EXHIBIT 10(a)
LOAN AGREEMENT
--------------
THIS LOAN AGREEMENT (hereinafter called "Agreement") made and entered
into this 12th day of June, 2003, by and between PEOPLES BANCORP INC., an OHIO
corporation, (hereinafter called "Borrower")and FIRST TENNESSEE BANK NATIONAL
ASSOCIATION, a national banking association having its principal office located
in Memphis, Tennessee ("Lender").
W I T N E S S E T H :
WHEREAS, the Borrower desires to borrow from Lender SEVENTEEN MILLION
DOLLARS ($17,000,000) and Borrower desires to pledge as collateral for this loan
25% of Borrower's common stock in the name of PEOPLES BANK, NATIONAL ASSOCIATION
(hereinafter called "Bank").
NOW, THEREFORE, in consideration of the premises and the mutual
agreements, covenants and conditions herein contained, the parties hereto hereby
agree as follows:
AGREEMENTS
----------
1. COMMITMENT AND FUNDING.
1.1 THE COMMITMENT. Subject to the terms and conditions herein set out,
Lender agrees and commits to make a loan (the "Loan") to Borrower SEVENTEEN
MILLION DOLLARS ($17,000,000). Such borrowing shall be evidenced by, and shall
be payable in accordance with the terms and provisions of, a promissory note
executed by Borrower, as maker, attached hereto and incorporated herein by
reference (such promissory note together with any renewals, modifications and
extensions thereof is herein referred to as the "Note").
1.2 FUNDING. The advance of Loan proceeds hereunder shall be made, upon
Borrower's request, by depositing the same into Bank's demand deposit account
with Lender. The Loan to Borrower may be made, at Borrower's request, in one or
more advances, each of which shall be subject to the terms and conditions of
this Agreement, including but not limited to Sections 2.1 and 2.2 hereof.
1.3 PREPAYMENTS. The Borrower may, at its option, at any time and from
time to time, without prepayment penalty or premium, prepay the Loan in whole or
in part; provided, however, that any such prepayment of principal shall be
accompanied by the payment of accrued interest on the amount of such prepayment
to the date thereof. Any such prepayment shall be applied to reduce the
principal installments under the Note in the inverse order of their maturities,
and shall not have the effect of suspending or deferring payments there under.
1.4 INTEREST RATE. The Loan indebtedness evidenced by the Note shall
bear interest from date at the variable rate determined in accordance with the
terms and provisions of the Note.
2. CONDITIONS OF LENDING.
2.1 LOAN DOCUMENTS. The obligation of Lender to fund the Loan is subject
to the condition precedent that Lender shall have received at or before the
execution of this Agreement all of the following in form and substance
satisfactory to Lender provided that if any of the following shall not have been
furnished to Lender at or before the date of this Agreement, the same shall be
furnished promptly thereafter unless Lender shall waive any such requirement in
writing.
a) The Note;
b) This Loan Agreement;
c) The Pledge and Security Agreement (hereinafter called "Pledge
Agreement"), executed by Borrower, granting to Lender a security interest in 25%
of Borrower's capital stock in Bank as security for the Loan, together with
irrevocable stock powers executed in blank with respect to such shares of stock,
and the original certificates representing such shares of stock.
d) Current certificates of good standing for the BORROWER IN THE STATE
OF OHIO.
e) Certified corporate resolutions of Borrower authorizing the
execution, delivery and performance of this Loan Agreement and of the other
instruments and documents to be executed and delivered in connection herewith,
and a certified copy of Borrower's articles of incorporation and bylaws.
f) True and exact copies of the current financial statements of the
Borrower and Bank and audit report and opinion of their independent, third
party, Certified Public Accountants, with respect thereto (it being understood
that Lender is relying upon such audit report and opinion in entering into this
Loan Agreement), the unaudited financial statements of Borrower and Bank as of
DECEMBER 31, 2002 and the DECEMBER 31, 2002 F.R. Y-6 Annual Report and F.R. Y-9
Parent Company only (and Consolidated, if applicable) financial statement(s)
filed by Borrower with the Federal Reserve.
g) Borrower is to also provide an opinion of independent, third party
counsel as to the due organization and valid existence of Borrower, the due
authorization and execution by Borrower of the Loan Documents, and the validity
and enforceability of the Loan Documents against Borrower as of June 12th, 2003.
h) The Note, this Loan Agreement, the Pledge Agreement, and any other
documents executed by Borrower in connection herewith shall be referred to
hereinafter as the "Loan Documents".
