Exhibit 4(g)
REVOLVING CREDIT AGREEMENT
This Revolving Credit Agreement (the "Agreement") is made and entered
into this 26th day of January, 1995 by and between Republic Bancorp Inc. (the
"Borrower") and Firstar Bank Milwaukee, N.A. (the "Bank").
ARTICLE I. DEFINITIONS
1.1 Adjusted LIBOR Rate. The term "Adjusted LIBOR Rate" means, for any
Interest Period, one and seventy-five one-hundredths percent (1.75%) per annum
in excess of the annual rate of interest obtained by dividing (i) the LIBOR
Rate for such Interest Period, by (ii) an amount equal to one minus the stated
maximum rate (expressed as a decimal) of all reserve requirements (including
any marginal, emergency, supplemental, special or other reserves) that is
specified on the first day of such Interest Period by the Board of Governors
of the Federal Reserve System (or a successor agency) for determining the
maximum reserve requirement with respect to Eurocurrency fundings (currently
referred to as "Eurocurrency liabilities" in Regulation D of such Board)
maintained by a member bank of such system and having a term equal to such
Interest Period.
1.2 Adjusted LIBOR Rate Loan. The term "Adjusted LIBOR Rate
Loan" means any loan hereunder bearing interest at the Adjusted
LIBOR Rate.
1.3 Business Day. The term "Business Day" means a day other than a
Saturday, Sunday or other day on which the Bank is not open for the
transaction of substantially all of its banking functions; provided, however,
that for purposes of determining the LIBOR Rate for an applicable Interest
Period, references to Business Day shall include only those days on which
dealings in dollar deposits are carried out by U.S. financial institutions in
the London Interbank market.
1.4 Financial Definitions. Except as otherwise provided, all
accounting terms shall be construed in accordance with generally accepted
accounting principles consistently applied and consistent with those applied
in the preparation of the financial statements referred to in section 4.11,
and financial data submitted pursuant to this Agreement shall be prepared in
accordance with such principles. As used herein:
(a) The term "Assets" means the sum of all assets
including Loan Loss Reserves of the Subsidiary Bank
accounting principles applicable to banks, consistently
applied.
(b) The term "Consolidated Net Worth" means the consolidated
shareholders' equity of the Borrower and its Subsidiaries
(including common stock, additional paid-in capital, retained
earnings, preferred stock and any paid-in capital attributable
thereto) determined in accordance with generally accepted
accounting principles.
(c) The term "Fixed Charge Coverage Ratio" means the ratio
calculated on a consolidated basis for the Borrower and its
Subsidiaries of the sum of pre-tax income and Interest Expense to
Interest Expense.
(d) The term "Interest Expense" means the interest expense on
short term and long term borrowings and does not include interest
expense on deposits, fed funds borrowings, advances from any
Federal Home Loan Bank or reverse repurchase agreements.
(e) The term "Loan Loss Reserves" means the loan loss reserves of
the Subsidiary Bank reported in the most recent call report of the
Subsidiary Bank.
(f) The term "Nonperforming Loans" means the sum of those loans 90
days or more past due and those loans classified as non-accrual or
renegotiated as reported in the most recent call report of the
Subsidiary Bank.
(g) The term "Other Real Estate" means the value of all real
estate owned by the Subsidiary Bank and classified as such by the
examiners of the Comptroller of the Currency, Federal Deposit
Insurance Corporation, Federal Reserve Board or appropriate state
agency responsible for examining the Subsidiary Bank, as shown on
the Subsidiary Bank's most recent examination report.
(h) The term "Primary Capital" means primary capital as such term
is used in the risk-based capital guidelines applicable to the
Subsidiary Bank.
(i) The term "Risk-Weighted Assets" will have the meaning
attributed to such term in the Risk-Based Capital Guidelines
issued by the Board of Governors of the Federal Reserve System and
in effect from time to time.
(j) The term "Tier 1 Capital" means tier 1 capital as such term is
used in the risk-based capital guidelines issued by the primary
regulator of the Subsidiary Bank and in effect from time to time.
(k) The term "Total Capital" means core capital and supplementary
capital (provided that supplementary capital shall only be
included in Total Capital to the extent permitted by the
Risk-Based Capital Guidelines issued by the Board of Governors of
the Federal Reserve System and in effect from time to time).
(l) The term "Total Loans" means the aggregate outstanding
principal amount of all loans shown as assets of the Subsidiary
Bank in its most recent call report; provided, however, in any
event Total Loans will include portfolio loans and loans held for
sale.
1.5 Interest Period. The term "Interest Period" means with respect
to each Adjusted LIBOR Rate Loan, the period commencing on the applicable
Borrowing Date and ending 1, 3 or 6 months thereafter, as specified by the
Borrower in the related notice of borrowing pursuant to Section 2.6 below, and
with respect to a Variable Rate Loan converted to an Adjusted LIBOR Rate
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Loan, or in the case of a continuation of an Adjusted LIBOR Rate Loan for an
additional Interest Period, the period commencing on the date of such
conversion or continuation and ending 1, 3 or 6 months thereafter, as
specified by the Borrower in the related notice pursuant to Section 2.8 below;
provided that:
(a) any Interest Period which would otherwise end on a day which
is not a Business Day will be extended to the next succeeding
Business Day unless such Business Day falls in another calendar
month, in which case such Interest Period will end on the
immediately preceding Business Day;
(b) any Interest Period which begins on the last Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in a calendar month at the end of such Interest
Period) will, subject to clause (c) below, end on the last
Business Day of a calendar month; and
(c) no Interest Period for an Adjusted LIBOR Rate Loan
will extend beyond the Termination Date.
