver its Notice of Conversion to the Bank by 2:00 p.m. (Eastern
Time) on June 13 (provided that June 13 and June 14 are Business
Days).
iii) The Bank may take action in reliance upon any oral, telephonic,
written or teletransmitted Notice of Conversion that the Bank in
good faith believes to be valid and to have been made by Borrower or
on behalf of Borrower by an Authorized Person. No Notice of
Conversion may be delivered by e-mail. The Bank may act on the
Notice of Conversion from any Authorized Person until the Bank shall
have received from Borrower, and had a reasonable time to act on,
written notice revoking the authority of such Authorized Person. The
Bank shall incur no liability to Borrower or to any other person as
a direct or indirect result of acting on any Notice of Conversion
under this Note. The Bank, in its sole discretion, may reject any
Notice of Conversion that is incomplete.
3
iv) If the Bank shall determine that for any reason adequate and
reasonable means do not exist for ascertaining the Fixed Rate with
respect to this Note, the Bank will give notice of such
determination to Borrower and the Applicable Rate shall remain equal
to the interest rate in effect prior to the Notice of Conversion.
v) Nothing herein shall be construed to be a waiver by the Bank of the
right to accrue interest at the default rate, or of any other rights
of the Bank set forth in this Note.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS. The Borrower agrees that the
representations and warranties contained in that certain Term Loan Credit
Agreement, of even date herewith, by and between the Borrower and the Bank (the
"Term Loan Credit Agreement"), are hereby incorporated herein by reference as if
fully set forth herein, which representations and warranties shall continue from
the date hereof until this Note is paid in full.
5. EVENTS OF DEFAULT; ACCELERATION. Upon the occurrence of an "Event of Default"
under the Term Loan Credit Agreement , the Bank shall be entitled to the
remedies set forth in Section 7.2 of the Term Loan Credit Agreement.
6. RIGHT OF SETOFF. After the occurrence of a "Default" as defined in the Term
Loan Credit Agreement, the Bank shall have the right to set off against the
amounts owing under this Note any property held in a deposit or other account
with the Bank or any Affiliate or otherwise owing by the Bank or any Affiliate
in any capacity to Borrower or any guarantor or endorser of this Note. Such
set-off shall be deemed to have been exercised immediately at the time the Bank
or such Affiliate elect to do so.
7. INABILITY TO DETERMINE LIBOR RATES, INCREASED COSTS, ILLEGALITY.
a. Increased Costs. If the Bank shall determine that, due to either (a)
the introduction of any change (other than any change by way of imposition of or
increase in reserve requirements included in the calculation of the LIBOR) in or
in the interpretation of any requirement of law or (b) the compliance with any
guideline or request from any central bank or other governmental authority
(whether or not having the force of law), there shall be any increase in the
cost to the Bank of agreeing to make or making, funding or maintaining any loans
based on LIBOR, then Borrower shall be liable for, and shall from time to time,
upon demand therefor by the Bank and pay to the Bank such additional amounts as
are sufficient to compensate the Bank for such increased costs.
b. Inability to Determine Rates. If the Bank shall determine that for any
reason adequate and reasonable means do not exist for ascertaining LIBOR for the
Interest Period specified above, the Bank will give notice of such determination
to Borrower. Thereafter, the Bank may not maintain the loan hereunder at the
LIBOR Rate until the Bank revokes such notice in writing and, until such
revocation, the Bank may convert the Applicable Rate from the LIBOR Rate to the
Base Rate.
c. Illegality. If the Bank shall determine that the introduction of any
law (statutory or common), treaty, rule, regulation, guideline or determination
of an arbitrator or of a governmental authority or in the interpretation or
administration thereof, has made it unlawful, or that any central bank or other
governmental authority has asserted that it is unlawful for the Bank to make
loans at based on LIBOR then, on notice thereof by the Bank to Borrower, the
Bank may suspend the maintaining of the loan hereunder at the LIBOR Rate until
the Bank shall have notified Borrower that the circumstances giving rise to such
determination shall no longer exist. If the Bank shall determine that it is
unlawful to maintain the loan hereunder based on LIBOR, the Bank may convert the
Applicable Rate from the LIBOR Rate to the Base Rate.
8. MISCELLANEOUS. This Note, together with any related loan and security
agreements and guaranties, contains the entire agreement between the Bank and
Borrower with respect to the Note, and supersedes every course of dealing, other
conduct, oral agreement and representation previously made by the Bank. All
rights and remedies of the Bank under applicable law and this Note or amendment
of any provision of this Note are cumulative and not exclusive. No single,
partial or delayed exercise by the Bank of any right or remedy shall preclude
the subsequent exercise by the Bank at any time of any right or remedy of the
Bank without notice. No waiver or amendment of any provision of this Note shall
be effective unless made specifically in writing by the Bank. No course of
dealing or other conduct, no oral agreement or representation made by the Bank,
and no usage of trade, shall operate as a waiver of any right or remedy of the
Bank. No waiver of any right or remedy of the Bank shall be effective unless
made specifically in writing by the Bank. Borrower agrees that in any legal
proceeding, a copy of this Note kept in the Bank's course of business may be
admitted into evidence as an original. This Note is a binding obligation
enforceable against Borrower and its successors and assigns and shall inure to
the benefit of the Bank and its successors and assigns. If a court deems any
provision of this Note invalid, the remainder of the Note shall remain in
effect. Section headings are for convenience only. Borrower hereby waives
protest, presentment and notice of any kind in connection with this Note.
Singular number includes plural and neuter gender includes masculine and
feminine as appropriate.
9. NOTICES. Any demand or notice hereunder or under any applicable law
pertaining hereto shall be in writing and duly given if delivered to Borrower
(at its address on the Bank's records) or to the Bank (at the address on page
one and separately to the Bank officer responsible for Borrower's relationship
with the Bank). Such notice or demand shall be deemed sufficiently given for all
purposes when delivered (i) by personal delivery and shall be deemed effective
when delivered, or (ii) by mail or courier and shall be deemed effective three
(3) business days after deposit in an official depository maintained by the
United States Post Office for the collection of mail or one (1) business day
after delivery to a nationally recognized overnight courier service (e.g.,
Federal Express). Notice by e-mail is not valid notice under this or any other
agreement between Borrower and the Bank.
10. JOINT AND SEVERAL. If there is more than one Borrower, each of them shall be
jointly and severally liable for all amounts which become due under this Note
and the term "Borrower" shall include each as well as all of them.
11. GOVERNING LAW; JURISDICTION. This Note has been delivered to and accepted by
the Bank and will be deemed to be made in the State of New York. This Note will
be interpreted in accordance with the laws of the State of New York excluding
its conflict of laws rules.
4
BORROWER HEREBY IRREVOCABLY CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY STATE
OR FEDERAL COURT IN ERIE COUNTY, NEW YORK; PROVIDED THAT NOTHING CONTAINED IN
THIS NOTE WILL PREVENT THE BANK FROM BRINGING ANY ACTION, ENFORCING ANY AWARD OR
JUDGMENT OR EXERCISING ANY RIGHTS AGAINST BORROWER INDIVIDUALLY, AGAINST ANY
SECURITY OR AGAINST ANY PROPERTY OF BORROWER WITHIN ANY OTHER COUNTY, STATE OR
OTHER FOREIGN OR DOMESTIC JURISDICTION. Borrower acknowledges and agrees that
the venue provided above is the most convenient forum for both the Bank and
Borrower. Borrower waives any objection to venue and any objection based on a
more convenient forum in any action instituted under this Note.
12. WAIVER OF JURY TRIAL. BORROWER AND THE BANK HEREBY KNOWINGLY, VOLUNTARILY,
AND INTENTIONALLY WAIVE ANY RIGHT TO TRIAL BY JURY BORROWER AND THE BANK MAY
HAVE IN ANY ACTION OR PROCEEDING, IN LAW OR IN EQUITY, IN CONNECTION WITH THIS
NOTE OR THE TRANSACTIONS RELATED HERETO. BORROWER REPRESENTS AND WARRANTS THAT
NO REPRESENTATIVE OR AGENT OF THE BANK HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT THE BANK WILL NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THIS JURY
TRIAL WAIVER. BORROWER ACKNOWLEDGES THAT THE BANK HAS BEEN INDUCED TO ENTER INTO
THIS NOTE BY, AMONG OTHER THINGS, THE PROVISIONS OF THIS SECTION.
Preauthorized Transfers from Deposit Account. If a deposit account number is
provided in the following blank Borrower hereby authorizes the Bank to debit
Borrower's deposit account # 8890769956 with the Bank automatically for any
amount which becomes due under this Note.
Acknowledgment. Borrower acknowledges that it has read and understands all the
provisions of this Note, including the Governing Law, Jurisdiction and Waiver of
Jury Trial, and has been advised by counsel as necessary or appropriate.
TAX ID/SS # 00-0000000 FINANCIAL INSTITUTIONS, INC.
---------------------- ----------------------------------
BORROWER
By:/s/ Xxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxx
----------------------------------
Its: Senior Vice President & CFO
----------------------------------
ACKNOWLEDGMENT
STATE OF NEW YORK)
: SS.
COUNTY OF WYOMING)
On the 15th day of December, in the year 2003, before me, the
undersigned, a Notary Public in and for said State, personally appeared Xxxxxx
X. Xxxxxx, personally known to me or proved to me on the basis of satisfactory
evidence to be the individual(s) whose name(s) is (are) subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in
his/her/their capacity(ies), and that by his/her/their signature(s) on the
instrument, the individual(s), or the person upon behalf of which the
individual(s) acted, executed the instrument.
/s/ Xxxxx Xxxxxxxx
-----------------------------
Notary Public
#196723 v3
--------------------------------------------------------------------------------
FOR BANK USE ONLY
Authorization Confirmed:
--------------------------------------------------------
Product Code: 22660
Disbursement of Funds:
Credit A/C # Off Ck # Payoff Obligation #
----------- --------- ------------
$ $ $
----------- --------- ------------
5
[LOGO] M&T Bank
Manufacturers and Traders Trust Company
PLEDGE OF SECURITIES
New York
Pledgor: FINANCIAL INSTITUTIONS, INC.
A(n) individual(s) |X| corporation partnership _________ organized and
registered under the laws of the State of New York
Organizational Identification Number (if any): _______________ (Note: this
number is not the same as the Taxpayer Identification Number.)
Chief executive office/principal residence: 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxx Xxxx
00000.
Borrower (if not same as Pledgor):______________________________________________
A(n) individual(s) corporation partnership__________organized under the laws
of the State of_________________________________________________________________
Chief executive office/principal residence:_____________________________________
_______________________________________________________________________________.
Bank: Manufacturers and Traders Trust Company (the "Bank"), a New York banking
corporation with its principal office at One M&T Plaza, Buffalo, New York 14240
Attention: Office of General Counsel.
THIS SECURITY AGREEMENT is granted to the Bank by Pledgor in consideration of
and as further security for payment of the Obligations, and for other valuable
consideration, the receipt and sufficiency of which is acknowledged. Pledgor,
intending to be legally bound, agrees with the Bank as follows:
2) DEFINITIONS. All terms unless otherwise defined in this Agreement shall have
the meanings assigned in the Uniform Commercial Code, as the same may be in
effect in the State of New York, as amended from time to time ("UCC").
a) "Brokerage Account" means any securities account or commodity account
included in the Collateral at any time together with all credit balances and
money credited to the account, all investment property carried in the account,
and, except as otherwise agreed by the Bank in writing, all other securities
accounts and commodity accounts maintained by Pledgor with the same Institution.
b) "Collateral" means collectively, whether now owned or hereafter
acquired or existing and wherever located all Pledgor's investment property
described on Schedule A, which Pledgor has delivered to the Bank or agrees to
deliver (or cause to be delivered or appropriate book-entries made) or otherwise
identified on any Institution's books and records as being subject to the Bank's
security interest, whether or not described in any schedule delivered to the
Bank, together with all Brokerage Accounts and all Income and Proceeds. In
addition, the word "Collateral" includes all property of Pledgor (however owned)
in the possession of, or subject to the control of, the Bank (or in the
possession of, or subject to the control of, a third party subject to the
control of the Bank including any Institution), whether now owned or hereafter
existing and whether tangible or intangible in character.
c) "Control Agreement" means an agreement, in form and substance
acceptable to the Bank in its sole discretion, among Pledgor, the Bank and an
Institution for the purpose of perfecting the security interest granted to the
Bank by Pledgor herein.
d) Any of the following events or conditions shall constitute an "Event of
Default": (i) the occurrence of an "Event of Default" under that certain e Term
Loan Credit Agreement, of even date herewith, by and between the Pledgor and the
Bank ("Term Loan Agreement"); (ii) Pledgor defaults in the performance of any
covenant or other provision with respect to any Control Agreement; or (iii) any
Control Agreement is terminated without the consent of the Bank.
e) "Income and Proceeds" mean all present and future income, proceeds,
earnings, increases, and substitutions from or for the Collateral of every kind
and nature, whether direct or indirect, including without limitation all
payments, interest, profits, distributions, benefits, rights, options, warrants,
dividends, stock dividends, stock splits, stock rights, regulatory dividends,
distributions, subscriptions, monies, claims for money due and to become due,
proceeds of any insurance on the Collateral, shares of stock of different par
value or no par value issued in substitution or exchange for shares included in
the Collateral (whether voluntary or involuntary, by agreement or by operation
of law), proceeds of any sale, transfer, surrender, redemption, exchange or
other disposition of the Collateral (whether merger, dissolution or liquidation
of the issuer of the Collateral) and all other property Pledgor is entitled to
receive on account of such Collateral, including accounts, documents,
instruments, chattel paper, investment property, and general intangibles.
f) "Institution" means any (i) securities intermediary (ii) broker; (iii)
issuer; or (iv) any other entity holding or who has issued any of the Collateral
to or on behalf of Pledgor, including, without limitation, any fiduciary.
g) "Obligations" means collectively, any and all indebtedness and other
liabilities or obligations of Pledgor (or if Pledgor is a partnership, any
general partner of Pledgor) to the Bank of every kind and character and all
extensions, refinancings, renewals, modifications and replacements thereof,
including, without limitation, all unpaid accrued interest thereon and all of
the costs and expenses payable as hereinafter provided: (i) whether now existing
or hereafter incurred; (ii) whether direct, indirect, primary, absolute,
secondary, contractual, tortious, liquidated, unliquidated, contingent, secured,
unsecured, matured or unmatured, by guarantee or otherwise; (iii) whether such
indebtedness or obligations are from time to time reduced and thereafter
increased, or entirely extinguished and thereafter reincurred; (iv) whether such
indebtedness was originally contracted with the Bank or with another or others;
(v) whether or not such indebtedness or obligations are evidenced by a
negotiable or non-negotiable instrument or any other writing; (vi) whether such
indebtedness is contracted by Pledgor alone or jointly or severally with another
or others; and (vii) all indebtedness incurred prior to, during or after any
filing by or against Pledgor of any petition or request for liquidation,
reorganization, arrangement, adjudication as a bankrupt, relief as a debtor, or
other relief under bankruptcy, insolvency, or similar laws now or hereafter in
effect in the United States of America or any state or territory thereof or any
foreign jurisdiction, notwithstanding Pledgor's legal status as a debtor or a
debtor-in-possession or Pledgor's discharge in any such proceeding. Obligations
also include, without limitation, all payments recovered from the Bank such as
sums claimed as impermissible set-offs, diversion of trust funds or as a
preference or fraudulent transfer. Such recovered sums shall be reinstated as
Obligations of Pledgor as of the date they arose, but for purposes of any
statute limiting action by the Bank under this Agreement or relating to the
Obligations, as of the date of recovery from the Bank. As used in this Section,
if Pledgor and Borrower are not the same person or entity, then any reference to
"Pledgor" shall be deemed to include a reference to "Borrower".
h) "Pledgor" means each of the persons or entities identified above as
Pledgor in any capacity, and each legal representative, successor or assign of
any thereof.
3) SECURITY INTEREST.
a) Grant of Security Interest. As security for payment and performance of
the Obligations, Pledgor grants a security interest in, and assigns, pledges and
hypothecates to the Bank all of its rights, title and interest in and to the
Collateral, whether now or hereafter acquired or existing and wheresoever
located.
1
b) Continuing and Unconditional Pledge. This Agreement is absolute and
unconditional and shall continue, notwithstanding any interim payment in full of
the Obligations, until released in writing by the Bank.
c) Control Agreement. If any of the Collateral is, or is maintained in, a
Brokerage Account or with an Institution, Pledgor agrees that it shall before,
or at the same time as, it has executed and delivered this Agreement to the
Bank, execute and deliver to the Bank, and cause any Institution at which the
Brokerage Account is maintained or any of the Collateral is held to execute and
deliver to the Bank, a Control Agreement. If the Institution refuses to execute
a Control Agreement that is acceptable to the Bank in its sole discretion,
Pledgor shall transfer the Collateral to a Brokerage Account maintained by M&T
Securities, Inc. with National Financial Services Corporation or if the
Collateral is in certificated form, cause the Collateral to be delivered to the
Bank, duly endorsed in blank without restrictions and with all signatures
guaranteed with medallion signature guaranty acceptable to the Bank and with all
necessary transfer tax stamps affixed, if applicable. If any of the Collateral
is held in a Brokerage Account with National Financial Services Corporation
through M&T Securities, Inc., Pledgor authorizes and consents to such portion of
the Collateral being subject to a Master Control Agreement between the Bank,
National Financial Services Corporation, M&T Securities, Inc. and other
Affiliates dated as of January 1, 1997, as such agreement may be amended,
modified or replaced from time to time. Pledgor acknowledges that such Master
Control Agreement provides, among other things, that the Bank has the ability
and right to have such portion of the Collateral sold, transferred or otherwise
disposed of without further action or consent by Pledgor.
d) Delivery of Certificated and Uncertificated Securities Not in Brokerage
Account. If the Collateral is not maintained in a Brokerage Account, then
contemporaneously with the execution and delivery of this Agreement to the Bank,
Pledgor shall:
i) Certificated Securities. If certificated securities, deliver such
certificated securities to the Bank, duly endorsed in blank without restrictions
and with all signatures guaranteed with medallion signature guaranty acceptable
to the Bank and with all necessary transfer tax stamps affixed.
ii) Uncertificated Securities. If uncertificated securities, either
(x) procure the issuance of security certificates to represent such
uncertificated securities and endorse and deliver such certificates as required
above; (y) cause the issuer thereof to register the Bank as the registered owner
of such uncertificated securities; or (z) cause the issuer of the uncertificated
securities to enter into a Control Agreement with the Bank and Pledgor.
4) REPRESENTATIONS AND WARRANTIES. Pledgor hereby represents and warrants to the
Bank that now and until this Agreement is terminated:
a) Enforceability. Pledgor, if an entity, (i) is duly organized, validly
existing and in good standing under the law of the jurisdiction in which it was
formed; (ii) is duly authorized to do business in each jurisdiction in which
failure to be so qualified might have a material adverse effect on its business
or assets; and (iii) has the power, authority and approvals necessary to own the
Collateral and grant a security interest in the Collateral under this Agreement
and execute and deliver this Agreement and each Control Agreement (if
applicable). This Agreement and each Control Agreement (if applicable) have been
duly executed and delivered by Pledgor, constitute valid and legally binding
obligations of Pledgor and are enforceable in accordance with their respective
terms against Pledgor.
b) No Conflicts. The execution, delivery and performance by Pledgor of
this Agreement and each Control Agreement (if applicable), the grant of the
security interest in the Collateral hereunder and the consummation of the
transactions contemplated hereby and thereby do not and will not (i) violate any
statute, regulation or other law applicable to Pledgor; (ii) violate any
judgment, order or award of any court, agency or other governmental authority or
of any arbitrator applicable to Pledgor; (iii) if an entity, violate Pledgor's
certificate of incorporation, by-laws, partnership agreement, operating
agreement or other applicable governing documents; (iv) constitute a default
under any agreement binding on Pledgor or result in a lien or encumbrance on any
assets of Pledgor; or (v) violate any restriction on the transfer of any of the
Collateral.
c) No Consents. No consent, approval, license, permit or other
authorization of any third-party (other than an Institution) or any governmental
body or office is required for the valid and lawful execution and delivery of
this Agreement and each Control Agreement, the creation and perfection of the
Bank's security interest in the Collateral or the valid and lawful exercise by
the Bank of the remedies available to it under this Agreement, any Control
Agreement or applicable law or of the voting and other rights granted to the
Bank in this Agreement or any Control Agreement except as may be required for
the offer of sale of those items of the Collateral that are securities under
applicable law.
d) Sole Owner; No Other Lien. Pledgor is sole record and beneficial owner
of the Collateral free and clear of all liens, security interests, pledges
encumbrances and adverse claims (other than those created under this Agreement),
has the unrestricted right to grant the security interest granted under this
Agreement and has granted to the Bank a valid security interest in the
Collateral free of all liens, encumbrances and adverse claims. There are no
restrictions applicable to the transfer of any of the Collateral, unless fully
and accurately described in an exhibit to this Agreement. The Collateral is held
or registered in Pledgor's legal name.
e) Brokerage Account. If any of the Collateral is, or is maintained in, a
Brokerage Account, such Brokerage Account is a valid and legally binding
obligation of the Institution with which such Brokerage Account is maintained,
the securities entitlements credited thereto are valid and genuine and are
enforceable in accordance with their terms and Pledgor has provided the Bank
with a complete and accurate statement of the financial assets and money
credited to such Brokerage Account as of the date hereof.
f) Certificates Genuine. If any of the Collateral is certificated
securities, each certificate or other document evidencing such portion of the
Collateral is genuine, has been duly authorized and validly issued by each of
the respective Issuers, is in all respects what it purports to be and is
enforceable in accordance with its terms.
g) Judgments and Litigation. There is no pending or threatened claim,
audit, investigation, action or other legal proceeding or judgment, order or
award of any court, agency or other governmental authority or arbitrator that
involves Pledgor or any of the Collateral and might have a material adverse
effect upon, or threaten the validity of, this Agreement or any of the
Collateral. Pledgor shall immediately notify the Bank upon acquiring knowledge
of such an action.
h) Name, Address and Organizational Information. Pledgor's full legal
name, its principal residence or its chief executive office (if a business)
address, and its state of registration and organizational identification number
(if any) are correctly set forth at the beginning of this Agreement.
i) Mutual Funds Held for 30 Days. If any of the Collateral consists of
mutual fund shares or any other interest in a mutual fund, such shares or
interest shall have been owned by Pledgor for more than thirty (30) days prior
to the date of this Agreement.
5) COVENANTS. Pledgor hereby covenants and agrees with the Bank that now and
until this Agreement is terminated Pledgor shall:
a) Defend Title. Defend its title to the Collateral and the security
interest of the Bank therein against the claims of any person claiming rights in
the Collateral against or through Pledgor and maintain and preserve such
security and its priority.
b) Intentionally omitted.
c) No Transfer. Neither sell, offer to sell nor otherwise transfer or
encumber any of the Collateral and if any of the Collateral is, or is in, a
Brokerage Account or subject to a Control Agreement, withdraw any money or
property from such Brokerage Account or enter into a control agreement with any
third-party relating to the foregoing. If any of the Collateral is, or is
maintained in, a Brokerage Account, this provision shall not prohibit Pledgor
from making trades in such Brokerage Account before the occurrence of an Event
of Default provided that (i) the Bank has agreed in a writing (acceptable to the
Bank in its sole discretion), signed by a duly authorized officer of the Bank
and the Institution, that Pledgor is authorized to engage in such trading; (ii)
the proceeds of such trades remain in the Brokerage Account; and (iii) the
trades do not have a material adverse effect on the value of all or any part of
the Collateral and are not otherwise inconsistent with the provisions of this
Agreement or any Control Agreement.
