EXHIBIT D
[LETTERHEAD OF STAR BANK]
August 9, 1996
Xx. Xxxxx Xxxxxxx
Chairman/CEO
Xx. Xxxxxxx Xxxxxxxxx
Chief Financial Officer
First Southern Bancorp, Inc.
P.O. Box 328
Stanford, KY 40484
Gentlemen:
This Loan Agreement shall set out the terms and conditions under which Star
Bank, N.A. (hereafter referred to as the "Bank," "Star" or "Star Bank")
agrees to lend First Southern Bancorp, Inc. (hereafter called the
"Company," "the Bancorp" or "the Borrower") Five Million Dollars
($5,000,000) under this Revolving Credit Agreement (the "Agreement"). The
purpose of this Loan is to purchase One Hundred Percent of the common stock
of Lincoln Financial Bancorp, Inc., Stanford, Kentucky.
THE REVOLVING CREDIT
Subject to the terms hereof, there being no event of default (or
circumstance which would, with the passage of time or the giving of notice
become an event of default) the Bank agrees to make revolving credit loan
to the Company (as described below) from the date of this Agreement through
May 19, 1997 (the "Maturity Date"). The loan will be evidenced by a
revolving promissory note (the "Revolving Note") substantially in the form
of Exhibit A attached hereto.
Under the Revolving Note, the Company may borrow, repay, and reborrow up to
$5,000,000 (the "Available Amount"). Should the total loan amount
outstanding at any time exceed the Amount Available, the Company shall,
upon notification, reduce the amount outstanding to an amount that is less
than or equal to the Amount Available.
The Revolving Note shall bear interest at the Bank's prime rate (the "Prime
Rate"). The Prime Rate is the rate announced as such from time to time by
the Bank. The Prime Rate is determined solely by the Bank pursuant to
market factors and its own operating needs, and is not necessarily the
Bank's best or most favorable rate for commercial or other loans. The
Prime Rate is currently 8.25%. The interest rate on the Revolving Note
shall be adjusted on the effective date of any change in the Bank's Prime
Rate. Interest
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First Southern Bancorp, Inc.
Page 2
shall accrue in arrears and be payable beginning September 30, 1996 and
quarterly thereafter and on the Maturity Date. Interest shall be
calculated on the basis of a 360 day year.
REPRESENTATIONS & WARRANTIES
To induce the Bank to enter into this Agreement and to agree to make the
Loan described herein, the Company represents and warrants that:
A) The Borrower is duly organized, validly existing and in good
standing as a corporation and bank holding company under the laws
of the Commonwealth of Kentucky and the United States of America,
and the Subsidiary Banks have been granted their charters and are
in good standing under the applicable laws and regulations of
Kentucky and other governing bodies.
B) The Borrower has full power and authority to own their properties
and to conduct their business as such business is now being
conducted and the Borrower has full power and authority to
execute, deliver and perform under this Agreement, the Note, and
all other documents or instruments executed or delivered in
connection herewith (collectively, the "Loan Documents").
C) The execution, delivery and performance by the Borrower of this
Loan Agreement and the other Loan Documents (i) have been fully
authorized by all requisite corporate action and (ii) do not
and will not violate (A) any provision of law, (B) any order of
any court or other agency of government, affecting the Borrower,
(C) any organizational or government documents of the Borrower,
or (D) any provision of any agreement to which the Borrower
or Bancorp is a party, or by which any of their respective
properties or assets are bound including, without limitation, any
outstanding debentures issued by the Borrower.
D) The Borrower is current on all taxes and assessments applicable
to them, and Xxxxxxxx agrees to pay all taxes and assessments
when due, except those Borrower is contesting in good faith (and
then only providing same are properly reserved against in
Xxxxxxxx's financial statements).
E) Borrower represents to the Bank there is no action or proceeding
pending, or to the best of the Borrower's knowledge threatened,
against or affecting Borrower which might result in any material
adverse change in any of their businesses or financial
conditions.
F) The Borrower is in compliance in all material respects with all
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First Southern Bancorp, Inc.
Page 3
laws, statutes, ordinances, rules, regulations and orders of
any federal, state or local governmental entity applicable
to them, and Xxxxxxxx agrees that Borrower shall continue to
be in compliance therewith.
G) The Borrower represents to the Bank that there has been no
material adverse change in the financial condition of the
Borrower since the financial statements received by the Bank for
the period ending June 30, 1996.
