UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13E-3
Rule 13e-3 Transaction Statement under Section 13(e)
of the Securities Act of 1934
(Amendment No. ________)
First Banks America, Inc.
- --------------------------------------------------------------------------------
(Name of Issuer)
First Banks, Inc.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Statement)
Common
- --------------------------------------------------------------------------------
(Title of Class of Securities)
31928N10
- --------------------------------------------------------------------------------
(CUSIP Number of Class of Securities)
Allen H. Blake
First Banks, Inc.
600 James S. McDonnell Boulevard
Hazelwood, Missouri 63042
(314) 592-5000
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications on Behalf of Persons Filing Statement)
Copy to:
John S. Daniels
6440 North Central Expressway, Suite 503
Dallas, Texas 75206
(214) 368-9405
This Statement is filed in connection with (check the appropriate box):
1. [X] The filing of solicitation materials or an information statement
subject to Regulation 14A (ss.ss.240.14a-1 through 240.14b-2),
Regulation 14C (ss.ss.240.14c-1 through 240.14c-101 or Rule 13e(c)
(ss.240.13e-3(c) under the Securities Exchange Act of 1934 ("the
Act").
2. [ ] The filing of a registration statement under the Securities Act
of 1933.
3. [ ] A tender offer.
4. [ ] None of the above.
Check the following box if the soliciting materials or information
statement referred to in checking box (1) are preliminary copies: [ X ]
Check the following box if the filing is a final amendment reporting the
results of the transaction: [ ]
Calculation of Filing Fee
----------------------------------------------- ------------------------
Transaction valuation* Amount of filing fee
----------------------------------------------- ------------------------
Transaction valuation is $32,381,446.62. Fee
was calculated based upon $92.00 per million $2,979.09
of value of the securities being acquired.
----------------------------------------------- ------------------------
* Set forth the amount on which the filing fee is calculated and
state how it was determined.
[ ] Check the box if any part of the fee is offset as provided by
ss.240.0-11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1. Amount Previously Paid:
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2. Form or Registration No:
----------------------------------------------
3. Filing Party:
--------------------------------------------------------
4. Date Filed:
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JOHN S. DANIELS
ATTORNEY AT LAW
6440 NORTH CENTRAL EXPRESSWAY
SUITE 503
DALLAS, TEXAS 75206
(214) 368-9405
October 8, 2002
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Schedule 13E-3 filed by First Banks, Inc.
Ladies and Gentlemen:
Enclosed on behalf of my client, First Banks, Inc., is a Schedule 13E-3 relating
to a proposed merger in which First Banks, Inc. proposes to acquire all of the
outstanding stock of First Banks America, Inc. ("FBA"). FBA is also filing its
preliminary proxy statement for the same transaction today. The filing fee
reflected on the cover sheet has been paid in accordance with Commission
procedures.
If you require additional information regarding this filing, please contact the
undersigned at (214) 368-9405.
Sincerely,
/s/ John S. Daniels
-------------------
John S. Daniels
Introduction
This Schedule 13E-3 is filed by First Banks, Inc. ("First Banks") in
connection with the proposed merger (the "Merger") of a subsidiary of First
Banks, FBA Acquisition Corporation ("FBA Acquisition") with and into First Banks
America, Inc., a Delaware corporation ("FBA") and is being filed concurrently
with FBA's Preliminary Proxy Statement filed pursuant to Regulation 14A (the
"Proxy Statement") under the Securities Exchange Act of 1934, as amended, for
the annual meeting of stockholders of FBA at which the Merger will be voted on.
The Merger is to be effected pursuant to the Agreement and Plan of Merger dated
September 23, 2002, by and among FBA, First Banks and FBA Acquisition (the
"Merger Agreement").
At the effective time of the Merger, FBA Acquisition will be merged
with and into FBA, FBA will thereby become a wholly-owned subsidiary of First
Banks, and the public stockholders of FBA will be entitled to receive $40.54 in
cash for each share of FBA common stock which they own.
The information in the Proxy Statement and the appendices thereto is
expressly incorporated by reference in response to all of the items in this
Schedule. Capitalized terms used but not defined herein have the meanings given
to such terms in the Proxy Statement, unless the context otherwise requires.
Item 2. Subject Company Information.
(Regulation M-A Item 1002)
(e) None.
Item 3. Identity and Background of Filing Person.
(Regulation M-A Item 1003)
The filing person, First Banks, is a Missouri corporation and
registered bank holding company with its principal office at 135 North Meramec,
Clayton, Missouri 63105. The controlling shareholders of First Banks are (i) the
James F. Dierberg II Family Trust, dated December 30, 1992; (ii) Irrevocable
Trust of Michael J. Dierberg, dated May 1, 1998; (iii) the Ellen C. Dierberg
Family Trust, dated December 30, 1992; (iv) James F. Dierberg, trustee of the
James F. Dierberg living trust, dated October 8, 1985; (v) the Michael J.
Dierberg Family Trust, dated December 30, 1992; and (vi) First Trust (Mary W.
Dierberg and First Bank, Trustees) established U/I James F. Dierberg, dated
December 30, 1992. First Bank is a wholly-owned subsidiary of First Banks. James
F. Dierberg and Mary W. Dierberg are husband and wife, and James F. Dierberg,
II, Michael J. Dierberg and Ellen D. Schepman, formerly Ellen C. Dierberg, are
their adult children.
The directors and executive officers of First Banks and their
positions with First Banks are as follows:
James F. Dierberg Chairman of the Board of Directors and
Chief Executive Officer
Allen H. Blake Director and President, Chief Financial Officer and
Secretary
Donald W. Williams Director, Senior Executive Vice President and
Chief Credit Officer
Michael J. Dierberg Director, Senior Vice President and General Counsel
Gordon A. Gundaker Director
David L. Steward Director
Hal J. Upbin Director
Douglas H. Yaeger Director
Michael F. Hickey Executive Vice President and
Chief Information Officer
Terrance M. McCarthy Senior Executive Vice President and
Chief Operating Officer
Michael F. McWhortor Executive Vice President - Banking Support
Mark T. Turkcan Executive Vice President - Mortgage Banking
Lisa K. Vansickle Senior Vice President and Controller
The remaining information required by Item 3 with respect to First
Banks is attached to this Schedule as Exhibits 3A through 3R, and is
incorporated herein by reference. All of the individuals listed are citizens of
the United States, and neither First Banks nor, to the best of its knowledge,
any of the persons listed has, during the last five years, (i) been convicted in
a criminal proceeding (excluding traffic violations or similar misdemeanors), or
(ii) been a party to any judicial or administrative proceeding (except for
matters dismissed without sanction or settlement) that resulted in a judgment,
decree or final order enjoining him, her, or it, as the case may be, from future
violations of, or prohibiting activities subject to, federal or state securities
laws or finding any violation of such laws.
Item 4. Terms of the Transaction.
(Regulation M-A Item 1004)
(b) Not applicable.
(c) None, except that the shares of FBA common stock owned by First
Banks are "Excluded Shares" under the Merger Agreement and are therefore not to
be exchanged in the Merger.
(e) None.
(f) Not applicable.
Item 5. Past Contacts, Transactions, Negotiations and Agreements.
(Regulation M-A Item 1005)
(c) None.
(d) Not applicable.
(e) None, except standard default and similar provisions contained
in loan agreements.
Item 6. Purposes of the Transaction and Plans or Proposals.
(Regulation M-A Item 1006)
(a) Not applicable.
(b) None.
(d) Not applicable.
Item 7. Purposes, Alternatives, Reasons and Effects.
(Regulation M-A Item 1013)
(b) None.
Item 8. Fairness of the Transaction.
(Regulation M-A Item 1014)
(f) None.
Item 10. Source and Amounts of Funds or Other Consideration.
(Regulation M-A Item 1007)
(b) None.
Item 12. The Solicitation or Recommendation.
(Regulation M-A Item 1012)
(a)-(c) Not applicable.
Item 13. Financial Statements.
(Regulation M-A Item 1010)
(b) Not applicable.
Item 14. Persons/Assets Retained, Employed, Compensated or Used.
(Regulation M-A Item 1009)
(a) None.
Item 15. Additional Information.
The information set forth in the Proxy Statement and the appendices
thereto is incorporated by reference herein.
Item 16. Exhibits
(a) The Proxy Statement, including the appendices thereto (filed by
FBA concurrently with this Schedule 13E-3) is incorporated by reference herein.
(b) The loan agreement referred to in the section of the Proxy
Statement entitled "Estimated Expenses; Financing" is filed herewith.
(c) Appendix B to the Proxy Statement is incorporated by reference
herein.
(d)-(e) Not applicable.
(f) The information from Appendix C to the Proxy Statement is
incorporated by reference herein.
(g) Not applicable.
After due inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
FIRST BANKS, INC.
By:/s/ Allen H. Blake
---------------------
Allen H. Blake
President
Date: October 8, 2002
Exhibit 3A
FIRST BANKS, INC.
State or Other Place of Organization: Missouri
- ------------------------------------
Principal Business: Bank Holding Company
- ------------------
Address of Principal Business: 135 North Meramec
- ----------------------------- Clayton, Missouri 63105
Address of Principal Office: 135 North Meramec
- --------------------------- Clayton, Missouri 63105
Exhibit 3B
JAMES F. DIERBERG (Chairman of the Board of Directors and Chief Executive
Officer of First Banks, Inc., and trustee of the James F. Dierberg living
trust, dated October 8, 1985)
Principal Occupation or Employment: Chairman of the Board of Directors
- ---------------------------------- and Chief Executive Officer
Name of Employer: First Banks, Inc.
- ----------------
Principal Business: Bank Holding Company
- ------------------
Address: 135 North Meramec
- ------- Clayton, Missouri 63105
Exhibit 3C
MARY W. DIERBERG (Trustee of First Trust established U/I James F. Dierberg,
dated December 30, 1992).
Principal Occupation or Employment: Housewife
- ----------------------------------
Address: c/o James F. Dierberg
- ------- 135 North Meramec
Clayton, Missouri 63105
Exhibit 3D
JAMES F. DIERBERG, II (Trustee of the living trust of the James F. Dierberg II
Family Trust, dated December 30, 1992)
Principal Occupation or Employment: Journalist
- ----------------------------------
Name of Employer: Self employed
- ----------------
Principal Business: Investment Advisor
- ------------------
Address: Phnom Penh
- ------- Cambodia
Exhibit 3E
MICHAEL J. DIERBERG (Trustee of the Michael J. Dierberg Family Trust,
dated December 30, 1992 and the Irrevocable Trust of Michael J. Dierberg,
dated May 1, 1998)
Principal Occupation or Employment: Director, Senior Vice President and
- ---------------------------------- General Counsel
Name of Employer: First Bank & Trust
- ----------------
Principal Business: Banking
- ------------------
Address: 550 Montgomery Street
- ------- San Francisco, California 94111
Exhibit 3F
ELLEN DIERBERG SCHEPMAN (Trustee of the Ellen C. Dierberg Family Trust,
dated December 30, 1992)
Principal Occupation or Employment: Marketing and Internet Coordinator
- ----------------------------------
Name of Employer: First Banks, Inc.
- ----------------
Principal Business: Bank Holding Company
- ------------------
Address: 135 North Meramec
- ------- Clayton, Missouri 63105
Exhibit 3G
FIRST BANK (Co-Trustee of First Trust)
State or Other Place of Organization: Missouri
- ------------------------------------
Principal Business: Banking
- ------------------
Address of Principal Business: 11901 Olive Boulevard
- ----------------------------- Creve Coeur, Missouri 63141
Address of Principal Office: 11901 Olive Boulevard
- --------------------------- Creve Coeur, Missouri 63141
Exhibit 3H
ALLEN H. BLAKE (President, Chief Financial Officer, Secretary and Director of
First Banks, Inc.)
Principal Occupation or Employment: President and Chief Financial
- ---------------------------------- Officer
Name of Employer: First Banks, Inc.
- ----------------
Principal Business: Bank Holding Company
- ------------------
Address: 135 North Meramec
- ------- Clayton, Missouri 63105
Exhibit 3I
DONALD W. WILLIAMS (Senior Executive Vice President and Chief Credit Officer
of First Banks, Inc.; Chairman of the Board, President and Chief Executive
Officer of First Bank)
Principal Occupation or Employment: Senior Executive Vice President and
- ---------------------------------- Chief Credit Officer
Name of Employer: First Banks, Inc.
- ----------------
Principal Business: Bank Holding Company
- ------------------
Address: 135 North Meramec
- ------- Clayton, Missouri 63105
Exhibit 3J
GORDON A. GUNDAKER (Director of First Banks, Inc.)
Principal Occupation or Employment: President and Chief Executive
- ---------------------------------- Officer
Name of Employer: Coldwell Banker Gundaker
- -----------------
Principal Business: Real Estate Broker
- ------------------
Address: 2458 Old Dorsett Road
- ------- St. Louis, Missouri 63043
Exhibit 3K
DAVID L. STEWARD (Director of First Banks, Inc.)
Principal Occupation or Employment: Chairman of the Board of Directors,
- ---------------------------------- President and Chief Executive
Officer
Name of Employer: World Wide Technology, Inc.
- ----------------
Principal Business: Internet-based hardware, software
- ------------------ and networking solutions
Address: 127 Weldon Parkway
- ------- St. Louis, Missouri 63043
Exhibit 3L
HAL J. UPBIN (Director of First Banks, Inc.)
Principal Occupation or Employment: Chairman of the Board of Directors,
- ---------------------------------- President and Chief Executive
Officer
Name of Employer: Kellwood Company
- ----------------
Principal Business: Manufacturer and marketer of apparel
- ------------------ and related soft goods.
Address: 600 Kellwood Parkway
- ------- St. Louis, Missouri 63017
Exhibit 3M
DOUGLAS H. YAEGER (Director of First Banks, Inc.)
Principal Occupation or Employment: Chairman of the Board of Directors,
- ---------------------------------- President and Chief Executive
Officer
Name of Employer: The Laclede Group, Inc.
- ----------------
Principal Business: Retail distribution of natural gas
- ------------------
Address: 720 Olive Street, Room 1507
- ------- St. Louis, Missouri 63101
Exhibit 3N
MICHAEL F. HICKEY (Executive Vice President and Chief Information Officer of
First Banks, Inc.)
Principal Occupation or Employment: Executive Vice President and
- ---------------------------------- Chief Information Officer
Name of Employer: First Banks, Inc.
- ----------------
Principal Business: Bank Holding Company
- ------------------
Address: 135 North Meramec
- ------- Clayton, Missouri 63105
Exhibit 3O
TERRANCE M. McCARTHY (Senior Executive Vice President and Chief Operating
Officer of First Banks, Inc.; Chairman of the Board of Directors, President and
Chief Executive Officer of First Bank & Trust)
Principal Occupation or Employment: Senior Executive Vice President and
- ---------------------------------- Chief Operating Officer
Name of Employer: First Banks, Inc.
- ----------------
Principal Business: Bank Holding Company
- ------------------
Address: 135 North Meramec
- ------- Clayton, Missouri 63105
Exhibit 3P
MICHAEL F. McWHORTOR (Executive Vice President - Banking Support of
First Banks, Inc.)
Principal Occupation or Employment: Executive Vice President -
- ---------------------------------- Banking Support
Name of Employer: First Banks, Inc.
- ----------------
Principal Business: Bank Holding Company
- ------------------
Address: 135 North Meramec
- ------- Clayton, Missouri 63105
Exhibit 3Q
MARK T. TURKCAN (Executive Vice President - Mortgage Banking of
First Banks, Inc.)
Principal Occupation or Employment: Executive Vice President -
- ---------------------------------- Mortgage Banking
Name of Employer: First Banks, Inc.
- ----------------
Principal Business: Bank Holding Company
- ------------------
Address: 135 North Meramec
- ------- Clayton, Missouri 63105
Exhibit 3R
LISA K. VANSICKLE (Senior Vice President and Controller of First Banks, Inc.)
Principal Occupation or Employment: Senior Vice President and Controller
- ----------------------------------
Name of Employer: First Banks, Inc.
