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SECOND AMENDED AND RESTATED
LOAN AND SUBORDINATED
DEBENTURE PURCHASE AGREEMENT
BETWEEN
GERMAN AMERICAN BANCORP, INC.
AND
JPMORGAN CHASE BANK, N.A.
Dated as of December 29,
2006
Second Amended and Restated Loan
and
Subordinated Debenture Purchase Agreement
German American Bancorp, Inc./JP Morgan Chase Bank, N.A.
1
SECOND AMENDED AND RESTATED
LOAN AND SUBORDINATED DEBENTURE PURCHASE AGREEMENT
THIS SECOND
AMENDED AND RESTATED LOAN AND SUBORDINATED DEBENTURE PURCHASE
AGREEMENT (this " Agreement ") is dated as of December 29,
2006 and is made by and between German American Bancorp, Inc., a
Indiana corporation (" Borrower "), and JPMorgan Chase Bank,
N.A., a national banking association (" Lender
").
RECITALS:
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1.
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Borrower is a bank holding company that owns 100%
of the issued and outstanding capital stock of German American
Bancorp, an Indiana banking corporation, which is its sole
Subsidiary Bank (defined below) of Borrower as of the date of this
Agreement.
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2.
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Borrower has requested that Lender provide it
with three credit facilities in the aggregate principal amount of
$35,000,000 consisting of (a) a term loan (the " Term Loan
"), (b) a revolving line-of-credit, and (c) subordinated debt
(evidenced by a subordinated debenture). The Term Loan and the
Revolving Loan may be referred to collectively as the " Senior
Loans " and the Senior Loans and the Subordinated Debt may be
referred to collectively as the " Loans ."
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3.
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The Subordinated Debt is intended to qualify as
Tier 2 capital under applicable rules and regulations promulgated
by the Board of Governors of the Federal Reserve System (the "
FRB ").
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4.
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Lender is willing to lend to Borrower up to an
aggregate principal amount of $35,000,000 under the Loans in
accordance with the terms, subject to the conditions and in
reliance on the recitals, representations, warranties, covenants
and agreements set forth herein and in the other Loan Documents (as
defined below).
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5.
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This Agreement is an amendment and restatement of
that certain Amended and Restated Loan and Security Agreement,
dated as of September 20, 2005, which provided for loans of up to
Forty Million Dollars ($40,000,000).
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Agreement
NOW, THEREFORE , in consideration of the mutual covenants,
conditions and agreements herein contained, the parties hereto
hereby agree as follows:
1.
DEFINITIONS .
1.1.
Defined
Terms .
The following capitalized terms generally used in this Agreement
and in the other Loan Documents shall have the meanings defined or
referenced below. Certain other capitalized terms used only in
specific sections of this Agreement may be defined in such
sections.
Second Amended and Restated Loan
and
Subordinated Debenture Purchase Agreement
German American Bancorp, Inc./JP Morgan Chase Bank, N.A.
2
"
Affiliate(s) " shall mean, with respect to any Person, such
Person’s immediate family members, partners, members or
parent and subsidiary corporations, and any other Person directly
or indirectly controlling, controlled by, or under common control
with, said Person, and their respective Affiliates, members,
shareholders, directors, officers, employees, agents and
representatives.
" Agreed Upon
Terms and Procedures " shall mean the Agreed Upon Terms and
Procedures relating to interest rates, interest and payments
executed by Borrower on the date hereof as such may be amended,
restated, supplemented or modified from time to time.
" Assignee
Lender " shall have the meaning ascribed to such term in
Section 7.2 .
" Bank
Subsidiary " shall have the same meaning as Subsidiary
Bank.
" Bankruptcy
Code " shall mean the Bankruptcy Reform Act of 1978, as amended
or recodified.
" Base
Rate " shall mean that rate of interest (expressed as a percent
per annum) equal to Lender’s "base" or "prime" rate (which is
not necessarily the lowest or most favorable rate of interest
charged by Lender on commercial loans at any time) in effect from
time to time, which means a base rate of interest established by
Lender from time to time that serves as the basis upon which
effective rates of interest are calculated for those loans making
reference thereto. Any change in the rate of interest hereunder due
to a change in the base or prime rate shall become effective on the
date each change in the base or prime rate is announced by
Lender.
" Base Rate
Tranche " shall mean a Borrowing Tranche as to which the Base
Rate is applicable.
"
Borrower " shall have that meaning ascribed to such term
above.
"
Borrower’s Accountant " means the current registered
public accounting firm of the Borrower, or such other nationally
recognized firm of certified public accountants selected by
Borrower as shall from time to time audit Borrower.
"
Borrower’s Liabilities " means Borrower’s
obligations under this Agreement, the Term Note, the Revolving Note
and any other Loan Documents (other than the principal, interest
and other amounts payable under the Subordinated Debenture).
" Borrowing
Date " means the date any Borrowing Tranche is disbursed,
renewed or converted (from a LIBO Tranche to a Base Rate Tranche or
from a Base Rate Tranche to a LIBO Tranche).
" Borrowing
Tranche " shall mean a disbursement of proceeds under any Loan
pursuant to this Agreement and the Agreed Upon Terms and
Procedures.
Second Amended and Restated Loan
and
Subordinated Debenture Purchase Agreement
German American Bancorp, Inc./JP Morgan Chase Bank, N.A.
3
"
Business Day " shall mean (a) for all purposes other than as
covered by clause (b) hereof, a day of the week (but not a
Saturday, Sunday or a legal holiday under the laws of the State of
Illinois or any other day on which banking institutions located in
Illinois are authorized or required by law or other governmental
action to close) on which the Chicago, Illinois offices of Lender
are open to the public for carrying on substantially all of
Lender’s business functions and (b) with respect to
determinations in connection with, and payments of principal and
interest on any LIBO Rate Tranche, any day which is a Business Day
described in clause (a) and which is also a day for trading by and
between banks in U.S. dollar-denominated deposits in the London
Interbank Eurodollar Market. Unless specifically referenced in this
Agreement as a Business Day, all references to "days" shall be to
calendar days.
" Closing
" has that meaning ascribed to such term in Section 2.5
.
" Closing
Date " means December 29, 2006.
" Code "
shall mean the Internal Revenue Code of 1986, as amended or
recodified.
" Code
Provisions " shall have the meaning ascribed to such term in
Section 6.1.13 .
"
Collateral " shall mean all the property (including all
tangible and intangible property) in which the Collateral Documents
grant (or purport to grant) Lender a security interest.
" Collateral
Documents " shall mean the Pledge Agreement and such other
certificates, documents, and instruments entered into or delivered
in connection with or relating to the Collateral.
" Default
Rate " shall have the meaning ascribed to such term in the
Agreed Upon Terms and Procedures.
" Equity
Interest " means any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person
which is not a corporation and any and all warrants, options or
other rights to purchase any of the foregoing.
" Event of
Default " shall have the meaning ascribed to such term in
Section 6 .
" Exchange
Act " means the Securities Exchange Act of 1934, as amended or
recodified.
" FDIC "
means the Federal Deposit Insurance Corporation.
" Federal
Reserve Notice " shall have the meaning ascribed to such term
in Section 8.6 .
" FRB "
means the Board of Governors of the Federal Reserve System.
" GAAP "
means generally accepted accounting principles in effect from time
to time in the United States of America.
Second Amended and Restated Loan
and
Subordinated Debenture Purchase Agreement
German American Bancorp, Inc./JP Morgan Chase Bank, N.A.
4
"
Governmental Agency(ies) " means, individually or
collectively, any federal, state, county or local governmental
department, commission, board, regulatory authority or agency
including, without limitation, the FRB, the FDIC and any state
banking regulatory authority.
