AMENDED AND RESTATED LOAN AGREEMENT
This AMENDED AND RESTATED LOAN AGREEMENT (the "Agreement"), dated as of
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October 29, 2002, is entered into between WINTRUST FINANCIAL CORPORATION, an
Illinois corporation (the "Borrower"), and LASALLE BANK NATIONAL ASSOCIATION, a
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national banking association ("LaSalle").
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RECITALS:
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WHEREAS, the Borrower and LaSalle are parties to that certain Loan
Agreement dated as of September 1, 1996, as thereafter amended from time to
time, the Borrower has requested an increase in its line of credit, and the
parties hereto agree that it would be in the best interests of the parties
hereto to amend and restate its borrowing and lending arrangement into a single
document;
WHEREAS, the Borrower desires to borrow from LaSalle up to the sum of
SEVENTY FIVE MILLION DOLLARS ($75,000,000) in order to refinance existing debt
and to provide for Borrower's working capital needs and the Borrower desires to
retain the benefit of its existing swap agreement;
WHEREAS, Borrower will continue to pledge to LaSalle and grant a
security interest in favor of LaSalle with respect to the capital stock of
Hinsdale Bank & Trust ("Hinsdale"), Lake Forest Bank & Trust Company ("Lake
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Forest"), North Shore Community Bank & Trust Company ("North Shore"),
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Libertyville Bank & Trust Company ("Libertyville"), Crystal Lake Bank and Trust
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Company ("Crystal Lake"), Northbrook Bank and Trust Company ("Northbrook") and
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Barrington Bank and Trust Company ("Barrington") (Hinsdale, Lake Forest, North
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Shore, Libertyville, Crystal Lake, Northbrook and Barrington are referred to
herein individually as a "Subsidiary" and collectively, the "Subsidiaries"; the
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capital stock of such Subsidiaries shall be collectively referred to herein as
the "Subsidiary Stock") as set forth in the Pledge and Security Agreement of the
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Borrower of even date herewith (the "Pledge Agreement");
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WHEREAS, the Subsidiary Stock continues to constitute 100% of the
issued and outstanding capital stock of the Subsidiaries; and
WHEREAS, LaSalle is willing to make loans to the Borrower in accordance
with the terms, subject to the conditions and in reliance upon the
representations, warranties and covenants set forth herein and in the other
documents and instruments entered into or delivered in connection with or
relating to the loan contemplated in this Agreement.
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements hereinafter set forth, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
AGREEMENT:
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1. COMMITMENT OF LASALLE.
LaSalle agrees to extend loans (each a "Loan" and collectively the
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"Loans")) to the Borrower in the principal amount of TWENTY FIVE MILLION DOLLARS
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($25,000,000), evidenced by a promissory note (the "Note 1") and a loan to the
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Borrower in the principal amount of FIFTY MILLION DOLLARS ($50,000,000),
evidenced by a promissory note (the "Note 2") (Note 1 and Note 2 are hereafter
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collectively referred to as the "Notes"), each secured by the Pledge Agreement,
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in accordance with terms and subject to the conditions set forth in this
Agreement, the Notes and the Pledge Agreement.
2. CONDITIONS OF BORROWING.
Notwithstanding any other provision of this Agreement, LaSalle shall
not be required to extend the Loans;
(a) if, since the date of this Agreement and up to the agreed upon date
of the Loans, there has occurred, in LaSalle's sole and complete discretion, a
material adverse change in the financial condition or affairs of the Borrower or
any Subsidiary;
(b) if any Default (as such term is defined below) has occurred or any
event which, with the giving of notice or lapse of time, or both, would
constitute such a Default;
(c) if any litigation or governmental proceeding has been instituted or
threatened against the Borrower, any Subsidiary or any of their respective
officers or shareholders which, in the sole discretion of LaSalle, could
materially adversely affect the financial condition or operations of the
Borrower or such Subsidiary;
(d) if all necessary or appropriate actions and proceedings shall not
have been taken in connection with, or relating to the transactions contemplated
hereby and all documents incident thereto shall not have been completed and
tendered for delivery, in form and substance satisfactory to LaSalle, including,
but not limited to, LaSalle's failure to have received evidence that: (i) the
Borrower has received all necessary regulatory approvals to acquire the
Subsidiiary Stock; and (ii) the Borrower has provided such notices to all
appropriate federal banking agencies as to satisfy the requirements of 12 U.S.C.
section 1817(j) (9)(E);
(e) if the Borrower shall not have tendered for delivery the Notes and
the Pledge Agreement, together with all of the Pledged Security (as such term is
defined in the Pledge Agreement) all in form and substance satisfactory to
LaSalle;
(f) if the Borrower shall not have tendered for delivery an Amended and
Restated Collateral Safekeeping Agreement, all in form and substance
satisfactory to LaSalle;
(g) if the Borrower shall not have tendered for delivery a legal
opinion, if requested, from the Borrower's counsel in form and substance
satisfactory to LaSalle and LaSalle's legal counsel; or
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(h) if LaSalle shall not have received, in form and substance
satisfactory to LaSalle, all certificates, affidavits, schedules, resolutions,
opinions, notes and other documents which are provided for hereunder, or which
it may reasonably request.
3. NOTES EVIDENCING BORROWING.
The Loans shall be evidenced by Note 1 executed by the Borrower in the
principal amount of TWENTY FIVE MILLION DOLLARS ($25,000,000) and by Note 2
executed by Borrower in the principal amount of FIFTY MILLION DOLLARS
($50,000,000), which Notes shall be in the form set forth as EXHIBIT A and
EXHIBIT B hereto, respectively.