H) If applicable, Borrower is in compliance with all provisions of
the Employee Retirement Income Security Act of 1974 ("ERISA").
I) This Loan Agreement, the Note, the Stock Pledge Agreement all
other loan documents are the legal and binding obligations of the
Borrower enforceable in accordance with their terms, subject to
bankruptcy, insolvency, and similar laws as may be enforced from
time to time and equitable principles whether determined in a
court of law or equity.
EVENTS OF DEFAULT
If any of the following events (each, an "Event of Default") shall occur,
then the Bank may, with written notice, accelerate the Loan and declare it
to be, and thereupon the Loan shall become, immediately due and payable
(except the Loan shall become automatically and immediately due and payable
upon the occurrence of an Event of Default under Paragraph D (iii) below)
AND the Bank shall have all rights provided herein or in any of the other
Loan Documents or otherwise provided by law to realize on the Collateral
Security:
A) Failure by Borrower to pay or repay any principal or interest on the
Loan, or any other amounts due to the Bank hereunder, within 5 (five)
business days after the date due in accordance with the payment
schedule outlined in both the Note and this Loan Agreement; or
B) Failure by Borrower to comply, or cause compliance with, any other
covenant, condition or agreement contained herein or in connection
herewith or to cure such failure within 30 (thirty) business days
after the occurrence of such failure; or
C) Any representation or warranty made herein or in connection herewith
shall be untrue or misleading; or
D) Borrower (i) makes any assignment for the benefit of creditors; (ii)
is insolvent or unable to pay its debts as they become due; (iii)
applies for the appointment of a receiver or trustee for
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First Southern Bancorp, Inc.
Page 4
any part of its assets or commences any proceeding under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of
debt, dissolution or liquidation law of any jurisdiction (or any such
application is filed, or any such proceedings are commenced, against
Borrower and any such party indicates its approval, consent or
acquiescence thereto, or any order is entered appointing such trustee
or receiver, or adjudicating any such party bankrupt or insolvent, or
approving the petition in any such proceedings); or
D) Borrower shall not have paid when due any other borrowed money
obligation or shall be in default under any other material agreement;
or
F) There shall have been rendered and not discharged any judgment or
judgments against Borrower or guarantors which might endanger the
solvency or viability of Borrower or guarantor.
G) In the reasonable opinion of the Bank, there has been a material
adverse change in the consolidated financial affairs or consolidated
operating condition of the Borrower, or in the value of the Collateral
Security which, in the reasonable judgment of the Bank, imperils the
Borrower's ability to repay its obligations to the Bank under this
Loan Agreement.
Any discrepancies between the loan documents as it relates to the Events of
Default shall be governed by this Loan Agreement.
COLLATERAL
All obligations of the Company to the Bank under this Agreement and the
Note shall be secured by the following (collectively called the
"Collateral"):
(A) Pledge of 100% of the common stock of the subsidiary financial
institutions of the Company (see Stock Pledge Agreement).
The Collateral and all documentation with respect thereto shall be in a
form satisfactory to the Bank, and the Company agrees to execute any and
all documents necessary to assure the protection, perfection, and/or
enforcement of the Bank's security interest in the Collateral.
COVENANTS
In consideration of the Bank's promise to make the loans described herein,
the Company agrees that, from the date of this Agreement
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First Southern Bancorp, Inc.
Page 5
until the Note is paid in full and canceled, it shall:
(A) The following Covenants must be complied with by the Company, as
applicable or there will be an Event of Default under this Agreement:
- The Bancorp will at all times, during the term of this Agreement,
own 100% of the Affiliate Banks of the Bancorp.
- The Bancorp will achieve the following minimum performance ratios
on a calendar year basis:
Return of Assets 1.25%
Return of Equity 15%
Capital to Assets 8%
*Non-Performing Loans/Primary Capital 10%
Allowance to Total Loans 1.4%
*Allowance to Non-Performing Loans 100%
* For purposes of this calculation, any purchased loans that are
current and performing as agreed but are carried as nonperforming
by Bancorp will be excluded from this calculation.
- The Bancorp will not pay dividends in excess of 35% of current
year earnings to the shareholders during the term of this
Agreement and so long as the Company has any unsatisfied
obligations to the Bank.
