Exhibit 10.42
CONFORMED COPY
REVOLVING CREDIT
AGREEMENT
dated as of May 27, 2008
between
FNB UNITED CORP.
as Borrower
and
SUNTRUST BANK
as Lender
TABLE OF CONTENTS
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Page
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ARTICLE
I. DEFINITIONS; CONSTRUCTION
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1
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Definitions
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1
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Accounting
Terms and Determination
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8
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Terms
Generally
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9
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ARTICLE
II. AMOUNT AND TERMS OF THE REVOLVING
COMMITMENT
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9
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Revolving Loans
and Revolving Credit Note
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9
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Procedure for
Revolving Loans
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9
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Optional
Reduction and Termination and/or Extension of Revolving
Commitment
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9
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Repayment and
Prepayments of Revolving Loans
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10
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Interest on
Loans
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10
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Intentionally
Omitted
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11
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Computation of
Interest
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11
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Inability to
Determine Interest Rates
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11
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Illegality
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11
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Increased
Costs
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11
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Payments
Generally
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12
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Funding
Indemnity
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12
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ARTICLE III.
CONDITIONS PRECEDENT TO REVOLVING LOANS
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12
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Conditions to
Initial Revolving Loan
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12
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Each Revolving
Loan
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13
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ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
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13
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Existence;
Power
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14
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Organizational
Power; Authorization
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14
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Governmental
Approvals; No Conflicts
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14
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Financial
Statements
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14
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Litigation
Matters
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14
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Compliance with
Laws and Agreements
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14
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Investment
Company Act, Etc.
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15
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Taxes
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15
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Margin
Regulations
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15
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ERISA
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15
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Disclosure
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15
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Subsidiaries
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15
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Dividend
Restrictions; Other Restrictions
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15
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Capital
Measures
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16
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FDIC
Insurance
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16
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OFAC
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16
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Patriot
Act.
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16
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ARTICLE
V. AFFIRMATIVE COVENANTS
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16
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Financial
Statements and Other Information
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16
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Notices of
Material Events
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18
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Existence;
Conduct of Business
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18
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Compliance with
Laws, Etc.
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18
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Books and
Records.
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18
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Visitation,
Inspection, Etc.
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19
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Maintenance of
Properties; Insurance
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19
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Use of
Proceeds
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19
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ARTICLE
VI. FINANCIAL COVENANTS
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19
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Return on
Average Assets
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Ratio of
Nonperforming Assets to Total Loans and OREO
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Capital
Measures
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19
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ARTICLE
VII. NEGATIVE COVENANTS
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20
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Indebtedness
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20
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Negative
Pledge
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Fundamental
Changes
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21
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Restricted
Payments
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22
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Restricted
Agreements
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Investments,
Etc
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ARTICLE VIII. EVENTS OF
DEFAULT
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Events of
Default
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ARTICLE
IX. MISCELLANEOUS
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25
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Notices
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Waiver;
Amendments
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Expenses;
Indemnification
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27
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Successors and
Assigns
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28
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Governing Law;
Jurisdiction; Consent to Service of Process
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29
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Waiver of Jury
Trial
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29
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Right of
Setoff
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29
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Counterparts;
Integration
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29
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Survival
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Severability
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29
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Interest Rate
Limitation
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30
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Patriot
Act
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30
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ii
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Financial
Institution Subsidiaries
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Notice of
Revolving Borrowing
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iii
REVOLVING CREDIT AGREEMENT
THIS REVOLVING CREDIT AGREEMENT
(this " Agreement ")
is made and entered into as of May 27, 2008, by and
between FNB UNITED CORP., a North Carolina
corporation (the “ Borrower ”), and SUNTRUST
BANK, a Georgia banking corporation (the " Lender
").
W I T N E S S E T
H:
WHEREAS, the Borrower has requested the Lender, and the
Lender has agreed, subject to the terms and conditions of this
Agreement, to establish a 364-day revolving credit facility in an
original principal amount of $10,000,000;
NOW, THEREFORE , in consideration of the premises and the
mutual covenants herein contained, the Borrower and the Lender
agree as follows:
ARTICLE I
DEFINITIONS;
CONSTRUCTION
Section 1.1.
Definitions . In addition to the other terms
defined herein, the following terms used herein shall have the
meanings herein specified (to be equally applicable to both the
singular and plural forms of the terms defined):
“ Acquisition” shall
mean any transaction or a series of related transactions for the
purpose of, or resulting, directly or indirectly, in (a) the
acquisition of all or substantially all of the assets of a Person,
or of any business or division of any Person, (b) the acquisition
of greater than 50% of the capital stock, partnership interest,
membership interest or other equity of any Person, or otherwise
causing a Person to become a Subsidiary, or (c) a merger or
consolidation of, or any other combination with, another Person
(other than a Person that is a Subsidiary), provided that the
Borrower or any Subsidiary is the surviving entity.
“ Affiliate”
shall mean, as to any Person, any other Person that directly, or
indirectly through one or more intermediaries, Controls, is
Controlled by, or is under common Control with, such
Person.
“ Availability Period”
shall mean the period from the Closing Date to the Commitment
Termination Date.