- ----------------
Principal Business: Bank Holding Company
- ------------------
Address: 135 North Meramec
- ------- Clayton, Missouri 63105
Exhibit B
SECURED CREDIT AGREEMENT
($90,000,000 Revolving Loan Facility and $20,000,000 Letter of Credit Facility)
dated as of August 22, 2002
among
FIRST BANKS, INC.
and
THE LENDERS SIGNATORY HERETO
and
WELLS FARGO BANK, NATIONAL ASSOCIATION
as Agent
WELLS FARGO BANK, NATIONAL ASSOCIATION
as Sole Lead Arranger and Sole Book Runner
TABLE OF CONTENTS
ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS......................................................................1
Section 1.01. Defined Terms..............................................................................1
Section 1.02. Accounting Terms...........................................................................9
ARTICLE II. AMOUNT AND TERMS OF REVOLVING LOAN AND LETTER OF CREDIT FACILITIES...................................9
Section 2.01 Advances....................................................................................9
Section 2.02 Interest...................................................................................10
Section 2.03 Margin and L/C Margin......................................................................12
Section 2.04 Payments...................................................................................13
Section 2.05 Commitment Fee.............................................................................13
Section 2.06 Termination or Reduction of the Commitments................................................13
Section 2.07 Voluntary Prepayments......................................................................13
Section 2.08 Computation of Interest and Fees...........................................................14
Section 2.09 Making of Payments.........................................................................14
Section 2.10 Payment on Nonbusiness Days................................................................14
Section 2.11 Use of Proceeds............................................................................14
Section 2.12 Fees on Advances and Indemnity.............................................................14
Section 2.13 Capital Adequacy...........................................................................16
Section 2.14. Failure of Any Lender to Make Advances....................................................16
Section 2.15. Issuance of Letters of Credit.............................................................17
Section 2.16. Payment of Amounts Drawn Under Letters of Credit..........................................17
Section 2.17. Special Account...........................................................................18
Section 2.18. Authorization for Borrowing...............................................................19
Section 2.19. Letter of Credit Fees.....................................................................19
ARTICLE III. CONDITIONS PRECEDENT...............................................................................20
Section 3.01 Initial Conditions Precedent...............................................................20
Section 3.02 Conditions Precedent to All Advances.......................................................21
ARTICLE IV. REPRESENTATIONS AND WARRANTIES.......................................................................22
Section 4.01 Corporate Existence and Power..............................................................22
Section 4.02 Authorization of Borrowing; No Conflict as to Law or Agreements............................22
Section 4.03 Legal Agreements...........................................................................22
Section 4.04 Subsidiaries...............................................................................22
Section 4.05 Financial Condition........................................................................22
Section 4.06 Adverse Change.............................................................................23
Section 4.07 Litigation.................................................................................23
Section 4.08 Regulation U...............................................................................23
Section 4.09 Taxes......................................................................................23
Section 4.10 Titles.....................................................................................23
Section 4.11 ERISA......................................................................................23
ARTICLE V. AFFIRMATIVE COVENANTS.................................................................................24
Section 5.01 Reporting Requirements.....................................................................24
Section 5.02 Books and Records; Inspection and Examination..............................................25
Section 5.03 Compliance with Laws.......................................................................25
Section 5.04 Payment of Taxes and Other Claims..........................................................25
Section 5.05 Operations.................................................................................26
Section 5.06 Insurance..................................................................................26
Section 5.07 Preservation of Corporate Existence........................................................26
Section 5.08 Additional Collateral......................................................................26
Section 5.09 Intercompany Note..........................................................................26
Section 5.10 Notice of Acquisition.....................................................................27
ARTICLE VI. NEGATIVE COVENANTS...................................................................................27
Section 6.01 Liens......................................................................................27
Section 6.02 Indebtedness...............................................................................27
Section 6.03 Guaranties.................................................................................28
Section 6.04 Dividends..................................................................................28
Section 6.05 Consolidation and Merger...................................................................28
Section 6.06 Subordinated Debt..........................................................................28
Section 6.07 Restrictions on Nature of Business.........................................................28
Section 6.08 Negative Pledges; Subsidiary Restrictions..................................................29
Section 6.09 Issuance of Additional Stock...............................................................29
ARTICLE VII. FINANCIAL COVENANTS.................................................................................29
Section 7.01 Total Risk Based Capital Ratio.............................................................29
Section 7.02 Tier I Risk Based Capital Ratio............................................................29
Section 7.03 Leverage...................................................................................29
Section 7.04 Minimum Return on Assets...................................................................29
Section 7.05 Maximum Non-Performing Assets..............................................................30
Section 7.06 Allowance for Loan and Lease Losses........................................................30
ARTICLE VIII. EVENTS OF DEFAULT, RIGHTS AND REMEDIES.............................................................30
Section 8.01 Events of Default..........................................................................30
Section 8.02 Rights and Remedies........................................................................33
Section 8.03 Offset.....................................................................................33
ARTICLE IX. THE AGENT............................................................................................34
Section 9.01 Authorization..............................................................................34
Section 9.02 Distribution of Payments and Proceeds......................................................34
Section 9.03 Expenses...................................................................................34
Section 9.04 Payments Received Directly by Lenders......................................................35
Section 9.05 Indemnification............................................................................35
Section 9.06 Limitations on Agent's Power...............................................................35
Section 9.07 Exculpation................................................................................35
Section 9.08 Agent and Affiliates.......................................................................36
Section 9.09 Credit Investigation.......................................................................36
Section 9.10 Resignation................................................................................36
Section 9.11 Assignments................................................................................36
Section 9.12 Participations.............................................................................37
Section 9.13 Disclosure of Information..................................................................38
ARTICLE X. MISCELLANEOUS.........................................................................................38
Section 10.01 No Waiver; Cumulative Remedies............................................................38
Section 10.02 Amendments, Etc...........................................................................38
Section 10.03 Notice....................................................................................39
Section 10.04 Costs and Expenses........................................................................39
Section 10.05 Indemnification by Borrower...............................................................39
Section 10.06 Execution in Counterparts.................................................................40
Section 10.07 Binding Effect, Assignment................................................................40
Section 10.08 Governing Law.............................................................................40
Section 10.09 Consent to Jurisdiction...................................................................40
Section 10.10 Severability of Provisions................................................................40
Section 10.11 Prior Agreements..........................................................................40
Section 10.12 Headings..................................................................................40
Exhibit A -- Revolving Loan Commitment Amounts
Exhibit B -- Compliance Certificate
Exhibit C -- Note
Exhibit D -- Pledge Agreement
Exhibit E1 -- Application for Standby Letter of Credit
Exhibit E2 -- Standby Letter of Credit Agreement
Exhibit F -- Union Financial Guaranty
Exhibit G -- Union Financial Security Agreement
Exhibit H -- Permissible Securities
Exhibit I -- Notice of Permitted Acquisition
Schedule 4.04 -- Subsidiaries
Schedule 4.07 -- Litigation
Schedule 6.02 -- Indebtedness
Schedule 6.03 -- Guaranties
SECURED CREDIT AGREEMENT
THIS SECURED CREDIT AGREEMENT dated as of August 22, 2002, is entered
into by and among FIRST BANKS, INC., a Missouri corporation ("Borrower"), the
financial institutions that have executed this Agreement as lenders (each
individually a "Lender" and collectively the "Lenders"), and WELLS FARGO BANK,
NATIONAL ASSOCIATION, a national banking association, as Agent.
WITNESSETH THAT:
WHEREAS Borrower, the Lenders and the Agent's affiliate, Wells Fargo
Bank Minnesota, National Association, were party to a Secured Credit Agreement
dated as of August 23, 2001 (the "Existing Credit Agreement") pursuant to which
the Lenders had severally made available to Borrower a revolving credit facility
in the aggregate amount of One Hundred Twenty Million Dollars ($120,000,000);
WHEREAS Borrower has requested that the Lenders make available a new
revolving credit facility in the amount of Ninety Million Dollars ($90,000,000)
and a revolving letter of credit facility in the amount of $20,000,000;
WHEREAS Borrower, the Lenders and Agent desire to enter into this
Secured Credit Agreement in replacement of the Existing Credit Agreement,
thereby making available to Borrower the requested revolving credit and letter
of credit facilities; and
WHEREAS the Lenders are willing severally to provide such revolving
credit and letter of credit facilities to Borrower, subject to the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto hereby agree as follows:
ARTICLE I.
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01. Defined Terms. As used in this Agreement, the
--------------
following terms have the following meanings (terms defined in the
singular to have the same meaning when used in the plural and vice
versa):
"Advance" means an advance by the Lenders to the Borrower
pursuant to Article II.
"Additional Lender" means a financial institution that becomes a
Lender pursuant to the procedures set forth in Section 9.11.
------------
"Affiliate" means any Person (1) which directly or indirectly
controls, or is controlled by, or is under common control with, the
Borrower or any Subsidiary; (2) which directly or indirectly
beneficially owns or holds five percent (5%) or more of any class of
voting stock of Borrower or any Subsidiary; or (3) five percent (5%)
or more of the voting stock of which is directly or indirectly
beneficially owned or held by Borrower or any Subsidiary. The term
"Control" for the purposes of this Agreement means the possession,
directly or indirectly, of the power to direct or cause the direction
of the management and policies of a Person, whether through the
ownership of voting securities, by contract, or otherwise. For the
purposes of the foregoing definition, a shareholder of Borrower shall
not be deemed to be directly or indirectly controlling or controlled
by the Borrower or a Subsidiary, provided the person in question will
not receive any proceeds from the Loans.
"Agent" means Wells Fargo Bank, National Association, acting in
its capacity as Agent pursuant to Article IX hereof, or any duly
appointed successor.
"Agreement" means this Secured Credit Agreement, as amended,
supplemented or modified from time to time.
"Bank Business Day" means a day other than a Saturday, Sunday,
United States national holiday or other day on which banks in
Minnesota are permitted or required by law to close.
"Bank Subsidiary" means any direct or indirect Subsidiary of the
Borrower which is a bank or thrift institution, including, without
limitation the financial institutions listed in Schedule 4.04 hereof
-------------
and, beginning one year following the acquisition thereof, any bank or
thrift institution subsequently becoming a direct or indirect
Subsidiary of the Borrower.
"Base Rate" means the rate of interest publicly announced from
time to time by the Agent as its "prime" or "base" rate or, if the
Agent ceases to announce a rate so designated, any similar successor
rate designated by the Agent.
"Borrower" has the meaning assigned to such term in the preamble
of this Agreement.
"Borrowing" means a borrowing under Article II consisting of
Advances made to the Borrower by each of the Lenders severally.
"Capitalized Lease" of a Person means any lease of property by
such Person as lessee which would be capitalized on a balance sheet of
such Person prepared in accordance with GAAP.
"Collateral" means the Borrower's Special Account and all
property which is subject or is to be subject to the Liens granted by
the Pledge Agreement, the FBA Security Agreement, the Third Party
Pledge Agreement and the Union Financial Security Agreement.
"Commitments" means the several commitments of the Lenders in the
aggregate original principal amount of $90,000,000, as such amount may
be reduced from time to time pursuant to Section 2.06 hereof. When
-------------
used with reference to a particular Lender, "Commitment" means that
Lender's obligation to make Advances in an aggregate amount equal to
its Commitment Amount.
"Commitment Amount" means, with respect to each Lender, the
amount set forth opposite that Lender's name on Exhibit A, as that
amount may be adjusted from time to time pursuant to Section 2.06 or
------------
any assignment made pursuant to Section 9.11.
------------
"Compliance Certificate" means a certificate in substantially the
form of Exhibit B, or such other form as the Borrower and the Required
Lenders may from time to time agree upon in writing, executed by the
chief financial officer of the Borrower, stating (i) that any
financial statements delivered therewith have been prepared in
accordance with GAAP, subject to year-end audit adjustments, (ii)
whether or not such officer has knowledge of the occurrence of any
Default or Event of Default and stating in reasonable detail the facts
with respect to such Default or Event of Default, (iii) all relevant
facts in reasonable detail to evidence, and the computations as to,
whether or not the Borrower is in compliance with the Financial
Covenants, and (iv) all relevant facts in reasonable detail to
evidence, and the computations as to, whether or not the Borrower is
in compliance with the other covenants.
"Default" means any of the events specified in Section 8.01,
-------------
whether or not any requirement for the giving of notice, the lapse of
time, or both, or any other condition, has been satisfied.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations and published
interpretations thereof.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) which together with the Borrower would be treated as a
single employer under Section 4001 of ERISA.
"Equity Capital" of a Bank Subsidiary means the aggregate of its
perpetual preferred stock (and related surplus), common stock, surplus
(excluding all surplus related to perpetual preferred stock),
undivided profits and capital reserves, plus its net unrealized
holding gains (or minus its net realized holding losses) on
available-for-sale securities.
"Eurodollar Business Day" means a Bank Business Day on which
dealings in U.S. dollar deposits are carried on in the London
interbank market.
"Eurodollar Rate" means the annual rate equal to the sum of (i)
the rate obtained by dividing (a) the rate (rounded up to the nearest
1/16 of 1%) determined by the Agent as of 11:00 a.m. London, England
time on the second Eurodollar Business Day prior to the date such rate
is to become effective to be the average rate at which U.S. dollar
deposits are offered or available to banks in the London interbank
market for funds to be made available on the first day of any Interest
Period in an amount approximately equal to the amount for which a
Eurodollar Rate quotation has been requested and maturing at the end
of such Interest Period, by (b) a percentage equal to 100% minus the
Federal Reserve System reserve requirement (expressed as a percentage)
applicable to such deposits, and (ii) the applicable Margin. In making
such determination, the Agent shall utilize Telerate page 3750 under
the heading "British Bankers Association LIBOR rates" in the column
designated "USD," as published by Bridge Information Systems, Inc., or
such other comparable source as may be available to the Agent in the
event such Telerate page is no longer published or readily available.
"Eurodollar Rate Funding" means a Borrowing or any portion
thereof, or any other portion of the principal balance of the Notes,
that bears interest at a Eurodollar Rate.
"Event of Default" means any of the events specified in Section
8.01, provided that any requirement for the giving of notice, the
lapse of time, or both, or any other applicable condition, has been
satisfied.
"Existing Credit Agreement" has the meaning assigned to such term
in the recitals to this Agreement
"FBA" means First Banks America, Inc., a Delaware corporation.
"FBA Security Agreement" means the security agreement dated as of
August 23, 2001, whereby FBA has granted a security interest to the
Borrower in all of its stock of San Francisco Company to secure the
Intercompany Note.
"Federal Funds Rate" means at any time an interest rate per annum
equal to the weighted average of the rates for overnight federal funds
transactions with members of the Federal Reserve System arranged by
federal funds brokers, as published for such day by the Federal
Reserve Bank of New York, or, if such rate is not so published for any
day which is a Bank Business Day, the average, determined by the
Agent, of the quotations for such day for such transactions received
by the Agent from three federal funds brokers of recognized standing
selected by it, it being understood that the Federal Funds Rate for
any day which is not a Bank Business Day shall be the Federal Funds
Rate for the next preceding Bank Business Day.
"Financial Covenants" means any covenant contained in Article
VII.
"First Bank (California)" means First Bank & Trust, a California
state bank.
"First Bank (Missouri)" means First Bank, a Missouri state bank.
"Floating Rate" means, at any time, an annual rate equal to the
greater of:
(i) the Base Rate; or
(ii) the Federal Funds Rate, plus 50 basis points (0.50%);
The Floating Rate shall change when and as the Base Rate or Federal
Funds Rate changes.
"Funded Debt" of the Borrower means (without duplication) (i) all
indebtedness of the Borrower for borrowed money; (ii) indebtedness
evidenced by bonds, notes or similar written debt instruments; and
(iii) the face amount of all letters of credit and bankers'
acceptances issued for the account of the Borrower, and without
duplication, all drafts drawn thereunder; provided, however, that in
-------- -------
no event shall any calculation of Funded Debt include Subordinated
Debt or debt of the type referred to in Section 6.02(b) or 6.02(c).
--------------- -------
"Funded Debt Ratio" means the ratio of Funded Debt to Net Income
of the Borrower for the most recent period of four fiscal quarters.
"GAAP" means generally accepted accounting principles applied on
a basis consistent with the accounting practices applied in the
financial statements described in Section 4.05.
------------
"Interest Period" means, with respect to any Eurodollar Rate
Funding (except as provided below on the Closing Date of this
Agreement), a period of one, two, three or six months beginning on a
Eurodollar Business Day, as elected by the Borrower. Each Interest
Period shall end on the day in the final month of such Interest Period
that immediately precedes the date which numerically corresponds to
the first day of such Interest Period, except that (i) if such final
month has no numerically corresponding day, then the Interest Period
shall end on the last Eurodollar Business Day of such month, and (ii)
if an Interest Period would otherwise end on a day which is not a
Eurodollar Business Day, such Interest Period shall end on the next
following Eurodollar Business Day, unless such next following
Eurodollar Business Day is the first Eurodollar Business Day of a
month, in which case such Interest Period shall end on the next
preceding Eurodollar Business Day.
"Intercompany Note" means the revolving promissory note dated
August 23, 2001, whereby FBA promises to repay certain obligations
incurred to the Borrower.
"L/C Application" means an Application for Standby Letter of
Credit in the form attached hereto as Exhibit E1, and the master
Standby Letter of Credit Agreement in the form of Exhibit E2, which is
incorporated into such Application by reference.
"L/C Margin" means an amount determined under Section 2.03 that
------------
is charged pursuant to Section 2.19(a).
---------------
"Lender" or "Lenders" has the meaning assigned to such term in
the preamble to this Agreement.
"Leverage" shall be defined and calculated in accordance with
Federal Reserve Board Regulation Y in the case of the Borrower and in
accordance with Section 38 of the Federal Deposit Insurance Act in the
case of a Bank Subsidiary.
"Letter of Credit" has the meaning given in Section 2.15.
------------
"Lien" means any mortgage, deed of trust, lien, pledge, security
interest or other charge or encumbrance, of any kind whatsoever,
including but not limited to the interest of the lessor or titleholder
under any Capitalized Lease, title retention contract or similar
agreement.
"Loan Document(s)" means this Agreement, the Notes, the Pledge
Agreement, the Intercompany Note, the FBA Security Agreement, the
Third Party Pledge Agreement and the Union Financial Security
Agreement, as each may be renewed, extended, amended, rearranged,
restructured, restated, replaced or otherwise modified from time to
time.
"Margin" means an amount determined pursuant to Section 2.03 that
------------
is added to other amounts to determine a Eurodollar Rate.
"Multiemployer Plan" means a Plan described in Section 4001(a)(3)
of ERISA which covers employees of the Borrower or any of its
Affiliates.
"Net Income" has the meaning assigned to such term by GAAP,
without reference to extraordinary items or adjustments caused solely
by changes in applicable accounting principles.
"Non-Performing Assets" of a Bank Subsidiary means the sum of:
(i) all loans classified as past due 90 days or more and still
accruing interest; (ii) all loans classified as "non-accrual" and no
longer accruing interest; (iii) all loans classified as "restructured
loans and leases"; and (iv) all other "Non-Performing Assets," as
reported in the then most recent call report of such Bank Subsidiary.
"Note" has the meaning set forth in Section 2.01.
------------
"Obligations" means all debts, liabilities, obligations,
covenants and duties of the Borrower arising under any of the Loan
Documents, whether direct or indirect, absolute or contingent, due or
to become due, and whether now existing or hereafter arising.
"Obligations of Reimbursement" has the meaning given in Section
-------
2.16(a).
-------
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Percentage" means, with respect to each Lender, the percentage
so designated next to such Lender's name in Exhibit A, as such
percentage may be adjusted from time to time pursuant to Section 9.11.