(a) Interest on amounts outstanding under the Notes shall be payable
quarterly, in arrears, commencing on November 29, 2002, and continuing on each
February 28, May 29, August 29 and November 29 thereafter. Interest shall be
also payable at maturity, after maturity on demand, and on the date any
principal payment hereon is paid.
(b) A final payment of all outstanding amounts due under Note 1,
including, but not limited to principal, interest and any amounts owing under
Subsection 10(m) of this Agreement, if not payable earlier, shall be due and
payable on February 27, 2006.
(c) A final payment of all outstanding amounts due under Note 2,
including, but not limited to principal, interest and any amounts owing under
Subsection 10(m) of this Agreement, if not payable earlier, shall be due and
payable on May 15, 2003.
(d) The amounts outstanding under the Notes from time to time shall
bear interest calculated on the actual number of days elapsed on the basis of a
360 day year, at a rate equal, at the Borrower's option, to either (a) the
London Inter-Bank offered Rate ("LIBOR") plus 140 basis points, or (b) the Prime
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Rate (whichever rate is so selected, the "Interest Rate").
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For purposes of this Agreement, the term "Prime Rate" shall mean the
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floating prime rate in effect from time to time as set by LaSalle, and referred
to by LaSalle as its Prime Rate. The Borrower acknowledges that the Prime Rate
is not necessarily LaSalle's lowest or most favorable rate of interest at any
one time. The effective date of any change in the Prime Rate shall for purposes
hereof be the date the rate change is publicly announced by LaSalle.
For purposes of this Agreement, "LIBOR" shall mean the per annum rate
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of interest at which U.S. dollar deposits in an amount comparable to the amount
of the relevant LIBOR Loan and for a period equal to the relevant "Interest
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Period" (hereinafter defined) are offered generally to LaSalle in the London
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Interbank Eurodollar market which are published by Bloomberg Financial Markets
systems (or other comparable nominated vendor of the British Bankers Association
LIBOR Rate) at approximately 11:30 a.m. (London time) one banking day prior to
the commencement of each Interest Period, such rate to remain fixed for such
Interest Period. "Interest Period" shall mean successive three month periods as
selected from time to time by the Borrower by notice given to LaSalle not less
than three banking days prior to the first day of each respective interest
Period; provided that: (i) each such three month period occurring after such
initial period shall commence on the day on which the next preceding period
expires; and (ii) the final Interest Period shall be such that its expiration
occurs on or before the stated maturity date hereof. The Borrower hereby further
promises to pay to the order of LaSalle, on
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demand, interest on the unpaid principal amount hereof after maturity (whether
by acceleration or otherwise) at a rate of two per cent per annum in excess of
the Prime Rate in effect at the time of maturity.
LaSalle's determination of LIBOR as provided above shall be conclusive,
absent manifest error. Furthermore, if LaSalle determines, in good faith (which
determination shall be conclusive, absent manifest error), prior to the
commencement of any Interest Period, that (a) U.S. dollar deposits of sufficient
amount and maturity for funding any LIBOR Loan are not available to LaSalle in
the London Interbank Eurodollar market in the ordinary course of business, or
(b) by reason of circumstances affecting the London Interbank Eurodollar market,
adequate and fair means do not exist for ascertaining the rate of interest to be
applicable to the relevant LIBOR Loan, LaSalle shall promptly notify the
Borrower and such LIBOR Loan shall be immediately due and payable on the last
banking day of the then existing interest Period, without further demand,
presentment, protest or notice of any kind, all of which are hereby waived by
the Borrower.
If, after the date hereof, the introduction of, or any change in any
applicable law, treaty, rule, regulation or guideline or in the interpretation
or administration thereof by any governmental authority or any central bank or
other fiscal, monetary or other authority having jurisdiction over LaSalle or
its lending office (a "Regulatory Change"), shall, in the opinion of counsel to
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LaSalle, makes it unlawful for LaSalle to make or maintain any LIBOR Loan
evidenced hereby, then LaSalle shall promptly notify the Borrower and such LIBOR
Loan shall be immediately due and payable on the last banking day of the then
existing Interest Period or on such earlier date as required by law, all without
further demand, presentment, protest or notice of any kind, all of which are
hereby waived by the Borrower.
If, for any reason, any LIBOR Loan is paid prior to the last banking
day of its then-current interest Period, the Borrower agrees to indemnify
LaSalle against any loss (including any loss on redeployment of the funds
repaid), cost or expense incurred by LaSalle as a result of such prepayment.
If any Regulatory Change (whether or not having the force of law) shall
(a) impose, modify or deem applicable any assessment, reserve, special deposit
or similar requirement against assets held by, or deposits in or for the account
of or loans by, or any other acquisition of funds or disbursements by, LaSalle;
(b) subject LaSalle or any LIBOR Loan to any tax, duty, charge, stamp tax or fee
or change the basis of taxation of payments to LaSalle of principal or interest
due from the Borrower to LaSalle hereunder (other than a change in the taxation
of the overall net income of LaSalle); or (c) impose on LaSalle any other
condition regarding such LIBOR Loan or LaSalle's funding thereof, and LaSalle
shall determine (which determination shall he conclusive, absent manifest error)
that the result of the foregoing is to increase the cost to LaSalle of making or
maintaining such LIBOR Loan or to reduce the amount of principal or interest
received by LaSalle hereunder, then the Borrower shall pay to LaSalle, on
demand, such additional amounts as LaSalle shall, from time to time, determine
are sufficient to compensate and indemnify LaSalle for such increased cost or
reduced amount.