"
Instructions " means disbursement instructions given by
Borrower to Lender specifying the manner in which proceeds of the
Loans should be disbursed at Closing.
" Interest
Rate Protection Agreement " shall mean an interest rate swap,
cap, collar or other hedging or derivative agreement, to which
Lender or any Affiliate of Lender is the counterparty, intended to
mitigate interest rate risk, along with any other related agreement
or instrument executed in connection therewith.
" Initial
Disbursement " shall have the meaning ascribed to such term
in Section 3.1 .
" Lender
" shall have that meaning ascribed to such term above.
" LIBO
Rate " shall mean that rate of interest equal to (a) the
quotient of (i) the rate of interest, rounded upward, if necessary,
to the nearest whole multiple of .0625% (1/16 of 1%), quoted by
Lender as the London Inter-Bank Offered Rate for deposits in U.S.
Dollars on the date, at approximately 11:00 a.m. London time, that
is two Business Days prior to any applicable Borrowing Date for
purposes of calculating effective rates of interest for Loans or
obligations making reference thereto for an amount approximately
equal to a LIBO Rate Tranche and for a period of time approximately
equal to a LIBOR Period, divided by (ii) 100% minus the Reserve
Percentage.
" LIBO Rate
Tranche " shall mean a Borrowing Tranche as to which the LIBO
Rate is applicable.
" LIBOR
Period " shall mean a period of 90 days, plus or minus one or
two days, with respect to a LIBO Rate Tranche; provided that no
LIBOR Period shall extend beyond any Maturity Date.
"
Lien(s) " shall mean any lien, claim, charge, pledge,
security interest, deed of trust, mortgage or other encumbrance of
any kind or other arrangement having the practical effect of the
foregoing or other preferential arrangement of any other kind and
shall include the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention
agreement.
" Loans "
has that meaning ascribed to such term in the recitals hereto.
" Loan
Documents " means those documents and instruments (including,
without limitation, all agreements, instruments and documents,
including, without limitation, guaranties, mortgages, deeds of
trust, pledges, powers of attorney, consents, assignments,
contracts, notices and all other written matter heretofore, now or
from time to time hereafter executed by or on behalf of Borrower in
connection with this Agreement and the Loans) entered into or
delivered in connection with or relating to the Loans, including
the documents listed on the schedule of closing documents prepared
in connection with the Closing. Loan Documents shall also include
any Interest Rate Protection Agreement between Borrower and
Lender.
Second Amended and Restated Loan
and
Subordinated Debenture Purchase Agreement
German American Bancorp, Inc./JP Morgan Chase Bank, N.A.
5
"
Maturity Date " means any of the Term Loan Maturity Date,
the Revolving Loan Maturity Date or the Subordinated Debt Maturity
Date as the context may indicate.
" Notes "
means the Term Note, the Revolving Note and the Subordinated
Debenture each as amended, restated, supplemented or modified from
time to time, and each note or debenture, as the case may be,
delivered in substitution or exchange for any of such Notes and,
where applicable, shall include the singular number as well as the
plural.
" Person
" means an individual, a corporation (whether or not for profit), a
partnership, a limited liability company, a joint venture, an
association, a trust, an unincorporated organization, a government
or any department or agency thereof (including a Governmental
Agency) or any other entity or organization.
" Pledge
Agreement " means a Pledge Agreement dated as of the Closing
Date between Borrower and Lender (as amended, restated,
supplemented or modified from time to time, the " Pledge
Agreement ") in the form attached as Exhibit D hereto,
pursuant to which the Subsidiary Bank Shares are pledged to
Lender.
" Potential
Event of Default " shall mean an event or circumstance that
with the passage of time, the giving of notice or both, could
become an Event of Default.
" Rate
Election Notice " shall mean a properly completed notice in the
form attached as Exhibit E hereto or a verbal notice
conveyed to Lender in accordance with its disbursement procedures
from time to time.
" Reserve
Percentage " shall mean the percentage announced within Lender
as the reserve percentage under Regulation D of the FRB for Loans
and obligations making reference to a LIBO Rate for a LIBOR Period.
The Reserve Percentage shall be based on Regulation D or other
regulations from time to time in effect concerning reserves for
Eurocurrency Liabilities as defined in Regulation D from related
institutions as though Lender were in a net borrowing position, as
promulgated by the FRB, or its successor.
" Revolving
Loan " has that meaning ascribed to such term in the recitals
hereto.
" Revolving
Loan Amount " shall mean the maximum principal amount of
$15,000,000.
" Revolving Loan
Maturity Date " means January 1, 2008.
" Revolving
Note " means a promissory note in the form attached as
Exhibit B hereto in the principal amount of the Revolving
Loan Amount, as amended, restated, supplemented or modified from
time to time and each note delivered in substitution or exchange
for such note.
" RICO
Related Law " shall mean the Racketeer Influenced and Corrupt
Organizations Act of 1970 or any other federal, state or local law
for which forfeiture of assets is a potential penalty.
Second Amended and Restated Loan
and
Subordinated Debenture Purchase Agreement
German American Bancorp, Inc./JP Morgan Chase Bank, N.A.
6
"
SEC " shall mean the Securities and Exchange Commission of
the United States of America.
"
Subordinated Debt " means the indebtedness of the Borrower
under the Subordinated Debenture.
"
Subordinated Debt Amount " shall mean the principal amount
of $10,000,000.
"
Subordinated Debt Maturity Date " means January 1, 2014.
"
Subordinated Debenture " means a subordinated debenture in
the form attached as Exhibit C hereto in the principal
amount of the Subordinated Debt Amount, as amended, restated,
supplemented or modified from time to time and each debenture
delivered in substitution or exchange for such subordinated
debenture.
"
Subsidiary " means any corporation, association,
partnership, joint venture or other entity of which more than fifty
percent (50%) of the outstanding capital stock having ordinary
voting power to elect a majority of the board of directors of such
corporation (irrespective of whether at the time stock of any other
class or classes of such corporation shall have or might have
voting power by reason of the happening of any contingency) or
other equity interests in case of Persons other than corporations
is at the time, directly or indirectly, owned or controlled by
Borrower.
" Subsidiary
Bank(s) " means German American Bancorp (including any
successor ) and any other depository institution Subsidiary of
Borrower that Borrower may hereafter establish or acquire.
" Subsidiary
Bank Shares " means the shares of common stock of German
American Bancorp that are included in the Collateral.
" Term
Loan " has that meaning ascribed to such term in the recitals
hereto.
" Term Loan
Amount " shall mean the principal amount of $10,000,000.
" Term Loan
Maturity Dates " mean the following dates for the following
amounts:
January 1, 2008:
$1,000,000;
January 1, 2009:
$1,500,000;
January 1, 2010:
$1,500,000;
January 1, 2011:
$1,500,000;
January 1, 2012:
$1,500,000;
January 1, 2013:
$1,500,000; and
January 1, 2014:
$1,500,000.
Second Amended and Restated Loan
and
Subordinated Debenture Purchase Agreement
German American Bancorp, Inc./JP Morgan Chase Bank, N.A.
7
"
Term Note " means a promissory note in the form attached as
Exhibit A hereto in the principal amount of the Term Loan
Amount, as amended, restated, supplemented or modified from time to
time and each note delivered in substitution or exchange for such
note.
" Tier 1
Capital " has the definition provided in, and shall be
determined in accordance with, the rules and regulations of the
FRB.
" Tier 2
Capital " shall have the definition provided in, and shall be
determined in accordance with, the rules and regulations of the
FRB.
" UCC "
shall mean the Uniform Commercial Code as enacted in the State of
Illinois, as amended or recodified.
1.2.