2
d) Control and Customer Agreements. If the Collateral is held in a
Brokerage Account, neither attempt to modify or attempt to terminate any Control
Agreement or the customer agreement with the Institution under which such
Brokerage Account was established.
e) Later Deliveries. Pledgor shall promptly deliver or transfer to the
Bank (with respect to any of the Collateral in the physical possession of the
Bank) or to an Institution (with respect to any of the Collateral held by such
Institution) for credit to the Brokerage Account and/or coverage by the Control
Agreement with such Institution, such portion of the Collateral (including,
without limitation, any certificate or instrument constituting or representing
such portion of the Collateral and any replacement or related certificates or
instruments, transaction statements, option contracts, warrants or related
documents evidencing transactions or proceeds thereof) that Pledgor may obtain
possession of after the date hereof, free and clear of all liens, encumbrances,
transfer restrictions and adverse claims so that the Bank has a first priority
interest in such portion of the Collateral. All such certificates, instruments
and the like shall be duly endorsed in blank without restriction and with all
signatures guaranteed with a medallion signature guaranty acceptable to the
Bank. Until such delivery or transfer, Pledgor shall hold each such item in
trust for the Bank.
f) Recordkeeping and Financial Statements. Maintain, or cause each agent
to maintain, accurate and complete records in conformity with generally accepted
accounting principles consistently applied and furnish to the Bank financial
statements in accordance with the Term Loan Agreement.
g) Taxes to be Paid. Pay when due every tax, assessment, fee and charge
and file each report required by any taxing authority for Pledgor or its assets,
including without limitation the Collateral.
h) Intentionally omitted..
i) Notice of Changes. Immediately notify the Bank of (i) any Event of
Default; (ii) any event or condition that might have a material adverse effect
upon Pledgor (or Borrower, if not same) the Institution, the value of the
Collateral or the security interest of the Bank; or (iii) any encumbrance upon
or claim asserted against any of the Collateral. Pledgor shall notify the Bank
at least ninety (90) days in advance of any change in (i) the name, identity or
structure of Pledgor (or Borrower, if not same) or (ii) the location of (A) any
of the Collateral, (B) any record concerning any of the Collateral, or (C)
Pledgor's (or Borrower's, if not same) state of registration, chief executive
office or principal residence.
j) Intentionally omitted.
k) Further Assurances.
i) At Pledgor's expense, Pledgor shall do such further acts and
execute and deliver to the Bank all such additional conveyances, financing
statements, certificates, stock or bond powers, instruments, legal opinions and
other assurances as the Bank may from time to time request or require to
protect, assure or enforce its interests, rights and remedies under this
Agreement. All endorsements must be in blank without restriction and with all
signatures guaranteed with a medallion signature guaranty acceptable to the
Bank.
ii) Pledgor will promptly deliver to the Bank (with respect to any
of the Collateral in the physical possession of the Bank) or to an Institution
(with respect to any of the Collateral held by such Institution), all
endorsements and instruments that could be necessary or convenient to transfer
any financial asset in the physical possession of the Bank or an Institution,
that are registered in the name of, payable to the order of or specially
endorsed to Pledgor, to such Institution or one of their respective nominees.
6) POWER OF ATTORNEY, IRREVOCABLE PROXY.
a) Pledgor irrevocably and unconditionally appoints the Bank as its
attorney-in-fact with full power to perform in the name of Pledgor each of
Pledgor's obligations under this Agreement or any Control Agreement and take any
action or execute any instrument that the Bank deems necessary or convenient for
such purpose including, without limitation, the power to endorse or execute and
deliver all stock or bond powers, pledges, instruments of assignment,
certificates, orders for transfer, financing statements, releases and other
writings relating to any of the Collateral in the Bank's or Pledgor's name. Such
power of attorney is coupled with an interest in favor of the Bank, and shall
not be terminated or otherwise affected by the death, bankruptcy, disability or
incompetence of Pledgor or by lapse of time. The Bank may receive and open any
mail addressed to Pledgor, retain any enclosure constituting or relating to any
of the Collateral, and take any other action deemed necessary in the Bank's sole
discretion to perfect or protect the Bank's interests pursuant to this Agreement
or any Control Agreement. Pledgor authorizes (both prospectively and
retroactively) the Bank to file in any public office financing statements, and
any continuations and amendments thereof, regarding any of the Collateral
without the signature of Pledgor. A photocopy or other reproduction of this
Agreement or any financing statement relating to any of the Collateral shall be
sufficient as a financing statement. Pledgor hereby consents and agrees that the
issuers of or obligors of the Collateral or any registrar or transfer agent or
trustee for any of the Collateral shall be entitled to accept the provisions
hereof as conclusive evidence of the rights of the Bank to effect any transfer
pursuant to this Agreement and the authority granted to the Bank herein,
notwithstanding any other notice or direction to the contrary heretofore or
hereafter given by Pledgor or any other person to any of such issuers, obligors,
registrars, transfer agents and trustees.
b) Pledgor irrevocably consents and appoints the Bank, whether or not any
of the Collateral has been transferred into the name of the Bank or its nominee,
as Pledgor's proxy with full power, in the same manner, to the same extent and
with the same effect as if Pledgor were to do the same: (i) to attend all
meetings of stockholders of the issuer of any financial asset which comprises
the Collateral (the "Company") held from the date hereof and to vote such
portion of the Collateral at such meeting in such manner as the Bank shall, in
its sole discretion, deem appropriate, including, without limitation, in favor
of the liquidation of the Company; (ii) to consent, in the sole discretion of
the Bank, to any and all action by or with respect to the Company for which the
consent of the stockholders of the Company is or may be necessary or
appropriate; and (iii) without limitation, to do all things which Pledgor can or
could do as a stockholder of the Company, giving to the Bank full power of
substitution and revocation. Such proxy shall not be exercisable by the Bank and
Pledgor alone shall have the foregoing powers (whether or not any of the
Collateral has been transferred into the name of the Bank or its nominee) until
the occurrence of an Event of Default; provided, however, Pledgor shall not
exercise or, as the case may be, shall not refrain from exercising such rights
if, in the Bank's judgment, such action would impair or otherwise have a
material adverse effect on the value of the Collateral or would otherwise be
inconsistent with this Agreement. The Bank, in its sole discretion, may elect to
postpone having such proxy become exercisable notwithstanding the occurrence of
any Event of Default which would otherwise cause such proxy to become
exercisable. Such proxy shall terminate when this Agreement is no longer in full
force and effect as hereinafter provided. Any expenses incurred with the
exercise of any of the rights hereunder shall constitute part of the
Obligations.
c) Pledgor hereby revokes for the duration of this Agreement each power of
attorney, authorization and proxy granted by Pledgor to any other person (other
than any Institution acting as safekeeping agent, if any) with respect to the
Collateral.
7) PLEDGOR'S WAIVERS. Neither Pledgor's obligations under this Agreement nor
Bank's interest in the Collateral shall be released, impaired or affected in any
way by (i) Pledgor's (or Borrower's, if not same) bankruptcy, reorganization or
insolvency under any law or that of any other party, or any action of a trustee
in any such proceeding; (ii) failure of any other party to perform its
obligations to the Bank; or (iii) any other circumstance that might constitute a
legal or equitable defense to Pledgor's (or Borrower's, if not same) obligations
under this Agreement, including without limitation: (A) any new agreements or
obligations of Pledgor (or Borrower, if not same) with or to the Bank,
amendments, changes in rate of interest, extensions of time for payments,
modifications, renewals or the existence of or waivers of default as to any
existing or future agreements of Pledgor (or Borrower, if not same) or any other
party with the Bank; (B) any adjustment, compromise or release of any of the
Obligations by the Bank or any other party; the existence or nonexistence or
order of any filings, exchanges, releases, impairment or sale of any security
for the Obligations or any part thereof or the order in which payments and
proceeds of collateral are applied; or acceptance by the Bank of any writing
intended by any other party to create an accord and satisfaction with respect to
any of the Obligations; (C) any delay in or failure to call for, take, hold,
continue, collect, preserve or protect, replace, assign, sell, lease, exchange,
convert or otherwise transfer or dispose of, perfect a security interest in,
realize upon or enforce any security interest in
3
any security for the Obligations or any part thereof, regardless of its value;
(D) any exercise, delay in the exercise or waiver of, any failure to exercise,
or any forbearance or other indulgence relating to, any right or remedy of the
Bank against Pledgor (or Borrower, if not same) or other person or relating to
the Obligations, any part thereof or any security for the Obligations; (E) any
fictitiousness, incorrectness, invalidity or unenforceability, for any reason,
of any instrument or other agreement, or act of commission or omission by the
Bank or Pledgor (or Borrower, if not same); (F) any composition, extension,
moratoria or other statutory relief granted to Pledgor (or Borrower, if not
same); or (G) any interruption in the business relations between the Bank and
Pledgor (or Borrower, if not same), or any dissolution or change in form of
organization, name or ownership of Pledgor (or Borrower, if not same) or death
or declaration of Pledgor or Borrower (if not same) if an individual as
incompetent. Further, Pledgor (or Borrower, if not same) waives without notice
each demand, presentment, protest and other act or thing upon which any of
Pledgor's (or Borrower's, if not same) obligations or the Bank's rights or
remedies pursuant to this Agreement or otherwise would or might be conditioned.
8) INCOME AND PROCEEDS OF THE COLLATERAL.
a) Cash Income. Until the occurrence of an Event of Default, Pledgor
reserves the right to request to receive all cash income and cash dividends that
comprise the Income and Proceeds (except cash income or cash dividends paid or
payable in respect of the total or partial liquidation or dissolution of an
issuer) paid on the Collateral; provided, however, until actually paid, all
rights to such cash income or cash dividends shall remain subject to the Bank's
security interest granted hereunder. Any other Income and Proceeds shall be
delivered to the Bank immediately upon receipt (but not later than the next
business day), in the exact form received and without commingling with other
property which may be received by, paid or delivered to Pledgor or for Pledgor's
account, whether as an addition to, in discharge of, in substitution of, or in
exchange of any of the Collateral.
b) Bond Coupons. If the Collateral consists of bonds with coupons, Pledgor
authorizes the Bank to remove all coupons from such bonds when interest is due
and send them for collection on Pledgor's behalf. The proceeds of such bonds
will be applied as directed by Pledgor in writing. The Bank shall have no
responsibility or liability for failure to process such coupons in a timely
fashion. If any coupon is returned unpaid, the Bank may either debit any of
Pledgor's deposit accounts with the Bank or reverse the loan credit, as
appropriate, in the amount of each such coupon previously credited, plus the
Bank expenses incurred in the attempted collection. If Pledgor's deposit
accounts have insufficient funds to pay any or all such amounts, each such
unpaid amount shall be added to the Obligations, and shall be secured by the
Collateral.
c) Cash Income After Event of Default. Upon the occurrence of an Event of
Default, Pledgor shall not demand or receive any cash income or cash dividends
with regard to the Collateral, and if Pledgor receives any such cash income or
cash dividends, the same shall be held by Pledgor in trust for the Bank in the
same medium in which received, shall not be commingled with any assets of
Pledgor and shall be delivered to the Bank in the form received, properly
endorsed to permit collection, not later than the next business day following
the day of its receipt. The Bank may apply the net cash receipts from such
income or cash dividends to payment of the Obligations or any part thereof,
provided that the Bank shall account for and pay over to Pledgor any such income
or interest remaining after payment in full of the Obligations.
d) Increases and Profits. Whether or not an Event of Default has occurred,
Pledgor authorizes the Bank to receive Income and Proceeds on the Collateral and
to hold the same as part of the Collateral and agrees to deliver the Income and
Proceeds (except as provided in 7(a) above) to the Bank immediately upon receipt
(but not later than the next business day), in the exact form received and
without commingling with other property which may be received by, paid or
delivered to Pledgor or for Pledgor's account, whether as an addition to, in
discharge of, in substitution of, or in exchange of any of the Collateral.
9) ADDITIONAL DUTIES OF PLEDGOR AND RIGHTS OF THE BANK.
a) Compliance with Securities Laws.
i) Pledgor has not acquired or transferred any of the Collateral in
any manner that would result in a violation of any applicable law, including
without limitation federal and state securities laws. Pledgor shall execute and
deliver or file each form and other writing (including without limitation any
application for exemption or notice of proposed sale pursuant to any securities
laws) and take each other action (including without limitation making public any
non-public material adverse information with respect to the issuer of any
Security), that the Bank deems necessary or desirable to permit the sale or
other disposition of any portion of the Collateral with or without registration.
Pledgor shall upon the request of the Bank cause the Collateral to be registered
and take each other action including, without limitation, compliance with all
applicable "blue sky" and other securities laws and regulations to permit
transfer or registration of those items of the Collateral in each jurisdiction
which the Bank shall select; and Pledgor shall execute and deliver in form and
substance satisfactory to the Bank its indemnity of each underwriter of such
Security against all of its liabilities, costs and expenses in connection with
the transfer, including attorneys' fees and disbursements.
ii) Pledgor acknowledges that compliance with the Securities Act of
1933, as amended, the rules and regulations thereunder (collectively, the "Act")
may impose limitations on the right of the Bank to sell or otherwise dispose of
securities included in the Collateral. For this reason, Pledgor hereby
authorizes the Bank to sell any securities included in the Collateral in such
manner and to such person as would, in the sole discretion of the Bank, help to
ensure the prompt transfer or sale of such securities and shall not require any
of such securities to be registered or qualified under any applicable securities
law. Without limiting the generality of the foregoing, in any such event the
Bank in its sole discretion may (i) proceed to make a private sale
notwithstanding that a registration statement for the purpose of registering any
of such securities could be or shall have been filed under the Act; (ii)
approach and negotiate with a single possible purchaser to effect such sale;
(iii) restrict such sale to a purchaser who will represent and agree that such
purchaser is purchasing for its own account, for investment and not with a view
to the distribution or sale of any of such securities; or (iv) require that any
sale hereunder (including a sale at auction) be conducted subject to
restrictions (A) as to the financial sophistication and ability of any person
permitted to bid or purchase at sale, (B) as to the content of legends to be
placed upon any certificates representing the securities sold in such sale,
including restrictions on future transfer thereof, (C) as to the representations
required to be made by each person bidding or purchasing at such sale relating
to that person's access to financial information about Pledgor or any issuer of
any of such securities, such person's intentions as to the holding of any of
such securities so sold for investment, for its own account, and not with a view
to the distribution thereof, and (D) as to such other matters as the Bank may,
in its sole discretion, deem necessary or appropriate in order that such sale
(notwithstanding any failure so to register) may be effected in compliance with
the UCC and other laws affecting the enforcement of creditors' rights under the
Act and all applicable state securities laws. Pledgor understands that a sale
under the above circumstances may yield a substantially lower price for such
securities than would otherwise be obtainable if the same were registered and
sold in the open market, and Pledgor shall not attempt to hold the Bank
responsible for sale of any of such securities at an inadequate price even if
the Bank accepts the first offer received or if only one potential purchaser
appears or bids at any such sale. If the Bank shall sell any securities included
in the Collateral at a sale, the Bank shall have the right to rely upon the
advice and opinion of any qualified appraiser, investment banker or broker as to
the commercially reasonable price obtainable on the sale thereof but shall not
be obligated to obtain such advice or opinion. Pledgor acknowledges that,
notwithstanding the legal availability of a private sale or a sale subject to
restrictions of the character described above, the Bank may, in its sole
discretion, elect to seek registration of any securities included in the
Collateral under the Act (or any applicable state securities laws). Pledgor
hereby assigns to the Bank any registration rights or similar rights Pledgor may
have from time to time with respect to any securities included in the
Collateral.
b) Substitution of Collateral. Prior to an Event of Default, Pledgor may
request the Bank in writing to liquidate an item of the Collateral held by the
Bank and use the Proceeds thereof to purchase substitute items of the
Collateral. If the Bank grants such request, the items purchased with the
Proceeds shall constitute part of the Collateral without the need for any
additional notice or action by the Bank or Pledgor.
c) Subsequent Changes Affecting Collateral. Pledgor acknowledges that it
has made its own arrangements for keeping informed of changes or potential
changes affecting the Collateral including, but not limited to, conversions,
subscriptions, exchanges, reorganizations, dividends, tender offers, mergers,
consolidations, maturity of bonds or other financial assets and shareholder
meetings. Pledgor agrees that the Bank has no responsibility to inform Pledgor
of such matters or to take any action with respect thereto even if any of the
Collateral has been registered in the name of the Bank or its agent or nominee.
d) Tax Reporting. All items of income, gain, expense and loss recognized
in any Brokerage Account or any Collateral in the possession of the Bank shall
be reported to the Internal Revenue Service and all state and local taxing
authorities under the name and taxpayer identification number of Pledgor.
4
e) Right to Cure. The Bank has the right, but not the obligation, to
perform at Pledgor's expense any of Pledgor's obligations with respect to the
Collateral under this Agreement. Further, at its option, the Bank may pay and
discharge taxes, liens, securities interest or other encumbrances on or adverse
claim against the Collateral and Pledgor agrees to reimburse the Bank for any
payment made or any expenses incurred (including attorneys' fees) by the Bank
pursuant to the foregoing.
10) DEFAULT.
a) Remedies Upon Default. At any time, and from time to time, after the
occurrence or existence of any Event of Default the Bank may take one or more of
the following remedies:
i) Term Loan Agreement. The Bank shall be entitled to the remedies
set forth in Section 7.2 of the Term Loan Credit Agreement.
ii) Sale of Collateral.
(1) The Bank may, in its sole discretion, transfer and realize
upon its interest in any portion of the Collateral by public or private sale or
otherwise, without notice to Pledgor including, without limitation, (i) deliver
a notice under any Control Agreement to an Institution for the sale or other
disposition of the financial assets in a Brokerage Account, (ii) remove any
financial asset in a Brokerage Account and register such asset in the Bank's
name or the name of the Bank's Institution or nominee or any other nominee;
(iii) exchange certificates representing any of the Collateral for certificates
of larger or smaller denominations; (iv) collect, including by legal action, any
notes, checks or other instruments for the payment of money included in the
Collateral and compromise or settle with any obligor of any such instrument.
(2) If notice of the time and place of any public sale of any
of the Collateral or the time after which any private sale or other intended
disposition thereof is required by the UCC, Pledgor acknowledges that five (5)
days advance notice shall constitute reasonable notice. The Bank shall not be
obligated to make any sale of any of the Collateral regardless of notice of sale
having been given. The Bank may adjourn any public or private sale from time to
time by announcing at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so
adjourned.
(3) If, under the UCC, the Bank may purchase any portion of
the Collateral, it may in payment of any part of the purchase price thereof,
cancel any part of the Obligations.
(4) If any portion of the Collateral is sold on credit or for
future delivery, it need not be retained by the Bank until the purchase price is
paid and the Bank shall incur no liability if the purchaser fails to take up or
pay for such portion of the Collateral. In case of any such failure, such
portion of the Collateral may be sold again.
(5) Pledgor shall execute and deliver to the purchasers of any
portion of the Collateral all instruments and other documents necessary or
proper to sell, convey and transfer title to such portion of the Collateral and,
if approval of any sale of such portion of the Collateral by any governmental
body or officer is required, Pledgor shall prepare or cooperate fully in the
preparation of and cause to be filed with such governmental body or officer all
necessary or proper applications, reports, registration statements and forms and
do all other things necessary or proper to expeditiously obtain such approval.
iii) Set-off. The Bank shall have the right but not the obligation
to set off against the Obligations any amount owing by the Bank or any of its
Affiliates in any capacity to any Pledgor in any capacity. Such set-off shall be
deemed to have been exercised immediately at the time the Bank or such Affiliate
elect to do so.
iv) Termination of Commitments. Any commitment of the Bank to grant
any financial accommodation to Pledgor (or Borrower, if not same) shall
terminate.
b) Application of Proceeds. Any cash held by the Bank as part of the
Collateral and all cash Proceeds of any sale of, collection from or other
realization upon any portion of the Collateral may, in the sole discretion of
the Bank, be held by the Bank as collateral for, or then or at any time be
applied, after payment of the Bank's Costs (defined below), in whole or in part
against, the Obligations or any part thereof in such order as the Bank may
elect, in its sole discretion. Any surplus of such cash or cash Proceeds held by
the Bank and remaining after the Bank's Costs and the Obligations have been
indefeasibly paid in full shall be paid over to Pledgor or to whomever may be
lawfully entitled to receive such surplus.
c) Consent to Change Collateral to Book-Entry or Uncertificated Form.
Pledgor authorizes the Bank and each Institution to take, at Pledgor's expense,
all steps necessary to change to appropriate form each certificated item of the
Collateral which is eligible for safekeeping in uncertificated form, to be
maintained in a Brokerage Account subject to a Control Agreement (if held with
an Institution) or to be held by the Bank (subject to the delivery requirements
in Section 2(d) hereof). Pledgor understands that there may be some delay and
expense in release of uncertificated items of the Collateral if Pledgor requires
its reissue in certificated form and that change to book-entry form for U.S.
Treasury securities may not be reversible.
d) Registered Holder of Collateral. Pledgor authorizes the Bank to
transfer any of the Collateral into its own name or that of its nominee so that
the Bank or its nominee may appear on record as the sole owner thereof;
provided, however, notwithstanding such a transfer, the Bank shall refrain from
exercising its rights under Section 9 hereof until the occurrence of an Event of
Default.
11) STANDARD OF CARE. Other than the exercise of reasonable care in the custody
of the Collateral in the Bank's physical possession, the Bank shall have no
responsibility or duty with respect to any of the Collateral or any matter or
proceeding arising out of or relating thereto and shall have no liability to
Pledgor (or Borrower, if not same) arising from any failure or delay by the
Bank. The Bank shall be deemed to have exercised reasonable care in the custody
and preservation of any portion of the Collateral which is in its possession if
the Bank affords such portion of the Collateral treatment substantially equal to
the treatment that the Bank accords its own assets of a similar nature;
provided, however, that the Bank shall have no duty to sell or convert any of
the Collateral whose market value is declining. In no event shall the Bank be
obligated to (a) preserve any right or remedy of Pledgor against any party with
respect to any of the Collateral; (b) ascertain any maturity, call, exchange,
conversion, redemption, offer, tender or similar matter relating to any of the
Collateral or provide notice of any such matter to Pledgor; or (c) provide to
Pledgor any communication received by the Bank or its nominee. Pledgor
acknowledges that Pledgor is not looking to the Bank to provide it with
investment advice.
12) COSTS AND EXPENSES; INDEMNITY.
a) Bank Costs. Pledgor agrees to pay on demand all costs and expenses
incurred by the Bank in enforcing this Agreement, in realizing upon or
protecting any of the Collateral (including preserving the value of any of the
Collateral) and in enforcing and collecting any of the Obligations or any
guaranty thereof, including, without limitation, if the Bank retains counsel for
advice, suit, appeal, insolvency or other proceedings under the Federal
Bankruptcy Code or otherwise, or for any of the above purposes, the actual
attorneys' fees incurred by the Bank (collectively "Bank Costs"). Payment of all
Bank Costs is secured by the Collateral. Bank Costs shall accrue interest at the
highest legal rate from the date of demand until payment is received by the
Bank.
b) Indemnity. Pledgor shall indemnify the Bank and its directors, officers
and employees, agents and attorneys against, and hold them harmless from, all
liabilities, costs or expenses, including attorneys' fees, incurred by any of
them under the corporate or securities laws applicable to holding, registering
or selling any of the Collateral, except for liability, costs or expenses
arising out of the recklessness or willful misconduct of the Bank.
5
13) MISCELLANEOUS.
a) Remedies Cumulative; Non-Waiver. The Bank shall have all of the rights
and remedies of a secured party under the UCC and other applicable law as well
as those specified by agreement with Pledgor or Borrower. All rights and
remedies of the Bank are cumulative, and no right or remedy shall be exclusive
of any other right or remedy. No single, partial or delayed exercise by the Bank
of any right or remedy shall preclude full and timely exercise at any time of
any right or remedy of the Bank without notice. No course of dealing or other
conduct, no oral agreement or representation made by the Bank, and no usage of
trade, shall operate as a waiver of any right or remedy of the Bank. No waiver
of any right or remedy of the Bank shall be effective unless made specifically
in writing by the Bank.
b) Construction This Agreement and any agreement executed in connection
herewith contains the entire agreement between the Bank and Pledgor with respect
to the Collateral, and supersedes every course of dealing, other conduct, oral
agreement and representation previously made by the Bank. Pledgor expressly
disclaims any reliance on any oral representation of the Bank with respect to
the subject matter of this Agreement or otherwise. No change in this Agreement
shall be effective unless made in a writing duly executed by the Bank. This
Agreement is a binding obligation enforceable against Pledgor and its successors
and assigns and shall inure to the benefit of the Bank and its successors and
assigns. Each provision of this Agreement shall be interpreted as consistent
with existing law and shall be deemed amended to the extent necessary to comply
with any conflicting law. If a court deems any provision invalid, the remainder
of this Agreement shall remain in effect. Pledgor agrees that, in any legal
proceeding, a copy of this Agreement kept in the course of the Bank's business
may be admitted into evidence as an original. Unless the context otherwise
clearly requires, references to plural includes the singular and references to
the singular include the plural and "or" has the inclusive meaning represented
by the phrase "and/or". Section headings are for convenience only. Neuter
pronouns shall be construed as masculine or feminine, and singular forms as
plural, as appropriate.
c) Guaranty of Obligations. Solely to the extent required by applicable
law to make the Collateral available for payment of the Obligations, Pledgor
guarantees the payment of the Obligations, without set-off, counterclaim or
other deduction and without limitation as to amount.
d) Waiver of Subrogation. Pledgor hereby waives any claim, right or remedy
which Pledgor may now have or hereafter acquire against Borrower that arises
hereunder or from the performance by Pledgor hereunder including, without
limitation, any claim, remedy or right of subrogation, reimbursement,
exoneration, indemnification, contribution or participation in any claim, right
or remedy of the Bank against Borrower or any security which the Bank now has or
hereafter acquires, whether or not such claim, right or remedy arises in equity,
under contract, by statute, under common law or otherwise.
e) Notices. Any demand or notice hereunder or under any applicable law
pertaining hereto shall be in writing and duly given if delivered to Pledgor (at
its address on the Bank's records) or to the Bank (at the address on page one
and separately to the Bank officer responsible for Borrower's relationship with
the Bank). Such notice or demand shall be deemed sufficiently given for all
purposes when delivered (i) by personal delivery and shall be deemed effective
when delivered, or (ii) by mail or courier and shall be deemed effective three
(3) business days after deposit in an official depository maintained by the
United States Post Office for the collection of mail or one (1) business day
after delivery to a nationally recognized overnight courier service (e.g.,
Federal Express). Notice by e-mail is not valid notice under this or any other
agreement between Pledgor and the Bank.
f) Joint and Several Liability. If there is more than one Pledgor, each of
them shall be jointly and severally liable pursuant to this Agreement and the
term "Pledgor" shall include each as well as all of them.
g) Governing Law and Jurisdiction. This Agreement has been delivered to
and accepted by the Bank and will be deemed to be made in the State of New York.