(B) The Bancorp will not enter into or allow the Affiliate Banks of the
Bancorp to enter into or consummate any plan for the creation of any
additional subsidiaries or any merger, acquisition, consolidation or
reorganization OR sell, transfer, assign, convey or lease any
substantial part of its or their property, tangible or intangible
(other than transfers in the normal course of banking business), OR
contract to do any of the foregoing, OR materially change the nature
of its or their business, provided however, that Star Bank shall
promptly consider and not unreasonably withhold its consent to such
transactions as do not, in the reasonable judgment of Star Bank,
materially adversely affect the financial or operating condition of
the Bancorp or the Affiliate Banks or adversely affect the collateral
security given under this Loan Agreement.
(C) The Company will give the Bank prompt notice of any:
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First Southern Bancorp, Inc.
Page 6
(i) default of this or contract under which the Company is liable;
(ii) environmental or labor dispute; (iii) lawsuit filed naming the
Company as a defendant; (iv) reportable event under ERISA; or (v)
material change in the Company's business prospects or financial
condition.
(D) The Company will maintain its corporate existence and remain in good
standing under the laws of each jurisdiction where it is duly
qualified to conduct its business.
(E) Any variance from these covenants shall be permitted only with the
prior written consent and/or waiver of the Bank in its discretion.
Any such waiver shall not preclude the exercise of any power or right
under this Agreement by the Bank.
CLOSING CONDITIONS
The obligation of the Bank to make the loan described by this Agreement is
subject to the satisfaction of each of the following conditions:
(A) RESOLUTIONS. The Company shall have delivered to the Bank a copy of
the resolutions of the Company's Board of Directors authorizing the
loans described herein and the execution and delivery of this
Agreement, the Note, and other documents the Bank deems necessary for
this loan, certified and executed (as applicable) by an appropriate
officer of the Company.
(B) OPINION. The Company shall have delivered to the Bank an opinion of
Counsel acceptable to the Bank, to the effect that: (i) the Company
is duly incorporated and validly existing under the laws of the State
of Kentucky and is qualified to do business under the laws of the
State of Kentucky; (ii) the Company has full power to execute and
deliver the Agreement, the Note, and other documents hereunder and to
perform its obligations under these documents; (iii) these actions
have been authorized by all necessary corporate action, and such
actions are not in conflict with any provision of law or of the
Articles of Incorporation of the Company, nor in any conflict with any
agreement, order or decree binding upon the Company which counsel has
knowledge after investigation; and (iv) this Agreement, the Note, and
other documents are the legal and binding obligations of the Company,
enforceable in accordance with their terms.
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First Southern Bancorp, Inc.
Page 7
(C) DEFAULT. Before and after giving effect to the loan described herein,
no event of default (as defined below) or event which would with the
passage of time or the giving of notice mature into an Event of
Default shall have occurred and/or be continuing.
(D) WARRANTIES. Before and after giving effect to the loan described
herein, the representations and warranties noted above shall be true
and correct on the date of this Agreement.
(E) FEES AND EXPENSES. The Company agrees to pay the Bank a one-time
nonrefundable commitment fee of $3,000.
- The Company agrees to pay the Bank an unused line fee of one
quarter of one percent (1/4%) on the daily unused balance of the
Loan. This fee will be calculated on a daily basis and is
payable quarterly in arrears.
(F) PROPER REGULATORY APPROVAL has been received by all governing bodies
for the purchase of Lincoln Financial Bancorp, Inc.
The following Financial Reporting will be required by the Company:
FINANCIAL REPORTS:
(A) Star will receive quarterly call reports on each Affiliated Bank owned
by First Southern Bancorp and on the Bancorp. An annual consolidated
audited financial statement will be provided on the Bancorp.
(B) Star reserves the right to inspect the books and records of the
Borrower at anytime upon reasonable notice.
LAW/JURISDICTION
This Agreement, the Loan, and the Note shall be deemed made in Ohio, and
all the rights and obligations of the parties hereunder shall in all
respects be governed by and construed in accordance with the laws of the
State of Ohio, including all matters of construction, validity, and
performance. Without limitation on the ability of the Bank to exercise all
its rights as to the Collateral security for any loan or note, or to
initiate and prosecute actions for repayment in any applicable
jurisdiction, the Company agrees
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First Southern Bancorp, Inc.
Page 8
that any action or proceeding commenced by or on behalf of the parties
relating to this Agreement, the loan, or the Note shall be commenced and
maintained exclusively in courts of applicable jurisdiction located in
Xxxxxxxx County, Ohio.