“ Base Rate”
shall mean the higher of (i) the per annum rate which the
Lender publicly announces from time to time to be its prime lending
rate, as in effect from time to time, and (ii) the Federal
Funds Rate, as in effect from time to time, plus one-half of
one percent (0.50%). The Lender's prime lending rate is a reference
rate and does not necessarily represent the lowest or best rate
charged to customers. The Lender may make commercial
loans or other loans at rates of interest at, above or below
the Lender's prime lending rate. Each change in
the Lender’s prime lending rate shall be effective from and
including the date such change is publicly announced as being
effective.
“ Base Rate Loan”
shall mean a Revolving Loan which bears interest at the Base
Rate.
“ Business Day” shall
mean (i) any day other than a Saturday, Sunday or other day on
which commercial banks in Atlanta, Georgia are authorized or
required by law to close and (ii) if such day relates to a
borrowing or continuation of, a payment or prepayment of principal
or interest on, or an Interest Period for, a
Eurodollar Loan
or a notice with respect thereto, any day on which dealings in
Dollars are carried on in the London interbank market.
“ Call Report ” shall
mean, with respect to Financial Institution Subsidiary, the
“Consolidated Reports of Condition and Income” (FFIEC
Form 031 or 041 or any successor form of the Federal Financial
Institutions Examination Council).
“ Change in Control”
shall mean (a) with respect to the Borrower, the
occurrence of one or more of the following events: (i) any sale,
lease, exchange or other transfer (in a single transaction or a
series of related transactions) of all or substantially all of the
assets of the Borrower to any Person or "group" (within the meaning
of the Securities Exchange Act of 1934 and the rules of the
Commission thereunder in effect on the date
hereof), (ii) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or "group"
(within the meaning of the Securities Exchange Act of 1934 and the
rules of the Commission thereunder as in effect on the date hereof)
of 25% or more of the outstanding shares of the voting stock of the
Borrower or (iii) occupation of a majority of the seats (other than
vacant seats) on the board of directors of the Borrower by Persons
who were neither (A) nominated by the current board of directors or
(B) appointed by directors so nominated, or (b) the Borrower shall
own, directly or indirectly, less than 100% of the voting stock of
any Financial Institution Subsidiary.
“ Change in Law” shall
mean (i) the adoption of any applicable law, rule or regulation
after the date of this Agreement, (ii) any change in any applicable
law, rule or regulation, or any change in the interpretation or
application thereof, by any Governmental Authority after the date
of this Agreement, or (iii) compliance by the Lender (or for
purposes of Section 2.10 ( b ), by the Lender’s
holding company, if applicable) with any request, guideline or
directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this
Agreement.
“ Closing Date” shall
mean the date on which the conditions precedent set forth in
Section 3.1 and Section 3.2 have been satisfied or
waived in accordance with Section 9.2 , and unless otherwise
indicated, shall be the date of this Agreement.
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“
Code” shall mean the Internal Revenue Code of
1986, as amended and in effect from time to time.
“
Commission” shall mean the Securities and
Exchange Commission, and any successor thereto.
“ Commitment Termination
Date” shall mean May 22, 2009, or such later date as
the Revolving Commitment has been extended pursuant to Section
2.3 , or earlier if terminated pursuant to
Section 2.3 or Section 8.1 .
“ Control” shall mean
the power, directly or indirectly, to direct or cause the
direction of the management and policies of a Person, whether
through the ability to exercise voting power, by contract or
otherwise. The terms " Controlling ", "
Controlled by ", and " under common Control
with " have meanings correlative thereto.
“ Default” shall mean
any condition or event that, with the giving of notice or the lapse
of time or both, would constitute an Event of
Default.
" Default Interest " shall have
the meaning set forth in Section 2.5 ( b
).
“ Dollar(s)” and the
sign " $ " shall mean lawful money of the United
States of America.
“
Environmental Laws ” shall mean all laws,
rules, regulations, codes, ordinances, orders, decrees, judgments,
injunctions, notices or binding agreements issued, promulgated or
entered into by or with any Governmental Authority, relating in any
way to the environment, preservation or reclamation of natural
resources, the management, Release or threatened Release of any
Hazardous Material or to health and safety matters.
“
Environmental Liability ” shall mean any
liability, contingent or otherwise (including any liability for
damages, costs of environmental investigation and remediation,
costs of administrative oversight, fines, natural resource damages,
penalties or indemnities), of the Borrower or any Subsidiary
directly or indirectly resulting from or based upon (a) any actual
or alleged violation of any Environmental Law, (b) the generation,
use, handling, transportation, storage, treatment or disposal of
any Hazardous Materials, (c) any actual or alleged exposure to any
Hazardous Materials, (d) the Release or threatened Release of any
Hazardous Materials or (e) any contract, agreement or other
consensual arrangement pursuant to which liability is assumed or
imposed with respect to any of the foregoing.
“ ERISA” shall mean
the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute.
“
ERISA Affiliate” shall mean any trade or
business (whether or not incorporated), which, together with the
Borrower, is treated as a single employer under Section 414(b) or
(c) of the Code or, solely for the purposes of Section 302 of ERISA
and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.
