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EXHIBIT 10.2
[NORTHEAST PENNSYLVANIA FINANCIAL CORP. LETTERHEAD]
______________, 1997
Northeast Pennsylvania Financial Corp.
00 X. Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxxx 00000
Dear _____________:
This letter confirms Northeast Pennsylvania Financial Corp.'s
commitment to fund a leveraged ESOP in an amount up to $________. The commitment
is subject to the following terms and conditions:
1. Lender: Northeast Pennsylvania Financial Corp. (the
"Company").
2. Borrower: First Federal Bank Employee Stock Ownership Plan.
3. Trustee: ______________________________.
4. Security: Unallocated shares of stock of the Company held in
the First Federal Bank Employee Stock Ownership Plan.
5. Maturity: Up to 10 years from takedown.
6. Amortization: Equal annual principal and interest payments
7. Pricing:
a. [____%] or [the Prime Rate as published in the
Wall Street Journal on the date of the loan
transaction].
8. Interest Payments:
a. Annual on a 360 day basis.
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9. Funding: In full by _______________, unless such date is
waived by the Company.
10. Prepayment: Voluntary prepayments are permitted at any time.
11. Conditions Precedent to Closing: Receipt by the Company of
all supporting loan documents in a form and with terms and
conditions satisfactory to the Company and its counsel.
Consummation of the transaction will also be contingent
upon no material adverse change occurring in the condition
of First Federal Bank or the Company.
12. Closing Date: Not later than _____________, unless such date
is waived by the Company.
If the terms and conditions are agreeable to you, please indicate your
acceptance by signing the enclosed copy and returning it to my attention.
Sincerely,
Lending Officer
Accepted on Behalf of
First Federal Bank
By: Date:
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President and Chief Executive Officer
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FIRST FEDERAL BANK
EMPLOYEE STOCK OWNERSHIP TRUST
LOAN AND SECURITY AGREEMENT
First Federal Bank
00 X. Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxxx 00000
_______________ , 1998
Gentlemen:
The undersigned Trustee,________________________ ("Borrower"), not
individually but solely as Trustee under the First Federal Bank Employee Stock
Ownership Trust (the "Trust") effective ____________ applies to you, Northeast
Pennsylvania Financial Corp., (hereinafter referred to as the "Lender"), for
your commitment, subject to all of the terms and conditions hereof and on the
basis of the representations hereinafter set forth, to make a loan available to
the Borrower as hereinafter set forth. The term "Bank" as used herein refers to
First Federal Bank, the sponsoring employer of the First Federal Bank Employee
Stock Ownership Plan (the "ESOP").
SECTION ONE. THE TERM LOAN.
1.1 AMOUNT AND TERMS. Subject to and upon the terms and conditions
herein set forth, the Lender agrees to lend amounts to the Borrower, (the
"Loan"), from time to time during the period of this agreement up to but not
including the maturity date of _________in an aggregate principal amount ("Loan
Amount") sufficient to permit the Borrower to acquire a number of shares
("Shares") of common stock, par value $0.01 ("Common Stock") of Northeast
Pennsylvania Financial Corp., a Delaware corporation, and the Holding Company of
the Bank, equal to 8% of the Shares issued in connection with the conversion of
the Bank from the mutual to stock form.
The Loan is intended to be an "exempt loan" as described in Section
4975(d)(3) of the Internal Revenue Code of 1986, as amended (the "Code"), as
defined in Section 54.4975-7(b) of the Treasury Regulations (the "Regulations"),
as described in Section 408(b)(3) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA") and as described in Department of Labor
Regulations Section 2550.408b-3 (collectively, the "Exempt Loan Rules").
