EXHIBIT 10.1
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FIRST AMENDMENT TO LOAN AGREEMENT
This First Amendment to Loan Agreement ("Agreement") is entered into as of
this 4th day of August, 1999, by and among (i) First Coastal Corporation, a
Delaware corporation ("Borrower"), (ii) Androscoggin Savings Bank, a Maine
savings bank in stock form, Machias Savings Bank, a Maine savings bank in mutual
form, and Norway Savings Bank, a Maine savings bank in mutual form (collectively
these three banks are sometimes referred to as "Lenders") and (iii) Machias
Savings Bank, in its capacity as Agent for the Lenders (the "Agent").
WHEREAS, Borrower borrowed $1,000,000.00 from each of the Lenders and from
Bangor Savings Bank for an aggregate of $4,000,000.00 on July 24, 1996 pursuant
to the terms of a Loan Agreement among Borrower, the Lenders and Bangor Savings
Bank; and
WHEREAS, Borrower's $4,000,000.00 obligation is evidenced in part by four
promissory notes dated July 24, 1996, each in the original principal amount of
$1,000,000.00 (hereinafter collectively referred to as the "Notes" and
individually as a "Note"); and
WHEREAS, each of the Lenders have held and continue to hold one of the
Notes, and Bangor Savings Bank has as of the date hereof assigned its Note to
Machias Savings Bank, resulting in Machias Savings Bank holding two of the
Notes; and
WHEREAS, the parties have agreed to amend certain terms and conditions of
the Loan Agreement dated July 24, 1996 and to amend the Notes; and
WHEREAS, except as set forth hereinafter, all of the terms and conditions
of the Loan Agreement shall remain in full force and effect and shall not be
modified hereby.
NOW THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
do hereby mutually agree, intending to be legally bound, as follows:
1. Section 1.2 of the Loan Agreement is hereby amended to provide in its
entirety as follows:
Section 1.2. Purpose of Note Purchase. As of August 4, 1999, the date of
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this Amendment to the Loan Agreement, the Lenders and Borrower acknowledge
that the outstanding principal of the Notes is $2,400,000 (hereinafter the
"Term Portion" of the Notes). Commencing on the date hereof, Lenders shall
advance to Borrower, up to an aggregate amount at any given time equal to
the difference between $4,000,000 and the Term Portion of the Notes. The
amount advanced (hereinafter the "Credit Line Portion" of the Notes) shall
be used as a credit line for Borrower's working capital needs.
2. Section 1.3 of the Loan Agreement is hereby amended to provide in its
entirety as follows:
Section 1.3 Term of Loan; Repayment of Principal.
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a. As of the date hereof, the parties acknowledge that the current
aggregate outstanding balance of the Notes is $2,400,000, which shall be
referred to herein as the "Term Portion" of the Notes, such that the Term
Portion of each Note is $600,000 as of the date hereof. The Term Portion of
each Note shall be payable in monthly installments over a term of five
years, commencing on the date hereof and ending on August 4, 2004.
b. The difference between $4,000,000 ($1,000,000 as to each Note) and the
then outstanding principal balance of the Term Portion of the Notes shall
be referred to as the "Credit Line Portion" of the Notes. The initial
Credit Line Portion of each Note shall be $400,000. All outstanding
advances under the Credit Line Portion of each Note shall be due and
payable in full on or before August 4, 2002.
c. August 4, 2004 as to the Term Portion of each Note and August 4, 2002 as
to the Credit Line Portion of each Note shall hereinafter collectively be
referred to as the "Maturity Date").
d. The Term Portion and Credit Line Portion of each Note shall be payable
in accordance with the terms and conditions of the Modification Agreements
attached hereto as EXHIBIT 1.3.
e. The final payment of the remaining principal balance of the Term Portion
of the Notes and of any outstanding balance of the Credit Line Portion of
the Notes on the respective Maturity Dates shall be accompanied by payment
of all accrued but unpaid interest with respect to the outstanding balances
as of such Maturity Dates.