" ERISA
Event " shall mean (a) any “reportable
event”, as defined in Section 4043 of ERISA or the
regulations issued thereunder with respect to a Plan (other than an
event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an “accumulated funding
deficiency” (as defined in Section 412 of the Code or Section
302 of ERISA), whether or not waived; (c) the filing pursuant to
Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by the Borrower or any of
its ERISA Affiliates of any liability under Title IV of ERISA with
respect to the termination of any Plan; (e) the receipt by the
Borrower or any ERISA Affiliate from the PBGC or a plan
administrator appointed by the PBGC of any notice relating to an
intention to terminate any Plan or Plans or to appoint a trustee to
administer any Plan; (f) the incurrence by the Borrower or any of
its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer
Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of
any notice, or the receipt by any Multiemployer Plan from the
Borrower or any ERISA Affiliate of any notice, concerning the
imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in
reorganization, within the meaning of Title IV of ERISA.
“ Eurodollar Loan”
shall mean a Revolving Loan which bears interest at a rate
determined by reference to LIBOR.
“ Event of Default”
shall have the meaning provided in Article VIII.
“ Federal Funds
Rate” shall mean, for any day, the rate per annum
(rounded upwards, if necessary, to the next 1/100
th of 1%) equal to the weighted average of the
rates on overnight Federal funds transactions with member banks of
the Federal Reserve System arranged by Federal funds brokers, as
published by the Federal Reserve Bank of New York on the next
succeeding Business Day or if such rate is not so published for any
Business Day, the Federal Funds Rate for such day shall be the
average rounded upwards, if necessary, to the next 1/100th of 1% of
the quotations for such day on such transactions received by the
Lender from three Federal funds brokers of recognized standing
selected by the Lender.
“
Financial Institution Subsidiary” shall mean
each of (a) CommunityONE Bank, National Association, a national
banking association, and (b) each other Subsidiary of the Borrower
existing on the Closing Date or thereafter formed or acquired that
is a depository institution with FDIC-insured deposits.
“
Fiscal Quarter” shall mean each fiscal quarter
(including the fiscal quarter at the fiscal year-end) of the
Borrower and its Subsidiaries.
“ FR Report Y-9C ”
shall mean the “Consolidated Financial Statements for Bank
Holding Companies-FR Y-9C” submitted by the Borrower as
required by Section 5(c) of the Bank Holding Company Act (12 U.S.C.
1844) and Section 225.5(b) of Regulation Y [12 CFR 225.5(b)], or
any successor or similar replacement report.
“
FR Report Y9-LP ” shall mean the “Parent
Company Only Financial Statements for Large Bank Holding
Companies-FR Y-9LP” submitted by the Borrower as required by
Section 5(c) of the Bank Holding Company Act (12 U.S.C. 1844) and
Section 225.5(b) of Regulation Y [12 CFR 225.5(b)], or any
successor or similar replacement report.
“ GAAP ” shall
mean generally accepted accounting principles in the United
States applied on a consistent basis and subject to the terms of
Section 1.2 .
“
Governmental Authority ” shall mean the
government of the United States of America, any other nation or any
political subdivision thereof, whether state or local, and any
agency, authority, instrumentality, regulatory body, court, central
bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or
pertaining to government.
“
Hazardous Materials ” means all
explosive or radioactive substances or wastes and all hazardous or
toxic substances, wastes or other pollutants, including petroleum
or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or
medical wastes and all other substances or wastes of any nature
regulated pursuant to any Environmental Law.
“
Hedging Agreements ” shall mean
interest rate swap, cap or collar agreements, interest rate future
or option contracts, currency swap agreements, currency future or
option contracts, foreign exchange contracts (forward and/or spot),
commodity agreements and other similar agreements or arrangements
designed to protect against fluctuations in interest rates,
currency values or commodity values.
“
Indebtedness ” of any Person shall mean,
without duplication (i) all obligations of such Person
for borrowed money, (ii) all obligations of such Person evidenced
by bonds, debentures, notes or other similar instruments, (iii) all
obligations of such Person in respect of the deferred purchase
price of property or services (other than trade payables incurred
in the ordinary course of business), (iv) all obligations of such
Person under any conditional sale or other title retention
agreement(s) relating to property acquired by such Person,
(v) all obligations of such Person under capital leases and
all monetary obligations of such Person under Synthetic Leases,
(vi) all obligations, contingent or otherwise, of such Person in
respect of letters of credit, acceptances or similar extensions of
credit, (vii) all guarantees by such Person of Indebtedness of
others, (viii) all Indebtedness of a third party secured by any
Lien on property owned by such Person, whether or not such
Indebtedness has been assumed by such Person, (ix) all obligations
of such Person, contingent or otherwise, to purchase, redeem,
retire or otherwise acquire for value any common stock of such
Person, and (x) all net obligations incurred by such Person under
Hedging Agreements.