1.2 THE NOTE. The disbursement of the Loan pursuant to Section 1.1
hereof shall be made against and evidenced by a promissory note of the Borrower
in the form annexed hereto as Exhibit A (the "Note"), such Note is to bear
interest as hereinafter provided, and to mature in ten
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(10) equal annual installments consisting of both principal and interest
amortized over a ten (10) year period in an amount sufficient to repay all
borrowed amounts plus interest, commencing on __________________ and on the last
day of each and every ___________ each year thereafter, except that the final
installment in the amount of all principal and interest not sooner paid shall be
due on________________, the final maturity thereof.
Without regard to the principal amount of the Note stated on its face,
the actual principal amount at any time outstanding and owed by the Borrower on
account of the Note shall be the amount of the disbursement of the Loan made by
the Lender under Section 1.1 hereof less all payments of principal actually
received by the Lender. The amount of such disbursement made by the Lender and
any repayments of principal thereof shall be recorded by the Lender on its books
or records or, at its option, endorsed on the reverse side of the Note by the
Lender and the unpaid principal balance at any time so recorded or endorsed by
the Lender shall be prima facie evidence in any court or other proceedings
brought to enforce the Note of the principal amount remaining unpaid thereon.
1.3 EXEMPT LOAN RULES. Notwithstanding anything to the contrary
contained in this Loan and Security Agreement (the "Agreement") or in the Note,
the Borrower shall be obligated to make repayments of the Loan only to the
extent that such repayments when added to the repayments theretofore made during
the applicable plan year would not exceed an amount which would cause the
limitations of Section 415 of the Code to be exceeded for any ESOP participant.
Except as set forth in the next succeeding sentence and to the extent
permitted by applicable law, including, without limitation, the Exempt Loan
Rules, the principal amount of the Loan and any interest thereon shall be
payable solely from contributions (other than contributions of employer
securities) made to the Trust in accordance with the ESOP, and cash dividends
received on the Shares, to enable the Borrower to pay its obligations under the
Loan and from earnings attributable to the Shares and the investment of such
contributions and dividends.
The Lender acknowledges and agrees that it shall have no other recourse
against the Borrower for repayment of the Loan and that it shall have no
recourse against assets of the ESOP included in the Trust other than pursuant to
Sections 3 and 8 hereof.
SECTION TWO. INTEREST AND FEES.
2.1 INTEREST RATE. The Loan shall bear interest (which the
Borrower hereby promises to pay) prior to maturity (whether by lapse of time,
acceleration or otherwise) at a rate per annum equal at all times to the
Interest Rate as defined in Section 10.3 hereof.
The term "Interest Rate" shall mean the prime rate as published in the
Wall Street Journal on ___________________.
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2.2 BASIS AND PAYMENT DATES. All interest accruing on the Note
prior to maturity shall be due and payable on a annual basis on the last day of
each year (commencing ____________) and at maturity (unless prepaid in whole
prior to such date, then on the date of such prepayment in whole) and interest
accruing after maturity shall be due and payable upon demand. All interest on
the Note shall be computed on the basis of a year of 360 days.
SECTION THREE. COLLATERAL.
3.1 GRANT OF SECURITY INTEREST-PLEDGED SHARES. The Borrower hereby
grants, pledges and assigns to the Lender all Shares of the issued and
outstanding common stock, par value $.01 per share all of which were either (i)
purchased by the Borrower from the proceeds of the disbursement of the Loan;
(ii) acquired by the Borrower with the proceeds of a prior exempt loan within
the meaning of Section 54.4975-7(b) of the Regulations, and pledged as
collateral for such prior exempt loan, where the balance of such prior exempt
loan has been repaid with the proceeds of the disbursement of the Loan (the
"Pledged Shares" being hereinafter referred to as the "Collateral"). The Pledged
Shares shall be evidenced by a stock certificate. The assignment and pledge
herein granted and provided for is made and given to secure and shall secure the
prompt payment of principal of and interest on the Note as and when the same
becomes due and payable and the payment, observance and performance of any and
all obligations and liabilities arising under or provided for in this Agreement
or the Note or any of them in each instance as the same may be amended or
modified and whether now existing or hereafter arising.