1.6 LIBOR Rate. The term "LIBOR Rate" means, for any Interest
Period, the annual rate of interest equal to the rate at which deposits in
dollars are offered to the Bank in the London Interbank Eurocurrency market
for such Interest Period as determined by the Bank from the dollar offered
rates which appear on the Telerate System page setting forth such rates on the
first day of such Interest Period.
1.7 Prime Rate. The term "Prime Rate" means the prime
rate of interest announced by the Bank and in effect from time to
time, with the rate thereon changing as and when such prime rate changes.
1.8 Variable Rate Loan. The term "Variable Rate Loan"
means any loan hereunder bearing interest at the Variable Rate.
1.9 Variable Rate. The term "Variable Rate" means a
rate of interest equal to .25% per annum less than the Prime
Rate. The Variable Rate shall change as and when such Prime Rate
changes.
ARTICLE II. LOANS, INTEREST RATE, FEES
2.1 Revolving Credit Facility. From time to time prior to January
25, 1996 or the earlier termination hereof pursuant to Section VI (the
"Termination Date"), the Borrower may borrow from the Bank up to the aggregate
principal amount outstanding at any one time of up to $18,000,000 (the "Loan
Amount"). All loans hereunder shall be evidenced by a single promissory note
of the Borrower payable to the order of the Bank in the principal amount of
$18,000,000 (the "Note"). Although the Note shall be expressed to be payable
in the amount of $18,000,000, the Borrower shall be obligated to pay only the
amount of loans actually disbursed hereunder, together with accrued interest
on the outstanding balance at the rates and on the dates specified therein and
such other charges provided for herein.
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2.2 Advances and Paying Procedure. The Bank is authorized and
directed to credit any of the Borrower's accounts with the Bank (or to the
account the Borrower designates in writing) for the loans made hereunder, and
the Bank is authorized to debit such account or any other account of the
Borrower with the Bank for the amount of any principal or interest due under
the Note or other amount due hereunder on the due date with respect thereto.
The Borrower will maintain a demand deposit account at the Bank to facilitate
borrowings and repayments hereunder.
2.3 Commitment Fee. For the period from the date hereof until
January 25, 1996, the Borrower shall pay to the Bank a commitment fee computed
at a rate of 1/8% per annum of the Loan Amount. Such commitment fee shall be
payable on a quarterly basis in arrears.
2.4 Security. The revolving credit facility provided for hereunder
shall be secured by all of the common and preferred stock of Republic Bank
(the "Subsidiary Bank") now owned or hereafter acquired by the Borrower,
except director qualifying shares, if any.
2.5 Interest Rates, Method of Calculation and Payment Dates.
(a) Interest Rate. The unpaid principal balance of each loan
outstanding from time to time hereunder shall bear interest at the
Variable Rate or the Adjusted LIBOR Rate as selected by the
Borrower in accordance with the procedure set forth in Section
2.6.
(b) Minimum Amount. Each loan shall be in the minimum
amount of $100,000 or in integral multiples of $100,000.
(c) Computations of Interest. All computations of interest and
other amounts due under the Note and this Agreement shall be based
on a year of 360 days using the actual number of days occurring in
the period for which such interest or other amounts are payable.
(d) Payments of Interest. The Borrower shall pay
interest on the outstanding principal balance of the
Note as follows:
(i) Variable Loans. Accrued and unpaid interest on
Variable Rate Loans shall be payable quarterly beginning
March 31, 1995 and continuing on the last day of each third
month thereafter and with the final payment of principal.
(ii) Adjusted LIBOR Rate Loans. Accrued and unpaid
interest on each Adjusted LIBOR Rate Loan with an Interest
Period of 1 or 3 months shall be payable on the last
Business Day of the applicable Interest Period therefor and
with the final payment of principal. Accrued and unpaid
interest on each Adjusted LIBOR Rate Loan with a 6 month
Interest Period shall be payable on a Business Day that is
3 months after the first Business Day of such Interest
Period and the last day of such Interest Period and with
the final payment of principal.
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(e) Limitation on Prepayments. A Variable Rate Loan may be
voluntarily prepaid in whole or in part at any time without
premium or penalty. An Adjusted LIBOR Rate Loan may not be paid
prior to the last day of the Interest Period applicable thereto.
(f) Interest Following Maturity. Principal amounts and accrued
interest thereon unpaid at the maturity thereof (whether by fixed
maturity or acceleration of maturity) shall bear interest from and
after maturity until paid computed at a rate equal to two percent
(2%) per annum in excess of the rate or rates then applicable to
each advance hereunder.
