Exhibit 10.25
TERM LOAN AGREEMENT
THIS TERM LOAN AGREEMENT (this "Agreement") is made and entered
into as of the 14th day of August, 1996, by and between NATIONAL CONSUMER
COOPERATIVE BANK, a corporation organized under the laws of the United States
that does business as the National Cooperative Bank (the "Company") and PNC
BANK, NATIONAL ASSOCIATION, a national banking association (the "Bank").
IN CONSIDERATION of the mutual covenants and agreements herein
contained, the Company and the Bank hereby agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.1 Definitions. As used in this Agreement, and unless the
context requires a different meaning, the following terms shall have the
meanings indicated (such meanings to be, when appropriate, equally applicable
to both the singular and plural forms of the terms defined):
"Accumulated Funding Deficiency" has the meaning ascribed to that term
in Section 302 of ERISA.
"Affiliate" means, with respect to a Person, any other Person that,
directly or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such first Person; unless
otherwise specified, "Affiliate" means an Affiliate of the Company.
"Asset Securitization" shall mean, with respect to any Person, a
transaction involving the sale or transfer of receivables by such Person to a
special purpose corporation or grantor trust (an "SPV") established solely
for the purpose of purchasing such receivables from the Company for Cash in
an amount equal to the Fair Market Value thereof; provided, however, that the
Company may (A) establish and maintain a reserve account containing Cash or
Securities as a credit enhancement in respect of any such sale, or (B)
purchase or retain a subordinated interest in such receivables being sold.
"Asset Securitization Recourse Liability" shall mean, with respect to
any Person, the maximum amount of such Person's liability (whether matured
or contingent) under any agreement, note or other instrument in connection
with any one or more Asset Securitizations in which such Person has agreed
to repurchase receivables or other assets, to provide direct or indirect
credit support (whether through cash payments, the establishment of reserve
accounts containing cash or Securities, an agreement to reimburse a provider
of a letter of credit for any draws thereunder, the purchase or retention of
a subordinated interest in such receivables or other assets, or other similar
arrangements), or in which such Person may be otherwise liable for all or a
portion of any SPV's obligations under Securities issued in connection with
such Asset Securitizations.
"Authorized Officer" means any of the Chairman of the Board of the
Company, the President of the Company, any Vice President of the Company,
the Treasurer of the Company, and any other officer duly authorized to
execute this Agreement on behalf of the Company.
"Bank Act" means the National Consumer Cooperative Bank Act, as amended, 12
U.S.C. Section 3001, et seq.
"Bank Lending Office" or "Lending Office of the Bank" means 100 South
Broad Street, Philadelphia, Pennsylvania 19110, or such other office or
offices situated in the United States of America as the Bank may from time
to time designate to the Company by written notice.
"Benefit Plan" means, at any time, any employee benefit plan (including
a Multiemployer Benefit Plan), the funding requirements of which (under
Section 302 of ERISA or Section 412 of the Code) are, or at any time within
six years immediately preceding the time in question were, in whole or in
part, the responsibility of the Company or an ERISA Affiliate.
"Business Day" means any day on which commercial banks are open for
business (and not required or authorized by law to close) in Philadelphia,
Pennsylvania.
"Capitalized Lease" means any obligation for Rentals which is required
to be capitalized on a balance sheet of the lessee in accordance with GAAP.
"Cash" means, as to any Person, such Person's cash and cash equivalents,
as defined in accordance with GAAP consistently applied.
"Class A Notes" means the class A notes issued by the Company to the
Secretary of the Treasury on behalf of the United States pursuant to
Section 116(a)(3)(A) [12 U.S.C. Section 3026(a)(3)(A)] of the Bank Act on the
Final Government Equity Redemption Date (the "Redemption Date") in full and
complete redemption of the class A stock of the Company held by the
Secretary of the Treasury on such Redemption Date and replacement notes for
such Class A notes in a principal amount(s) not greater than those notes
being replaced and containing identical terms of subordination as the
Class A notes. The terms "class A notes", "Final Government Equity
Redemption Date", and "class A stock" are defined in the Bank Act, which
definitions are incorporated by this reference as if fully set forth herein.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commitment Expiration Date" has the meaning specified in Section 2.1 of
this Agreement.
"Consolidated Adjusted Net Income" for any fiscal period of the Company,
means net earnings or net loss (determined on a consolidated basis) of the
Company and the Subsidiaries after income taxes for such period, but
excluding from the determination of such earnings the following items
(together with the income tax effect, if any, applicable thereto):
(a) the proceeds of any life insurance policy;
(b) any gain or loss arising from the sale of capital assets;
(c) any gain arising from any reappraisal, revaluation or write-up of
assets;
(d) any gain arising from transactions of a non-recurring or
nonoperating and material nature or arising from sales or other
dispositions relating to the discontinuance of operations;
(e) earnings of any Subsidiary accrued prior to the date it became a
Subsidiary;
(f) earnings of any corporation, substantially all the assets of which
have been acquired in any manner, realized by such other
corporation prior to the date of such acquisition;
(g) net earnings of any business entity (other than a Subsidiary) in
which the Company or any Subsidiary has an ownership interest,
unless such net earnings shall have actually been received by the
Company or such Subsidiary in the form of cash distributions;
(h) any portion of the net earnings of any Subsidiary which for any
reason is unavailable for payment of dividends to the Company or
any other Subsidiary;
(i) the earnings of any Person to which assets of the Company shall
have been sold, transferred or disposed of, or into which the
Company shall have merged, prior to the date of such transaction;
(j) any gain arising from the acquisition of any Securities of the
Company or any Subsidiary; and
(k) any amortization of deferred or other credit representing the
excess of the equity in any Subsidiary at the date of acquisition
thereof over the amount invested in such Subsidiary.
"Consolidated Adjusted Net Worth" at any time means, with respect to the
Company and the Subsidiaries (determined on a consolidated basis):
I. the amount of capital stock liability plus (or minus in the case of a
deficit) the capital surplus and earned surplus of the Company and the
Subsidiaries, less (without duplication) the sum of
(a) the net book value, after deducting any reserves applicable
thereto, of all items of the following character which are included
in the assets of the Company and the Subsidiaries:
(i) all deferred charges and prepaid expenses other than prepaid
taxes and prepaid insurance premiums;
(ii) treasury stock;
(iii) unamortized debt discount and expense and unamortized stock
discount and expense;
(iv) good will, the excess of the cost of assets acquired over
the book value of such assets on the books of the
transferor, the excess of the cost of investments in any
Person (including any Subsidiary) over the value of such
investments on the books of such Person at the time of
making such investments, organizational or experimental
expense, patents, trademarks, copyrights, trade names and
other intangibles;
(v) all receivables (other than Eurodollar deposits) owing by
Persons whose principal place of business or principal
assets are located in any jurisdiction other than the
United States of America or Canada; and
(vi) any increment resulting from reappraisal, revaluation or
write-up of capital assets subsequent to December 31, 1991,
other than any adjustment made pursuant to statement of
accounting standards number 115.
If the Company shall have any Restricted Investments outstanding at any time,
such Investments shall be excluded from Consolidated Adjusted Net Worth.
"Consolidated Debt" means at any date of determination thereof, the
aggregate amount of all Indebtedness of the Company and its Subsidiaries,
plus, without duplication, the aggregate amount of the obligations of the
Company and its Subsidiaries set forth below, at such time:
I. the principal amount of all recourse and nonrecourse interest bearing
obligations of the Company or any Subsidiary including, without
limitation, any such obligations bearing an implicit rate of interest,
such as Capitalized Leases, and interest bearing obligations secured
by any Lien upon Property owned by the Company or any Subsidiary, even
though such Person has not assumed or become liable for the payment of
such obligations;
(a) the aggregate amount of all demand and term deposits made by any
Person with the Company or any Subsidiary (including, without
limitation, certificates of deposit issued by the Company or any
Subsidiary);
(b) the face amount of all letters of credit issued by the Company or
any Subsidiary and all bankers' acceptances accepted by the
Company or any Subsidiary; and
(c) the aggregate amount of any Asset Securitization Recourse
Liabilities.
"Consolidated Earnings Available for Fixed Charges" shall mean, for any
period, the sum of: (i) Consolidated Adjusted Net Income during such period;
plus (ii) to the extent deducted in determining Consolidated Adjusted Net
Income, (a) all provisions for any Federal, state or other income taxes made
by the Company and its Subsidiaries during such period, and (b) Consolidated
Fixed Charges during such period plus (iii) contributions made by the Company
to Development Corp.
"Consolidated Effective Net Worth" at any time means
I. Consolidated Adjusted Net Worth at such time; plus
(a) the aggregate outstanding principal amount of Class A Notes at
such time.
"Consolidated Fixed Charges" shall mean, with respect to the Company on
a consolidated basis for any period, the sum of: (i) all interest and all
amortized discount and expense on all Indebtedness for borrowed money of the
Company and its Subsidiaries, plus (ii) all Rentals payable during such
period by the Company and its Subsidiaries.
"Consolidated Net Earnings" means, for any period, the net income or
loss of the Company and its Subsidiaries, as applicable (determined on a
consolidated basis for such Persons at such time), for such period, as
determined in accordance with generally accepted accounting principles in
effect at such time.
"Consolidated Net Worth" means, with respect to the Company, the sum of
(i) the common stock account of the Company determined as of any date in
accordance with GAAP consistent with the principles applied in the
preparation of the Company's consolidated statement of financial condition
for the fiscal year ended December 31, 1995; (ii) the Class A Notes; and
(iii) the consolidated retained earnings account (whether allocated or
unallocated) of the Company and its Subsidiaries determined as of any date
in accordance with GAAP consistent with the principles applied in the
preparation of the Company's consolidated statement of financial condition
for the fiscal year ended December 31, 1995.
"Consolidated Senior Debt" means all unsecured Indebtedness of the
Company and its Subsidiaries on a consolidated basis (i) for borrowed money
(including, without limitation, the Indebtedness hereunder, the Senior Notes,
Indebtedness under the NatWest Loan Agreement, and all demand and term
deposits made by any Person with the Company or any of its Subsidiaries)
which is not expressly subordinate or junior to any other Indebtedness, plus
without duplication, (ii) all "guarantees," as defined in Section 6.2(d)
hereof, and (iii) Asset Securitization Recourse Liabilities to the extent,
but only to the extent, that such obligations have matured and remain unpaid.