STAR BANK, N.A.
By:/S/ XXXXXXX X. XXXXXXXX, V.P.
Xxxxxxx X. Xxxxxxxx
Vice President
Accepted this ___ day of _______________, 19__.
First Southern Bancorp, Inc.
By: /S/ XXXXX XXXXXXX /S/ XXXXXXX XXXXXXXXX
Xxxxx Xxxxxxx Xxxxxxx Xxxxxxxxx
Chairman Chief Financial Officer
[LETTERHEAD OF STAR BANK]
May 15, 1997
Xx. Xxxxx Xxxxxxx
Chairman & CEO
Xx. Xxxxxxx Xxxxxxxxx
Chief Financial Officer
First Southern Bancorp, Inc.
P. O. Box 328
Stanford, KY 40484
Dear Xxxx and Xxxxx:
This Letter Amendment shall amend the terms and conditions of the Loan
Agreement dated May 19, 1996 between Star Bank, N.A. (Star) and First
Southern Bancorp, Inc. (Borrower). The only terms and conditions amended
are specified in this letter and are as follows:
1) The term of the agreement will be renewed for the period May 19, 1997
to May 18, 1998.
2) The unused line fee will be reduced from one quarter of one percent to
one eighth of one percent.
3) The annual performance ratios for First Southern Bancorp, Inc. will be
as follows:
Return on assets .75%
Return on equity 8.00%
Tangible capital to assets 8.50%
Allowance to total loans 1.00%
*Non-performing loans to capital 10.00%
*Allowance to non-performing loans 100.00%
*For purposes of this calculation, any purchased loans that are
current and performing as agreed but are carried as non-performing by
the Bancorp will be excluded from this calculation.
4) The borrower will not pay any dividends to its shareholders during the
term of this agreement.
5) The Borrower agrees to pay Star a renewal fee of $3,000.
If you are in agreement with the foregoing, please execute the counterpart
of this letter and return it to me, whereupon this letter will become a
legally binding amendment to the Loan Agreement dated May 19, 1995.
Sincerely,
/S/ XXXXXXX X. XXXXXXXX
Xxxxxxx X. Xxxxxxxx
Senior Vice President
Enclosure(s)
Agreed and Accepted:
/S/ XXXXX XXXXXXX
Xxxxx Xxxxxxx, Chairman
/S/ XXXXXXX XXXXXXXXX
Xxxxxxx Xxxxxxxxx
Chief Financial Officer
May 19, 1997
Xx. Xxxxx Xxxxxxx
Chairman and CEO
Xx. Xxxxxxx Xxxxxxxxx
Chief Financial Officer
First Southern Bancorp, Inc.
P. O. Box 328
Stanford, KY 40484
Dear Xxxx and Xxxxx:
This letter is an addendum to the Second Amendment to the Loan Agreement
dated May 19, 1995, and amended on May 19, 1996. The following change is
effective as of the date of this agreement:
1) Collateral securing this note is 100% of the common stock of the
following subsidiaries which is reflective of the recent name changes:
- First Southern National Bank, Somerset, Ky.
- First Southern National Bank of Madison County, Richmond, Ky.
- First Southern National Bank of the Bluegrass, Lexington, Ky.
- Lincoln Financial Bancorp, Inc., Liberty, Ky.
- First Southern National Bank of Xxxxxxx County, Lancaster, Ky.
- First Southern National Bank of Xxxxx County, Monticello, Ky.
If you are in agreement with the foregoing, please execute the counterpart
of this letter and return it to me, whereupon this letter will become a
legally binding part of the Second Amendment to the Loan Agreement dated
May 19, 1997.
Sincerely,
/S/ XXXXXXX X. XXXXXXXX
Xxxxxxx X. Xxxxxxxx
Senior Vice President
Agreed and accepted:
First Southern Bancorp, Inc.
/S/ XXXXX XXXXXXX
Xxxxx Xxxxxxx, Chairman & CEO
/S/ XXXXXXX XXXXXXXXX
Xxxxxxx Xxxxxxxxx
Chief Financial Officer
[LETTERHEAD OF STAR BANK]
September 24, 1997
Xx. Xxxxx Xxxxxxx
President & CEO
First Southern Bancorp, Inc.