------------
"Permitted Acquisition" means the acquisition by the Borrower or
any of its Subsidiaries of stock or other equity interests in any
other Person, the consolidation or merger of any other Person into the
Borrower or any of its Subsidiaries, or the transfer of any assets of
any other Person to the Borrower or any of its Subsidiaries outside
the ordinary course of business, in each case so long as:
(i) no Default or Event of Default is continuing at the time of
such acquisition, consolidation, merger or transfer, or
would be caused by such acquisition, consolidation, merger
or transfer;
(ii) all authorizations of governmental agencies, bodies or
authorities which are necessary to approve the acquisition
have been obtained and are in full force and effect, or will
be obtained contemporaneously with the making of any Advance
for such purpose, and no further approval, consent, order or
authorization of or designation, registration, declaration
or filing with any governmental authority is required in
connection therewith; and
(iii) in the case of any consolidation or merger, the continuing
or surviving corporation shall be controlled by the Borrower
immediately following the transaction; provided, however,
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that (A) a Subsidiary may merge with and into the Borrower
or another Subsidiary, but (B) under no circumstances may
the Borrower merge into or consolidate with any Subsidiary.
"Person" means an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint
venture, governmental authority, or other juridical entity of whatever
nature.
"Plan" means any employee benefit or other plan established,
maintained, or to which contributions have been made by the Borrower
or any ERISA Affiliate.
"Planned Recapitalization" means one or more related transactions
in which (i) FBA will "go private" and either be merged into or
consolidated with the Borrower, or its assets will be transferred to
the Borrower, (ii) the Intercompany Note will be cancelled; and
simultaneously (iii) San Francisco Company and Union Financial or, if
they are merged or consolidated as part of the related transactions,
the surviving entity, will guarantee payment of the Obligations and
execute such agreements as the Agent may reasonably request to grant a
first priority security interest to the Agent for the benefit of the
Lenders in the stock of all Bank Subsidiaries. In conjunction with the
elimination of FBA as a separate entity, the Borrower may also cause
(I) San Francisco Company and Union Financial to be merged or
consolidated (the "Holding Company Merger"), and the surviving entity
(the "Surviving Holding Company") to own both Bank Subsidiaries, and
(II) the Bank Subsidiaries to be merged or consolidated (the "Bank
Merger"), and the surviving entity (the "Surviving Bank") to be owned
by the survivor of the Holding Company Merger.
"Pledge Agreement" means the collateral pledge agreement in the
form of Exhibit D pledging to the Agent for the ratable benefit of the
Lenders all of the stock of FBA and Union Financial that is owned by
the Borrower, certain stock acquired after the date of this Agreement,
and the Intercompany Note.
"Primary Equity Capital" of an entity means the aggregate of the
allowance for loan and lease losses of such entity, as reported in the
most recent Form 10-Q or Form 10-K filed by the Borrower with the
Securities and Exchange Commission, plus the Equity Capital of such
entity.
"Prohibited Transaction" means any transaction prohibited by
Section 406 of ERISA or Section 4975 of the Internal Revenue Code, as
amended from time to time.
"Reportable Event" means any of the events set forth in Section
4043 of ERISA.
"Required Lenders" means Lenders (including, where relevant,
Additional Lenders) having an aggregate Percentage of 66 2/3% or more.
"Return on Assets" of a Person means the percentage determined by
dividing the Net Income of such Person for the four calendar quarters
immediately preceding the date of determination by its total average
assets as of the end of such period. The total average assets of a
Person shall be as reported in its most recent quarterly financial
statements or, in the case of a Bank Subsidiary, in its most recent
quarterly call report.
"Revolving Credit Termination Date" means August 21, 2003.
"San Francisco Company" means The San Francisco Company, a
Delaware corporation.
"Subordinated Debt" means indebtedness of the Borrower or any of
its Subsidiaries which is subordinated in right of payment to all
indebtedness of the Borrower to any Lender, on terms that have been
approved in writing by the Required Lenders and that have been noted
by appropriate legend on all instruments evidencing the Subordinated
Debt.
"Subsidiary" means, as to Borrower, any corporation with total
assets exceeding $1,000,000 of which shares of stock having ordinary
voting power (other than stock having such power only by reason of the
happening of a contingency) to elect a majority of the board of
directors or other managers of such corporation are at the time owned,
or the management of which corporation is otherwise controlled,
directly or indirectly through one or more intermediaries, or both, by
the Borrower or a Subsidiary of the Borrower.
"Third Party Pledge Agreement" means the security agreement dated
August 23, 2001, whereby San Francisco Company has pledged all its
stock of First Bank (California) to the Borrower to secure the
Intercompany Note.
"Tier I Risk Based Capital Ratio" shall be defined and calculated
in accordance with Federal Reserve Board Regulation Y in the case of
the Borrower and in accordance with Section 38 of the Federal Deposit
Insurance Act in the case of a Bank Subsidiary.
"Total Risk Based Capital Ratio" shall be defined and calculated
in accordance with Federal Reserve Board Regulation Y in the case of
the Borrower and in accordance with Section 38 of the Federal Deposit
Insurance Act in the case of a Bank Subsidiary.
"Union Financial" means Union Financial Group, Ltd, a Delaware
corporation.
"Union Financial Guaranty" means the guaranty in the form of
Exhibit F, whereby Union Financial guarantees payment of the
Obligations.
"Union Financial Security Agreement" means the security agreement
in the form of Exhibit G, whereby Union Financial pledges all of its
stock of First Bank (Missouri) to the Agent to secure the Union
Financial Guaranty.
Section 1.02. Accounting Terms. All accounting terms not specifically
----------------
defined herein shall be construed in accordance with GAAP consistent with those
applied in the preparation of the financial statements and reports referred to
in Section 4.05, and all financial data submitted pursuant to this Agreement
------------
shall be prepared in accordance with such principles.
ARTICLE II.
AMOUNT AND TERMS OF REVOLVING LOAN AND LETTER OF CREDIT FACILITIES
Section 2.01 Advances.
--------
(a) Each Lender agrees, severally but not jointly, on the terms
and subject to the conditions hereinafter set forth, to make Advances
to the Borrower from time to time during the period from the date
hereof to and including the Revolving Credit Termination Date in an
aggregate amount not to exceed at any time outstanding that Lender's
Commitment Amount. The total amount of the Advances outstanding at any
time hereunder shall not exceed the Commitments. Within the limits of
the Commitments, the Borrower may borrow, prepay pursuant to Section
-------
2.07 and reborrow under this Section 2.01. The Advances made by each
---- ------------
Lender shall be evidenced by and repayable in accordance with a single
promissory note of the Borrower (a "Note") payable to the order of
that Lender, substantially in the form of Exhibit C hereto, dated the
date hereof. The Notes shall bear interest on the unpaid principal
amount thereof from the date thereof until paid as set forth in
Section 2.02.
------------
(b) Each Borrowing under this Section 2.01 shall occur following
------------
written or telephonic request to the Agent from the Borrower, any
telephonic request to be confirmed by fax in such form as the Borrower
and the Agent may agree. Each such notice or request shall specify (i)
the date of the requested Borrowing, (ii) the amount thereof, and
(iii) if any portion of such Borrowing will bear interest at a
Eurodollar Rate, the Interest Period selected by the Borrower with
respect thereto. Such notice or request must be received by the Agent
not later than 1:00 p.m. (Minneapolis time) on the Bank Business Day
prior to the day on which such Borrowing is to occur or, if all or any
portion of the Borrowing will bear interest at a Eurodollar Rate, not
later than three Eurodollar Business Days prior to the date on which
such Borrowing is to occur. Upon receiving a request for a Borrowing
under this Section 2.01, and in any event not later than 2:00 p.m.
-------------
(Minneapolis time) on the day that the request is received, the Agent
will notify the Lenders of the amount of the requested Borrowing, the
amount of each Lender's Advance with respect thereto, and, if
applicable, the fact that the Borrower has elected a Eurodollar Rate
and the Interest Period selected by the Borrower. Upon fulfillment of
the applicable conditions set forth in Article III, each Lender shall
remit its Percentage of the requested Borrowing to the Agent in
immediately available funds. So long as a Lender receives notice of
the requested Borrowing prior to 2:00 p.m. (Minneapolis time) on the
date the request is received, that Lender will make its Advance with
respect to that Borrowing available to the Agent by wire transfer of
immediately available funds to the Agent not later than 11:00 a.m.
(Minneapolis time) on the date called for in such notice. If payment
is not made by a Lender when due hereunder interest on the unpaid
amount shall accrue from and including the due date to the date of
payment at the Base Rate, and shall be payable on demand. Prior to
12:00 noon (Minneapolis time) on the day of the requested Borrowing,
the Agent shall disburse such funds by wire transferring the same to
an account designated by the Borrower at First Bank (Missouri) or in
such other manner as the Agent and the Borrower may from time to time
agree in writing. The Agent shall have no obligation to disburse the
requested Borrowing if any condition set forth in Article III has not
been satisfied on the day of the requested Borrowing. Each Borrowing
shall be in the amount of $1,000,000 or an integral multiple of
$100,000 greater than $1,000,000. The Borrower shall promptly confirm
each telephonic request for an Advance by executing and delivering an
appropriate confirmation certificate to the Agent. The Borrower shall
be obligated to repay all Advances made to it notwithstanding the fact
that the person requesting the same was not in fact authorized so to
do. Any request for an Advance shall be deemed to be a representation
that the statements set forth in Article IV are correct except to the
extent that the same relate specifically to an earlier date.
(c) In the event that any one or more Lenders' obligations to
make Advances at the Eurodollar Rate are suspended pursuant to Section
-------
2.02(d) following a request for a Borrowing that specifies that a
------
Eurodollar Rate is to apply, such Lenders shall nevertheless be
obliged to fund their respective Advances, and such Advances shall
bear interest at the Floating Rate until they are repaid or until such
Lenders may again make, maintain or fund Advances at the Eurodollar
Rate and the Borrower requests pursuant to Section 2.02(b) that a
Eurodollar Rate be applicable to such Advances.
Section 2.02 Interest
--------
(a) Floating Rate. Unless the Borrower elects a Eurodollar Rate
pursuant to Section 2.01(b) or subsection (b)of this Section, the
----------------
principal balance of the Notes shall bear interest at the Floating
Rate.
(b) Conversion of Principal to Eurodollar Rates. At the election
of the Borrower, which may be exercised from time to time, the
Borrower may request in writing or by telephone that a Eurodollar Rate
be applicable for the portion of the outstanding principal balance of
the Notes (including any Advance requested or to be requested) and for
the Interest Period indicated by the Borrower in its request. The
portion of the outstanding balance of the Notes for which a Eurodollar
Rate is requested must, on the first day of the applicable Interest
Period, either (A) bear interest at the Floating Rate, or (B) bear
interest at a Eurodollar Rate with respect to which the Interest
Period expires on such first day. A request for a Eurodollar Rate must
be received by the Agent before 1:00 p.m. (Minneapolis time) on the
day three Eurodollar Business Days before the first day of the
proposed Interest Period. Upon receiving a request for a Eurodollar
Rate, and in any event not later than the close of business on the day
that the request is received, the Agent will notify the Lenders of the
principal amount to be subject to such Eurodollar Rate and the
Interest Period applicable thereto. Not later than 4:00 p.m.
(Minneapolis time) on the second Eurodollar Business Day prior to the
date on which such Eurodollar Rate is to become effective, the Agent
will notify the Lenders and the Borrower of the interest rate to be
applicable thereto. Following a request for a Eurodollar Rate under
this Section or Section 2.01, the Eurodollar Rate as determined
-------------
hereunder shall be the interest rate applicable for the proposed
Interest Period to the portion of the outstanding principal balance of
the Notes to which the quotation related, subject to fluctuations in
the applicable Margin (and the remaining part of the principal balance
of the Notes, if any, shall continue to bear interest at the rate or
rates previously applicable to such amounts). At the termination of
such Interest Period, the interest rate applicable to the portion of
the principal balance of the Notes to which the Eurodollar Rate
quotation was applicable shall revert to the Floating Rate unless a
new Eurodollar Rate quotation is requested by the Borrower in
accordance with this paragraph.
(c) Setting and Notice of Rates. The Eurodollar Rate applicable
to each Eurodollar Rate Funding shall be determined by the Agent
between the opening of business and 11:00 a.m. (Minneapolis time) on
the second Eurodollar Business Day prior to the beginning of the
applicable Interest Period. Promptly following such determination, the
Agent shall give notice thereof (which may be by telephone if promptly
confirmed by fax) to the Borrower and each Lender. Each such
determination of the applicable Eurodollar Rate shall be conclusive
and binding upon the parties hereto, in the absence of demonstrable
error. The Agent, upon written request of the Borrower or any Lender,
shall deliver to the Borrower or such requesting Lender a statement
showing the computations used by the Agent in determining the
applicable Eurodollar Rate hereunder.
(d) Limitations on Eurodollar Rate Fundings. In no event shall
more than six Eurodollar Rate Fundings be outstanding at any one time.
In no event may the Borrower request a Eurodollar Rate Funding if,
after giving effect to such Eurodollar Rate Funding, the Borrower
would be required to prepay the Eurodollar Rate Funding in order to
pay the principal amount of the Advances on the Revolving Credit
Termination Date. In no event may the Borrower rescind any request for
a Eurodollar Rate Funding once made. Notwithstanding anything to the
contrary in this Agreement, the Agent and the Lenders shall have no
obligation to honor any request for a Eurodollar Rate Funding if a
Default or Event of Default has occurred and is continuing when such
request is made or on the first day of the Interest Period applicable
thereto. If on or prior to the first day of any Interest Period the
Agent reasonably determines (which determination shall be conclusive)
that by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate for such Interest Period, or the Required Lenders
reasonably determine (which determination shall be conclusive) and
notify the Agent that the Eurodollar Rate will not adequately and
fairly reflect the cost to the Lenders of funding the requested
Eurodollar Rate Funding for such Interest Period, then the Agent shall
give the Borrower prompt notice thereof specifying the amounts or
periods, and so long as such condition remains in effect, the Lenders
shall be under no obligation to fund any Eurodollar Rate Fundings and
the Borrower shall, on the last day(s) of the then current Interest
Period(s) for the outstanding Eurodollar Rate Fundings, either prepay
such Eurodollar Rate Fundings or convert such Eurodollar Rate Fundings
into Floating Rate Borrowings in accordance with the terms of this
Agreement. Notwithstanding any other provision of this Agreement, in
the event that it becomes unlawful for any Lender to make, maintain,
or fund Advances at the Eurodollar Rate hereunder, then such Lender
shall promptly notify the Borrower thereof and such Lender's
obligation to make, maintain or fund Advances at the Eurodollar Rate
shall be suspended until such time as such Lender may again make,
maintain, and fund Advances at the Eurodollar Rate. If the obligation
of any Lender to make, maintain or fund Advances at the Eurodollar
Rate shall be suspended pursuant to this subsection 2.02(d), such
Lender's affected Advances shall be automatically converted into
Floating Rate Advances on the last day(s) of the then current Interest
Period(s) for the affected Advances.
(e) Records. Absent error, the records of the Agent shall be
conclusive evidence as to the amount of each Eurodollar Rate Funding
and the interest rate and Interest Period applicable thereto.
(f) Default Interest. Upon the occurrence of any Default or Event
of Default, and so long as such Default or Event of Default continues
without written waiver thereof by the Required Lenders, each Note
shall bear interest at an annual rate that shall be four percent
(4.00%) plus the annual rate at which interest would otherwise accrue
on that Note. Accrual of interest at such increased rate shall not be
deemed a waiver or excuse of any such Default or Event of Default.
Section 2.03 Margin and L/C Margin.
---------------------
(a) Generally. The Margin and the L/C Margin through and
including the first adjustment occurring as specified below shall be
1.00% and 1.125% respectively. Beginning with the receipt by the
Lenders of the financial statements and Compliance Certificate for the
period ending September 30, 2002, the Margin and the L/C Margin shall
be adjusted each quarter on the basis of the Funded Debt Ratio as at
the end of the previous fiscal quarter, in accordance with the
following table:
Funded Debt Ratio Margin in Basis Points L/C Margin in Basis Points
----------------- ---------------------- --------------------------
1.75 to 1.00 or more 125.0 137.5
1.00 to 1.00 or more, but less than 112.5 125.0
1.75 to 1.00
Less than 1.00 to 1.00 100.0 112.5
Reductions and increases in the Margin and L/C Margin will be made
quarterly on the first day of the month following the date the
Borrower's financial statements and Compliance Certificate required
under Section 5.01 are due. Notwithstanding the foregoing, (i) if the
Borrower fails to deliver any financial statements or Compliance
Certificates when required under Section 5.01, the Agent may (and,
upon request of the Required Lenders, shall), by notice to the
Borrower, increase the Margin and L/C Margin to the highest rates set
forth above until such time as the Agent has received all such
financial statements and Compliance Certificates, and (ii) no
reduction in the Margin or the L/C Margin will be made if a Default or
an Event of Default has occurred and is continuing at the time that
such reduction would otherwise be made.
(b) Adjustments. If, upon receipt of the Borrower's audited
financial statements with respect to any fiscal year of the Borrower,
the Margin or L/C Margin is determined to be higher than that based on
the Borrower's interim financial statements as of the end of such
fiscal year, and the Borrower is thus determined to have underpaid
interest or Letter of Credit Fees since the adjustment date following
the end of such fiscal year, the Borrower shall pay such amount on
demand. If, upon such receipt, the Margin or L/C Margin is determined
to be lower than that based on the Borrower's interim financial
statements as of the end of such fiscal year, and the Borrower is thus
determined to have overpaid interest or Letter of Credit Fees since
the adjustment date following the end of such fiscal year, the Lenders
shall credit such overpayment, first, as a prepayment of accrued but
unpaid interest on the Notes, and, second, as a prepayment of interest
thereafter accruing on the Notes.
Section 2.04 Payments.
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(a) Interest. Interest accruing on the principal balance of the Notes
shall be due and payable as follows:
(i) Interest accruing on the principal balance of the Notes at the
Floating Rate each calendar quarter shall be due and payable on
the last day of that calendar quarter, with the first quarterly
payment of interest due on the last day of September, 2002; and
the last payment of interest shall be due on the Revolving Credit
Termination Date.