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(e) Any amount of principal or interest on the Note which is not paid
when due, whether at stated maturity, by acceleration or otherwise shall bear
interest payable on demand at an interest rate equal at all times to two percent
(2%) above the Prime Rate.
(f) Each Loan shall be made available to the Borrower upon its written
or verbal request, from any person whose authority to so act has not been
revoked by the Borrower in writing previously received by LaSalle. Such request
must be received by no later than 11:00 a.m. Chicago, Illinois time, on the day
it is to be funded. The proceeds of each Loan shall be made available at the
office of LaSalle by credit to the account of the Borrower or by other means
requested by the Borrower and acceptable to LaSalle. LaSalle is authorized to
rely on the telephonic, telecopy or telegraphic loan requests which LaSalle
believes in its good faith judgment to emanate from a properly authorized
representative of the Borrower, whether or not that is in fact the case. The
Borrower does hereby irrevocably confirm, ratify and approve all such advances
by LaSalle and does hereby indemnify LaSalle against losses and expenses
(including court costs, attorneys' and paralegals' fees) and shall hold LaSalle
harmless with respect thereto.
(g) If any payment to be made by the Borrower hereunder shall become
due on a Saturday, Sunday or bank holiday under the laws of the State of
Illinois, such payment shall be made on the next succeeding business day and
such extension of time shall be included in computing any interest in respect of
such payment.
4. PRINCIPAL PAYMENTS AND PREPAYMENTS.
(a) Borrower hereby agrees that LaSalle shall have the exclusive right,
in its sole discretion to determine the application of all payments received
from the Borrower. Unless LaSalle elects otherwise, LaSalle shall apply such
payments in the following order; (i) expenses under the Agreement; (ii) accrued
interest under Note 2; (iii) accrued interest under any subordinated notes or
debentures issued by the Borrower and owned by LaSalle; (iv) accrued interest
under Note 1; (v) principal amounts outstanding under Note 2; (vi) principal
amounts outstanding under any subordinated note or debenture issued by Borrower
and owned by LaSalle; (vii) principal amounts outstanding under Note 1;
provided, however, subject to certain applicable rules, regulations or
limitations which govern the repayment of subordinated indebtedness by a bank
holding company subsequent to an event of default, LaSalle is authorized to
apply any payments it receives in such order, combination and amount as LaSalle,
in its sole and absolute discretion, may determine.
(b) Prepayments of Prime Rate Loans are permitted at any time, and
shall be applied to the next succeeding principal payment due. Any prepayments
of LIBOR Loans shall be subject to the terms of Section 3(d), above.
5. REPRESENTATIONS AND WARRANTIES.
To induce LaSalle to make the Loan provided for herein, the Borrower
represents and warrants as follows:
(a) The Borrower: (i) is a corporation duly organized and validly
existing and in good standing under the laws of the State of Illinois; (ii) is
duly qualified as a foreign
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corporation and is in good standing in all states in which it is doing business
except where the failure to so qualify would not have a material adverse effect
on the Borrower or its business, and (iii) has all requisite power and
authority, corporate or otherwise, to own, operate and lease its properties and
to carry on its business as now being conducted. Each Subsidiary is an Illinois
banking corporation or a national banking association, and has all requisite
power and authority, corporate or otherwise, to own, operate and lease its
property and to carry on its business as now being conducted. The Borrower and
the Subsidiaries have made payment of all franchise and similar taxes in the
State of Illinois and in all of the respective jurisdictions in which they are
incorporated or qualified, insofar as such taxes are due and payable at the date
of this Agreement, except for any such taxes the validity of which is being
contested in good faith and for which proper reserves have been set aside on the
books of the Borrower or such Subsidiary, as the case may be.
(b) The Borrower is the owner of 100% of the issued and outstanding
capital stock of each of the Subsidiaries.
(c) The Subsidiary stock has been duly authorized, legally and validly
issued, fully paid and nonassessable, and is owned by the Borrower free and
clear of all pledges liens, security interests, charges or encumbrances, except,
upon consummation of the transactions contemplated herein, for the security
interest granted by the Borrower to LaSalle. There are, as of the date hereof,
no outstanding options, rights or warrants obligating Borrower to issue, deliver
or sell, or cause to be issued, delivered or sold, additional shares of the
capital stock of any Subsidiary or obligating Borrower to grant, extend or enter
into any such agreement or commitment, except for such agreements or commitments
existing as of the date of this Agreement and disclosed to LaSalle.
(d) The financial statements of:
(i) the Borrower, all of which have heretofore been furnished
to LaSalle, have been prepared in accordance with generally accepted
accounting principles consistently applied ("GAAP") and maintained by
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the Borrower throughout the periods involved, and fairly present the
financial condition of the Borrower individually and on a consolidated
basis at such dates specified therein and the results of its operations
for the periods then ended; and
(ii) each Subsidiary, all of which have heretofore been
furnished to LaSalle, to the best knowledge of the Borrower have been
prepared in accordance with GAAP and maintained by such Subsidiary
throughout the periods involved, and fairly present the financial
condition of such Subsidiary at such dates specified therein and the
results of its operations for the periods then entered.