2.6 Procedure for Borrowing. The Borrower shall give notice to the
Bank of a proposed borrowing not later than 10:00 a.m. Milwaukee, Wisconsin
time on a proposed borrowing date in the case of a Variable Rate Loan or, in
the case of an Adjusted LIBOR Rate Loan, at least three Business Days prior to
the proposed borrowing date. Each such request shall be effective upon receipt
by the Bank, shall be in writing or by telephone to be promptly confirmed in
writing and sent to the Bank at the address specified below, shall specify the
proposed borrowing date, whether the requested loan is to be a Variable Rate
Loan or an Adjusted LIBOR Rate Loan, the amount of such loan and in case of an
Adjusted LIBOR Rate Loan, the initial Interest Period therefor. Subject to the
terms and conditions of this Agreement, the proceeds of each loan shall be
made available to the Borrower by depositing the proceeds thereof in
immediately available funds in an account maintained by the Borrower at the
Bank.
2.7 Conversion of Variable Rate Loans to Adjusted LIBOR Rate
Loans. So long as no default has occurred and is continuing, the Borrower may
convert all or any part of any outstanding Variable Rate Loan into an Adjusted
LIBOR Rate Loan by giving notice to the Bank of such conversion not later than
10:00 a.m. Milwaukee, Wisconsin time on a Business Day that is at least three
Business Days prior to the date of the requested conversion. Each such notice
shall be effective upon receipt by the Bank, shall be in writing or by
telephone to be promptly confirmed in writing and sent to the Bank at the
address specified below and shall specify the date and the amount of such
conversion and the initial Interest Period therefor. Each conversion of a
Variable Rate Loan to an Adjusted LIBOR Rate Loan shall be on a Business Day.
2.8 Procedures at the End of an Interest Period.
(a) Automatic Conversion. Unless the Borrower requests a new
Adjusted LIBOR Rate Loan in accordance with Section 2.6 above or
requests an extension of an Adjusted LIBOR Rate Loan in accordance
with Section 2.8(b) below, the Bank shall automatically and
without request by the Borrower convert each Adjusted LIBOR Rate
Loan to a Variable Rate Loan on the last day of the Interest
Period applicable thereto.
(b) Extension of Adjusted LIBOR Rate Loan. So long as no default
has occurred and is continuing, the Borrower may cause all or any
part of any outstanding Adjusted LIBOR Rate Loan to continue to
bear interest at an Adjusted LIBOR Rate at the end of an Interest
Period by notifying the Bank not later than 10:00 a.m. Milwaukee,
Wisconsin time on a Business Day that is at least three Business
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Days prior to the first day of a new Interest Period. Each such
notice shall be effective upon receipt by the Bank, shall be in
writing or by telephone to be promptly confirmed in writing and
sent to the Bank at the address specified below and shall specify
the first day of the Interest Period, the amount of the new
Adjusted LIBOR Rate Loan and the duration of such Interest Period.
Each new Interest Period for a new Adjusted LIBOR Rate Loan shall
begin on the last Business Day of the immediately preceding
Interest Period.
2.9 Special Provisions.
(a) Basis for Determining Interest Rate Inadequate or
Unfair. If with respect to the Interest Period for any
Adjusted LIBOR Rate Loan:
(i) the Bank determines in good faith (which determination
will be binding and conclusive on all parties) that by
reason of circumstances affecting the London interbank
market adequate and reasonable means do not exist for
ascertaining the applicable Adjusted LIBOR Rate; or
(ii) the Bank reasonably determines (which determination will
be binding and conclusive on all parties) that the Adjusted
LIBOR Rate will not adequately and fairly reflect the cost
of maintaining or funding such Adjusted LIBOR Rate Loan for
such Interest Period, or that the making or funding of
Adjusted LIBOR Rate Loans has become impracticable as a
result of an event occurring after the date of the
Agreement which in the reasonable opinion of the Bank
materially affects Adjusted LIBOR Rate Loans; then, [a] the
Bank will promptly notify the Borrower thereof, and [b] so
long as such circumstances will continue, the Bank will not
be under any obligation to make any Adjusted LIBOR Rate
Loan so affected.
(b) Changes in Law Rendering Certain Loans Unlawful. In the event
that any regulatory change should make it (or, in the good faith
judgment of the Bank, should raise substantial questions as to
whether it is) unlawful for the Bank to make, maintain or fund an
Adjusted LIBOR Rate Loan, (i) the Bank will promptly notify the
Borrower thereof; (ii) the obligation of the Bank to make Adjusted
LIBOR Rate Loans will, upon the effectiveness of such event, be
suspended for the duration of such unlawfulness; and (iii) upon
such notice, any outstanding Adjusted LIBOR Rate Loan will
automatically convert to a Variable Rate Loan.
(c) Funding Losses. The Borrower hereby agrees that upon demand by
the Bank (which demand will be accompanied by a statement setting
forth the basis for the calculations of the amount being claimed)
the Borrower will indemnify the Bank against any net loss or
expense which the Bank may sustain or incur (including, without
limitation, any net loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by
the Bank to fund or maintain Adjusted LIBOR Rate Loans), as
determined by the
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Bank, as a result of (i) any payment, prepayment
or conversion of any Adjusted LIBOR Rate Loan of the Bank on a
date other than the last Business Day of an Interest Period
whether or not required by any other provision of the Agreement,
or (ii) any failure of the Borrower to obtain an advance by
reference to the Adjusted LIBOR Rate on a Borrowing Date or to
convert a Variable Rate Loan to an Adjusted LIBOR Rate Loan or to
continue an Adjusted LIBOR Rate Loan at the end of any Interest
Period on a borrowing date, as specified by the Borrower in a
notice to the Bank as set forth above. All notices to the Bank
pursuant to this Agreement with respect to Adjusted LIBOR Rate
Loans will be deemed to be irrevocable.