3.2 FURTHER ASSURANCES. The Borrower covenants and agrees that it
will at any time and from time to time as requested by the Lender execute and
deliver such further instruments and perform such other acts as the Lender may
reasonably deem necessary or desirable to provide for or perfect the lien of the
Lender in the Collateral hereunder.
3.3 VOTING. Upon the occurrence of a Default, as defined in
Section Nine hereunder, the Lender shall have the right to transfer the
Collateral or any part thereof into its name or into the name of its nominee.
The Lender shall not be entitled to vote the Pledged Shares unless and until a
Default has occurred and so long as the same shall not have been waived by the
Lender.
3.4 PARTIAL RELEASES. The Lender agrees, provided always that no
Default shall have occurred and be continuing, as promptly as is practicable
after__________ in each year (the period commencing_____________ and
ending______________ and each subsequent 12-month period ending
on_______________ being hereinafter referred to as a "Plan Year"), to release
that number of Pledged Shares then being held to secure the Loan which is equal
to the number of such Pledged Shares held as of the last day of the Plan Year
multiplied by a fraction, the numerator of which is the aggregate amount of all
principal and interest payments made on the Note during the Plan Year and the
denominator of which is the sum of the numerator plus the unpaid principal and
interest of the Note as of the last day of such Plan Year.
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SECTION FOUR. PAYMENTS.
4.1 PLACE AND APPLICATION. All payments of principal, interest,
fees and all other amounts payable hereunder shall be made to the Lender
at_____________________________________ for the account of the Lender (or at
such other place for the account of the Lender as the Lender may from time to
time in writing specify to the Borrower) in immediately available and freely
transferable funds. All payments shall be paid in full without setoff or
counterclaim and without reduction for and free from any and all taxes, levies,
duties, fees, charges, deductions, withholdings, restrictions or conditions of
any nature imposed by any government or any political subdivision or taxing
authority thereof.
4.2 PREPAYMENTS. The Borrower shall have the privilege of
prepaying in whole or in part the Note at any time upon giving three (3)
Business Days' prior notice to the Lender, each such prepayment to be made by
the payment of the principal amount to be prepaid and accrued interest thereon
to the date fixed for prepayment. The term "Business Day" shall mean any day on
which savings institutions are generally open for business in Pennsylvania,
other than Saturday and Sunday. All such prepayments shall be made without
premium or penalty. Prepayments shall first be applied to the several
installments of the Note in the inverse order of their respective maturities.
SECTION FIVE. REPRESENTATIONS AND WARRANTIES.
The Borrower represents and warrants to the Lender as follows:
5.1 The Trust is a duly organized, validly existing employee stock
ownership trust.
5.2 The proceeds of the disbursement of the Loan shall be applied
in their entirety to the payment of the purchase price for the Pledged Shares.
5.3 The Borrower has full right, power and authority to enter into
this Agreement, to make the borrowings hereunder provided for, to issue the Note
in evidence thereof and to perform each and all of the matters and things herein
and therein provided for and this Agreement does not, and the Note when issued
will not, nor will the performance or observance by the Borrower of any of the
matters or things herein or therein provided, contravene any provision of law or
the Trust or any other covenant or agreement affecting the Trust or any of its
assets. As of the date of the disbursement of the Loan, the Pledged Shares will
be fully paid and non-assessable and the Pledged Shares will be owned by the
Borrower free and clear of all liens, charges and encumbrances whatsoever,
except for any lien of Lender provided for herein.
5.4 Except as disclosed to the Lender in writing, there is no
litigation or governmental proceeding pending, nor to the knowledge of the
Borrower threatened, against the ESOP and Trust.
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5.5 The ESOP and Trust have no material liabilities, whether
absolute or contingent, except for those heretofore disclosed to the Lender.
SECTION SIX. REPRESENTATIONS AND WARRANTIES OF THE LENDER
The Lender represents and warrants that:
6.1 The Lender is a corporation duly organized under the laws of
the State of Delaware, and is validly existing and in good standing under the
laws of the State of Delaware. The Lender has full power and authority and legal
right to make and perform this Agreement.