"Consolidated Senior Obligations" at any time means, with respect to
the Company and the Subsidiaries (determined on a consolidated basis), the
sum of
I. the aggregate unpaid principal amount of Consolidated Senior Debt, plus
(a) the aggregate amount of all Capitalized Leases, plus
(b) Restricted Guarantees computed on the basis of total outstanding
contingent liability.
"Consolidated Subsidiary" means, with respect to any Person at any time,
any Subsidiary or other Person the accounts of which would be consolidated
with those of such first Person in its consolidated financial statements as
of such time; unless otherwise specified, "Consolidated Subsidiary" means a
Consolidated Subsidiary of the Company.
"Credit Agreement Related Claim" means any claim (whether civil, criminal
or administrative and whether sounding in tort, contract or otherwise) in any
way arising out of, related to, or connected with, this Agreement, the Note,
or the relationship established hereunder or thereunder.
"Default" means an Event of Default or an event or condition the
existence or occurrence of which would, with the lapse of time or the giving
of notice or both, become an Event of Default.
"Default Rate" means the rate of interest applicable under Section 3.3
from time to time.
"Development Corp." means NCB Development Corporation, a District of
Columbia non-profit corporation established pursuant to 12 U.S.C. Section
3051(b).
"Dollars", and the sign "$" mean such coin or currency of the United
States of America as at the time shall constitute legal tender for the
payment of public and private debts.
"Eligible Cooperatives" has the meaning assigned to such term in
Section 3015 of Title 12 of the United States Code.
"Eligible Derivatives" means derivative Securities which are sold in
the ordinary course of the business of the Company and its Subsidiaries for
the purpose of hedging or otherwise managing portfolio risk.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" means any Person, including a Subsidiary or other
Affiliate, that is a member of any group of organizations within the meaning
of Code Sections 414(b), (c), (m) or (o) of which the Company is a member.
"Events of Default" means the occurrence of any of the events described in
Section 7.1 of this Agreement.
"Exchange Act" means the Securities and Exchange Act of 1934, as
amended, and any successor Federal statute.
"Fair Market Value" means, at any time with respect to any Property, the
sale value of such Property that would be realized in an arm's-length sale
at such time between an informed and willing buyer and an informed and
willing seller, under no compulsion to buy or sell, respectively.
"Fixed Charges" means, with respect to the Company, for any period, the
sum of: (i) all interest and all amortized discount and expense on all
Indebtedness for borrowed money of the Company, plus (ii) all Rentals payable
during such period by the Company.
"Funded Debt" means all Indebtedness for borrowed money that by its
terms matures more than twelve months from the date as of which any
determination of Funded Debt is made, any and all Indebtedness maturing
within twelve months from such date that is renewable at the option of the
obligor to a date beyond twelve months from the date of such determination,
including any Indebtedness renewable or extendable (whether or not
theretofore renewed or extended) under, or payable from the proceeds of
other Indebtedness that may be incurred pursuant to the provisions of, any
revolving credit agreement or other similar agreement.
"GAAP" means generally accepted accounting principles.
"Government Obligations" means any and all direct obligations of the
United States of America or obligations in respect of which the payment of
the principal of, and interest thereon, is unconditionally guaranteed by the
United States of America.
"Governmental Body" means (i) the United States of America, any State
thereof, any other country or any political subdivision of such other
country, or any department, agency, commission, board, bureau or
instrumentality of the United States of America, any State thereof,
any other country or political subdivision of such other country or any
subdivision of any of them, and (ii) any quasi-governmental body, agency or
authority (including any central bank) exercising regulatory authority over
the Bank pursuant to applicable law in respect of the transactions
contemplated by this Agreement.
"Guarantees" means all obligations of any Person guaranteeing or in
effect guaranteeing any indebtedness or obligation or dividend of any other
Person (the "primary obligor") in any manner, whether directly or indirectly,
including, without limitation, all obligations incurred through an agreement
contingent or otherwise, by such Person
(a) to purchase any indebtedness or obligation or any Property
constituting security therefor;
(b) to advance or supply funds;
(i) for the purchase or payment of any indebtedness or obligation,
or
(ii) to maintain working capital, equity capital or other balance
sheet condition or otherwise to advance or make available
funds for the purchase or payment of any indebtedness or
obligation;
(c) to purchase Property, Securities or services primarily for the
purpose of assuring the owner of any indebtedness or obligation
of the ability of the primary obligor to make payment of the
indebtedness or obligation; or
(d) otherwise to assure the owner of the indebtedness or obligation
of the primary obligor against loss in respect thereof.
Liabilities or endorsements in the ordinary course of business of checks and
other negotiable instruments for deposit or collection and obligations of
the Company or the Subsidiaries to acquire assets from the Bank in the
ordinary course of business shall not be deemed "Guarantees."
"Indebtedness" means, with respect to any Person, all (i) liabilities
or obligations, direct and contingent, which in accordance with GAAP would
be included in determining total liabilities as shown on the liability side
of a balance sheet of such Person at the date as of which Indebtedness is
to be determined, including, without limitation, contingent liabilities
which, in accordance with such principles, would be set forth in a specific
Dollar amount on the liability side of such balance sheet; (ii) liabilities
or obligations of others for which such Person is directly or indirectly
liable, by way of guaranty (whether by direct guaranty, suretyship,
discount, endorsement, take-or-pay agreement, agreement to purchase or
advance or keep in funds or other agreement having the effect of a guaranty)
or otherwise; (iii) liabilities or obligations secured by liens on any
assets of such Person, whether or not such liabilities or obligations shall
have been assumed by it; (iv) liabilities or obligations of such Person,
direct or contingent, with respect to letters of credit issued for the
account of such Person and banker's acceptances credited for such Person;
(v) obligations in the form of demand and term deposit accounts maintained
by such Person; and (vi) Asset Securitization Recourse Liabilities to the
extent, but only to the extent, that such obligations have matured and
remain unpaid.
"Interest Payment Date" means each January 1, April 1, July 1 and
October 1 after the Loan Date and up to the Maturity Date.
"Investment" in any Person by the Company means: (a) the amount paid or
committed to be paid, or the value of property or services contributed or
committed to be contributed, by the Company for or in connection with the
acquisition by the Company of any stock, bonds, notes, debentures,
partnership or other ownership interests or other securities of such Person;
and (b) the amount of any advance, loan or extension of credit to, or
guaranty or other similar obligation with respect to any Indebtedness of,
such Person by the Company and (without duplication) any amount committed to
be advanced, loaned, or extended to, or the payment of which is committed to
be assured by a guaranty or similar obligation for the benefit of, such
Person by the Company.
"Lien" means any mortgage, deed of trust, pledge, security interest,
encumbrance, lien or charge of any kind (including any agreement to give any
of the foregoing), any conditional sale or other title retention agreement,
any lease in the nature of any of the foregoing, and the filing of or
agreement to give any financing statement under the Uniform Commercial
Code of any jurisdiction.
"Loan" means the loan to be made by the Bank to the Company pursuant to
this Agreement.
"Loan Date" means the date when the Loan is advanced pursuant to
Section 2.1 hereof and which shall not be later than August 31, 1996.
"Maturity Date" means the date twenty four (24) months after the Loan
Date.
"Multiemployer Benefit Plan" means any Benefit Plan that is a
multiemployer plan as defined in Section 4001(a)(3) of ERISA.
"NatWest Loan Agreement" means the Loan Agreement dated as of
December 15, 1993 among the Company, the Banks listed therein, and
National Westminster Bank USA, now known as Fleet Bank, N.A., as Agent,
as amended through the date hereof.
"NCB Financial Corporation" means NCB Financial Corporation, a Delaware
Corporation.
"NCB Mortgage" means NCB Mortgage Corporation, a Delaware corporation.
"NCB Senior Obligations" means, at any date of determination thereof, with
respect to the Company, the sum of:
I. the aggregate unpaid principal amount of Senior Debt, plus
(a) the aggregate amount of all Capitalized Leases, plus
(b) Restricted Guarantees computed on the basis of total outstanding
contingent liability, plus
(c) Asset Securitization Recourse Liabilities of the Company (meeting
the conditions set forth in either clause (i) or clause
(ii) below):
(i) to the extent, but only to the extent, that such obligations
arise from the Company's obligation to repurchase receivables
or other assets as a result of a default in payment by the
obligor thereunder or any other default in performance by
such obligor under any agreement related to such receivables;
or
(ii) if the Company shall maintain a reserve account containing
Cash or Securities in respect of any such obligations or
shall retain or purchase a subordinated interest therein,
to the extent, but only to the extent, of the amount of
such reserve account or subordinated interest.
"Note" means the Promissory Note issued to the Bank by the Company
pursuant to this Agreement, substantially in the form (appropriately
completed) of Exhibit A to this Agreement.
"Notice of Borrowing" means the notice given to the Bank by the Company
pursuant to and in accordance with Section 4.1 of this Agreement.
"Paid-in-Capital" shall have the meaning ascribed to it by GAAP.
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"Permitted Liens" means (i) pledges or deposits by the Company under
workman's compensation laws, unemployment insurance laws, social security
laws, or similar legislation, or good faith deposits in connection with bids,
tenders, contracts (other than for the payment of Indebtedness of the
Company), or leases to which the Company is a party, or deposits to secure
public or statutory obligations of the Company or deposits of cash or U.S.
government Bonds to secure surety, appeal, performance or other similar
bonds to which the Company is a party, or deposits as security for contested
taxes or import duties or for the payment of rent; (ii) Liens imposed by law,
such as carriers', warehousemen's, materialmen's and mechanics' liens, or
Liens arising out of judgments or awards against the Company with respect to
which the Company at the time shall currently by prosecuting an appeal or
proceedings for review; (iii) Liens for taxes not yet subject to penalties
for non-payment and Liens for taxes the payment of which is being contested
as permitted by Section 6.10) hereof; and (iv) Liens incidental to the
conduct of the business of the Company or to the ownership of its property
which were not incurred in connection with Indebtedness of the Company, all
of which Liens do not in the aggregate materially detract from the value of
the properties to which they relate or materially impair their use in the
operation of the business of the Company.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association,
joint venture or other entity, or a government or any political subdivision
or agency thereof, a court, or any other legal entity, whether acting in an
undivided fiduciary or other capacity.