(e) To the best knowledge of the Borrower, since the latest date of the
financial statements referred to in Section 5(d) above, there have been no
material changes in the assets, liabilities, or condition, financial or
otherwise, of the Borrower or any Subsidiary other than changes arising from
transactions in the ordinary course of business, and no such changes have been
materially adverse, whether in the ordinary course of business or otherwise. To
the best knowledge of the Borrower, neither the business nor the properties of
the Borrower or any
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Subsidiary have been materially and adversely affected in any way, including,
without limitation, as a result of any fire, explosion, accident, strike,
lockout, labor dispute, flood, drought, embargo, imposition of governmental
restrictions, confiscation by a governmental agency or acts of God.
(f) There are no actions, suits, proceedings or written agreements
pending, nor to the best of the knowledge of the Borrower threatened or
proposed, against the Borrower or, to the best knowledge of the Borrower, any
Subsidiary, at law or in equity or before or by any federal, state, municipal or
other governmental department, commission, board or other administrative agency,
domestic or foreign, which are of a material nature. Neither of the Borrower
nor, to the best knowledge of the Borrower, any Subsidiary is in default with
respect to any order, writ, injunction or decree of, or any written agreement
with, any court, commission, board or agency, domestic or foreign.
(g) all tax returns and reports of the Borrower and, to the best
knowledge of the Borrower, each Subsidiary, required by law to be filed have
been duly filed, and all taxes, assessments, fees and other governmental charges
upon the Borrower and the Subsidiaries or upon any of their properties or assets
which are due and payable have been paid, and the Borrower knows of no
additional assessment of a material nature against the Borrower or the
Subsidiaries for taxes, or, except as disclosed on the financial statements
referred to in Section 5(d) above, of any basis for any such additional
assessment.
(h) The Borrower's primary business is that of a financial holding
company. All necessary regulatory approvals have been obtained for the Borrower
to conduct its business.
(i) The deposit accounts of the Subsidiaries are insured by the Federal
Deposit Insurance Corporation ("FDIC").
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(j) None of the Pledged security constitutes margin stock, as defined
in Regulation U of the Board of Governors of the Federal Reserve system ("FRS").
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The foregoing representations and warranties shall survive the making
of this Agreement, and execution and delivery of the Notes and the Pledge
Agreement, and shall be deemed to be continuing representations and warranties
until such time as the Borrower has satisfied all of its obligations to LaSalle;
including, but not limited to the obligation to pay in full all principal,
interest and other amounts in accordance with the terms of this Agreement, the
Notes and the Pledge Agreement.
6. NEGATIVE COVENANTS
The Borrower agrees that until the Borrower satisfies all of its
obligations to LaSalle, including, but not limited to its obligations to pay in
full all principal, interest and other amounts owing in accordance with the
terms of this Agreement, the Notes and the Pledge Agreement, the Borrower shall
not, nor shall the Borrower cause, permit or allow any Subsidiary to:
(a) create, assume, incur, have outstanding, or in any manner become
liable in respect of any indebtedness for borrowed money, except in the case of
Borrower, subordinated indebtedness in an amount not to exceed $25,000,000
(issued in compliance with 12 CFR 3),
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secured indebtedness under Section 6(b)(vi), and except as permitted with the
express prior written consent of LaSalle and, in the case of the Subsidiaries,
indebtedness incurred in the ordinary course of the business of banking and in
accordance with applicable laws and regulations and safe and sound banking
practices. For purposes of this Agreement, the phrase "indebtedness" shall mean
and include:
(i) all items arising from the borrowing of money, which
according to generally accepted accounting principles now in effect,
would be included in determining total liabilities as shown on the
balance sheet;
(ii) all indebtedness secured by any lien in property owned by
the Borrower whether or not such indebtedness shall have been assumed;
(iii) all guarantees and similar contingent liabilities in
respect to indebtedness of others; and
(iv) all other interest-bearing obligations evidencing
indebtedness in others;
(b) create, assume, incur, suffer or permit to exist any mortgage,
pledge, deed of trust, encumbrance (including the lien or retained security
title of a conditional vendor), security interest, assignment, lien or charge of
any kind or character upon or with respect to property whether owned at the date
hereof or hereafter acquired by the Borrower or a Subsidiary, or assign or
otherwise convey any right to receive income, except:
(i) liens for taxes, assessments or other governmental charges
for the then current year or which are not yet due or delinquent;
(ii) liens for taxes, assessments or other governmental
charges already due, but the validity of which is being contested in
good faith in such a manner as not to make the property forfeitable;
(iii) liens and charges incidental to current operations which
are not due or delinquent;
(iv) liens for workmen's compensation awards not due or
delinquent;
(v) pledges or deposits to secure obligations under workmen's
compensation laws or similar legislation;
(vi) purchase money mortgages or other liens on real property
including those incurred for the construction of a banking facility,
and bank furniture and fixtures acquired or held in the ordinary course