Certain UCC
and Accounting Terms: Interpretations . Except as otherwise
defined in this Agreement or the other Loan Documents, all words,
terms or phrases used herein and therein shall be defined by the
applicable definition therefor (if any) in the UCC. Notwithstanding
the foregoing, any accounting terms used in this Agreement which
are not specifically defined herein shall have the meaning
customarily given to them in accordance with GAAP or (in the case
of regulatory accounting terms) the customary meaning given them by
the appropriate Government Agency. Where the character or amount of
any asset or liability or item of income or expense is required to
be determined or any consolidation or other accounting computation
is required to be made for the purposes of this Agreement, it shall
be done in accordance with GAAP except where such principles are
inconsistent with the specific provisions of this Agreement or
applicable regulatory accounting principles or interpretations. The
foregoing definitions are equally applicable to both the singular
and plural forms of the terms defined. The words "hereof", "herein"
and "hereunder" and words of like import when used in this
Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement. The word "including" when
used in this Agreement without the phrase "without limitation,"
shall mean "including, without limitation". All references to time
of day herein are references to Chicago, Illinois time unless
otherwise specifically provided. Any reference contained herein to
attorneys’ fees and expenses shall be deemed to be reasonable
fees and expenses of Lender’s outside counsel and of any
other third-party experts or consultants engaged by Lender’s
outside counsel on Lender’s behalf. All references to any
Loan Document shall be deemed to be to such document as amended,
modified or restated from time to time.
1.3.
Exhibits and
Schedules Incorporated . All exhibits and schedules
attached hereto or referenced herein, are hereby incorporated into
this Agreement.
Second Amended and Restated Loan
and
Subordinated Debenture Purchase Agreement
German American Bancorp, Inc./JP Morgan Chase Bank, N.A.
8
2.
CREDIT
FACILITIES.
2.1.
The
Loans . Lender agrees to extend to Borrower the following
credit facilities in the aggregate principal amount of the sum of
Term Loan Amount, the Revolving Loan Amount plus the Subordinated
Debt Amount:
2.1.1.
The Term Loan . Lender agrees to extend the Term Loan
to Borrower in accordance with the terms of, and subject to the
conditions set forth in, this Agreement, the Term Note and the
other Loan Documents. An initial Borrowing Tranche in an amount
equal to the entire principal amount of the Term Loan shall be
borrowed on the Closing Date and, thereafter, such Borrowing
Tranche may be converted or renewed from time to time in accordance
with the terms and subject to the conditions set forth in this
Agreement. Subject to Section 2.6 , the Interest Rate Floor
Amount and any other conditions and limitations set forth in this
Agreement, any Borrowing Tranche under the Term Loan shall be
treated as, at Borrower’s election subject to and in
accordance with the terms in this Agreement: (a) a LIBO Rate
Tranche and shall bear interest per annum at a rate equal to 1.15%
(115 basis points) plus the LIBO Rate; or (b) a Base Rate Tranche
and shall bear interest at a rate equal to the Base Rate. The
unpaid principal balance plus all accrued but unpaid interest on
the Term Loan shall be due and payable on the Term Loan Maturity
Dates (in the amounts provided in the definition of "Term Loan
Maturity Dates"), or such earlier date on which such amount shall
become due and payable on account of acceleration by Lender in
accordance with the terms of the Term Note and this Agreement.
Until January 1, 2014, the Borrower may not reduce the outstanding
balance of the Term Loan below $500,000 if there is any outstanding
principal owing under the Subordinated Debt.
2.1.2.
The Revolving Loan . Lender agrees to extend the
Revolving Loan to Borrower in accordance with the terms of, and
subject to the conditions set forth in, this Agreement, the
Revolving Note and the other Loan Documents. An initial Borrowing
Tranche under the Revolving Loan shall be borrowed on the Closing
Date and, thereafter, any such Borrowing Tranche may be converted
or renewed from time to time in accordance with the terms and
subject to the conditions set forth in this Agreement. Subject to
Section 2.6 , the Interest Rate Floor Amount and any other
conditions and limitations set forth in this Agreement, any
Borrowing Tranche under the Revolving Loan shall be treated as, at
Borrower’s election subject to and in accordance with the
terms set forth in this Agreement: (a) a LIBO Rate Tranche and
shall bear interest per annum at a rate equal to 1.15% (115 basis
points) plus the LIBO Rate; or (b) a Base Rate Tranche and shall
bear interest at a rate equal to the Base Rate. The unpaid
principal balance plus all accrued but unpaid interest on the
Revolving Loan shall be due and payable on the Revolving Loan
Maturity Date, or such earlier date on which such amount shall
become due and payable on account of acceleration by Lender in
accordance with the terms of the Revolving Note and this
Agreement.
Second Amended and Restated Loan
and
Subordinated Debenture Purchase Agreement
German American Bancorp, Inc./JP Morgan Chase Bank, N.A.
9
2.1.3.
The Subordinated Debt . Lender agrees to extend the
Subordinated Debt to Borrower in accordance with the terms of, and
subject to the conditions set forth in, this Agreement, the
Subordinated Debenture and the other Loan Documents. An initial
Borrowing Tranche in an amount equal to the entire principal amount
of the Subordinated Debt shall be borrowed on the Closing Date and,
thereafter, any such Borrowing Tranche may be converted or renewed
from time to time in accordance with the terms and subject to the
conditions set forth in this Agreement. Subject to Section
2.6 and any other conditions and limitations set forth in this
Agreement, any Borrowing Tranche under the Subordinated Debt shall
be treated as, at Borrower’s election subject to and in
accordance with the terms set forth in this Agreement: (a) a LIBO
Rate Tranche and shall bear interest per annum at a rate equal to
1.35% (135 basis points) plus the LIBO Rate; or (b) a Base Rate
Tranche and shall bear interest at a rate equal to 0.20% (20 basis
points) plus the Base Rate. The unpaid principal balance plus all
accrued but unpaid interest on the Subordinated Debt shall be due
and payable on the Subordinated Debt Maturity Date, or such earlier
date on which such amount shall become due and payable on account
of acceleration by Lender in accordance with the terms of the
Subordinated Debenture or this Agreement.
2.2.
The Notes
and the Subordinated Debenture .
The Loans shall be
evidenced by the Term Note, the Revolving Note and the Subordinated
Debenture.
2.3.
Maturity
Dates .
On each Term Loan
Maturity Date, all sums then due and owing under this Agreement and
the other Loan Documents with respect to the Term Loan shall be
repaid in full. On the Revolving Loan Maturity Date, all sums due
and owing under this Agreement and the other Loan Documents with
respect to the Revolving Loan shall be repaid in full. On the
Subordinated Debenture Maturity Date, all sums due and owing under
this Agreement and the other Loan Documents with respect to the
Subordinated Debenture shall be repaid in full. Borrower
acknowledges and agrees that Lender has not made any commitments,
either express or implied, to extend the terms of the Loans past
their Maturity Dates, unless Borrower and Lender hereafter
specifically otherwise agree in writing.
2.4.
Collateral .
Borrower’s
Liabilities shall be secured by the Collateral pledged pursuant to
the Pledge Agreement. Notwithstanding anything to the contrary in
any Loan Document, the obligations of Borrower to Lender under the
Subordinated Debenture shall be unsecured.
2.5.
The
Closing .
The initial funding
of the Loans (the " Closing ") will occur at the offices of
Lender, at 120 South LaSalle Street, 3 rd Floor,
Chicago, Illinois 60603, at 10:00 a.m. on the Closing Date, or at
such other place or time or on such other date as the parties
hereto may agree, by disbursing the proceeds of the Loan in
accordance with any Instructions received at least one Business Day
prior to Closing.