"Prepayment Amount" means the present value, discounted at the
Reinvestment Rates, of the positive amount by which: (a) the interest the
Bank would have earned had the amount of principal prepaid been paid on the
Maturity Date at the Note's interest rate exceeds, (b) the interest the Bank
would earn by reinvesting the amount of principal prepaid at the Reinvestment
Rates from the date of such prepayment to the Maturity Date.
"Prohibited Transaction" means any transaction that is prohibited under
Code Section 4975 or ERISA Section 406 and not exempt under Code Section 4975
or ERISA Section 408.
"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
"Qualified Assets" means, at any date of determination thereof, the sum of
the following items (a), (b) and (c) owned by the Company:
I. The principal amount of all promissory notes and other interest bearing
obligations acquired by the Company in the ordinary course of its
business less (i) reserves for credit losses applicable thereto, and
(ii) unearned income;
(a) Cash on hand and in banks; and
(b) Investments other than "Restricted Investments" (as such term is
defined in the Senior Note Agreements as in effect on the date
hereof).
"Regulatory Change" means any applicable law, interpretation, directive,
request or guideline (whether or not having the force of law), or any change
therein or in the administration or enforcement thereof, that becomes
effective or is implemented or first required or expected to be complied
with after the date hereof, whether the same is (i) the result of an
enactment by a government or any agency or political subdivision thereof, a
determination of a court or regulatory authority, or otherwise or (ii)
enacted, adopted, issued or proposed before or after the date hereof,
including any such that imposes, increases or modifies any tax, reserve
requirement, insurance charge, special deposit requirement, assessment or
capital adequacy requirement, but excluding any such that imposes, increases
or modifies any income or franchise tax imposed upon the Bank by any
jurisdiction (or any political subdivision thereof) in which the Bank or
any office is located.
"Reinvestment Rates" means the per annum rates of interest equal to
three-quarters of one percent (3/4%) above the rates of interest reasonably
determined by the Bank to be in effect not more than seven days prior to date
of any prepayment of principal in the secondary market for United States
Treasury Obligations in amount(s) and with a maturity which correspond (as
closely as possible) to the principal amount(s) prepaid and to the Maturity
Date.
"Rentals" means all fixed rentals (including as such all payments that
the lessee is obligated to make to the lessor on termination of the lease or
surrender of the property) payable by the Company, as lessee or sublessee
under a lease of real or personal property, but shall be exclusive of any
amounts required to be paid by the Company (whether or not designated as
rents or additional rents) on account of maintenance, repairs, insurance,
taxes and similar charges. Fixed rents under any so-called "percentage
leases" shall be computed solely on the basis of the minimum rents, if any,
required to be paid by the lessee regardless of sales volume or gross
revenues.
"Restricted Guarantees" at any time means all Guarantees by the Company
of obligations of others that constitute sum certain obligations at the time
such Guarantees are incurred.
"Restricted Investments" at any time means any investment that is not
permitted under Section 6.2(i) of this Agreement.
"Restricted Payment" means any payment by the Company of the type
described in Section 6.2(f) of this Agreement.
"Security" shall have the meaning ascribed thereto in Section 2(1) of
the Securities Act, as amended; provided, however, that Asset Securitization
Recourse Liabilities shall not constitute "Securities" except (i) to the
extent that such obligations arise from the Company's obligation to
repurchase receivables or other assets as a result of a default in payment
by the obligor thereunder or any other default in performance by such
obligor under any agreement related to such receivables or (ii) if the
Company shall maintain a reserve account containing Cash or Securities in
respect of any such obligations or shall retain or purchase a subordinated
interest therein to the extent of the amount of such reserve account or
subordinated interest.
"Selected Banks" means PNC Bank, Delaware, the bank signatories to the
NatWest Loan Agreement, and the one hundred largest commercial banks that
either are United States national banking associations or are chartered
under the laws of a state of the United States and that have ratings by
Thompson BankWatch, Inc. no lower than B/C.
"Senior Debt" means all Indebtedness of the Company for borrowed money
(including, without limitation, all Indebtedness under this Agreement, the
Senior Note Agreements and the Natwest Loan Agreement) that is not expressly
subordinate or junior to any other Indebtedness.
"Senior Note Agreements" means, collectively, (i) the separate Senior
Note Agreements dated as of December 16, 1994 in respect of the Company's
(A) 8.84% Series A Senior Notes due March 31, 2000, (B) 8.85% Series B
Senior Notes due March 31, 2000, and (C) 7.96% Series C Senior Notes due
March 31, 2000, (ii) the separate Assumption Agreement and Amended and
Restated Senior Note Agreement dated as of December 1, 1993 in respect of
the Company's (A) Amended and Restated 8.18% Series A Senior Notes due
June 24, 1997, (B) Amended and Restated 8.32% Series B Senior Notes due
December 24, 1997, and (C) Amended and Restated 8.44% Series C Senior Notes
due June 24, 1998, as each may be amended from time to time, (iii) Notes
issued in the amount of $30,000,000 due September 28, 2001 pursuant to a
Master Shelf Agreement dated as of December 30, 1994, for up to $50,000,000
of Notes between the Company and The Prudential Insurance Company of America,
and (iv) the separate Senior Note Agreements dated as of December 15, 1995,
with respect to the Company's 6.60% Series D and 6.59% Series E Senior Notes
due December 31, 2002.
"Senior Notes" shall mean the Senior Notes issued by the Company under
the terms and conditions of the Senior Note Agreements.
"SPV" shall have the meaning assigned to such term in the definition of
"Asset Securitization" in this Article 1 and NCB I, Inc., NCB Retail Finance
Corporation and any other Subsidiary of the Company having powers limited to
the holding of regular or residual interests arising out of an Asset
Securitization.
"Subsidiary" shall mean any corporation a majority of the capital stock
of which at the time outstanding, having ordinary voting power for the
election of directors, is owned by the Company directly or indirectly.
"Termination Event" means, with respect to any Benefit Plan, (i) any
Reportable Event with respect to such Benefit Plan, (ii) the termination of
such Benefit Plan, or the filing of a notice of intent to terminate such
Benefit Plan, or the treatment of any amendment to such Benefit Plan as a
termination under ERISA Section 4041(c), (iii) the institution of proceedings
to terminate such Benefit Plan under ERISA Section 4042 or (iv) the
appointment of a trustee to administer such Benefit Plan under ERISA
Section 4042.
"Voting Stock" means Securities of any class or classes of a corporation
the holders of which are ordinarily, in the absence of contingencies,
entitled to vote in the election of the corporate directors (or persons
performing similar functions).
Section 1.2 Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with generally accepted
accounting principles in the United States.
Section 1.3 Time Period Computations. In the computation of a period
of time specified in this Agreement from a specified date to a subsequent
date, the word "from" means "from and including" and the words "to" and
"until" mean "to but excluding".
ARTICLE II
GENERAL LOAN PROVISIONS
Section 2.1 The Loan. Subject to the terms and conditions of this
Agreement, on the Loan Date the Bank shall lend to the Company, and the
Company shall borrow from the Bank, the principal amount of FIFTEEN MILLION
UNITED STATES DOLLARS ($15,000,000) (the "Loan") in a single advance.
Section 2.2 Term of the Loan. The entire principal amount of the
Loan shall be due and payable on the Maturity Date.
Section 2.3 Proceeds of the Loan. The Bank shall, upon the Company's
satisfaction of the conditions specified in Article IV of this Agreement,
make the entire principal amount of the Loan available to the Company before
12:00 Noon (Philadelphia, Pennsylvania time) on the Loan Date in Dollars in
immediately available funds at the bank (and for credit to the account of
the Company at such bank designated by the Company) designated by the Company
in the Notice of Borrowing.
Section 2.4 The Notes. The Loan shall be evidenced by a Promissory
Note of the Company, which shall be substantially in the form of Exhibit A
to this Agreement (appropriately completed), dated the Loan Date, payable to
the order of the Bank in the principal amount of the Loan. The Bank's
statement of account, ledger or other relevant record shall, in the absence
of manifest error, be conclusive as the statement of the amount of principal
of and interest on the Loan and other amounts owing under the Note.
ARTICLE III
INTEREST AND REPAYMENT
Section 3.1 Interest on the Loan. The Loan shall bear interest at the
rate of six and seventy-one hundredths percent (6.71%) per annum.
Section 3.2 Additional Interest. If, after the date of this
Agreement, any Regulatory Change
I. shall subject the Bank to any tax, duty or other charge with respect to
its obligation to make or maintain the Loan, or shall change the basis
of taxation of payments to the Bank of the principal of or interest on
the Loan in respect of any other amounts due under this Agreement in
respect of its obligation to make the Loan (except for changes in the
rate of tax on the overall net income of the Bank); or
(i) shall impose, modify or deem applicable any reserve, special
deposit, capital adequacy or similar requirement against
assets of, deposits with or for the account of, or credit
extended by, the Bank or shall impose on the Bank any other
condition affecting (1) the obligation of the Bank to make
or maintain the Loan, or (2) the Note;
and the result of any of the foregoing is to increase the cost to the Bank of
making or maintaining the Loan or to reduce the amount of any sum received or
receivable by the Bank under this Agreement or under the Note, by an amount
reasonably deemed by the Bank to be material, then, within fifteen days after
demand by the Bank, the Company shall pay to the Bank such additional amount
or amounts as will compensate the Bank for such increased cost or reduction.
A certificate of the Bank setting forth the basis for determining such
additional amount or amounts necessary to compensate the Bank shall be
conclusive in the absence of manifest error.
Section 3.3 Interest after Maturity. In the event the Company shall
fail to make any payment of the principal amount of, or interest on, the
Loan when due (whether by acceleration or otherwise), after giving effect to
any applicable grace period provided for in this Agreement, the Company
shall pay interest on such unpaid amount, payable from time to time on
demand, from the date such amount shall have become due to the date of
payment thereof, accruing on a daily basis, at a per annum rate (the
"Default Rate") equal to the sum of the interest rate on the Loan in effect
immediately before such amount became due, plus two percent (2.0%).