6.2 The execution, delivery and performance by the Lender of this
Agreement have been duly authorized by all necessary action by the Lender and is
not and will not violate any provisions of law applicable to the Lender, any
rules, regulations or orders applicable to the Lender or any judgments or
decrees binding upon the Lender. This Agreement is a valid and legally binding
obligation of the Lender enforceable against the Lender in accordance with its
terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting credits' rights generally
and the general principles of equity (regardless of whether considered in a
proceeding at law or in equity).
6.3 No authorizations, approvals or consents of, and no filings or
registrations with, any governmental regulatory authority or agency are required
for the execution, delivery or performance by the Lender of this Agreement, or
any transaction contemplated hereby, or for the validity or enforceability
against the Lender hereof except as have already been received or accomplished.
6.4 The execution, delivery and performance of the Agreement and
the consummation of the transactions contemplated hereby will not violate,
conflict with or constitute a default under (i) any of the provisions of the
Lender's Certificate of Incorporation or Bylaws, (ii) any provision of any
agreement, instrument, order, arbitration award, judgment or decree to which the
Lender is a party or by which it is or its assets are bound (iii) any statute,
rule or regulation of any federal, state or local government or agency
applicable to the Lender, except in any such case (i), (ii), (iii) above, for
any such conflicts, violations, defaults which either individually or in the
aggregate do not have a material adverse effect on the business properties of
the Lender and its subsidiaries, taken as a whole.
6.5 The Bank has taken such actions as are required by applicable
law to be taken by it to establish the ESOP and the Trust.
6.6 There is no action, suit, investigation or proceeding pending,
or to the best knowledge of the Bank, threatened against or affecting the ESOP
before any court or governmental department, agency or instrumentality.
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6.7 The Loan will be an "exempt loan" as that term is defined
under Section 54.4975-7(b)(1)(iii) of the Regulations, provided the ESOP
Committee determines that the interest rate is not more than reasonable; and the
transactions contemplated by this Agreement are not "prohibited transactions"
within the meaning of Section 4975 of the Code or Section 406(a) of ERISA.
6.8 Except as otherwise provided in this Agreement, the Shares are
not subject to any restriction on transfer under applicable Federal securities
law and may be freely traded over-the-counter.
SECTION SEVEN. CONDITIONS PRECEDENT.
The obligation of the Lender to make the Loan shall be subject to
satisfaction of the following conditions precedent:
7.1 The Lender shall have received executed originals of this
Agreement and the Note duly signed and properly completed.
7.2 The Lender shall have received either (i) the certificate
evidencing all the Pledged Shares together with duly executed blank stock power
therefore or (ii) if such Pledged Shares are not yet available, a duly executed
agreement to pledge such stock in the form attached hereto as Exhibit B (in
which event such certificate and stock power will be delivered within 6 days of
the date of the Lender makes the Loan).
7.3 The Lender shall have received copies (executed or certified,
as may be appropriate) of all legal documents or proceedings taken in connection
with the execution and delivery of this Agreement and the Note.
SECTION EIGHT. COVENANTS.
Borrower covenants and agrees that so long as any amount remains unpaid
on the Note or the Commitment is outstanding, except to the extent compliance in
any case or cases is waived in writing by the Lender:
8.1 COMPLIANCE. The Borrower will comply with all requirements of
the Code, ERISA and any other law, rule or regulation applicable to it as such
laws, rules or regulations affect the ESOP or the Trust.
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8.2 REPORTS.
(a) The Borrower will maintain a system of accounting for the
ESOP and the Trust in accordance with sound accounting practice and
will, from time to time, furnish to the Lender and its duly authorized
representatives, such information and data with respect to the
financial condition of the ESOP and the Trust as the Lender may
reasonably request.