of business to secure the purchase price of such property or to secure
the indebtedness incurred solely for the purpose of financing the
acquisition, construction or improvement of any such property to be
subject to such mortgages or other liens, or mortgages or other liens
existing on any such property at the time of acquisition, or
extensions, renewals, or replacements of any of the foregoing for the
same or a lesser amount; provided that no such mortgage or other liens
shall extend to
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or cover any property other than the property being acquired,
constructed or improved, and no such extension, renewal or replacement
shall extend to or cover any property not theretofore subject to the
mortgage or lien being extended, renewed or replaced, and provided
further that no such mortgage or lien shall exceed 75% of the price of
acquisition, construction or improvement at the time of acquisition,
construction or improvement; and provided further that the aggregate
principal amount of consolidated indebtedness at any one time
outstanding and secured by mortgages, liens, conditional sale
agreements and other security interests permitted by this clause (vi)
shall not exceed 10% of the consolidated capital of the Borrower or a
Subsidiary in any given calendar year, as the case may be;
(vii) liens existing on the date hereof as shown on the
financial statements; and
(viii) in the case of a Subsidiary, liens incurred in the
ordinary course of the business of banking and in accordance with
applicable laws and regulations and safe and sound banking practices;
(c) dispose by sale, assignment, lease or otherwise property or assets
now owned or hereafter acquired, outside the ordinary course of business in
excess of 10% of its consolidated assets in any fiscal year;
(d) merge into or consolidate with or into any other person, firm or
corporation;
(e) make any loans or advances whether secured or unsecured to any
person, firm or corporation, other than loans or advances made by a Subsidiary
in the ordinary course of its banking business and in accordance with applicable
laws and regulations and safe and sound banking practices;
(f) engage in any business or activity not permitted by all applicable
laws and regulations, including without limitation, the Bank Holding Company Act
of 1954, the Illinois Banking Act, the Federal Deposit Insurance Act and any
regulations promulgated thereunder;
(g) make any loan or advance secured by the capital stock of another
bank or depository institution (except for loans made in the ordinary course of
business), or acquire the capital stock, assets or obligations of or any
interest in another bank or depository institution, without prior written
approval of LaSalle;
(h) directly or indirectly create, assume, incur, suffer or permit to
exist any pledge, encumbrance, security interest, assignment, lien or charge of
any kind or character on any capital stock owned by the Borrower;
(i) cause or allow the percent of any Subsidiary Stock to diminish as a
percentage of the outstanding capital stock of any such Subsidiary;
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(j) sell, transfer, issue, reissue, exchange or grant any option with
respect to the Subsidiary Stock, except pursuant to such agreements or
commitments therefor existing as of the date of this Agreement and disclosed to
LaSalle;
(k) redeem any of its capital stock, declare a stock dividend or split
or otherwise change the capital structure of Borrower or any Subsidiary without
prior written approval of LaSalle, if such redemption, dividend, split or other
action would result in any change in the identity of the individuals or entities
previously in control of the Borrower or any Subsidiary or grant a security
interest in any ownership interest of any individual or entity, directly or
indirectly controlling the Borrower or any Subsidiary, which could result in a
change in the identity of the individuals or entities previously in control of
the Borrower or any Subsidiary. For the purpose hereof, the terms "control" or
"controlling" shall mean the possession of the power to direct, or cause the
direction of, the management and policies of the Borrower or a Subsidiary, as
applicable, by contract or voting of securities;
(l) breach or fail to perform or observe any of the terms and
conditions of the Notes, the Pledge Agreement or any other document or agreement
entered into or delivered in connection with, or relating to, the Loan,
(m) engage in any unsafe or unsound banking practices; or
(n) violate any law or regulation, or any condition imposed by of
undertaking provided to the FRS, the FDIC or the Illinois Commissioner of Banks
and Real Estate in connection with the Borrower's ownership of the Subsidiary
Stock.
7. AFFIRMATIVE COVENANTS.
The Borrower agrees that until the Borrower satisfies all of its
obligations to LaSalle; including, but not limited to its obligations to pay in
full all principal, interest and other amounts in accordance with the terms of
the Agreement, the Notes and the Pledge Agreement, it shall:
(a) furnish and deliver to LaSalle:
(i) as soon as practicable, and in no event later than
forty-five (45) days after the and of each of the first three calendar
quarters of the Borrower and each Subsidiary, a copy of: (1) the
balance sheet, profit and loss statement, surplus statement and any
supporting schedules prepared in accordance with GAAP and signed by the
presidents and chief financial officers of the Borrower and the
Subsidiaries; and (2) all financial statements, including, but not
limited to, all call reports, filed with any state or federal bank
regulatory authority;
(ii) as soon as practicable, and in no event later than one
hundred twenty (120) days after the end of each calendar year, a copy
of: (1) the consolidated balance sheets as of the end of such year and
the consolidated profit and loss and surplus statements for the
Borrower and its Subsidiaries for such year, audited by independent
certified public accountants satisfactory to LaSalle and accompanied by