(d) Conclusiveness of Statements. Determinations and
statements of the Bank pursuant to this Section 2.9 will
be conclusive absent manifest error.
ARTICLE III. CONDITIONS TO BORROWING
3.1 Conditions to Borrowing. The Bank shall not be obligated to
make (or continue to make) advances hereunder unless (i) the Bank has received
executed copies of this Agreement, the Note and Amended and Restated
Collateral Pledge Agreement (together with the Note, collectively, the "Loan
Documents"), in form and content satisfactory to the Bank; (ii) the Bank has
received original stock certificates representing 1,014,389 shares of common
stock of Republic Bank and certificates representing 510,000 shares of
preferred stock of Republic Bank and stock powers thereto; (iii) the Bank has
received certified copies of the Articles of Incorporation, By-Laws and a
certificate of status or good standing for the Borrower and the Subsidiary
Bank; (iv) the Bank has received a certified copy of a resolution or
authorization in form and content satisfactory to the Bank authorizing the
loan and all acts contemplated by this Agreement and all related documents,
and confirmation of proper authorization of all guaranties and other acts of
third parties contemplated hereunder; (v) the Bank has been provided with an
opinion of the Borrower's counsel in form and content satisfactory to the Bank
confirming the matters outlined in Section 4.1 and such other matters as the
Bank reasonably requests; (vi) no default exists under this Agreement or under
any other Loan Documents, or under any other agreements by and between the
Borrower and the Bank; and (vii) all proceedings taken in connection with the
transactions contemplated by this Agreement and all instruments,
authorizations and other documents applicable thereto, shall be satisfactory
to the Bank and its counsel.
ARTICLE IV. WARRANTIES AND COVENANTS
During the term of this Agreement, and while any part of the credit
granted the Borrower is available or any obligations under any of the Loan
Documents are unpaid or outstanding, the Borrower warrants and agrees as
follows:
4.1 Organization and Authority. The Borrower is a validly existing
corporation in good standing under the laws of its state of organization, and
has all requisite power and authority, corporate or otherwise, and possesses
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all licenses necessary, to conduct its business and own its properties. The
execution, delivery and performance of this Agreement and the other Loan
Documents (i) are within the Borrower's power; (ii) have been duly authorized
by necessary corporate action; (iii) do not require the approval of any
governmental agency; and (iv) will not violate any law, agreement or
restriction by which the Borrower is bound. This Agreement and the other Loan
Documents are the legal, valid and binding obligations of the Borrower,
enforceable against the Borrower in accordance with their terms.
4.2 Subsidiaries. As of the date hereof, the Borrower has five
subsidiaries consisting of the Subsidiary Bank, Mayflower Mortgage
Corporation, Republic Savings Bank, Market Street Mortgage Corporation and CUB
Funding Corporation (individually a "Subsidiary" and together, the
"Subsidiaries"). The Borrower agrees to notify the Bank immediately of any
entities which after the date hereof become subsidiaries of the Borrower or
the Subsidiaries. The Subsidiary Bank, as of the date hereof, has issued and
outstanding 1,014,389 shares of common stock, par value $10 per share, which
are duly authorized, validly issued, fully paid and non-assessable, of which
the Borrower owns 1,014,389 shares, which represent one hundred percent (100%)
of the issued and outstanding common stock of the Subsidiary Bank. The
Subsidiary Bank has issued and outstanding 510,000 shares of preferred stock,
par value $10 per share, which are duly authorized, validly issued, fully paid
and non-assessable, of which the Borrower owns 510,000 shares, which represent
one hundred percent (100%) of the issued and outstanding preferred stock of
the Subsidiary Bank. The common stock and preferred stock of the Subsidiary
Bank are free and clear of any liens, charges, encumbrances, rights of
redemption, preemptive rights or rights of first refusal of any kind or nature
whatsoever, except liens in favor of the Bank. Except as permitted under
Section 4.15, the Subsidiary Bank has no other shares of capital stock (common
or preferred), or securities or other obligations convertible into any of the
foregoing, authorized or outstanding and has no outstanding offers,
subscriptions, warrants, rights or other agreements or commitments obligating
the Subsidiary Bank to issue or sell any of the foregoing.
4.3 Litigation and Compliance with Laws. The Borrower and the
Subsidiaries have complied in all material respects with all applicable
federal and state laws and regulations, the failure to comply with which would
have a material adverse effect on the Borrower and the Subsidiaries taken as a
whole. Except to the extent previously disclosed to Bank, there are no claims,
actions, suits, or proceedings pending, or to the best knowledge of Borrower,
threatened or contemplated against or affecting Borrower or any Subsidiary, at
law or in equity, or before any federal, state or other governmental
authority, or before any arbitrator or arbitration panel, whether by contract
or otherwise which, if adversely decided, would have a material adverse effect
on the Borrower and the Subsidiaries taken as a whole, and there is no decree,
judgment or order of any kind in existence against or restraining Borrower or
any Subsidiary, or any of their officers, employees or directors, from taking
any action of any kind in connection with the business of Borrower or any
Subsidiary which decree, judgment or order has remained unvacated, unbonded
and unstayed for sixty (60) days following the date of entry thereof and
which, if it remains unvacated, unbonded and unstayed, would have a material
adverse effect on Borrower and the Subsidiaries taken as a whole. Except to
the extent previously disclosed to
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the Bank, neither Borrower nor any Subsidiary has (i) received from
any regulatory authority any criticisms, recommendations or suggestions
and Borrower has no reason to believe that any such is contemplated,
relating to any problem perceived by such regulatory authority with
any Subsidiary's capital structure, loan policies or portfolio, or
other banking and business practices which problem, if uncorrected, would
have a material adverse effect on the Borrower and the Subsidiaries taken as a
whole and which has not been resolved to the satisfaction of such regulatory
authority prior to taking any enforcement action with respect thereto, or (ii)
entered into any memorandum of understanding or similar arrangement with any
federal or state regulator relating to any unsound or unsafe banking practice
or conduct or any violation of law respecting the operations of the Borrower
or the operations of the Subsidiary Bank, which memorandum of understanding or
similar arrangement reflects a problem with such practice, conduct or
operations that is materially adverse to Borrower and its Subsidiaries taken
as a whole.