“
Interest Period” shall mean, with respect to
any Eurodollar Loan, a period of three months, provided
that:
(i) the initial
Interest Period for any such Loan shall commence on the date of
such Loan and each Interest Period occurring thereafter in respect
of such Loan shall commence on the day on which the next preceding
Interest Period expires;
(ii) if
any Interest Period would otherwise end on a day other than a
Business Day, such Interest Period shall be extended to the
next succeeding Business Day, unless such Business Day falls in
another calendar month, in which case such Interest Period would
end on the next preceding Business Day;
(iii) any
Interest Period which begins on the last Business Day of a calendar
month or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period shall end on the last Business Day of such subsequent
calendar month;
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no Interest
Period may extend beyond the Commitment Termination Date
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“
Investments” shall have the meaning set forth in Section
7.6 hereof.
"
LIBOR " shall mean for any applicable Interest Period
with respect to a Eurodollar Loan, that rate per annum
that is equal to the quotient of:
(i) the rate
per annum equal to the London interbank offered rate for deposits
in U.S. dollars for a three-month period, which rate appears on
Reuters Screen LIBOR01 Page (or any successor page), or such
similar service as determined by the Lender that displays British
Bankers' Association interest settlement rates for deposits in U.S.
Dollars, as of 11:00 A.M. (London, England time) two (2) Business
Days prior to the first day of such Interest Period;
provided , that if no such offered rate appears on such
page, the rate used will be the per annum rate of interest
determined by the Lender to be the rate at which U.S. dollar
deposits for a three-month period are offered to the Lender in the
London Inter-Bank Market as of 10:00 A.M. (Atlanta,
Georgia time), on the day which is two (2)
Business Days prior to the first day of such Interest Period,
divided by
(ii) a
percentage equal to 1.00 minus the maximum reserve
percentages (including any emergency, supplemental, special or
other marginal reserves) expressed as a decimal (rounded upward to
the next 1/100th of 1%) in effect on any day to which the Bank is
subject with respect to any Eurodollar loan pursuant to regulations
issued by the Board of Governors of the Federal Reserve System with
respect to eurocurrency funding (currently referred to as
"eurocurrency liabilities" under Regulation D). This
percentage will be adjusted automatically on and as of the
effective date of any change in any reserve percentage.
“ Lien ” shall mean
any mortgage, pledge, security interest, lien (statutory or
otherwise), charge, encumbrance, hypothecation, assignment, deposit
arrangement, or other arrangement having the practical effect of
the foregoing or any preference, priority or other security
agreement or preferential arrangement of any kind or nature
whatsoever (including any conditional sale or other title retention
agreement and any capital lease having the same economic effect as
any of the foregoing).
" Loan
Documents " shall mean, collectively, this Agreement,
the Revolving Credit Note, any Hedging Agreement
entered into with Lender in connection with the Indebtedness under
this Agreement or the Revolving Credit Note and any and all other
instruments, agreements, documents and writings executed by the
Borrower in connection with any of the foregoing.
“
Material Adverse Effect ” shall mean, with
respect to any event, act, condition or occurrence of whatever
nature (including any adverse determination in any litigation,
arbitration, or governmental investigation or proceeding), whether
singly or in conjunction with any other event or events, act or
acts, condition or conditions, occurrence or occurrences whether or
not related, a material adverse change in, or a material adverse
effect on, (i) the business, results of operations,
financial condition, assets, or liabilities of the
Borrower and of the Borrower and its Subsidiaries taken as a whole
, (ii) the ability of the Borrower to perform any of its
obligations under the Loan Documents, (iii) the rights and remedies
of the Lender under any of the Loan Documents or (iv) the legality,
validity or enforceability of any of the Loan Documents.
“ Multiemployer Plan ”
shall have the meaning set forth in Section 4001(a)(3) of
ERISA.
"Nonperforming Assets"
shall mean the sum of (a)
Nonperforming Loans, (b) nonaccrual investment securities and (c)
Other Real Estate Owned (determined in accordance with, and as set
forth on, Borrower’s FR Report Y-9C).
“Nonperforming Loans”
shall mean the sum of (a) nonaccrual
loans and lease financing receivables, (b) loans and lease
financing receivables that are contractually past due 90 days or
more as to interest or principal and are still accruing interest
and (c) loans for which the terms have been modified due to a
deterioration in the financial position of the Borrower (determined
in accordance with, and as set forth on, Borrower’s FR Report
Y-9C).
“
Notice of Borrowing ” shall have the meaning as
set forth in Section 2.2 .
“ Obligations ” shall
mean all amounts owing by the Borrower to the Lender pursuant to or
in connection with this Agreement or any other Loan Document,
including without limitation, all principal, interest (including
any interest accruing after the filing of any petition in
bankruptcy or the commencement of any insolvency, reorganization or
like proceeding relating to the Borrower, whether or not a claim
for post-filing or post-petition interest is allowed in such
proceeding), all reimbursement obligations, all net
obligations under Hedging Agreements, fees, expenses,
indemnification and reimbursement payments, costs and expenses
(including all fees and expenses of counsel to the Lender incurred
pursuant to this Agreement or any other Loan Document), whether
direct or indirect, absolute or contingent, liquidated or
unliquidated, now existing or hereafter arising hereunder or
thereunder, together with all renewals, extensions,
modifications or refinancings thereof.