Section 3.4 Payment and Computations.
(a) All payments required or permitted to be made to the Bank under
this Agreement or the Note shall be made to the Bank in Dollars at the
Lending Office of the Bank in immediately available funds.
(b) Interest on the Loan shall be computed on the basis of a year of
360 days consisting of 12 months of 30 days each and, in the case of a
portion of a month, for the actual number of days (including the first day
but excluding the last day) elapsed.
(c) Interest on the Loan shall be payable in arrears on the Interest
Payment Dates; provided, that in the event that any Interest Payment Date
shall be a day which is not a Business Day, the obligation to make such
payment shall be deferred to the next succeeding Business Day unless such
Business Day falls in another calendar month, in which case the Interest
Payment Date shall be advanced to the next preceding Business Day.
(d) Whenever any payment of principal is required or permitted to be
made on a day which is not a Business Day, the obligation of the Company to
make such payment shall be deferred until the next succeeding Business Day
and, in such case, such extension of time shall be included in the
computation of interest in respect of such principal amount at the rate
in effect at the date such principal amount was otherwise due and payable.
Section 3.5 Payment at Maturity. Any principal amount of the Note
theretofore not repaid, together with any accrued interest thereon, shall be
due and payable in full on the Maturity Date.
Section 3.6 Optional Prepayments; Certain Early Repayments.
I. Subject to the terms and conditions of this Section 3.6, the
Company may, at its sole option, prepay the principal amount of the Loan in
whole or in part (in any amount of $1,000,000 or more) at any time and from
time to time (each an "Optional Prepayment"). Each Optional Prepayment shall
be accompanied by the payment of all accrued and unpaid interest to the date
of such Optional Prepayment on the principal amount of such Optional
Prepayment.
(a) In respect of each Optional Prepayment proposed to be made by the
Company, the right of the Company to make such Optional Prepayment is
subject to the Bank's receipt from the Company, at least three Business Days
prior to the date specified therein as the date on which Optional Prepayment
is to be made, of a written notice (which shall be irrevocable) specifying
(i) the principal amount of such Optional Prepayment and (ii) the date
(which shall be a Business Day) on which such Optional Prepayment will be
made.
(b) If the Company prepays all or any part of the outstanding principal
balance of the Loan in advance of the Maturity Date (whether due to optional
prepayment, acceleration or for any other reason), in addition to the
payments on principal and accrued and unpaid interest, the Company shall pay
to the Bank, together with such prepayment, the Prepayment Amount.
ARTICLE IV
CONDITIONS PRECEDENT TO THE LOAN
Section 4.1 Delivery on or Prior to Loan Date. The obligation of the
Bank to make the Loan to the Company hereunder is subject to the condition
precedent that the Bank shall have received an irrevocable Notice of
Borrowing from the Company on the Business Day prior to the requested Loan
Date that specifies the Loan Date (which shall be a Business Day) and that
the Bank shall have received from the Company, on or prior to the Loan Date,
the following instruments, each dated as of the Loan Date:
(a) The Note, duly executed by the Company;
(b) An opinion of counsel to the Company in form and substance
satisfactory to the Bank;
(c) A certified copy of the resolutions of the Board of Directors of
the Company authorizing the execution and delivery of this Agreement and the
Note;
(d) A certificate of the Secretary, an Assistant Secretary or an
Assistant Treasurer of the Company certifying the names and true signatures
of the Authorized Officers;
(e) A certified copy of the By-Laws of the Company as in effect on the
Loan Date; and
(f) Evidence satisfactory to the Bank that the committed amount of the
long-term borrowing facilities extended to the Company, including the Loan
to be made hereunder, does not exceed $250,000,000.
Section 4.2 Further Condition Precedent to the Loan. The obligation
of the Bank to make the Loan shall be subject to the further conditions
precedent that on the relevant Loan Date the following statements shall be
true and correct as of the Loan Date:
I. The representations and warranties of the Company contained in Article V
are correct;
(a) No event has occurred and is continuing, or would result from the
Loan after giving effect to the application of the proceeds therefrom, which
constitutes an Event of Default or would constitute an Event of Default but
for the requirement that notice be given or time elapse or both;
(b) No Default shall have occurred and be continuing at the time the
Loan is to be made or would result from the making of the Loan or from the
application of the proceeds thereof; and
(c) All legal matters incident to the closing of the transactions
contemplated by this Agreement and the making of the Loan shall be
satisfactory to the Bank and its counsel.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants that:
Section 5.1 Existence, Power and Authority. Each of the Company and
its Subsidiaries is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation, with
full corporate power and authority to carry on its business as currently
conducted and to own or hold under lease its property; the Company is duly
qualified or diligently pursuing to become qualified to do business as a
foreign corporation in good standing in each other jurisdiction in which the
conduct of its business or the maintenance of its property requires it to be
so qualified; the Company has full corporate power and authority to execute
and deliver this Agreement and the Note and to carry out the transactions
contemplated by this Agreement.
Section 5.2 Authorization; Enforceable Obligations. This Agreement
and the Note have been duly authorized and have been or will be duly
executed and delivered by the Company and constitute, or when executed and
delivered pursuant hereto will constitute, a legal, valid and binding
obligation of the Company enforceable against the Company in accordance with
their terms (except as such enforceability may be limited by general
principles of the law of equity or by any applicable bankruptcy,
reorganization, insolvency, moratorium or similar laws affecting creditors'
rights generally).
Section 5.3 No Legal Bar. The execution, delivery and performance by
the Company of this Agreement and of the Note, (i) do not and will not
violate the certificate of incorporation or charter, by-laws or any
preferred stock provision of the Company or (ii) do not and will not violate
or conflict with any law, governmental rule or regulation or any judgment,
writ, order, injunction, award or decree of any court, arbitrator,
administrative agency or other governmental authority applicable to the
Company or any indenture, mortgage, contract, agreement or other undertaking
or instrument to which the Company is a party or by which its property may
be bound and (iii) do not and will not result in the creation or imposition
of any lien, mortgage. security interest or other encumbrance on any of its
property pursuant to the provisions of any such indenture, mortgage,
contract, agreement or other undertaking or instrument.
Section 5.4 Consents. The execution, delivery and performance by the
Company of this Agreement and of the Note, do not and will not require any
consent, which has not been obtained, of any other Person (including,
without limitation, stockholders of the Company) or any consent, license,
permit, authorization or other approval of, any giving of notice to,
exemption by, any registration, declaration or filing with, or any taking of
any other action in respect of, any court, arbitrator, administrative agency
or other governmental authority.
Section 5.5 Litigation. Except as previously disclosed to the Bank
in writing, there is no action, suit, investigation or proceeding by or
before any court, arbitrator, administrative agency or other governmental
authority pending or, to the knowledge of the Company, threatened (i) which
involves any of the transactions contemplated by this Agreement or (ii)
against or affecting the Company which could be reasonably expected to
materially adversely affect the financial condition, business or operation
of the Company.
Section 5.6 No Default. The Company is not in default under any
material order, writ. injunction, award or decree of any court, arbitrator,
administrative agency or other governmental authority binding upon it or its
property, or any material indenture, mortgage, contract. agreement or other
undertaking or instrument to which it is a party or by which its property
may be bound, and nothing has occurred which would materially adversely
affect the ability of the Company, to carry on its business or perform its
obligations under any such material order, writ, injunction, award or decree
or any such material indenture, mortgage, contract, agreement or other
undertaking or instrument.
Section 5.7 Financial Condition. The consolidated balance sheet of
the Company and its Consolidated Subsidiaries as at December 31, 1995, and
the related consolidated statements of income, stockholders' or members'
equity and cash flows for the fiscal year ended on such date, reported upon
by Deloitte & Touche, and the unaudited consolidated statement of financial
condition of the Company and its Consolidated Subsidiaries as at
March 31, 1996, and the related consolidated statements of income and
stockholders' or members' equity for the three (3) months ended that date,
present fairly the consolidated financial condition of the Company and its
Consolidated Subsidiaries as of said date and the consolidated results of
their operations for such fiscal year, in conformity with GAAP.
No material adverse changes have occurred in the financial condition of the
Company or its Consolidated Subsidiaries since March 31, 1996.
Section 5.8 Use of Proceeds. The Company shall use the proceeds of
the Loan for its general corporate purposes. None of the proceeds of the
Loan shall be used to purchase or carry, or reduce or retire or refinance
any credit incurred to purchase or carry, any margin stock (within the
meaning of Regulations U and X of the Board of Governors of the Federal
Reserve System) or to extend credit to others for the purchasing or carrying
of any margin stock. If requested by the Bank, the Company shall complete
and sign Part I of a copy of Federal Reserve Form U-1 referred to in
Regulation U and deliver such copy to the Bank.
Section 5.9 Company Not an Investment Company. The Company 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.
Section 5.10 Environmental Matters. The Company and its Consolidated
Subsidiaries conduct their respective operations in compliance with all
applicable laws and regulations concerning the discharge of substances into
the environment and other environmental control matters, except to the
extent that non-compliance would not have a material adverse effect on
the business, results of operations or condition (financial or otherwise) of
the Company or its Consolidated Subsidiaries taken as a whole. Neither the
Company nor any of its Consolidated Subsidiaries has any liability,
contingent or otherwise, under any law, ordinance or regulation relating to
the storage, transport, disposal or release of "oil", "petroleum products",
"hazardous substance", "hazardous waste", "hazardous material", "hazardous
chemical substance", "refuse" or any other term of similar import (as such
terms are defined in any such law, ordinance or regulation), except to the
extent that any such liability would not have a material adverse effect on
the business, results of operations or condition (financial or otherwise)
of the Company or its Consolidated Subsidiaries taken as a whole.