2.2 OTHER CONDITIONS. The obligation of the Lender to fund the Loan is
subject to each of the following further terms and conditions:
a) The proceeds of such Loan shall be used for the purpose of general
corporate needs of Peoples Bancorp, Inc.
b) At the time of funding, each of the Loan advances hereunder and each
of Borrower's warranties and representations contained herein or in the Pledge
Agreement shall be and remain true and correct in all material respects. In
addition, no Event of Default (as defined in Section 6 hereof) shall have
occurred and be continuing, and, if requested by Lender, Borrower shall execute
a certificate verifying each of such matters to be true in all respects, if such
be the case.
c) At the time the loan is funded hereunder, there shall have occurred,
in the opinion of Lender, no material adverse changes in the condition,
financial or otherwise, of Borrower or Bank from that reflected in the financial
statements furnished pursuant to Section 2.1 hereof.
3. REPRESENTATIONS AND WARRANTIES.
In order to induce the Lender to enter into this Agreement and to make the Loan,
the Borrower represents and warrants to the Lender (which representations and
warranties shall survive the delivery of the Loan Documents and the funding of
the Loan) that:
3.1 CORPORATE STATUS. Borrower is a corporation duly organized and
existing under the laws of the State of OHIO, is duly qualified to do business
and is in good standing under the laws of the State of OHIO, and has the
corporate power and authority to own its properties and assets and conduct its
affairs and business [Peoples Bank National Association is a national banking
association validly existing under the laws of the United States of America].
3.2 CORPORATE POWER AND AUTHORITY. Borrower has full power and authority
to enter into this Agreement, to borrow funds contemplated herein, to execute
and deliver this Agreement, the Note, Pledge Agreement and other Loan Documents
executed and delivered by it, and to incur the obligations provided for herein,
all of which have been duly authorized by all proper and necessary corporate
action; and the officer executing each of the Loan Documents is duly authorized
to do so by all necessary corporate action. Any consents or approval of
shareholders of Borrower required as a condition to the validity of any Loan
Document have been obtained; and each of said Loan Documents is the valid,
legal, and binding obligation of Borrower enforceable in accordance with its
terms.
3.3 NO VIOLATION OF AGREEMENTS OR LAW. Neither Borrower nor Bank is in
default under any indenture, agreement or instrument to which it is a party or
by which it may be bound, nor in violation of any state or federal statute,
rule, ruling, or regulation governing its operations and the conduct of its
business, operations or financial condition of Borrower or Bank. Neither the
execution and delivery of the Loan Documents nor the consummation of the
transactions herein contemplated, or compliance with the provisions hereof will
conflict with, or result in the breach of, or constitute a default under, any
indenture, agreement or other instrument to which Borrower is a party or by
which it may be bound, or result in the creation or imposition of any lien,
charge or encumbrance upon any of the property of Borrower, or violate or be in
conflict with any provision of the charter or bylaws of Borrower.
3.4 COMPLIANCE WITH LAW; GOVERNMENT APPROVALS.
(a) Borrower has complied and is complying with all requirements, made
all applications, and submitted all reports required by The Bank Holding Company
Act of 1956, as amended, and any regulations or rulings issued in connection
therewith, and the transaction contemplated hereby will not violate any such
statutes, rules, rulings, or regulations nor will the consummation of said
actions and transactions cause Borrower to be in violation thereof. Borrower
has, as required, received all governmental approvals necessary for the
consummation of the transactions described herein, including the approval of the
Board of Governors of the Federal Reserve System.