Second Amended and Restated Loan
and
Subordinated Debenture Purchase Agreement
German American Bancorp, Inc./JP Morgan Chase Bank, N.A.
10
2.6.
Interest Rates .
Borrower agrees
that matters concerning the election, payment, application, accrual
and computation of interest and interest rates shall be in
accordance with the Agreed Upon Terms and Procedures agreed to, as
executed, by Borrower.
2.7.
Payments .
Borrower agrees
that matters concerning prepayments, payments and application of
payments shall be in accordance with the Agreed Upon Terms and
Procedures agreed to, as executed by, Borrower.
2.8.
Capital
Adequacy .
If Lender shall
reasonably determine that the application or adoption of any law,
rule, regulation, directive, interpretation, treaty or guideline
regarding capital adequacy, or any change therein or in the
interpretation or administration thereof, whether or not having the
force of law (including, without limitation, application of changes
to Regulation H and Regulation Y of the FRB issued by the FRB on
January 19, 1989 and regulations of the Comptroller of the
Currency, Department of Treasury, 12 CFR Part 3, Appendix A, issued
by the Comptroller of the Currency on January 27, 1989) increases
the capital required or expected to be maintained by Lender or any
person or entity controlling Lender, and such increase is based
upon the existence of Lender’s obligations hereunder and
under other commitments of this type, then, within 10 days after
demand from Lender, Borrower shall pay to Lender, from time to
time, such amount or amounts as will compensate Lender or such
controlling person or entity, as the case may be, for such
increased capital requirement. The determination of any amount to
be paid by Borrower under this Section 2.8 shall take into
consideration the policies of Lender or of any Person controlling
Lender with respect to capital adequacy and shall be based upon any
reasonable averaging, attribution and allocation methods. A
certificate of Lender setting forth the amount or amounts as shall
be necessary to compensate Lender as specified in this Section
2.8 shall be delivered to Borrower and shall be conclusive in
the absence of manifest error.
3.
DISBURSEMENTS.
3.1.
Initial and
Subsequent Disbursements .
At such time as all
of the terms and conditions set forth in Section 3.2 have
been satisfied by Borrower and Borrower has executed and delivered
to Lender each of the Loan Documents and any other related
documents in form and substance satisfactory to Lender, in its sole
and absolute discretion, Lender shall disburse to Borrower an
amount equal to $20,000,000 (the " Initial Disbursement "),
representing a disbursement of $10,000,000 under the Term Loan,
none under the Revolving Loan, and $10,000,000 under the
Subordinated Debenture, and shall apply the Initial Disbursement to
the payment (without prepayment penalty or premium) of
Borrower’s liabilities incurred to Lender under the Amended
and Restated Loan and Security Agreement, dated as of September 20,
2005, as once amended. In the event Borrower fails to satisfy such
disbursement conditions, Borrower nevertheless shall pay all costs
and expenses incurred by Lender in connection with the transactions
contemplated herein promptly upon receipt of an invoice therefor
from Lender.
Second Amended and Restated Loan
and
Subordinated Debenture Purchase Agreement
German American Bancorp, Inc./JP Morgan Chase Bank, N.A.
11
3.2.
Conditions Precedent to Initial Disbursement .
In conjunction with
and as additional (but independent) supporting evidence for certain
of the covenants, representations and warranties made by Borrower
herein, prior to and as a condition of the Initial Disbursement,
Borrower shall deliver or cause to be delivered to Lender each of
the following, each of which shall be in form and substance
satisfactory to Lender, in its sole and absolute
discretion:
3.2.1.
Searches . UCC, tax lien and judgment searches
regarding Borrower conducted in Indiana.
3.2.2.
Opinions . An opinion of counsel of Borrower
satisfactory to Lender, dated on or about the date of the Initial
Disbursement.
3.2.3.
Loan Documents . The Loan Documents, including,
without limitation, the Notes and the Collateral Documents.
3.2.4.
Pledged Securities . The actual certificates
representing all of the securities constituting the Pledged Stock
(as defined in the Pledge Agreement) together with irrevocable
stock powers for each such certificate endorsed by Borrower in
blank.
3.2.5.
Authority Documents .
3.2.5.1.
Copies certified by
the Indiana Secretary of State of (a) the articles of incorporation
of Borrower, and (b) the articles of incorporation of German
American Bancorp.
3.2.5.2.
Certificates of
existence for Borrower and German American Bancorp issued by the
Secretary of State of the State of Indiana.
3.2.5.3.
Copies certified by
the Secretary or an Assistant Secretary of Borrower of the Bylaws
of Borrower and German American Bancorp.
3.2.5.4.
Copies certified by
the Secretary or an Assistant Secretary of Borrower of resolutions
of the board of directors of Borrower authorizing the execution,
delivery and performance (including the authority to pledge the
Pledged Stock) of this Agreement, the Notes and the other Loan
Documents.
Second Amended and Restated Loan
and
Subordinated Debenture Purchase Agreement
German American Bancorp, Inc./JP Morgan Chase Bank, N.A.
12
3.2.5.5. An
incumbency certificate of the Secretary or an Assistant Secretary
of Borrower certifying the names of the officer or officers of
Borrower authorized to sign this Agreement, the Notes and the other
documents provided for in this Agreement, together with a sample of
the true signature of each such officer (Lender may conclusively
rely on such certificate until formally advised by a like
certificate of any changes therein).
3.2.6.
Loan Fee and Certain Costs of Lender . Payment of the
Loan Fee and certain costs and expenses incurred by Lender to date
in connection with the transactions contemplated herein, such as
Lender’s attorneys’ fees and expenses and other fees
and expenses paid or payable to any other parties.
3.2.7.
Other Requirements . Such other additional
information regarding Borrower, Subsidiary Bank and their
respective assets, liabilities (including any liabilities arising
from, or relating to, legal proceedings) and contracts as Lender
may require in its sole discretion.
3.2.8.
Other Documents . Such other certificates,
affidavits, schedules, resolutions, opinions, notes or other
documents which are provided for hereunder or as Lender may
reasonably request.
3.3.
Conditions
to All Disbursements; Renewals and Conversions .
Notwithstanding anything to the contrary contained herein, the
continued performance, observance and compliance by Borrower of and
with all of the covenants, conditions and agreements of Borrower
contained herein (whether or not non-performance constitutes an
Event of Default) and in the other Loan Documents shall be further
conditions precedent to any disbursements of the proceeds under any
Loan. In addition, Lender shall not be required to disburse
proceeds under any Loan or to renew or convert any Borrowing
Tranche at any time that any of the following are true:
3.3.1.
Default . There exists an Event of Default or
Potential Event of Default.
3.3.2.
Legislation or Proceedings . Any legislation has been
passed or any suit or other proceeding has been instituted the
effect of which is to prohibit, enjoin (or to declare unlawful or
improper) or otherwise adversely affect, in Lender’s sole and
absolute judgment, Borrower’s performance of its obligations
hereunder, or any litigation or governmental proceeding has been
instituted or threatened against Borrower or Subsidiary Bank or any
of their officers or shareholders which, in the sole discretion of
Lender, may adversely affect the financial condition or operations
of Borrower or Subsidiary Bank.
3.3.3.
Collateral . Lender has reasonable cause to believe
that any Collateral might be subject to forfeiture under any RICO
Related Law or any of the Collateral is subject to any Lien other
than in favor of Lender.
Second Amended and Restated Loan
and
Subordinated Debenture Purchase Agreement
German American Bancorp, Inc./JP Morgan Chase Bank, N.A.
13
3.3.4.
Material Adverse Change . There has occurred, in
Lender’s sole and complete discretion, a material adverse
change in the financial condition or affairs of Borrower or
Subsidiary Bank since September 30, 2006.