ARTICLE VI
COVENANTS
Section 6.1 Affirmative Covenants. The Company covenants and agrees
that, so long as this Agreement shall remain in effect or any of the
principal of or interest on the Note shall remain unpaid:
(a) The Company will deliver to the Bank, within ninety (90) days after
the end of each fiscal year, the consolidated and consolidating balance
sheet of the Company and its Consolidated Subsidiaries as at the end of such
fiscal year, and the related consolidated and consolidating statements of
income, stockholders' or members' equity and cash flows for such fiscal
year, accompanied by a certificate of independent public accountants of
recognized standing satisfactory to the Bank, which certificate will contain
no material exceptions or qualifications except such as are acceptable to
the Bank;
(b) The Company will deliver to the Bank, within sixty (60) days after
the end of each of the first three quarters of each fiscal year, the
consolidated balance sheet of the Company and its Consolidated Subsidiaries
as at the end of such quarter, and the related consolidated statements of
income and stockholders' equity for such quarter, certified (subject to
year-end audited-adjustments) by an authorized accounting or financial
officer of the Company;
(c) The Company shall deliver to the Bank within thirty (30) days after
it files them with the Securities and Exchange Commission copies of the
annual reports and of the information, documents, and other reports (or
copies of such portions of any of the foregoing as the Securities and
Exchange Commission may by rules and regulations prescribe) which the Company
is required to file with the Securities and Exchange Commission pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934;
(d) The Company will deliver to the Bank, from time to time, such
additional information regarding its financial condition, business or affairs
as the Bank may reasonably request, including without limitation a copy of
any Senior Note Agreement and other agreement evidencing Indebtedness of the
Company for borrowed money then in effect;
(e) The Company will deliver to the Bank, simultaneously with the
delivery of each set of financial statements referred to in (a) above, a
certificate of the President, any Vice President or the Treasurer of the
Company (i) stating that in the course of the performance of his duties he
would normally obtain knowledge of any condition or event which constitutes
an Event of Default, or any event, act or condition which with notice or
lapse of time or both would constitute an Event of Default, (ii) stating
whether or not he has obtained knowledge of any such condition, act or event
and, if so, specifying each such condition, act or event of which he has
knowledge and the nature and period of existence thereof and the action the
Company is taking and proposes to take with respect thereto; and
(iii) setting forth the calculations necessary to establish the Company's
compliance with Section 6.1(m) hereof;
(f) The Company will preserve and maintain its corporate existence and
each of the material rights, privileges, licenses and franchises, which are
necessary or desirable in the normal conduct of its business. The Company
will comply with all applicable laws, rules, regulations, and orders of any
governmental or regulatory body or authority, a breach of which could have a
material adverse effect on the financial condition or business (taken as a
whole) of the Company, except where contested in good faith and by proper
proceedings;
(g) Promptly after becoming aware thereof the Company will deliver to
the Bank notice of any Event of Default and any event which, with the passage
of time or the giving of notice or both, would become an Event of Default;
(h) The Company will keep proper books of record and account in a
manner reasonably satisfactory to the Bank in which, true, complete and
correct entries shall be made of all dealings or transactions in relation
to its business and activities;
(i) The Company will permit the Bank to make or cause to be made (and,
after the occurrence of and during the continuance of an Event of Default,
at the Company's expense), inspections and audits of any books, records and
papers of the Company and to make extracts therefrom and copies thereof, or
to make inspections and examinations of any properties and facilities of the
Company, on reasonable notice, at all such reasonable times and as often as
the Bank may reasonably require, in order to assure that the Company is and
will be in compliance with its obligations under this Agreement;
(j) The Company will pay and discharge all of its obligations and
liabilities, including, without limitation, all taxes, assessments and
governmental charges upon its income and properties, when due, unless and
to the extent only that such obligations, liabilities, taxes, assessments
and governmental charges shall be contested in good faith and by appropriate
proceedings and that proper and adequate book reserves relating thereto are
established by the Company, and then only to the extent that a bond is filed
in cases where the filing of a bond is necessary to avoid the creation of
a lien or encumbrance against any of its properties;
(k) The Company will promptly notify the Bank in writing of any
litigation, legal proceeding or dispute affecting the Company whether or not
fully covered by insurance, and regardless of the subject matter thereof
(excluding, however, any actions relating to workmen's compensation claims
or negligence claims relating to use of motor vehicles, if fully covered by
insurance, subject to deductibles, and any disputes in the ordinary course
of business involving amounts less than Two Hundred Fifty Thousand Dollars
($250,000));
(l) The Company will:
(i) Maintain with responsible insurance companies rated "A" or
better by A.M. Best Co. such insurance on such of its properties, in
such amounts and against such risks as is customarily maintained by
similar businesses (including, without limitation, public liability,
embezzlement or other criminal misappropriation insurance); file with
the Bank upon its request a detailed list of the insurance then in
effect, stating the names of the insurance companies, the amounts and
rates of the insurance, dates of the expiration thereof and the
properties and risks covered thereby; and, within 10 days after
notice in writing from the Bank, obtain such additional insurance as
the Bank may reasonably request; and
(ii) Carry all insurance available through the PBGC or any private
insurance companies covering its obligations (if any) to the PBGC;
(m) The Company will maintain:
(i) At all times, Consolidated Effective Net Worth in an amount
not less than the sum of (i) Two Hundred Sixty-Five Million Dollars
($265,000,000) plus (ii) the sum, for all fiscal quarters of the
Company ended subsequent to January 1, 1993, of the greater of (A)
Zero Dollars ($0) and (B) fifty percent (50%) of Consolidated Net
Earnings for each such fiscal quarter;
(ii) At all times, Consolidated Adjusted Net Worth in an amount
not less than the sum of (i) One Hundred Million Dollars
($100,000,000) plus (ii) the sum, for all fiscal quarters of the
Company ended subsequent to January 1, 1993, of the greater of
(A) Zero Dollars ($0) and (B) fifty percent (50%) of Consolidated
Net Earnings for each such fiscal quarter;
(iii) With respect to the Company at all times, Investments
of the types described in Section 6.2(i)(i) through (xii) in an
aggregate amount not less than Twenty-Five Million ($25,000,000)
Dollars;
(iv) With respect to the Company for each period of four (4)
consecutive fiscal quarters of the Company, Consolidated Earnings
Available for Fixed Charges not less than one hundred ten percent
(110%) of Consolidated Fixed Charges for such period;
(v) With respect to the Company, Paid-in-Capital in each of the
following Subsidiaries in an amount not greater than the following
amounts:
Amount of
Subsidiary Paid-in-Capital
NCB Financial Corporation $15,000,000
NCB Mortgage $15,000,000
(vi) With respect to the Company at all times, Investments in
Subsidiaries (other than as set forth in subsection 6.1(m)(v) above
and excluding SPV's and secured loans to NCB Mortgage) in an
aggregate amount with respect to all such Subsidiaries of
not greater than $30,000,000;
(vii) At all times, a ratio of Consolidated Debt to Consolidated
Adjusted Net Worth in an amount not greater than 8.0 to 1.0;
For purposes of calculating the ratio set forth in subsection
6.1(m)(vii) above and in subsection 6.1(m)(viii) below only,
"Consolidated Adjusted Net Worth" shall be reduced by the amount by
which the sum of 75% of (i) 90 day overdue accounts,
(ii) non-performing loans, (iii) REO, in substance foreclosure and
other miscellaneous repossession and (iv) modified loans, exceed
the reserves for credit losses established by the Company and its
Subsidiaries;
(viii) At all times, a ratio of Consolidated Senior Debt of the
Company to Consolidated Adjusted Net Worth in an amount not greater
than 6.5 to 1.0; and
(ix) Qualified Assets of not less than one hundred (100%) percent
of the sum (at any date of determination thereof) of:
a. NCB Senior Obligations, plus
b. the aggregate unpaid principal amount of Subordinated
Debt (as defined in the Senior Note Agreements as in effect on the
date hereof), less
c. the aggregate unpaid principal amount of Class A Notes;
(n) The Company will comply and remain at all times in compliance with
all material provisions of the Senior Note Agreements and all other
agreements evidencing Indebtedness of the Company for borrowed money.
Section 6.2 Negative Covenants. The Company covenants and agrees that,
so long as this Agreement shall remain in effect or any of the principal of
or interest on the Note shall remain unpaid, the Company, will not:
(a) Merge or consolidate with any Persons (whether or not the Company
is the surviving entity), except a Subsidiary may consolidate with, or merge
into, the Company or another Subsidiary;
(b) Sell or transfer any of its property to anyone (other than to an
entity at least fifty percent (50%) of the capital stock of which at the
time outstanding, having ordinary voting power for the election of directors,
is owned by the company directly or indirectly through Subsidiaries) with
the intention of taking back a lease of such property, except a lease for a
temporary period during or at the end of which it is intended that the use
by the Company of such property will be discontinued;
(c) Create, or assume or permit to exist, any Lien on any of the
properties or assets of the Company whether nor owned or hereafter acquired,
except:
(i) Permitted Liens;
(ii) As set forth on Exhibit B annexed hereto;
(iii) To secure obligations in connection with Eligible
Derivatives;
(d) Assume, endorse, be or become liable for, or guarantee, the
obligations of any Person, except by the endorsement of negotiable
instruments for deposit or collection in the ordinary course of business.