P. O. Box 328
Stanford, KY 40484
Dear Xxxx:
This letter amends the loan agreement between Star Bank, N.A. and First
Southern Bancorp, Inc. hereby releasing as collateral the common stock of
Lincoln Financial Bancorp, Inc. to facilitate the sale of Lincoln Financial
Bancorp, Inc. All other terms and conditions of the loan agreement remain
unchanged.
Please call if you have any questions.
Sincerely,
Xxxxxxx X. Xxxxxxxx
Senior Vice President
[LETTERHEAD OF STAR BANK]
June 8, 1998
Xx. Xxxxx Xxxxxxx
Chairman
Xx. Xxxxxxx Xxxxxxxxx
First Southern Bancorp, Inc.
First Southern Funding, Inc.
P. O. Box 328
Stanford, KY 40484
Dear Xxxx and Xxxxx:
This letter agreement is to serve as the fourth amendment to the Loan
Agreement (hereafter referred to as "Agreements") dated May 19, 1995, as
amended on May 19, 1996 and May 19, 1997 between First Southern Funding,
Inc. (hereafter referred to as "Funding") and Star Bank, N.A. (hereafter
referred to as "Star"). This letter agreement is to also serve as the
second amendment to the Loan Agreement (hereafter referred to as
"Agreements") dated August 9, 1996 and as amended on May 19, 1997 between
First Southern Bancorp, Inc. (hereafter referred to as "Bancorp") and Star
Bank, N.A.
The only terms and conditions amended are specified in this letter
agreement and are as follows:
1. Funding and Bancorp, collectively, will have a revolving line of
credit available in the amount of $15 million (Fifteen million
dollars). This revolving line of credit shall be evidenced by a $15
million note dated May 19, 1998 with Funding and Bancorp listed as
individual borrowers. Funding incurs no liability for draws made by
Bancorp and Bancorp incurs no liability for draws made by Funding, and
no cross-collateralization exists. Either Funding or Bancorp may
borrow, pay and re-borrow under this revolver. Draws made by Funding
or Bancorp will be governed based on their Agreements, respectively,
and this amendment to those Agreements. Both Funding and Bancorp
agree and acknowledge that this combined note for $15 million, dated
May 18, 1998 is a renewal of the two existing individual notes, for
$10 million and $5 million, and all documentation relative to those
notes is now a legal binding document tied to this one note for $15
million. Any discrepancies between the note and the Agreements are
governed by the Agreements.
2. The terms of the Agreements will be renewed for the period May 18,
1998 to May 18, 1999.
3. The revolving notes shall bear interest at the interest rate as
specified on the note, which will be Star prime minus one percent (1%)
floating.
4. Each Limited Liability Company, whose assets are purchased with Star
loan proceeds, will assign their interest in the purchased asset to
Star, agrees not to incur any additional debt and will execute an
amendment to the note which documents the Limited Liability Company as
a co-borrower at the time of the purchase for the amount borrowed from
Star. The Limited Liability Company's liability to Star will
terminate when the amount borrowed for that asset is repaid.
5. Funding agrees to execute a negative stock pledge in reference to any
United Trust, Inc. common stock which is purchased.
6. Funding and Bancorp agree to pay renewal fees of $10,000 and $5,000
respectively.
If you are in agreement with the foregoing, please execute the counterpart
of this letter agreement below and return it to me, whereupon this letter
will become a legally binding amendment to the Agreements.
Sincerely,
/S/ XXXXXXX X. XXXXXXXX
Xxxxxxx X. Xxxxxxxx
Senior Vice President
Agreed and Accepted:
By: /S/ XXXXX XXXXXXX
Xxxxx Xxxxxxx, Guarantor
By: /S/ XXXXXXX XXXXXXXXX
Xxxxxxx Xxxxxxxxx, Guarantor
By: /S/ XXXXX XXXXXXX
Xxxxx Xxxxxxx, Chairman
By: /S/ XXXXXXX XXXXXXXXX
Xxxxxxx Xxxxxxxxx, Chief Financial Officer
PROMISSORY NOTE
===================================================================
Borrower: FIRST SOUTHERN FUNDING, INC.; ET. AL. Lender: STAR BANK, NATIONAL ASSOCIATION
000 Xxxxxx Xxxxxx, X.X. 8105 c/o Xxxxxx Financial Institutions Division
Xxxxxx 000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000 Xxxxxxxxxx, XX 00000
========================================================================
Principal Amount: $15,000,000.00 Initial Rate: 7.500% Date of Note: May 18, 1998
PROMISE TO PAY. FIRST SOUTHERN FUNDING, INC. and FIRST SOUTHERN BANCORP,
INC. (referred to in this Note individually and collectively as "Borrower")
[INDIVIDUAL -- SEE LOAN AGREEMENT] promise to pay to STAR BANK,
NATIONAL ASSOCIATION ("Lender"), or order, in lawful money of the United
States of America, the principal amount of Fifteen Million & 00/100
Dollars ($15,000,000.00) or so much as may be outstanding together with
interest on the unpaid outstanding principal balance of each advance.