(ii) Interest on each Eurodollar Rate Funding shall be due and payable
on the last day of the applicable Interest Period or, if such
Interest Period is six months, on the last day of the third month
during such Interest Period, and on the last day of such Interest
Period.
(b) Principal. The principal balance of the Notes shall be due and
payable in full on the Revolving Credit Termination Date.
Section 2.05 Commitment Fee. The Borrower shall pay to the Agent, for
---------------
the benefit of the Lenders, a commitment fee at an annual rate
equal to 22.5 basis points (.225%) applied to the aggregate daily average of the
sum of (i) the unused amount of the Commitment Amounts hereunder plus (ii) the
difference between $20,000,000 and the outstanding face amount of Letters of
Credit. The commitment fee shall be due and payable quarterly in arrears with
the first quarterly payment due September 30, 2002. Any commitment fee remaining
unpaid on the Revolving Credit Termination Date shall be due and payable on that
date.
Section 2.06 Termination or Reduction of the Commitments. The Borrower
-------------------------------------------
may at any time and from time to time upon 10 calendar days' prior notice to the
Agent permanently terminate the Commitments in whole or permanently reduce the
Commitments in part, without penalty or premium, provided that (i) the
Commitments may not be terminated while any Advances remain outstanding, (ii)
each partial reduction shall be in the amount of $1,000,000 or a multiple
thereof, (iii) any partial reduction of the Commitments shall be pro rata as to
each Lender in accordance with that Lender's Percentage, and (iv) no reduction
shall reduce the Commitments to an amount less than the aggregate amount of the
Advances outstanding at the time.
Section 2.07 Voluntary Prepayments. The Borrower may prepay the
----------------------
portion of the principal balance of the Notes bearing interest at a Floating
Rate (the "Floating Rate Portion") in whole or in part, at any time and from
time to time; provided that (i) prepayment of any Lender's Note must be
accompanied by pro rata prepayment of each other Lender's Note, (ii) any
prepayment of the full amount of any Note shall include accrued interest
thereon, and (iii) each partial prepayment of the Floating Rate Portion of the
Notes shall be in the principal amount of $1,000,000 or an integral multiple of
$100,000 greater than $1,000,000.
The Borrower may prepay the portion of the principal balance of the
Notes bearing interest at a Eurodollar Rate (the "Eurodollar Rate Portion") in
whole or in part, at any time from time to time; provided that (i) prepayment of
any Lender's Note must be accompanied by pro rata prepayment of each other
Lender's Note, (ii) any prepayment of the full amount of any Note shall include
accrued interest thereon, (iii) each partial prepayment of the Eurodollar Rate
Portion of the Notes shall be in the principal amount of $1,000,000 or an
integral multiple of $100,000 greater than $1,000,000, (iv) any prepayment of
the Eurodollar Rate Portion of the Notes shall be made only upon three Bank
Business Days' notice to the Agent, and (v) if the prepayment is made on a date
other than the last day of the applicable Interest Period, such prepayment must
be accompanied by a written agreement from Borrower to reimburse the Lenders for
any amounts due to the Lenders pursuant to Section 2.12(b).
---------------
Section 2.08 Computation of Interest and Fees. Interest under the
---------------------------------
Notes and the fees hereunder shall be computed on the basis of actual number of
days elapsed in a year of 360 days.
Section 2.09 Making of Payments. All payments of principal and
-------------------
interest under the Notes and of the fees hereunder shall be made to the Agent in
immediately available funds. Payments received after 2:00 p.m. (Minneapolis
time) on any day shall be deemed received on the next succeeding Bank Business
Day. The Borrower and the Lenders agree that the amount shown on the books and
records of the Agent as being the principal balance of each Lender's Note shall
be prima facie evidence of such principal amount. The Borrower hereby authorizes
the Agent to charge against any account the Borrower may maintain with Wells
Fargo Bank, National Association, an amount equal to the accrued interest and
fees from time to time due and payable to the Agent under the Notes or
hereunder, or (at the option of the Required Lenders) to make an Advance in such
amount, all without receipt of any request for such charge or Advance.
Section 2.10 Payment on Nonbusiness Days. Payments of interest on
-----------------------------
Eurodollar Fundings shall be governed by Section 2.04(a)(ii). With respect to
--------------------
all other payments to be made hereunder or under the Notes, whenever such
payments shall be stated to be due on a day other than a Bank Business Day, such
payment may be made on the next succeeding Bank Business Day, and such extension
of time shall in each case be included in the computation of payment of interest
on such Note or the fees hereunder, as the case may be.
Section 2.11 Use of Proceeds. The proceeds of the Advances shall be
---------------
used by the Borrower (i) for its general corporate purposes, (ii) to refinance
existing indebtedness under the Existing Credit Agreement, (iii) for Permitted
Acquisitions, and (iv) for the Planned Recapitalization.
Section 2.12 Fees on Advances and Indemnity. In addition to
---------------------------------
any interest payable on Advances made hereunder and any fees or other amounts
payable hereunder, the Borrower agrees:
(a) If at any time any generally applicable law, rule or regulation or
the generally applicable interpretation or administration thereof by any
governmental authority (including, without limitation, Regulation D of the
Federal Reserve Board):
(i) shall subject any Lender to any tax, duty or other charges
(including but not limited to any tax designed to discourage
the purchase or acquisition of foreign securities or debt
instruments by United States nationals) with respect to this
Agreement, or shall materially change the basis of taxation
of payments to any Lender of the principal of or interest on
any portion of the principal balance of the Notes bearing
interest at a Eurodollar Rate (except for the imposition of
or changes in respect of the rate of tax on the overall net
income of that Lender); or
(ii) shall impose or deem applicable or increase any reserve,
special deposit or similar requirement against assets of,
deposits with or for the account of, or credit extended by
any Lender because of any portion of the principal balance
of any Note bearing interest at a Eurodollar Rate;
and the result of any of the foregoing would be to increase the cost to
that Lender of making or maintaining any such portion or to reduce any sum
received or receivable by that Lender with respect to such portion, then,
within 30 days after demand by any Lender specifying the basis of the
Lender's assertion in reasonable detail, the Borrower shall pay that Lender
such additional amount or amounts as will compensate that Lender for such
increased cost or reduction.
(b) The Borrower shall also compensate any Lender, upon written
request by that Lender (which request shall set forth the basis for
requesting such amounts), for all losses and expenses in respect of any
interest or other consideration paid by that Lender to lenders of funds
borrowed by it or deposited with it to maintain any portion of the
principal balance of any Note at a Eurodollar Rate which that Lender may
sustain to the extent not otherwise compensated for hereunder and not
mitigated by the reemployment of such funds to the extent such loss or
expense arises (i) as a consequence of any failure by the Borrower to make
any payment when due of any amount due hereunder in connection with any
Eurodollar Rate Fundings, (ii) due to any failure of the Borrower to borrow
or convert any Eurodollar Rate Fundings on a date specified therefor in a
notice thereof, or (iii) due to any payment or prepayment of any Eurodollar
Rate Funding on a date other than the last day of the applicable Interest
Period for such Eurodollar Rate Funding. A certificate as to any such loss
or expense (including calculations, in reasonable detail, showing how that
Lender computed such loss or expense) shall be promptly submitted by that
Lender to the Borrower. Such loss or expense may be computed as though that
Lender acquired deposits in the London interbank market to fund that
portion of the principal balance whether or not that Lender actually did
so.
(c) A notice from any Lender under this Section claiming compensation
and setting forth the additional amount or amounts to be paid to it
hereunder shall be conclusive in the absence of error. In determining any
such amount, a Lender may use any reasonable averaging and attribution
methods.
Section 2.13 Capital Adequacy. If any Lender determines at any time
-----------------
that its Return has been reduced as a result of any Capital Adequacy Rule
Change, that Lender may require the Borrower to pay it the amount necessary to
restore its Return to what it would have been had there been no Capital Adequacy
Rule Change. For purposes of this Section:
(a) "Return", for any period, means the percentage determined by
dividing (i) the sum of interest and ongoing fees earned by a Lender under
this Agreement during such period, by (ii) the average capital that Lender
is required to maintain during such period as a result of its being a party
to this Agreement, as reasonably determined in good faith by that Lender
based upon its total capital requirements and a reasonable attribution
formula that takes account of the Capital Adequacy Rules then in effect.
Return may be calculated for each calendar quarter and for the shorter
period between the end of a calendar quarter and the date of termination in
whole of this Agreement.
(b) "Capital Adequacy Rule" means any law, rule, regulation or
guideline regarding capital adequacy that applies to any Lender, or the
interpretation thereof by any governmental or regulatory authority with
supervisory authority over such Lender. Capital Adequacy Rules include
rules requiring financial institutions to maintain total capital in amounts
based upon percentages of outstanding loans, binding loan commitments and
letters of credit.
(c) "Capital Adequacy Rule Change" means any change applicable to
banks generally in any Capital Adequacy Rule occurring after the date of
this Agreement, but the term does not include any changes in applicable
requirements that at the date hereof are scheduled to take place under the
existing Capital Adequacy Rules or any increases in the capital that any
Lender is required to maintain to the extent that the increases are
required due to a regulatory authority's action affecting only that Lender.
(d) For purposes of this Section, "Lender" includes (but is not
limited to) the Agent, the Lenders, as defined elsewhere in this Agreement,
and any assignee of any interest of any Lender hereunder and any
participant in the loans made hereunder.
The initial notice sent by a Lender shall be sent as promptly as practicable
after that Lender learns that its Return has been reduced, shall include a
demand for payment of the amount necessary to restore that Lender's Return for
the quarter in which the notice is sent, and shall state in reasonable detail
the cause for the reduction in its Return and its calculation of the amount of
such reduction. Thereafter, that Lender may send a new notice during each
calendar quarter setting forth the calculation of the reduced Return for that
quarter and including a demand for payment of the amount necessary to restore
its Return for that quarter.
Section 2.14. Failure of Any Lender to Make Advances. Should any
-----------------------------------------
Lender default in making an Advance, the other Lenders shall not be released
from their several obligations to make Advances as agreed hereunder, and, in the
event such defaulting Lender is the Agent, the other Lenders shall forthwith
appoint one of themselves to act as Agent. However, such default shall not
obligate any of the Lenders to increase their Commitment Amounts. Without
limiting any other remedies to which the Borrower may be entitled, Borrower
shall be released from all liability to pay such defaulting Lender any accrued
or future fees under Section 2.05 and the other obligations of the Borrower to
------------
such defaulting Lender under the Loan Documents, except the obligation to repay
the outstanding Revolving Loans theretofore made by such Lender and interest
accrued thereon as provided in the Loan Documents, shall terminate; provided,
--------
however, once such default is cured, then such defaulting Lender shall,
- -------
subsequent thereto, have all rights under the Loan Documents.
Section 2.15. Issuance of Letters of Credit.
-----------------------------
(a) The Agent will issue one or more letters of credit for the
account of the Borrower (each a "Letter of Credit") from time to time
during the period from the date hereof until the Revolving Credit
Termination Date, in an aggregate amount at any time outstanding not
to exceed $20,000,000. Each Letter of Credit, if any, shall be issued
pursuant to a separate L/C Application entered into by the Borrower as
applicant, completed in a manner satisfactory to the Agent and
delivered to the Agent at least five Bank Business Days prior to the
date such Letter of Credit is to be issued. The terms and conditions
set forth in each such L/C Application shall supplement the terms and
conditions hereof, but in the event of inconsistency between the terms
of any such L/C Application and the terms hereof, the terms hereof
shall control.
(b) Each Lender shall be deemed to hold a participation interest
in each Letter of Credit equal to that Lender's Percentage of the face
amount of that Letter of Credit. If the Agent makes any payment
pursuant to the terms of any Letter of Credit and is not promptly
reimbursed, the Agent may request that each Lender pay such Lender's
Percentage of the unreimbursed amount. Upon receipt of any such
request prior to 1:00 p.m. (Minneapolis time) on a Bank Business Day,
the recipient shall be unconditionally and irrevocably obligated to
pay its Percentage of the unreimbursed amount to the Agent in
immediately available funds prior to 3:00 p.m. (Minneapolis time) on
such date. Notices received after 1:00 P.M. (Minneapolis time) shall
be deemed to have been received on the following Bank Business Day. If
payment is not made by a Lender when due hereunder, interest on the
unpaid amount shall accrue from and including the date of the Agent's
request to the date of payment at the Base Rate. After making any
payment to the Agent under this subsection in connection with a
particular Letter of Credit, a Lender shall be entitled to participate
to the extent of its Percentage in the related reimbursements and any
interest thereon received by the Agent from the Borrower or otherwise.
Upon receiving any such reimbursement, the Agent will distribute to
each Lender its Percentage of such reimbursement and any interest
thereon.
(c) No Letter of Credit shall be issued with an expiry date later
than 90 days after the Revolving Credit Termination Date.
(d) Any request for the issuance of a Letter of Credit under this
Section 2.15 shall be deemed to be a representation that the
statements set forth in Article IV hereof are correct except to the
extent that the same relate specifically to an earlier date.
Section 2.16. Payment of Amounts Drawn Under Letters of Credit. The
-------------------------------------------------
Borrower agrees to pay the Agent any and all amounts required to be paid under
the applicable L/C Application, when and as required to be paid thereby,
including the amounts designated below, when and as designated:
(a) The Borrower hereby agrees to pay the Agent on the day a
draft is honored under any Letter of Credit a sum equal to all amounts
drawn under such Letter of Credit plus any and all reasonable charges
and expenses that the Agent may pay or incur relative to such draw,
plus interest on all such amounts, charges and expenses as set forth
below (all such amounts are hereinafter referred to, collectively, as
the "Obligation of Reimbursement").
(b) The Borrower hereby agrees to pay the Agent on demand
interest on all amounts, charges and expenses payable by the Borrower
to the Agent under this Section 2.16, accrued from the date any such
draft is paid, or any such charge or expense is paid or incurred, by
the Agent until payment in full by the Borrower at the Floating Rate.
(c) Upon the occurrence of any Default or Event of Default, and
so long as any such Default or Event of Default continues without
written waiver thereof by the Required Lenders, the rate of interest
on all amounts, charges and expenses payable by the Borrower to the
Agent under this Section 2.16 shall be four percent (4.00%) plus the
-------------
Floating Rate.
Section 2.17. Special Account.
---------------
(a) If the Commitments are terminated in whole pursuant to
Section 2.06, if an Event of Default shall occur, and in any event on
------------
the Revolving Credit Termination Date, the Borrower shall pay the
Agent in immediately available funds, for deposit in a deposit account
established for the sole purpose of holding such funds, an amount
equal to the maximum aggregate amount available to be drawn under all
Letters of Credit then outstanding, assuming compliance with all
conditions for drawing thereunder (the "Maximum Reimbursement
Obligation"). Alternatively, the Borrower may transfer to the Agent
cash and Permissible Securities for deposit in a securities account
established for the sole purpose of holding such funds, of an
aggregate Collateral Value equal to the Maximum Reimbursement
Obligation; provided, however, that if the Borrower wishes to transfer
-------- -------
Permissible Securities in lieu of cash, it must simultaneously deliver
to the Agent such account and control agreements and such other
documents as the Agent may reasonably determine are necessary in order
to establish and perfect the security interest referred to in
subsection (c), below. Any such deposit account or securities account
shall be referred to herein as the "Special Account."
(b) "Permissible Securities" means securities described in
Exhibit H, and the "Collateral Value" of a Permissible Security is its
market value, as reasonably determined by the Agent, multiplied by the
percentage determined pursuant to Exhibit H. The "Collateral Value" of
cash is its face value.
(c) The Borrower hereby grants to the Agent, for the benefit of
the Lenders, a security interest in the Special Account and all funds
and Permissible Securities held therein from time to time and all
proceeds thereof, as security for the payment of all Obligations. Any
interest earned on funds and Permissible Securities deposited in the
Special Account shall be credited to the Special Account. Amounts on
deposit in the Special Account may be applied by the Agent at any time
or from time to time to the Borrower's Obligation of Reimbursement or
any other Obligations, in the Agent's sole discretion, and shall not
be subject to withdrawal by the Borrower so long as the Agent
maintains a security interest therein. The Agent agrees to transfer
any balance of cash or Permisssible Securities in the Special Account
to the Borrower at such time as the Obligations have been paid in
full.
Section 2.18. Authorization for Borrowing. In the event that the
-----------------------------
Borrower shall be obligated to make any payment pursuant to Section 2.16(a) or
----------------
any payment or transfer of securities pursuant to Section 2.17, and shall not
-------------
have made other arrangements for payment or transfer of securities as of the due
date, then the Agent will initiate a Borrowing in an amount not to exceed the
amount available to be borrowed pursuant to Section 2.01 without request from
------------
the Borrower and use the proceeds to satisfy such payment obligation. The
procedure for such Borrowing, and the Agent's and Lenders' rights and
Obligations with respect thereto, shall be in all respects identical to those
applicable to a Borrowing initiated by the Borrower pursuant to Section 2.01,
------------
and such Borrowing shall not itself cause a Default or Event of Default. Such
Borrowing shall bear interest at the Floating Rate.
Section 2.19. Letter of Credit Fees. The Borrower agrees to pay fees
---------------------
as follows:
(a) Letter of Credit Fees. The Borrower agrees to pay the Agent for
the benefit of the Lenders a fee with respect to each Letter of Credit, if
any, accruing on a daily basis and computed at an annual rate equal to the
L/C Margin of the aggregate amount that may then be drawn on all issued and
outstanding Letters of Credit from and including the date of issuance of
each such Letter of Credit until such date as each such Letter of Credit
shall terminate by its terms or be fully drawn, due and payable quarterly
in arrears on the last day of each calendar quarter, commencing September
30, 2002, and on the date when the last Letter of Credit expires or is
fully drawn. The foregoing fee shall be in addition to any and all fees,
commissions and charges of the Agent with respect to or in connection with
any such Letter of Credit. Upon the occurrence of any Default or Event of
Default, and so long as such Default or Event of Default continues without
written waiver thereof by the Required Lenders, the annual rate at which
such fee accrues shall be four percent (4.00%) plus the L/C Margin. Accrual
of such fee at such increased rate shall not be deemed a waiver or excuse
of any such Default or Event of Default.