For purposes hereof, the term "guarantee" shall include any agreement,
whether such agreement is on a contingency or otherwise, to purchase,
repurchase or otherwise acquire Indebtedness of any other Person, or to
purchase, sell or lease, as lessee or lessor, property or services, in any
such case primarily for the purpose of enabling another person to make
payment of Indebtedness, or to make any payment (whether as an advance,
capital contribution, purchase of an equity interest or otherwise) to assure
a minimum equity, asset base, working capital or other balance sheet or
financial condition, in connection with the Indebtedness of another Person,
or to supply funds to or in any manner invest in another Person in
connection with such Person's Indebtedness. Asset Securitization Recourse
Liabilities shall not constitute "guarantees" hereunder;
(e) Acquire all or substantially all of the assets or any of the capital
stock of any Person except for Investments permitted under Section 6.1(m)
(vi);
(f) (i) Except for redemptions by the Company of its Class B1 Common
Stock from the holders thereof who no longer have loans from the Company
outstanding, purchase, redeem, retire or otherwise acquire, directly or
indirectly, or make any sinking fund payments with respect to, any shares of
any class of stock of the Company now or hereafter outstanding or set apart
any sum for any such purpose; or
(ii) Declare or pay any dividends or make any distribution of
any kind on the Company's outstanding stock, or set aside any sum for any
such purpose, except that the Company may declare or pay any dividend
payable solely in shares of its common stock;
(g) Make any material change in its business, or in the nature of its
operation, or liquidate or dissolve itself (or suffer any liquidation or
dissolution), or convey, sell, lease, assign, transfer or otherwise dispose
of any of its property, assets or business except in the ordinary course of
business and for a fair consideration, or dispose of any shares of stock or
any Indebtedness, whether now owned or hereafter acquired;
(h) Make any voluntary or optional prepayment of any Indebtedness of
the Company or any of its Subsidiaries for borrowed money incurred or
permitted to exist under the terms of this Agreement, other than:
(i) Indebtedness evidenced by the Note;
(ii) Indebtedness of NCB Mortgage to the Company; and
(iii) any Indebtedness which has a maturity of not more than
one year from the date of its occurrence;
(i) Make, or suffer to exist, any Investment in any Person, including,
without limitation, any shareholder, director, officer or employee of the
Company or any of its Subsidiaries, except investments in:
(i) Demand deposits in and one-to-four day unsecured loans to
Selected Banks;
(ii) Marketable obligations of the United States;
(iii) Marketable obligations guaranteed by or insured by the
United States, or those for which the full faith and credit of the
United States is pledged for the repayment of principal and interest
thereon;
(iv) Marketable obligations issued, guaranteed, or fully insured
by any agency, instrumentality, or corporation of the United States
established or to be established by the Congress, for which the credit
of such agency, instrumentality, or corporation is pledged for the
repayment of the principal and interest thereof;
(v) Marketable general obligations of a state, a territory or a
possession of the United States, or any political subdivision of any
of the foregoing, or the District of Columbia, unconditionally secured
by the full faith and credit of such state, territory, possession,
political subdivision or district provided that such state, territory,
possession, political subdivision or district has general taxing
authority and the power to levy such taxes as may be required for the
payment of principal and interest thereof;
(vi) Domestic and London interbank market, negotiable time and
variable rate certificates of deposit issued by Selected Banks;
(vii) Marketable bankers' acceptances and finance bills
accepted by Selected Banks;
(viii) Prime commercial paper having a credit rating equal to
at least A-2 issued by Standard & Poor's Rating Services, a division of
The McGraw Hill Companies ("S&P"), P-2 issued by Moody's Investors
Service, Inc. ("Moody's") or Duff-2 issued by Duff & Phelps Inc.
("Duff & Phelps");
(ix) Marketable corporate debt securities having an A credit
rating issued by both S&P and Moody's;
(x) Repurchase, reverse repurchase agreements and security
lending agreements collateralized by securities of the type described
in subsections (ii) and (iv);
(xi) Asset-backed securities issued against a pool of receivables
which have a long-term rating of AAA or better by S&P, Moodys or Duff &
Phelps and which have an average life or final maturity, as determined
by the dealer's prepayment assumptions at the time of purchase, of no
more than five years;
(xii) Mortgaged-backed securities issued against an underlying
pool of mortgages which have a long-term rating of AAA or better by S&P,
Moodys or Duff & Phelps; provided such mortgage-backed securities shall
have an average life, as determined by the dealer's prepayment
assumptions at the time of purchase, of no more than five years;
(xiii) Subsidiaries, subject to the limitations stated in
subsection 6.1(m)(vi) hereof;
(xiv) Promissory notes and other interest bearing obligations
acquired in the ordinary course of business and the issuance of letters
of credit in the ordinary course of business;
(j) Change its fiscal year;
(k) (i) Be or become obligated to the Pension Benefit Guaranty
Corporation, other than in respect of annual premium payments, in
excess of $50,000 in the aggregate;
(ii) Be or become obligated to the IRS with respect to excise or
other penalty taxes provided for in Section 4975 of the Code in excess
of $50,000 in the aggregate;
(l) Modify, amend, supplement or terminate, or agree to modify, amend,
supplement or terminate its charter or by-laws;
(m) Except as expressly permitted by this Agreement, directly or
indirectly: (i) make any investment in an Affiliate; or (ii) consolidate
with or purchase or acquire assets from an Affiliate; or enter into any
other transaction directly or indirectly with or for the benefit of
any Affiliate (including, without limitation, guarantees and assumptions
of obligations of an Affiliate); provided, however, that (x) any Affiliate
who is an individual may serve as an employee or director of the Company and
receive reasonable compensation for his services in such capacity, (y) the
Company may enter into any transaction with an Affiliate providing for
the leasing of property, the rendering or receipt of services or the
purchase or sale of product, inventory and other assets in the ordinary
course of business if the monetary or business consideration arising
therefrom would be substantially as advantageous to the Company as the
monetary or business consideration that would obtain in a comparable
arm's-length transaction with a Person not an Affiliate, and (z) subject
to compliance with Section 6.1(m) and the other provisions of this
Agreement, the Company may make annual charitable contributions in
reasonable amounts as may be determined from time to time by the Board of
Directors of the Company to NCB Development Corporation, a not-for-profit
corporation organized under the laws of the District of Columbia;
(n) Subject to subsections 6.1(m)(vi), (vii) and (viii), create,
incur, permit to exist or have outstanding any Indebtedness, except:
(i) Indebtedness under the NatWest Loan Agreement and the Note;
(ii) Taxes, assessments and governmental charges, non-interest
bearing accounts payable and accrued liabilities, in any case not more
than 90 days past due from the original due date thereof (e. g.,
deferred compensation and deferred taxes) and in each case incurred
and continuing in the ordinary course of business;
(iii) Indebtedness under, and as permitted by, the Senior Note
Agreements;
(iv) Indebtedness under the Class A Notes; and
(v) Indebtedness of NCB Mortgage to the Company.
ARTICLE VII
EVENTS OF DEFAULT
Section 7.1. Events of Default. If one or more of the following
Events of Default shall occur and be continuing:
(a) (i) the Company shall fail to make any payment of principal on
the Note when due; or
(ii) the Company shall fail to make any payment of interest on
the Note when due and such failure shall continue for a period of three (3)
Business Days; or
(b) the Company shall default in any payment of principal of or
interest on any other obligation for borrowed money beyond any period of
grace provided with respect thereto or in the performance of any other
agreement, term or condition contained in any instrument or agreement
evidencing, securing, guaranteeing or otherwise relating to any such
obligation and shall not have cured such default within any period of
grace provided by such agreement, or any event or condition referred to
in any such agreement shall occur or fail to occur, if the effect of such
default, event or condition is to cause, or permit the holder or holders
of such obligations (or a trustee on behalf of such holder or holders) to
cause, such obligation to become due prior to its stated maturity and such
accelerated obligation is for an amount in excess of one percent (1%) of
the Indebtedness of the Company and its Consolidated Subsidiaries; or
(c) any representation or warranty herein made by the Company, or any
certifIcate or financial statement furnished pursuant to the provisions
hereof, shall prove to have been false or misleading in any material respect
as of the time made or furnished; or
(d) the Company shall default in the performance or observance of any
covenant, condition or agreement contained in Section 6.1(g), 6.1(n) or 6.2;
or
(e) the Company shall default in the performance or observance of any
other covenant, condition or provision hereof and such default shall not be
remedied within thirty (30) days after written notice thereof is delivered
to the Company by the holder of the Note; or
(f) a proceeding (other than a proceeding commenced by the Company)
shall have been instituted in a court having jurisdiction in the premises
seeking a decree or order for relief in respect of the Company in an
involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or for the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator
(or similar official) of the Company or for any substantial part of its
total assets, or for the winding-up or liquidation of its affairs and such
proceedings shall remain undismissed or unstayed and in effect for a period
of sixty (60) consecutive days or such court shall enter a decree or order
granting the relief sought in such proceeding; or
(g) the Company shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect,
shall consent to the entry of an order for relief in an involuntary case
under any such law, or shall consent to the appointment of or taking
possession by a receiver, liquidator, assignee, trustee, custodian,
sequestrator (or other similar official) of the Company or for any
substantial part of its total assets, or shall make a general assignment
for the benefit of creditors, or shall fail generally to pay its debts as
they become due, or shall take any corporate action in furtherance of any
of the foregoing; or
(h) a judgment or order shall be entered against the Company by any
court, and (i) in the case of a judgment or order for the payment of money,
either (A) such judgment or order shall continue undischarged and unstayed
for a period of 10 days in which the aggregate amount of all such judgments
and orders exceeds $500,000 or (B) enforcement proceedings shall have been
commenced upon such judgment or order and (ii) in the case of any judgment
or order for other than the payment of money, such judgment or order could,
in the reasonable judgment of the Bank, together with all other such
judgments or orders, have a materially adverse effect on the Company; or
(i) (i) any Termination Event shall occur with respect to any Benefit
Plan, (ii) any Accumulated Funding Deficiency, whether or not waived,
shall exist with respect to any Benefit Plan, (iii) any Person shall
engage in any Prohibited Transaction involving any Benefit Plan, (iv)
the Company or any ERISA Affiliate shall be in "default" (as defined
in ERISA Section 4219(c)(5)) with respect to payments owing to a
Multiemployer Benefit Plan as a result of the Company's or any ERISA
Affiliate's complete or partial withdrawal (as described in ERISA
Section 4203 or 4208) from such Multiemployer Benefit Plan, (v) the
Company or any ERISA Affiliate shall fail to pay when due an amount
that is payable by it to the PBGC or to a Benefit Plan under Title IV
of ERISA, or (vi) a proceeding shall be instituted by a fiduciary of
any Benefit Plan against the Company or any ERISA Affiliate to enforce
ERISA Section 515 and such proceeding shall not have been dismissed
within 30 days thereafter, except that no event or condition referred
to in clauses (i) through (vi) shall constitute an Event of Default if
it, together with all other such events or conditions at the time
existing, has not had, and in the reasonable determination of the
Bank will not have, a materially adverse effect on the Company;
then, and in any such event, the Bank upon notice to the Company may (a)
declare the entire outstanding principal amount of the Note, any and all
accrued and unpaid interest thereon and any and all other amounts payable
by the Company to the Bank under this Agreement or the Note to be forthwith
due and payable, whereupon the entire outstanding principal amount of
the Note, together with any and all accrued and unpaid interest thereon
and any and all other such amounts, shall become and be forthwith due and
payable, and (b) terminate the obligation of the Bank to make the Loan, in
each case without presentment, demand, protest or further notice of any
kind, all of which are hereby expressly waived by the Company; provided,
however, that in the event of the entry of an order for relief with respect
to the Company under the Federal Bankruptcy Code, (a) any principal amount
of the Note then outstanding, together with any and all accrued and unpaid
interest thereon and any and all such other amounts, shall thereupon
automatically become and be due and payable, and (b) the Bank's obligation
to make the Loan shall thereupon automatically terminate, in each case
without presentment, demand, protest or notice of any kind, all of which
are hereby expressly waived by the Company.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Amendments and Waivers: Cumulative Remedies. No delay
or failure of the Bank or any other holder of the Note in exercising any
right, power or privilege hereunder shall affect such right, power or
privilege; nor shall any single or partial exercise thereof or any
abandonment or discontinuance of steps to enforce such a right, power or
privilege preclude any further exercise thereof or of any other right,
power or privilege. The rights and remedies of the Bank, of any other
holder of the Note and of the Company are cumulative and not exclusive
of any rights or remedies which any of them would otherwise have. Any
waiver, permit, consent or approval of any kind or character (whether
involving a breach, default, provision, condition or term hereof or
otherwise) on the part of the Bank, of any other holder of the Note,
or of the Company under this Agreement or under the Note must be in
writing and shall be effective only in the specific instance and for
the purpose for which given and only to the extent set forth specifically
in such writing. No notice or demand given hereunder shall entitle the
recipient thereof to any other or further notice or demand in similar
or other circumstances.