Interest shall be calculated from the date of each advance until repayment
of each advance.
PAYMENT. Borrower will pay this loan in one payment of all outstanding
principal plus all accrued unpaid interest on May 18, 1999. In addition,
Borrower will pay regular quarterly payments of accrued unpaid interest
beginning August 18, 1998, and all subsequent interest payments are due on
the same day of each quarter after that. The annual interest rate for this
Note is computed on a 365/360 basis; that is, by applying the ratio of the
annual interest rate over a year of 360 days, multiplied by the outstanding
principal balance, multiplied by the actual number of days the principal
balance is outstanding. Borrower will pay Lender at Xxxxxx's address shown
above or at such other place as Lender may designate in writing. Unless
otherwise agreed or required by applicable law, payments will be applied
first to accrued unpaid interest, then to principal, and any remaining
amount to any unpaid collection costs and late charges.
VARIABLE INTEREST RATE. The interest rate on this Note is subject to
change from time to time based on changes in an index which is Xxxxxx's
Prime Rate (the "Index"). This is the rate Lender charges, or would
charge, on 90-day unsecured loans to the most creditworthy corporate
customers. This rate may or may not be the lowest rate available from
Lender at any given time. Lender will tell Borrower the current Index rate
upon Xxxxxxxx's request. Borrower understands that Lender may make loans
based on other rates as well. The interest rate changes will not occur
more often than each DAY. The Index currently is 8.500% per annum. The
interest rate to be applied to the unpaid principal balance of this Note
will be at a rate of 1,000 percentage point under the Index, resulting in
an initial rate of 7.500% per annum. NOTICE: Under no circumstances will
the interest rate on this Note be more than the maximum rate allowed by
applicable law.
PREPAYMENT; MINIMUM INTEREST CHARGE. In any event, even upon full
prepayment of this Note, Borrower understands that Lender is entitled to a
minimum interest charge of $50.00. Other than Xxxxxxxx's obligation to pay
any minimum interest charge, Borrower may pay without penalty all or a
portion of the amount owed earlier than it is due. Early payments will
not, unless agreed to by Xxxxxx in writing, relieve Xxxxxxxx of Xxxxxxxx's
obligation to continue to make payments of accrued unpaid interest.
Rather, they will reduce the principal balance due.
LATE CHARGE. If a payment is 10 days or more late, Borrower will be
charged 5.000% of the regularly scheduled payment or $50.00, whichever is
greater.
DEFAULT. Borrower will be in default if any of the following happens: (a)
Borrower fails to make any payment when due. (b) Borrower breaks any
promise Borrower has made to Lender, or Borrower fails to comply with or to
perform when due any other term, obligation, covenant, or condition
contained in this Note or any agreement related to this Note, or in any
other agreement or loan Borrower has with Lender. (c) Any representation
or statement made or furnished to Lender by Borrower or on Xxxxxxxx's
behalf is false or misleading in any material respect either now or at the
time made or furnished. (x) Xxxxxxxx becomes insolvent, a receiver is
appointed for any part of Xxxxxxxx's property. Xxxxxxxx makes an
assignment for the benefit of creditors, or any proceeding is commenced
either by Borrower or against Borrower under any bankruptcy or insolvency
laws. (e) Any creditor tries to take any of Xxxxxxxx's property on or in
which Xxxxxx has a lien or security interest. This includes a garnishment
of any of Xxxxxxxx's accounts with Xxxxxx. (f) Any guarantor dies or any
of the other events described in this default section occurs with respect
to any guarantor of this Note. (g) A material adverse change occurs in
Borrower's financial condition, or Xxxxxx believes the prospect of payment
or performance of the indebtedness is impaired. (h) Lender in good xxxxx
xxxxx itself insecure.