(b) Letter of Credit Administrative Fees. The Borrower agrees to pay
the Agent, on demand, the administrative fees charged by the Agent in
connection with issuing Letters of Credit, honoring drafts under Letters of
Credit, amendments thereto, transfers thereof and all other activity with
respect to Letters of Credit at the then-current rates published by the
Agent for such services rendered on behalf of customers of the Agent
generally and provided to the Borrower.
ARTICLE III.
CONDITIONS PRECEDENT
Section 3.01 Initial Conditions Precedent. The obligation of the
------------------------------
Lenders to make any Advance and the obligation of the Agent to issue any Letter
of Credit are subject to the condition precedent that the Agent shall have
received on or before the day of the first Advance all of the following, each
dated (unless otherwise indicated) as of the date hereof, in form and substance
satisfactory to each Lender:
(a) The Notes, properly executed on behalf of the Borrower.
(b) Current searches of appropriate filing offices showing that (i) no
state or federal tax liens have been filed and remain in effect against the
Borrower or FBA, (ii) no financing statements have been filed and remain in
effect against the Borrower or FBA except financing statements perfecting
only Liens permitted under Section 6.01, and (iii) no judgment liens are in
effect against the Borrower or FBA.
(c) Separate certificates of the secretaries of the Borrower and Union
Financial certifying, in the case of each such corporation, (i) that the
execution, delivery and performance of the Loan Documents and other
documents contemplated hereunder to which such corporation is a party have
been duly approved by all necessary action of the Board of Directors of
such corporation, and attaching true and correct copies of the applicable
resolutions granting such approval, (ii) that attached to such certificate
are true and correct copies of the articles of incorporation and bylaws of
such corporation, together with such copies, and (iii) the names of the
officers of such corporation who are authorized to sign the Loan Documents
and other documents contemplated hereunder to which such corporation is a
party, including, with respect to the Borrower, requests for Advances and
L/C Applications, together with the true signatures of such officers. The
Agent and the Lenders may conclusively rely on each such certificate until
they shall receive a further certificate of the Secretary or Assistant
Secretary of the applicable corporation canceling or amending the prior
certificate and submitting the signatures of the officers named in such
further certificate.
(d) A certificate of good standing of the Borrower and of each of its
Subsidiaries, dated not more than twenty (20) days before the date of the
first Advance.
(e) A signed copy of an opinion of counsel for the Borrower and its
Subsidiaries, addressed to the Lenders as to matters referred to in
Sections 4.01, 4.02, 4.03 and 4.07, and as to such other matters as the
-------------- ---- ---- ----
Lenders may reasonably request, with that opinion being subject to
customary assumptions and limitations and reasonably acceptable to each
Lender's counsel. In the case of Section 4.07, the opinion may be to the
------------
best knowledge of such counsel, and, in the case of Section 4.03, insofar
------------
as it relates to enforcement of remedies, it may be subject to applicable
bankruptcy, insolvency, reorganization or similar laws affecting the rights
of creditors generally from time to time, and to usual equity principles.
(f) The Pledge Agreement, duly executed by the Borrower.
(g) One or more certificates, representing in the aggregate all of the
issued and outstanding capital stock of FBA and Union Financial that is
owned by the Borrower, and one blank stock power executed by the Borrower
for each such certificate.
(h) The Intercompany Note, duly executed by FBA.
(i) The FBA Security Agreement, duly executed by FBA.
(j) Certificates representing, in the aggregate, all of the issued and
outstanding capital stock of San Francisco Company owned by FBA, and one
blank stock power executed by FBA for each such certificate.
(k) The Third Party Pledge Agreement, duly executed by San Francisco
Company.
(l) Certificates representing, in the aggregate, all of the issued and
outstanding capital stock of First Bank (California) owned by San Francisco
Company, and one blank stock power executed by San Francisco Company for
each such certificate.
(m) The Union Financial Guaranty, duly executed by Union Financial.
(n) The Union Financial Security Agreement, duly executed by Union
Financial.
(o) Certificates representing, in the aggregate, all of the issued and
outstanding capital stock of First Bank (Missouri) that is owned by Union
Financial, and one blank stock power executed by Union Financial for each
such certificate.
(p) Evidence that all of the Borrower's obligations under the Existing
Credit Agreement have been paid and discharged in full, or will be so paid
and discharged from proceeds of the first Borrowing.
It is understood and agreed that Wells Fargo Bank Minnesota, National
Association maintains possession of the documents described in subsections (g),
(h), (i), (j), (k), (l) and (o) pursuant to the Existing Credit Agreement; that
such documents will be turned over to the Agent simultaneously with the first
Borrowing, and that such turnover will satisfy the requirements of such
subsections.
Section 3.02 Conditions Precedent to All Advances. The obligation of
-------------------------------------
each Lender to make any Advance (including the initial Advance) and the
obligation of the Agent to issue any Letter of Credit shall be subject to the
further conditions precedent that on the date of such Advance:
(a) The representations and warranties contained in Article IV are
correct on and as of the date of such Advance as though made on and as of
such date, except to the extent that such representations and warranties
relate solely to an earlier date.
(b) No event has occurred and is continuing, or would result from such
Advance, which constitutes a Default or an Event of Default.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders as
follows:
Section 4.01 Corporate Existence and Power. The Borrower and each of
------------------------------
its Subsidiaries (i) is a corporation duly incorporated, validly existing and in
good standing under the laws of the state of its incorporation, and is duly
licensed or qualified to transact business in all jurisdictions where the
character of the property owned or leased or the nature of the business
transacted by it makes such licensing or qualification necessary and where
failure to be so licensed or qualified would have a materially adverse impact on
its business or properties; (ii) is in compliance with the requirements of
applicable laws and regulations, the noncompliance with which would materially
and adversely affect its business or financial condition; and (iii) has all
requisite power and authority to conduct its business, to own its properties and
to execute and deliver, and to perform all of its obligations under, the Loan
Documents.
Section 4.02 Authorization of Borrowing; No Conflict as to Law or
-------------------------------------------------------
Agreements. The execution, delivery and performance by the Borrower and each of
- ----------
its Subsidiaries of the Loan Documents to which it is a party and the Borrowings
and requests for Letters of Credit from time to time hereunder have been duly
authorized by all necessary corporate action and do not and will not (i) require
any consent or approval of the stockholders of the Borrower or any of its
Subsidiaries, or any authorization, consent or approval by any governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, except such as have already been obtained, (ii) violate any provision
of any law, rule or regulation (including, without limitation, Regulation X of
the Board of Governors of the Federal Reserve System) or of any order, writ,
injunction or decree presently in effect having applicability to the Borrower or
any of its Subsidiaries or of the Articles of Incorporation or Bylaws of the
Borrower or any of its Subsidiaries, (iii) result in a breach of or constitute a
default under any indenture or loan or credit agreement or any other material
agreement, lease or instrument to which the Borrower or any of its Subsidiaries
is a party or by which it or its properties may be bound or affected, or (iv)
result in, or require, the creation or imposition of any Lien or other charge or
encumbrance of any nature upon or with respect to any of the properties now
owned or hereafter acquired by the Borrower or any of its Subsidiaries.
Section 4.03 Legal Agreements. This Agreement and the other Loan
-----------------
Documents to which it is a party constitute, the legal, valid and binding
obligations of the Borrower and each of its Subsidiaries, as applicable,
enforceable against each such party in accordance with their respective terms.
Section 4.04 Subsidiaries. Except as listed in Schedule 4.04, as of
------------ --------------
the date of this Agreement the Borrower has no direct or indirect Subsidiaries.
The percentage of the capital stock of each Subsidiary owned by the Borrower or
by one or more other Subsidiaries is as set forth in Schedule 4.04.
-------------
Section 4.05 Financial Condition. The Borrower has heretofore
---------------------
furnished to the Lenders its audited financial statements as of December 31,
2001, and call reports of the Bank Subsidiaries dated as of June 30, 2002. Those
financial statements fairly present the financial condition of the Borrower and
its Subsidiaries on the dates thereof and the results of their operations and
cash flows for the periods then ended, and were prepared in accordance with
GAAP, subject, in the case of the interim financial statements, to year-end
audit adjustments.
Section 4.06 Adverse Change. There has been no material adverse change
--------------
in the business, properties or condition (financial or otherwise) of the
Borrower or its Subsidiaries since the date of the latest financial statements
referred to in Section 4.05.
------------
Section 4.07 Litigation. Except as disclosed in Schedule 4.07, as of
---------- -------------
the date of this Agreement, there are no actions, suits or proceedings pending
or, to the knowledge of the Borrower, threatened against or affecting the
Borrower or any of its Subsidiaries or the properties of the Borrower or any of
its Subsidiaries before any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, which, if determined
adversely to the Borrower or any of its Subsidiaries, would have a material
adverse effect on the financial condition, properties, or operations of the
Borrower or any of its Subsidiaries.
Section 4.08 Regulation U. No part of the proceeds of any Advance will
------------
be used by the Borrower or any Bank Subsidiary directly or indirectly, (i) to
purchase or carry any margin stock (as defined in Regulation U of the Board of
Governors of the Federal Reserve System; herein, the "Board") or to extend
credit to others for the purpose of purchasing or carrying any margin stock or
(ii) for any purpose which entails a violation of, or which is inconsistent
with, the provisions of Regulation U issued by the Board.
Section 4.09 Taxes. The Borrower and each of its Subsidiaries has paid
-----
or caused to be paid to the proper authorities when due all federal, state and
local taxes required to be withheld by it. The Borrower and each of its
Subsidiaries has filed all federal, state and local tax returns which to the
knowledge of the officers of the Borrower are required to be filed, and the
Borrower and each of its Subsidiaries has paid or caused to be paid to the
respective taxing authorities all taxes as shown on said returns or on any
assessment received by it to the extent such taxes have become due, other than
taxes whose amount, applicability or validity is being contested in good faith
by appropriate proceedings and for which the Borrower or its Subsidiary, as
applicable, has provided adequate reserves in accordance with GAAP.
Section 4.10 Titles. The Borrower or its Subsidiaries, as applicable,
------
have good title to each of the material properties and assets reflected in the
latest balance sheet referred to in Section 4.05.
------------
Section 4.11 ERISA. As of the date of this Agreement, no Plan
-----
established or maintained by the Borrower or any ERISA Affiliate that is subject
to Part 3 of Subtitle B of Title I of ERISA had an accumulated funding
deficiency (as such term is defined in Section 302 of ERISA) in excess of
$1,000,000 as of the last day of the most recent fiscal year of such Plan ended
prior to the date hereof, and no liability to the Pension Benefit Guaranty
Corporation or the Internal Revenue Service in excess of such amount has been,
or is expected by the Borrower or any ERISA Affiliate to be, incurred with
respect to any Plan of the Borrower or any ERISA Affiliate. Neither the Borrower
nor any of its Subsidiaries has any contingent liability with respect to any
post-retirement benefit under a Welfare Plan as described in Section 3(1) of
ERISA, other than liability for continuation coverage described in Part 6 of
Subtitle B of Title I of ERISA.
ARTICLE V.
AFFIRMATIVE COVENANTS
So long as any Note or L/C Application or any other Obligation
hereunder shall remain unpaid, any Commitments shall be outstanding or the Agent
shall have any obligation to issue Letters of Credit, the Borrower will comply,
and will cause each of its Subsidiaries to comply, with the following
requirements, unless the Required Lenders shall otherwise consent in writing:
Section 5.01 Reporting Requirements. The Borrower will deliver to each
----------------------
Lender:
(a) As soon as available, and in any event within 90 days after the
end of each fiscal year of the Borrower, a copy of the annual audit report
of the Borrower with the unqualified opinion of independent certified
public accountants selected by the Borrower and to which the Agent and the
Required Lenders do not reasonably object.
(b) As soon as available, and in any event within 45 days after the
end of each fiscal quarter of the Borrower, a copy of the Borrower's Form
10Q filed with the SEC with respect to such fiscal quarter.
(c) As soon as available, and in any event within 90 days after the
end of each fiscal year of FBA, a copy of the annual audit report of FBA
with the unqualified opinion of independent certified public accountants
selected by FBA and acceptable to the Agent and the Required Lenders;
provided, however, that the annual audit report of FBA need not be prepared
-------- -------
or delivered if such report is no longer required by the SEC or other
applicable regulator.
(d) As soon as available, and in any event within 45 days after the
end of each fiscal quarter of FBA, a copy of FBA's Form 10Q filed with the
SEC with respect to such fiscal quarter; provided, however, that the
-------- -------
quarterly report of FBA need not be prepared or delivered if such report is
no longer required by the SEC or other applicable regulator.
(e) As soon as available, and in any event within 90 days after the
end of each fiscal year of the Borrower, the Complete Annual Report of
Domestic Holding Companies (FRY-6 Report) required by the Federal Reserve
Bank of St. Louis.
(f) As soon as available, and in any event no later than 45 days after
the end of each calendar quarter, the complete FRY-9LP and FRY-9C reports
required to be filed by the Borrower and its Subsidiaries quarterly with
the Federal Reserve Banks of the districts where they are located.
(g) As soon as available, and in any event within 45 days after the
end of each calendar quarter, the complete call report prepared by each
Bank Subsidiary at the end of such calendar quarter in compliance with the
requirements of any federal or state regulatory agency which has authority
to examine such Bank Subsidiary, prepared in accordance with the
requirements imposed by the applicable regulatory authorities and applied
on a basis consistent with the accounting practices reflected in any
previous call reports and similar statements delivered to the Agent prior
to the date of this Agreement.
(h) As soon as available, and in any event within 45 days after the
end of each calendar quarter, commencing November 15, 2002, a Compliance
Certificate, duly executed by the chief financial officer of the Borrower.
(i) Unless covered by insurance, promptly after the Borrower learns of
the commencement thereof, notice in writing of all litigation and of all
proceedings before any governmental or regulatory agency which, if
determined adversely to the Borrower or any of its Subsidiaries, would have
a material adverse effect on the financial condition, properties or
operations of the Borrower and its Subsidiaries, taken as a whole.
(j) As promptly as practicable (but in any event not later than five
business days) after the Borrower or an executive officer of any of its
Subsidiaries obtains knowledge of the occurrence of any Default or Event of
Default, notice of such occurrence, together with a detailed statement by a
responsible officer of the Borrower of the steps being taken by the
Borrower to cure the effect of such event.
(k) Promptly upon the filing thereof, copies of all registration
statements and all annual and quarterly reports which the Borrower or any
Subsidiary of the Borrower shall have filed with the Securities and
Exchange Commission.
(l) Such other information respecting the financial condition and
results of operations of the Borrower or any of its Subsidiaries as any
Lender may from time to time reasonably request.
Section 5.02 Books and Records; Inspection and Examination. The
-------------------------------------------------
Borrower and each of its Subsidiaries will keep accurate books of record and
account for itself in which true and complete entries will be made in accordance
with GAAP and, upon request of any Lender, will give any representative of that
Lender reasonable access to, and permit such representative to examine, copy or
make extracts from, any and all books, records and documents in its possession,
to inspect any of its properties and to discuss its affairs, finances and
accounts with any of its principal officers, all at such times during normal
business hours and as often as any Lender may reasonably request; provided,
--------
however, that with respect to the loans made by any Bank Subsidiary, a Lender
- -------
may only review and make copies of summaries of the watch lists prepared on a
quarterly basis and loan credit reports; review of specific loan accounts and
loan review reports may be requested by any Lender, whereupon the Borrower and
such Lender shall within 10 days agree to the number of such accounts and
reports that are reasonable and appropriate to review; provided further,
-------- -------
however, that during the continuance of any Default or Event of Default, there
- -------
shall be no restrictions upon the scope of the review, inspection and
reproduction rights of the Lenders concerning the loans of any Subsidiary.
Section 5.03 Compliance with Laws. The Borrower and each of its
----------------------
Subsidiaries will comply with the requirements of applicable laws and
regulations, the noncompliance with which would materially and adversely affect
its business or the financial condition of the Borrower or any of its
Subsidiaries.
Section 5.04 Payment of Taxes and Other Claims. The Borrower and each
---------------------------------
of its Subsidiaries will pay or discharge, when due, (a) all taxes, assessments
and governmental charges levied or imposed upon it or upon its income or
profits, or upon any properties belonging to it, prior to the date on which
penalties attach thereto, (b) all federal, state and local taxes required to be
withheld by it, and (c) all lawful claims for labor, materials and supplies
which, if unpaid, might by law become a Lien or charge upon any properties of
the Borrower or any of its Subsidiaries; provided, that neither the Borrower nor
any of its Subsidiaries shall be required to pay any such tax, assessment,
charge or claim whose amount, applicability or validity is being contested in
good faith by appropriate proceedings and for which the Borrower or its
Subsidiary, as applicable, has provided adequate reserves in accordance with
GAAP.
Section 5.05 Operations. The Borrower will, and will cause each of its
----------
Subsidiaries to, operate and maintain its business and property in the ordinary
course in a prudent manner consistent with sound banking practices and in such a
manner that the performance by the Borrower of its Obligations hereunder is not
jeopardized or impaired.
Section 5.06 Insurance. The Borrower and each of its Subsidiaries will
---------
obtain and maintain insurance with insurers believed by it to be responsible and
reputable, in such amounts and against such risks as the Borrower considers
prudent and economical. Without limiting the foregoing, the Borrower will cause
the Bank Subsidiaries to maintain blanket bond coverage, property and casualty
coverage, and errors and omissions coverage as customary for banks.
Section 5.07 Preservation of Corporate Existence. The Borrower and
-------------------------------------
each of its Subsidiaries will preserve and maintain its corporate existence and
all of its material rights, privileges and franchises; provided, however, that
-------- -------
neither the Borrower nor its Subsidiaries shall be required to preserve any of
its rights, privileges and franchises if its Board of Directors shall determine
that the preservation thereof is no longer desirable in the conduct of its
business and that the loss thereof is not disadvantageous in any material
respect to any Lender as a holder of a Note.