(b) Borrower has complied and is complying with all other applicable
state or federal statutes, rules, rulings and regulations. The borrowing of
money and pledging of such stock as described herein and said actions and
transactions will not violate any of such statutes, rules, rulings, or
regulations. Borrower has made all filings and received all governmental or
regulatory approvals necessary for the consummation of the transactions
described herein.
3.5 LITIGATION. There are no actions, suits or proceedings pending or,
to the knowledge of the Borrower threatened against before any court, arbitrator
or governmental or administrative body or agency which, if adversely determined,
would result in any material and adverse change in the financial condition,
business operation, or properties or assets of the Borrower. Without limiting
the generality of the foregoing, neither Borrower nor Bank is subject to any
Supervisory Action (herein defined) by any federal or state bank regulatory
authority. As used herein, "Supervisory Action" shall mean and include the
issuance by any bank regulatory authority of a letter agreement or memorandum of
understanding (regardless of whether consented or agreed to by the party to whom
it is addressed); or the issuance by or at the behest of any bank regulatory
authority of a cease and desist order, injunction, directive, restraining order,
notice of charges, or civil money penalties, against Borrower, Bank or the
directors or officers of either of them, whether temporary or permanent.
3.6 FINANCIAL CONDITION. The balance sheets and the related statements
of income of Borrower and Bank, which have been delivered to the Lender pursuant
to Sections 2.1 hereof and the financial reports of Borrower and Bank which will
be delivered to Lender pursuant to Section 4.5 hereof are, or will be as of
their respective dates and for the respective periods stated therein, complete
and correctly and fairly present the financial condition of Borrower and Bank,
and the results of their operations, respectively, as of the dates and for the
periods stated therein, and have been, or will be as of their respective dates
and for the respective periods stated therein, prepared in accordance with
generally accepted accounting principles consistently applied throughout the
period involved. There has been no material adverse change in the business,
properties or condition of Borrower or Bank since the date of the financial
statement furnished to Lender pursuant to Section 2.1 hereof.
3.7 TAX LIABILITY. Borrower and Bank have filed all tax returns, which
are required to be filed by them, and have paid all taxes, which have become due
pursuant to such returns or pursuant to any assessments received by them.
a. Subsidiaries. Borrower subsidiaries are Peoples Bank, National Association,
Peoples Investment Company, PEBO Capital Trust I and PEBO Capital Trust II.
Peoples Bank National Association also operates Peoples Insurance Agency, Inc.
and Peoples Loan Services, Inc.
3.9 BANK STOCK. The common stock of Bank owned by Borrower is duly
authorized and validly issued by Bank. The total number of shares of common
stock of Bank issued and outstanding as of the date hereof is 10,000 shares, of
which 2,500 SHARES ARE BEING PLEDGED FOR THIS TRANSACTION. The stock in Bank
owned by Borrower is free and clear of all liens, encumbrances, security
interests or pledges except the pledge to Lender described herein; said common
stock is fully paid and non-assessable; the Bank stock certificates delivered to
Lender pursuant to the Pledge Agreement will be genuine and comply with
applicable laws concerning form, content, and manner of preparation and
execution; there are no outstanding warrants or options to acquire any common
stock of Bank; there are no outstanding securities convertible or exchangeable
into shares of common stock of Bank; there are no restrictions on the transfer
or pledge of any shares of common stock of Bank; Borrower has the right to
pledge and transfer the pledged stock and assign the income there from upon
notice but without obtaining the consent of any other person or entity; and the
Pledge Agreement creates for the benefit of Lender a first security interest in
the pledged Bank stock, subject to no other interests or claims.
4.0 AFFIRMATIVE COVENANTS. Borrower covenants and agrees that, until the
Note together with interest thereon is paid in full, unless specifically waived
by the Lender in writing, Borrower will, or will cause Borrower and Bank to:
4.1 BUSINESS AND EXISTENCE. Perform all things necessary to preserve and
keep in full force and effect the existence, rights and franchises of Borrower
and to comply with all laws and regulations applicable to Borrower and Bank,
including, but not limited to, laws and regulations of state and federal
authorities applicable to banks and bank holding companies.