3.3.5.
Representations and Warranties . Any representation
or warranty of Borrower contained herein shall not be true on and
as of the date of any Borrowing Tranche, with the same effect as
though such representations and warranties had been made, or such
information had been presented, on and as of such date (except for
such representations or warranties that speak as of a particular
date or for a particular time period, as to which such
representations or warranties shall not be true as of such dates or
for such periods).
3.3.6.
Approvals . All necessary or appropriate actions and
proceedings have not been taken in connection with, or relating to,
the transactions contemplated hereby and all documents incident
thereto have not been completed and tendered for delivery, in
substance and form satisfactory to Lender, including, without
limitation, if appropriate in the opinion of Lender, Lender’s
failure to have received evidence of all necessary approvals from
Governmental Agencies.
3.3.7.
Other Documents . Lender has not received in
substance and form reasonably satisfactory to Lender, the
Instructions, and all certificates, affidavits, schedules,
resolutions, opinions, notes, or other documents which are provided
for hereunder.
3.3.8.
Other Provisions . Lender’s refusal to disburse
any proceeds of the Loans on account of the provisions of this
Section 3.3 shall not alter or diminish any of
Borrower’s other obligations hereunder or otherwise prevent
any breach or default of Borrower hereunder from becoming an Event
of Default. Each Rate Election Notice submitted by Borrower
hereunder shall constitute an affirmation that Borrower has
performed, observed and complied with its covenants, conditions and
agreements contained herein in all material respects and that all
representations and warranties made by Borrower hereunder continue
to be true and correct as of the date of such Rate Election Notice
(except for such representations or warranties that speak as of a
particular date or for a particular time period, as to which such
representations or warranties shall continue to be true as of such
dates or for such periods).
3.4.
WARRANTIES . Borrower represents and warrants that as
of the date of the execution of this Agreement (except for such
representations and warranties that speak as of a particular date
or for a particular time period, as to which Borrower represents
and warrants as of such dates or for such periods) and continuing
(except for such representations and warranties that speak as of a
particular date or for a particular time period) so long as any of
Borrower’s Liabilities or the Subordinated Debt remain
outstanding, and (even if there shall be no Borrower’s
Liabilities or Subordinated Debt outstanding) so long as this
Agreement remains in effect:
Second Amended and Restated Loan
and
Subordinated Debenture Purchase Agreement
German American Bancorp, Inc./JP Morgan Chase Bank, N.A.
14
3.4.1.
Existence; Etc . Each of Borrower, and each of the
Bank Subsidiaries: (i) is a corporation, bank, limited liability
company, or other entity, respectively, duly organized and validly
existing and (if "good standing" is recognized in such state of
organization, in good standing) under the laws of its state of
organization; (ii) is duly qualified as a foreign corporation and
(if "good standing" is recognized in such state, in good standing)
in good standing in all states in which it is doing business except
where the failure to so qualify would not have a material adverse
effect on Borrower or any of the Bank Subsidiaries, or their
respective businesses; and (iii) has all requisite power and
authority, corporate or otherwise, to own, operate and lease its
properties and to carry on its business as now being conducted.
Borrower and the Bank Subsidiaries have made payment of all
franchise and similar taxes and in all jurisdictions, except for
any such taxes: (i) (A) which are not yet due and payable, where
the failure to pay such taxes will not have a material adverse
effect on Borrower or any of the Bank Subsidiaries or (B) the
validity of which is being contested in good faith by appropriate
proceedings diligently conducted, and (ii) for which proper
reserves have been set aside on the books of Borrower and the Bank
Subsidiaries.
3.4.2.
Subsidiaries. Schedule 3.4.2 sets forth all material
Subsidiaries of the Borrower. Borrower’s Quarterly Report on
Form 10-Q for the quarter ended September 30, 2006, sets forth each
class of stock of Borrower, together with the issued and
outstanding shares of each class, as of September 30, 2006, and
there has been no material change in such information after
September 30, 2006. German American Bancorp, the sole Subsidiary
Bank of Borrower, has only one authorized class of stock, of which
674,725 Common Shares, par value $10 per share, are authorized, all
of which have been issued to the Borrower and are owned of record
and beneficially by the Borrower. There is no plan, agreement or
understanding providing for, or contemplating, the issuance of any
additional shares of capital stock of the Subsidiary Bank. All of
the Subsidiary Bank Shares have been duly authorized, legally and
validly issued, fully paid and nonassessable and are owned by
Borrower free and clear of all Liens, except as may exist for the
benefit of Lender and, following the Closing Date, Borrower will
continue to own the Subsidiary Bank Shares free and clear of all
pledges, liens, security interests, charges or encumbrances, except
for any security interest granted herewith by Borrower to Lender.
None of the Subsidiary Bank Shares have been issued in violation of
any shareholder’s preemptive rights. There are, as of the
date of this Agreement, no outstanding options, rights, warrants or
other agreements or instruments obligating Borrower to issue,
deliver or sell, or cause to be issued, delivered or sold,
additional shares of the capital stock of the Subsidiary Bank or
obligating Borrower or the Subsidiary Bank to grant, extend or
enter into any such agreement or commitment.
3.4.3.
Financial Statements . Borrower has delivered to
Lender copies of the consolidated financial statements of Borrower
as of and for the year ending December 31, 2005, audited by
Borrower’s Accountant (the "2005 Statements"), as included in
its Annual Report on Form 10-K for its fiscal year ended December
31, 2005. The 2005 Statements are true and correct, are in
accordance with the respective books of account and records of
Borrower, and have been prepared in accordance with GAAP applied on
a basis consistent with prior periods, and fairly and accurately
present the consolidated financial condition of Borrower as of such
date and the results of its consolidated operations for the year
then ended. Since December 31, 2005, there has been no material
adverse change in the financial condition, business, properties or
operations of Borrower. In addition, Borrower has delivered to
Lender copies of the reports of condition and income (hereinafter
referred to as " call reports ") filed by its sole
Subsidiary Bank (German American Bancorp) for the period ending
September 30, 2006, and copies of Form FRY-9LP and FRY-9C filed by
Borrower for the period ending September 30, 2006 (such call
reports and Forms FRY-9LP and FRY-9C, together with the 2005
Statements, the " Financial Statements "). Each of such
reports filed by Borrower or the Bank Subsidiaries with any
Governmental Agency is true and correct and is in accordance with
the respective books of account and records of Borrower and the
Bank Subsidiaries, and has been prepared in accordance with
applicable banking regulations, rules and guidelines on a basis
consistent with prior periods, and fairly and accurately presents
the financial condition of Borrower and the Bank Subsidiaries and
their respective assets and liabilities and the results of their
respective operations as of such date.
Second Amended and Restated Loan
and
Subordinated Debenture Purchase Agreement
German American Bancorp, Inc./JP Morgan Chase Bank, N.A.
15
3.4.4.
Transaction is Legal and Authorized . The borrowing
of the principal amounts of the Loans, the execution and delivery
of this Agreement and the other Loan Documents and compliance by
Borrower with all of the provisions of this Agreement and of the
other Loan Documents are within the corporate and other powers of
Borrower. This Agreement and the other Loan Documents have been
duly authorized, executed and delivered by Borrower and each of
this Agreement and the other Loan Documents is the legal, valid and
binding obligation of Borrower, enforceable against Borrower in
accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
the rights of creditors generally, and general principles of
equity.
3.4.5.