an unqualified opinion; and (2) all financial statements and reports,
including, but not limited to call reports and annual reports, filed
annually with any state or federal regulatory authority;
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(iii) immediately upon request by LaSalle, copies of the then
current loan/asset watch list, the substandard loan/asset list, the
nonperforming loan/asset list and other real estate owned list of the
subsidiaries;
(iv) immediately after receiving knowledge thereof, notice in
writing of all charges, assessment, actions, suits and proceedings that
are proposed or initiated by, or brought before, any court or
governmental department, commission, board or other administrative
agency, in connection with the Borrower or any Subsidiary (other than
litigation in the ordinary course of business not involving the FRS,
the FDIC or the Illinois Commissioner of Banks and Real Estate, which,
if adversely decided, would not have a material effect on the financial
condition or operations of the Borrower or such Subsidiary); and
(v) promptly after the occurrence thereof, notice of any other
matter which has resulted in a materially adverse change in the
financial condition or operations of the Borrower or any Subsidiary;
(b) contemporaneously with the furnishing of a copy of each annual
report and of each quarterly statement provided pursuant to Section 7(a)(i) and
(ii) above, deliver to LaSalle, a certificate signed by the President and the
Treasurer of the Borrower, containing a computation of the then current
financial ratios specified in Subsections 7(d) through (h) of this Agreement,
and stating that no Default or unmatured Default has occurred or is continuing,
or, if such event exists, describing such event and the steps, if any, that are
being taken to cure it, and the time within which such cure will occur;
(c) maintain such capital as is necessary to cause the Borrower to have
adequate capital in accordance with the regulations of the FRS and any
requirements or conditions that the FRS has or may impose on the Borrower;
(d) maintain such capital as is necessary to cause each Subsidiary to
be classified as a "adequately capitalized" institution in accordance with the
regulations of the FDIC, currently measured on the basis of information filed by
Borrower in its quarterly Consolidated Report of Income and Condition (the "Call
Report") as follows:
(i) Total Capital to Risk-Weighted Assets of not less than 8%;
(ii) Tier 1 Capital to Risk-Weighted Assets Of not less than
4%; and
(iii) Tier 1 Capital to average Total Assets of not less than
4% (For the purposes of this subsection (d)(iii), the average Total
Assets shall be determined on the basis of information contained in the
preceding four (4) Call Reports);
(e) cause the Borrower, on a consolidated basis, to maintain tangible
equity capital of no less than $150,000,000. For the purposes of this Section 7
(e), "tangible equity capital" shall mean the sum of the common stock, surplus
and retained earning accounts of the Borrower, reduced by the amount of any
goodwill;
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(f) cause the ratio of nonperforming loans to the primary capital of
the Subsidiaries, on a consolidated basis, to be not more than twenty percent
(20%) at all times. For purposes of this Section 7(f), "primary capital" shall
mean the sum of the common stock, surplus and retained earning accounts plus the
reserve for loan and lease losses, and "nonperforming loans" shall mean the sum
of all non-accrual loans and loans on which any payment is ninety (90) or more
days past due;
(g) cause the ratios of the loan and lease loss reserve to the total
loans of the Subsidiaries, on a consolidated basis, to be not less than one half
of one percent (.50%) at all times;
(h) cause the Borrower's return on assets, determined on the basis of
information filed in the Borrower's Call Report, to be at least thirty five
hundredths of one percent (.35%) at all times;
(i) promptly pay and discharge all taxes, assessments and other
governmental charges imposed upon the Borrower or the Subsidiaries or upon the
income, profits or property of the Borrower or the Subsidiaries and all claims
for labor, material or supplies which, if unpaid, may by law become a lien or
charge upon the property of the Borrower or the Subsidiaries. Neither the
Borrower nor the Subsidiaries shall be required to pay any such tax, assessment,
charge or claim, so long as the validity thereof shall be contested in good
faith by appropriate proceedings, and reserves therefor shall be maintained on
the books of the Borrower or any such Subsidiary as are deemed reasonably
adequate by LaSalle;
(j) maintain bonds and insurance and cause each Subsidiary to maintain
bonds and insurance with responsible and reputable insurance companies or
associations in such amounts and covering such risk as is usually carried by
owners of similar businesses and properties in the same general area in which
the Borrower or such Subsidiary respectively operate, and such additional bonds
and insurance as may be reasonably required by LaSalle;
(k) permit and cause the Subsidiaries to permit LaSalle, through its
employees, attorneys, accountants or other agents, to inspect any of the
properties, corporate books and financial books and records of the Borrower and
the Subsidiaries at such times and as often as LaSalle reasonably may request;
and
(l) promptly provide and cause the Subsidiaries promptly to provide
LaSalle with such other information concerning the business, operations,
financial condition and regulatory status of the Borrower and the Subsidiaries
as LaSalle may from time to time reasonably request.
8. COLLATERAL.
Pursuant to the Pledge Agreement, the Borrower has herewith assigned,
transferred, pledged and delivered to LaSalle as collateral for all of the
Borrower's obligations from time to time to LaSalle the Subsidiary Stock and any
other Pledged Security (as defined in the Pledge Agreement) whether now or
hereafter pledged.