“
Other Real Estate Owned ” shall mean the sum of
(a) real estate acquired in satisfaction of debts previously
contracted and (b) other real estate owned, as set forth on
Schedule HC-M of Borrower’s FR Report Y-9C.
“ Participant ” shall
have the meaning set forth in Section 9.4 ( c
).
“ Payment Office
” shall mean the office of the Lender located at 303
Peachtree Street, Atlanta, Georgia 30308, or such other location as
to which the Lender shall have given written notice to the
Borrower.
“ PBGC” shall
mean the Pension Benefit Guaranty Corporation referred to and
defined in ERISA, and any successor entity performing similar
functions.
“
Permitted Encumbrances ” shall mean
(i) Liens
imposed by law for taxes not yet due or which are being contested
in good faith by appropriate proceedings and with respect to which
adequate reserves are being maintained in accordance with
GAAP;
(ii) statutory
Liens of landlords and Liens of carriers, warehousemen, mechanics,
materialmen and other Liens imposed by law created in the ordinary
course of business for amounts not yet due or which are being
contested in good faith by appropriate proceedings and with respect
to which adequate reserves are being maintained in accordance with
GAAP;
(iii) pledges and
deposits made in the ordinary course of business in compliance with
workers' compensation, unemployment insurance and other social
security laws or regulations;
(iv) deposits to
secure the performance of bids, trade contracts, leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature, in each case in the ordinary
course of business;
(v) judgment and
attachment liens not giving rise to an Event of Default or Liens
created by or existing from any litigation or legal proceeding that
are currently being contested in good faith by appropriate
proceedings and with respect to which adequate reserves are being
maintained in accordance with GAAP; and
(vi) easements,
zoning restrictions, rights-of-way and similar encumbrances on real
property imposed by law or arising in the ordinary course of
business that do not secure any monetary obligations and do not
materially detract from the value of the affected property or
materially interfere with the ordinary conduct of business of the
Borrower and its Subsidiaries taken as a whole;
provided , that the term “Permitted
Encumbrances” shall not include any Lien securing
Indebtedness.
“ Person ” shall
mean any individual, partnership, firm, corporation, association,
joint venture, limited liability company, trust or other entity, or
any Governmental Authority.
“
Plan ” means any employee pension benefit plan
(other than a Multiemployer Plan) subject to the provisions of
Title IV of ERISA or Section 412 of the Code or Section 302 of
ERISA, and in respect of which the Borrower or any ERISA Affiliate
is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an “employer” as defined in
Section 3(5) of ERISA.
“ Regulation D
” shall mean Regulation D of the Board of Governors of
the Federal Reserve System, as the same may be in effect from time
to time, and any successor regulations.
“
Release ” means any release, spill, emission,
leaking, dumping, injection, pouring, deposit, disposal, discharge,
dispersal, leaching or migration into the environment (including
ambient air, surface water, groundwater, land surface or subsurface
strata) or within any building, structure, facility or
fixture.
“ Responsible Officer "
shall mean any of the president, the chief executive officer, the
chief operating officer, the chief financial officer, the treasurer
or a vice president of the Borrower or such other representative of
the Borrower as may be designated in writing by any one of the
foregoing with the consent of the Lender; and, with respect to the
financial covenants only, the chief financial officer or the
treasurer of the Borrower.
“ Revolving
Commitment” shall mean the obligation of the
Lender to make Revolving Loans to the Borrower in an aggregate
principal amount not exceeding $10,000,000.
“ Revolving Loan ” shall mean
a loan made by the Lender to the Borrower under its Revolving
Commitment, which will at all times be a Eurodollar Loan except
under circumstances set forth in Section 2.8 or Section
2.9 hereof.
“
Revolving Credit Note ” shall mean a promissory
note of the Borrower payable to the order of the Lender in the
principal amount of the Revolving Commitment, in substantially the
form of Exhibit A .
“
Subsidiary ” shall mean, with respect to any
Person (the “ parent ”), any corporation,
partnership, joint venture, limited liability company,
association or other entity the accounts of which would be
consolidated with those of the parent in the parent's consolidated
financial statements if such financial statements were prepared in
accordance with GAAP as of such date, as well as any other
corporation, partnership, joint venture, limited liability
company, association or other entity (i) of which
securities or other ownership interests representing
more than 30% of the equity or more than 30%
of the ordinary voting power, or in the case of a
partnership, more than 30% of the general partnership interests
are, as of such date, owned, Controlled or held, or (ii) that is,
as of such date, otherwise Controlled, by the parent or one or more
subsidiaries of the parent or by the parent and one or more
subsidiaries of the parent. Unless otherwise indicated, all
references to "Subsidiary" hereunder shall mean a Subsidiary of the
Borrower.
“
Synthetic Lease ” of any Person shall mean (a)
a lease designed to have the characteristics of a loan for federal
income tax purposes while obtaining operating lease treatment for
financial accounting purposes, or (b) an agreement for the use or
possession of property creating obligations that are not required
to appear on the balance sheet of such Person but which, upon the
insolvency or bankruptcy of such Person would be characterized by a
court of competent jurisdiction as indebtedness of such
Person.