Except as otherwise provided under federal law, this Agreement will be
interpreted in accordance with the laws of the State of New York excluding its
conflict of laws rules. PLEDGOR HEREBY IRREVOCABLY CONSENTS TO THE EXCLUSIVE
JURISDICTION OF ANY STATE OR FEDERAL COURT IN ERIE COUNTY, NEW YORK; provided
that nothing contained in this Note will prevent the Bank from bringing any
action, enforcing any award or judgment or exercising any rights against
Borrower individually, against any security or against any property of Borrower
within any other county, state or other foreign or domestic jurisdiction.
Pledgor acknowledges and agrees that the venue provided above is the most
convenient forum for both the Bank and Pledgor. Pledgor waives any objection to
venue and any objection based on a more convenient forum in any action
instituted under this Agreement.
h) WAIVER OF JURY TRIAL. PLEDGOR AND THE BANK HEREBY KNOWINGLY,
VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHT TO TRIAL BY JURY PLEDGOR AND THE
BANK MAY HAVE IN ANY ACTION OR PROCEEDING, IN LAW OR IN EQUITY, IN CONNECTION
WITH THIS AGREEMENT OR THE TRANSACTIONS RELATED HERETO. PLEDGOR REPRESENTS AND
WARRANTS THAT NO REPRESENTATIVE OR AGENT OF THE BANK HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT THE BANK WILL NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THIS JURY TRIAL WAIVER. PLEDGOR ACKNOWLEDGES THAT THE BANK HAS BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE PROVISIONS OF
THIS SECTION.
--------------------------------------------------------------------------------
14) TIN CERTIFICATION. Under penalties of perjury, Pledgor certifies that: (1)
the taxpayer number set forth below is Pledgor's correct social security or
employer identification number (or I am waiting for a number to be issued to
me); and (2) Pledgor is not subject to backup withholding because (a) Pledgor is
exempt from backup withholding; (b) Pledgor has not been notified by the
Internal Revenue Service ("IRS") that it is subject to backup withholding as a
result of a failure to report all interest or dividends; or (c) the IRS has
notified Pledgor that it is no longer subject to backup withholding.
CERTIFICATION INSTRUCTIONS: Pledgor must cross out item (2) if it has been
notified by the IRS that Pledgor is currently subject to backup withholding
because of under-reporting interest or dividends on Pledgor's tax return.
(Please check here only if you are subject to backup withholding.)
The IRS does not require your consent to any provision of this document other
than the certifications required to avoid backup withholding.
--------------------------------------------------------------------------------
15) RELEASE OF SECURITY INTEREST, TERMINATION OF PLEDGE. Notwithstanding any
other provision of this Agreement or the Term Loan Agreement, the Bank agrees to
release the Collateral from the security interest granted hereunder, and
terminate this Agreement in writing, upon the concurrent satisfaction of all of
the following conditions:
a. Capitalization. The Pledgor and its subsidiaries, are in compliance
with the capital ratios required by Section 6.8 of the Term Loan
Agreement ;
b. Net Income. The consolidated net income of the Pledgor, calculated
in accordance with Section 6.10 (A) of the Term Loan Agreement, for
the previous four fiscal quarters of the Pledgor, shall not be less
than Twenty Million Dollars ($20,000,000.00);
c. Nonperforming Assets to Total Loans and Other Real Estate Ratio. The
Pledgor's Nonperforming Assets to Total Loans and Other Real Estate
Ratio, calculated in accordance with Section 6.7 of the Term Loan
Agreement, does not exceed 2.0%;
d. Regulatory Enforcement. Neither Pledgor nor any of its subsidiaries
is the subject of any pending or , to Pledgor's or any of its
subsidiaries knowledge, threatened, regulatory enforcement action,
proceeding or investigation; and
e. Other Default. No other default under this Agreement exists.
6
16) REINSTATEMENT OF SECURITY INTEREST AND PLEDGE. In the event that, after the
release of the security interest granted hereunder and the termination of this
Agreement pursuant to Section 14 hereof, Pledgor shall, at any time during the
effective period of the Term Loan Agreement, fail to satisfy the conditions
contained in Section 14(a) or Section 14(d) hereof, Pledgor covenants and agrees
that it shall promptly execute another pledge of securities, in substantially
the same form as this Agreement and acceptable to the Bank, once again
subjecting the Collateral to a security interest and pledge in favor of the
Bank. At Pledgor's expense, Pledgor shall do such further acts and execute and
deliver to the Bank all such additional conveyances, financing statements,
certificates, stock or bond powers, instruments, legal opinions and other
assurances as the Bank may from time to time request or require to protect,
assure or enforce its interests, rights and remedies under this Section 15. The
provisions of this Section 15 shall survive any termination of this Agreement.
Dated: 12/15/03
------------------------------
TAX ID/SS # 00-0000000 FINANCIAL INSTITUTIONS, INC.
-------------------------- -----------------------------------
PLEDGOR
By:/s/ Xxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxx
-----------------------------------
Its: Senior Vice President & CFO
-----------------------------------
ACKNOWLEDGMENT
STATE OF NEW YORK)
: SS.
COUNTY OF WYOMING)
On the 15th day of December, in the year 2003, before me, the undersigned,
a Notary Public in and for said State, personally appeared Xxxxxx X. Xxxxxx,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual(s) whose name(s) is (are) subscribed to the within instrument
and acknowledged to me that he/she/they executed the same in his/her/their
capacity(ies), and that by his/her/their signature(s) on the instrument, the
individual(s), or the person upon behalf of which the individual(s) acted,
executed the instrument.
/s/ Xxxxx Xxxxxxxx
--------------------------
Notary Public
7
FINANCIAL INSTITUTIONS, INC.
PLEDGE OF SECURITIES
SCHEDULE A
DESCRIPTION OF PLEDGED SECURITIES
Wyoming County Bank
-------------------------------------------------------------------------------
CERTIFICATE NUMBER SHARES
-------------------------------------------------------------------------------
C686 150
-------------------------------------------------------------------------------
C689 150
-------------------------------------------------------------------------------
C690 87,213 3/4
-------------------------------------------------------------------------------
C696 375
-------------------------------------------------------------------------------
C698 10
-------------------------------------------------------------------------------
C699 10
-------------------------------------------------------------------------------
C700 10
-------------------------------------------------------------------------------
C701 10
-------------------------------------------------------------------------------
C702 562 1/2
-------------------------------------------------------------------------------
C703 562 1/2
-------------------------------------------------------------------------------
C706 150
-------------------------------------------------------------------------------
C707 150
-------------------------------------------------------------------------------
C708 150
-------------------------------------------------------------------------------
C709 150
-------------------------------------------------------------------------------
C710 10
-------------------------------------------------------------------------------
C712 20
-------------------------------------------------------------------------------
C713 10
-------------------------------------------------------------------------------
National Bank of Geneva
-------------------------------------------------------------------------------
CERTIFICATE NUMBER SHARES
-------------------------------------------------------------------------------
86 4,000
-------------------------------------------------------------------------------
87 770
-------------------------------------------------------------------------------
95 4,800
-------------------------------------------------------------------------------
112 170
-------------------------------------------------------------------------------
113 10
-------------------------------------------------------------------------------
114 10
-------------------------------------------------------------------------------
115 10
-------------------------------------------------------------------------------
120 10
-------------------------------------------------------------------------------
121 10
-------------------------------------------------------------------------------
122 10
-------------------------------------------------------------------------------
123 10
-------------------------------------------------------------------------------
126 10
-------------------------------------------------------------------------------
127 10
-------------------------------------------------------------------------------
128 10
-------------------------------------------------------------------------------
135 10
-------------------------------------------------------------------------------
138 10
-------------------------------------------------------------------------------
140 20
-------------------------------------------------------------------------------
141 10
-------------------------------------------------------------------------------
143 10
-------------------------------------------------------------------------------
144 10
-------------------------------------------------------------------------------
145 20
-------------------------------------------------------------------------------
147 70
----------------------------------------- -------------------------------------
CLB-149-NY (RFC Revised 12/03) 8 Manufacturers and Traders Trust Company, 2001
First Tier Bank and Trust (formerly Salamanca Trust Company)
-------------------------------------------------------------------------------
CERTIFICATE NUMBER SHARES
-------------------------------------------------------------------------------
1447 16,000
-------------------------------------------------------------------------------
Bath National Bank
-------------------------------------------------------------------------------
CERTIFICATE NUMBER SHARES
-------------------------------------------------------------------------------
To be delivered no later than 12/30/03 TBD
-------------------------------------------------------------------------------
CLB-149-NY (RFC Revised 12/03) 8 Manufacturers and Traders Trust Company, 2001
SECOND AMENDMENT
TO
REVOLVING CREDIT AGREEMENT
THIS SECOND AMENDMENT is dated December 15, 2003 and made by and between
Financial Institutions, Inc., a New York corporation having its head office at
000 Xxxxxxx Xxxxxx, Xxxxxx, Xxx Xxxx 00000 (the "Borrower") and Manufacturers
and Traders Trust Company, a New York banking corporation, having its principal
banking office at One M&T Plaza, Buffalo, New York 14023 (the "Bank").
WHEREAS, Bank, at Borrower's request, has made available to Borrower a
Five Million Dollar ($5,000,000.00) revolving credit facility (the "Revolving
Loan"), which Loan was made pursuant to the terms and conditions contained in
that certain Revolving Credit Agreement, dated as of April 25, 2001, by and
between Borrower and Bank (the "Original Agreement"); and
WHEREAS, Bank, at Borrower's request, agreed to extend the term of the
Original Agreement and increase the amount of the Loan to Ten Million Dollars in
accordance with the provisions of that certain First Amendment to Revolving
Credit Agreement, dated as of July 3, 2003, by and between Borrower and Bank
(the Original Agreement, as amended by the First Amendment to Revolving Credit
Agreement, the "Amended Agreement"); and
WHEREAS, Bank, at Borrower's request, agreed to make available to Borrower
a Twenty-Five Million Dollar ($25,000,000.00) term loan facility (the "Term
Loan") pursuant to the terms and conditions of contained in that certain Term
Loan Agreement, of even date herewith, by and between Borrower and Bank (the
"Term Loan Agreement"), subject to a decrease in the amount of the Revolving
Loan and the amendment of certain covenants contained in the Amended Agreement,
in accordance with the provisions of this Second Amendment as set forth herein;
NOW, THEREFORE, in consideration of the premises herein contained, and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto hereby agree as follows:
17) The definition of "Commitment Amount" contained in Section 1.1 of the
Amended Agreement is hereby amended in its entirety as follows:
"Commitment Amount. $5,000,000."
2. The definition of "Nonperforming Asset" contained in Section 1.1 of the
Amended Agreement is hereby amended to refer to "Nonperforming Assets", and the
reference to "6.8" therein, is hereby amended to refer to "6.7".
3. Section 4.7 of the Amended Agreement is hereby amended by adding the
following to the end thereof:
-1-
", or as have been publicly disclosed in the Borrower's filings with the
Securities and Exchange Commission ("SEC")".
4. The references to $250,000 in Sections 4.10, 5.1(g), 5.1 (h), 6.1(e),
6.2, 6.6, 7.1(f) and 7.1(i), are all hereby amended to refer to $5,000,000.00.
5. Section 4.15 of the Amended Agreement is hereby deleted and replaced in
its entirety as follows:
"4.15. Environmental Matters. The Borrower and each of its Subsidiaries
are in compliance, in all material respects, with all Environmental Laws.
No demand, claim, notice, suit, suit in equity, action, administrative
action, investigation or inquiry arising under, relating to or in
connection with any Environmental Laws is pending or threatened against
the Borrower or any of its Subsidiaries, any real property in which the
Borrower or any such Subsidiary holds or, to the Borrower's knowledge, has
held, an interest or any past or present operation of the Borrower or any
such Subsidiary, other than any such proceedings that will not,
individually or in the aggregate, have an adverse effect of more than
$5,000,000.00, not covered by insurance, on the financial condition,
business, operations or prospects of the Borrower or the Borrower and its
Subsidiaries on a consolidated basis. Neither the Borrower nor any of its
Subsidiaries (i) is the subject of any federal or state investigation
evaluating whether any remedial action is needed to respond to a release
of any Hazardous Materials or other wastes into the environment, (ii) has
received any notice of any Hazardous Materials or other wastes in or upon
any of its properties in violation of any Environmental Laws, or (iii)
knows of any basis for any such investigation, notice or violation, except
as disclosed to the Bank on Exhibit C and as to such matters disclosed on
such Exhibit, none will, individually or in the aggregate, have an adverse
effect of more than $5,000,000.00, not covered by insurance, on the
financial condition, business, operations or prospects of the Borrower or
the Borrower and its Subsidiaries on a consolidated basis."
6. Section 5.1(f) of the Amended Agreement is hereby deleted and replaced
in its entirety as follows:
"(f) within five (5) Business Days of the Chief Executive Officer or the
Chief Financial Officer of the Borrower becoming aware of the existence of
any condition or event that constitutes a Default, written notice thereof
specifying the nature and duration thereof and the action being or
proposed to be taken with respect thereto;"
7. The first sentence of Section 6.1(i) of the Amended Agreement is hereby
amended by adding the following to the beginning thereof:
-2-
"other than as permitted in accordance with Section 6.1(j),".
8. Section 6.1(j) of the Amended Agreement is hereby deleted and replaced
in its entirety as follows:
"(j) Encumbrances incurred in connection with repurchase agreements; liens
incurred in connection with asset securitizations; Encumbrances incurred
in connection with the holding of municipal deposits subject to the New
York State Comptroller's guidelines for collateralization; Encumbrances
granted to a Federal Reserve Bank, a Federal Home Loan Bank or the Federal
Agricultural Mortgage Corporation to secure advances or other transactions
incidental to the conduct of the banking business of the Borrower or any
such Subsidiary, including loans to meet liquidity requirements;"
9. The first sentence of Section 6.3 of the Amended Agreement is hereby
deleted in its entirety.
10. Section 6.7 of the Amended Agreement is hereby deleted and replaced in
its entirety as follows:
"6.7. Nonperforming Assets to Total Loans and Other Real Estate Ratio. The
Borrower shall not permit its Nonperforming Assets to Total Loans and
Other Real Estate Ratio to be less than 6.00%. As used in this Section
6.7, "Nonperforming Assets to Total Loans and Other Real Estate Ratio"
means the ratio of (A) "Nonperforming Assets" to (B) the sum of (i) "Total
Loans", plus (ii) "Other Real Estate"; "Nonperforming Assets" means the
Consolidated loans, leases and other assets of the Borrower that are not
accruing interest or are 90 days or more past due in the payment of
principal or interest, plus Consolidated "other real estate owned" by the
Borrower ("Other Real Estate"); and "Total Loans" means the Consolidated
principal of loans made by Borrower to unrelated third parties; in each
case as shown on the Consolidated financial statements of Borrower,
prepared in accordance with FFIEC requirements."
11. Section 6.8 of the Amended Agreement is hereby deleted and replaced in
its entirety as follows:
"6.8. Capitalization of Borrower and Material Subsidiaries. The Borrower
and its Material Subsidiaries, including any other federally-insured
depository institution that may be acquired after the date hereof and
prior to the Termination Date, will maintain total "Risk-Based Capital
Ratios", "Tier I Risk-Based Capital Ratios", and "Leverage Ratios, as
defined in applicable FDIC regulations, as follows:
-3-
Leverage Ratio: not less than 5.00%;
Tier I Risk-Based Capital Ratio: not less than 8.75%; and
total Risk-Based Capital Ratio: not less than 10.00%."
12. Section 6.9 of the Amended Agreement is hereby deleted and replaced in
its entirety as follows:
"6.9. Minimum Tangible Common Equity. The Borrower shall not permit its
Tangible Common Equity to be less than $100,000,000.00. As used in this
Section 6.9, "Tangible Common Equity" means the difference between (A) the
consolidated stockholder equity in the Borrower, including, but not
limited to, accumulated other comprehensive income accounted for under
FASB 115 as gains or losses on securities held for sale, minus (B) the sum
of (i) the consolidated preferred stockholder equity in the Borrower, and
(ii) the consolidated goodwill and intangibles of the Borrower; in each
case as shown on the consolidated financial statements of Borrower and its
Subsidiaries, prepared in accordance with FFIEC requirements"
13. Section 6.10 of the Amended Agreement is hereby deleted and replaced
in its entirety as follows:
"6.10. Debt Service Coverage Ratio. The Borrower shall not permit, on a
"Rolling Four-Quarter Basis", the ratio of (A) the consolidated net income
of the Borrower, during any such fiscal period, as shown on the
consolidated financial statements of Borrower, prepared in accordance with
FFIEC requirements, to (B) the total of (i) the installments of all
principal payable by the Borrower in connection with any indebtedness or
other obligation required to be paid during the next four fiscal quarters
and arising from the borrowing of any money or the deferral of the
purchase price of any asset and (ii) the total interest expense of the
Borrower thereon during such next four fiscal quarters, calculated on the
basis of the interest rate(s) applicable to such principal obligations as
of the end of the last fiscal quarter included in the Rolling Four-Quarter
Basis, in each case as shown on the financial statements of Borrower,
prepared in accordance with FFIEC requirements, to be less than 1.25 to
1.00. As used in this Section 6.10, "Rolling Four-Quarter Basis" means a
basis using the most recently completed four (4) full consecutive fiscal
quarters of Borrower which precede and include the date on which the Debt
Service Coverage Ratio is calculated."
14. Section 7.1(a) of the Amended Agreement is hereby deleted and replaced
in its entirety as follows:
"(a) the Borrower shall fail to pay within five days after the same
becomes due and payable (i) any amount of principal of the Term Loan, or
(ii) any amount of
-4-
interest thereon or any fees or expenses payable hereunder or under the
Term Note; or"
15. Section 7.1(b) of the Amended Agreement is hereby deleted and replaced
in its entirety as follows:
"(b) The Borrower shall fail to perform any term, covenant or agreement
contained in Sections 5.1(f), 5.5, 6.2, 6.3, 6.5, 6.8, 6.9 or 6.10; or"
16. Section 7.1(c) of the Amended Agreement is hereby deleted and replaced
in its entirety as follows:
"(c) the Borrower shall fail to perform any covenant contained in Sections
5.1(e), 5.1(g), 5.1(h), 5.2, 6.1, 6.4, 6.6 or 6.7 and such failure shall
continue for 30 days; or"
17. The two references to "45" contained in Section 7.1(h) of the Amended
Agreement are each hereby amended to refer to "90".
18. Exhibit D to the Amended Agreement is hereby deleted, in its entirety,
and replaced with the Exhibit D attached to this Second Amendment.
19. Exhibit E to the Amended Agreement is hereby deleted, in its entirety,
and replaced with the Exhibit E attached to this Second Amendment.
20. As a material inducement to Bank to enter into this Second Amendment,
the Borrower hereby:
(a) represents that no "Event of Default" specified in Section VII
of the Amended Agreement, as further amended by this Second
Amendment, nor any event which with notice or lapse of time or
both would become such an Event of Default, has occurred,
except as has been disclosed to Bank in writing;
(b) covenants that the representations and warranties contained in
Section IV of the Amended Agreement, as further amended by
this Second Amendment, continue to be true and correct in all
respects on and as of the date of this Second Amendment, with
the same force and effect as if made on and as of the date of
this Second Amendment; and
(c) represents and warrants that there has been no violation of
any of the affirmative covenants contained in Section V of the
Amended Agreement, as further amended by this Second
Amendment, nor of any of the negative covenants contained in
Section VI of the Amended Agreement, ,
-5-
as further amended by this Second Amendment, except as has
been disclosed to Bank in writing.
21. Except to the extent specifically modified by this Second Amendment,
all the terms and provisions contained in the Amended Agreement remain in full
force and effect.
IN WITNESS WHEREOF, the parties hereto have signed this Second Amendment
on the date first above written.
FINANCIAL INSTITUTIONS, INC.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------------
Xxxxxx X. Xxxxxx, Senior Vice President
& CFO
MANUFACTURERS AND TRADERS
TRUST COMPANY
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxxx, Vice President
-6-
EXHIBIT D
FINANCIAL INSTITUTIONS, INC.
MATERIAL SUBSIDIARIES
Name Percentage of Ownership
---- -----------------------
Wyoming County Bank 99.66%
National Bank of Geneva 100.00%
Bath National Bank 100.00%
First Tier Bank & Trust 100.00%
-7-
EXHIBIT E
FINANCIAL INSTITUTIONS, INC. REPORT OF CHIEF FINANCIAL OFFICER
Financial Institutions, Inc. (the "Borrower") hereby certifies that:
This Report is furnished pursuant to Section 5.1(c) of the Term Loan
Credit Agreement dated as of December 15, 2003, and Section 5.1(c) of the
Revolving Credit Agreement dated as of December 15, 2003 (collectively, the
"Credit Agreements") between the Borrower and MANUFACTURERS AND TRADERS TRUST
COMPANY. Unless otherwise defined herein, the terms used in this Report have the
meanings given to them in the Credit Agreements.
As required by Section 5.1(a) and (b) of the Credit Agreements, the
Consolidated financial statements of the Borrower for the [year/quarter] ended
_________________, 200__ (the "Financial Statements"), prepared in accordance
with generally accepted accounting principles consistently applied, accompany
this Report. The Financial Statements present fairly the Consolidated financial
position of the Borrower as at the date thereof and the Consolidated results of
operations of the Borrower for the period covered thereby (subject only to
normal recurring year-end adjustments which will not in the aggregate be
material in amount).
The figures set forth in Schedule A for determining compliance by the
Borrower with the financial covenants contained in Sections 6.7, 6.9 and 6.10 of
the Credit Agreement are true and complete as of the date hereof.
As of the date hereof, Borrower and its Material Subsidiaries, including
any other federally-insured depository institution that was acquired after
December 15, 2003 and prior to the Maturity Date, have total "Risk-Based Capital
Ratios", "Tier I Risk-Based Capital Ratios", and "Leverage Ratios", as defined
in applicable FDIC regulations, as required by Section 6.8 of the Credit
Agreements.
The activities of the Borrower and its Subsidiaries during the period
covered by the Financial Statements have been reviewed by me as Borrower's Chief
Financial Officer or by employees or agents of Borrower under my immediate
supervision. Based on such review, to my best knowledge and belief, and as of
the date of this Report, no Default has occurred. *
WITNESS my hand this ___ day of_________ 200___.
FINANCIAL INSTITUTIONS, INC.
By:
-------------------------------
Chief Financial Officer
*If a Default has occurred, this paragraph is to be modified with an appropriate
statement as to the nature thereof, the period of existence thereof and what
action the Borrower has taken, is taking, or proposes to take with respect
thereto.
-8-
SCHEDULE A
to
EXHIBIT E
AFFIRMATIVE (FINANCIAL) COVENANTS
Nonperforming Assets to Total Loans and Other Real Estate Ratio (Section 6.7)
MAXIMUM PERMITTED: 6.0%
ACTUAL:
(i) Non accrual and other loans and
leases past due 90 days or more
and still accruing $
-------------
(ii) Other real estate owned $
-------------
(iii) Nonperforming Assets:
line (i) plus line(ii) $
------------
(iv) Total Loans $
------------
(v) Other real estate owned $
------------
(vii) Nonperforming Assets to Total Loans
and Other Real Estate Ratio:
[line (iii) divided by (line (iv) plus line (v)] times 100 %
---------
Minimum Tangible Common Equity (Section 6.9)
REQUIRED: $100,000,000
ACTUAL:
(i) Consolidated stockholders' equity $
------------
(ii) Consolidated stockholders' preferred equity $
------------
(iii) Consolidated goodwill and intangibles
(v) Total Tangible Common Equity:
line (i) minus line (ii) minus line (iii) $
------------
-9-
Debt Service Coverage Ratio (Section 6.10)
MINIMUM PERMITTED: 1.25 : 1.00
ACTUAL:
(i) Consolidated net income on
Rolling-Four Quarter Basis $
------------
(iv) Total principal payable by Borrower
during next four fiscal quarters $
------------
(v) Total interest accruing on total
principal payable by Borrower
during next four quarters $
------------
(iv) Debt Service Coverage Ratio:
line (i) divided by [line (ii) plus line (iii)] : 1.00
----- -----
WITNESS my hand this ______ day of ____________, 20__.