4.4 F.D.I.C. Insurance. The Subsidiary Bank and Republic Savings
Bank are insured as to deposits by the Federal Deposit Insurance Corporation
and no act has occurred which would adversely affect the status of such banks
as insured banks.
4.5 Corporate Existence; Business Activities; Assets. The Borrower
shall (i) preserve its corporate existence, rights and franchises; (ii) carry
on its business activities in substantially the manner such activities are
conducted as of the date of this Agreement; (iii) not liquidate, dissolve,
merge or consolidate with or into a nonaffiliated entity; and (iv) not sell,
lease, transfer or otherwise dispose of all or substantially all of its
assets.
4.6 Use of Proceeds; Margin Stock; Speculation. Advances by the
Bank hereunder shall be used by the Borrower to fund the purchase of mortgage
servicing rights and for the Borrower's other corporate purposes. The Borrower
will not use any of the loan proceeds to purchase or carry "margin" stock (as
defined in Regulation U of the Board of Governors of the Federal Reserve
System). No part of any of the proceeds shall be used for speculative
investment purposes, including, without limitation, speculating or hedging in
the commodities and/or futures market.
4.7 Restriction on Liens. The Borrower will not create, incur,
assume or permit to exist any mortgage, pledge, encumbrance or other lien or
levy upon or security interest in any of the Borrower's property now owned or
hereafter acquired, except (i) with respect to taxes and assessments which are
either not delinquent or which are being contested in good faith with adequate
reserves provided; (ii) easements, restrictions and minor title irregularities
and encumbrances which do not, as a practical matter, have an adverse effect
upon the value to the Borrower and use of the affected property; (iii) liens
in favor of the Bank; (iv) other liens disclosed in writing to the Bank prior
to the date hereof; and (v) judgment liens arising in connection with court
proceedings, provided the execution or other enforcement of such judgment
liens is effectively stayed and the claims secured thereby are being actively
contested in good faith and by appropriate proceedings.
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4.8 Restriction on Contingent Liabilities. The Borrower will not
guarantee or become a surety or otherwise contingently liable for any
obligations of others, except pursuant to the deposit and collection of
checks, the issuance or confirmation of letters of credit by the Subsidiary
Bank and Republic Savings Bank and similar matters in the ordinary course of
business; provided, however, the Borrower may guarantee or become a surety or
otherwise contingently liable for any obligations of its Subsidiaries to other
creditors under warehouse lines of credit for mortgage loans; and further
provided, the Borrower may guarantee or become a surety or otherwise
contingently liable for any other obligations of its Subsidiaries which do
not, in the aggregate, exceed $10,000,000.
4.9 Insurance. The Borrower will maintain insurance to such
extent, covering such risks and with such insurers as is usual and customary
for businesses operating similar properties, and as is reasonably satisfactory
to the Bank, including insurance for fire and other risks insured against by
extended coverage, public liability insurance and workers' compensation
insurance.
4.10 Taxes and Other Liabilities. The Borrower will pay and
discharge, prior to the time they become delinquent, all of its taxes,
assessments and other liabilities, except when the payment thereof is being
contested in good faith by appropriate procedures which will avoid foreclosure
of liens securing such items, and with adequate reserves provided therefor.
4.11 Financial Statements and Reporting. The financial statements
and other information previously provided to the Bank or provided to the Bank
in the future are or will be complete and accurate and prepared in accordance
with generally accepted accounting principles. There has been no material
adverse change in the Borrower's financial condition since such information
was provided to the Bank. The Borrower will (i) maintain accounting records in
accordance with generally recognized and accepted principles of accounting
consistently applied throughout the accounting periods involved; (ii) provide
the Bank with such information concerning its business affairs and financial
condition (including insurance coverage) as the Bank may reasonably request;
and (iii) without request and provided the Borrower has received the consent
of any person or regulator which it deems necessary or appropriate for
disclosure of such information, if applicable, provide the Bank with:
(a) Borrower's annual financial statements prepared and audited by
a nationally recognized certified public accountant within 90 days
of the end of the Borrower's fiscal year accompanied by a
certificate by the accountants who prepared the audit report, as
of the date of such audit report, stating that in the course of
their audit, nothing has come to their attention suggesting that a
condition or event has occurred which constitutes a default
hereunder or which, after notice or lapse of time or both, would
constitute a default hereunder (or if there was such a condition
or event, specifying the same); but such accountants shall not be
liable for any failure to obtain knowledge of any such condition
or event.