“
Tangible Net Worth” shall mean, as of any date,
the total shareholders’ equity of the Borrower and its
Subsidiaries that would be reflected on the Borrower's consolidated
balance sheet as of such date prepared in accordance with GAAP,
minus the amount of all assets of the Borrower and
its Subsidiaries that would be classified as intangible assets
(including without limitation goodwill and net core deposit
intangible) on the Borrower’s consolidated balance sheet as
of such date prepared in accordance with GAAP.
“
Total Loans” shall mean for the Borrower on a
consolidated basis the line item “Loans net of
unearned income” set forth on the Borrower’s
consolidated balance sheet delivered pursuant to Section 5.1
( a ) and ( b ).
“ Withdrawal Liability
” shall mean liability to a Multiemployer Plan as a result of
a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of
ERISA.
Section 1.2. Accounting Terms and
Determination . Unless otherwise defined or
specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made,
and all financial statements required to be delivered hereunder
shall be prepared, in accordance with GAAP as in effect from time
to time, applied on a basis consistent (except for such changes
approved by the Borrower's independent public accountants) with the
most recent audited consolidated financial statement of the
Borrower delivered pursuant to Section 5.1 ( a );
provided , that if the Borrower notifies the Lender that the
Borrower wishes to amend any covenant in Article VI to eliminate
the effect of any change in GAAP on the operation of such covenant
(or if the Lender notifies the Borrower that it wishes
to amend Article VI for such purpose), then the Borrower's
compliance with such covenant shall be determined on the basis of
GAAP in effect immediately before the relevant change in GAAP
became effective, until either such notice is withdrawn or such
covenant is amended in a manner satisfactory to the Borrower and
the Lender.
Section 1.3. Terms
Generally .
The definitions of terms herein shall apply equally
to the singular and plural forms of the terms
defined. The words "include", "includes" and "including"
shall be deemed to be followed by the phase "without
limitation". In the computation of periods of time from
a specified date to a later specified date, the word "from" means
"from and including" and the word "to" means "to but excluding".
Unless the context requires otherwise (i) any definition of or
reference to any agreement, instrument or other document herein
shall be construed as referring to such agreement, instrument or
other document as it was originally executed or as it may from time
to time be amended, supplemented or otherwise modified (subject to
any restrictions on such amendments, supplements or modifications
set forth herein), (ii) any reference herein to any Person shall be
construed to include such Person's successors and permitted
assigns, (iii) the words "hereof", "herein" and "hereunder" and
words of similar import shall be construed to refer to this
Agreement as a whole and not to any particular provision hereof,
(iv) all references to Articles, Sections, Exhibits and
Schedules shall be construed to refer to Articles, Sections,
Exhibits and Schedules to this Agreement and (v) all
references to a specific time shall be construed to refer to the
time in the city and state of the Lender's principal office, unless
otherwise indicated.
ARTICLE II
AMOUNT AND TERMS OF THE
REVOLVING COMMITMEN
Section 2.1. Revolving Loans and
Revolving Credit Note . (a) Subject to the terms and
conditions set forth herein, the Lender agrees to make Revolving
Loans to the Borrower, from time to time during the
Availability Period, in an aggregate principal amount outstanding
at any time not to exceed the Revolving Commitment. During the
Availability Period, the Borrower shall be entitled to borrow,
prepay and reborrow Revolving Loans in accordance with the terms
and conditions of this Agreement; provided , that the
Borrower may not borrow or reborrow should there exist a Default or
Event of Default.
(b) The
Borrower's obligation to pay the principal of, and interest on,
Revolving Loans shall be evidenced by the records of the Lender and
by the Revolving Credit Note. The entries made in such
records and/or on the schedule annexed to the Revolving Credit Note
shall be prima facie evidence of the existence and amounts
of the obligations of the Borrower therein recorded;
provided , that the failure or delay of the Lender in
maintaining or making entries into any such record or on such
schedule or any error therein shall not in any manner affect the
obligation of the Borrower to repay the Revolving Loans (both
principal and unpaid accrued interest) in accordance with the terms
of this Agreement.
Section
2.2.
Procedure for Revolving Loans . The
Borrower shall give the Lender written notice (or telephonic notice
promptly confirmed in writing) of each Revolving Loan substantially
in the form of Exhibit 2.2 (a " Notice of Borrowing
") prior to 11:00 a.m. two (2) Business Days prior to which a
Revolving Loan is being requested. Each Notice of Borrowing shall
be irrevocable and shall specify: (i) the principal
amount of the Revolving Loan, (ii) the proposed date of the
Revolving Loan (which shall be a Business Day),
and (iii) if the Revolving Loan is $1,000,000 or
greater, its purpose (provided in sufficient detail that
is reasonably satisfactory to the
Lender). The aggregate principal amount of each
Revolving Loan shall be not less than $500,000 or a larger multiple
of $100,000, or in such lesser amounts equal to the amount of the
unused Revolving Commitment. Upon the satisfaction of the
applicable conditions set forth in Article III hereof, the Lender
will make the proceeds of each Revolving Loan available to the
Borrower at the Payment Office on the date specified in the
applicable Notice of Borrowing by crediting an account maintained
by the Borrower with the Lender or at the Borrower’s option,
by effecting a wire transfer of such amount to an account
designated by the Borrower to the Lender.