FINANCIAL INSTITUTIONS, INC.
By:
---------------------------------------
` Chief Financial Officer
-10-
[LOGO] M&T Bank
Manufacturers and Traders Trust Company
STANDARD LIBOR GRID NOTE
New York
Buffalo, New York December 15, 2003 $5,000,000.00
BORROWER: FINANCIAL INSTITUTIONS, INC.
a(n) |_| individual(s) |_| partnership |X| corporation |_| __________ organized
under the laws of New York
Address of residence/chief executive office: 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxx
Xxxx 00000
BANK: MANUFACTURERS AND TRADERS TRUST COMPANY, a New York banking corporation
with its principal banking xxxxxx xx Xxx X & X Xxxxx, Xxxxxxx, XX 00000.
Attention: Office of General Counsel
18) DEFINITIONS. Each capitalized term shall have the meaning specified herein
and the following terms shall have the indicated meanings:
a) "Authorized Person" shall mean, each individually, Xxxxxx X. Xxxxxx
Mention of the Authorized Person's name is for reference purposes
only and the Bank may rely on a person's title to ascertain whether
someone is an Authorized Person.
b) "Automatic Adjustment Date" shall mean two (2) Business Days before
the last day of the Interest Period initially selected by the
Borrower for a LIBOR Rate Loan that is subject to the Automatic
Continuation Option.
c) "Automatic Continuation Option" shall mean the option to have the
Interest Period for a LIBOR Rate Loan to automatically continue at
the same Interest Period duration initially selected by the Borrower
for such LIBOR Rate Loan as of the last day such Interest Period.
d) "Base Rate" shall mean 0 percentage points above the rate of
interest announced by the Bank as its prime rate of interest
("Prime"). If the prior blank is not completed, the Base Rate shall
be one (1) percentage point above Prime.
e) "Base Rate Loan" shall mean a Loan which bears interest at the Base
Rate.
f) "Business Day" shall mean any day of the year on which banking
institutions in New York, New York are not authorized or required by
law or other governmental action to close and, in connection with
the LIBOR Rate, on which dealings are carried on in the London
interbank market.
g) "Continuation Date" shall mean the date on which Borrower's election
to continue a LIBOR Rate Loan for another Interest Period becomes
effective in accordance with this Note.
h) "Conversion Date" shall mean the date on which Borrower's election
to convert a Base Rate Loan to a LIBOR Rate Loan or a LIBOR Rate
Loan to a Base Rate Loan becomes effective in accordance with this
Note.
i) "Interest Period" shall mean, as to any LIBOR Rate Loan, the period
commencing on the Draw Date, the Conversion Date or Continuation
Date for such LIBOR Rate Loan and ending on the numerically
corresponding day (or, if there is no numerically corresponding day,
on the last day) of the calendar month that is one (1), two (2),
three (3) or six (6)months thereafter, in each case as Borrower may
elect; provided, however, that if an Interest Period would end on a
day that is not a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless such next
succeeding Business Day would fall in the next calendar month, in
which case such Interest Period shall end on the immediately
preceding Business Day.
j) "Draw Date" shall mean, in relation to any Loan, the Business Day on
which such Loan is made, or to be made, to Borrower pursuant to the
Note.
k) "LIBOR Rate Loan" shall mean a Loan which bears interest at the
LIBOR Rate.
l) "LIBOR" shall mean the rate obtained by dividing (i) the one, two,
three or six month interest period London Interbank Offered Rate (as
selected by Borrower) as fixed by the British Bankers Association
for United States dollar deposits in the London Interbank Eurodollar
Market at approximately 11:00 a.m. London, England time (or as soon
thereafter as practicable) as determined by the Bank from any
broker, quoting service or commonly available source utilized by the
Bank by (ii) a percentage equal to 100% minus the stated maximum
rate of all reserves required to be maintained against "Eurocurrency
Liabilities" as specified in Regulation D (or against any other
category of liabilities which includes deposits by reference to
which the interest rate on LIBOR Rate Loan or Loans is determined or
any category of extensions of credit or other assets which includes
loans by a non-United States' office of a bank to United States'
residents) on such date to any member bank of the Federal Reserve
System.
m) "LIBOR Rate" shall mean 1.50 percentage points above LIBOR with an
Interest Period selected by Borrower.
n) "Loan" means a loan made to Borrower by the Bank pursuant to this
Note.
o) "Maximum Principal Amount" shall mean Five Million and 00/100
Dollars ($ 5,000,000.00).
p) "Minimum Borrowing Amount" shall mean (i) for Base Rate Loans, any
whole dollar increment and (ii) for LIBOR Rate Loans, $ 100,000.00
with minimum increments thereafter of $ 100,000.00 ; provided,
however, in no event shall the Minimum Borrowing Amount for a LIBOR
Rate Loan be less than $100,000.00 with minimum increments
thereafter of $100,000.00.
q) "Outstanding Principal Amount" shall mean the actual outstanding
principal amount under this Note at any time.
19) PAYMENT OF PRINCIPAL, INTEREST AND EXPENSES
a) Promise to Pay. For value received, and intending to be legally bound,
Borrower promises to pay to the order of the Bank on or before the "Termination
Date", as defined in that certain Revolving Credit Agreement (the " Credit
Agreement") of even date herewith between the Borrower and the Bank, the Maximum
Principal Amount or the Outstanding Principal Amount, if less; plus interest as
set forth below and all fees and costs (including, without limitation,
reasonable attorneys' fees and disbursements, for outside counsel) the Bank
incurs in order to collect any amount due under this Note, to negotiate or
document a workout or restructuring, or to preserve its rights or realize upon
any guaranty or other security for the payment of this Note ("Expenses").
b) Interest. Each Loan shall earn interest on the Outstanding Principal
Amount thereof calculated on the basis of a 360-day year for the actual number
of days of each year (365 or 366) that on each day shall be:
i) LIBOR Rate Loans. Interest shall accrue on a LIBOR Rate Loan from
and including the first day of the Interest Period applicable
thereto until, but not including, the last day of such Interest
Period or the day the LIBOR Rate Loan is paid in full (if sooner) at
a rate per annum equal to the LIBOR Rate in effect on the following
dates (depending on the circumstance): (i) for new LIBOR Rate Loans,
the Business Day the Bank receives (or is deemed to receive) a
Request for a LIBOR Rate Loan; (ii) for
1
CLB-171 NY (RFC Revised 6/02)
conversions and continuations of LIBOR Rate Loans pursuant to
Section 4, the Business Day the Bank receives (or is deemed to
receive) the Notice of Conversion or Notice of Continuation, as the
case may be, in accordance with Section 4(b); for LIBOR Rate Loans
where the Automatic Continuation Option is selected, the Automatic
Adjustment Date for such LIBOR Rate Loan.
ii) Base Rate Loans. Interest shall accrue on a Base Rate Loan from
and including the first date the Base Rate Loan was made (i.e., the
Draw Date or the Conversion Date, as the case may be) to, but not
including, the day such Base Rate Loan is paid in full or converted,
at the rate per annum equal to the Base Rate. Any change in the Base
Rate resulting from a change in the Bank's prime rate shall be
effective on the date of such change.
c) Maximum Legal Rate. It is the intent of the Bank and of Borrower that
in no event shall interest be payable at a rate in excess of the maximum rate
permitted by applicable law (the "Maximum Legal Rate"). Solely to the extent
necessary to prevent interest under this Note from exceeding the Maximum Legal
Rate, any amount that would be treated as excessive under a final judicial
interpretation of applicable law shall be deemed to have been a mistake and
automatically canceled, and, if received by the Bank, shall be refunded to
Borrower.
d) Payments; Late Charge; Default Rate. Payments shall be made in
immediately available United States funds at any banking office of the Bank.
Interest shall be due and payable as follows: (i) in respect to each Base Rate
Loan, monthly when invoiced and (ii) in respect to each LIBOR Rate Loan, on the
last day of each Interest Period applicable thereto. If payment is not received
within five days of its due date, Borrower shall pay a late charge equal to the
greatest of (a) 5% of the delinquent amount, (b) the Bank's then current late
charge as announced by the Bank from time to time, or (c) $50.00. In addition,
if the Bank has not actually received any payment under this Note within thirty
days after its due date, from and after such thirtieth day the interest rate for
all amounts outstanding under this Note shall automatically increase to 5
percentage points above the higher of the Base Rate or the highest LIBOR Rate
(the "Default Rate"), and any judgment entered hereon or otherwise in connection
with any suit to collect amounts due hereunder shall bear interest at the
Default Rate. Payments may be applied in any order in the sole discretion of the
Bank but, prior to demand, shall be applied first to past due interest,
Expenses, late charges, and principal payments, if any, which are past due, then
to current interest and Expenses and late charges, and last to remaining
principal.
e) Prepayment of LIBOR Rate Loans. If (i) Borrower pays, in whole or in
part, any LIBOR Rate Loan, before the expiration of its respective Interest Rate
Period, (ii) fails to draw down, in whole or in part, a LIBOR Rate Loan after
giving a Request therefor, (iii) otherwise tries to revoke any LIBOR Rate Loan,
in whole or in part, or (iv) there occurs a Bankruptcy Event or the applicable
rate is converted from the LIBOR Rate to the Base Rate pursuant to Section 4(d),
then Borrower shall be liable for and shall pay the Bank, on demand, the actual
amount of the liabilities, expenses, costs or funding losses that are a direct
or indirect result of such prepayment, failure to draw, early termination of an
Interest Period, revocation, bankruptcy or otherwise, whether such liability,
expense, cost or loss is by reason of (a) any reduction in yield, by reason of
the liquidation or reemployment of any deposit or other funds acquired by the
Bank, or (b) the fixing of the interest rate payable on any LIBOR Rate Loans.
The determination by the Bank of the amount of foregoing amount shall, in the
absence of manifest error, be conclusive and binding upon Borrower.
20) LOANS.
a) General. Any Loan hereunder shall either be in the form of a Base Rate
Loan or a LIBOR Rate Loan. No Loan, or any portion thereof, shall be made to the
extent that the sum of the (i) principal amount of the requested Loan, or any
portion thereof and (ii) the Outstanding Principal Amount of all Loans under the
Note exceeds the Maximum Principal Amount under this Note. The Bank may make any
Loan in reliance upon any oral, telephonic, written, teletransmitted or other
request (the "Request(s)") that the Bank in good faith believes to be valid and
to have been made by Borrower or on behalf of Borrower by an Authorized Person.
The Bank may act on the Request of any Authorized Person until the Bank shall
have received from Borrower, and had a reasonable time to act on, written notice
revoking the authority of such Authorized Person. The Bank shall incur no
liability to Borrower or to any other person as a direct or indirect result of
making any Loan pursuant to this paragraph.
b) Request for LIBOR Rate Loans. Borrower shall give the Bank its
irrevocable Request for a LIBOR Rate Loan specifying:
i) the Draw Date for the LIBOR Rate Loan, which shall be two (2)
Business Days after the date of the Request; provided, however
if a Request is received by the Bank after 2:00 p.m. (Eastern
Time), the Request for the LIBOR Rate Loan shall be deemed to
have been received on the next Business Day;
ii) the aggregate amount of such LIBOR Rate Loan, which amount
shall not be less than the Minimum Borrowing Amount;
iii) the applicable Interest Period (i.e., 1, 2, 3 or 6 month
Interest Period); and
iv) whether Borrower is electing the Automatic Continuation Option
for such LIBOR Rate Loan.
c) Requests for Base Rate Loans. Borrower may request any Base Rate Loan
not later than 2:00 p.m. (Eastern Time) on any proposed Draw Date specifying the
aggregate amount of such Base Rate Loan.
d) Delivery of Requests Delivery of a Notice or Request for a LIBOR Rate
Loan or a Base Rate Loan shall be made to the Bank as follows, or such other
contact point designated by the Bank from time to time:
Manufacturers and Traders Trust Company
Attn: Xxxxxxx X. Xxxxxxx
--------------------------
Fax No. (000) 000-0000
------------------------
Telephone No. (000) 000-0000
------------------
21) CONTINUATION and CONVERSION ELECTIONS.
a) Election. An Authorized Person of Borrower may, upon irrevocable
Request to the Bank,
i) elect to convert on any Business Day any Base Rate Loan into a
LIBOR Rate Loan provided the amount converted is not less than
the Minimum Borrowing Amount; or
2
ii) elect to convert any or a part of LIBOR Rate Loan as of the
last day of the applicable Interest Period into a Base Rate
Loan provided no partial conversion of a LIBOR Rate Loan shall
reduce the outstanding principal amount of such LIBOR Rate
Loan to less than the Minimum Borrowing Amount; or
iii) elect to continue all or a part (subject to the Minimum
Borrowing Amount limitation) of any LIBOR Rate Loan as of the
last day of the Interest Period applicable to such LIBOR Rate
Loan with the same or a different Interest Period provided no
partial continuation of a LIBOR Rate Loan with a different
Interest Period shall reduce the outstanding principal amount
of the LIBOR Rate Loan with the same Interest Period to less
than the Minimum Borrowing Amount.
b) Notice of Conversion/Continuation.
i) For an election under Section 4(a)(i) or 4(a)(iii), an
Authorized Person must deliver to the Bank by 2:00 p.m.
(Eastern Time) on a Business Day a Notice of Conversion
("Notice of Conversion") for an election under Section 4(a)(i)
or a Notice of Continuation ("Notice of Continuation") for an
election under Section 4(a)(iii) specifying:
(a) the aggregate amount of the Loans to be converted or
continued;
(b) the duration of the requested Interest Period (i.e., 1,
2, 3 or 6 month Interest Period); and
(c) whether the Automatic Continuation Option will be
activated for such LIBOR Rate Loan.
ii) The Continuation Date or Conversion Date (as the case may be)
shall be the later of (A) two (2) Business Days from the
Business Day the Bank receives the Notice of Conversion or
Notice of Continuation (either, a "Notice") in accordance with
the foregoing Section or (B) the last day of the relevant
Interest Period if a Notice is received by the Bank more than
two (2) Business Days before the last day of an Interest
Period. If a Notice is received after 2:00 p.m. (Eastern
Time), the Notice will be deemed to have been received on the
next Business Day. Notice of Continuation received more than
two (2) Business Days before the end of an Interest Period
shall be deemed to have been received two (2) Business Days
before the end of such Interest Period for purposes of
determining the LIBOR Rate for the next Interest Period per
Section 2(b)(i). Accordingly, if, for example, Borrower has a
LIBOR Rate Loan with a one month Interest Period ending on
June 15 and wants to continue the LIBOR Rate Loan with a two
month Interest Period, Borrower must deliver its Notice of
Continuation identifying the new two month Interest Period to
the Bank by 2:00 p.m. (Eastern Time) on June 13 (provided that
June 13 and June 14 are Business Days).
iii) For LIBOR Rate Loans where Borrower has elected to activate
the Automatic Continuation Option, the Bank shall
automatically continue such LIBOR Rate Loan with an same
Interest Period initially selected by the Borrower. Once the
Automatic Continuation Option has been activated for a LIBOR
Rate Loan, the submission of a Notice of Conversion or a
Notice of Continuation with a different Interest Period shall
result in the cancellation of the Automatic Continuation
Option for such LIBOR Rate Loan.
iv) For an election under Section 4(a)(ii), an Authorized Person
may deliver to the Bank a Notice of Conversion at any time
during an Interest Period up to the last day of such Interest
Period or may have the LIBOR Rate Loan automatically convert
to a Base Rate Loan pursuant to Section 4(c). Any such Notice
of Conversion delivered during an Interest Period shall be
effective on the last day of the Interest Period.
v) The Bank may take action in reliance upon any oral,
telephonic, written or teletransmitted Notice that the Bank in
good faith believes to be valid and to have been made by
Borrower or on behalf of Borrower by an Authorized Person. No
Notice may be delivered by e-mail. The Bank may act on the
Notice from any Authorized Person until the Bank shall have
received from Borrower, and had a reasonable time to act on,
written notice revoking the authority of such Authorized
Person. The Bank shall incur no liability to Borrower or to
any other person as a direct or indirect result of acting on
any Notice under this Note. The Bank, in its sole discretion,
may reject any Notice that is incomplete.
c) Expiration of Interest Period. Unless Borrower has elected the
Automatic Continuation Option with respect to a LIBOR Rate Loan, if Borrower
does not submit a Notice of Continuation in accordance with Section 4(b)(i) and
4(b)(ii) so that the Bank receives the Notice of Continuation at least two (2)
Business Days before the end of an Interest Period with respect to such LIBOR
Rate Loan, such LIBOR Rate Loan shall automatically be converted into a Base
Rate Loan and such Loan shall accrue interest at the Base Rate until two (2)
Business Days after the Bank receives a Notice of Conversion pursuant to Section
4(b)(i) and 4(b)(ii) electing to convert the Loan from a Base Rate Loan to a
LIBOR Rate Loan pursuant to Section 4(a)(i). A Notice of Continuation received
one (1) Business Day before the end of an Interest Period will not effect a
continuation of such Loan as a LIBOR Rate Loan. Rather, such LIBOR Rate Loan
shall automatically convert to a Base Rate Loan on the last day of the Interest
Period. The late Notice of Continuation, however, will be deemed to be a Notice
of Conversion that will be effective two (2) Business Days from the date
received by the Bank.
d) Conversion upon Default. Unless the Bank shall otherwise consent in
writing, if (i) Borrower has failed to pay when due, in whole or in part, the
indebtedness under the Note, or (ii) there exists a condition or event which
with the passage of time, the giving of notice or both shall constitute an event
of default under any of Borrower's agreement with the Bank, if any, Borrower may
not elect to have a Loan converted or continued as a LIBOR Rate Loan or have any
Loan made as a LIBOR Rate Loan. Further, the Bank, in its sole discretion, may
(i) permit any outstanding LIBOR Rate Loans to continue until the last day of
the applicable Interest Period at which time such Loan shall automatically be
converted into a Base Rate Loan or (ii) convert any outstanding LIBOR Rate Loans
into a Base Rate Loan before the end of the applicable Interest Period
applicable to such LIBOR Rate Loan. Notwithstanding the foregoing, if Borrower
commences, or has commenced against it, any proceeding or request for relief
under any bankruptcy, insolvency or similar laws now or hereafter in effect in
the United States of America or any state or territory thereof or any foreign
jurisdiction or any formal or informal proceeding for the dissolution or
liquidation of, settlement of claims against or winding up of affairs of
Borrower (a "Bankruptcy Event"), any outstanding LIBOR Rate Loans shall be
automatically converted to Base Rate Loans without further action by the Bank
and Borrower's rights to have Base Rate Loans converted under Section 4 shall be
automatically terminated. Nothing herein shall be construed to be a waiver by
the Bank to have any Loan accrue interest at the Default Rate of interest (which
shall be calculated from the higher of the LIBOR Rate or the Base Rate) or the
right of the Bank to the amounts set forth in Section 2(e) of this Note.
22) SETOFF. After the occurrence of any "Default," as defined in the
Credit Agreement, the Bank shall have the right to set off against the amounts
owing under this Note any property held in a deposit or other account with the
Bank or any of its affiliates or otherwise owing by the Bank or any of its
affiliates in any capacity to Borrower or any guarantor or endorser of this
Note. Such set-off shall be deemed to have been exercised immediately at the
time the Bank or such affiliate elect to do so.
3
23) DEFAULT. Upon the occurrence of an "Event of Default" under the Credit
Agreement, the Bank shall be entitled to the remedies set forth in Section 7.2
of the Credit Agreement.
24) BANK RECORDS CONCLUSIVE. The Bank shall set forth on a schedule attached to
this Note or maintained on computer, the date and original principal amount of
each Loan and the date and amount of each payment to be applied to the
Outstanding Principal Amount of this Note. The Outstanding Principal Amount set
forth on any such schedule shall be presumptive evidence of the Outstanding
Principal Amount of this Note and of all Loans. No failure by the Bank to make,
and no error by the Bank in making, any annotation on any such schedule shall
affect the Borrower's obligation to pay the principal and interest of each Loan
or any other obligation of Borrower to the Bank pursuant to this Note.
25) PURPOSE. Borrower certifies (a) that no Loan will be used to purchase margin
stock except with the Bank's express prior written consent for each such
purchase and (b) that all Loans shall be used for a business purpose, and not
for any personal, family or household purpose.
26) AUTHORIZATION. Borrower, if a corporation, partnership, limited liability
company, trust or other entity, represents that it is duly organized and in good
standing or duly constituted in the state of its organization and is duly
authorized to do business in all jurisdictions material to the conduct of its
business; that the execution, delivery and performance of this Note have been
duly authorized by all necessary regulatory and corporate or partnership action
or by its governing instrument; that this Note has been duly executed by an
authorized officer, partner or trustee and constitutes a binding obligation
enforceable against Borrower and not in violation of any law, court order or
agreement by which Borrower is bound; and that Borrower's performance is not
threatened by any pending or threatened litigation.
27) INABILITY TO DETERMINE LIBOR RATES, INCREASED COSTS, ILLEGALITY.
a) Increased Costs. If the Bank shall determine that, due to either (a)
the introduction of any change (other than any change by way of imposition of or
increase in reserve requirements included in the calculation of the LIBOR) in or
in the interpretation of any requirement of law or (b) the compliance with any
guideline or request from any central bank or other governmental authority
(whether or not having the force of law), there shall be any increase in the
cost to the Bank of agreeing to make or making, funding or maintaining any LIBOR
Rate Loans, then Borrower shall be liable for, and shall from time to time, upon
demand therefor by the Bank and pay to the Bank such additional amounts as are
sufficient to compensate the Bank for such increased costs.
b) Inability to Determine Rates. If the Bank shall determine that for any
reason adequate and reasonable means do not exist for ascertaining LIBOR for any
requested Interest Period with respect to a proposed LIBOR Rate Loan, the Bank
will give notice of such determination to Borrower. Thereafter, the Bank may not
make or maintain LIBOR Rate Loans, as the case may be, hereunder until the Bank
revokes such notice in writing. Upon receipt of such notice, Borrower may revoke
any request for a LIBOR Rate Loan or Notice then submitted by it. If Borrower
does not revoke such notice the Bank may make, or continue the Loans, as
proposed by Borrower, in the amount specified in the applicable request
submitted by Borrower, but such Loans shall be made or continued as Base Rate
Loans instead of LIBOR Rate Loans, as the case may be.
c) Illegality. If the Bank shall determine that the introduction of any
law (statutory or common), treaty, rule, regulation, guideline or determination
of an arbitrator or of a governmental authority or in the interpretation or
administration thereof, has made it unlawful, or that any central bank or other
governmental authority has asserted that it is unlawful for the Bank to make
LIBOR Rate Loans, then, on notice thereof by the Bank to Borrower, the Bank may
suspend the making of LIBOR Rate Loans until the Bank shall have notified
Borrower that the circumstances giving rise to such determination shall no
longer exist. If the Bank shall determine that it is unlawful to maintain any
LIBOR Rate Loans, Borrower shall prepay in full all LIBOR Rate Loans then
outstanding, together with accrued interest, either on the last date of the
Interest Period thereof if the Bank may lawfully continue to maintain such LIBOR
Rate Loans to such day, or immediately, if the Bank may not lawfully continue to
maintain such LIBOR Rate Loans. If Borrower is required to prepay any LIBOR Rate
Loan immediately as set forth in this subsection, then concurrently with such
prepayment, Borrower may borrow from the Bank, in the amount of such repayment,
a Base Rate Loan.
28) MISCELLANEOUS. This Note, together with any related loan and security
agreements and guaranties, contains the entire agreement between the Bank and
Borrower with respect to the Note, and supersedes every course of dealing, other
conduct, oral agreement and representation previously made by the Bank. All
rights and remedies of the Bank under applicable law and this Note or amendment
of any provision of this Note are cumulative and not exclusive. No single,
partial or delayed exercise by the Bank of any right or remedy shall preclude
the subsequent exercise by the Bank at any time of any right or remedy of the
Bank without notice. No waiver or amendment of any provision of this Note shall
be effective unless made specifically in writing by the Bank. No course of
dealing or other conduct, no oral agreement or representation made by the Bank,
and no usage of trade, shall operate as a waiver of any right or remedy of the
Bank. No waiver of any right or remedy of the Bank shall be effective unless
made specifically in writing by the Bank. Borrower agrees that in any legal
proceeding, a copy of this Note kept in the Bank's course of business may be
admitted into evidence as an original. This Note is a binding obligation
enforceable against Borrower and its successors and assigns and shall inure to
the benefit of the Bank and its successors and assigns. If a court deems any
provision of this Note invalid, the remainder of the Note shall remain in
effect. Section headings are for convenience only. Singular number includes
plural and neuter gender includes masculine and feminine as appropriate.