LENDER'S RIGHTS. Upon default, Xxxxxx may declare the entire unpaid
principal balance on this Note and all accrued unpaid interest immediately
due, without notice, and then Borrower will pay that amount. Upon default,
including failure to pay upon final maturity, Lender, at its option, may
also, if permitted under applicable law, increase the variable interest
rate on this Note 5.000 percentage points. The interest rate will not
exceed the maximum rate permitted by applicable law. Lender may hire or
pay someone else to help collect this Note if Borrower does not pay.
Xxxxxxxx also will pay Lender that amount. This includes, subject to any
limits under applicable law, Xxxxxx's attorneys' fees and Xxxxxx's legal
expenses whether or not there is a lawsuit, including attorneys' fees and
legal expenses for bankruptcy proceedings (including efforts to modify or
vacate any automatic stay or injunction), appeals, and any anticipated
post-judgment collection services. If not prohibited by applicable law,
Xxxxxxxx also will pay any court costs, in addition to all other sums
provided by law. This Note has been delivered to Lender and accepted by
Lender in the State of Ohio. If there is a lawsuit, Xxxxxxxx agrees upon
Xxxxxx's request to submit to the jurisdiction of the courts of XXXXXXXX
County, the State of Ohio. Xxxxxx and Xxxxxxxx hereby waive the right to
any jury trial in any action, proceeding or counterclaim brought by either
Xxxxxx or Borrower against the other. This Note shall be governed by and
construed in accordance with the laws of the State of Ohio.
CONFESSION OF JUDGMENT. Xxxxxxxx hereby irrevocably authorizes and
empowers any attorney-at-law, including an attorney hired by Xxxxxx, to
appear in any court of record and to confess judgment against Xxxxxxxx for
the unpaid amount of this Note as evidenced by an affidavit signed by an
officer of Lender setting forth the amount then due, plus attorneys' fees
as provided in this Note, plus costs of suit, and to release all errors,
and waive all rights of appeal. If a copy of this Note, verified by an
affidavit, shall have been filed in the proceeding, it will not be
necessary to file the original as a warrant of attorney. Borrower waives
the right to any stay of execution and the benefit of all exemption laws
nor or hereafter in effect. No single exercise of the foregoing warrant
and power to confess judgment will be deemed to exhaust the power, whether
or not any such exercise shall be held by any court to be invalid,
voidable, or void; but the power will continue undiminished and may be
exercised from time to time as Lender may elect until all amounts owing on
this Note have been paid in full. Xxxxxxxx waives any conflict of interest
that an attorney hired by Xxxxxx may have in acting on behalf of Xxxxxxxx
in confessing judgment against Xxxxxxxx while such attorney is retained by
Xxxxxx. Xxxxxxxx expressly consents to such attorney acting for Xxxxxxxx
in confessing judgment.
DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $20.00 if
Borrower makes a payment on Borrower's loan and the check or preauthorized
charge with which Borrower pays is later dishonored.
RIGHT OF SETOFF. Borrower grants to Lender a contractual possessory
security interest in, and hereby assigns, conveys, delivers, pledges and
transfers to Lender all Borrower's right, title and interest in and to,
Xxxxxxxx's accounts with Lender (whether checking, savings, or some other
account), including without limitation all accounts held jointly with
someone else and all accounts Borrower may open in the future, excluding
however all IRA and Xxxxx accounts, and all trust accounts for which the
grant of a security interest would be prohibited by law.
PROMISSORY NOTE Page 2
(Continued)
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Borrower authorizes Xxxxxx, to the extent permitted by applicable law, to
charge or setoff all sums owing on this Note against any and all such
accounts.
COLLATERAL. This Note is secured by various marketable securities.