4.2 MAINTAIN PROPERTIES. Maintain, preserve, and protect all properties
used or useful in the conduct of Borrower's and Bank's business and keep the
same in good repair, working order and condition.
4.3 INSURANCE. At all times keep the insurable properties of Borrower
and Bank adequately insured and maintain in force (i) insurance, to such an
extent and against such risks, including fire, as is customary with companies in
the same or similar business, (ii) necessary workmen's compensation insurance,
fidelity bonds and directors' and officers' insurance coverage in amounts
satisfactory to Lender, and (iii) such other insurance as may be required by
law; and if required by Lender, deliver to the Lender a copy of the bonds and
policies providing such coverage and a certificate of Borrower's or Bank's chief
executive officer, as the case may be, setting forth the nature of the risks
covered by such insurance, the amount carried with respect to each risk, and the
name of the insurer.
4.4 TAXES AND LIENS. Pay and discharge promptly all taxes, assessments,
and governmental charges or levies imposed upon Borrower or Bank or upon any of
their respective income and profits, or their properties, real, personal or
mixed, or any part thereof, before the same shall become delinquent; provided,
however, that Borrower and Bank shall not be required to pay and discharge or to
cause to be paid and discharged any such tax, assessment, charge, levy or claim
so long as the amount or validity thereof shall be contested in good faith by
appropriate proceedings.
4.5 FINANCIAL REPORTS. Furnish to Lender (a) as soon as available and in
any event within ninety (90) days after the end of each calendar year,
consolidated and consolidating balance sheets of Borrower and Bank, as of the
end of such year and consolidated and consolidating statements of income of
Borrower and Bank for the year then ended, together with the audit report and
opinion of independent Certified Public Accountants acceptable to the Lender
with respect thereto, such audit report and opinion shall contain no exceptions
or qualifications unacceptable to Lender; (b) promptly upon receipt, copies of
all management letters and other assessments and recommendations, formal or
informal, submitted by the Certified Public Accountants to Borrower or Bank; (c)
a copy of Borrower's FR Y-9 Parent Company Only (and Consolidated, if
applicable) financial statement(s) and (d) a copy of Borrower's F.R. Y-6 Annual
Report promptly upon the filing of the same with the Federal Reserve Board; and
(e) a copy of Bank's Quarterly Report of Condition and Income ("Call Report")
promptly upon the filing with the appropriate regulatory agency.
4.6 REGULATORY EXAMINATIONS. Promptly notify Lender if the Borrower,
Bank or both enters into any agreements with any Federal or state regulatory
body or authority, with respect to the properties, loans, operations and/or
condition of Borrower, Bank or both and if required by Lender, fully and
completely assist and cooperate with Lender in requesting approval by such
regulatory body or authority of the furnishing to Lender of any such agreement
or examination by the appropriate regulatory body or authority, and furnish such
information to Lender if such approval is given; provided, however, that Lender
shall take steps as may be necessary to assure that all such agreements,
examinations and information shall remain confidential and shall be used by
Lender solely in connection with the administration of the Loan is accordance
with the provisions of this Agreement.
4.7 ADDITIONAL INFORMATION. Furnish such other information regarding the
operations, business affairs and financial condition of Borrower and Bank as
Lender may from time to time reasonably request, including but not limited to
true and exact copies of any monthly management reports to their respective
directors, their respective tax returns, and all information furnished to
shareholders, or any governmental authority, including the results of any stock
valuation performed.
4.8 RIGHT OF INSPECTION. Except to the extent, if any, prohibited by
applicable law, permit any person designated by Lender, to inspect any of the
properties, books and financial and other reports and records of Borrower and
Bank, including, but not limited to, all documentation and records pertaining to
Bank's loans, investments and deposits; and to discuss their affairs; finances
and accounts with Borrower's and Bank's principal officers, at all such
reasonable times and as often as Lender may reasonable request. If required by
Lender, Borrower will pay Lender loan fees in an amount determined by Lender to
be necessary to cover the costs of such inspections, including a reasonable
allowance for Lender's overhead as well as out-of-pocket expenses in connection
with such inspection.