29) NOTICES. Any demand or notice hereunder or under any applicable law
pertaining hereto shall be in writing and duly given if delivered to Borrower
(at its address on the Bank's records) or to the Bank (at the address on page
one and separately to the Bank officer responsible for Borrower's relationship
with the Bank). Such notice or demand shall be deemed sufficiently given for all
purposes when delivered (i) by personal delivery and shall be deemed effective
when delivered, or (ii) by mail or courier and shall be deemed effective three
(3) business days after deposit in an official depository maintained by the
United States Post Office for the collection of mail or one (1) business day
after delivery to a nationally recognized overnight courier service (e.g.,
Federal Express). Notice by e-mail is not valid notice under this or any other
agreement between Borrower and the Bank.
30) JOINT AND SEVERAL. If there is more than one Borrower, each of them shall be
jointly and severally liable for all amounts which become due under this Note
and the term "Borrower" shall include each as well as all of them.
31) GOVERNING LAW; JURISDICTION. This Note has been delivered to and accepted by
the Bank and will be deemed to be made in the State of New York. This Note will
be interpreted in accordance with the laws of the State of New York excluding
its conflict of laws rules. BORROWER HEREBY IRREVOCABLY CONSENTS TO THE
EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT IN ERIE COUNTY, NEW YORK;
PROVIDED THAT NOTHING CONTAINED IN THIS NOTE WILL PREVENT THE BANK FROM BRINGING
ANY ACTION, ENFORCING ANY AWARD OR JUDGMENT OR EXERCISING ANY RIGHTS AGAINST
BORROWER INDIVIDUALLY, AGAINST ANY SECURITY OR AGAINST ANY PROPERTY OF
4
BORROWER WITHIN ANY OTHER COUNTY, STATE OR OTHER FOREIGN OR DOMESTIC
JURISDICTION. Borrower acknowledges and agrees that the venue provided above is
the most convenient forum for both the Bank and Borrower. Borrower waives any
objection to venue and any objection based on a more convenient forum in any
action instituted under this Note.
32) WAIVER OF JURY TRIAL. BORROWER AND THE BANK HEREBY KNOWINGLY, VOLUNTARILY,
AND INTENTIONALLY WAIVE ANY RIGHT TO TRIAL BY JURY BORROWER AND THE BANK MAY
HAVE IN ANY ACTION OR PROCEEDING, IN LAW OR IN EQUITY, IN CONNECTION WITH THIS
NOTE OR THE TRANSACTIONS RELATED HERETO. BORROWER REPRESENTS AND WARRANTS THAT
NO REPRESENTATIVE OR AGENT OF THE BANK HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT THE BANK WILL NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THIS JURY
TRIAL WAIVER. BORROWER ACKNOWLEDGES THAT THE BANK HAS BEEN INDUCED TO ENTER INTO
THIS NOTE BY, AMONG OTHER THINGS, THE PROVISIONS OF THIS SECTION.
Preauthorized Transfers from Deposit Account. If a deposit account number is
provided in the following blank Borrower hereby authorizes the Bank to debit
available funds in Borrower's deposit account #8890769956 with the Bank
automatically for any amount which becomes due under this Note or as directed by
an Authorized Person, by telephone.
Acknowledgment. Borrower acknowledges that it has read and understands all the
provisions of this Note, including the Governing Law, Jurisdiction and Waiver of
Jury Trial, and has been advised by counsel as necessary or appropriate.
Replacement Note. This Note is given in replacement of and in substitution for,
but not in payment of, a note dated on or about July 3, 2002 in the original
principal amount of $10,000,000.00 issued by Borrower to the Bank.
TAX ID/SS # 00-0000000 FINANCIAL INSTITUTIONS, INC.
-------------------------------- --------------------------------
BORROWER
By:/s/ Xxxxxx X. Xxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxx
--------------------------------
Its: Senior Vice President & CFO
--------------------------------
ACKNOWLEDGMENT
STATE OF NEW YORK)
: SS.
COUNTY OF WYOMING)
On the 15th day of December, in the year 2003, before me, the
undersigned, a Notary Public in and for said State, personally appeared Xxxxxx
X. Xxxxxx, personally known to me or proved to me on the basis of satisfactory
evidence to be the individual(s) whose name(s) is (are) subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in
his/her/their capacity(ies), and that by his/her/their signature(s) on the
instrument, the individual(s), or the person upon behalf of which the
individual(s) acted, executed the instrument.
/s/ Xxxxx Xxxxxxxx
------------------------------
Notary Public
--------------------------------------------------------------------------------
FOR BANK USE ONLY
Authorization Confirmed:________________________________________________________
Product Code: 11900
Disbursement of Funds:
Credit A/C # Off Ck # Payoff Obligation #
--------- ----------- ----------
$ $ $
--------- ----------- ----------
5
CLB-171 NY (RFC Revised 6/02)
FIRST AMENDMENT
TO
REVOLVING CREDIT AGREEMENT
THIS FIRST AMENDMENT is dated July 3, 2002 and made by and between
Financial Institutions, Inc., a New York corporation having its head office at
000 Xxxxxxx Xxxxxx, Xxxxxx, Xxx Xxxx 00000 (the "Borrower") and Manufacturers
and Traders Trust Company, a New York banking corporation, having its principal
banking office at One M&T Plaza, Buffalo, New York 14023 (the "Bank").
WHEREAS, Bank, at Borrower's request, has made available to Borrower a
Five Million Dollar ($5,000,000.00) revolving credit facility (the "Loan"),
which Loan was made pursuant to the terms and conditions contained in that
certain Revolving Credit Agreement, dated as of April 25, 2001, by and between
Borrower and Bank (the "Original Agreement"); and
WHEREAS, Bank, at Borrower's request, agreed to extend the term of the
Original Agreement and increase the amount of the Loan in accordance with the
provisions of this First Amendment as set forth herein;
NOW, THEREFORE, in consideration of the premises herein contained, and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto hereby agree as follows:
33) The definition of "Termination Date" contained in Section 1.1 of the
Original Agreement is hereby amended in its entirety as follows:
"Termination Date. April 30, 2005 or such earlier date on which the
commitment to make loans is terminated or the Commitment Amount is reduced
to zero in accordance with the terms hereof."
34) The definition of "Commitment Amount" contained in Section 1.1 of the
Original Agreement is hereby amended in its entirety as follows:
"Commitment Amount. $10,000,000."
35) As a material inducement to Bank to enter into this First Amendment,
the Borrower hereby:
1
(a) represents that no "Event of Default" specified in Section VII
of the Original Agreement, nor any event which with notice or
lapse of time or both would become such an Event of Default,
has occurred;
(b) covenants that the representations and warranties contained in
Section IV of the Original Agreement continue to be true and
correct in all respects on and as of the date of this First
Amendment, with the same force and effect as if made on and as
of the date of this First Amendment;
(c) represents and warrants that there has been no violation of
any of the affirmative covenants contained in Section V of the
Original Agreement nor of any of the negative covenants
contained in Section VI of the Original Agreement; and
(d) agrees to pay Bank an extension fee of $5,000 upon execution
of this First Amendment, together with its reasonable
out-of-pocket costs and expenses incurred in connection with
this First Amendment (including, but not limited to,
reasonable attorneys' fees and expenses).
36) Except to the extent specifically modified by this First Amendment,
all the terms and provisions contained in the Original Agreement remain in full
force and effect.
IN WITNESS WHEREOF, the parties hereto have signed this First Amendment on
the date first above written.
FINANCIAL INSTITUTIONS, INC.
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President & CFO
MANUFACTURERS AND TRADERS
TRUST COMPANY
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
2
REVOLVING CREDIT AGREEMENT
Dated as of April 25, 2001
between
MANUFACTURERS AND TRADERS TRUST COMPANY ("M&T")
and
FINANCIAL INSTITUTIONS, INC. ("FII")
TABLE OF CONTENTS
Page
--------------------------------------------------------------------------------
SECTION I DEFINITIONS .................................................... 1
1.1 Definitions ............................................. 1
1.2. Accounting Terms ........................................ 4
SECTION II DESCRIPTION OF CREDIT ......................................... 4
2.1. The Loans ............................................... 4
2.2. Fees .................................................... 5
2.3. The Note ................................................ 5
2.4 Duration of Interest Periods ............................ 5
2.5 Interest Rates and Payments of Interest ................. 5
2.6. Changed Circumstances ................................... 5
2.7. Illegality .............................................. 6
2.8. Prepayments of the Loans ................................ 6
2.9. Method of Payment ....................................... 6
2.10. Overdue Payments ........................................ 6
2.11. Computation of Interest and Fees ........................ 7
SECTION III CONDITIONS OF LOANS .......................................... 7
3.1. Conditions Precedent to Initial Loan .................... 7
3.2. Conditions Precedent to all Loans ....................... 7
SECTION IV REPRESENTATIONS AND WARRANTIES ................................ 8
4.1. Organization and Qualification .......................... 8
4.2. Corporate Authority ..................................... 8
4.3. Valid Obligations ....................................... 9
4.4. Consents or Approvals ................................... 9
4.5. Title to Properties; Absence of Encumbrances ............ 9
4.6. Financial Statements .................................... 9
4.7. Changes ................................................. 9
4.8. Defaults ................................................ 9
4.9. Taxes ................................................... 10
4.10. Litigation .............................................. 10
4.11. Use of Proceeds ......................................... 10
4.12. Subsidiaries ............................................ 10
4.13. Investment Company Act, etc ............................. 10
4.14. Compliance with ERISA ................................... 10
4.15. Environmental Matters ................................... 11
SECTION V AFFIRMATIVE COVENANTS .......................................... 11
5.1. Financial Statements and other Reporting Requirements ... 11
5.2. Conduct of Business ..................................... 13
5.3. Maintenance and Insurance ............................... 13
5.4. Taxes ................................................... 13
5.5. Inspection by the Bank .................................. 14
5.6. Maintenance of Books and Records ........................ 14
5.7. Further Assurances ...................................... 14
SECTION VI NEGATIVE COVENANTS ............................................ 15
6.1. Encumbrances ............................................ 15
6.2. Merger; Consolidation; Sale or Lease of Assets .......... 16
6.3. Stock of Subsidiaries ................................... 16
6.4. Investments ............................................. 17
6.5. Acquisitions ............................................ 17
6.6. ERISA ................................................... 17
6.7. Double Leverage Ratio ................................... 17
6.8. Nonperforming Asset Coverage Ratio ...................... 17
6.9. Capitalization of Borrower and Material Subsidiaries .... 18
6.10. Minimum Tangible Net Worth .............................. 18
SECTION VII DEFAULTS ..................................................... 18
7.1. Events of Default ....................................... 18
7.2. Remedies ................................................ 20
SECTION VIII MISCELLANEOUS ............................................... 21
8.1. Notices ................................................. 21
8.2. Expenses ................................................ 21
8.3. Set-Off ................................................. 22
8.4. Term of Agreement ....................................... 22
8.5. No Waivers .............................................. 22
8.6. Governing Law ........................................... 22
8.7. Amendments .............................................. 23
8.8. Binding Effect of Agreement ............................. 23
8.9. Counterparts ............................................ 23
8.10. Partial Invalidity ...................................... 23
8.11. Captions ................................................ 23
8.12. Waiver of Jury Trial .................................... 23
8.13 Entire Agreement ........................................ 23
EXHIBITS
EXHIBIT A - Form of Standard Libor Grid Note
EXHIBIT B - Encumbrances
EXHIBIT C - Litigation; Environmental Matters
EXHIBIT D - Material Subsidiaries
EXHIBIT E - Form of Report of Chief Financial Officer
EXHIBIT F - Form of Opinion of Counsel to the Borrower
REVOLVING CREDIT AGREEMENT
Dated as of April 25, 2001
THIS REVOLVING CREDIT AGREEMENT is made as of April 25, 2001 by and
between Financial Institutions, Inc. (the "Borrower"), a New York corporation
having its head office at 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxx Xxxx 00000 and
Manufacturers and Traders Trust Company (the "Bank"), a New York banking
corporation having its principal banking office at Xxx X&X Xxxxx, Xxxxxxx, Xxx
Xxxx 00000.
SECTION I
DEFINITIONS
1.1 Definitions
All capitalized terms used in this Agreement or in the Note or in any
certificate, report or other document made or delivered pursuant to this
Agreement (unless otherwise defined therein) shall have the meanings assigned to
them below:
Account. See Section 2.1
Agreement. This Agreement, as the same may be supplemented or amended from
time to time.
Bank. See Preamble.
Base Rate. The rate of interest announced from time to time by the Bank at
its prime rate of interest.
Base Rate Loan. Any Loan bearing interest at the Base Rate.
Borrower. See Preamble.
Business Day. Shall have the meaning set forth in the Note.
Code. The Internal Revenue Code of 1986 and the rules and regulations
thereunder, collectively, as the same may from time to time be supplemented or
amended.
Commitment Amount. $5,000,000.
Controlled Group. All trades or businesses (whether or not incorporated)
under common control that, together with the Borrower, are treated as a single
employer under Section 414(b) or 414(c) of the Code or Section 4001 of ERISA
Controlled Subsidiary. Any corporation, association, joint stock company,
business trust or other similar organization of which more than 50% of the
ordinary voting power for the election of a majority of the members of the board
of directors or other governing body of such entity is held or controlled by the
Borrower; or any other such entity the management of which is directly or
indirectly controlled by the Borrower through the exercise of voting power or
otherwise; or any joint venture, whether incorporated or not, in which the
Borrower has an ownership interest of more than 50%.
Default. An Event of Default or event or condition that, but for the
requirement that time elapse or notice be given, or both, would constitute an
Event of Default.
Encumbrances. See Section 6.1.
ERISA. The Employee Retirement Income Security Act of 1974 and the rules
and regulations thereunder, collectively, as the same may from time to time be
supplemented or amended.
Environmental Laws. All applicable foreign, federal, state and local
environmental, health or safety statutes, laws, regulations, rules, ordinances,
policies and rules or common law whether now existing or hereafter enacted or
promulgated, relating to injury to, or the protection of, real or personal
property or human health or the environment.
Event of Default. Any event described in Section 7.1.
Federal Banking Agency - means any of the Federal Deposit Insurance
Corporation, Comptroller of Currency, Board of Governors of the Federal Reserve
System or Office of Thrift Supervision.
FFIEC. The Federal Financial Institutions Examination Council, or such
other regulatory agency or authority having jurisdiction over financial
reporting by banks and bank holding companies.
Hazardous Material. Any substance which is or becomes defined as a
"hazardous waste," "hazardous material," "hazardous substance," "controlled
industrial waste," "pollutant" or "contaminant" under any Environmental Law or
which is toxic, explosive, corrosive, flammable, infectious, radioactive,
carcinogenic, mutagenic or otherwise hazardous and is or becomes regulated by
any governmental authority or instrumentality or which contains gasoline, diesel
fuel or other petroleum products, asbestos or polychlorinated biphenyls
('PCB's").
Interest Period. With respect to each Libor Rate Loan, the period defined
in the Note.
2
Investment. The purchase or acquisition of any share of capital stock,
partnership interest, evidence of indebtedness or other equity security of any
other person or entity, any loan, advance or extension of credit to, or
contribution to the capital of, any other person or entity, any real estate held
for sale or investment, any commodities futures contracts held other than in
connection with bona fide hedging transactions, any other investment in any
other person or entity, and the making of any commitment or acquisition of any
option to make an Investment.
LIBOR Rate Loan. Any Loan bearing interest at the LIBOR Rate as defined in
the Note.
Loan. A loan made to the Borrower by the Bank pursuant to Section II of
this Agreement, and "Loans" means all of such loans, collectively.
Material Subsidiary. Those Subsidiaries listed on Exhibit D hereto, and
any other Subsidiary of the Borrower that is a federally-insured depository
institution.
Nonperforming Asset. As defined in Section 6.8.
Note. A Standard Libor Grid Note of the Borrower, substantially in the
form of Exhibit A hereto, evidencing the obligation of the Borrower to the Bank
to repay the Loans.
Obligations. All obligations of the Borrower to the Bank hereunder of
every kind and description, direct or indirect, absolute or contingent, primary
or secondary, due or to become due, now existing or hereafter arising,
regardless of how they arise or by what agreement or instrument, if any, and
including obligations to perform acts and refrain from taking action as well as
obligations to pay money.
PBGC. The Pension Benefit Guaranty Corporation or any entity succeeding to
any or all of its actions under ERISA
Permitted Encumbrances. See Section 6.1.
Plan. An employee pension or other benefit plan that is subject to Title
IV of ERISA or subject to the minimum funding standards under Section 412 of the
Code and is either (i) maintained by the Borrower or any member of the
Controlled Group for employees of the Borrower or any member of the Controlled
Group or (ii) if such Plan is established, maintained pursuant to a collective
bargaining agreement or any other arrangement under which more than one employer
makes contributions and to which the Borrower or any member of the Controlled
Group is then making or accruing an obligation to make contributions or has
within the preceding five Plan years made contributions.
Subsidiary. Any corporation, association, joint stock company, business
trust or other similar organization of which 50% or more of the ordinary voting
power for the election of a
3
majority of the members of the board of directors or other governing body of
such entity is held or controlled by the Borrower or a Subsidiary of the
Borrower; or any other such entity the management of which is directly or
indirectly controlled by the Borrower or a Subsidiary of the Borrower through
the exercise of voting power or otherwise; or any joint venture, whether
incorporated or not, in which the Borrower has an ownership interest of 50% or
more.
Termination Date. April 24, 2003 or such earlier date on which the
commitment to make Loans is terminated in accordance with the terms hereof.
1.2. Accounting Terms. All terms of an accounting character shall have the
meanings assigned thereto by generally accepted accounting principles or
regulatory accounting principles, as applicable, as applied on a basis
consistent with the financial statements referred to in Section 4.6 of this
Agreement, but as herein specifically modified.
SECTION II
DESCRIPTION OF CREDIT
2.1. The Loans. (a) Subject to the terms and conditions hereof, the Bank
will make Loans to the Borrower, from time to time until the close of business
on the Termination Date, in such sums as the Borrower may request, provided that
the aggregate principal amount of all Loans at any one time outstanding
hereunder may not exceed the Commitment Amount. All Loans hereunder shall be
credited by the Bank to Account No. __________ at the Bank, for the credit of
the Borrower (the "Account").
(a) The Borrower may borrow, prepay pursuant to Section 2.8 and reborrow,
from the date of this Agreement until the Termination Date, the Commitment
Amount or any lesser sum subject to the Minimum Borrowing Amount limitations set
forth in the Note. Any Loan not repaid by the Termination Date shall be due and
payable on the Termination Date.
(b) Provided that no Default shall have occurred and be continuing, the
Borrower may make and effectuate the conversion elections as described in
Section 4 of the Note by giving the Bank prior notice of each such conversion
(which notice shall be effective upon receipt) in accordance with the
provisions.
(c) Subject to the terms and conditions hereof, the Bank shall make each
Loan on the effective date specified therefor by crediting the amount of such
Loan in immediately available funds to the Account, for the credit of the
Borrower.
2.2. Fees. (a) The Borrower shall pay to the Bank a commitment fee on the
daily average unused portion of the Commitment Amount during each quarter or
portion thereof, computed at the rate of 1/4 of 1% per annum.
4
(b) Commitment fees shall be payable quarterly in arrears on the last day
of each calendar quarter commencing April 30, 2001 and ending on the Termination
Date.
(c) Additionally Borrower shall pay Bank a one time facility fee, on or
before the effective date of this Agreement of $5,000.00.
2.3. The Note. The Loans shall be evidenced by the Note, payable to the
order of the Bank and having a final maturity of the Termination Date. The Note
shall be dated on or before the date of the first Loan and shall have the blanks
therein appropriately completed. The Bank shall, and is hereby irrevocably
authorized by the Borrower to, enter on the schedule forming a part of the Note
or otherwise in its records appropriate notations evidencing the date and the
amount of each Loan, the applicable interest rate and the date and amount of
each payment of principal made by the Borrower with respect thereto; and in the
absence of manifest error, such notations shall constitute a rebuttable
presumption of the correctness thereof; provided that no failure on the part of
the Bank to make any such notation shall in any way affect any Loan or the
rights or obligations of the Bank or the Borrower with respect thereto.
2.4 Duration of Interest Periods. (a) The duration of each Interest Period
applicable to a Loan shall be as specified in the Note.
(b) Notwithstanding the foregoing, the Borrower may not select an Interest
Period that would end, but for the provisions of the definition of Interest
Period, after the Termination Date.
2.5 Interest Rates and Payments of Interest. Each Base Rate Loan and Libor
Rate Loan shall bear interest on the outstanding principal amount thereof at a
rate per annum as provided in the Note.
2.6. Changed Circumstances.
(a) If the Bank shall determine that, due to either (i) the introduction
of any change (other than any change by way of imposition of or increase in
reserve requirements included in the calculation of the interest rate for LIBOR
Rate Loans) in or in the interpretation of any requirement of law or (ii) the
compliance with any guideline or request from any central bank or other
governmental authority (whether or not having the force of law), there shall be
any increase in the cost to the Bank of agreeing to make or making, funding or
maintaining any LIBOR Rate Loans, then Borrower shall be liable for, and shall
from time to time, upon demand therefor by the Bank and pay to the Bank such
additional amounts as are sufficient to compensate the Bank for such increased
costs.
(b) If the Bank shall determine that for any reason adequate and
reasonable means do not exist for ascertaining the interest rate for any
requested Interest Period with respect to a proposed LIBOR Rate Loan, the Bank
will give notice of such determination to Borrower. Thereafter, the Bank may not
make or maintain LIBOR Rate Loans, as the case may be,
5
hereunder until the Bank revokes such notice in writing. Upon receipt of such
notice, Borrower may revoke any request for a LIBOR Rate Loan or Notice then
submitted by it. If Borrower does not revoke such notice the Bank may make, or
continue the Loans, as proposed by Borrower, in the amount specified in the
applicable request submitted by Borrower, but such Loans shall be made or
continued as Base Rate Loans instead of LIBOR Rate Loans, as the case may be.
2.7. Illegality. If the Bank shall determine that the introduction of any
law (statutory or common), treaty, rule, regulation, guideline or determination
of an arbitrator or of a governmental authority or in the interpretation or
administration thereof, has made it unlawful, or that any central bank or other
governmental authority has asserted that it is unlawful for the Bank to make
LIBOR Rate Loans, then, on notice thereof by the Bank to Borrower, the Bank may
suspend the making of LIBOR Rate Loans until the Bank shall have notified
Borrower that the circumstances giving rise to such determination shall no
longer exist. If the Bank shall determine that it is unlawful to maintain any
LIBOR Rate Loans, Borrower shall prepay in full all LIBOR Rate Loans then
outstanding, together with accrued interest, either on the last date of the
Interest Period thereof if the Bank may lawfully continue to maintain such LIBOR
Rate Loans to such day, or immediately, if the Bank may not lawfully continue to
maintain such LIBOR Rate Loans. If Borrower is required to prepay any LIBOR Rate
Loan immediately as set forth in this subsection, then concurrently with such
prepayment, Borrower may borrow from the Bank, in the amount of such repayment,
a Base Rate Loan.
2.8. Prepayments of the Loans.
(a) Base Rate Loans may be prepaid at any time, without premium or
penalty, in minimum amounts of $100,000 but with accrued interest to the date of
payment.
(b) LIBOR Rate Loans may be prepaid in a manner consistent with and
subject to provisions contained in the Note.
2.9. Method of Payment. All payments and prepayments of principal and all
payments of interest, fees and other amounts payable hereunder shall be made by
the Borrower to the Bank at its head office in immediately available funds, on
or before 1:00 p.m. (Buffalo, New York time) on the due date thereof, free and
clear of, and without any deduction or withholding for, any taxes or other
payments. The Bank may, and the Borrower hereby authorizes the Bank to, debit
the amount of any payment not made by such time to the Account of the Borrower
with the Bank.
2.10. Overdue Payments. Overdue principal (whether at maturity, by reason
of acceleration or otherwise) and, to the extent permitted by applicable law,
overdue interest and fees or any other amounts payable hereunder or under the
Note shall bear interest from and including the due date until paid as set forth
in the Note.
6
2.11. Computation of Interest and Fees. Interest and all fees payable
hereunder shall be computed daily and paid for the actual number of days for
which due in a manner consistent with the terms and conditions of the Note.
SECTION III
CONDITIONS OF LOANS
3.1. Conditions Precedent to Initial Loan. The obligation of the Bank to
make its initial Loan is subject to the condition precedent that the Bank shall
have received, in form and substance satisfactory to the Bank and its counsel,
the following:
(a) this Agreement and the Note, duly executed by the Borrower;
(b) a certificate of the Secretary or an Assistant Secretary of the
Borrower with respect to resolutions of the Board of Directors of the Borrower
authorizing the execution and delivery of this Agreement and the Note and
identifying the officer(s) authorized to execute, deliver and take all other
actions required under this Agreement, and providing specimen signatures of such
officers;
(c) the certificate of incorporation of the Borrower and all amendments
and supplements thereto, filed in the office of the Secretary of State of New
York, each certified by the Secretary or an Assistant Secretary of the Borrower
as being a true and correct copy thereof;
(d) the Bylaws of the Borrower and all amendments and supplements thereto,
certified by the Secretary or an Assistant Secretary as being a true and correct
copy thereof as currently in effect;
(e) a current Certificate of Good Standing showing Borrower to be a
corporation in good standing in the State of New York;
(f) an opinion addressed to it from Counsel of the Borrower, substantially
in the form of Exhibit F hereto; and
(g) such other documents, and completion of such other matters, as counsel
for the Bank may deem necessary or appropriate.