(b) notice of the filing by the Borrower of the following with the
Board of Governors of the Federal Reserve System promptly after
the filing thereof: (i) the Borrower's FR Y-6 Report; (ii) the
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Borrower's FR Y-9 Report; (iii) notices of all acquisitions; (iv)
notices of the declaration and/or payment of all
dividends; and (v) notices of additions to and deletions
from the Borrower's Federal Reserve Bank stock;
(c) quarterly call reports prepared on FFIEC forms, or any
successors thereto, of the Subsidiary Bank within 45 days of the
end of each quarter prepared in accordance with the guidelines of
the regulatory agency which regulates such bank;
(d) notice of any memorandum of understanding or any other
agreement with any banking regulatory agencies, or cease and
desist order, immediately after entered into by or issued against
Borrower, any Subsidiary or any of their officers, employees or
directors in their capacity as such;
(e) promptly after request therefor, any other information concerning
the business affairs and financial condition of the Borrower or
its Subsidiaries as the Bank may reasonably request; and
(f) a certificate of the chief financial officer, executive vice
president or treasurer of the Borrower, substantially in the form
of Exhibit A attached hereto, within 30 days of the end of each
fiscal quarter stating (i) that no default or event or condition
which, with notice or lapse of time, or both, would constitute a
default, has occurred and is continuing or, if a default or such
an event or condition has occurred and is continuing, a statement
setting forth the details thereof and the action which the
Borrower has taken and proposes to take with respect thereto, and
(ii) that the Borrower is in compliance with the covenants set
forth in Sections 4.13(a) and (b) hereof.
4.12 Information. The Borrower will make available for review by
the Bank at any reasonable time, promptly upon reasonable notice of a request
therefor, financial statements, call reports and any other records or
documents of the Borrower or any Subsidiary that the Borrower or any
Subsidiary is not prohibited from disclosing. The Borrower and any Subsidiary
will use reasonable efforts to obtain the consent of any person or regulator
which it deems necessary or appropriate for disclosure of the information
described above.
4.13 Financial Status.
(a) The Borrower will maintain as of the end of each fiscal quarter:
(i) Consolidated Net Worth of at least $100,000,000.
(ii) a Fixed Charge Coverage Ratio of greater than 1.75 to 1.
(iii) a four quarter rolling average return on assets of
the Borrower of greater than 0.75%. The Borrower's average
return on assets will not be less than 0.5% for any two
consecutive quarters.
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(b) The Borrower will cause the Subsidiary Bank to maintain as of the
end of each fiscal quarter:
(i) a ratio of Primary Capital to Assets of at least 6%.
(ii) a ratio of Nonperforming Loans less loans 90 days
past due but still accruing interest plus Other Real Estate
to Total Loans plus Other Real Estate of not greater than
3%;
(iii) a ratio of Nonperforming Loans less loans 90 days
past due but still accruing interest plus Other Real Estate
to Primary Capital of not greater than 24%.
(iv) a four quarter rolling average return on assets of
at least 0.75%. The average return on assets of the
Subsidiary Bank will not be less than 0.5% for any two
consecutive quarters.
(v) a ratio of Total Capital to Risk-Weighted Assets of at
least 12%.
4.14 Access to Records. The Borrower will permit representatives of
the Bank to visit and inspect any of the properties and examine any books and
records of the Borrower and any Subsidiary including without limitation the
stock transfer records of the Subsidiary Bank, at any reasonable time upon
reasonable notice and as often as the Bank may reasonably desire.
4.15 Issuance of Stock. The Borrower will not permit the Subsidiary
Bank to issue any additional shares of common or preferred stock, or any
options, warrants or other common stock equivalents, or sell or issue
securities or obligations convertible into such ("New Stock"), whether in the
form of stock dividends or stock splits or otherwise, unless such New Stock
shall be issued to the Borrower and delivered by the Borrower to the Bank,
together with any additional documents reasonably required by the Bank in
connection therewith, as additional collateral to secure the loan provided for
hereunder.
ARTICLE V. COLLATERAL
5.1 Collateral. This Agreement and the Note are secured by an
Amended and Restated Collateral Pledge Agreement dated October 1, 1993.
5.2 Credit Balances; Setoff. The Borrower grants the Bank a
security interest and lien in any credit balance or other money now or
hereafter owed the Borrower by the Bank, and, in addition, agrees that the
Bank may, at any time after an occurrence of an event described in Section 6.1
below (notwithstanding any cure periods), without notice or demand, set off
against any such credit balance or other money any indebtedness outstanding
hereunder or under the Note.
The information in this Article V is for information only and the
omission of any reference to an agreement shall not affect the validity or
enforceability thereof. The rights and remedies of the Bank outlined in this
Agreement and the documents identified above are intended to be cumulative.
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ARTICLE VI. DEFAULTS
6.1 Defaults. The occurrence of one or more of
the following events shall constitute a default:
(a) Nonpayment. The Borrower shall fail to pay (i) any interest
due on the Note, or any other amount payable hereunder, by five
days after the same becomes due; or (ii) any principal amount due
on the Note when due.