4.9 NOTICE OF DEFAULT. At the time of Borrower's first knowledge or
notice, furnish the Lender with written notice or the occurrence of any event or
the existence of any condition, which constitutes or upon written notice or
lapse of time or both would constitute an Event of Default under the terms of
this Loan Agreement.
4.10 COMPLIANCE WITH BANKING REGULATIONS. At all times be in compliance
with, cause Bank to be in compliance with, all banking and bank holding company
laws, rules and regulations applicable to Borrower or Bank.
4.11 CAPITAL RATIO/EQUITY CAPITAL ADEQUACY. With respect to the
financial statements of the Borrower and Bank, maintain at all times until
payment in full of the Loan capital levels of both Borrower and Bank in full
compliance with all state and federal regulatory authorities and, without
limiting the generality of the foregoing, a ratio of Tier 1 Capital to Total
Assets as required by all state and federal regulatory authorities; PROVIDED,
HOWEVER, with respect to the financial statement of the Bank in no event shall
the minimum ratio of Tier 1 Capital to Total Assets be less THAN 6.50%. For
purposes hereof, "Tier 1 Capital" is defined in Appendix A to Title 12, Code of
Federal Regulations, Part 225n, Capital Adequacy Guidelines for Bank Holding
Companies.
4.12 LOAN LOSS RESERVES. With respect to Bank, maintain at all
times loan loss reserves in amounts deemed adequate by all federal and state
regulatory authorities. As used herein, non-performing loans shall have the
meaning set out in Section 6.1(i) hereof.
4.13 NOTIFICATION OF NONCOMPLIANCE. Chief executive officer of
Borrower is to furnish Lender a notification of any non-compliance within
forty-five (45) days after the end of any calendar quarter of which Borrower
and/or Bank may be in non-compliance with any or all terms, covenants and
conditions of this Loan Agreement and all related Loan Documents.
5.0 NEGATIVE COVENANTS. Borrower covenants and agrees that, until
the indebtedness evidenced by the Note, together with interest, is paid in full,
Borrower will not, without written notification to and receiving written consent
of Lender, which shall not be unreasonably withheld (said notification and
consent, in terms of form and timing, will conform to specific directives
contained in attached Exhibit A to this agreement).
5.1 INDEBTEDNESS. Create, incur, assume or suffer to exist,
contingently or otherwise, any indebtedness, except for the following
indebtedness:
i) the indebtedness of Borrower under the Loan;
ii) operating expenses incurred by Borrower in the
ordinary course of business;
iii) trust preferred securities outstanding or to be issued
5.2 MERGER, DISSOLUTION, ACQUISITION OF ASSETS, AFFILIATES AND
SUBSIDIARIES. Enter into, or permit Bank to enter into, any transaction of
merger or consolidation, or any reorganization, reclassification of stock,
readjustment or change in capital structure; or acquire, or permit Bank to
acquire, all of the stock, property or assets of any other person, corporation,
partnership or other entity and in conjunction with or independent of any of the
above listed actions, create, establish or acquire affiliates or subsidiaries or
acquire or own stock or any other interest in any bank other than Bank, or
permit the creation, establishment or acquisition of such affiliates or
subsidiaries by Bank, except for the following:
i) the pending merger between Borrower and Kentucky
Bancshares, Inc.
ii) any publicly traded securities of banks or bank
holding companies that Borrower may hold or
purchase during the term of the note.
5.3 STOCK. Sell, transfer or otherwise dispose of any of its common
capital stock in Bank nor permit Bank to issue additional shares of stock or
rights, options or securities convertible into capital stock of Bank.
5.4 DIVIDENDS, REDEMPTIONS AND OTHER PAYMENTS. Declare or pay any
dividends if an Event of Default has occurred and is continuing under this
Agreement or the payment of a dividend would create an Event of Default. The
payment of any dividend shall in all respects comply with the Rules and
Regulations of the Federal Reserve Board.
5.5 CAPITAL EXPENDITURES. Make or become committed to make, or
permit Bank to make or to become committed to make, directly or indirectly,
during any calendar year, capital expenditures that for Borrower and Bank exceed
amounts deemed acceptable to applicable regulatory authorities.