(b) Without any request the Borrower will furnish to the
Lender promptly after knowledge thereof shall have come to the
attention of the Borrower, written notice of the occurrence of any
Default hereunder or of any threatened or pending litigation or
governmental proceeding against the Plan or the Trust.
8.3 DETERMINATION LETTER. The Bank shall apply for a determination
letter from the Internal Revenue Service that the Plan and the Trust, taken
together, qualify as an employee stock ownership plan for purposes of Section
4975(e)(7) of the Code and the rules and regulations thereunder.
SECTION NINE. DEFAULT AND REMEDIES.
9.1 DEFAULT. Any one or more of the following events shall
constitute a Default hereunder:
(a) As of the date when due, the Borrower fails to make
payment of principal and/or interest with respect to the Note or any
other amounts payable under this Agreement when due;
(b) As of the date proven false, the Borrower makes any
representation, warranty or statement herein or in connection with the
making of the Loan which proves to be incorrect in any material
respect;
(c) As of the date the Borrower fails to perform or observe
any term, covenant or agreement (other than those referred to in
subparts (a) and (b), inclusive, of this Section 9.1) contained in this
Agreement and such failure continues unremedied for a period of 30 days
after notice to the Borrower by the Lender or any other holder of the
Note;
(d) As of the date of termination of the ESOP if such
termination is prior to the expiration of the term of this Agreement.
9.2 LIMITATIONS ON USE OF TRUST ASSETS. When any Default described
in subsections (a) to (c), of Section 9.1 has occurred and is continuing, the
Lender or the holder of the Note shall have no rights to assets of the Trust
other than (i) contributions (other than contributions of employer securities)
that are made by the Lender to enable the Borrower to meet its obligations
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pursuant to the Loan, cash dividends received by the Borrower on the Shares and
earnings attributable to the investment of such contributions and dividends and
(ii) the Pledged Shares; provided further, however, that the value of Trust
assets transferred to the Lender as a result of a Default shall not exceed the
amount of the repayment then in default, and, provided further, that so long as
the Lender is a "party in interest" within the meaning of ERISA Section 3(14) or
a "disqualified person" within the meaning of Section 4975(e)(2) of the Code, a
transfer of Trust assets upon Default shall be made only if, and to the extent
of, the Borrower's failure to meet the loan's payment schedule.
9.3 RIGHTS UPON DEFAULT. When any Default has occurred and is
continuing the Lender may, in addition to such other rights or remedies as it
may have, then or at any time or times thereafter exercise with respect to the
Collateral any and all of the rights, options and remedies of a secured party
under the Uniform Commercial Code of Pennsylvania (the "UCC") including without
limitation the sale of all or any part of the Collateral at any brokers' board
or any public or private sale, provided, however that the Lender shall only be
able to exercise such rights and remedies to the extent of all interest and
principal payments which are due and payable as of the date of the Default and
provided further that prior to such exercise the Lender shall release from the
Collateral so much thereof as it would have been required to release under
Section 3.4 hereof if the period from the previous December 31 to the date of
such release constituted a Plan Year and no Default had occurred. The net
proceeds of any such sale, after deducting all costs and expenses incurred in
the collection, protection, sale and delivery of the Collateral (which expenses
Borrower promises to pay) shall be applied first to the payment of any costs and
expenses incurred by the Lender in selling or otherwise disposing of the
Collateral, second, to the payment of the principal of and the interest on the
Note, and, third, ratably as among any other items of the indebtedness hereby
secured. Any surplus remaining after the full payment and satisfaction of the
foregoing shall be returned to the Borrower or to whomsoever a court of
competent jurisdiction shall determine to be entitled thereto. Any requirement
of said UCC as to reasonable notice shall be met by the Lender personally
delivering or mailing notice (by certified mail - return receipt requested) to
the Borrower at its address as provided in Section 10.6 hereof at least ten (10)
days prior to the event giving rise to the requirement of such notice. In
connection with any offer, solicitation or sale of the Collateral, the Lender
may restrict bidders and otherwise proceed in whatever manner it reasonably
believes appropriate in order to comply or assure compliance with applicable
legal requirements pertaining to the offer and sale of securities of the same
type as the Collateral.