3.2. Conditions Precedent to all Loans. The obligation of the Bank to make
each Loan, including the initial Loan, or continue or convert Loans to Loans of
another type, is further subject to the following conditions:
(a) timely receipt by the Bank of the Borrower's request for a Loan or
Notice of Conversion as provided in the Note;
7
(b) the representations and warranties contained in Section IV shall be
true and accurate in all material respects on and as of the date of any request
for a Loan or conversion election as described in Section 4 of the Note and on
the effective date of the making, continuation or conversion of each Loan as
though made at and as of each such date (except to the extent that such
representations and warranties expressly relate to an earlier date), and no
Default shall have occurred and be continuing, or would result from such Loan;
(c) the resolutions referred to in Section 3.1(b) shall remain in full
force and effect; and
(d) no change shall have occurred in any law or regulation or
interpretation thereof that, in the opinion of counsel for the Bank, would make
it illegal or against the policy of any governmental agency or authority for the
Bank to make Loans hereunder, provided that the Bank shall so advise the
Borrower in writing, setting forth the basis of such opinion (but only if the
Bank in its sole discretion believes that it may then disclose such
information).
The making of each Loan shall be deemed to be a representation and
warranty by the Borrower on the date of the making, continuation or conversion
of such Loan as to the accuracy of the statements referred to in subsection (b)
of this Section 3.2.
SECTION IV
REPRESENTATIONS AND WARRANTIES
In order to induce the Bank to enter into this Agreement and to make Loans
hereunder, the Borrower represents and warrants to the Bank that:
4.1. Organization and Qualification. Each of the Borrower and its
Subsidiaries (a) is (i) a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation; or (ii) a
trust duly created and properly organized under the laws of its jurisdiction of
formation, (b) has all requisite corporate or trust powers to own its property
and conduct its business as now conducted and as presently contemplated and (c)
is duly qualified and to the extent applicable in good standing as a foreign
corporation and is duly authorized to do business in each jurisdiction where the
nature of its properties or business requires such qualification.
4.2. Corporate Authority. The execution, delivery and performance of this
Agreement and the Note and the transactions contemplated hereby are within the
corporate power and authority of the Borrower and have been authorized by all
necessary corporate proceedings, and do not and will not (a) require any consent
or approval of the stockholders of the Borrower, (b) contravene any provision of
the charter documents or by-laws of the Borrower or any law, rule or regulation
applicable to the Borrower, (c) contravene any provision of, or
8
constitute an event of default or event that, but for the requirement that time
elapse or notice be given, or both, would constitute an event of default under,
any other agreement, instrument, order or undertaking binding on the Borrower,
or (d) result in or require the imposition of any Encumbrance on any of the
properties, assets or rights of the Borrower.
4.3. Valid Obligations. This Agreement and the Note and all of their
respective terms and provisions are the legal, valid and binding obligations of
the Borrower, enforceable in accordance with their respective terms except as
limited by bankruptcy, insolvency, reorganization, moratorium or other laws
affecting the enforcement of creditors' rights generally, and except as the
remedy of specific performance or of injunctive relief is subject to the
discretion of the court before which any proceeding therefor may be brought.
4.4. Consents or Approvals. The execution, delivery and performance of
this Agreement and the Note and the transactions contemplated herein do not
require any approval or consent of, or filing or registration with, any
governmental or other agency or authority, or any other party.
4.5. Title to Properties; Absence of Encumbrances. Each of the Borrower
and its Subsidiaries has good and marketable title to all of the properties,
assets and rights of every kind and nature now purported to be owned by it,
including, without limitation, such properties, assets and rights as are
reflected in the financial statements referred to in Section 4.6 (except such
properties, assets or rights as have been disposed of in the ordinary course of
business since the date thereof), free from all Encumbrances except Permitted
Encumbrances and, except for such Permitted Encumbrances, free from all defects
of title that might materially adversely affect such properties, assets or
rights, taken as a whole.
4.6. Financial Statements. The Borrower has furnished the Bank its
consolidated balance sheet as of December 31, 2000 and its consolidated
statements of income, changes in stockholders' equity and cash flow for the
fiscal year then ended, and related footnotes, audited and certified by KPMG,
LLP. All such financial statements were prepared in accordance with generally
accepted accounting principles or regulatory accounting principles, as
applicable, applied on a consistent basis throughout the periods specified and
present fairly the financial position of the Borrower and its Subsidiaries as of
such dates and the results of the operations of the Borrower and its
Subsidiaries for such periods. There are no liabilities, contingent or
otherwise, of the Borrower and its Subsidiaries not disclosed in such financial
statements that involve a material amount.
4.7. Changes. Since the date of the most recent financial statements
referred to in Section 4.6, there have been no changes in the assets,
liabilities, financial condition, business or prospects of the Borrower or any
of its Subsidiaries other than changes in the ordinary course of business, the
effect of which has not, in the aggregate, been materially adverse.
4.8. Defaults. As of the date of this Agreement, no Default exists.
9
4.9. Taxes. The Borrower and each Subsidiary have filed all federal, state
and other tax returns required to be filed, within the applicable filing due
dates (including any extensions of such dates); and all taxes, assessments and
other governmental charges due from the Borrower and each Subsidiary have been
fully paid. The Borrower and each Subsidiary have established on their books
reserves adequate for the payment of all federal, state and other tax
liabilities.
4.10. Litigation. Except as set forth on Exhibit C hereto, there is no
litigation, arbitration, proceeding or investigation pending, or, to the
knowledge of the Borrower's or any Subsidiary's officers, threatened, against
the Borrower or any Subsidiary that, if adversely determined, could, singly or
in the aggregate, result in a judgment in excess of $250,000 not adequately
covered by insurance or as to which adequate reserves are not being maintained,
could result in a forfeiture of all or any substantial part of the property of
the Borrower or its Subsidiaries, or could otherwise have a material adverse
effect on the assets, business or prospects of the Borrower or any Material
Subsidiary.
4.11. Use of Proceeds. No portion of any Loan is to be used for the
"purpose of purchasing or carrying" any "margin stock" as such terms are used in
Regulations U and X of the Board of Governors of the Federal Reserve System, 12
C.F.R. 221 and 224, as amended; and following the application of the proceeds of
each Loan, the value of all "margin stock" of the Borrower will not exceed 25%
of the value of the total assets of the Borrower that are subject to the
restrictions set forth in Section 6.1 and 6.2.
4.12. Subsidiaries. As of the date of this Agreement, all the Material
Subsidiaries of the Borrower are listed on Exhibit D hereto. As of the date of
this Agreement, the Borrower or a Subsidiary of the Borrower is the owner, free
and clear of all liens and encumbrances, of the specified percentage of the
issued and outstanding voting securities of each Subsidiary as listed on Exhibit
D hereto. All such voting securities have been validly issued and are fully paid
and nonassessable, and no rights to subscribe to any additional voting
securities have been granted, and no options, warrants or similar rights are
outstanding, except as listed on Exhibit D hereto.
4.13. Investment Company Act, etc. Neither the Borrower nor any of its
Subsidiaries is subject to regulation under the Investment Company Act of 1940,
as amended, the Public Utility Holding Company Act of 1935, as amended, or any
other statute or regulation that limits its ability to incur indebtedness for
money borrowed.
4.14. Compliance with ERISA. The Borrower and each member of the
Controlled Group have fulfilled their obligations under the minimum funding
standards of ERISA and the Code with respect to each Plan and are in compliance
in all material respects with the applicable provisions of ERISA and the Code,
and have not incurred any liability to the PBGC or a Plan under Title N of
ERISA; and no "prohibited transaction" or "reportable event" (as such terms are
defined in ERISA) has occurred with respect to any Plan which could have a
material adverse effect on the assets, business or prospects of the Borrower or
any Material Subsidiary.
10
4.15. Environmental Matters. The Borrower and each of its Subsidiaries are
in compliance, in all material respects, with all Environmental Laws. No demand,
claim, notice, suit, suit in equity, action, administrative action,
investigation or inquiry arising under, relating to or in connection with any
Environmental Laws is pending or threatened against the Borrower or any of its
Subsidiaries, any real property in which the Borrower or any such Subsidiary
holds or, to the Borrower's knowledge, has held, an interest or any past or
present operation of the Borrower or any such Subsidiary, other than any such
proceedings that will not have a material adverse effect on the financial
condition, business, operations or prospects of the Borrower or the Borrower and
its Subsidiaries on a consolidated basis. Neither the Borrower nor any of its
Subsidiaries (i) is the subject of any federal or state investigation evaluating
whether any remedial action is needed to respond to a release of any Hazardous
Materials or other wastes into the environment, (ii) has received any notice of
any Hazardous Materials or other wastes in or upon any of its properties in
violation of any Environmental Laws, or (iii) knows of any basis for any such
investigation, notice or violation, except as disclosed to the Bank on Exhibit C
and as to such matters disclosed on such Exhibit, none will have a material
adverse effect on the financial condition, business, operations or prospects of
the Borrower or the Borrower and its Subsidiaries on a consolidated basis.
SECTION V
AFFIRMATIVE COVENANTS
So long as the Bank has any commitment to lend hereunder or any Loan or other
Obligation hereunder remains outstanding, the Borrower covenants as follows:
5.1. Financial Statements and other Reporting Requirements. The Borrower
shall furnish to the Bank:
(a) as soon as available to the Borrower, but in any event within 100 days
after the end of each of its fiscal years, a consolidated balance sheet as of
the end of such year, and the related consolidated and consolidating statements
of income, changes in stockholders' equity and cash flow for such year, audited
and certified by KMPG, LLP, (or other independent certified public accountants
of national standing selected by the Borrower);
(b) as soon as available to the Borrower, but in any event within 55 days
after the end of each of its fiscal quarters, (i) the consolidated balance sheet
as of the end of such quarter, and a related consolidated statements of income
and cash flow for the period then ended, certified by the chief financial
officer of the Borrower but subject, however, to normal, recurring year-end
adjustments that shall not in the aggregate be material in amount, (ii) Forms
XXX-0, XXX-00 and a Call Report (as applicable) for the Borrower (on a parent
only basis) and for each of the Borrower's banking subsidiaries for the period
then ended, certified by the cashier or other authorized officer of each such
Subsidiary, in the forms required to be filed by the Borrower and
11
each such Subsidiary by the FFIEC; and (iii) SEC Forms 10K and 10Q, as
applicable for the Borrower on a consolidated basis.
(c) concurrently with the delivery of each financial statement pursuant to
subsections (a) and (b) of this Section 5.1, a report in substantially the form
of Exhibit E, hereto signed on behalf of the Borrower by its chief financial
officer;
(d) promptly after the same are available, copies of all proxy statements,
financial statements and reports as the Borrower shall send to its stockholders
or as the Borrower may file with the Securities and Exchange Commission;
(e) if and when the Borrower gives or is required to give notice to the
PBGC of any "Reportable Event" (as defined in Section 4043 of ERISA) with
respect to any Plan that might constitute grounds for a termination of such Plan
under Title IV of ERISA, or knows that any member of the Controlled Group or the
plan administrator of any Plan has given or is required to give notice of any
such Reportable Event, a copy of the notice of such Reportable Event given or
required to be given to the PBGC;
(f) immediately upon becoming aware of the existence of any condition or
event that constitutes a Default, written notice thereof specifying the nature
and duration thereof and the action being or proposed to be taken with respect
thereto;
(g) promptly upon becoming aware of any litigation or of any investigative
proceedings by a governmental agency or authority commenced or threatened
against the Borrower or any of its Subsidiaries, the outcome of which, singly or
in the aggregate, could have an adverse effect of more than $250,000, not
covered by insurance, on the assets, business or prospects of the Borrower or
the Borrower and its Subsidiaries on a consolidated basis, written notice
thereof and the action being or proposed to be taken with respect thereto;
(h) promptly upon becoming aware of any investigative proceedings by a
governmental agency or authority commenced or threatened against the Borrower or
any of its Subsidiaries regarding any violation of Environmental Laws or any
spill, release, discharge or disposal of any Hazardous Material, the outcome of
which, singly or in the aggregate, could have an adverse effect of more than
$250,000, not covered by insurance, on the assets, business or prospects of the
Borrower or the Borrower and its Subsidiaries on a consolidated basis, written
notice thereof and the action being or proposed to be taken with respect
thereto; and
(i) from time to time, such other financial data and information about the
Borrower or its Subsidiaries as the Bank may reasonably request. Notwithstanding
the preceding, the Bank and the Borrower acknowledge that they are each engaged
in the business of banking and certain incidental activities, and that they
compete from time to time for, among other things, consumer and commercial loan
customers and depositors. As such, the Borrower and its Subsidiaries shall not
be obligated to furnish to the Bank any information that constitutes
confidential or proprietary information, a trade secret or any other form of
material non-public information, the
12
absence of which would not have a material adverse effect upon the Bank's
ability to monitor or collect the indebtedness evidenced by the Note
("Confidential Information"). In the event that the Borrower or a Subsidiary
does supply Confidential Information to the Bank, the Bank shall maintain the
Confidential Information in strict confidence and shall only disclose
Confidential Information to Permitted Transferees to the extent permitted by
Section 5.5 hereof. Moreover, the Bank hereby confirms that it is aware, and
that any Permitted Transferees of such information shall be advised, that the
United States securities laws prohibit any person who has material non-public
information about a company from purchasing or selling securities of such
company or tipping or advising others regarding trading in such securities.
Accordingly, the Bank agrees that it shall not use, or knowingly cause or permit
any Permitted Transferee or third party to use, any Confidential Information in
contravention of such securities laws or any similar rules or regulations.
5.2. Conduct of Business. The Borrower shall and shall cause its Material
Subsidiaries to:
(a) duly observe and comply in all material respects with all applicable
laws and valid requirements of any governmental authorities relative to its
corporate existence, rights and franchises, to the conduct of its business and
to its property and assets (including without limitation all Environmental Laws
and ERISA), and shall maintain and keep in full force and effect all licenses
and permits necessary in any material respect to the proper conduct of its
business; and
(b) maintain its corporate or organizational existence, provided that
Borrower may, subject to the provisions of sections 6.2 through 6.5, reorganize
its Subsidiaries provided that Borrower's ownership interest in its subsidiaries
or its subsidiaries' assets is not diluted; and
(c) engage only in business activities permitted for bank holding
companies and their subsidiaries under applicable law.
5.3. Maintenance and Insurance. Each of the Borrower and its Material
Subsidiaries shall maintain its properties in good repair, working order and
condition as required for the normal conduct of its business, and shall at all
times maintain liability and casualty insurance with financially sound and
reputable insurers in such amounts as the officers of the Borrower in the
exercise of their reasonable judgment deem to be adequate.
5.4. Taxes. The Borrower shall pay or cause to be paid all taxes,
assessments or governmental charges on or against it or any of its Subsidiaries
or its or their properties on or prior to the time when late charges or other
penalties accrue with respect thereto; provided that this covenant shall not
apply to any tax, assessment or charge that is being contested in good faith by
appropriate proceedings and with respect to which adequate reserves have been
established and are being maintained in accordance with generally accepted
accounting principles.
13
5.5. Inspection by the Bank. The Borrower shall permit the Bank or its
designees, at reasonable times and upon reasonable notice (or if an Event of
Default shall have occurred and is continuing, at any time and without prior
notice), to (i) visit and inspect the properties of the Borrower and its
Subsidiaries, (ii) examine and make copies of and take abstracts from the
financial records of the Borrower and its Subsidiaries, and (iii) discuss the
affairs, finances and accounts of the Borrower and its Subsidiaries, as the same
relate to Borrower's ability to repay any Loan, with their appropriate officers,
employees and accountants. Notwithstanding the preceding, the Borrower and its
Subsidiaries shall not be obligated to furnish to the Bank any information that
is Confidential Information (as defined in Section 5.1(i)). In handling such
Confidential Information that is disclosed and identified as such by Borrower or
any Subsidiary, the Bank shall exercise the same degree of care that it
exercises with respect to its own proprietary information of the same types to
maintain the confidentiality of any non-public information thereby received or
received pursuant to this Agreement except that disclosure of such information
may be made (i) to the subsidiaries or affiliates of the Bank in connection with
their present or prospective business relations with the Borrower, subject to
the same degree of care and confidentiality required of the Bank by this Section
5.5, (ii) to prospective permitted transferees or purchasers of an interest in
the Loans, (iii) as required by law, regulation, rule or order, subpoena,
judicial order or similar order and (iv) as may be required in connection with
the examination, audit or similar investigation of the Bank (any person or
entity receiving such information pursuant to the foregoing being referred to
herein as a ("Permitted Transferee"). Moreover, the Bank hereby confirms that it
is aware, and that any Permitted Transferees of such information shall be
advised, that the United States securities laws prohibit any person who has
material non-public information about a company from purchasing or selling
securities of such company or tipping or advising others regarding trading in
such securities. Accordingly, the Bank agrees that it shall not use, or
knowingly cause or permit any Permitted Transferee or third party to use, any
Confidential Information in contravention of such securities laws or any similar
rules or regulations.
5.6. Maintenance of Books and Records. Each of the Borrower and its
Subsidiaries shall keep adequate books and records of account, in which true and
complete entries will be made reflecting all of its business and financial
transactions, and such entries will be made in accordance with generally
accepted accounting principles or regulatory accounting principles, as
applicable, consistently applied and applicable law.
5.7. Further Assurances. At any time and from time to time the Borrower
shall, and shall cause each of its Subsidiaries to, execute and deliver such
further instruments and take such further action as may reasonably be requested
by the Bank to effect the purposes of this Agreement and the Note.
SECTION VI
NEGATIVE COVENANTS
14
So long as the Bank has any commitment to lend hereunder or any Loan or other
Obligation hereunder remains outstanding, the Borrower covenants as follows:
6.1. Encumbrances. Neither the Borrower nor any of its Material
Subsidiaries shall create, incur, assume or suffer to exist any mortgage,
pledge, security interest, lien or other charge or encumbrance, including the
lien or retained security title of a conditional vendor upon or with respect to
any of its property or assets ("Encumbrances"), or assign or otherwise convey
any right to receive income, including the sale or discount of accounts
receivable with or without recourse, except the following ("Permitted
Encumbrances"):
(a) Encumbrances in favor of the Bank or any of its affiliates;
(b) Encumbrances existing as of the date of this Agreement, not otherwise
described in Section 6.1, and disclosed in Exhibit B hereto;
(c) liens for taxes, fees, assessments and other governmental charges to
the extent that payment of the same may be postponed or is not required in
accordance with the provisions of Section 5.4;
(d) landlords' and lessors' liens in respect of rent not in default or
liens in respect of pledges or deposits under workmen's compensation,
unemployment insurance, social security laws, or similar legislation (other than
ERISA) or in connection with appeal and similar bonds incidental to litigation;
mechanics', laborers' and materialmen's and similar liens, if the obligations
secured by such liens are not then delinquent; liens securing the performance of
bids, tenders, contracts (other than for the payment of money); and statutory
obligations incidental to the conduct of its business and that do not in the
aggregate materially detract from the value of its property or materially impair
the use thereof in the operation of its business;
(e) judgment and other similar liens, singly or in the aggregate in excess
of $250,000, arising in connection with court proceedings, provided that the
execution or other enforcement of such judgment or similar lien has been in
existence for less than 30 days or is effectively stayed and the claims secured
thereby are being actively contested in good faith and by appropriate
proceedings;
(f) rights of lessors under capitalized leases;
(g) Encumbrances securing indebtedness for borrowed money incurred in
connection with the purchase of real or personal property used in its business,
provided that any such Encumbrances shall not extend to assets of the Borrower
or any such Subsidiary not financed by such indebtedness;
(h) easements, rights of way, restrictions and other similar charges or
Encumbrances relating to real or personal property and not interfering in a
material way with the ordinary conduct of its business;
15
(i) Encumbrances on its assets created in connection with the refinancing
of indebtedness secured by Permitted Encumbrances on such assets, provided that
the amount of indebtedness secured by any such Encumbrance shall not be
increased as a result of such refinancing and no such Encumbrance shall extend
to property and assets of the Borrower or any such Subsidiary not encumbered
prior to any such refinancing;
(j) Encumbrances incurred in connection with repurchase agreements; liens
incurred in connection with asset securitizations; Encumbrances granted to a
Federal Reserve Bank or a Federal Home Loan Bank to secure advances or other
transactions incidental to the conduct of the banking business of the Borrower
or any such Subsidiary, including loans to meet liquidity requirements;
(k) Encumbrances securing obligations of a Subsidiary to the Borrower or
another Subsidiary; and
(l) other Encumbrances which are incidental to the conduct of its business
on an ongoing basis and that do not in the aggregate have a material adverse
effect on its assets, business or prospects.
6.2. Merger; Consolidation; Sale or Lease of Assets. The Borrower shall
not, in a single transaction or a series of transactions, sell or otherwise
dispose of all or any substantial part of its shares of the capital stock of any
of Borrower's Material Subsidiaries; neither the Borrower nor any of its
Material Subsidiaries shall sell, lease or otherwise dispose of all or any
portion of any other assets, , in a single transaction or a series of
transactions, in excess of $250,000, provided that with respect to a Material
Subsidiary such a sale will be permitted if it is in the ordinary course of
business and does not represent more than 10% of such Material Subsidiary's
assets; and neither the Borrower nor any of its Material Subsidiaries shall
liquidate, merge or consolidate with any other person or entity; provided that
the Borrower may merge or consolidate into or with another person or entity if
no Default has occurred and is continuing or would result from such merger or
consolidation and if the Borrower is the surviving company; and provided,
further, that any Subsidiary of the Borrower may merge or consolidate into or
with (i) the Borrower if the Borrower is the surviving company, or (ii) any
other Subsidiary of the Borrower; or (iii) any other person if the Subsidiary is
the surviving company in, and remains a Controlled Subsidiary following, such
merger or consolidation; and provided further, that any Subsidiary that is not a
Material Subsidiary may be liquidated, merged or consolidated into or with
another person or entity if the assets of such Subsidiary do not represent more
than 10% of the consolidated total assets of the Borrower.
6.3. Stock of Subsidiaries. The Borrower shall not permit any of its
Material Subsidiaries to issue any additional shares of their respective capital
stock or other equity securities which contain general voting powers, any
options therefor or any securities convertible thereto other than to the
Borrower or another Material Subsidiary. Neither the Borrower nor any of its
Material Subsidiaries shall sell, transfer or otherwise dispose of any of the
capital stock or
16
other equity securities of a Material Subsidiary which contain general voting
powers, except (i) to the Borrower or any of its Material Subsidiaries, (ii) in
connection with a transaction permitted by Section 6.2; (iii) to an officer,
employee or director of the Borrower or any Material Subsidiary; or (iv) to
other persons or entities, provided that such dispositions do not, singly or in
the aggregate, constitute more than 10% of the total number of shares of capital
stock or other equity securities outstanding of such Subsidiary which contain
general voting powers.
6.4. Investments. Neither the Borrower nor any of its Material
Subsidiaries shall make or maintain any Investments other than (i) investments
permitted by applicable banking laws, regulations or regulatory pronouncements;
(ii) existing Investments in Subsidiaries and new Investments in such
Subsidiaries in the ordinary course of its business; and (iii) acquisitions of
new Subsidiaries permitted by Section 6.5.
6.5. Acquisitions. Neither the Borrower nor any of its Material
Subsidiaries shall acquire, in a single transaction or a series of transactions,
all or a majority of the voting shares or all or a substantial portion of the
assets of any person or entity unless (i) the consolidated total assets of the
Borrower (as would be reported in the Borrower's financial statements prepared
in accordance with FFIEC requirements) before giving effect to such acquisition
would constitute at least 70% of the consolidated total assets of the Borrower
after giving effect to such acquisition or (ii) the consolidated total assets of
the Borrower before giving effect to such acquisition would constitute less than
70% but at least 50% of the consolidated total assets of the Borrower and the
Borrower is able to demonstrate to the Bank's reasonable satisfaction that the
consolidated total assets of the Borrower before giving effect to such
acquisition would constitute at least 70% of the consolidated total assets of
the Borrower at any time within six months after giving effect to such
acquisition.