3. Section 1.4 of the Loan Agreement is hereby amended to provide in its
entirety as follows:
Section 1.4. Prepayment. Borrower may prepay the Notes in whole or in
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part at any time at its option and without penalty upon not less than three
Business Days (as hereinafter defined) prior written notice to the Savings
Banks, specifying the date and the amount of prepayment, and upon the
payment of all accrued but unpaid interest on the amount prepaid to the
date of such prepayment, provided that each such optional principal
prepayment shall be in a minimum aggregate amount of $100,000, and shall be
applied to the Notes on a pro rata basis, in accordance with the principal
amount outstanding under each Note.
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4. Sections 1.5(a) and (b) of the Loan Agreement are hereby amended to
provide as follows:
Section 1.5. Interest. (a) The Term Portion of each of the Notes shall
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bear interest on the outstanding principal balance thereunder from the date
hereof until payment in full of the unpaid principal amount of the Term
Portion, at a fixed rate per annum equal to 8%, computed on the basis of a
year of 360 days, until August 4, 2002, at which time interest shall
convert to a variable rate equal to the Prime Rate as reported in the Money
Rates section of the Wall Street Journal, being the base rate on corporate
loans posted by at least 75% of the nation's 30 largest banks, adjusted
daily. Interest on the Credit Line Portion of the Notes shall accrue at a
variable rate equal to said Wall Street Journal Prime Rate, adjusted daily.
All Interest shall be payable monthly, in arrears, on the last day of each
calendar month commencing on August 4, 1999 and continuing on the last day
of each month thereafter and on the applicable Maturity Date.
(b) If the Borrower fails to pay any installment of principal and/or
interest on the date such installment payment is due (other than payment in
full of the principal balance of the Notes whether by acceleration or at
the applicable Maturity Date), and such failure continues for more than
five (5) Business Days, the Borrower shall pay a late charge equal to five
percent (5%) of the total amount of such delinquent installment payment.
Notwithstanding the foregoing, Borrower shall not be in payment default,
nor shall any late payment charge be imposed, by virtue of an underpayment
of principal and/or interest arising from a good faith error by Borrower in
the computation of principal and/or interest due under the Notes, which
underpayment is cured within five (5) Business Days after written notice
thereof by Agent to Borrower.
[section 1.5(c) of the Loan Agreement remains unchanged]
5. Section 5.4(a) of the Loan Agreement is hereby amended to provide as
follows:
Section 5.4. Financial Statements. (a) Borrower shall deliver or cause
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to be delivered to the Agent on behalf of the Savings Banks:
(i) Within 60 days after the end of each calendar quarter (except as
provided in (ii) below) on a consolidated basis for Borrower (A) a balance
sheet as at the end of such period and statements of operations and cash
flow, and such other quarterly statements as are customarily prepared by it
on a quarterly basis, (B) a report setting forth in reasonable detail loan
delinquencies, non-accrual loans and loan charge-offs; and (C) upon the
written request of the Agent and with reasonable notice, such other
quarterly financial statements and information as the Savings Banks may
reasonably deem necessary to provide current financial information;
(ii) As soon as reasonably available, but in no event more than 105 days
after the end of each fiscal year ending on or after December 31, 1995 and
until the Maturity Date, audited consolidated financial statements of the
Borrower for the fiscal year then ended.
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[sections 5.4(a)(iii) and (iv) remain unchanged]
6. Section 6.2 of the Loan Agreement is hereby amended to provide in its
entirety as follows:
Section 6.2. Stock and Dividends. Borrower shall not (i) apply any
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property or assets to the purchase, retirement or redemption of any shares
of its capital stock; or (ii) declare or pay cash dividends on any shares
of its capital stock or make any other distributions in respect of its
capital stock (other than dividends or distributions payable solely in
shares of its capital stock or distributions under its Shareholders Rights
Plan), if at the time of such action and after giving effect thereto:
(1) an Event of Default or an Incipient Default shall have occurred
and be continuing; or
(2) the Borrower's debt to equity ratio on a parent only basis is
greater than 50%.
7. Section 6.3 of the Loan Agreement entitled "Encumbrances and
Indebtedness" is hereby deleted.