Section 5.08 Additional Collateral. The Borrower will deliver, and
----------------------
cause FBA, Union Financial and San Francisco Company to deliver, to the Agent
any shares of capital stock of any FDIC-insured financial institution or its
holding company acquired in whole or in part with proceeds of Advances if either
(A) 20% or more of any class of the voting securities of such entity are
acquired, or (B) the Borrower's investment therein is $1,000,000 or more;
provided, however, that the Borrower need not deliver such shares if such entity
- -------- -------
is immediately merged with or consolidated into a Subsidiary. Any shares of
capital stock so delivered shall constitute additional collateral under the
Pledge Agreement (if delivered by the Borrower), the FBA Security Agreement (if
delivered by FBA), the Union Financial Security Agreement (if delivered by Union
Financial) or the Third Party Pledge Agreement (if delivered by San Francisco
Company). The Borrower need not deliver any shares of capital stock of any
FDIC-insured financial institution or its holding company acquired in whole or
in part with proceeds of Advances to the Agent unless it either acquires 20% or
more of any class of the voting securities or its investment therein is
$1,000,000 or more; however the Borrower will not, and will not permit FBA,
Union Financial or San Francisco Company to grant any security interest in such
shares to any third party.
Section 5.09 Intercompany Note. The Borrower will not permit the
------------------
principal balance of the Intercompany Note to be less than $25,000,000 and, not
later than 10 days prior to its stated maturity, cause the maturity of the
Intercompany Note to be extended through the date that is 90 days after the
Revolving Credit Termination Date, provided, however, that the Intercompany Note
will be cancelled upon consummation of the Planned Recapitalization.
Section 5.10 Notice of Acquisition. At or before the time the Borrower
---------------------
or a Subsidiary enters into a definitive agreement in connection with a
Permitted Acquisition of an entity whose assets are equal to or in excess of
$500,000,000 or that is subject to a regulatory order or agreement, the Borrower
will notify the Agent of such acquisition in writing. The notice shall be
accompanied by a Schedule in the form of Exhibit I, duly completed and executed
on behalf of the Borrower, demonstrating that such Permited Acquisition will not
result in an Event of Default.
ARTICLE VI.
NEGATIVE COVENANTS
So long as any Note or any other Obligation shall remain unpaid, any
Commitments shall be outstanding, or the Agent shall have any obligation to
issue Letters of Credit, the Borrower will comply, and will cause each of its
Subsidiaries to comply, with the following covenants unless the Required Lenders
shall otherwise consent in writing:
Section 6.01 Liens. The Borrower will not create, incur, assume or
-----
suffer to exist, or permit FBA, San Francisco Company or Union Financial to
create, incur, assume or suffer to exist, any Lien or other charge or
encumbrance of any nature on any of the Collateral, now owned or hereafter
acquired, or assign or otherwise convey any right to receive income with respect
to the Collateral or give its consent to the subordination of any right or claim
of the Borrower to any right or claim of any other Person.
Section 6.02 Indebtedness. Neither the Borrower nor any of its
------------
Subsidiaries that are not Bank Subsidiaries will incur, create, assume or permit
to exist any indebtedness or liability on account of deposits or advances or any
indebtedness for borrowed money, or any other indebtedness or liability
evidenced by notes, bonds, debentures or similar obligations, except:
(a) Indebtedness to the Lenders under the Notes.
(b) Indebtedness of the Borrower or its Subsidiaries listed in
Schedule 6.02 hereto, and any extensions or renewals thereof.
-------------
(c) Indebtedness of the Borrower or any of its Subsidiaries that may
be treated as regulatory capital, or that is issued to provide a source of
repayment of securities that may be treated as regulatory capital, of the
Borrower or such Subsidiary.
(d) Subordinated Debt, or renewals or extensions thereof.
(e) Indebtedness not otherwise permitted under this Section 6.02, so
------------
long as such indebtedness does not exceed $5,000,000 in the aggregate
outstanding at any one time.
Section 6.03 Guaranties. Neither the Borrower nor any of its
----------
Subsidiaries will assume, guarantee, endorse or otherwise become directly or
contingently liable in connection with any obligations of any other Person,
except:
(a) The endorsement of negotiable instruments by the Borrower or any
of its Subsidiaries for deposit or collection or similar transactions in
the ordinary course of business.
(b) Guaranties, endorsements and other direct or contingent
liabilities in connection with the obligations of other Persons in
existence on the date hereof and listed in Schedule 6.03 hereto.
-------------
(c) Letters of credit and other obligations in the nature of
guaranties incurred by the Bank Subsidiaries in the ordinary course of
their banking businesses.
(d) Guaranties of obligations permitted by Section 6.02(c).
-----------------
(e) Other assumptions, guarantees, endorsements and similar
liabilities in connection with obligations of other Persons, not in excess
of $5,000,000 in the aggregate outstanding at any one time.
Section 6.04 Dividends. The Borrower will not pay dividends, or make
---------
any payments on account of the purchase, redemption or other retirement of any
of its common stock, or make any distribution in respect thereof, directly or
indirectly (any such payment or distribution being a "shareholder
distribution"). The Borrower will not make any shareholder distribution with
respect to any of its preferred stock in excess of $1,000,000 in the aggregate
during any period of 12 consecutive months.
Section 6.05 Consolidation and Merger. Neither the Borrower nor any of
------------------------
its Subsidiaries will consolidate with or merge into any Person, or permit any
other Person to merge into it, or acquire (in a transaction analogous in purpose
or effect to a consolidation or merger) all or substantially all of the assets
of any other Person, except that the foregoing shall not prohibit any Permitted
Acquisition or the Planned Recapitalization.
Section 6.06 Subordinated Debt. Neither the Borrower nor any of its
------------------
Subsidiaries will (i) make any payment of, or acquire, any Subordinated Debt
except as expressly permitted by the subordination provision thereof; (ii) give
security for all or any part of such Subordinated Debt; (iii) amend or cancel
the subordination provisions of such Subordinated Debt; (iv) take or omit to
take any action as a result of which the subordination of such Subordinated Debt
or any part thereof to the Notes might be terminated, impaired or adversely
affected; or (v) omit to give the Lenders prompt written notice of any default
under any agreement or instrument relating to such Subordinated Debt by reason
whereof such Subordinated Debt might become or be declared to be immediately due
and payable.
Section 6.07 Restrictions on Nature of Business. The Borrower will
-----------------------------------
not, and will not permit any of its Subsidiaries to, change the nature of its
business substantially, and will not engage, or permit any of its Subsidiaries
to engage, in any line of business if, as a result thereof, the business of the
Borrower and its Subsidiaries, taken as a whole, would not be predominantly the
banking and thrift business (including activities deemed closely related to
banking and/or thrift business by applicable regulatory authorities) as
currently constituted.
Section 6.08 Negative Pledges; Subsidiary Restrictions. The Borrower
------------------------------------------
will not, and will not permit any Subsidiary (including Bank Subsidiaries) to,
enter into any agreement, bond, note or other instrument with or for the benefit
of any Person other than the Lenders which would (i) prohibit the Borrower or
such Subsidiary from granting, or otherwise limit the ability of the Borrower or
such Subsidiary to grant, to the Lenders any Lien on any assets or properties of
the Borrower or such Subsidiary (it being agreed, however, that nothing herein
shall preclude the Bank Subsidiaries from granting security interests to secure
deposits), or (ii) require the Borrower or such Subsidiary to grant a Lien to
any other Person if the Borrower or such Subsidiary grants any Lien to the
Lenders. Except pursuant to any applicable law or regulation, the Borrower will
not permit any Subsidiary to place or allow any restriction, directly or
indirectly, on the ability of such Subsidiary to (a) pay dividends or any
distributions on or with respect to such Subsidiary's capital stock or (b) make
loans or other cash payments to the Borrower.
Section 6.09 Issuance of Additional Stock. Neither the Borrower nor
-----------------------------
any Subsidiary whose shares are pledged pursuant to the Pledge Agreement, the
FBA Security Agreement, the Third Party Pledge Agreement or the Union Financial
Security Agreement will issue any additional shares of capital stock unless such
additional shares are immediately pledged pursuant to the Pledge Agreement, the
FBA Security Agreement, the Third Party Pledge Agreement or the Union Financial
Security Agreement, as applicable; provided, however, that FBA may issue
-------- -------
additional shares of its voting stock free and clear of this prohibition so long
as the shares of its voting stock that are subject to the Pledge Agreement
constitute more than 80% of all of the voting stock of FBA.
ARTICLE VII.
FINANCIAL COVENANTS
Section 7.01 Total Risk Based Capital Ratio. The Borrower shall
---------------------------------
maintain on a consolidated basis, and shall cause each Bank Subsidiary to
maintain, its Total Risk Based Capital Ratio at not less than 10%.
Section 7.02 Tier I Risk Based Capital Ratio. The Borrower shall
---------------------------------
maintain on a consolidated basis, and shall cause each Bank Subsidiary to
maintain, its Tier I Risk Based Capital Ratio at not less than 6%.
Section 7.03 Leverage. The Borrower shall maintain on a consolidated
--------
basis, and shall cause each Bank Subsidiary to maintain, a minimum Leverage of
not less than 5%.
Section 7.04 Minimum Return on Assets. The Borrower will maintain (on
------------------------
a consolidated basis) its Return on Assets, determined as of each calendar
quarter end, at not less than .70%.
Section 7.05 Maximum Non-Performing Assets.
-----------------------------
(a) The Borrower will maintain on a consolidated basis, its
Non-Performing Assets at an amount not greater than 25% of its Primary
Equity Capital, determined as of each calendar quarter end.
(b) The Borrower will cause First Bank (Missouri) and First Bank
(California) to maintain their Non-Performing Assets at amounts not greater
than 20% and 10%, respectively, of their Primary Equity Capital, determined
as of each calendar quarter-end. For purposes of this Section 7.05(b),
----------------
First Bank (Missouri)'s non-performing asset known as the Lake of the
Ozarks Development in an amount not in excess of $17,000,000 shall not be
treated as a Non-Performing Asset.
Section 7.06 Allowance for Loan and Lease Losses. The Borrower will
------------------------------------
cause the Bank Subsidiaries to maintain their combined allowance for loan and
lease losses at not less than 100% of their combined Non-Performing Assets. The
Bank Subsidiaries' allowance for loan or lease losses at any time shall be the
amount set forth in the most recent Form 10-Q or 10-K filed by the Borrower with
the Securities and Exchange Commission (or any successor report).
ARTICLE VIII.
EVENTS OF DEFAULT, RIGHTS AND REMEDIES
Section 8.01 Events of Default. "Event of Default", wherever used
-----------------
herein, means any one of the following events:
(a) Default in the payment of principal of any Note when the same
becomes due and payable.
(b) Default in the payment of interest on any Note or of any fees or
other amounts required to be paid under this Agreement, and the continuance
of such default for a period of ten days or more.
(c) Failure to pay when due any amount specified in Section 2.16
-------------
hereof relating to the Borrower's Obligation of Reimbursement, or failure
to pay immediately when due any amounts required to be paid for deposit in
the Special Account.
(d) Default in the performance, or breach, of any covenant or
agreement on the part of the Borrower contained in any Financial Covenant
or in Article VI hereof.
(e) Default in a material respect in the performance, or breach, of
any covenant or agreement of the Borrower in this Agreement (other than a
covenant or agreement a default in whose performance or whose breach is
elsewhere in this Section specifically dealt with), and the continuance of
such default or breach for a period of 30 days after the date on which an
executive officer of the Borrower or any of its Subsidiaries first obtains
knowledge of such default or breach.
(f) Any representation or warranty made by the Borrower in this
Agreement or by the Borrower (or any of its officers) or any of its
Subsidiaries (or any of its officers) in any other Loan Document,
certificate, instrument, or statement contemplated by or made or delivered
pursuant to or in connection with this Agreement, shall prove to have been
incorrect or misleading in any material respect when made.
(g) A default under any bond, debenture, note or other evidence of
indebtedness of the Borrower or any of its Subsidiaries in excess of
$2,000,000 (other than to the Lenders) or under any indenture or other
instrument under which any such evidence of indebtedness has been issued or
by which it is governed where a party thereto has the right to accelerate
any indebtedness owing to such party from the Borrower or any of its
Subsidiaries thereunder as a result of such default, or any default by the
Borrower or any of its Subsidiaries in the payment of required principal or
interest under any of the foregoing agreements or instruments.
(h) An event of default shall occur under any security agreement,
mortgage, deed of trust, assignment or other instrument or agreement
directly or indirectly securing any obligations of the Borrower hereunder
or under any Note or under any guaranty of such obligations.
(i) Default in the payment of any amount in excess of $2,000,000 owed
by the Borrower or any of its Subsidiaries to any Lender other than
hereunder or under the Notes and the expiration of the applicable period of
grace, if any, with respect thereto; provided, however, that if such
-------- -------
default shall be cured by the Borrower or its Subsidiary, as applicable, as
may be permitted by the terms of such indebtedness, or waived by the Lender
holding such indebtedness, in each case prior to the commencement of any
action under Section 8.02, then the Event of Default hereunder by reason of
------------
such default shall be deemed likewise to have been thereupon cured or
waived.
(j) The Borrower or any of its Subsidiaries shall be adjudicated a
bankrupt or insolvent, or admit in writing its inability to pay its debts
as they mature, or make an assignment for the benefit of creditors; or the
Borrower or any of its Subsidiaries shall apply for or consent to the
appointment of any receiver, trustee, or similar officer for it or for all
or any substantial part of its property; or such receiver, trustee or
similar officer shall be appointed without the application or consent of
the Borrower or its Subsidiary, as applicable and such appointment shall
continue undischarged for a period of 30 days; or the Borrower or any of
its Subsidiaries shall institute (by petition, application, answer, consent
or otherwise) any bankruptcy, insolvency, reorganization, arrangement,
readjustment of debt, dissolution, liquidation or similar proceeding
relating to it under the laws of any jurisdiction; or any such proceeding
shall be instituted (by petition, application or otherwise) against the
Borrower or any of its Subsidiaries and shall continue without dismissal
for a period of 30 days; or any judgment, writ, warrant of attachment or
execution or similar process shall be issued or levied against a
substantial part of the property of the Borrower or any of its Subsidiaries
and such judgment, writ, or similar process shall not be released, vacated
or fully bonded within 30 days after its issue or levy.
(k) A petition shall be filed by the Borrower or any of its
Subsidiaries under the United States Bankruptcy Code naming the Borrower or
any of its Subsidiaries as debtor; or an involuntary petition shall be
filed against the Borrower or any of its Subsidiaries under the United
States Bankruptcy Code, and such petition shall not have been dismissed
within 45 days after the Borrower of the applicable Subsidiary has received
notice of such filing; or an order for relief shall be entered in any case
under the United States Bankruptcy Code naming the Borrower or any of its
Subsidiaries as debtor.
(l) The rendering against the Borrower or any of its Subsidiaries of a
final judgment, decree or order for the payment of money in excess of
$10,000,000 and the continuance of such judgment, decree or order
unsatisfied and in effect for any period of 30 consecutive days without a
stay of execution or other similar relief.
(m) A writ of attachment, garnishment, levy or similar process shall
be issued against or served upon the Agent or any Lender with respect to
(i) any property of the Borrower or any of its Subsidiaries in the
possession of the Agent or such Lender, or (ii) any indebtedness of the
Agent or such Lender to the Borrower or any of its Subsidiaries, and the
same shall not be lifted within 30 days.
(n) A trustee shall have been appointed by an appropriate United
States District Court to administer any Plan, or the Pension Benefit
Guaranty Corporation shall have instituted proceedings to terminate any
Plan or to appoint a trustee to administer any Plan, or withdrawal
liability shall have been asserted against the Borrower or any ERISA
Affiliate by a Multiemployer Plan; or the Borrower or any ERISA Affiliate
shall have incurred liability to the Pension Benefit Guaranty Corporation,
the Internal Revenue Service, the Department of Labor or Plan participants
in excess of $2,000,000 with respect to any Plan; or any Reportable Event
that the Required Lenders may determine in good faith might constitute
grounds for the termination of any Plan, for the appointment by the
appropriate United States District Court of a trustee to administer any
Plan or for the imposition of withdrawal liability with respect to a
Multiemployer Plan, shall have occurred and be continuing 30 days after
written notice to such effect shall have been given to the Borrower by the
Lenders.
(o) The issuance against the Borrower or any Subsidiary of the
Borrower (including without limitation, any Bank Subsidiary) of any
informal or formal administrative action, temporary or permanent, by any
federal or state regulatory agency having jurisdiction or control over the
Borrower or such Subsidiary, such action taking the form of, but not
limited to: (i) any directive citing conditions or activities deemed to be
unsafe or unsound or breaches of fiduciary duty or law or regulation; (ii)
a memorandum of understanding; (iii) a cease and desist order; (iv) the
termination of insurance coverage of customer deposits by the Federal
Deposit Insurance Corporation; (v) the suspension or removal of an
executive officer or director, or the prohibition of participation by any
others in the business affairs of the Borrower or such Subsidiary; (vi) a
capital maintenance agreement; or (vii) any other regulatory action,
agreement or understanding involving safety or soundness issues with
respect to the Borrower or such Subsidiary.
(p) James F. Dierberg, Mary W. Dierberg, members of their immediate
family, and trusts, partnerships and other organizations of which they have
effective voting control shall cease to own in the aggregate at least 51%
of the voting shares of the Borrower.
Section 8.02 Rights and Remedies. Upon the occurrence of an Event of
-------------------
Default or at any time thereafter until such Event of Default is cured to the
written satisfaction of the Required Lenders, the Agent may, with the consent of
the Required Lenders, and shall, upon written request of the Required Lenders:
(a) By notice to the Borrower, declare the Commitments and the Agent's
obligation to issue Letters of Credit to be terminated, whereupon the same
shall forthwith terminate.