Section
2.3. Optional Reduction and Termination and/or
Extension of Revolving Commitment .
(a) The
Revolving Commitment shall terminate on the Commitment Termination
Date; provided , that the Commitment Termination Date may be
extended by the Lender for additional 364-day periods in its sole
discretion upon receiving a written request from the Borrower not
earlier than 60 days and not later than 45 days prior to then
existing Commitment Termination Date for an extension. Upon the
receipt of such request, the Lender shall use its best efforts to
notify the Borrower not later than 30 days prior to any Commitment
Termination Date whether it will extend the then existing
Commitment Termination Date for an additional 364-day period;
provided , that the failure of the Lender to give any such
notice to the Borrower shall mean that the then existing Commitment
Termination Date will not be so extended.
(b) Upon
at least two (2) Business Days' prior written notice (or telephonic
notice promptly confirmed in writing) to the Lender (which notice
shall be irrevocable), the Borrower may reduce the Revolving
Commitment in part or terminate the Revolving Commitment in whole;
provided , that (i) any partial reduction pursuant to this
Section 2.3 shall be in an amount of at least $100,000 and
any larger multiple of $50,000 and (ii) no such reduction shall be
permitted which would reduce the Revolving Commitment (after giving
effect thereto and any concurrent prepayments made under Section
2.4 ) to an amount less than the outstanding Revolving
Loans.
Section
2.4. Repayment and Prepayments of Revolving
Loans .
(a) The
outstanding principal amount of all Revolving Loans shall be due
and payable (together with accrued and unpaid interest thereon) on
the Commitment Termination Date.
(b) The
Borrower shall have the right at any time and from time to time to
prepay any Eurodollar Loan, in whole or in part, without premium or
penalty, subject to Section 2.12 hereof. Each partial
prepayment shall be in an amount not less than $100,000 and
integral multiples thereof.
(c) Subject
to Sections 2.8 and 2.9 , each Eurodollar Loan shall
automatically continue on the last day of an Interest Period for
another three-month Interest Period unless the Borrower elects to
repay in whole or in part such Eurodollar Loan on the last day of
such Interest Period. In the case of a partial repayment, such
Eurodollar Loan shall be continued for another one-month Interest
Period in the principal amount designated by the Borrower, subject
to the minimum amounts specified in Section 2.2 .
Section
2.5. Interest on Loans .
(a) The
Borrower shall pay interest on each Eurodollar Loan at LIBOR,
plus 1.50% per annum. If a Base Rate Loan shall be
outstanding under the circumstances set forth in Section 2.8
or 2.9 , then the Borrower shall pay interest on each Base
Rate Loan at the Base Rate in effect from time to time.
(b) While
an Event of Default exists or after acceleration, at the option of
the Lender, the Borrower shall pay interest (" Default
Interest ") with respect to all Eurodollar Loans at the
rate otherwise applicable for the then-current Interest
Period plus an additional 2% per annum until the last
day of such Interest Period, and thereafter, and with respect to
all Base Rate Loans and all other Obligations hereunder, at the
Base Rate, plus 2% per annum.
(c) Interest
on the principal amount of all Revolving Loans shall accrue from
and including the date such Revolving Loans are made to but
excluding the date of any repayment thereof. Interest on all
outstanding Eurodollar Loans shall be payable on the last day of
each Interest Period applicable thereto and on the Commitment
Termination Date. Interest on any Base Rate Loans shall be payable
on the last day of each calendar month and on the Commitment
Termination Date. All Default Interest shall be payable on
demand.
(d) The
Lender shall determine each interest rate applicable to the
Revolving Loans hereunder and shall promptly notify the Borrower of
such rate in writing (or by telephone, promptly confirmed in
writing). Any such determination shall be conclusive and
binding for all purposes, absent manifest error.
Section 2.6. Intentionally
Omitted.
Section
2.7. Computation of Interest
. All computations of interest
hereunder shall be made on the basis of a year of 360 days for
the actual number of days (including the first day but excluding
the last day) occurring in the period for which such interest or
fees are payable (to the extent computed on the basis of days
elapsed). Each determination by the Lender of an interest amount
hereunder shall be made in good faith and, except for manifest
error, shall be final, conclusive and binding for all
purposes.
Section
2.8. Inability to Determine Interest
Rates . If
prior to the commencement of any Interest Period for any Eurodollar
Loan, the Lender shall have determined (which determination shall
be conclusive and binding upon the Borrower ) that (a) by
reason of circumstances affecting the relevant interbank market,
adequate means do not exist for ascertaining LIBOR, or (b)
LIBOR does not adequately and fairly reflect the cost to the Lender
of making, funding or maintaining its Eurodollar Loans, the Lender
shall give written notice (or telephonic notice, promptly confirmed
in writing) to the Borrower as soon as practicable thereafter.