5.6 RELOCATION. Cause or permit Borrower or the bank to relocate
their principal office, principal banking office, and principal registered
office or approved charter location.
5.7 SALE OF ASSETS. Sell, lease, transfer or dispose of all or any
substantial part of its assets, including the assets of any of its subsidiaries.
6.0 DEFAULT AND REMEDIES.
6.1 EVENTS OF DEFAULT. Any one or more of the following events
shall constitute a default ("Event of Default") under the terms of this
Agreement:
(a) Default in the payment when due of the principal of or interest
on the Note.
(b) Default in the performance of any provisions or breach of any
covenant of this Agreement or any other Loan Document.
(c) If any representation or warranty or any other statement of
fact contained herein, in any other Loan Document, or in any writing,
certificate, or report or statement at any time furnished to Lender pursuant to
or in connection with this Agreement shall prove to be false or misleading in
any material respect.
(d) If Borrower or Bank files a petition in bankruptcy or seeks
reorganization or arrangements under the Bankruptcy Code (as it now exists or as
amended); is unable or admits in writing its inability to pay its debts as they
become due or is not generally paying its debts as they come due; makes an
assignment for the benefit of creditors; has a receiver, custodian or trustee
appointed voluntarily or involuntarily, for its property; or is adjudicated
bankrupt; or if an involuntary petition is filed in bankruptcy, for
reorganization or arrangements, or for the appointment of a receiver, custodian
or trustee of Borrower or Bank on their respective properties and if Borrower or
Bank either acquiesce therein or fails to have such petition dismissed within
sixty (60) days of the filing thereof.
(e) If any executive officer of Borrower or Bank, who in the
reasonable judgment of Lender, occupies a position of substantial and material
management responsibility shall, by reason of death, permanent disability, or
departure from the employ of Borrower or Bank, or for any other reason, ceases
to be active in the management of Borrower or Bank and the Borrower or Bank
shall not, within a period of ninety (90) days from such permanent disability,
death or departure secure a replacement for said officer (such replacement to
be, by reason of his or her experience and credentials, satisfactory to the
Lender). For purposes of this section, permanent disability means any disability
that prevents such officer from rendering full-time services to Borrower or Bank
for sixty (60) consecutive days or in the aggregate for (90) days within a
calendar year.
(f) If Bank shall fail to maintain an annualized return on total
average assets of at least (0.85%) as of the date of all financial reports
required by regulatory authorities. For purposes of this Section 6.1 (h) "total
average assets" shall be deemed to mean the year-to-date average of total assets
of Bank.
(g) If the Bank's non-performing loans exceed TWO PERCENT (2.00%)
of the Bank's gross loans. For purposes hereof, "non-performing loans" shall be
defined as the sum of all loans whose installments or prepayments are 90 days or
more past due plus all loans that are on non-accrual plus those loans which have
been renegotiated (as defined by the regulatory agencies) or restructured to
provide a reduction in either interest or principal because of a deterioration
in the financial position of the borrower.
(h) If there shall at any time occur without the prior written
approval of Lender a change in control (including any change in control under
the Change in Bank Control Act of 1978, as amended, and any transaction or
restructuring which requires approval under the Bank Holding Company Act of
1956, as amended) of Bank or Borrower.
(i) The issuance by or at the request of any bank regulatory
authority of any Supervisory Action (as defined in Section 3.5 hereof) or the
taking by Borrower or Bank of any action of the sort described in Section 3.5 to
prevent or forestall the imposition by such bank regulatory authority of any
such Supervisory Action.
6.2 REMEDIES. If an Event of Default shall occur, at any time
thereafter, Lender may, at its option without demand or notice (except as
otherwise provided herein), the same being expressly waived, declare the Loan,
with interest thereon, to be immediately due and payable, and may proceed to
exercise all rights and remedies available under the Pledge Agreement, under any
other Loan Document, at law or in equity, concurrently or sequentially, in such
order as Lender may elect, all such rights and remedies being cumulative.