9. EVENTS OF DEFAULT; DEFAULT; RIGHTS UPON DEFAULT.
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The happening or occurrence of any of the following events or acts
shall each constitute a default hereunder (each, a "Default"), and any such
-------
default shall also constitute a Default under the Notes, the Pledge Agreement
and any other loan document, without right to notice or time to cure in favor of
the Borrower except as indicated below:
(a) if the Borrower fails to make any payment, as provided for herein;
(b) if there continues to exist any breach under any obligation of any
other documents executed pursuant to this Agreement including, without
limitation, the Notes and the Pledge Agreement and such breach remains uncured
beyond the applicable time period, if any, specifically provided therefor;
(c) if any representation or warranty made in this Agreement shall be
false when made or be false at any time during the term of this Agreement or any
extension hereof, or if the Borrower fails to perform or observe any covenant or
agreement contained in this Agreement within thirty (30) days after notice
thereof by LaSalle;
(d) if the Borrower fails to perform or observe any covenant or
agreement contained in any other agreement between the Borrower or any
Subsidiary and LaSalle, or if any condition contained in any agreement between
the Borrower or any Subsidiary and LaSalle is not fulfilled and such failure
remains uncured beyond the cure period, if any, specifically provided therefor;
(e) if the Borrower shall continue to fail to perform and observe, or
cause at permit any Subsidiary to fail to perform and observe any covenants
under this Agreement, including, without limitation, all affirmative and
negative covenants set forth in Sections 6 and 7 of this Agreement for fifteen
(15) days after notice thereof by LaSalle;
(f) if the FRS, the FDIC, the Illinois Commissioner of Banks and Real
Estate or other governmental agency charged with the regulation of bank holding
companies or depository institutions: (i) issues to the Borrower or any
Subsidiary, or initiates any action, suit or proceeding to obtain against,
impose on or require from the Borrower, or any Subsidiary, a cease and desist
order or similar regulatory order, the assessment of civil monetary penalties,
articles of agreement, a memorandum of understanding, a capital directive, a
capital restoration plan, restrictions that prevent or as a practical matter
impair the payment of dividends by any Subsidiary (except those de novo
Subsidiaries in their first three years of existence) or the payments of any
debt by the Borrower, restrictions that make the payment of dividends by any
Subsidiary or the payment of debt by the Borrower subject to prior regulatory
approval, a notice or finding under section 51 or section 52 of the Illinois
Banking Act or section 8(a) of the Federal Deposit Insurance Act, or any similar
enforcement action, measure or proceeding; or (ii) issues to any officer or
director of the Borrower, or any Subsidiary, or initiates any action, suit or
proceeding to obtain against, impose on or require from any such officer or
director, a cease and desist order or similar regulatory order, a removal order,
a suspension order, or the assessment of civil monetary penalties;
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(g) if any Subsidiary is notified that it is considered an institution
in "troubled condition" within the meaning of 12 U.S.C. Section 1831i and the
regulations promulgated thereunder, or if a conservator or receiver is appointed
for any Subsidiary;
(h) if the Borrower or any Subsidiary (i) becomes insolvent or is
unable to pay its debts as they mature; (ii) makes an assignment for the benefit
of creditors or admits in writing its inability to pay its debts as they mature;
(iii) suspends transaction of its usual business; or (iv) if a trustee of any
substantial part of the assets of the Borrower or any Subsidiary is applied for
or appointed, and if appointed in a proceeding brought against the Borrower, the
Borrower by any action or failure to act indicates its approval of, consent to,
or acquiescence in such appointment, or within thirty (30) days such appointment
is not vacated or stayed on appeal or otherwise, or shall not otherwise have
ceased to continue in effect;
(i) if any proceedings involving the Borrower or any Subsidiary are
commenced by or against the Borrower or any Subsidiary under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt, dissolution or
liquidation law or statute of the federal government or any state government and
if such proceedings are instituted against the Borrower, the Borrower by any
action or failure to act indicates its approval of, consent to or acquiescence
therein, or an order shall be entered approving the petition in such proceedings
and within thirty (30) days after the entry thereof such order is not vacated or
stayed on appeal or otherwise, or shall not otherwise have ceased to continue in
effect, or
(j) if the Borrower or any Subsidiary continues to be in default in any
payment of principal or interest for any other obligation or in the performance
of any other term, condition or covenant contained in any agreement (including,
but not limited to, an agreement in connection with the acquisition of capital
equipment on a title retention or net lease basis), under which any such
obligation is created, the effect of which default is to cause or permit the
holder of such obligation to cause such obligation to become due prior to its
stated maturity.
Upon the occurrence of a Default, LaSalle shall have all rights and
remedies provided by applicable law and, without limiting the generality of the
foregoing, may, at its option, declare its commitments to be terminated and the
Notes shall thereupon be and become forthwith, due and payable, without any
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Borrower, anything contained herein, in the Notes
or the Pledge Agreement to the contrary notwithstanding, and may, also without
limitation, appropriate and apply toward the payment of the Notes any
indebtedness of LaSalle to the Borrower however created or arising, and may,
also without limitation exercise any and all rights in and to the Pledged
Security referred to in Section 6 above and in the Pledge Agreement. There shall
be no obligation to liquidate the Pledged Security nor any other collateral
pledged hereunder in any order or with any priority or to exercise any remedy
available to LaSalle in any order,
10. MISCELLANEOUS.
(a) No failure or delay on the part of LaSalle in exercising any right,
power or remedy hereunder shall operate as a waiver thereof. No single or
partial exercise of any such right, power or remedy shall preclude any other or
further exercise thereof or the exercise of any other right, power or remedy
hereunder. The remedies herein provided are cumulative and not
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exclusive of any remedies provided by law. Time is of the essence in the
performance of the covenants, agreements and obligations of the Borrower and the
Subsidiaries.
(b) This Agreement constitutes the entire agreement between the parties
and supersedes all prior agreements between LaSalle and the Borrower with
respect to the subject matter hereof. No amendment, modification, termination or
waiver of any provision of this Agreement, the Pledge Agreement or the Notes, or
consent to any departure by the Borrower therefrom, shall be effective unless in
writing and signed by LaSalle, and then such waiver or consent shall be
effective only for the specific purpose for which given. No notice to or demand
on the Borrower in any case shall entitle the Borrower to any other or further
notice or demand in similar or other circumstances.
(c) All notices, requests, demands and other communications provided
for hereunder shall be: (i) in writing, (ii) made in one of the following
manners, and (iii) shall be deemed given (A) if and when personally delivered;
(B) on the next business day if sent by nationally recognized overnight courier
addressed to the appropriate party as set forth below; or (C) on the second
business day after being deposited in United States certified or registered
mail, and addressed as follows:
If to Borrower: Wintrust Financial Corporation
727 North Bank Lane
Lake Forest, Illinois 60645
Attention: Edward J. Wehmer
If to LaSalle: LaSalle Bank National Association
135 South LaSalle Street
Chicago, Illinois 60674
Attention: Jeffery J. Bowden
or, as to each party, at such other address as shall be designated by such party
in a written notice to each other party complying as to delivery with the terms
of this subsection.
