Exhibit 10.4 Draft ESOP Loan Commitment Letter and ESOP Loan Documents
DRAFT
FIRST SAVINGS BANK OF NEW JERSEY, SLA
EMPLOYEE STOCK OWNERSHIP TRUST
LOAN AND SECURITY AGREEMENT
Bayonne Bancshares, Inc.
000 Xxxxxxxx
Xxxxxxx, Xxx Xxxxxx 00000
_______________ , 1997
Gentlemen:
The undersigned, _____________________, __________, ___________
("Trustee"), not individually but solely as Trustee under the First Savings Bank
of New Jersey, SLA Employee Stock Ownership Trust (the "Trust") effective
_____________, 199_ (the "Borrower"), applies to you 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. Bayonne Bancshares, Inc. is hereinafter referred to as
the "Lender". The term "Bank" as used herein refers to First Savings Bank of New
Jersey, SLA, as the sponsoring employer of First Savings Bank of New Jersey, SLA
Employee Stock Ownership Plan (the "ESOP").
SECTION ONE. THE TERM LOAN.
1.1 Amount and Terms. By its acceptance hereof the Lender agrees, subject
to all of the terms and conditions hereof and on the basis of the
representations hereinafter set forth, to make a loan (the "Loan") of up to
_________________________________ ($_____________) (the "Commitment"), such
proceeds to be used by the Borrower entirely to acquire shares ("Shares") of the
common stock, par value $.01 of Bayonne Bancshares, Inc., a Delaware
corporation.
The Loan is intended to be an "exempt loan" as described in Section 4975(d)
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 to bear interest as
hereinafter provided, and shall become due and payable in ______ (__)
consecutive annual equal installments consisting of both principal and interest
amortized over a _____ (__) year period in an amount sufficient to repay the
Loan plus interest, commencing on _____________, 1997 and on the last day of
each and _____________ 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.
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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 _____________, 1997) 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 ___________________________________ (_______)
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 do 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 or an Event of Default
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 an Event of 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 or
Event of Default shall have occurred and be continuing, as promptly as is
practicable after _____________ in each year (the period commencing
_______________ and ending _____________, 1997 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
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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.
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 000 Xxxxxxxx,
Xxxxxxx, Xxx Xxxxxx 00000, 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
at the place of payment. 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. 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.
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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.
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.
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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.
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 10 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 or Event of
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. EVENTS OF DEFAULT AND REMEDIES.
9.1 Event of Default. Any one or more of the following shall constitute an
Event of Default hereunder:
(a) The Borrower shall default in the payment of principal and/or
interest in respect of the Note or any other amounts payable under this
Agreement when due;
(b) Any representation, warranty or statement made by the Borrower
herein or in connection with the making of the Loan proves to be incorrect
in any material respect as of the date of the issuance or making thereof;
(c) The Borrower shall default in the due performance or observance by
it of 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 default shall continue unremedied for a period of 30
days after notice to the Borrower by the Lender or any other holder of the
Note;
(d) The ESOP shall be terminated prior to the expiration of the term
of this Agreement.
9.2 Limitations on Use of Trust Assets. When any Event of 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
pursuant to the Loan, cash dividends received by the Borrower on the
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Shares and earnings attributable to the investment of such contributions and
dividends and (ii) the Pledged Stock; provided further, however, that the value
of Trust assets transferred to the Lender as a result of an Event of 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 an Event of Default. When any Event of 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 New Jersey (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 Event of
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 Event of 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 11.6
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 shares of Pledged Stock 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. DEFINITIONS.
10.1 The term "Business Day" shall mean any day on which savings
institutions are generally open for business in New Jersey other than a Saturday
or Sunday.
10.2 The term "Event of Default" shall mean any event condition specified
as such in Section 9.1 hereof and the term "Default" shall mean any event or
condition which, with the lapse of time, the giving of notice, or both would
constitute an Event of Default.
Capitalized terms defined elsewhere in this Agreement shall have the
meanings as defined in all provisions hereof.
10.3 The term "Interest Rate" shall mean prime rate as published in the
Wall Street Journal on __________, 1997.
SECTION ELEVEN. MISCELLANEOUS.
11.1 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 New Jersey, 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.