Section 8.2 Survival of Representation and Warranties. All
representations, warranties, covenants and agreements of the Company
contained herein or made in writing in connection herewith shall survive
the execution and delivery of this Agreement, the making of the Loan
hereunder and the issuance of the Note, provided that the survival of a
representation or warranty shall not constitute a restatement of such
representation or warranty after the Loan Date.
Section 8.3 Supervening Illegality. If, after the Loan Date, as the
result of (i) the adoption of any law, rule or regulation by the United
States of America or other Governmental Body, (ii) any change in the
existing laws, rules and regulations of the United States of America or
other Governmental Body, (iii) the issuance of any order or decree by any
Governmental Body, (iv) any change in the interpretation or administration
of any applicable law, rule, regulation, order or decree by any Governmental
Body (including any central bank or similar agency) charged with the
interpretation or administration thereof, or (v) compliance by the Bank with
any request or directive (whether or not having the force of law) of any
Governmental Body, it shall be unlawful or impossible for the Bank to
maintain the Loan (after the Bank shall have used reasonable efforts to
avoid such result), the Bank shall so notify the Company and the Bank
may require the Company to prepay the entire principal amount of,
and all accrued and unpaid interest on, the Loan, together with any
amount payable pursuant to Section 3.6(c), by giving the Company at
least thirty (30) business days' prior written notice. If after the date
hereof and prior to the Loan Date it shall become unlawful or impossible for
the Bank to make the Loan, the obligation to make the Loan shall terminate
forthwith.
Section 8.4 No Reduction in Payments. All payments due to the Bank
hereunder, and all other terms, conditions, covenants and agreements to be
observed and performed by the Company hereunder, shall be made, observed or
performed by the Company without any reduction or deduction whatsoever,
including any reduction or deduction for any set-off, recoupment,
counterclaim (whether sounding in tort, contract or otherwise) or tax.
Section 8.5 Change of Control Option.
(a) In the event that there shall occur any Change of Control (as
defined below) in respect of the Company, the Bank shall have the right, at
its option exercisable at any time within six months following the Change
Date (as defined below), to require the Company to purchase the Note on the
Purchase Date (as defined below) at a purchase price that shall be equal to
the sum of (i) the principal amount of the Note then outstanding, plus (ii)
any and all accrued and unpaid interest on the Note to the Purchase Date
plus (iii) the amount that would be payable by the Company under
Section 3.6(c) in the case of a prepayment in full of the Note (the
"Purchase Price").
(b) The Company shall give the Bank written notice of the occurrence
of a Change of Control within five Business Days following the Change Date.
No failure of the Company to give notice of a Change of Control shall limit
the right of the Bank to require the Company to purchase the Note pursuant
to this Section 8.5.
(c) The Bank may exercise its option hereunder to require the Company
to purchase the Note by delivering to the Company at any time within six
months after the Change Date (i) written notice of such exercise specifying
the Purchase Date and (ii) the Note duly endorsed. The Bank's commitment
shall automatically terminate immediately upon the Company's receipt of the
Bank's written notice of such exercise of its option under and in accordance
with this Section 8.5.
(d) In the event of the exercise by the Bank of its option under this
Section 8.5 in the manner provided herein, the Company shall pay or cause to
be paid to the Bank on the Purchase Date the Purchase Price (determined in
accordance with Subsection 8.5(A)) in immediately available funds.
(e) As used in this Section 8.5, the term:
(i) "Change Date" means the date on which any Change of Control
shall be deemed to have occurred; provided, that, if the Company shall
fail to give timely notice of the occurrence of a Change of Control to
the Bank as provided in Subsection 8.5(b) of this Section 8.5, for the
purpose of determining the duration of the option of the Bank granted
under this Section 8.5, "Change Date" shall mean the earlier of (i)
the date on which notice of a Change of Control is duly given by the
Company to the Bank or (ii) the date on which the Bank obtains actual
knowledge of the Change of Control.
(ii) "Change of Control" means when, and shall be deemed to have
occurred at such time as, a "person" or "group" (within the meaning of
Sections 13(d) and 14(d)(2) of the Exchange Act) becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act)
of more than fifty percent (50%) of the then outstanding Voting Stock
of the Company; provided, that fifty percent shall become seventy
percent (70%) with respect to any "employee benefit plan" (as defined
in Section 3(3) of ERISA) maintained by the Company or any Subsidiary
of the Company or any trust or funding vehicle maintained for or
pursuant to such "employee benefit plan".
(iii) "Purchase Date" means the date on which the Company
shall purchase the Note from the Bank pursuant to the exercise by the
Bank of its option under this Section 8.5 pursuant to a notice given
to the Company in accordance with Subsection 8.5(C) of this Section
8.5. which date shall be a business day not less than 90 nor more
than 120 days after the date the Bank gives the Company written
notice of such exercise.
(iv) "Voting Stock" shall mean capital stock of the Company of
any class or classes (however designated) the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for
the election of the Board of Directors of the Company, it being
understood that, at the date hereof, the Common Stock, Classes B
and C $100 par value, of the Company are the only outstanding
classes of capital stock of the Company that constitute "Voting
Stock".
Section 8.6 Stamp Taxes. The Company agrees to pay, and to save the
Bank harmless from all liability for, any stamp, transfer, documentary or
similar taxes, assessments or charges (herein "Stamp Taxes"), and any
penalties or interest with respect thereto, which may be assessed, levied,
collected or imposed, or otherwise become payable, in connection
with the execution and delivery of this Agreement or the Note.
Section 8.7 Notices. Any notice, statement, request or demand
required or permitted hereunder to be in writing may be given by telex,
cable or electronic communication means. All notices, statements, requests
and demands given to or made upon either party hereto in accordance with
the provisions of this Agreement shall be deemed to have been given or made
in the case of telephonic notice (to the extent expressly permitted
hereunder) when made, or in the case of any other type of notice, when
actually received, if to the Company, to it at
National Consumer Cooperative Bank
1401 Eye Street, N.W. - Suite 700
Washington, D.C. 20005
Attention: Richard L. Reed
Telecopy: (202) 336-7803
and:
Shea & Gardner
1800 Massachusetts Avenue, N. W.
Washington, D.C. 20036
Attention: Martin J. Flynn, Esq.
Telecopy: 202-828-2195
and if to the Bank, to it at:
PNC Bank, National Association
100 South Broad Street
Philadelphia, Pennsylvania 19110
Attention: Amy T. Petersen
Telecopy: (215) 585-5972
or such other address for notice as either party may designate for itself in
a notice to the other party, except in cases where it is expressly provided
herein that such notice, statement, request or demand shall not be effective
until received by the party to whom it is addressed.
Section 8.8 Governing Law. This Agreement and the Note shall be
deemed to be contracts under the laws of the Commonwealth of Pennsylvania
and for all purposes shall be governed by and construed in accordance with
the laws of said state.
Section 8.9 Successors and Assigns.
I. This Agreement shall be binding upon and inure to the benefit of
and be enforceable by the respective successors and assigns of the parties
hereto, provided that the Company may not assign or transfer any of its
interest hereunder without the prior written consent of the Bank.
(a) The Bank may make, carry or transfer the Loan at, to or for the
account of, any of its branch offices or the offices of any of its Affiliates.
(b) The Bank may assign its rights and delegate its obligations under
this Agreement; provided that any such assignment or delegation (other than
the pledge of the Note to the Federal Reserve Bank) may be made only with
the prior written consent of the Company, which consent shall not be
unreasonably withheld or delayed. The Bank may sell participations in
all or any part of the Loan made by it or its commitment or any other
interest herein or in the Note to another bank or other entity. In the
case of an assignment, upon notice thereof by the Bank to the Company,
the assignee shall have, to the extent of such assignment (unless
otherwise provided thereby), the same rights and benefits as it would have
if it were the Bank hereunder and the holder of the Note, and, if the
assignee has expressly assumed, for the benefit of the Company, the Bank's
obligations hereunder, the Bank shall be relieved of its obligations
hereunder to the extent of such assignment and assumption. In the
case of a participation, the participant shall not have any rights under
this Agreement or the Note or any other document delivered in connection
herewith (the participant's rights against the Bank in respect of such
participation to be those set forth in the agreement executed by the
Bank in favor of the participant relating thereto) and all amounts
payable by the Company shall be determined as if the Bank had not sold
such participation.