(b) Nonperformance. The Borrower or any guarantor shall default in
the performance of any agreement, term, provision, condition, or
covenant (other than a default occurring under Section 6.1(a),
(c), (d), (e), (f), (g) or (h) of this Agreement) required to be
performed or observed by the Borrower or any guarantor hereunder
or under any other Loan Document, continuing for a period of 30
days.
(c) Misrepresentation. Any financial information, statement,
certificate, representation or warranty given to the Bank by the
Borrower or any guarantor (or any of their representatives) in
connection with entering into this Agreement or the other Loan
Documents and/or any borrowing hereunder, or required to be
furnished under the terms hereof, shall prove untrue in any
material respect (as determined by the Bank in the exercise of its
reasonable judgment) as of the time when given.
(d) Default on Other Obligations. The Borrower or any guarantor
shall be in default under the terms of any loan agreement,
promissory note, lease, conditional sale contract or other
agreement, document or instrument evidencing, governing or
securing any indebtedness owing by the Borrower or any guarantor
to the Bank and the period of grace, if any, to cure said default
shall have passed or any indebtedness in excess of $1,000,000
owing by the Borrower to any third party provided the Borrower has
received a notification from such third party declaring the unpaid
balance of the indebtedness together with interest thereon and
other amounts accrued thereunder to be immediately due and
payable.
(e) Judgments. Any judgment shall be obtained against the
Borrower, any guarantor or any Subsidiary, the uninsured amount of
which, together with all other outstanding unsatisfied judgments
against the Borrower, any guarantor or any Subsidiary, shall
exceed the sum of $500,000 and shall remain unvacated, unbonded or
unstayed for a period of 60 days following the date of entry
thereof.
(f) Regulatory Orders. The Borrower or any of its Subsidiaries
shall enter into (i) any memorandum of understanding or other
agreement with any banking regulatory agency relating to any
unsound or unsafe banking practice or conduct or (ii) any
memorandum of understanding or other agreement with any banking
regulatory agency relating to any violation of law respecting the
operation of Borrower or such Subsidiary which has the effect of
prohibiting such Subsidiary from declaring and paying any
dividends or making any other distribution on account of any
shares of any class of its
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stock; or Borrower or any Subsidiary or any of their
officers, employees, or directors shall be the subject of
a judicial or administrative determination restraining
any of them from taking any actions of any kind in connection with
the business of Borrower or such Subsidiary, assessing a civil
penalty, finding that any criminal offense occurred in connection
with the operations of Borrower or such Subsidiary, or suspending
or removing any officer or director of Borrower or such
Subsidiary.
(g) Insolvency/Bankruptcy. The Borrower, any of its Subsidiaries
or any guarantor shall: (i) become insolvent; or (ii) be unable,
or admit in writing its inability, to pay its debts as they
mature; or (iii) make a general assignment for the benefit of
creditors or to an agent authorized to liquidate any substantial
amount of its property; or (iv) become the subject of an "Order
for Relief" as said term is defined under the United States
Bankruptcy Code; or (v) file an answer to a creditor's petition
(admitting the material allegations thereof) for reorganization or
to effect a plan or other arrangement with creditors; or (vi)
apply to a court for the appointment of a receiver for any of its
assets; or (vii) have a receiver appointed for any of its assets
(with or without the consent of the Borrower, such Subsidiary or
such guarantor, respectively) and such receiver shall not be
discharged within 60 days after the appointment; or (viii) be
closed or taken over by any regulatory agency; or (ix) sell or
have sold all or substantially all of its assets to any
nonaffiliated entity; or (x) otherwise become the subject of an
insolvency proceeding or an out-of-court settlement with its
creditors.
(h) Adverse Change. There is a material adverse change
in the financial condition of the Borrower, any of the
Subsidiaries or any guarantor.
6.2 Termination of Loans. Upon the occurrence of any of the events
identified in Section 6.1, the Bank may at any time thereafter
(notwithstanding the cure periods identified in Sections 6.1(a), 6.1(b),
6.1(d) and 6.1(e)) immediately terminate its obligation to make additional
loans hereunder, without demand or further notice of any kind, all of which
are hereby waived.
6.3 Acceleration of Obligations. Upon the occurrence of any of the
events identified in Sections 6.1(a) through 6.1(f) and 6.1(h), and the
passage of any applicable cure period, the Bank may at any time thereafter,
(i) by written notice to the Borrower, declare the unpaid principal balance of
the Note, together with the interest accrued thereon and other amounts accrued
hereunder, to be immediately due and payable and the unpaid balance shall
thereupon be due and payable, all without presentation, demand, protest or
further notice of any kind, all of which are hereby waived, and
notwithstanding anything to the contrary contained herein or in any of the
other Loan Documents and (ii) require the Borrower to cause the Subsidiary
Bank to appoint an independent transfer agent for the purpose of registering
and transferring ownership of the capital stock of the Subsidiary Bank. Upon
the occurrence of any event under Section 6.1(g), then the unpaid principal
balance under the Note, together with all interest accrued thereon and other
14
amounts accrued hereunder, shall thereupon be immediately due and payable, all
without presentation, demand, protest or notice of any kind, all of which are
hereby waived, and notwithstanding anything to the contrary contained herein
or in any of the other Loan Documents.
6.4 Other Remedies. Nothing in this Article VI is intended to
restrict the Bank's rights under any of the Loan Documents or at law, and the
Bank may exercise all such rights and remedies as and when they are available.