11.2 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.
11.3 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.
11.4. 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.
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11.5 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 and without any notation of any such
payment being made on the Note.
11.6 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
[Trustee Address], Trust Officer; if to the Lender at 000 Xxxxxxxx, Xxxxxxx, Xxx
Xxxxxx 00000, 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 11.6.
11.7 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.
11.8 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 unenforceability without impairing the enforceability of
the remaining provisions hereof affecting the enforceability of such provision
in any other jurisdiction.
11.9 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.
11.10 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 Jersey 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.
11.11 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 Savings
Bank of New Jersey, SLA Employee Stock Ownership Trust effective _____________,
199_, by and between the undersigned and First Savings Bank of New Jersey, SLA
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.
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11.12 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.
11.13 Xxxxxx's Duty of Care. It is agreed and understood that the Lender's
duty with respect to the Collateral shall be solely to use reasonable care in
the custody and preservation of 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 ______________, 1997.
_____________________, and its
successors in trust, as Trustee
under that certain First Savings
Bank of New Jersey, SLA Employee
Stock Ownership Trust effective
_____________, 199_ by and between
the undersigned and First Savings
Bank of New Jersey, SLA.
By_________________________________
Accepted and agreed to at Bayonne, New Jersey as of the date last above
written.
By_________________________________
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DRAFT EXHIBIT A
PROMISSORY NOTE
$--------
Bayonne, New Jersey __________, 1997
For VALUE RECEIVED, the undersigned, [Trustee], not individually but solely
as Trustee under that certain First Savings Bank of New Jersey, SLA Employee
Stock Ownership Trust effective _____________, 199_ by and between the
undersigned ("Borrower") and First Savings Bank of New Jersey, SLA promises to
pay to the order of Bayonne Bancshares, Inc. (the "Lender") at its office at 000
Xxxxxxxx, Xxxxxxx, Xxx Xxxxxx 00000, the principal sum of
_________________________________ ($_____________), if less, the aggregate
principal amount of the loan made to the Borrower under Section 1.1 of the Loan
and Security Agreement hereinafter referred to in _____ (__) consecutive annual
equal installments consisting of both principal and interest, amortized over
such period in an amount sufficient to repay the Loan plus interest, payable
annually commencing on _____________, 1997, and on the last business day of each
and _____________ in each year thereafter, except that the final installment in
the amount of all principal and interest not sooner paid shall be due on
_____________, 200_, the final maturity hereof.
The Borrower promises to pay interest (computed on the basis of a year of
360 days) at said office 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 _____________, commencing
_____________, 1997, 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 Savings Bank of New Jersey, SLA 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 thereby or
referred to therein to which Loan and Security Agreement reference is hereby
made for a statement thereof.
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 New
Jersey without regard to principles of conflicts of laws. The Borrower hereby
waives presentment for payment and demand.
Upon the occurrence of an Event of 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 9.2 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 Savings Bank of New Jersey,
SLA Employee Stock Ownership Trust effective _____________,
199_ by and between the undersigned and First Savings Bank
of New Jersey, SLA.
By:_________________________________________________________
DRAFT EXHIBIT B
SECURITY AGREEMENT
INSTRUMENTS OR NEGOTIABLE DOCUMENTS TO BE DEPOSITED
For new value contemporaneously given by Xxxxxxx Xxxxxxxxxx, Inc.,
("Lender") to the undersigned ("Borrower"), the receipt whereof is hereby
acknowledged, the Borrower does hereby grant a security interest to said Lender
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:
________ shares of the common stock, par value $.01 per share, of Bayonne
Bancshares, Inc., a Delaware corporation.
Xxxxxxxx agrees to deliver said collateral to said Xxxxxx not later than
the close of business on ______________, 1997, said date being within 10
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 New Jersey,
particularly the Uniform Commercial Code, except where preempted by federal law.
Dated at Bayonne, New Jersey the ______ day of ______________, 1997.
[TRUSTEE], and its successors in trust, as Trustee under
that certain First Savings Bank of New Jersey, SLA Employee
Stock Ownership Trust effective _____________, 199_ by and
between the undersigned and First Savings Bank of New
Jersey, SLA.
By:_________________________________________________________