9.4 ERISA RESTRICTIONS. The number of Pledged Shares as to which
the Lender may exercise the rights set forth in this Section 9 may not exceed
that number of shares (then remaining subject to pledge hereunder) which is then
equal in current value to the amount in default under the Note. The remedies set
forth in this Section 9 may only be exercised to the extent consistent with the
restrictions on remedies set forth in Section 408(b)(3) of ERISA and the
regulations thereunder and Section 4975(d)(3) of the Code and the regulations
thereunder.
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SECTION TEN. MISCELLANEOUS.
10.1 HOLIDAYS. If any principal of the Note shall fall due on
Saturday, Sunday or on another day which is a legal holiday for savings
institutions in the State of Pennsylvania interest at the rate the Note bears
for the period prior to maturity shall continue to accrue on such principal from
the stated due date thereof to and including the next succeeding Business Day on
which the same is payable.
10.2 NO WAIVER, CUMULATIVE REMEDIES. No delay or failure on the
part of the Lender or the part of the holder of the Note in the exercise of any
power or right shall preclude any other or further exercise thereof, or the
exercise of any other power or right, and the rights and remedies hereunder of
the Lender and of any holder of the Note are cumulative to, and not exclusive
of, any rights or remedies which any of them would otherwise have.
10.3 AMENDMENTS, ETC. No amendment, modification, termination or
waiver of any provision of this Agreement or of the Note nor consent to any
departure by the Borrower therefrom, shall in any event be effective unless the
same shall be in writing and signed by the Lender, and then such consent,
modification or waiver shall be effective only in the specific instance and for
the specific purpose for which given. No notice to or demand on the Borrower in
any case shall entitle the Borrower to any other further notice or demand in
similar or other circumstances.
10.4. SURVIVAL OF REPRESENTATIONS. All representations and
warranties made herein or in certificates given in connection with the Loan
shall survive the execution and delivery of this Agreement and of the Note, and
shall continue in full force and effect with respect to the date as of which
they were made as long as any credit is in use or available hereunder.
10.5 PAYMENTS. So long as the Lender is the holder of the Note, the
Borrower will promptly and punctually pay the principal of and interest on the
Note without presentment of the Note.
10.6 ADDRESSES FOR NOTICES. All communications provided for herein
shall be in writing and shall be deemed to have been given or made when served
personally or when deposited in the United States mail addressed, if to the
Borrower at_____________________________________ Trust Officer; if to the Lender
at______________________________, or at such other address as shall be
designated by any party hereto in a written notice to each other party pursuant
to this Section 10.6.
10.7 HEADINGS. Article and Section headings used in this Agreement
are for convenience or reference only and are not a part of this Agreement for
any other purpose.
10.8 SEVERABILITY OF PROVISIONS. Any provision of this Agreement
which is unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such
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unenforceability without impairing the enforceability of the remaining
provisions hereof affecting the enforceability of such provision in any other
jurisdiction.
10.9 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, and by different parties hereto on separate counterparts, and all
such counterparts taken together shall be deemed to constitute one and the same
instrument.
10.10 BINDING NATURE, GOVERNING LAW, ETC. This Agreement shall be
binding upon the Borrower and its successors and assigns and shall inure to the
benefit of the Lender and the benefit of its successors and assigns, including
any subsequent holder of the Note. To the extent not preempted by Federal law,
this Agreement and the rights and duties of the parties hereto shall be
construed and determined in accordance with the laws of the State of New York
without regard to principles of conflicts of laws. This Agreement constitutes
the entire understanding of the parties with respect to the subject matter
hereof and any prior agreements, whether written or oral, with respect thereto
are superseded hereby.