No Defaults or Restrictions . Neither the execution
and delivery of this Agreement or any of the Loan Documents nor
compliance with their terms and conditions will conflict with or
result in breach of, or constitute a default under, any of the
terms, obligations, covenants, conditions or provisions of any
corporate restriction or of any indenture, mortgage, deed of trust,
pledge, bank loan or credit agreement, corporate charter, bylaw or
any other agreement or instrument to which Borrower or any of the
Bank Subsidiaries is now a party or by which any of them or any of
their properties may be bound or affected, or any judgment, order,
writ, injunction, decree or demand of any court, arbitrator, grand
jury, or Governmental Agency, or result in the creation or
imposition of any lien, charge or encumbrance of any nature
whatsoever upon any property or asset of Borrower or any of the
Bank Subsidiaries under the terms or provisions of any of the
foregoing. Neither Borrower nor any of the Bank Subsidiaries is in
material default in the performance, observance or fulfillment of
any of the terms, obligations, covenants, conditions or provisions
contained in any indenture or other agreement creating, evidencing
or securing indebtedness of any kind or pursuant to which any such
indebtedness is issued, or other agreement or instrument to which
Borrower or any Bank Subsidiary is a party or by which Borrower or
any Bank Subsidiary or any of their respective properties may be
bound or affected.
3.4.6.
Governmental Consent . No governmental orders,
permissions, consents, approvals or authorizations are required to
be obtained and no registrations or declarations are required to be
filed in connection with, or contemplation of, the execution and
delivery of this Agreement or any of the other Loan Documents.
Second Amended and Restated Loan
and
Subordinated Debenture Purchase Agreement
German American Bancorp, Inc./JP Morgan Chase Bank, N.A.
16
3.4.7.
Taxes . Borrower and each of the Bank Subsidiaries
have filed all United States income tax returns and all state and
municipal tax returns which are required to be filed, and have
paid, or made provision for the payment of, all material taxes
which have become due pursuant to said returns or to any assessment
received by Borrower or any of the Bank Subsidiaries, except such
taxes, if any, as are being contested in good faith and as to which
adequate reserves have been provided. Borrower is not is aware of
any audit, assessment or other proposed action or inquiry of the
Internal Revenue Service or any other taxing authority with respect
to any tax liability of Borrower or any Subsidiary in an aggregate
amount greater than $3,000,000.00.
3.4.8.
Compliance with Law . Borrower and each of the Bank
Subsidiaries are in compliance with all applicable statutes, rules,
regulations, orders and restrictions of any domestic or foreign
government or any instrumentality or agency thereof, having
jurisdiction over the conduct of their respective businesses or the
ownership of their respective properties, except where any such
failure would not have a material adverse effect on the
consolidated financial condition or results of operations of
Borrower.
3.4.9.
Restriction . Except as set forth as an exhibit to
Borrower’s Form 10-K for its fiscal year ended December 31,
2005, or its Quarterly Reports on Form 10-Q for its fiscal quarters
ended March 31, 2006, June 30, 2006 and September 30, 2006,
respectively, or described therein, neither Borrower nor any of the
Bank Subsidiaries is a party, nor is bound by, any material
contract or agreement or instrument, or subject to any charter or
other corporate restriction, that is of a type that Borrower is
required to file as an exhibit to its Form 10-K annual reports or
otherwise describe therein.
3.4.10.
No Material Adverse Change . There has been no
material adverse change to the business, operations, properties or
assets of Borrower since December 31, 2005.
3.4.11.
Reserve for Possible Loan and Lease Losses . The
reserve for possible loan and lease losses shown on the Financial
Statements at September 30, 2006, was considered by
Borrower’s management to be adequate in all respects to
provide for Borower’s possible specific losses, net of
recoveries relating to loans previously charged off, on loans
outstanding at that date, and included an additional amount of
historically-allocated reserves for unanticipated future losses at
a level considered adequate by Borrower’s management as of
that date.
3.4.12.
Regulatory Enforcement Actions . None of Borrower, or
any of the Bank Subsidiaries, or any of their respective officers
or directors, is now operating under any currently effective
written restrictions agreed to by Borrower or any of the Bank
Subsidiaries, or agreements, memoranda, or written commitments by
Borrower or any of the Bank Subsidiaries (other than restrictions
of general application) imposed or required by any Governmental
Agency nor are any such restrictions threatened or agreements,
memoranda or commitments being sought by any Governmental
Agency.
Second Amended and Restated Loan
and
Subordinated Debenture Purchase Agreement
German American Bancorp, Inc./JP Morgan Chase Bank, N.A.
17
3.4.13.
Pending Litigation . Neither Borrower nor any of the
Bank Subsidiaries is party to or has received notice of any
actions, suits, proceedings or written agreements pending, nor, to
the best knowledge of Borrower, have any such actions, suits,
proceedings or written agreements been threatened or proposed,
against Borrower or any of the Bank Subsidiaries at law or in
equity or before or by any federal, state, municipal, or other
governmental department, commission, board, or other administrative
agency, domestic or foreign which are reasonably likely to have a
material adverse effect on Borrower’s condition (financial or
otherwise), business or operations, on a consolidated basis; and
neither Borrower or any of the Bank Subsidiaries is in default with
respect to any order, writ, injunction, or decree of, or any
written agreement with, any court, commission, board or agency,
domestic or foreign, except where any such failure would not have a
material adverse effect on Borrower or any of the Bank
Subsidiaries. For purposes of this subsection 3.4.13, a "material
adverse effect" shall not be deemed to exist with respect to a
matter that involves primarily a claim for money unless the amount
of such claim, including all related claims, exceeds
$1,000,000.00.
3.4.14.
No Liens . Borrower is not a party to any agreement,
instrument or undertaking or subject to any other restriction
pursuant to which Borrower has placed, or will be required to place
(or under which any other Person may place), a Lien upon any of its
Properties securing indebtedness, either upon demand or upon the
happening of a condition, with or without such demand, except for
tax liens with respect to real estate taxes not yet due and
payable.
3.4.15.
Margin Security . Borrower does not own any "margin
security" as such term is defined in Regulation G of the FRB.
3.4.16.
Solvency . After giving effect to the consummation of
the transactions contemplated by this Agreement, Borrower and
Subsidiaries have capital sufficient to carry on their respective
business and transactions and all businesses and transactions in
which they are about to engage and each is solvent and able to pay
its debts as they mature. No transfer of property is being made and
no indebtedness is being incurred in connection with the
transactions contemplated by this Agreement with the intent to
hinder, delay or defraud either present or future creditors of
Borrower or any Subsidiary.
3.4.17.
Non-Foreign Status . Borrower is not a nonresident
alien for purposes of U.S. income taxation and is not a foreign
corporation, foreign partnership, foreign trust or foreign estate
(as said terms are defined in the Internal Revenue Code and Income
Tax Regulations).
3.4.18.
Investment Company Act . Borrower is not an
"investment company" or a company "controlled" by an "investment
company," within the meaning of the Investment Company Act of 1940,
as amended.
Second Amended and Restated Loan
and
Subordinated Debenture Purchase Agreement
German American Bancorp, Inc./JP Morgan Chase Bank, N.A.
18
3.4.19.
No Misstatement . No information, exhibit, report or
document furnished by Borrower or any of the Bank Subsidiaries to
Lender in connection with the negotiation or execution of this
Agreement or any of the other Loan Documents contained any material
misstatement of fact or omitted to state a fact necessary to make
the statements contained therein not materially misleading in light
of the circumstances in which they were made, all as of the date
when furnished to Lender. All representations, warranties,
covenants and agreements made in this Agreement or in any
certificate or other document delivered to Lender by or on behalf
of Borrower pursuant to or in connection with this Agreement shall
be deemed to have been relied upon by Lender notwithstanding
Lender’s review of any documents or materials delivered by
Borrower to Lender pursuant to the terms hereof and notwithstanding
any investigation heretofore or hereafter made by Lender or on its
behalf (and Borrower hereby acknowledges such reliance by Lender in
making the Loans and all disbursements thereunder) and,
furthermore, shall survive the making of any or all of the
disbursements of proceeds under the Loans and continue in full
force and effect as long as there remains unperformed any
obligations to Lender hereunder or under any of the other Loan
Documents.