8. Section 6.4 of the Loan Agreement entitled "Sales and Dispositions" is
hereby deleted.
9. Section 6.6 of the Loan Agreement entitled "Capital Expenditures" is
hereby deleted.
10. Section 7.1 of the Loan Agreement is hereby amended to provide as
follows:
Section 7.1. Events of Default. Each of the following events shall
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constitute an Event of Default hereunder if such event shall not be
remedied within the time period set forth below, unless Borrower receives
the prior written consent of Lenders holding at least three of the Notes,
which written consent may be given through the Agent:
(a) Borrower shall fail to pay any amount of principal, interest,
fees, or other payments due hereunder or under the Notes when such amount
is due and payable and such failure continues for more than fifteen (15)
Business Days;
(b) Borrower or any Borrower Subsidiary (i) shall fail to pay any
indebtedness aggregating $750,000 or more, when due, which is not waived
(whether such payment is due by scheduled maturity, by required prepayment,
by acceleration, by demand or otherwise); or (ii) shall fail to perform any
term, covenant or agreement on its part to be performed under any agreement
or instrument evidencing or securing or relating to any such indebtedness
or any guaranty when required to be performed, if the effect of such
failure is to accelerate, or to permit the holder or holders of such
indebtedness or the
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trustees under any such agreement or instrument to accelerate, the maturity
of such indebtedness or such obligation guaranteed by Borrower or any
Borrower Subsidiary;
[subsections (c), (d) and (e) remain unchanged]
(f) Borrower or any Borrower Subsidiary shall suffer the entry of
judgments against it for the payment of money in excess of $750,000 in the
aggregate at any one time by any court of record or shall suffer the
issuance of any writs of attachment on any of its assets having values in
the aggregate at any one time of greater than 750,000, and Borrower or such
Borrower Subsidiary shall not discharge the same or provide for their
discharge in accordance with their terms, or procure a stay of execution
thereon within thirty (30) days from the date of entry thereof, unless
execution thereon is effectively stayed pending further proceedings; or
[subsection (g) remains unchanged]
11. Section 7.2 of the Loan Agreement is hereby amended to provide as
follows:
Section 7.2 Acceleration. Upon the occurrence of any Event of Default the
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Agent shall, at the direction of Lenders holding at least three of the
Notes, by written notice to Borrower, declare the entire indebtedness of
Borrower then outstanding under the Notes immediately due and payable
without presentment, demand, protest, notice of protest or any other notice
of any kind, all of which are hereby expressly waived. Notwithstanding the
foregoing provisions of this Section, the entire indebtedness of Borrower
then outstanding under the Notes shall become immediately due and payable
without notice or election of any kind and without need for any action by
the Agent or Savings Banks if there shall occur an Event of Default under
Section 7.1(e) of this Agreement.
12. Each reference in the Loan Agreement to "Three Fourths of the Savings
Banks" is hereby amended to refer to "Lenders holding at least three of the
Notes."
13. The foregoing constitute all of the amendments to the Loan Agreement.
Except as set forth above, the terms, conditions and obligations of the Loan
Agreement: (a) remain unchanged; (b) are hereby ratified and affirmed in their
entirety; (c) continue in full force and effect; and (d) are legally valid,
binding, and enforceable in accordance with their terms.
14. The Borrower hereby acknowledges and affirms that it knows of no
defenses, set offs, or other claims against Lenders or Agent arising under or
out of the Loan Agreement, as amended.
15. This Agreement shall be binding upon the parties hereto as well as
their successors and assigns.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed on the date first above written.
WITNESS: FIRST COASTAL CORPORATION
/s/ William E. Saufley By: /s/ Gregory T. Caswell
its President and CEO
MACHIAS SAVINGS BANK
/s/ Heather L. Vose By: /s/ Edward L. Hennessey, Jr.
its President
ANDROSCOGGIN SAVINGS BANK
/s/ Diane M. Flagg By: /s/ Steven A. Closson
its President
NORWAY SAVINGS BANK
/s/ Sandy Smith By: /s/ David L. Wyman
its EVP and Treasurer
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