Nothing herein contained shall be deemed to limit the right and privilege of
Lender, in its sole discretion, before or after the occurrence of an Event of
Default, to make demand for payment of the Note, such Note being payable on
demand.
7.0 MISCELLANEOUS.
7.1 AMENDMENTS. The provisions of this Loan Agreement and the other
Loan Documents may be amended or modified only by an instrument in writing
signed by the parties thereto.
7.2 NOTICES. All notices and other communications provided for
hereunder shall be in writing and shall be mailed, certified mail, return
receipt requested or delivered, if to the Borrower, to it at CHARLES R.
HUNSAKER, ESQ., PEOPLES BANCORP, P.O. BOX 738, MARIETTA, OHIO, 45750, and if to
the Lender, to it at 845 Crossover Lane, Suite 150, Memphis, Tennessee, 38117,
Attention: Correspondent Services; or as to any such person at such other
address as shall be designated by such person in a written notice to the other
parties hereto complying as to delivery with the terms of this Section 7.2. All
such notices and other communications shall be effective (i) if mailed, when
received or three business days after mailing, whichever is earlier; or (ii) if
delivered, upon delivery.
7.3 NO WAIVER, CUMULATIVE REMEDIES. No failure to exercise and no
delay in exercising, on the part of the Lender, any right, power or privilege
hereunder, shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or privilege hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
Waiver of any right, power, or privilege hereunder or under any instrument or
document now or hereafter evidencing or securing the Loan is a waiver only as to
the specified item. The rights and remedies herein provided are cumulative and
not exclusive of any rights or remedies provided by law.
7.4 BINDING EFFECT. This Loan Agreement shall be binding upon, and
inure to the benefit of the parties hereto and their respective heirs,
successors, and assigns, except that Borrower shall not have the right to assign
its rights hereunder or any interest therein without the prior written consent
of Lender.
7.5 GOVERNING LAW. This Loan Agreement shall be governed and
construed in accordance with the laws of the State of Tennessee; except that the
provisions hereof which relate to the payment of interest shall be governed by
(i) the laws of the United States or, (ii) the laws of the State of Tennessee,
whichever permits the Lender to charge the higher rate, as more particularly set
out in the Note.
7.6 VENUE OF ACTIONS. As an integral part of the consideration for
the making of the Loan hereunder, it is expressly understood and agreed that no
suit or action shall be commenced by the Borrower, or by any successor, personal
representative or assignee of it, with respect to the Loan contemplated hereby,
or with respect to any of the Loan Documents, other than in a state court of
competent jurisdiction in and for the County of the State in which the principal
place of business of the Lender is situated, or in the United States District
Court for the District in which the principal place of business of the Lender is
situated, and not elsewhere. Nothing in this paragraph contained shall prohibit
Lender from instituting suit in any court of competent jurisdiction for the
enforcement of its rights hereunder or under any other Loan Document, but the
parties stipulate and agree that the courts specified in the preceding sentence
of this section shall be an appropriate forum for any such suit.
7.7 TERMINOLOGY; SECTION HEADINGS. All personal pronouns used in
this Loan Agreement whether used in the masculine, feminine, or neuter gender,
shall include all other genders; and the singular of any such pronoun or of any
term defined herein shall include the plural, and vice versa. Section headings
are for convenience only and neither limit nor amplify the provisions of this
Loan Agreement.
7.8 ENFORCEABILITY OF AGREEMENT. Should any one or more of the
provisions of this Loan Agreement be determined to be illegal or unenforceable,
all other provisions nevertheless, shall remain effective and binding on the
parties hereto. In the event that the provisions of the Note or this Loan
Agreement governing the determination of the rate of interest on the Loan should
be construed by a court of competent jurisdiction not to constitute a valid,
enforceable designation of a rate of interest or method of determining the same,
the Loan indebtedness shall bear interest at the maximum effective variable
contract rate which may be charged by Lender under applicable law from time to
time in effect.