3.4.20.
Survival of Warranties . All representations and
warranties contained in this Agreement or any of the other Loan
Documents shall survive the execution and delivery of this
Agreement.
4.
AFFIRMATIVE COVENANTS .
Borrower covenants and agrees that:
4.1.
Financial
Statements . Borrower shall deliver to Lender:
4.1.1. as
soon as available, but in any event not more than 90 days after the
close of each fiscal year of Borrower, Borrower’s annual
report on Form 10-K as filed with the SEC;
4.1.2. as
soon as available, but in no event later than forty-five (45) days
after the end of each calendar quarter, a copy of all call reports,
filed with any state or federal bank regulatory authority for the
Bank Subsidiaries;
4.1.3. as
soon as available, but in no event later than forty-five (45) days
after the end of each calendar quarter (other than the fourth
quarter), a copy of Borrower’s quarterly report on Form 10-Q
as filed with the SEC; Borrower shall furnish Lender, at the same
time as the annual report and the quarterly reports referred to in
subsection 4.1, a quarterly compliance certificate in the form set
forth as Exhibit F hereto, which certificate shall state
that: (A) Borrower is in compliance in all material respects with
all covenants contained in this Agreement; (B) that no Default or
Event of Default has occurred or is continuing, or, if there is any
such event, describing such event, the steps, if any, that are
being taken to cure it, and the time within which such cure will
occur; and (C) all representations and warranties made by Borrower
herein (other than those representations and warranties in Section
3 hereof that speak as of a particular date or for a particular
time period, which shall continue to have been true, accurate and
complete as of such dates or such time periods) continue to be
true, accurate, and complete as of the date of such certificate.
Such quarterly compliance certificate shall be signed by the
principal executive officer or the principal financial officer of
Borrower and shall also contain, in a form and with such
specificity as is reasonably satisfactory to Lender, such
additional information as Lender shall have reasonably requested by
Borrower prior to the submission thereof;
Second Amended and Restated Loan
and
Subordinated Debenture Purchase Agreement
German American Bancorp, Inc./JP Morgan Chase Bank, N.A.
19
4.1.4. to
the extent permitted by law, promptly after the same are available,
copies of: (A) each annual report, proxy or financial statement or
other report or communication sent by Borrower to the stockholders
of Borrower; (B) each registration statement which Borrower may
file with any Governmental Agency or with any securities exchange;
and (C) all special reports which Borrower may file or be required
to file with any Governmental Agency or with any securities
exchange that relate to the overall financial condition or results
of operations of Borrower;
4.1.5.
immediately after
receiving knowledge thereof, notice in writing of all charges,
assessments, actions, suits and proceedings (as well as notice of
the outcome of any such charges, assessments, orders, actions,
suits and proceedings) that are proposed or initiated by, or
brought before, any court or governmental department, commission,
board or other administrative agency, in connection with Borrower
or any of the Bank Subsidiaries, other than ordinary course of
business litigation or proceedings which, if adversely decided,
would not have a material adverse effect on the consolidated
financial condition or operations of Borrower; and
4.1.6.
promptly upon
receipt thereof, one copy of each written report submitted to
Borrower by Borrower’s Accountant, and
4.1.7.
promptly after
Lender shall request the same, such other information respecting
Borrower or any Bank Subsidiary, as Lender may reasonably
request.
4.2.
Financial
Covenants. The financial covenants in this Section 4.2
shall apply so long as any of Borrower’s Liabilities shall
remain outstanding:
4.2.1.
Capitalization Status . Borrower shall maintain at
all times its categorization as ‘Well Capitalized’ as
defined by the regulations of Borrower’s primary federal
regulatory Governmental Agency, and shall cause each of the Bank
Subsidiaries to maintain at all times its categorization as
‘Well Capitalized’ as defined by the regulations of
each respective Bank Subsidiary’s primary federal
Governmental Agency.
4.2.2.
Consolidated Non-Performing Assets Plus OREO Ratio .
Borrower and its Subsidiaries shall maintain at all times a
"Consolidated Non-Performing Asset Ratio" of not greater than three
and one-quarter percent (3.25%). As used in this Section, the term
"Consolidated Non-Performing Assets Ratio" means the ratio,
determined on a consolidated basis for the Borrower and its
Subsidiaries, of the sum of "Non-Perfoming Assets" plus "OREO," to
the sum of "Total Loans" plus "OREO." As used in this Section, the
term "Non-Perfoming Assets" means the sum of all loans classified
as past due 90 days or more and still accruing interest, all loans
classified a ‘non-accrual’ and no longer accruing
interest, and all loans classified as ‘restructured loans and
leases.’ As used in this Section, the term "Total Loans"
means the total of all performing and non-performing loans. As used
in this Section, the term "OREO" means the book value, net of
accumulated depreciation, of all real estate that is owned by
Borrower or any of its Subsidiaries but which is not occupied and
used by the Borrower and its Subsidiaries in the ordinary course of
business, or held by the Borrower and its Subsidiaries for future
use. The ratio set forth in this Section shall be measured
quarterly and shall be determined from the applicable quarterly
financial statements filed with the applicable Governmental
Agency.
Second Amended and Restated Loan
and
Subordinated Debenture Purchase Agreement
German American Bancorp, Inc./JP Morgan Chase Bank, N.A.
20
4.3.
Taxes, Assessments, Etc . Borrower shall, and shall
cause each of the Bank Subsidiaries to, promptly pay and discharge
all taxes, assessments and other governmental charges imposed upon
Borrower or any of the Bank Subsidiaries or upon the income,
profits, or property of Borrower or any of the Bank Subsidiaries
and all claims for labor, material or supplies which, if unpaid,
might by law become a Lien upon the property of Borrower or any of
the Bank Subsidiaries, except for tax liens with respect to real
estate taxes not yet due and payable. Neither Borrower or any of
the Bank Subsidiaries shall be required to pay any such tax,
assessment, charge or claim, so long as the validity thereof shall
be contested in good faith by appropriate proceedings, and adequate
reserves therefor shall be maintained on the books of Borrower and
the Bank Subsidiaries.
4.4.
Insurance . Borrower shall, and shall cause each Bank
Subsidiary to, maintain bonds and insurance with responsible and
reputable insurance companies or associations in such amounts and
covering such risks as are usually carried by owners of similar
businesses and properties in the same general area in which
Borrower and each Bank Subsidiary, operate, and such additional
bonds and insurance as may reasonably be required by Lender.
4.5.
Inspection . Borrower shall permit and cause each
Bank Subsidiary to permit Lender through its employees, attorneys,
accountants or other agents, to inspect any of the properties and
the corporate and financial books and records of Borrower and each
Bank Subsidiary, at the locations at which such properties and
books and records are kept, at reasonable times, as often as Lender
reasonably may request.
4.6.
Information . Borrower shall, and shall cause the
Bank Subsidiaries to, provide Lender with such information
concerning the business, operations, financial condition and
regulatory status of Borrower and the Bank Subsidiaries as Lender
may from time to time reasonably request.
4.7.
Maintenance
of Existence . Borrower shall, and shall cause each Bank
Subsidiary to, do or cause to be done all things necessary to
maintain, preserve and renew their respective existence and rights
and franchises, and comply with all related laws applicable to each
of Borrower and each Bank Subsidiary, except where any such failure
would not have a material adverse effect on Borrower’s
consolidated financial condition or results of operations.