6.6. ERISA. Neither the Borrower nor any member of the Controlled Group
shall permit any Plan maintained by it to (i) engage in any non-exempt
"prohibited transaction" (as defined in Section 4975 of the Code in excess,
singly or in the aggregate, of $250,000, (ii) incur any "accumulated funding
deficiency" (as defined in Section 302 of ERISA) whether or not waived, or (iii)
terminate any Plan in a manner that could result in the imposition of a lien or
encumbrance on the assets of the Borrower or any of its Subsidiaries pursuant to
Section 4068 of ERISA
6.7. Double Leverage Ratio. The Borrower shall not permit its Double
Leverage Ratio to be greater than 1.35 to 1.0. As used in this Section 6.6,
"Double Leverage Ratio" means the ratio of (i) the amount of equity Investments
of the Borrower in its Subsidiaries to (ii) the consolidated stockholders'
equity of the Borrower, in each case as reported in the Borrower's financial
statements prepared in accordance with FFIEC requirements.
6.8. Nonperforming Asset Coverage Ratio. The Borrower shall not permit its
Nonperforming Asset Coverage Ratio to be less than 8.5 to 1.0. As used in this
Section 6.7, "Nonperforming Asset Coverage Ratio"" means the ratio of (i)
consolidated stockholders' equity of the Borrower and its Subsidiaries plus Loan
Loss Reserves to (ii) Nonperforming Assets;
17
"Loan Loss Reserves" means the loan loss reserves and allocated transfer risk
reserves of the Borrower, as shown on the financial statements of the Borrower
prepared in accordance with in accordance with FFIEC requirements; and
"Nonperforming Assets" means the loans, leases and other assets of the Borrower
that are not accruing interest or are 90 days or more past due in the payment of
principal or interest, plus "other real estate owned" by the Borrower, in each
case as shown on the financial statements of the Borrower prepared in accordance
with FFIEC requirements.
6.9. Capitalization of Borrower and Material Subsidiaries. The Borrower
and its Material Subsidiaries, excluding any other federally-insured depository
institution that may be acquired after the date hereof and prior to the
Termination Date, will maintain total "Risk-Based Capital Ratios", "Tier I
Risk-Based Capital Ratios", and "Leverage Ratios", as defined in applicable FDIC
regulations, sufficient to cause each entity or consolidated entity described
herein to be considered "well capitalized" by the appropriate Federal Banking
Agency. Any other federally-insured depository institution that may be acquired
prior to the Termination Date shall maintain total "Risk-Based Capital Ratios",
"Tier I Risk-Based Capital Ratios", and "Leverage Ratios", as defined in
applicable FDIC regulations, sufficient to cause each such entity so acquired to
be considered no less than "adequately capitalized", and any entity with which
it is consolidated to be considered "well capitalized", by the appropriate
Federal Banking Agency.
6.10. Minimum Tangible Net Worth. The Borrower shall not permit its
Tangible Net Worth to be less than $75,000,000. As used in this Section 6.10,
"Tangible Net Worth" means the consolidated net worth of the Borrower and its
Subsidiaries plus or minus any amounts attributable to those assets which are
permitted or required to be added to or deducted, respectively, from "tier 1
capital" in accordance with Section II.B.1 of Appendix A to Regulation Y of the
Board of Governors of the Federal Reserve System, 12 C.F.R. 225, as amended,
excluding therefrom: (i) any market value adjustments on available for sale
securities; and (ii) any value attributable to mortgage servicing rights.
SECTION VII
DEFAULTS
7.1. Events of Default. There shall be an Event of Default hereunder if
any of the following events occurs:
(a) the Borrower shall fail to pay when due (i) any amount of principal of
any Loans, or (ii) any amount of interest thereon or any fees or expenses
payable hereunder or under the Note within five days of the due date therefor;
or
(b) The Borrower shall fail to perform any term, covenant or agreement
contained in Sections 5.1(f), 5.5, 6.2, 6.3, 6.5 or 6.7, 6.9, or 6.10; or
18
(c) the Borrower shall fail to perform any covenant contained in Sections
5.1(e), 5.1(g), 5.1(h), 5.2, 6.1, 6.4, 6.6 or 6.8 and such failure shall
continue for 30 days; or
(d) the Borrower shall fail to perform any term, covenant or agreement
(other than in respect of subsections 7.1(a) through (c) hereof contained in
this Agreement or the Note and such default shall continue for 60 days after
notice thereof has been sent to the Borrower by the Bank; or
(e) any representation or warranty of the Borrower made in this Agreement
or in the Note or any other documents or agreements executed in connection with
the transactions contemplated by this Agreement or in any certificate delivered
hereunder shall prove to have been false in any material respect upon the date
when made or deemed to have been made; or
(f) the Borrower or any of its Material Subsidiaries shall fail to pay at
maturity (or upon demand, if a demand facility), or within any applicable period
of grace, any indebtedness in excess, singly or in the aggregate, of $250,000
for borrowed money or for the use of real or personal property, or fail to
observe or perform any term, covenant or agreement evidencing or securing such
indebtedness, or relating to such use of real or personal property, the result
of which failure is to permit the holder or holders of such obligations to cause
such indebtedness to become due prior to its stated maturity upon delivery of
required notice, if any; or
(g) the Borrower or any of its Material Subsidiaries shall (i) apply for
or consent to the appointment of, or the taking of possession by, a receiver,
custodian, trustee, liquidator or similar official of itself or of all or a
substantial part of its property, (ii) be generally not paying its debts as such
debts become due, (iii) make a general assignment for the benefit of its
creditors, (iv) commence a voluntary case under the Federal Bankruptcy Code (as
now or hereafter in effect), (v) take any action or commence any case or
proceeding under any law relating to bankruptcy, insolvency, reorganization,
winding-up or composition or adjustment of debts, or any other law providing for
the relief of debtors, (vi) fail to contest in a timely or appropriate manner,
or acquiesce in writing to, any petition filed against it in an involuntary case
under the Federal Bankruptcy Code or other law, (vii) take any action under the
laws of its jurisdiction of incorporation or organization similar to any of the
foregoing, or (viii) take any corporate action for the purpose of effecting any
of the foregoing; or
(h) a proceeding or case shall be commenced, without the application or
consent of the Borrower or any of its Material Subsidiaries in any court of
competent jurisdiction, seeking (i) the liquidation, reorganization,
dissolution, winding up, or composition or readjustment of its debts, (ii) the
appointment of a trustee, receiver, custodian, liquidator or the like of it or
of all or any substantial part of its assets, or (iii) similar relief in respect
of it, under any law relating to bankruptcy, insolvency, reorganization,
winding-up or composition or adjustment of debts or any other law providing for
the relief of debtors, and such proceeding or case shall continue undismissed,
or unstayed and in effect, for a period of 45 days; or an order for relief shall
be entered in an involuntary case under the Federal Bankruptcy Code, against the
Borrower or such Subsidiary; or action under the laws of the jurisdiction of
incorporation or organization of the
19
Borrower or any of its Material Subsidiaries similar to any of the foregoing
shall be taken with respect to the Borrower or such Subsidiary and shall
continue unstayed and in effect for any period of 45 days; or
(i) a judgment or order for the payment of money shall be entered against
the Borrower or any of its Subsidiaries by any court, or a warrant of attachment
or execution or similar process shall be issued or levied against property of
the Borrower or such Subsidiary, that, singly or in the aggregate, exceeds
$250,000 in value and such judgment, order, warrant or process shall continue
undischarged or unstayed for 30 days; or
(j) the Borrower or any member of the Controlled Group shall fail to pay
when due an amount, singly or in the aggregate, in excess of $250,000 that it
shall have become liable to pay to the PBGC or to a Plan under Title IV of
ERISA; or notice of intent to terminate a Plan or Plans shall be filed under
Title IV of ERISA by the Borrower, any member of the Controlled Group, any plan
administrator or any combination of the foregoing; or the PBGC shall institute
proceedings under Title IV of ERISA to terminate or to cause a trustee to be
appointed to administer any such Plan or Plans or a proceeding shall be
instituted by a fiduciary of any such Plan or Plans against the Borrower and
such proceedings shall not have been dismissed within 45 days thereafter; or a
condition shall exist by reason of which the PBGC would be entitled to obtain a
decree adjudicating that any such Plan or Plans must be terminated; or
(k) any banking Subsidiary shall cease to be insured under the Federal
Deposit Insurance Act and any rules and regulations issued thereunder, as from
time to time supplemented or amended; or a cease and desist order shall be
issued against the Borrower or any banking Subsidiary pursuant to 12 U.S.C.
1818(b) or (c) or any similar applicable provision of state law and any rules
and regulations issued thereunder, as from time to time supplemented or amended,
(l) the acquisition by any person or entity, or two or more persons or
entities acting in concert, of beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under the Securities Exchange
Act of 1934) of 25% or more of the outstanding shares of voting stock of the
Borrower; provided that this provision shall not apply to acquisitions of
beneficial ownership by any director, officer, employee or employee benefit plan
of the Borrower or any Subsidiary, nor to any of the foregoing who act in
concert with any other person or entity, or
(m) there occurs an Event of Default as defined in the Note.
7.2. Remedies. Upon the occurrence of an Event of Default described in
subsections 7.1(h) and (i), immediately and automatically, and upon the
occurrence of any other Event of Default, at any time thereafter while such
Event of Default is continuing, at the Bank's option and upon the Bank's written
declaration:
(a) the Bank's commitment to make any further Loans hereunder shall
terminate;
20
(b) the unpaid principal amount of the Loans together with accrued
interest and all other Obligations hereunder shall become immediately due and
payable without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived; and
(c) the Bank may exercise any and all rights it has under this Agreement,
the Note or any other documents or agreements executed in connection herewith,
or at law or in equity, and proceed to protect and enforce the Bank's rights by
any action at law, in equity or other appropriate proceeding.
SECTION VIII
MISCELLANEOUS
8.1. Notices. Unless otherwise specified herein, all notices hereunder to
any party hereto shall be in writing and shall be deemed to have been given when
given in a manner consistent with Section 12 of the Note, in each case addressed
to such party at its address indicated below:
If to the Borrower, at
FINANCIAL INSTITUTIONS, INC.
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Bank, at
MANUFACTURERS AND TRADERS TRUST COMPANY
Commercial Lending Division
00xx Xxxxx, Xxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Vice President
Telephone: 000-000-0000
Facsimile: 000-000-0000
or at any other address specified by such party in writing.
21
8.2. Expenses. The Borrower will pay on demand the reasonably allocated
fees and costs of the Bank's outside legal counsel and all disbursements of said
legal counsel in connection with the preparation of this Agreement, the Note or
any other documents or agreements executed in connection therewith. The Borrower
will also pay on demand the reasonable expenses of the Bank in connection with
the waiver or amendment of this Agreement, the Note or any other documents or
agreements executed in connection therewith, or the administration, default or
collection of the Loans or other Obligations or in connection with the Bank's
exercise, preservation or enforcement of any of its rights, remedies or options
thereunder, including, without limitation, fees and expenses of outside legal
counsel, accounting, consulting, brokerage or other similar professional fees or
expenses, and any fees or expenses associated with any travel or other costs
relating to any appraisals or examinations conducted in connection with the
Obligations.
8.3. Set-Off. (a) Regardless of the adequacy of any collateral or other
means of obtaining repayment of the Obligations, any deposits, balances or other
sums credited by or due from the head office of the Bank or any of its branch
offices to the Borrower may, to the extent permitted by law, at any time and
from time to time after the occurrence of an Event of Default hereunder, without
notice to the Borrower or compliance with any other condition precedent now or
hereafter imposed by statute, rule of law, or otherwise (all of which are hereby
expressly waived) be set off, appropriated, and applied by the Bank against any
and all Obligations of the Borrower to the Bank in such manner as the head
office of the Bank or any of its branch offices in their sole discretion may
determine, and the Borrower hereby grants the bank a continuing security
interest in such deposits, balances or other sums for the payment and
performance of all such Obligations.
(b) In the event that the Bank is placed in receivership or enters a
similar proceeding, the Borrower may, to the extent permitted by law, make any
payment due to the Bank hereunder to the extent of finally collected
unrestricted deposits of the Borrower held by the Bank, by giving notice to the
Bank to apply such deposits to such Obligations. If the amount of such deposits
is insufficient to pay such Obligations in full, the Borrower shall pay the
balance of such deficiency in accordance with this Agreement.
8.4. Term of Agreement. This Agreement shall continue in full force and
effect so long as the Bank has any commitment to make Loans hereunder or any
Loan or any Obligation hereunder shall be outstanding.
8.5. No Waivers. No failure or delay by the Bank in exercising any right,
power or privilege hereunder or under the Note or under any other documents or
agreements executed in connection herewith shall operate as a waiver thereof;
nor shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. The
rights and remedies provided herein and in the Note and such other documents and
agreements are cumulative and not exclusive of any rights or remedies otherwise
provided by agreement or law.
22
8.6. Governing Law. This Agreement and the Note shall be deemed to be
contracts made under seal and shall be construed in accordance with and governed
by the laws of the State of New York (without giving effect to any conflicts of
laws provisions contained therein).
8.7. Amendments. Neither this Agreement nor the Note nor any provision
hereof or thereof may be amended, waived, discharged or terminated except by a
written instrument signed by the Bank and, in the case of amendments, by the
Borrower.
8.8. Binding Effect of Agreement. This Agreement shall be binding upon and
inure to the benefit of the Borrower and the Bank and their respective
successors and assigns; provided that the Borrower may not assign or transfer
its rights or obligations hereunder. The Bank may sell or transfer its interests
hereunder and under the Note without the consent of the Borrower, or grant
participations therein to participants without such consent. In the case of any
such participation, the Borrower agrees that any such participant shall be
entitled to the benefits of Sections 2.6, 2.7, and 8.3 to the same extent as if
such transferee or participant were the Bank hereunder, but only if the Bank
would then be entitled to such benefits; provided the Borrower may, for all
purposes of this Agreement, treat the Bank as the person entitled to exercise
all rights hereunder and under the Note and to receive all payments with respect
thereto.
8.9. Counterparts. This Agreement may be signed in any number of
counterparts with the same effect as if the signatures hereto and thereto were
upon the same instrument.
8.10. Partial Invalidity. The invalidity or unenforceability of any one or
more phrases, clauses or sections of this Agreement shall not affect the
validity or enforceability of the remaining portions of it.
8.11. Captions. The captions and headings of the various sections and
subsections of this Agreement are provided for convenience only and shall not be
construed to modify the meaning of such sections or subsections.
8.12. WAIVER OF JURY TRIAL. THE BANK AND THE BORROWER AGREE THAT NEITHER
OF THEM NOR ANY ASSIGNEE OR SUCCESSOR SHALL (A) SEEK A JURY TRIAL IN ANY
LAWSUIT, PROCEEDING, COUNTERCLAIM OR ANY OTHER ACTION BASED UPON, OR ARISING OUT
OF, THIS AGREEMENT, THE NOTE, ANY RELATED DOCUMENTS OR AGREEMENTS OR THE
DEALINGS OR THE RELATIONS BETWEEN OR AMONG ANY OF THEM, OR (B) SEEK TO
CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT
BE OR HAS NOT BEEN WAIVED. NEITHER THE BANK NOR THE BORROWER HAS AGREED WITH OR
REPRESENTED TO THE OTHER THAT THE PROVISIONS OF THIS PARAGRAPH WILL NOT BE FULLY
ENFORCED IN ALL INSTANCES.
8.13 Entire Agreement. This Agreement, the Note and the documents and
agreements executed in connection herewith constitute the final agreement of the
parties hereto
23
and supersede any prior agreement or understanding, written or oral, with
respect to the matters contained herein and therein.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized officers as of the day and year first above written.
FINANCIAL INSTITUTIONS, INC.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------
Its: SVP & CFO
-----------------------------
MANUFACTURERS AND TRADERS
TRUST COMPANY
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------
Its: Vice President
-----------------------------
24
EXHIBIT A
Standard LIBOR Grid Note
See Attached Note
[LOGO] M&T Bank
Manufacturers and Traders Trust Company
STANDARD LIBOR GRID NOTE
New York
Buffalo, New York April 25, 2001 $5,000,000.00
BORROWER: FINANCIAL INSTITUTIONS, INC.
a(n) |_| individual(s) |_| partnership |X| corporation |_|________ organized
under the laws of New York
Address of residence/chief executive office: 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxx
Xxxx 00000
BANK: MANUFACTURERS AND TRADERS TRUST COMPANY, a New York banking corporation
with its principal banking xxxxxx xx Xxx X & X Xxxxx, Xxxxxxx, XX 00000.
Attention: Office of General Counsel
37) DEFINITIONS. Each capitalized term shall have the meaning specified herein
and the following terms shall have the indicated meanings:
a) "Authorized Person" shall mean, each individually, Xxxxxx X. Xxxxxx
Mention of the Authorized Person's name is for reference purposes
only and the Bank may rely on a person's title to ascertain whether
someone is an Authorized Person.
b) "Automatic Adjustment Date" shall mean two (2) Business Days before
the last day of the Interest Period initially selected by the
Borrower for a LIBOR Rate Loan that is subject to the Automatic
Continuation Option.
c) "Automatic Continuation Option" shall mean the option to have the
Interest Period for a LIBOR Rate Loan to automatically continue at
the same Interest Period duration initially selected by the Borrower
for such LIBOR Rate Loan as of the last day such Interest Period.
d) "Base Rate" shall mean 0 percentage points above the rate of
interest announced by the Bank as its prime rate of interest
("Prime"). If the prior blank is not completed, the Base Rate shall
be one (1) percentage point above Prime.
e) "Base Rate Loan" shall mean a Loan which bears interest at the Base
Rate.
f) "Business Day" shall mean any day of the year on which banking
institutions in New York, New York are not authorized or required by
law or other governmental action to close and, in connection with
the LIBOR Rate, on which dealings are carried on in the London
interbank market.
g) "Continuation Date" shall mean the date on which Borrower's election
to continue a LIBOR Rate Loan for another Interest Period becomes
effective in accordance with this Note.
h) "Conversion Date" shall mean the date on which Borrower's election
to convert a Base Rate Loan to a LIBOR Rate Loan or a LIBOR Rate
Loan to a Base Rate Loan becomes effective in accordance with this
Note.
i) "Interest Period" shall mean, as to any LIBOR Rate Loan, the period
commencing on the Draw Date, the Conversion Date or Continuation
Date for such LIBOR Rate Loan and ending on the numerically
corresponding day (or, if there is no numerically corresponding day,
on the last day) of the calendar month that is one (1), two (2),
three (3) or six (6)months thereafter, in each case as Borrower may
elect; provided, however, that if an Interest Period would end on a
day that is not a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless such next
succeeding Business Day would fall in the next calendar month, in
which case such Interest Period shall end on the immediately
preceding Business Day.
j) "Draw Date" shall mean, in relation to any Loan, the Business Day on
which such Loan is made, or to be made, to Borrower pursuant to the
Note.
k) "LIBOR Rate Loan" shall mean a Loan which bears interest at the
LIBOR Rate.
l) "LIBOR" shall mean the rate obtained by dividing (i) the one, two,
three or six month interest period London Interbank Offered Rate (as
selected by Borrower) as fixed by the British Bankers Association
for United States dollar deposits in the London Interbank Eurodollar
Market at approximately 11:00 a.m. London, England time (or as soon
thereafter as practicable) as determined by the Bank from any
broker, quoting service or commonly available source utilized by the
Bank by (ii) a percentage equal to 100% minus the stated maximum
rate of all reserves required to be maintained against "Eurocurrency
Liabilities" as specified in Regulation D (or against any other
category of liabilities which includes deposits by reference to
which the interest rate on LIBOR Rate Loan or Loans is determined or
any category of extensions of credit or other assets which includes
loans by a non-United States' office of a bank to United States'
residents) on such date to any member bank of the Federal Reserve
System.
m) "LIBOR Rate" shall mean 1.50 percentage points above LIBOR with an
Interest Period selected by Borrower.
n) "Loan" means a loan made to Borrower by the Bank pursuant to this
Note.
o) "Maximum Principal Amount" shall mean Five Million and 00/100
Dollars ($ 5,000,000.00).
p) "Minimum Borrowing Amount" shall mean (i) for Base Rate Loans, any
whole dollar increment and (ii) for LIBOR Rate Loans, $ 100,000.00
with minimum increments thereafter of $ 100,000.00 ; provided,
however, in no event shall the Minimum Borrowing Amount for a LIBOR
Rate Loan be less than $100,000.00 with minimum increments
thereafter of $100,000.00.
q) "Outstanding Principal Amount" shall mean the actual outstanding
principal amount under this Note at any time.
38) PAYMENT OF PRINCIPAL, INTEREST AND EXPENSES
a) Promise to Pay. For value received, and intending to be legally bound,
Borrower promises to pay to the order of the Bank on or before the "Termination
Date", as defined in that certain Revolving Credit Agreement (the " Credit
Agreement") of even date herewith between the Borrower and the Bank, the Maximum
Principal Amount or the Outstanding Principal Amount, if less; plus interest as
set forth below and all fees and costs (including, without limitation,
reasonable attorneys' fees and disbursements, for outside counsel) the Bank
incurs in order to collect any amount due under this Note, to negotiate or
document a workout or restructuring, or to preserve its rights or realize upon
any guaranty or other security for the payment of this Note ("Expenses").
b) Interest. Each Loan shall earn interest on the Outstanding Principal
Amount thereof calculated on the basis of a 360-day year for the actual number
of days of each year (365 or 366) that on each day shall be:
i) LIBOR Rate Loans. Interest shall accrue on a LIBOR Rate Loan from
and including the first day of the Interest Period applicable
thereto until, but not including, the last day of such Interest
Period or the day the LIBOR Rate Loan is paid in full (if sooner) at
a rate per annum equal to the LIBOR Rate in effect on the following
dates (depending on the circumstance): (i) for new LIBOR Rate Loans,
the Business Day the Bank receives (or is deemed to receive) a
Request for a LIBOR Rate Loan; (ii) for conversions and
continuations of LIBOR Rate Loans pursuant to Section 4, the
Business Day the Bank receives (or is deemed to receive) the Notice
of Conversion or Notice of Continuation, as the case may be, in
accordance with Section 4(b); for LIBOR Rate Loans where the
Automatic Continuation Option is selected, the Automatic Adjustment
Date for such LIBOR Rate Loan.
ii) Base Rate Loans. Interest shall accrue on a Base Rate Loan from
and including the first date the Base Rate Loan was made (i.e., the
Draw Date or the Conversion Date, as the case may be) to, but not
including, the day such Base Rate Loan is paid in full or converted,
at the rate per annum equal to the Base Rate. Any change in the Base
Rate resulting from a change in the Bank's prime rate shall be
effective on the date of such change.
c) Maximum Legal Rate. It is the intent of the Bank and of Borrower that
in no event shall interest be payable at a rate in excess of the maximum rate
permitted by applicable law (the "Maximum Legal Rate"). Solely to the extent
necessary to prevent interest under this Note from exceeding the Maximum Legal
Rate, any amount that would be treated as excessive under a final judicial
interpretation of applicable law shall be deemed to have been a mistake and
automatically canceled, and, if received by the Bank, shall be refunded to
Borrower.
d) Payments; Late Charge; Default Rate. Payments shall be made in
immediately available United States funds at any banking office of the Bank.
Interest shall be due and payable as follows: (i) in respect to each Base Rate
Loan, monthly when invoiced and (ii) in respect to each LIBOR Rate Loan, on the
last day of each Interest Period applicable thereto. If payment is not received
within five days of its due date, Borrower shall pay a late charge equal to the
greatest of (a) 5% of the delinquent amount, (b) the Bank's then current late
charge as announced by the Bank from time to time, or (c) $50.00. In addition,
if the Bank has not actually received any payment under this Note within thirty
days after its due date, from and after such thirtieth day the interest rate for
all amounts outstanding under this Note shall automatically increase to 5
percentage points above the higher of the Base Rate or the highest LIBOR Rate
(the "Default Rate"), and any judgment entered hereon or otherwise in connection
with any suit to collect amounts due hereunder shall bear interest at the
Default Rate. Payments may be applied in any order in the sole discretion of the
Bank but, prior to demand, shall be applied first to past due interest,
Expenses, late charges, and principal payments, if any, which are past due, then
to current interest and Expenses and late charges, and last to remaining
principal.
e) Prepayment of LIBOR Rate Loans. If (i) Borrower pays, in whole or in
part, any LIBOR Rate Loan, before the expiration of its respective Interest Rate
Period, (ii) fails to draw down, in whole or in part, a LIBOR Rate Loan after
giving a Request therefor, (iii) otherwise tries to revoke any LIBOR Rate Loan,
in whole or in part, or (iv) there occurs a Bankruptcy Event or the applicable
rate is converted from the LIBOR Rate to the Base Rate pursuant to Section 4(d),
then Borrower shall be liable for and shall pay the Bank, on demand, the actual
amount of the liabilities, expenses, costs or funding losses that are a direct
or indirect result of such prepayment, failure to draw, early termination of an
Interest Period, revocation, bankruptcy or otherwise, whether such liability,
expense, cost or loss is by reason of (a) any reduction in yield, by reason of
the liquidation or reemployment of any deposit or other funds acquired by the
Bank, or (b) the fixing of the interest rate payable on any LIBOR Rate Loans.