LINE OF CREDIT. This Note evidences a revolving line of credit. Advances
under this Note may be requested orally by Borrower or as provided in this
paragraph. Lender may, but need not, require that all oral requests be
confirmed in writing. All communications, instructions, or directions by
telephone or otherwise to Lender are to be directed to Xxxxxx's office
shown above. Advances under this Note may be requested in amounts of
$25,000.00 or greater. Any request for advances of less than $25,000.00
will not be honored. Xxxxxxxx agrees to be liable for all sums either:
(a) advanced in accordance with the instructions of an authorized person or
(b) credited to any of Xxxxxxxx's accounts with Xxxxxx. The unpaid
principal balance owing on this Note at any time may be evidenced by
endorsements on this Note or by Xxxxxx's internal records, including daily
computer print-outs. Lender will have no obligation to advance funds under
this Note if: (a) Borrower or any guarantor is in default under the terms
of this Note or any agreement that Borrower or any guarantor has with
Lender, including any agreement made in connection with the signing of this
Note; (b) Borrower or any guarantor ceases doing business or is insolvent;
(c) any guarantor seeks, claims or otherwise attempts to limit, modify or
revoke such guarantor's guarantee of this Note or any other loan with
Lender; (d) Borrower has applied funds provided pursuant to this Note for
purposes other than those authorized by Lender; or (e) Lender in good xxxxx
xxxxx itself insecure under this Note or any other agreement between Lender
and Borrower.
GENERAL PROVISIONS. If any part of this Note cannot be enforced, this fact
will not affect the rest of the Note. In particular, this section means
(among other things) that Borrower does not agree or intend to pay, and
Lender does not agree or intend to contract for, charge, collect, take,
reserve or receive (collectively referred to herein as "charge or
collect"), any amount in the nature of interest or in the nature of a fee
for this loan, which would in any way or event (including demand,
prepayment, or acceleration) cause Lender to charge or collect more for
this loan than the maximum Lender would be permitted to charge or collect
by federal law or the law of the State of Ohio (as applicable). Any such
excess interest or unauthorized fee shall, instead of anything stated to
the contrary, be applied first to reduce the principal balance of this loan
and when the principal has been paid in full, be refunded to Borrower.
Lender may delay or forgo enforcing any of its rights or remedies under
this Note without losing them. Each Borrower understands and agrees that,
with or without notice to Borrower, Lender may with respect to any other
Borrower (a) make one or more additional secured or unsecured loans or
otherwise extend additional credit; (b) alter, compromise, renew, extend,
accelerate, or otherwise change one or more times the time for payment or
other terms any indebtedness, including increases and decreases of the rate
of interest on the indebtedness; (c) exchange, enforce, waive, subordinate,
fail or decide not to perfect, and release any security, with or without
the substitution of new collateral; (d) apply such security and direct the
order or manner of sale thereof, including without limitation, any
nonjudicial sale permitted by the terms of the controlling security
agreements, as Lender in its discretion may determine; (e) release,
substitute, agree not to sue, or deal with any one or more of Borrower's
sureties, endorsers, or other guarantors on any terms or in any manner
Lender may choose; and (f) determine how, when and what application of
payments and credits shall be made on any other indebtedness owing by such
other borrower. Borrower and any other person who signs, guarantees or
endorses this Note, to the extent allowed by law, waive presentment, demand
for payment, protest and notice of dishonor. Upon any change in the terms
of this Note, and unless otherwise expressly stated in writing, no party
who signs this Note, whether as maker, guarantor, accommodation maker or
endorser, shall be released from liability. All such parties agree that
Lender may renew or extent (repeatedly and for any length of time) this
loan or release any party or guarantor or collateral; or impair, fail to
realize upon or perfect Xxxxxx's security interest in the collateral; and
take any other action deemed necessary by Lender without the consent of or
notice to anyone. All such parties also agree that Xxxxxx may modify this
loan without the consent of or notice to anyone other than the party with
whom the modification is made. The obligations under this Note are joint
and several.
PRIOR TO SIGNING THIS NOTE, EACH BORROWER READ AND UNDERSTOOD ALL THE
PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS.
EACH BORROWER AGREES TO THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF A
COMPLETED COPY OF THE NOTE.
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NOTICE: FOR THIS NOTICE "YOU" MEANS THE BORROWER AND "HIS" MEANS LENDER.
WARNING - BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT
TRIAL. IF YOU DO NOT PAY ON TIME, A COURT JUDGMENT MAY BE TAKEN AGAINST
YOU WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO
COLLECT FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR
WHETHER FOR RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY
WITH THE AGREEMENT, OR ANY OTHER CAUSE.
=================================================================
BORROWER:
FIRST SOUTHERN FUNDING, INC.
/S/ XXXXXXX XXXXXXXXX
Authorized Officer
FIRST SOUTHERN BANCORP, INC., Co-Borrower
By: /S/ XXXXXXX XXXXXXXXX
Authorized Officer