7.9 INTEREST LIMITATIONS. It is the intention of the parties hereto
to comply strictly with all applicable usury laws; and, accordingly, in no event
and upon no contingency shall Lender ever be entitled to receive, collect, or
apply as interest any interest, fees, charges or other payments equivalent to
interest, in excess of the maximum rate for which Borrower may lawfully contract
under applicable law, from time to time in effect. Any provision hereof, or of
any other agreement executed by Borrower that would otherwise operate to bind,
obligate or compel Borrower to pay interest in excess of such maximum lawful
rate shall be construed to require the payment of the maximum rate only. The
provisions of this paragraph shall be given precedence over any other provisions
of this paragraph shall be given precedence over any other provisions contained
herein or in any other agreement applicable to the Loan, that is in conflict
with the provisions of this paragraph.
7.10 NON-CONTROL. In no event shall Lender's rights hereunder be
deemed to indicate that Lender is in control of the business, management or
properties of Borrower or Bank or has power over the daily management functions
and operating decisions made by Borrower or Bank.
7.11 FEES AND EXPENSES. Borrower agrees to pay a $2,000 fee to
reimburse Lender for out-of-pocket expenses, including due diligence expenses,
legal counsel fees, incurred by Lender in connection with the development,
preparation, execution, recording of Loan and Loan Documents. Any expenses
related to future, amendment, administration or enforcement of, or the
preservation of any rights under this Loan Agreement and the other Loan
Documents, or the collection of the Loan or realization upon any collateral
security therefore will also be the expense of the Borrower.
7.12 INDEMNIFICATION. Borrower hereby agrees to indemnify Lender
against, and hold Lender harmless from, any and all claims, suits and damages
asserted against Lender by any person or entity [including, but not limited to,
shareholders and former shareholders of PEOPLES BANCORP INC.] arising out of or
asserted with respect to the transactions contemplated by this Loan Agreement
and shall pay all attorneys' fees and costs in connection with the defense of
any such claim. Said indemnification would not include gross negligence or acts
of bad faith by Lender. Notwithstanding any other provision herein, a violation
of the terms of this agreement by Lender, as determined by a court of competent
jurisdiction not subject to appeal, shall not constitute "negligence" which is
indemnified by Borrower under terms of this section.
7.13 Waiver of Right to Trial by Jury. EACH PARTY TO THIS AGREEMENT
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION (A) ARISING UNDER THIS AGREEMENT OR ANY OTHER INSTRUMENT,
DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR (B) IN ANY
WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES
HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT OR ANY OTHER INSTRUMENT,
DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR THE
TRANSACTIONS RELATED HERETO OR THERETO, IN EACH WHETHER NOW EXISTING OR
HEREAFTER ARISING: AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
IN WITNESS WHEREOF, Borrower and Lender have caused this Agreement to be duly
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
ATTEST: PEOPLES BANCORP, INC.
---------------------
("Borrower")
By: /s/ MARK F. BRADLEY By: /s/ ROBERT E. EVANS
--------------- ---------------
Title: EVP Title: President & Chief Executive
Officer
By: /s/ MARK F. BRADLEY By: /s/ JOHN W. CONLON
--------------- --------------
Title: EVP Title: Chief Financial Officer
FIRST TENNESSEE BANK
NATIONAL ASSOCIATION
("Lender")
By: /s/ G. PORTER ROBINSON
------------------
Title: Senior Vice President
Rev. June 10, 2002 version 3.
EXHIBIT A
Notification and Consent
- ------------------------
Borrower and Lender agree to the following actions related to Section 5.0 of
Loan Agreement:
5.1 Indebtedness. Borrower agrees to notify Lender in writing before any
documents for additional indebtedness are signed or otherwise executed.
Lender will submit its written response to Borrower no later than five
(5) business days of the date of original notification.
5.2 Merger, Dissolution, Acquisition of Assets, Affiliates and Subsidiaries.
Borrower will notify Lender in writing after negotiations of a definitive
agreement are completed but before any documents are signed or otherwise
executed for any type of transaction referenced in Section 5.2 of
attached Loan Agreement. Lender will submit its written response to
Borrower no later than five (5) business days of the date of original
notification.
If Lender does not submit its written denial or consent for any notification
referenced above within the specified time, Borrower may interpret said
non-response as consent.