(b) By notice to the Borrower, declare the entire unpaid principal
amount of the Notes then outstanding, all interest accrued and unpaid
thereon, and all other amounts payable under this Agreement to be forthwith
due and payable, whereupon the Notes, all such accrued interest and all
such amounts shall become and be forthwith due and payable, without
presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Borrower.
(c) By notice to the Borrower, require the Borrower to pay to the
Agent in immediately available funds, for deposit in the Special Account,
an amount equal to the maximum aggregate amount available to be drawn under
all Letters of Credit then outstanding.
(d) Without notice to the Borrower and without further action, apply
(and direct each Lender to apply) any and all money owing by any Lender to
the Borrower to the payment of the Notes then outstanding, including
interest accrued thereon, and of all other Obligations.
(e) Exercise any other rights and remedies available to the Agent and
the Lenders by law or agreement.
Notwithstanding the foregoing, upon the occurrence of an Event of Default
described in Section 8.01(j) or (k) hereof, the entire unpaid principal amount
--------------- ---
of the Notes then outstanding, all interest accrued and unpaid thereon, and all
other Obligations shall be immediately due and payable without presentment,
demand, protest or notice of any kind.
Section 8.03 Offset. In addition to the remedies set forth in Section
------ -------
8.02, upon the occurrence of any Event of Default and thereafter while the same
- ----
be continuing, the Borrower hereby irrevocably authorizes each Lender to set off
any Obligations owed to such Lender against all deposits and credits of the
Borrower with, and any and all claims of the Borrower against, such Lender. Such
right shall exist whether or not such Lender shall have made any demand
hereunder or under any other Loan Document, whether or not the Obligations, or
any part thereof, or deposits and credits held for the account of the Borrower
is or are matured or unmatured, and regardless of the existence or adequacy of
any collateral, guaranty or any other security, right or remedy available to
such Lender or Lenders. Each Lender agrees that, as promptly as is reasonably
possible after the exercise of any such setoff right, it shall notify the
Borrower of its exercise of such setoff right; provided, however, that the
-------- -------
failure of such Lender to provide such notice shall not affect the validity of
the exercise of such setoff rights.
ARTICLE IX.
THE AGENT
Section 9.01 Authorization. Each Lender and the holder of each Note
-------------
irrevocably appoints and authorizes the Agent to act on behalf of such Lender or
holder to the extent provided herein or in any document or instrument delivered
hereunder or in connection herewith, and to take such other action as may be
reasonably incidental thereto.
Section 9.02 Distribution of Payments and Proceeds.
-------------------------------------
(a) After deduction of any costs of collection as hereinafter
provided, the Agent shall remit to each Lender that Lender's Percentage of
all payments of principal, interest, fees and other amounts for the account
of the Lenders that are received by the Agent under the Loan Documents.
Each Lender's interest in the Loan Documents shall be payable solely from
payments, collections and proceeds actually received by the Agent under the
Loan Documents; and the Agent's only liability to the Lenders hereunder
shall be to account for each Lender's Percentage of such payments,
collections and proceeds in accordance with this Agreement. If the Agent is
ever required for any reason to refund any such payments, collections or
proceeds, each Lender will refund to the Agent, upon demand, its Percentage
of such payments, collections or proceeds, together with its Percentage of
interest or penalties, if any, payable by the Agent in connection with such
refund. The Agent may, in its sole discretion, make payment to the Lenders
in anticipation of receipt of payment from the Borrower. If the Agent fails
to receive any such anticipated payment from the Borrower, each Lender
shall promptly refund to the Agent, upon demand, any such payment made to
it in anticipation of payment from the Borrower, together with interest for
each day on such amount until so refunded at a rate equal to the Federal
Funds Rate for each such date.
(b) Notwithstanding the foregoing, if any Lender has wrongfully
refused to fund its Percentage of any Borrowing or other Advance as
required hereunder, or if the principal balance of any Lender's Note is for
any other reason less than its Percentage of the aggregate principal
balances of the Notes then outstanding, the Agent may remit all payments
received by it to the other Lenders until such payments have reduced the
aggregate amounts owed by the Borrower to the extent that the aggregate
amount owing to such Lender hereunder is equal to its Percentage of the
aggregate amount owing to all of the Lenders hereunder. The provisions of
this paragraph are intended only to set forth certain rules for the
application of payments, proceeds and collections in the event that a
Lender has breached its obligations hereunder and shall not be deemed to
excuse any Lender from such obligations.
Section 9.03 Expenses. All payments, collections and proceeds received
--------
or effected by the Agent may be applied, first, to pay or reimburse the Agent
for all costs, expenses, damages and liabilities at any time incurred by or
imposed upon the Agent in connection with this Agreement or any other Loan
Document (including but not limited to all reasonable attorney's fees,
foreclosure expenses and advances made to protect the security of any
collateral). If the Agent does not receive payments, collections or proceeds
sufficient to cover any such costs, expenses, damages or liabilities within 30
days after their incurrence or imposition, each Lender shall, upon demand, remit
to the Agent its Percentage of the difference between (i) such costs, expenses,
damages and liabilities, and (ii) such payments, collections and proceeds.
Section 9.04 Payments Received Directly by Lenders. If any Lender or
--------------------------------------
other holder of a Note shall obtain any payment or other recovery (whether
voluntary, involuntary, by application of offset or otherwise) on account of
principal of or interest on any Note other than through distributions made in
accordance with Section 9.02, such Lender or holder shall promptly give notice
------------
of such fact to the Agent and shall purchase from the other Lenders or holders
such participations in the Notes held by them as shall be necessary to cause the
purchasing Lender or holder to share the excess payment or other recovery
ratably with each of them; provided, however, that if all or any portion of the
-------- -------
excess payment or other recovery is thereafter recovered from such purchasing
Lender or holder, the purchase shall be rescinded and the purchasing Lender
restored to the extent of such recovery (but without interest thereon).
Section 9.05 Indemnification. The Agent shall not be required to do
---------------
any act hereunder or under any other document or instrument delivered hereunder
or in connection herewith or take any action toward the execution or enforcement
of the agency hereby created, or to prosecute or defend any suit in respect of
this Agreement or the Notes or any documents or instrument delivered hereunder
or in connection herewith unless indemnified to its satisfaction by the holders
of the Notes against loss, cost, liability and expense; provided, however, that
-------- -------
no Lender shall be obligated to indemnify the Agent for any portion of any such
loss, cost, liability or expense resulting from the gross negligence or willful
misconduct of the Agent. If any indemnity furnished to the Agent for any purpose
shall, in the opinion of the Agent, be insufficient or become impaired, the
Agent may call for additional indemnity and not commence or cease to do the acts
indemnified against until such additional indemnity is furnished.
Section 9.06 Limitations on Agent's Power. Notwithstanding any other
----------------------------
provision of this Agreement, the Agent shall not have the power, without the
consent of all of the Lenders, to (i) forgive any indebtedness of the Borrower
arising under this Agreement or the Notes, (ii) agree to reduce the rate of
interest charged under this Agreement or the commitment fee payable under
Section 2.05, (iii) agree to extend the maturity or decrease the amount of any
- -------------
payment due under this Agreement or the Notes, (iv) release any Collateral from
the lien created by the Pledge Agreement, the FBA Security Agreement, the Union
Financial Security Agreement or the Third Party Pledge Agreement, or (v) amend
the definition of "Required Lenders" in Section 1.01. In addition, in no event
------------
may the Agent increase the total Commitment Amount (being the aggregate sum of
all Commitment Amounts of all Lenders) hereunder without the consent of all
Lenders or increase or decrease the Commitment Amount of any given Lender
without the consent of that Lender.
Section 9.07 Exculpation. The Agent shall be entitled to rely upon
-----------
advice of counsel concerning legal matters, and upon this Agreement, any Loan
Document and any schedule, certificate, statement, report, notice or other
writing which it believes to be genuine or to have been presented by a proper
person. Neither the Agent nor any of its directors, officers, employees or
agents shall (a) be responsible for any recitals, representations or warranties
contained in, or for the execution, validity, genuineness, effectiveness or
enforceability of this Agreement, any Loan Document, or any other instrument or
document delivered hereunder or in connection herewith, (b) be responsible for
the validity, genuineness, perfection, effectiveness, enforceability, existence,
value or enforcement of any collateral security, (c) be under any duty to
inquire into or pass upon any of the foregoing matters, or to make any inquiry
concerning the performance by the Borrower or any other obligor of its
obligations, or (d) in any event, be liable as such for any action taken or
omitted by it or them, except for its or their own gross negligence or willful
misconduct. The agency hereby created shall in no way impair or affect any of
the rights and powers of, or impose any duties or obligations upon, the Agent in
its individual capacity.
Section 9.08 Agent and Affiliates. The Agent shall have the same
---------------------
rights and powers hereunder in its individual capacity as any other Lender, and
may exercise or refrain from exercising the same as though it were not the
Agent, and the Agent and its affiliates may accept deposits from and generally
engage in any kind of business with the Borrower as fully as if the Agent were
not the Agent hereunder.
Section 9.09 Credit Investigation. Each Lender acknowledges that it
---------------------
has made such inquiries and taken such care on its own behalf as would have been
the case had its Commitment been granted and the Advances made directly by such
Lender to the Borrower without the intervention of the Agent or any other
Lender. Each Lender agrees and acknowledges that the Agent makes no
representations or warranties about the creditworthiness of the Borrower, any
Subsidiary or any other party to this Agreement or with respect to the legality,
validity, sufficiency or enforceability of this Agreement, any Loan Document, or
any other instrument or document delivered hereunder or in connection herewith.
Section 9.10 Resignation. The Agent may resign as such at any time
-----------
upon at least 30 days' prior notice to the Borrower and the Lenders. In the
event of any resignation of the Agent, the Required Lenders shall as promptly as
practicable appoint a successor Agent. If no such successor Agent shall have
been so appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the resigning Agent's giving of notice of
resignation, then the resigning Agent may, on behalf of the Lenders, appoint a
successor Agent, which shall be a commercial bank organized under the laws of
the United States of America or of any State thereof. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall
thereupon be entitled to receive from the prior Agent such documents of transfer
and assignment as such successor Agent may reasonably request and the resigning
Agent shall be discharged from its duties and obligations under this Agreement.
After any resignation pursuant to this Section, the provisions of this Section
shall inure to the benefit of the retiring Agent as to any actions taken or
omitted to be taken by it while it was an Agent hereunder.
Section 9.11 Assignments.
-----------
(a) No Lender may assign any of its rights or obligations under any
Loan Document without the prior written consent of the Borrower and the
Agent, which consent may not be unreasonably withheld; provided, however,
-------- -------
that the consent of the Borrower shall not be required in connection with
any such assignment made at any time when a Default or an Event of Default
has occurred and is continuing. The aggregate principal amount of the Notes
and the portion of the Commitment Amounts so assigned in any assignment
shall be not less than $5,000,000, and the assigning Lender shall retain at
least $5,000,000 of such Notes and Commitment Amounts for its own account;
provided, however, that the foregoing restriction shall not apply to a
-------- -------
Lender assigning its entire Note and Commitment Amount to a single
institution. Simultaneously with each assignment of Notes and Commitment
Amounts, the assigning Lender shall be deemed to have assigned a
proportional share of its obligations and rights under Section 2.15(b). If
---------------
the Agent and (if applicable) the Borrower so consent, then, from and after
the effective date of any such assignment, the assignee thereunder (an
"Additional Lender") shall, to the extent that rights and obligations
hereunder have been assigned to it pursuant to such assignment, have the
rights and obligations so assigned to it, and the assigning Lender shall,
to the extent that rights and obligations have been assigned by it pursuant
to such assignment, relinquish its rights and be released from its
obligations under this Agreement. Within five business days after any
request of the Agent following such assignment of Notes and Commitment
Amounts, the Borrower will execute and deliver to the Agent new Notes to
the order of such assignee in amounts corresponding to the interest in the
assigning Lender's rights and obligations under this Agreement acquired by
such assignee pursuant to such assignment and, if the assigning Lender has
retained an interest in such rights and obligations, new Notes to the order
of the assigning Lender in amounts corresponding to such interests retained
by it hereunder. Such new Notes shall be in an aggregate principal amount
equal to the aggregate principal amount of the Notes to be replaced by such
new Notes, shall be dated the effective date of such assignment and shall
otherwise be in the form of the Notes to be replaced thereby. Such new
Notes shall be issued in substitution for, but not in satisfaction or
payment of, the Notes being replaced thereby. The Agent shall bear the cost
of preparation of such new Notes. Upon the issuance of such new Notes, the
term, "Note", as used herein, shall include all such new Notes issued
pursuant to this Section 9.11.
------------
(b) Any Lender making an assignment under this Section shall pay the
Agent a transfer fee in the amount of $3,000 simultaneous with such
assignment.
(c) Notwithstanding any other provision of this Agreement, any Lender
may at any time create a security interest in all or any portion of its
rights under this Agreement and that Lender's Notes in favor of any Federal
Reserve Bank in accordance with Regulation A of the Board of Governors of
the Federal Reserve System.
(d) Except as set forth in this Section 9.11 and the following Section
------------ -------
9.12, no Lender may assign any of its rights or obligations under any Loan
----
Document.
Section 9.12 Participations. In addition to the rights granted in
--------------
Section 9.11, each Lender may grant participations in a portion of its Notes,
- ------------
Commitments and obligations under Section 2.15(b) to any institutional investor,
---------------
without the consent of the Borrower or the Agent, but only so long as (except in
the case of a participation granted to an affiliate of a Lender, in which case
the limitation and qualification set forth in clause (a) and (b) below shall not
apply):
(a) Within five Bank Business Days after granting any participation,
such Lender gives the Agent and the Borrower notice of such participation,
including the name, address and telecopier number of the participant and
the amount of the Notes and Commitments covered by the participation; and
(b) The principal amount of the participations so granted is no less
than $5,000,000.
No holder of any such participation, other than an affiliate of such
Lender, shall be entitled to require such Lender to take or omit to take any
action hereunder, except that such Lender may agree with such participant that
such Lender will not, without such participant's consent, (i) forgive any
indebtedness of the Borrower under this Agreement or the Notes, (ii) agree to
reduce the rate of interest charged under this Agreement, or (iii) agree to
extend the final maturity of any indebtedness evidenced by the Notes, except as
expressly provided by the terms of the Loan Documents. No Lender shall, as
between the Borrower and such Lender, be relieved of any of its obligations
hereunder as a result of any such granting of a participation. The Borrower
hereby acknowledges and agrees that any participant described in this Section
will, for purposes of Section 9.04, be considered to be a Lender hereunder
-------------
(provided that such participant shall not be entitled to receive any more than
the Lender selling such participation would have received had such sale not
taken place) and may rely on, and possess all rights under, any opinions,
certificates, or other instruments or documents delivered under or in connection
with any Loan Document. Except as set forth in this Section 9.12, no Lender may
------------
grant any participation in any Loan Document or Commitment.
Section 9.13 Disclosure of Information. The Borrower authorizes each
-------------------------
Lender and the Agent to disclose to any participant, assignee or Additional
Lender (each, a "Transferee") and any prospective Transferee any and all
financial and other information in the possession of the Agent or any Lender
concerning the Borrower which has been delivered to the Agent or such Lender by
the Borrower pursuant to this Agreement or which has been delivered to the Agent
or such Lender by the Borrower in connection with the credit evaluation of the
Borrower by the Agent or such Lender prior to entering into this Agreement;
provided, however, that prior to disclosing such information to a Transferee or
- -------- -------
prospective Transferee, the applicable Lender shall obtain from such Transferee
or prospective Transferee a confidentiality agreement agreeing that such
information shall be used only in connection with such Person's evaluation and,
if applicable, administration of its interest in this Agreement and the loans
hereunder, and shall not be disclosed to any other person, subject to exceptions
permitting disclosure to regulators and auditors, disclosure as required by law
or judicial process, and disclosure under such other limited circumstances as
that Lender and such Transferee or prospective Transferee may reasonably agree.
ARTICLE X.
MISCELLANEOUS
Section 10.01 No Waiver; Cumulative Remedies. No failure or delay on
-------------------------------
the part of the Lenders in exercising any right, power or remedy under the Loan
Documents shall operate as a waiver thereof; nor shall any Lender's acceptance
of payments while any Default or Event of Default is outstanding operate as a
waiver of such Default or Event of Default, or any right, power or remedy under
the Loan Documents; nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy under the Loan Documents. The remedies
provided in the Loan Documents are cumulative and not exclusive of any remedies
provided by law.
Section 10.02 Amendments, Etc. No amendment, modification, termination
---------------
or waiver of any provision of any Loan Document or consent to any departure by
the Borrower therefrom shall be effective unless the same shall be in writing
and signed by the Required Lenders (or, in the case of any action described in
Section 9.06, the number of Lenders specified for the applicable action in such
- ------------
Section) and then such waiver or consent shall be effective only in the specific
instance and 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.
Section 10.03 Notice. Except as otherwise expressly provided herein,
------
all notices and other communications hereunder shall be in writing and shall be
(i) personally delivered, (ii) transmitted by registered mail, postage prepaid,
(iii) sent by Federal Express or similar expedited delivery service, or (iv)
transmitted by telecopy (followed, in the case of any notice from the Agent or a
Lender to the Borrower, pursuant to any of Sections 8.02(a), 8.02(b) or 8.03, by
---------------- ------- ----
a notice transmitted by registered mail, postage prepaid), in each case
addressed to the party to whom notice is being given at its address as set forth
by its signature below, or, if telecopied, transmitted to that party at its
telecopier number set forth by its signature below; or, as to each party, at
such other address or telecopier number as may hereafter be designated in a
notice by that party to the other party complying with the terms of this
Section. All such notices or other communications shall be deemed to have been
given on (i) the date received if delivered personally, by mail, or by Federal
Express or similar expedited delivery service, or (ii) the date of transmission
if delivered by telecopy, except that notices or requests to the Agent or any
Lender pursuant to any of the provisions of Article II shall not be effective
until received.