Until the Lender notifies the Borrower that the circumstances
giving rise to such notice no longer exist, (x) the
obligation of the Lender to make Eurodollar Loans or to continue
outstanding Revolving Loans as Eurodollar Loans shall be suspended
and (y) all such affected Eurodollar Loans shall be converted into
Base Rate Loans on the last day of the then current Interest Period
unless the Borrower elects to prepay such Revolving Loans in
accordance with this Agreement.
Section
2.9. Illegality .
If any Change in Law shall make it
unlawful or impossible for the Lender to make, maintain or fund any
Eurodollar Loan, the Lender shall promptly give notice thereof to
the Borrower, whereupon until the Lender notifies the Borrower that
the circumstances giving rise to such suspension no longer exist,
the obligation of the Lender to make Eurodollar Loans, or to
continue any outstanding Revolving Loans as Eurodollar Loans, shall
be suspended. Any new Revolving Loan shall be made as a Base Rate
Loan and all then outstanding Eurodollar Loans shall be converted
to a Base Rate Loan either (x) on the last day of the then current
Interest Period if the Lender may lawfully continue to maintain
such Eurodollar Loans to such date or (y) immediately if the Lender
shall determine that it may not lawfully continue to maintain such
Eurodollar Loans to such date.
Section 2.10. Increased
Costs .
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If any Change
in Law shall:
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(i)
impose, modify or deem applicable any reserve, special deposit or
similar requirement that is not otherwise included in the
determination of LIBOR hereunder against assets of, deposits with
or for the account of, or credit extended by, the Lender (except
any such reserve requirement reflected in the calculation of
LIBOR); or
(ii) impose
on the Lender or the eurodollar interbank market any other
condition affecting this Agreement or any Eurodollar Loans made by
the Lender; and the result of the foregoing is to increase the cost
to the Lender of making, continuing or maintaining a Eurodollar
Loan or to reduce the amount received or receivable by the Lender
hereunder (whether of principal, interest or any other amount),
then the Borrower shall promptly pay, upon written notice from and
demand by the Lender, within five Business Days after the date of
such notice and demand, additional amount or amounts sufficient to
compensate the Lender for such additional costs incurred or
reduction suffered.
(b) If
the Lender shall have determined that on or after the date of this
Agreement any Change in Law regarding capital requirements has or
would have the effect of reducing the rate of return on the
Lender's capital (or on the capital of the Lender's parent
corporation) as a consequence of its obligations hereunder to
a level below that which the Lender or the Lender's parent
corporation could have achieved but for such Change in Law (taking
into consideration the Lender's policies or the policies of the
Lender's parent corporation with respect to capital adequacy) then,
from time to time, within five (5) Business Days after receipt by
the Borrower of written demand by the Lender, the Borrower
shall pay to the Lender such additional amounts as will compensate
the Lender or the Lender's parent corporation for any such
reduction suffered.
(c) A
certificate of the Lender setting forth the amount or amounts
necessary to compensate the Lender or its parent corporation, as
the case may be, specified in paragraph (a) or (b) of this Section
shall be delivered to the Borrower and shall be conclusive,
absent manifest error. The Borrower shall pay the Lender
such amount or amounts within 10 days after receipt
thereof.
(d) Failure
or delay on the part of the Lender to demand compensation pursuant
to this Section shall not constitute a waiver of the Lender's right
to demand such compensation.
Section 2.11. Payments
Generally . The
Borrower shall make each payment required to be made by it
hereunder (whether of principal, interest, or of amounts payable
under Section 2.10 or otherwise) prior to
12:00 noon, on the date when due, in immediately available funds,
without set-off or counterclaim. Any amounts received after such
time on any date may, in the discretion of the Lender, be deemed to
have been received on the next succeeding Business Day for purposes
of calculating interest thereon. All such payments shall
be made to the Lender at its Payment Office. If any
payment hereunder shall be due on a day that is not a Business Day,
the date for payment shall be extended to the next succeeding
Business Day, and, in the case of any payment accruing interest,
interest thereon shall be made payable for the period of such
extension. All payments hereunder shall be made in
Dollars.
Section 2.12. Funding Indemnity
. In the event of (a) the payment of any principal of a
Eurodollar Loan other than on the last day of the Interest Period
applicable thereto (including as a result of an Event of Default),
or (b) the failure by the Borrower to borrow, prepay, or continue
any Eurodollar Loan on the date specified in any applicable notice
(regardless of whether such notice is withdrawn or revoked), then,
in any such event, the Borrower shall compensate the
Lender, within five (5) Business Days after written demand from the
Lender, for any loss, cost or expense attributable to
such event. In the case of a Eurodollar Loan, such loss, cost or
expense shall be deemed to include an amount determined by the
Lender to be the excess, if any, of (A) the amount of
interest that would have accrued on the principal amount of such
Eurodollar Loan if such event had not occurred at LIBOR applicable
to such Eurodollar Loan for the period from the date of such event
to the last day of the then current Interest Period therefor (or in
the case of a failure to borrow or continue, for the period that
would have been the Interest Period for such Eurodollar Loan) over
(B) the amount of interest that would accrue on the principal
amount of such Eurodollar Loan for the same period if LIBOR were
set on the date such Eurodollar Loan was prepaid or converted or
the date on which the Borrower failed to b
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