The determination by the Bank of the amount of foregoing amount shall, in the
absence of manifest error, be conclusive and binding upon Borrower.
39) LOANS.
a) General. Any Loan hereunder shall either be in the form of a Base Rate
Loan or a LIBOR Rate Loan. No Loan, or any portion thereof, shall be made to the
extent that the sum of the (i) principal amount of the requested Loan, or any
portion thereof and (ii) the Outstanding Principal Amount of all Loans under the
Note exceeds the Maximum Principal Amount under this Note. The Bank may make any
Loan in reliance upon any oral, telephonic, written, teletransmitted or other
request (the "Request(s)") that the Bank in good faith believes to be valid and
to have been made by Borrower or on behalf of Borrower by an Authorized Person.
The Bank may act on the Request of any Authorized Person until the Bank shall
have received from Borrower, and had a reasonable time to act on, written notice
revoking the authority of such Authorized Person. The Bank shall incur no
liability to Borrower or to any other person as a direct or indirect result of
making any Loan pursuant to this paragraph.
b) Request for LIBOR Rate Loans. Borrower shall give the Bank its
irrevocable Request for a LIBOR Rate Loan specifying:
i) the Draw Date for the LIBOR Rate Loan, which shall be two (2)
Business Days after the date of the Request; provided, however
if a Request is received by the Bank after 2:00 p.m. (Eastern
Time), the Request for the LIBOR Rate Loan shall be deemed to
have been received on the next Business Day;
ii) the aggregate amount of such LIBOR Rate Loan, which amount
shall not be less than the Minimum Borrowing Amount;
iii) the applicable Interest Period (i.e., 1, 2, 3 or 6 month
Interest Period); and
iv) whether Borrower is electing the Automatic Continuation Option
for such LIBOR Rate Loan.
c) Requests for Base Rate Loans. Borrower may request any Base Rate Loan
not later than 2:00 p.m. (Eastern Time) on any proposed Draw Date specifying the
aggregate amount of such Base Rate Loan.
d) Delivery of Requests Delivery of a Notice or Request for a LIBOR Rate
Loan or a Base Rate Loan shall be made to the Bank as follows, or such other
contact point designated by the Bank from time to time:
Manufacturers and Traders Trust Company
Attn: Xxxxxxx X. Xxxxxxx
------------------------------
Fax No. (000) 000-0000
----------------------------
Telephone No. (000) 000-0000
----------------------
40) CONTINUATION and CONVERSION ELECTIONS.
a) Election. An Authorized Person of Borrower may, upon irrevocable
Request to the Bank,
i) elect to convert on any Business Day any Base Rate Loan into a
LIBOR Rate Loan provided the amount converted is not less than
the Minimum Borrowing Amount; or
ii) elect to convert any or a part of LIBOR Rate Loan as of the
last day of the applicable Interest Period into a Base Rate
Loan provided no partial conversion of a LIBOR Rate Loan shall
reduce the outstanding principal amount of such LIBOR Rate
Loan to less than the Minimum Borrowing Amount; or
iii) elect to continue all or a part (subject to the Minimum
Borrowing Amount limitation) of any LIBOR Rate Loan as of the
last day of the Interest Period applicable to such LIBOR Rate
Loan with the same or a different Interest Period provided no
partial continuation of a LIBOR Rate Loan with a different
Interest Period shall reduce the outstanding principal amount
of the LIBOR Rate Loan with the same Interest Period to less
than the Minimum Borrowing Amount.
b) Notice of Conversion/Continuation.
i) For an election under Section 4(a)(i) or 4(a)(iii), an
Authorized Person must deliver to the Bank by 2:00 p.m.
(Eastern Time) on a Business Day a Notice of Conversion
("Notice of Conversion") for an election under Section 4(a)(i)
or a Notice of Continuation ("Notice of Continuation") for an
election under Section 4(a)(iii) specifying:
(a) the aggregate amount of the Loans to be converted or
continued;
(b) the duration of the requested Interest Period (i.e., 1,
2, 3 or 6 month Interest Period); and
(c) whether the Automatic Continuation Option will be
activated for such LIBOR Rate Loan.
ii) The Continuation Date or Conversion Date (as the case may be)
shall be the later of (A) two (2) Business Days from the
Business Day the Bank receives the Notice of Conversion or
Notice of Continuation (either, a "Notice") in accordance with
the foregoing Section or (B) the last day of the relevant
Interest Period if a Notice is received by the Bank more than
two (2) Business Days before the last day of an Interest
Period. If a Notice is received after 2:00 p.m. (Eastern
Time), the Notice will be deemed to have been received on the
next Business Day. Notice of Continuation received more than
two (2) Business Days before the end of an Interest Period
shall be deemed to have been received two (2) Business Days
before the end of such Interest Period for purposes of
determining the LIBOR Rate for the next Interest Period per
Section 2(b)(i). Accordingly, if, for example, Borrower has a
LIBOR Rate Loan with a one month Interest Period ending on
June 15 and wants to continue the LIBOR Rate Loan with a two
month Interest Period, Borrower must deliver its Notice of
Continuation identifying the new two month Interest Period to
the Bank by 2:00 p.m. (Eastern Time) on June 13 (provided that
June 13 and June 14 are Business Days).
iii) For LIBOR Rate Loans where Borrower has elected to activate
the Automatic Continuation Option, the Bank shall
automatically continue such LIBOR Rate Loan with an same
Interest Period initially selected by the Borrower. Once the
Automatic Continuation Option has been activated for a LIBOR
Rate Loan, the submission of a Notice of Conversion or a
Notice of Continuation with a different Interest Period shall
result in the cancellation of the Automatic Continuation
Option for such LIBOR Rate Loan.
iv) For an election under Section 4(a)(ii), an Authorized Person
may deliver to the Bank a Notice of Conversion at any time
during an Interest Period up to the last day of such Interest
Period or may have the LIBOR Rate Loan automatically convert
to a Base Rate Loan pursuant to Section 4(c). Any such Notice
of Conversion delivered during an Interest Period shall be
effective on the last day of the Interest Period.
v) The Bank may take action in reliance upon any oral,
telephonic, written or teletransmitted Notice that the Bank in
good faith believes to be valid and to have been made by
Borrower or on behalf of Borrower by an Authorized Person. No
Notice may be delivered by e-mail. The Bank may act on the
Notice from any Authorized Person until the Bank shall have
received from Borrower, and had a reasonable time to act on,
written notice revoking the authority of such Authorized
Person. The Bank shall incur no liability to Borrower or to
any other person as a direct or indirect result of acting on
any Notice under this Note. The Bank, in its sole discretion,
may reject any Notice that is incomplete.
c) Expiration of Interest Period. Unless Borrower has elected the
Automatic Continuation Option with respect to a LIBOR Rate Loan, if Borrower
does not submit a Notice of Continuation in accordance with Section 4(b)(i) and
4(b)(ii) so that the Bank receives the Notice of Continuation at least two (2)
Business Days before the end of an Interest Period with respect to such LIBOR
Rate Loan, such LIBOR Rate Loan shall automatically be converted into a Base
Rate Loan and such Loan shall
accrue interest at the Base Rate until two (2) Business Days after the Bank
receives a Notice of Conversion pursuant to Section 4(b)(i) and 4(b)(ii)
electing to convert the Loan from a Base Rate Loan to a LIBOR Rate Loan pursuant
to Section 4(a)(i). A Notice of Continuation received one (1) Business Day
before the end of an Interest Period will not effect a continuation of such Loan
as a LIBOR Rate Loan. Rather, such LIBOR Rate Loan shall automatically convert
to a Base Rate Loan on the last day of the Interest Period. The late Notice of
Continuation, however, will be deemed to be a Notice of Conversion that will be
effective two (2) Business Days from the date received by the Bank.
d) Conversion upon Default. Unless the Bank shall otherwise consent in
writing, if (i) Borrower has failed to pay when due, in whole or in part, the
indebtedness under the Note, or (ii) there exists a condition or event which
with the passage of time, the giving of notice or both shall constitute an event
of default under any of Borrower's agreement with the Bank, if any, Borrower may
not elect to have a Loan converted or continued as a LIBOR Rate Loan or have any
Loan made as a LIBOR Rate Loan. Further, the Bank, in its sole discretion, may
(i) permit any outstanding LIBOR Rate Loans to continue until the last day of
the applicable Interest Period at which time such Loan shall automatically be
converted into a Base Rate Loan or (ii) convert any outstanding LIBOR Rate Loans
into a Base Rate Loan before the end of the applicable Interest Period
applicable to such LIBOR Rate Loan. Notwithstanding the foregoing, if Borrower
commences, or has commenced against it, any proceeding or request for relief
under any bankruptcy, insolvency or similar laws now or hereafter in effect in
the United States of America or any state or territory thereof or any foreign
jurisdiction or any formal or informal proceeding for the dissolution or
liquidation of, settlement of claims against or winding up of affairs of
Borrower (a "Bankruptcy Event"), any outstanding LIBOR Rate Loans shall be
automatically converted to Base Rate Loans without further action by the Bank
and Borrower's rights to have Base Rate Loans converted under Section 4 shall be
automatically terminated. Nothing herein shall be construed to be a waiver by
the Bank to have any Loan accrue interest at the Default Rate of interest (which
shall be calculated from the higher of the LIBOR Rate or the Base Rate) or the
right of the Bank to the amounts set forth in Section 2(e) of this Note.
41) SETOFF. After the occurrence of any "Default," as defined in the Credit
Agreement, the Bank shall have the right to set off against the amounts owing
under this Note any property held in a deposit or other account with the Bank or
any of its affiliates or otherwise owing by the Bank or any of its affiliates in
any capacity to Borrower or any guarantor or endorser of this Note. Such set-off
shall be deemed to have been exercised immediately at the time the Bank or such
affiliate elect to do so.
42) DEFAULT. Upon the occurrence of an "Event of Default" under the Credit
Agreement, the Bank shall be entitled to the remedies set forth in Section 7.2
of the Credit Agreement.
43) BANK RECORDS CONCLUSIVE. The Bank shall set forth on a schedule attached to
this Note or maintained on computer, the date and original principal amount of
each Loan and the date and amount of each payment to be applied to the
Outstanding Principal Amount of this Note. The Outstanding Principal Amount set
forth on any such schedule shall be presumptive evidence of the Outstanding
Principal Amount of this Note and of all Loans. No failure by the Bank to make,
and no error by the Bank in making, any annotation on any such schedule shall
affect the Borrower's obligation to pay the principal and interest of each Loan
or any other obligation of Borrower to the Bank pursuant to this Note.
44) PURPOSE. Borrower certifies (a) that no Loan will be used to purchase margin
stock except with the Bank's express prior written consent for each such
purchase and (b) that all Loans shall be used for a business purpose, and not
for any personal, family or household purpose.
45) AUTHORIZATION. Borrower, if a corporation, partnership, limited liability
company, trust or other entity, represents that it is duly organized and in good
standing or duly constituted in the state of its organization and is duly
authorized to do business in all jurisdictions material to the conduct of its
business; that the execution, delivery and performance of this Note have been
duly authorized by all necessary regulatory and corporate or partnership action
or by its governing instrument; that this Note has been duly executed by an
authorized officer, partner or trustee and constitutes a binding obligation
enforceable against Borrower and not in violation of any law, court order or
agreement by which Borrower is bound; and that Borrower's performance is not
threatened by any pending or threatened litigation.
46) INABILITY TO DETERMINE LIBOR RATES, INCREASED COSTS, ILLEGALITY.
a) Increased Costs. If the Bank shall determine that, due to either (a)
the introduction of any change (other than any change by way of imposition of or
increase in reserve requirements included in the calculation of the LIBOR) in or
in the interpretation of any requirement of law or (b) the compliance with any
guideline or request from any central bank or other governmental authority
(whether or not having the force of law), there shall be any increase in the
cost to the Bank of agreeing to make or making, funding or maintaining any LIBOR
Rate Loans, then Borrower shall be liable for, and shall from time to time, upon
demand therefor by the Bank and pay to the Bank such additional amounts as are
sufficient to compensate the Bank for such increased costs.
b) Inability to Determine Rates. If the Bank shall determine that for any
reason adequate and reasonable means do not exist for ascertaining LIBOR for any
requested Interest Period with respect to a proposed LIBOR Rate Loan, the Bank
will give notice of such determination to Borrower. Thereafter, the Bank may not
make or maintain LIBOR Rate Loans, as the case may be, hereunder until the Bank
revokes such notice in writing. Upon receipt of such notice, Borrower may revoke
any request for a LIBOR Rate Loan or Notice then submitted by it. If Borrower
does not revoke such notice the Bank may make, or continue the Loans, as
proposed by Borrower, in the amount specified in the applicable request
submitted by Borrower, but such Loans shall be made or continued as Base Rate
Loans instead of LIBOR Rate Loans, as the case may be.
c) Illegality. If the Bank shall determine that the introduction of any
law (statutory or common), treaty, rule, regulation, guideline or determination
of an arbitrator or of a governmental authority or in the interpretation or
administration thereof, has made it unlawful, or that any central bank or other
governmental authority has asserted that it is unlawful for the Bank to make
LIBOR Rate Loans, then, on notice thereof by the Bank to Borrower, the Bank may
suspend the making of LIBOR Rate Loans until the Bank shall have notified
Borrower that the circumstances giving rise to such determination shall no
longer exist. If the Bank shall determine that it is unlawful to maintain any
LIBOR Rate Loans, Borrower shall prepay in full all LIBOR Rate Loans then
outstanding, together with accrued interest, either on the last date of the
Interest Period thereof if the Bank may lawfully continue to maintain such LIBOR
Rate Loans to such day, or immediately, if the Bank may not lawfully continue to
maintain such LIBOR Rate Loans. If Borrower is required to prepay any LIBOR Rate
Loan immediately as set forth in this subsection,
then concurrently with such prepayment, Borrower may borrow from the Bank, in
the amount of such repayment, a Base Rate Loan.
47) MISCELLANEOUS. This Note, together with any related loan and security
agreements and guaranties, contains the entire agreement between the Bank and
Borrower with respect to the Note, and supersedes every course of dealing, other
conduct, oral agreement and representation previously made by the Bank. All
rights and remedies of the Bank under applicable law and this Note or amendment
of any provision of this Note are cumulative and not exclusive. No single,
partial or delayed exercise by the Bank of any right or remedy shall preclude
the subsequent exercise by the Bank at any time of any right or remedy of the
Bank without notice. No waiver or amendment of any provision of this Note shall
be effective unless made specifically in writing by the Bank. No course of
dealing or other conduct, no oral agreement or representation made by the Bank,
and no usage of trade, shall operate as a waiver of any right or remedy of the
Bank. No waiver of any right or remedy of the Bank shall be effective unless
made specifically in writing by the Bank. Borrower agrees that in any legal
proceeding, a copy of this Note kept in the Bank's course of business may be
admitted into evidence as an original. This Note is a binding obligation
enforceable against Borrower and its successors and assigns and shall inure to
the benefit of the Bank and its successors and assigns. If a court deems any
provision of this Note invalid, the remainder of the Note shall remain in
effect. Section headings are for convenience only. Singular number includes
plural and neuter gender includes masculine and feminine as appropriate.
48) NOTICES. Any demand or notice hereunder or under any applicable law
pertaining hereto shall be in writing and duly given if delivered to Borrower
(at its address on the Bank's records) or to the Bank (at the address on page
one and separately to the Bank officer responsible for Borrower's relationship
with the Bank). Such notice or demand shall be deemed sufficiently given for all
purposes when delivered (i) by personal delivery and shall be deemed effective
when delivered, or (ii) by mail or courier and shall be deemed effective three
(3) business days after deposit in an official depository maintained by the
United States Post Office for the collection of mail or one (1) business day
after delivery to a nationally recognized overnight courier service (e.g.,
Federal Express). Notice by e-mail is not valid notice under this or any other
agreement between Borrower and the Bank.
49) JOINT AND SEVERAL. If there is more than one Borrower, each of them shall be
jointly and severally liable for all amounts which become due under this Note
and the term "Borrower" shall include each as well as all of them.
50) GOVERNING LAW; JURISDICTION. This Note has been delivered to and accepted by
the Bank and will be deemed to be made in the State of New York. This Note will
be interpreted in accordance with the laws of the State of New York excluding
its conflict of laws rules. BORROWER HEREBY IRREVOCABLY CONSENTS TO THE
EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT IN ERIE COUNTY, NEW YORK;
PROVIDED THAT NOTHING CONTAINED IN THIS NOTE WILL PREVENT THE BANK FROM BRINGING
ANY ACTION, ENFORCING ANY AWARD OR JUDGMENT OR EXERCISING ANY RIGHTS AGAINST
BORROWER INDIVIDUALLY, AGAINST ANY SECURITY OR AGAINST ANY PROPERTY OF BORROWER
WITHIN ANY OTHER COUNTY, STATE OR OTHER FOREIGN OR DOMESTIC JURISDICTION.
Borrower acknowledges and agrees that the venue provided above is the most
convenient forum for both the Bank and Borrower. Borrower waives any objection
to venue and any objection based on a more convenient forum in any action
instituted under this Note.
51) WAIVER OF JURY TRIAL. BORROWER AND THE BANK HEREBY KNOWINGLY, VOLUNTARILY,
AND INTENTIONALLY WAIVE ANY RIGHT TO TRIAL BY JURY BORROWER AND THE BANK MAY
HAVE IN ANY ACTION OR PROCEEDING, IN LAW OR IN EQUITY, IN CONNECTION WITH THIS
NOTE OR THE TRANSACTIONS RELATED HERETO. BORROWER REPRESENTS AND WARRANTS THAT
NO REPRESENTATIVE OR AGENT OF THE BANK HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT THE BANK WILL NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THIS JURY
TRIAL WAIVER. BORROWER ACKNOWLEDGES THAT THE BANK HAS BEEN INDUCED TO ENTER INTO
THIS NOTE BY, AMONG OTHER THINGS, THE PROVISIONS OF THIS SECTION.
Preauthorized Transfers from Deposit Account. If a deposit account number is
provided in the following blank Borrower hereby authorizes the Bank to debit
available funds in Borrower's deposit account #8890769956 with the Bank
automatically for any amount which becomes due under this Note or as directed by
an Authorized Person, by telephone.
Acknowledgment. Borrower acknowledges that it has read and understands all the
provisions of this Note, including the Governing Law, Jurisdiction and Waiver of
Jury Trial, and has been advised by counsel as necessary or appropriate.
Replacement Note. This Note is given in replacement of and in substitution for,
but not in payment of, a note dated on or about July 3, 2002 in the original
principal amount of $10,000,000.00 issued by Borrower to the Bank.
TAX ID/SS # 00-0000000 FINANCIAL INSTITUTIONS, INC.
------------------------------ ----------------------------------
BORROWER
By:/s/ Xxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxx
----------------------------------
Its: Senior Vice President & CFO
----------------------------------
ACKNOWLEDGMENT
STATE OF NEW YORK)
: SS.
COUNTY OF WYOMING)
On the____day of December, in the year 2003, before me, the undersigned, a
Notary Public in and for said State, personally appeared Xxxxxx X. Xxxxxx,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual(s) whose name(s) is (are) subscribed to the within instrument
and acknowledged to me that he/she/they executed the same in his/her/their
capacity(ies), and that by his/her/their signature(s) on the instrument, the
individual(s), or the person upon behalf of which the individual(s) acted,
executed the instrument.
------------------------------
Notary Public
--------------------------------------------------------------------------------
FOR BANK USE ONLY
Authorization Confirmed:________________________________________________________
Product Code: 11900
Disbursement of Funds:
Credit A/C # Off Ck # Payoff Obligation #
------------ ------------ ----------
$ $ $
------------ ------------ ----------
SCHEDULE TO STANDARD LIBOR GRID NOTE
TYPE OF LOAN
AMOUNT LIBOR RATE INTEREST INTEREST AMOUNT NOTATION
DATE OF LOAN OR BASE RATE RATE* PERIOD** PAID MADE BY
---------------------------------
* For Base Rate Loans, insert "Base Rate"
** For LIBOR Rate Loans only
EXHIBIT B
FINANCIAL INSTITUTIONS, INC.
ENCUMBRANCES
NONE
EXHIBIT C
FINANCIAL INSTITUTIONS, INC.
LITIGATION
NONE
EXHIBIT D
FINANCIAL INSTITUTIONS, INC.
MATERIAL SUBSIDIARIES
Name Percentage of Ownership
---- -----------------------
Wyoming County Bank 99.60%
National Bank of Geneva 99.10%
Pavilion State Bank 100.00%
First Tier Bank & Trust 100.00%
EXHIBIT E
FINANCIAL INSTITUTIONS, INCREPORT OF CHIEF FINANCIAL OFFICER
Financial Institutions, Inc. (the "Borrower") hereby certifies that:
This Report is furnished pursuant to Section 5.1(c) of the Revolving
Credit Agreement dated as of April __, 2001 the ("Credit Agreement") between the
Borrower and MANUFACTURERS AND TRADERS TRUST COMPANY. Unless otherwise defined
herein, the terms used in this Report have the meanings given to them in the
Credit Agreement.
As required by Section 5.1(a) and (b) of the Credit Agreement, the
consolidated financial statements of the Borrower and its Subsidiaries for the
[year/quarter] ended _________________, 200__ (the "Financial Statements"),
prepared in accordance with generally accepted accounting principles
consistently applied, accompany this Report. The Financial Statements present
fairly the consolidated financial position of the Borrower and its Subsidiaries
as at the date thereof and the consolidated results of operations of the
Borrower and its Subsidiaries for the period covered thereby (subject only to
normal recurring year-end adjustments which will not in the aggregate be
material in amount).
The figures set forth in Schedule A for determining compliance by the
Borrower with the financial covenants contained in Sections 6.7, 6.8 and 6.10 of
the Credit Agreement are true and complete as of the date hereof.
As of the date hereof, Borrower and its Material Subsidiaries, excluding
any other federally-insured depository institution that was acquired after April
25, 2001 and prior to the Termination Date, have total "Risk-Based Capital
Ratios", "Tier I Risk-Based Capital Ratios", and "Leverage Ratios", as defined
in applicable FDIC regulations, sufficient to cause each of such entity or
consolidated entity to be considered "well capitalized" by the appropriate
Federal Banking Agency; and any other federally-insured depository institution
that was acquired after April 25, 2001 has total "Risk-Based Capital Ratios",
"Tier I Risk-Based Capital Ratios", and "Leverage Ratios", as defined in
applicable FDIC regulations, sufficient to cause each such entity so acquired to
be considered no less than "adequately capitalized", and any entity with which
it is consolidated to be considered "well capitalized", by the appropriate
Federal Banking Agency; to comply with Section 6.9 of the Credit Agreement.
The activities of the Borrower and its Subsidiaries during the period
covered by the Financial Statements have been reviewed by me as Borrower's Chief
Financial Officer or by employees or agents of Borrower under my immediate
supervision. Based on such review, to my best knowledge and belief, and as of
the date of this Report, no Default has occurred. *
WITNESS my hand this ___ day of_________ 2000_.
FINANCIAL INSTITUTIONS, INC.
By:
-------------------------------
Chief Financial Officer
*If a Default has occurred, this paragraph is to be modified with an appropriate
statement as to the nature thereof, the period of existence thereof and what
action the Borrower has taken, is taking, or proposes to take with respect
thereto.
SCHEDULE A
to
EXHIBIT E
AFFIRMATIVE (FINANCIAL) COVENANTS
Double Leverage Ratio (Section 6.7)
MAXIMUM PERMITTED 1.35: 1.00
---- -------
ACTUAL:
(i) Consolidated equity Investments in $
Subsidiaries -------------
(ii) Consolidated stockholders' equity $
-------------
(iii) Double Leverage Ratio: line (i) : 1.00
divided by line (ii) ---- -------
Nonperforming Asset Coverage Ratio (Section 6.8)
MINIMUM REQUIRED: 8.5: 1.00
---- -------
ACTUAL:
(i) Consolidated stockholders' equity $
-------------
(ii) loan loss reserves $
-------------
(iii) Non accrual and other past due loans and
leases $
-----------
(iv) Other real estate owned $
-----------
(v) Nonperforming assets: line (iii)
plus line(iv) $
-------------
(vi) Nonperforming Assets Coverage Ratio:
[line (i) plus line (ii)] divided by line (v) $ : 1.00
---- -------
Minimum Tangible Net Worth (Section 6.10)
REQUIRED: $75,000,000
ACTUAL:
(i) Consolidated stockholders' equity $
(ii) Less: Intangible assets ($ )
----------
(iii) Plus:
(iv) Total Tangible Net Worth (line (i) minus
line (ii) plus line (iii) $
-----------
WITNESS my hand this ______ day of ____________, 20__.
FINANCIAL INSTITUTIONS, INC.
By:
--------------------------------------
Chief Financial Officer
EXHIBIT F
OPINION OF COUNSEL TO THE BORROWER