10.11 CONCERNING THE BORROWER. The term "Borrower" as used herein
shall mean and include the undersigned as Trustee of the Trust and its
successors in trust not individually but solely as Trustee under that certain
First Federal Bank Employee Stock Ownership Trust effective___________________,
by and between the undersigned and Richmond County Savings Bank and this
Agreement shall be binding upon the undersigned and its successors and assigns
and upon the trust estate. The undersigned assumes no personal or individual
liability or responsibility for payment of the indebtedness evidenced by the
Note or for observance or performance of the covenants and agreements herein
contained or for the truthfulness of the representations and warranties herein
contained, the undersigned having executed this Agreement and the Note solely in
its capacity as Trustee as aforesaid to bind the undersigned, its successors in
trust and the trust estates.
10.12 LIMITED LIABILITY. Anything contained herein or in the Note to
the contrary notwithstanding, the sole and only recourse of the Lender and any
other holder of the Note for payment of the obligations hereunder and under the
Note, as against the Borrower for the payment of the obligations hereunder and
under the Note shall be to (i) the Collateral, (ii) contributions, other than
employer securities not constituting Collateral hereunder, made to the ESOP and
the Trust by sponsoring employers to enable the Borrower to meet its obligations
hereunder and under the Note, and (iii) earnings attributable to the Pledged
Shares and to the investment of such employer contributions, but only to the
extent of the failure of the Borrower to meet the payment schedule of the Loan
provided for herein. The Trust assets may be transferred to Lender upon the
occurrence of a Default or an Event of Default hereunder only upon and to the
extent of the failure of the Plan to meet the payment schedule of the Loan. In
no event may the value of the Trust assets so transferred exceed the amount of
the default.
10.13 XXXXXX'S DUTY OF CARE. It is agreed and understood that the
Xxxxxx's duty with respect to the Collateral shall be solely to use reasonable
care in the custody and preservation of
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the Collateral in the Lender's possession, which shall not include any steps
necessary to preserve rights against prior parties.
All provisions in this Agreement shall be construed so as to maintain
(i) the ESOP as a qualified leveraged employee stock ownership plan under
Sections 401(a) and 4975(e)(7) of the Code, (ii) the Trust as exempt from
taxation under Section 501(a) of the Code, and (iii) the Loan as an "exempt
loan" under the Exempt Loan Rules.
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Upon your acceptance hereof in the manner hereinafter set forth, this
Agreement shall constitute a contract between us for the uses and purposes
hereinabove set forth.
Dated as of this ___ day of__________________
_________________, and its
successors in trust, as Trustee
under that certain First Federal
Bank Employee Stock Ownership Trust
effective ______________ by and
between the undersigned and First
Federal Bank.
By
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Accepted and agreed to at Hazleton, Pennsylvania as of the date last
above written.
By
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EXHIBIT A
PROMISSORY NOTE
Amount sufficient to satisfy the Loan Amount _________, 199__
Hazleton, Pennsylvania
For VALUE RECEIVED, the undersigned,_______________, not individually
but solely as Trustee under that certain First Federal Bank Employee Stock
Ownership Trust effective ______________ by and between the undersigned
("Borrower") and First Federal Bank promises to pay to the order of Northeast
Pennsylvania Financial Corp. (the "Lender") at its office
at_________________________, the aggregate unpaid principal amount of all loan
amounts or advances under the loan made to the Borrower under Section 1.1 of the
Loan and Security Agreement hereinafter referred to in ten (10) consecutive
annual equal installments, consisting of both principal and interest, amortized
over a ten (10) year period in an amount sufficient to repay all borrowed
amounts plus interest, payable annually on ________________, and on the last
business day of each and every_________ in each year thereafter, except that the
final installment in the amount of all principal and interest not sooner paid
shall be due on ______________, the final maturity hereof.