Section 8.10 Maximum Rate of Interest Permitted by Law. Nothing in
this Agreement shall require the Company to pay interest for the account of
the Bank at a rate exceeding the maximum rate permitted by applicable law
to be charged or received by the Bank, it being understood that neither
this Section nor Section 8.8 is intended to make the criminal laws of any
jurisdiction applicable in circumstances in which they would not otherwise
apply. If the rate of interest specified herein or in the Note would
otherwise exceed the maximum rate so permitted to be charged or received
with respect to the Note, the rate of interest required to be paid for
the account of the Bank shall be automatically reduced to such
maximum rate.
Section 8.11 Expenses; Indemnification.
(a) The Company shall save the Bank harmless against all reasonable
out-of-pocket expenses (including attorneys' fees and expenses) of the Bank
and shall indemnify the Bank, its Affiliates, officers, employees and agents
("Indemnified Persons") against the costs of preparing this Agreement and
the Note, all costs, expenses, losses and damages arising in connection
with this Agreement or the Note, including with respect to any Credit
Agreement Related Claim. The obligation of the Company under this paragraph
shall survive the payment of the Note.
(b) All amounts payable by the Company under Section 8.11(a) shall be
immediately due upon written request by the Bank for the payment thereof.
Section 8.12 Set-Off; Suspension of Payment and Performance. The
Bank is hereby authorized by the Company, at any time and from time to time,
without notice, (a) during any Event of Default, to set off against, and to
appropriate and apply to the payment of, the liabilities of the Company
under this Agreement and the Note (whether matured or unmatured, fixed or
contingent or liquidated or unliquidated) any and all liabilities owing by
the Bank or any of its Affiliates to the Company (whether payable in Dollars
or any other currency, whether matured or unmatured and, in the case of
liabilities that are deposits, whether general or special, time or demand
and however evidenced and whether maintained at a branch or office located
within or without the United States) and (b) during any Event of Default,
to suspend the payment and performance of such liabilities owing by such
Person or its Affiliates and, in the case of liabilities that are deposits,
to return as unpaid for insufficient funds any and all checks and other
items drawn against such deposits.
Section 8.13 Judicial Proceedings Waiver of Jury Trial. Any judicial
proceeding brought against the Company with respect to any Credit Agreement
Related Claim may be brought in any court of competent jurisdiction whose
territorial jurisdiction includes the Eastern District of Pennsylvania, and,
by execution and delivery of this Agreement, the Company (a) accepts,
generally and unconditionally, the nonexclusive jurisdiction of such
courts and any related appellate court and irrevocably agrees to be bound
by any judgment rendered thereby in connection with any Credit Agreement
Related Claim and (b) irrevocably waives any objection it may now or
hereafter have as to the venue of any such proceeding brought in such a
court or that such a court is an inconvenient forum. The Company hereby
waives personal service of process and consents that service of process upon
it may be made by certified or registered mail, return receipt requested, at
its address specified or determined in accordance with the provisions of
Section 8.7, and service so made shall be deemed complete on the third
Business Day after such service is deposited in the mail. Nothing herein
shall affect the right of the Bank or any other Indemnified Person to serve
process in any other manner permitted by law or shall limit the right of the
Bank or any other Indemnified Person to bring proceedings against the
Company in the courts of any other jurisdiction. Any judicial proceeding
by the Company against the Bank involving any Credit Agreement Related Claim
shall be brought only in a court located in the Commonwealth of Pennsylvania.
THE COMPANY AND THE BANK HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL
PROCEEDING TO WHICH THEY ARE BOTH PARTIES INVOLVING ANY CREDIT
AGREEMENT RELATED CLAIM.
Section 8.14 LIMITATION OF LIABILITY. NEITHER THE BANK NOR ANY
OTHER INDEMNIFIED PERSON SHALL HAVE ANY LIABILITY WITH RESPECT TO,
AND THE COMPANY HEREBY WAIVES, RELEASES AND AGREES NOT TO SUE
FOR, ANY SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES SUFFERED OR
ALLEGED BY THE COMPANY OR THE BANK IN CONNECTION WITH ANY CREDIT
AGREEMENT RELATED CLAIM.
Section 8.15 Severability. The provisions of this Agreement are
severable, and if any clause or provision of this Agreement shall be held
invalid or unenforceable in whole or in part in any jurisdiction, then such
clause or provision shall, as to such jurisdiction, be ineffective to
the extent of such invalidity or unenforceability without in any manner
affecting the validity or enforceability of such clause or provision in any
other jurisdiction or the remaining provisions hereof In any jurisdiction.
Section 8.16 Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto on separate
counterparts, each complete set of which, when so executed and delivered
by all parties, shall be an original but all such counterparts shall
together constitute but one and the same instrument.
Section 8.17 Headings, Bold Type and Index. The section headings,
subsection headings, and bold type used herein and the Index hereto have
been inserted for convenience of reference only and do not constitute
matters to be considered in interpreting this Agreement.
IN WITNESS WHEREOF, the parties hereto, by their officers hereunto duly
authorized, have executed this Agreement as of the day and year first above
written.
NATIONAL CONSUMER
COOPERATIVE BANK PNC BANK, NATIONAL ASSOCIATION
By:____________________________ By: __________________________
Its:___________________________ Its: _________________________
EXHIBIT "A"
FORM OF PROMISSORY NOTE
PROMISSORY NOTE
U.S. $15,000,000 Dated:_______________
FOR VALUE RECEIVED, the undersigned, National Consumer Cooperative Bank,
a corporation organized under the laws of the United States (the "Company"),
hereby promises to pay to the order of PNC Bank, National Association (the
"Bank") the principal amount of FIFTEEN MILLION UNITED STATES DOLLARS
($15,000,000) on the Maturity Date.
The Company promises to pay interest from the date hereof until the
Maturity Date on the principal amount of this Promissory Note from time to
time outstanding at the per annum interest rate of SIX AND SEVENTY-ONE
HUNDREDTHS PERCENT (6.71%), payable on each Interest Payment Date. Interest
shall be computed on the basis of a year of 360 days consisting of 12 months
of 30 days each and, in the case of a portion of a month, for the actual
number of days (including the first and excluding the last) elapsed. Any
principal amount of this Promissory Note which is not paid on the Maturity
Date shall bear interest from the Maturity Date and until paid in full at
the Default Rate. In no event shall the rate of interest borne by this
Promissory Note at any time exceed the maximum rate of interest permitted at
that time under applicable law.
Payments of the principal amount of and interest on this Promissory
note shall be made in lawful money of the United States of America to the
Bank at 100 South Broad Street, Philadelphia, Pennsylvania or at such other
place as the holder of this Note may designate in writing to the Company.
This Promissory Note is a Note referred to in the Term Loan Agreement,
of even date herewith (the "Term Loan Agreement"), between the Bank and the
Company. The Term Loan Agreement, among other things, contains provisions
for optional prepayments on account of the principal of this Promissory Note
by the Company and for acceleration of the maturity of this Promissory Note
upon the terms and conditions therein specified. Capitalized terms used
(but not defined) in this Promissory Note shall have the meanings given to
them in the Term Loan Agreement.
NATIONAL CONSUMER COOPERATIVE
BANK
By:______________________________________
Its:_____________________________________
EXHIBIT "B"
PURSUANT TO SECTION 6.2
OF TERM LOAN AGREEMENT BY AND BETWEEN
NATIONAL CONSUMER COOPERATIVE BANK
AND
PNC BANK, NATIONAL ASSOCIATION
_______________________________
PERMITTED SECURITY INTERESTS,
LIENS AND ENCUMBRANCES
______________________________
NCB Savings Bank, FSB, ("NCBSB") has under pledge to the Federal Home Loan
Bank of Cincinnati (FHLBC) its mortgage loan portfolio under a Blanket
Agreement for Advances and Security Agreement which allows a blanket lien to
secure borrowings from FHLBC.
The Company extends lines of credit to NCB Mortgage, secured by all assets
of NCB Mortgage pursuant to certain Business Loan/Security Agreements.
Each of the Company and NCB Mortgage sells mortgage loans, ESOP loans and
other loans from its portfolio in the ordinary course of business,
structured either as an Asset Securitization or a sale of whole loans.
The SPV or other purchaser typically provides for an alternative security
interest and files a financing statement covering such loans in order to
protect itself against a subsequent determination that such sale was not a
sale but rather a loan.
PROMISSORY NOTE
U.S. $15,000,000 Dated: August __, 1996
FOR VALUE RECEIVED, the undersigned, National Consumer Cooperative Bank,
a corporation organized under the laws of the United States (the "Company"),
hereby promises to pay to the order of PNC Bank, National Association (the
"Bank") the principal amount of FIFTEEN MILLION UNITED STATES DOLLARS
($15,000,000) on the Maturity Date.
The Company promises to pay interest from the date hereof until the
Maturity Date on the principal amount of this Promissory Note from time to
time outstanding at the per annum interest rate of SIX AND SEVENTY-ONE
HUNDREDTHS PERCENT (6.71%), payable on each Interest Payment Date. Interest
shall be computed on the basis of a year of 360 days consisting of 12 months
of 30 days each and, in the case of a portion of a month, for the actual
number of days (including the first and excluding the last) elapsed.
Any principal amount of this Promissory Note which is not paid on the
Maturity Date shall bear interest from the Maturity Date and until paid in
full at the Default Rate. In no event shall the rate of interest
borne by this Promissory Note at any time exceed the maximum rate of
interest permitted at that time under applicable law.
Payments of the principal amount of and interest on this Promissory
note shall be made in lawful money of the United States of America to the
Bank at 100 South Broad Street, Philadelphia, Pennsylvania or at such other
place as the holder of this Note may designate in writing to the Company.
This Promissory Note is a Note referred to in the Term Loan Agreement,
of even date herewith (the "Term Loan Agreement"), between the Bank and the
Company. The Term Loan Agreement, among other things, contains provisions
for optional prepayments on account of the principal of this Promissory Note
by the Company and for acceleration of the maturity of this Promissory Note
upon the terms and conditions therein specified. Capitalized terms used
(but not defined) in this Promissory Note shall have the meanings given to
them in the Term Loan Agreement.
NATIONAL CONSUMER COOPERATIVE
BANK
By:______________________________________
Its:_____________________________________