Second Amended and Restated Loan
and
Subordinated Debenture Purchase Agreement
German American Bancorp, Inc./JP Morgan Chase Bank, N.A.
21
4.8.
Compliance with Laws . Borrower shall, and shall
cause each of the Bank Subsidiaries to, comply with all applicable
statutes, rules, regulations, orders and restrictions in respect of
the conduct of their respective businesses and the ownership of
their respective properties, except where any such failure would
not have a material adverse effect on Borrower’s consolidated
financial condition or results of operations.
4.9.
Notice Re
Defaults . Borrower shall promptly notify Lender, to the
extent permitted by law, of the occurrence of any Event of Default,
regardless of the materiality thereof.
4.10.
Compliance
with Loan Documents . Borrower shall comply with, observe
and timely perform each and every one of the covenants, agreements
and obligations under each and every one of the Loan Documents and
any other Loan Document to which it is a party
4.11.
Lender
Expenses . Whether or not any Loan is made, Borrower will
(a) pay all reasonable costs and expenses of the Lender incident to
the transactions contemplated by this Agreement including, without
limitation, all costs and expenses incurred in connection with the
preparation, negotiation and execution of the Loan Documents, or in
connection with any modification, amendment, alteration, or the
enforcement of this Agreement, the Notes, the Subordinated
Debenture or the other Loan Documents, including, without
limitation, the Lender’s out-of-pocket expenses and the
charges and disbursements to counsel retained by the Lender, and
(b) pay and save the Lender and all other holders of the Notes and
Subordinated Debenture harmless against any and all liability with
respect to amounts payable as a result of (i) any taxes which may
be determined to be payable in connection with the execution and
delivery of this Agreement, the Notes, the Subordinated Debenture
or the other Loan Documents or any modification, amendment or
alteration of the terms or provisions of this Agreement, the Notes,
the Subordinated Debenture or the other Loan Documents, (ii) any
interest or penalties resulting from nonpayment or delay in payment
of such expenses, charges, disbursements, liabilities or taxes, and
(iii) any income taxes in respect of any reimbursement by Borrower
for any of such violations, taxes, interests or penalties paid by
the Lender. The obligations of the Borrower under this Section 4.11
shall survive the repayment in full of the Notes and the
Subordinated Debenture. Any of the foregoing amounts incurred by
the Lender and not paid by the Borrower upon demand shall bear
interest from the date incurred at the rate of interest in effect
or announced by Lender from time to time as its Base Rate plus 6%
per annum and shall be deemed part of the Borrower’s
Liabilities hereunder.
4.12.
Subordinated
Debt . If the Subordinated Debt ceases to be deemed to be
Tier 2 Capital other than due to the limitation imposed by the
second sentence of 12 C.F.R. §250.166(e), which limits the
capital treatment of subordinated debt during the five years
immediately preceding the maturity date of the subordinated debt,
Borrower shall: (a) immediately notify Lender; and (b) immediately
upon request of Lender execute and deliver all such agreements
(including, without limitation, pledge agreements and replacement
notes) as Lender may reasonably request in order to restructure the
obligations evidenced by the Subordinated Debt as a senior secured
obligation of Borrower.
Second Amended and Restated Loan
and
Subordinated Debenture Purchase Agreement
German American Bancorp, Inc./JP Morgan Chase Bank, N.A.
22
5.
NEGATIVE
COVENANTS.
Borrower covenants and agrees that:
5.1.
Indebtedness . Borrower shall not, and Borrower shall
not permit any Bank Subsidiary to create, assume, incur, have
outstanding, or in any manner become liable in respect of any
indebtedness for borrowed money, other than the amount of the
Liabilities and Subordinated Debt and other than borrowings in the
ordinary course of business of the Bank Subsidiaries (including
borrowings from the Federal Home Loan Bank system) and in
accordance with applicable laws and regulations and safe and sound
banking practices. For purposes of this Agreement, the phrase
"indebtedness" shall mean and include: (i) all items arising from
the borrowing of money, which according to GAAP now in effect,
would be included in determining total liabilities as shown on the
balance sheet; (ii) all indebtedness secured by any Lien on
property owned by Borrower or any Bank Subsidiary whether or not
such indebtedness shall have been assumed; (iii) all guarantees and
similar contingent liabilities in respect to indebtedness of
others; and (iv) all other interest-bearing obligations evidencing
indebtedness to others for borrowed money.
5.2.
Liens . Borrower shall not, and shall not permit any
Bank Subsidiary to create, assume, incur, suffer or permit to exist
(other than (i) to secure borrowings in the ordinary course of
business of the Bank Subsidiaries (including borrowings from the
Federal Home Loan Bank system) and in accordance with applicable
laws and regulations and safe and sound banking practices, and (ii)
tax liens with respect to real estate taxes not yet due and
payable), any Lien of any kind or character upon or with respect to
any of its assets or properties, whether owned at the date hereof
or hereafter acquired, or assign or otherwise convey any right to
receive income.
5.3.
Disposal of
Interests in Bank Subsidiaries . Borrower shall not dispose
of any stock or other interest in the equity of any of its Bank
Subsidiaries, by sale, assignment, lease or otherwise, now owned or
hereafter acquired, without the prior written consent of Lender,
which consent shall not be unreasonably withheld.
5.4.
Mergers or
Consolidations . Borrower shall not, and shall not permit
any of the Bank Subsidiaries to, purchase substantially all of the
assets of, or merge into or consolidate with or into, any other
person, entity or corporation, without the prior written consent of
Lender, which consent shall not be unreasonably withheld; provided,
however, that no such consent shall be required unless the
purchase, merger or consolidation would be considered to involve a
significant business combination as determined for purposes of the
pro forma financial information filing requirements of Article 11
of Regulation S-X of the Securities and Exchange Commission.
5.5.
Pledged
Shares .
5.5.1.
Encumbrance . Borrower shall not itself, nor shall it
cause, permit or allow any Subsidiary to directly or indirectly
create, assume, incur, suffer or permit to exist any Lien on the
Subsidiary Bank Shares or the stock of any other Subsidiary owned
by Borrower or any Subsidiary, except for any security interest
granted herewith or previously by Borrower to Lender. Borrower
shall not itself, nor shall it cause, permit or allow any
Subsidiary to sell, transfer, issue, reissue, exchange or grant any
option with respect to any Subsidiary Bank Shares.
Second Amended and Restated Loan
and
Subordinated Debenture Purchase Agreement
German American Bancorp, Inc./JP Morgan Chase Bank, N.A.
23
5.5.2.
Dilution . Borrower shall not itself, nor shall it
cause, permit or allow any Subsidiary to cause or allow, the
percentage of Subsidiary Bank Shares owned directly or indirectly
by Borrower to diminish as a percentage of the outstanding capital
stock of Subsidiary Bank.
5.6.
Trust
Preferred Financings . Borrower shall not issue any
securities of a type commonly known as trust preferred securities
without Lender’s prior written consent, which shall not
unreasonably be withheld.
6.
BORROWER’S DEFAULTS AND LENDER’S
REMEDIES.
6.1.
Events of
Default . Each of the following shall constitute an "Event of
Default" under this Agreement:
6.1.1.
Borrower fails to
pay, when due, any principal or interest on any Note, the Loan Fee
or any other amount payable under this Agreement, the Notes (other
than principal or interest), or any other Loan Document, and such
failure continues for a period of five Business Days after written
notice thereof from Lender to Borrower; or
6.1.2.
Borrower fails to
keep or perform any of its agreements, undertakings, obligations,
covenants or conditions under this Agreement not expressly referred
to in another clause of this Section 6.1, or under any of the other
Loan
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