(d) This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which taken
together shall constitute but one and the same instrument.
(e) This Agreement shall become effective when it shall have been
executed by the Borrower and LaSalle and thereafter shall be binding upon and
inure to the benefit of the Borrower, LaSalle and their respective successors
and assigns; provided, that the Borrower shall not assign its rights hereunder
or any interest herein without the prior written consent of LaSalle.
(f) This Agreement and the Notes shall be governed by the internal laws
of the State of Illinois, and for all purposes shall be construed in accordance
with the laws of said State without giving effect to the choice of law
provisions of such State.
(g) Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or
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lack of enforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction. Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law.
(h) All covenants, agreements, representations and warranties made by
the Borrower herein shall, notwithstanding any investigation by or knowledge on
the part of LaSalle, be deemed material and relied on by LaSalle and shall
survive the execution and delivery to LaSalle of this Agreement and the Notes.
(i) This Agreement shall govern the terms of any extensions or renewals
of the Notes, subject to any additional terms and conditions imposed by LaSalle
in connection with any such extension or renewal.
(j) The Borrower hereby represents that the indebtedness evidenced
hereby constitutes a loan made by LaSalle to enable the Borrower to carry on a
commercial enterprise for the purpose of investment or profit; and that such
loan is a loan for business purposes under the intent and purview of 815 ILCS
205/4.
(k) LASALLE AND THE BORROWER, AFTER CONSULTING OR HAVING HAD THE
OPPORTUNITY TO CONSULT WITH COUNSEL, EACH KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE IRREVOCABLY THE RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY
LEGAL PROCEEDING BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT, THE NOTES, THE COLLATERAL, OR ANY OTHER AGREEMENT EXECUTED OR
CONTEMPLATED TO BE EXECUTED IN CONJUNCTION WITH THIS AGREEMENT, OR ANY COURSE OF
CONDUCT OR COURSE OF DEALING IN WHICH LASALLE AND THE BORROWER ARE ADVERSE
PARTIES. THIS PROVISION IS A MATERIAL INDUCEMENT FOR LASALLE GRANTING ANY
FINANCIAL ACCOMMODATION TO THE BORROWER,
(l) TO INDUCE LASALLE TO MAKE THE LOAN, THE BORROWER IRREVOCABLY AGREES
THAT ALL ACTIONS ARISING DIRECTLY OR INDIRECTLY AS A RESULT OR CONSEQUENCE OF
THIS AGREEMENT, THE NOTES, THE PLEDGE AGREEMENTS OR ANY OTHER AGREEMENT WITH
LASALLE SHALL BE INSTITUTED AND LITIGATED ONLY IN COURTS HAVING SITUS IN THE
CITY OF CHICAGO, ILLINOIS. THE BORROWER HEREBY CONSENTS TO THE EXCLUSIVE
JURISDICTION AND VENUE OF ANY STATE OR FEDERAL COURT HAVING ITS SITUS IN
CHICAGO, AND WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS, THE BORROWER
HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND CONSENTS THAT ALL SUCH
SERVICE OF PROCESS MAY BE MADE BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED,
DIRECTED TO THE BORROWER AS SET FORTH HEREIN IN THE MANNER PROVIDED BY
APPLICABLE STATUTE, LAW, RULE OF COURT OR OTHERWISE.
(m) The Borrower will pay all reasonable costs and expenses (including,
without limitation, reasonable attorneys' fees) in connection with the
preparation, negotiation,
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documentation, execution and delivery of this Agreement, and shall pay all
reasonable costs and expenses (including, without limitation, reasonable
attorneys' fees) for the administration, amendment, modification, collection and
enforcement of this Agreement, the Notes, the Pledge Agreement and the other
instruments and documents to be delivered hereunder. In addition, the Borrower
shall pay, and save LaSalle harmless from any liability for, any and all stamp
and other taxes determined to be payable in connection with the execution and
delivery of this Agreement, the borrowings hereunder, or the Notes and the other
instruments and documents to be delivered hereunder, and agrees to save LaSalle
harmless from and against any and all liabilities with respect to or resulting
from any delay in paying or omitting to pay such taxes. The foregoing
obligations shall survive any termination of this Agreement, the Notes or the
Pledge Agreement. Any of the foregoing amounts incurred by LaSalle and not paid
by the Borrower upon demand shall bear interest from the date incurred at the
Prime Rate plus two percent (2%) per annum and shall be deemed part of the
indebtedness hereunder.
(n) Any accounting term not specifically defined herein shall be
construed in accordance with generally accepted accounting principles and all
financial data submitted pursuant to this Agreement shall be prepared in
accordance with such principles.
(o) LaSalle reserves the right to sell participations in this Loan or
otherwise assign, transfer or hypothecate all or any part of this Loan.
(p) All covenants, agreements warranties and representations of the
Borrower herein shall be deemed to have been made jointly and severally by the
Borrower and the Subsidiaries.
(q) The Borrower agrees to do such further acts and things and to
execute and deliver to LaSalle such additional assignments, agreements, powers
and instruments as LaSalle may reasonably require or deem advisable to carry
into affect the purpose of this Agreement, the Notes, the Pledge Agreement or
any agreement or instrument in connection herewith, or to better assure and
confirm unto the LaSalle its rights, powers and remedies hereunder or under such
other loan documents.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
LASALLE BANK NATIONAL WINTRUST FINANCIAL CORPORATION
ASSOCIATION
By: ________________________________ By: ________________________________
Its: ________________________________ Its: ________________________________
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