The Borrower promises to pay interest (computed on the basis of a year
of 360 days) on the balance of principal from time to time remaining outstanding
and unpaid hereon at the rate per annum equal at all times to the Interest Rate
as defined in Section 10.3 of the Loan and Security Agreement (as defined below)
on the last business day of each and every January, commencing ______________,
and in each year thereafter and on the final maturity date of this Note. On
demand, the Borrower promises to pay interest on any overdue principal hereof
(whether by lapse of time, acceleration, or otherwise) until paid at the stated
rate.
This Note is issued under the terms and provisions of that certain
First Federal Bank Employee Stock Ownership Trust Loan and Security Agreement
bearing even date herewith by and between the Borrower and the Lender (the "Loan
and Security Agreement") and this Note and the holder hereof are entitled to all
the benefits and security provided for by or referred to in such Loan and
Security Agreement.
This Note may be declared due prior to its express maturity and
voluntary prepayments may be made hereon, all in the events, on the terms and in
the manner as provided in such Loan and Security Agreement.
Recourse for the payment of this Note has been limited by the
provisions of the Loan and Security Agreement and this Note is expressly made
subject to such provisions. This Note shall be governed by and construed in
accordance with the laws of Pennsylvania without regard to
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principles of conflicts of laws. The Borrower hereby waives presentment for
payment and demand.
Upon the occurrence of a Default as such term is defined in the Loan
and Security Agreement at the option of the Lender, all amounts payable by the
Borrower to the Lender under the terms of this Note may immediately become due
and payable by the Borrower to the Lender pursuant to the provisions of Section
9.3 of the Loan and Security Agreement, and the Lender shall have all of the
rights, powers, and remedies available under the terms of this Note, any of the
other documents evidencing and securing this Loan and all applicable laws. The
Borrower and all endorsers, guarantors, and other parties who may now or in the
future be primarily or secondarily liable for the payment of the indebtedness
evidenced by this Note hereby severally waive presentment, protest and demand,
notice of protest, notice of demand and of dishonor and non-payment of this Note
and expressly agree that this Note any payment hereunder may be extended from
time to time without in any way affecting the liability of the Borrower,
guarantors and endorsers.
________________and its successors in
trust, as Trustee under that certain
First Federal Bank Employee Stock
Ownership Trust effective
_____________ by and between the
undersigned and First Federal Bank.
By:
---------------------------
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EXHIBIT B
SECURITY AGREEMENT
INSTRUMENTS OR NEGOTIABLE DOCUMENTS TO BE DEPOSITED
For new value contemporaneously given by Northeast Pennsylvania
Financial Corp., ("Lender") to the undersigned ("Borrower"), the receipt whereof
is hereby acknowledged, the Borrower does hereby grant a security interest to
said Xxxxxx in the instruments or negotiable documents hereafter described
("Collateral"), in all of which Collateral the Borrower warrants that the
Borrower has good, valid and effective rights to the ownership and possession
thereof and to the grant of the security interest hereby made:
All Shares of the common stock, par value $.01 per share, of
Northeast Pennsylvania Financial Corp., a Delaware corporation,
acquired with the proceeds of the Loan Amount.
Xxxxxxxx agrees to deliver said collateral to said Xxxxxx not later than
the close of business on ________________, said date being within____
days from the date hereof.
Said security interest secures the payment of all indebtedness and
liabilities as undertaken in the Loan and Security Agreement to which this is a
part, now existing or hereafter arising, and the Lender has all the rights with
respect to said Xxxxxxxxxx and said security interest as more fully set forth in
the form of secured note or notes executed and delivered by the undersigned to
said Lender prior hereto or contemporaneously herewith.
This agreement, including matters of interpretation and construction,
and the rights of the Lender and the duties and obligations of the debt
hereunder are to be determined in accordance with the laws of the State of
Pennsylvania, particularly the Uniform Commercial Code, except where preempted
by federal law.
Dated at Hazleton, Pennsylvania the ____ day of ____________.
____________________, and its
successors in trust, as Trustee under
that certain First Federal Bank
Employee Stock Ownership Trust
effective _____________ by and
between the undersigned and First
Federal Bank.
By:
---------------------------------