ARTICLE VII. MISCELLANEOUS
7.1 Delay; Cumulative Remedies. No delay on the part of the Bank
in exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, power
or privilege hereunder preclude other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies
herein specified are cumulative and are not exclusive of any rights or
remedies which the Bank would otherwise have.
7.2 Relationship to Other Documents. The warranties, covenants and
other obligations of the Borrower (and the rights and remedies of the Bank)
that are outlined in this Agreement and the other Loan Documents are intended
to supplement each other. In the event of any inconsistencies in any of the
terms in the Loan Documents, all terms shall be cumulative so as to give the
Bank the most favorable rights set forth in the conflicting documents.
7.3 Participations. The Bank may, at its option, sell all or any
interests in the Note and other Loan Documents to other financial
institutions, and in connection with such sales (and thereafter) disclose any
financial information the Bank may have concerning the Borrower to any such
participant or potential participant.
7.4 Successors. The rights, options, powers and remedies granted
in this Agreement shall extend to the Bank and to its successors and assigns,
shall be binding upon the Borrower and its successors and assigns and shall be
applicable hereto and to all renewals and/or extensions hereof.
7.5 Expenses and Attorneys' Fees. The Borrower agrees to reimburse
the Bank for all reasonable fees and out-of-pocket disbursements incurred by
the Bank in connection with the preparation, execution, delivery,
administration and enforcement of this Agreement or any of the other Loan
Documents, and any waivers or amendments with respect hereto, including all
reasonable costs of collection before and after judgment, and including,
without limitation, the reasonable fees and disbursements of counsel
(including inside counsel) for the Bank.
7.6 Payments. Payments due under the Note and other Loan Documents
shall be made in lawful money of the United States, and the Bank is authorized
to charge payments due under the Loan Documents against any account of the
Borrower. All payments may be applied by the Bank to principal, interest and
other amounts due under the Loan Documents in any order which the
Bank elects.
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7.7 Notices. All notices, requests and other communications that
are required or may be given under this Agreement shall be in writing, and
shall be deemed to have been given on the date of delivery, if delivered by
hand, telecopier or courier or three days after mailing, if mailed by
certified or registered mail, postage prepaid, return receipt requested,
addressed as set forth below (which addresses may be changed from time to time
by notice given in the manner provided in this Section):
If to Borrower: Republic Bancorp Inc.
1060 East Main Street
P.O. Box 70
Owosso, MI 48867
Telecopy No. (517) 725-2319
Attn: Thomas F. Menacher, Chief Financial
Officer
If to Bank: Firstar Bank Milwaukee, N.A.
777 East Wisconsin Avenue
Milwaukee, WI 53202
Telecopy No. (414) 765-6236
Attn: Peter M. Kronberg, Vice President
7.8 Applicable Law and Jurisdiction; Interpretation and
Modification. This Agreement and all other Loan Documents shall be governed by
and interpreted in accordance with the laws of the State of Wisconsin.
Invalidity of any provision of this Agreement shall not affect the validity of
any other provision. The provisions of the Loan Documents shall not be
altered, amended or waived without the express written consent of the Bank
(and the Borrower, when appropriate). THE BORROWER HEREBY CONSENTS TO THE
EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT SITUATED IN THE COUNTY OR
JURISDICTION WHERE THE BANK'S OFFICE WHICH IS DESIGNATED IN THE NOTE AS THE
PLACE FOR PAYMENT IS LOCATED (OR, IN THE ABSENCE OF SUCH DESIGNATION, THE
BANK'S MAIN OFFICE), AND WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS,
WITH REGARD TO ANY ACTIONS, CLAIMS, DISPUTES OR PROCEEDINGS RELATING TO THIS
AGREEMENT, THE COLLATERAL, ANY OTHER LOAN DOCUMENT, OR ANY TRANSACTIONS
ARISING THEREFROM, OR ENFORCEMENT AND/OR INTERPRETATION OF ANY OF THE
FOREGOING. This Agreement, the other Loan Documents and any amendments hereto
(regardless of when executed) will be deemed effective and accepted only at
the Bank's offices, and only upon the Bank's receipt of the executed originals
thereof.
7.9 Waiver of Jury Trial. THE BORROWER AND THE BANK HEREBY JOINTLY
AND SEVERALLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR
PROCEEDING RELATING TO ANY OF THE LOAN DOCUMENTS, THE OBLIGATIONS THEREUNDER
OR ANY TRANSACTION ARISING THEREFROM OR CONNECTED THERETO. THE BORROWER AND
THE BANK EACH REPRESENT TO THE OTHER THAT THIS WAIVER IS KNOWINGLY, WILLINGLY
AND VOLUNTARILY GIVEN.
7.10 Previous Agreement. This Agreement amends,
restates and supersedes the Revolving Credit Agreements dated
January 27, 1994, as amended and December 28, 1992, as amended.
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IN WITNESS WHEREOF, the undersigned have executed this REVOLVING
CREDIT AGREEMENT as of the 26th day of January, 1995.
REPUBLIC BANCORP INC.
a Michigan corporation
By: /s/ Thomas F. Menacher
-----------------------------
Name and Title: Thomas F. Menacher
Chief Financial Officer
FIRSTAR BANK MILWAUKEE, N.A.
By: /s/ Peter M. Kronberg
-----------------------------
Peter M. Kronberg, Vice President
17