Section 10.04 Costs and Expenses. The Borrower agrees to pay on demand
------------------
(i) all costs and expenses incurred by the Agent in connection with the
negotiation, preparation, execution, administration or amendment of the Loan
Documents and the other instruments and documents to be delivered hereunder and
thereunder, including the reasonable fees and out-of-pocket expenses of counsel
for the Agent with respect thereto, whether paid to outside counsel or allocated
by in-house counsel, and (ii) all costs and expenses incurred by the Agent or
any Lender in connection with the enforcement of the Loan Documents, including
the reasonable fees and out-of-pocket expenses of counsel for the Agent or any
Lender with respect thereto, whether paid to outside counsel or allocated by
in-house counsel.
Section 10.05 Indemnification by Borrower. The Borrower hereby agrees
---------------------------
to indemnify the Agent and the Lenders and each officer, director, employee and
agent thereof (herein individually each called an "Indemnitee" and collectively
called the "Indemnitees") from and against any and all losses, claims, damages,
reasonable expenses (including, without limitation, reasonable attorneys' fees)
and liabilities (all of the foregoing being herein called the "Indemnified
Liabilities") incurred by an Indemnitee in connection with or arising out of the
execution or delivery of this Agreement or any agreement or instrument
contemplated hereby, the performance by the parties hereto of their respective
obligations hereunder or the use of the proceeds of any Advance (including but
not limited to any such loss, claim, damage, expense or liability arising out of
any claim in which it is alleged that any Environmental Law has been breached
with respect to any activity or property of the Borrower), except for any
portion of such losses, claims, damages, expenses or liabilities incurred solely
as a result of the gross negligence or willful misconduct of the applicable
Indemnitee or the breach of this Agreement or any other Loan Document by that
Indemnitee. If and to the extent that the foregoing indemnity may be
unenforceable for any reason, the Borrower hereby agrees to make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law. All obligations provided
for in this Section shall survive any termination of this Agreement.
Section 10.06 Execution in Counterparts. This Agreement and the other
-------------------------
Loan Documents may be executed in any number of counterparts, each of which when
so executed and delivered shall be deemed to be an original and all of which
counterparts of this Agreement or such other Loan Document, as the case may be,
taken together, shall constitute but one and the same instrument.
Section 10.07 Binding Effect, Assignment. The Loan Documents shall be
---------------------------
binding upon and inure to the benefit of the Borrower and the Lenders and their
respective successors and assigns, except that the Borrower shall not have the
right to assign its rights thereunder or any interest therein without the prior
written consent of each of the Lenders.
Section 10.08 Governing Law. The Loan Documents shall be governed by,
-------------
and construed in accordance with, the laws of the State of Minnesota.
Section 10.09 Consent to Jurisdiction. The Borrower and the Lenders
------------------------
each irrevocably (i) agree that any suit, action or other legal proceeding
arising out of or relating to this Agreement or any other Loan Document may be
brought in a court of record in Hennepin County in the State of Minnesota or in
the Courts of the United States located in such State, (ii) consent to the
jurisdiction of each such court in any suit, action or proceeding, (iii) waive
any objection which they may have to the laying of venue of any such suit,
action or proceeding in any such courts and any claim that any such suit, action
or proceeding has been brought in an inconvenient forum, and (iv) agree that a
final judgment in any such suit, action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law.
Section 10.10 Severability of Provisions. Any provision of this
----------------------------
Agreement which is prohibited or unenforceable shall be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof.
Section 10.11 Prior Agreements. This Agreement and the other Loan
-----------------
Documents and related documents described herein restate and supersede in their
entirety any and all prior agreements and understandings, oral or written,
between any of the Lenders and the Borrower.
Section 10.12 Headings. Article and Section headings in this Agreement
--------
are included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose.
[The balance of this page is intentionally left blank.]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized as of the
date first above written.
Address: FIRST BANKS, INC.
600 James S. McDonnell Blvd.
Mail Code M1-199-014
Hazelwood, MO 63042
Attention: Allen H. Blake By /s/ Allen H. Blake
-------------------------------
Telecopier: (314) 592-6621 Its President
---------------------------
Address: WELLS FARGO BANK, NATIONAL
MAC: N9305-071 ASSOCIATION, as Agent
Sixth Street and Marquette Avenue
Minneapolis, Minnesota 55479
Attention: Doug Gallun
Telecopier: 612-667-3510 By /s/ Doug Gallun
-------------------------------
Its Vice President
---------------------------
Address: WELLS FARGO BANK, NATIONAL
MAC: N9305-071 ASSOCIATION, as a Lender
Sixth Street and Marquette Avenue
Minneapolis, Minnesota 55479
Attention: Doug Gallun By /s/ Doug Gallun
-------------------------------
Telecopier: 612-667-3510 Its Vice President
---------------------------
Commitment Amount: $20, 454,545
Percentage: 22.72727%
Address: AMERICAN NATIONAL BANK &
120 South LaSalle Street TRUST COMPANY OF CHICAGO
Chicago, Illinois 60603-3400
Attention: Thomas Hackett
Telecopier: (312) 661-9511 By /s/ Thomas H. Hackett
-------------------------------
Its First Vice President
---------------------------
Commitment Amount: $16,363,636
Percentage: 18.18182%
Address: LASALLE BANK NATIONAL
One Metropolitan Square ASSOCIATION
211 North Broadway, Suite 4050
St. Louis, Missouri 63102
Attention: Robert J. Mathias By /s/ Robert J. Mathias
-------------------------------
Telecopier: (314) 621-3947 Its Senior Vice President
---------------------------
Commitment Amount: $16,363,636
Percentage: 18.18182%
Address: THE NORTHERN TRUST COMPANY
50 South LaSalle Street
Chicago, Illinois 60675
Attention: Thomas E. Bernhardt By /s/ Thomas E. Bernhardt
-------------------------------
Telecopier: 312-557-8337 Its Vice President
---------------------------
Commitment Amount: $10,227,273
Percentage: 11.36364%
Address: UNION BANK OF CALIFORNIA, N.A.
445 South Figureroa Street
Los Angeles, California 90071
Attention: Dennis A. Cattell By /s/ Dennis A. Cattell
-------------------------------
Telecopier: (213) 236-5548 Its Vice President
---------------------------
Commitment Amount: $8,181,818
Percentage: 9.09091%
Address: SUNTRUST BANK, NASHVILLE
201 Fourth Avenue North
Nashville, Tennessee 37219
Attention: Richard B. Boring By /s/ Richard B. Boring
-------------------------------
Telecopier: (615) 748-5161 Its Vice President
---------------------------
Commitment Amount: $10,227,273
Percentage: 11.36364%
Address: FIFTH THIRD BANK
1701 Golf Road, Tower One, Suite 700
Rolling Meadows, IL 60008
Attention: Patrick A. Horne By /s/ Patrick A. Horne
-------------------------------
Telecopier: (847) 871-6026 Its Vice President
---------------------------
Commitment Amount: $8,181,818
Percentage: 9.09091%
EXHIBIT A
REVOLVING LOAN COMMITMENT AMOUNTS
- ---------------------------------------- -------------------- --------------- -----------------------------------------
Commitment Amount Percentage
Name Amount Notice Address
- ---------------------------------------- -------------------- --------------- -----------------------------------------
- ---------------------------------------- -------------------- --------------- -----------------------------------------
Wells Fargo Bank, National $20,454,545 22.72727% MAC N9305-071
Association, as a Bank Sixth and Marquette
Minneapolis, Minnesota 55479
Attention: Doug Gallun
Telecopier: 612-667-3510
- ---------------------------------------- -------------------- --------------- -----------------------------------------
- ---------------------------------------- -------------------- --------------- -----------------------------------------
American National Bank & Trust Company $16,363,636 18.18182% 120 South LaSalle Street
of Chicago Chicago, Illinois 60603-3400
Attention: Sunil Mehta
Telecopier: (312) 661-9511
- ---------------------------------------- -------------------- --------------- -----------------------------------------
- ---------------------------------------- -------------------- --------------- -----------------------------------------
LaSalle Bank National Association $16,363,636 18.18182% One Metropolitan Square
211 North Broadway, Suite 4050
St. Louis, Missouri 63102
Attention: Robert J. Mathias
Telecopier: (314) 621-3947
- ---------------------------------------- -------------------- --------------- -----------------------------------------
- ---------------------------------------- -------------------- --------------- -----------------------------------------
The Northern Trust Company $10,227,273 11.36364% 50 South LaSalle Street
Chicago, Illinois 60675
Attention: Thomas E. Bernhardt
Telecopier: (312) 557-8337
- ---------------------------------------- -------------------- --------------- -----------------------------------------
- ---------------------------------------- -------------------- --------------- -----------------------------------------
Union Bank of California, N.A. $ 8,181,818 9.09091% 445 South Figureroa Street
Los Angeles, California 90071
Attention: Dennis A. Cattell
Telecopier: (213) 236-5548
- ---------------------------------------- -------------------- --------------- -----------------------------------------
- ---------------------------------------- -------------------- --------------- -----------------------------------------
SunTrust Bank, Nashville $10,227,273 11.36364% 201 Fourth Avenue North
Nashville, Tennessee 37219
Attention: Richard B. Boring
Telecopier: (615) 748-5161
- ---------------------------------------- -------------------- --------------- -----------------------------------------
- ---------------------------------------- -------------------- --------------- -----------------------------------------
Fifth Third Bank $ 8,181,818 9.09091% 1701 Golf Road
Tower One, Suite 700
Rolling Meadows, IL 60008
Attention: Patrick A. Horne
Telecopier: (847) 871-6026
- ---------------------------------------- -------------------- --------------- -----------------------------------------
EXHIBIT B
COMPLIANCE CERTIFICATE
This Compliance Certificate is being submitted on this ___ day of
__________________, 200__, for the quarter ending on the ___ day of
__________________, 200__, pursuant to the terms of the Secured Credit Agreement
dated as of August ___, 2002 ("Credit Agreement"), as the same may be thereafter
amended from time to time, among Wells Fargo Bank, National Association (the
"Agent"), the Lenders that are parties thereto, and First Banks, Inc., as
Borrower. Capitalized terms used but not defined herein shall have the meanings
set forth in the Credit Agreement.
The undersigned officers of First Banks, Inc. jointly and severally
certify to the Lenders that as of the date hereof:
A. The representations and warranties contained in Article IV of the
Credit Agreement are correct as of the date hereof, except to the
extent that the same relate specifically to an earlier date;
B. No Default or Event of Default has occurred and is continuing;
C. Attached is an accurate listing of the current Subsidiaries of
First Banks, Inc.;
D. The balance due on the Intercompany Note is $________ as of the
quarter end referenced above; and
E. The computation of Margin and L/C Margin and compliance with the
covenants contained in Article VII of the Credit Agreement are
supported by the following:
2.03 Funded Debt Ratio
-----------------
(i) First Banks, Inc. (consolidated) (2) Ratio of L/C
Net Income for the quarter ended: Funded Debt (2) to (1) Margin Margin
- --------------------------------- ----------- ---------- ------ ------
$
- ---------------- ----------------
- ---------------- ----------------
- ---------------- ----------------
- ---------------- ----------------
Total Net Income $ (1) % bp bp
---------------- --------------- ---------- ----------- -----------
7.01 Total Risk Based Capital Ratio
------------------------------
(2)
Weighted-Risk
Assets and Minimum
(1) Off-Balance Sheet Ratio of Ratio
Total Capital Items (1) to (2) Permitted
------------- ----- ---------- ---------
First Banks, Inc. (consolidated) % 10.0%
------------------ ----------------- ------------ -----
First Bank (Missouri) % 10.0%
------------------ ----------------- ------------ -----
First Bank (California) % 10.0%
------------------ ----------------- ------------ -----
7.02 Tier I Risk Based Capital Ratio
-------------------------------
(2)
Weighted-Risk
Assets and Off- Minimum
(1) Balance Sheet Ratio of Ratio
Tier I Capital Items (1) to (2) Permitted
-------------- ----- ---------- ---------
First Banks, Inc. (consolidated) % 6.0%
------------------ ----------------- ------------ ----
First Bank (Missouri) % 6.0%
------------------ ----------------- ------------ ----
First Bank (California) % 6.0%
------------------ ----------------- ------------ ----
7.03 Leverage Ratio
--------------
Minimum
(1) (2) Ratio of Ratio
Tier I Capital Total Assets (1) to (2) Permitted
-------------- ------------ ---------- ---------
First Banks, Inc. (consolidated) % 5.0%
------------------ ----------------- ------------ ----
First Bank (Missouri) % 5.0%
------------------ ----------------- ------------ ----
First Bank (California) % 5.0%
------------------ ----------------- ------------ ----
7.04 Minimum Return on Assets
------------------------
Minimum
Net Income for the quarter ended: Average Total Ratio of Ratio
- --------------------------------- Assets (2) (1) to (2) Permitted
------ ---------- ---------
First Banks, Inc. (consolidated)
$
- --------------------------- --------------------
- --------------------------- --------------------
- --------------------------- --------------------
- --------------------------- --------------------
Total Net Income $ (1) % 0.70%
-------------------- ------------------ ------------ -----
7.05 Non-Performing Assets
(1) (2) Maximum
Non-Performing Primary Equity Ratio of Ratio
Assets Capital (1) to (2) Permited
------ ------- ---------- ---------
First Banks, Inc. (consolidated) % 25%
------------------ ---------------- ------------ ---
First Bank (Missouri) * % 20%
------------------ ----------------- ------------ ---
First Bank (California) % 10%
------------------ ----------------- ------------ ---
*Not including the Lake of the Ozarks Development asset, currently
$__________; or, if the Lake of the Ozarks asset is currently valued in
excess of $17,000,000, including only excess of Lake of Ozarks asset
over $17,000,000.
7.06 Allowance for Loan and Lease Losses
-----------------------------------
(1)
Allowance for (2) Minimum
Loan and Non-Performing Ratio of Ratio
Lease Losses Assets (1) to (2) Permitted
------------ ------ ---------- ---------
First Bank (Missouri) and First Bank
(California) (combined) % 100%
------------- -------------- ---------- ----
Signed as of the day and year first above written.
FIRST BANKS, INC.
By:
---------------------------------------------------------
Chief Executive Officer
By:
---------------------------------------------------------
Chief Financial Officer
By:
---------------------------------------------------------
Senior Vice President - Chief Accounting Officer
By:
---------------------------------------------------------
Chief Operating Officer
By:
---------------------------------------------------------
Chief Credit Officer
EXHIBIT C
NOTE
$_________________ St. Louis, Missouri
August ______, 2002
For value received, the undersigned FIRST BANKS, INC., a Missouri
corporation (the "Borrower"), hereby promises to pay on the Revolving Credit
Termination Date (as defined in the Credit Agreement, defined below), to the
order of _____________, a _____________ (the "Lender"), at the office of Wells
Fargo Bank, National Association, as agent (the "Agent") at Sixth Street and
Marquette Avenue, Minneapolis, Minnesota, or at any other place designated at
any time in accordance with the Credit Agreement, in lawful money of the United
States of America and in immediately available funds, the principal sum of
_______________ Dollars ($______________) or, if less, the aggregate unpaid
principal amount of all Advances made by the Lender to the Borrower under the
Credit Agreement together with interest on the principal amount hereunder
remaining unpaid from time to time (the "Principal Balance"), computed on the
basis of the actual number of days elapsed and a 360-day year, from the date
hereof until this Note is fully paid at the rate determined from time to time
under the Credit Agreement of even date herewith (as amended, supplemented or
restated from time to time, the "Credit Agreement") by and among the Borrower,
the Lenders from time to time party thereto and Wells Fargo Bank, National
Association, as Agent for the Lenders thereunder. This Note may be prepaid only
in accordance with the Credit Agreement.
This Note is issued pursuant, and is subject, to the Credit Agreement,
which provides, among other things, for acceleration hereof. This Note is a
"Note" referred to in the Credit Agreement.
This Note is secured, among other things, pursuant to the several
security agreements delivered pursuant to the Credit Agreement, and may now or
hereafter be secured by one or more other security agreements or other
instruments or agreements.
The Borrower hereby agrees to pay all costs of collection, including
reasonable attorneys' fees and legal expenses in the event this Note is not paid
when due, whether or not legal proceedings are commenced.
Presentment or other demand for payment, notice of dishonor and protest
are expressly waived.
FIRST BANKS, INC.
By
-----------------------------------------
Its
--------------------------------------
EXHIBIT D
PLEDGE AGREEMENT
This Agreement is made as of this ___ day of August 2002, by and
between FIRST BANKS, INC., a Missouri Corporation ("Debtor") and WELLS FARGO
BANK, NATIONAL ASSOCIATION, a national banking association ("Secured Party").
RECITALS
Debtor, Secured Party and certain financial institutions have executed
a secured credit agreement of even date herewith (the "Credit Agreement"),
pursuant to which such financial institutions (the "Lenders") have agreed to
lend up to $90,000,000 to Debtor and pursuant to which Secured Party has agreed
to issue up to $20,000,000 in face amount of standby letters of credit for the
account of Debtor.
One condition to the Lenders' and Secured Party's commitments under
the Credit Agreement is that Debtor execute, deliver and perform this Collateral
Pledge Agreement, thereby granting a security interest to Secured Party, as
agent for the Lenders, in the Collateral described herein.
Now, therefore, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto hereby agree as follows:
1. Security Interest and Collateral. To secure the payment and
performance of the "Obligations," as such term is defined in the Credit
Agreement, Debtor hereby grants Secured Party (for its own account and as agent
for the Lenders) a security interest (the "Security Interest") in (i) all of the
capital stock of First Banks America, Inc., a Delaware corporation, and Union
Financial Group, Ltd., a Delaware corporation, owned by Debtor, (ii) that
certain $100,000,000 Promissory Note dated August 23, 2001, made by First Banks
America, Inc. and payable to the order of Debtor (the "FBA Note"), (iii) any
capital stock that Debtor may hereafter acquire and deliver to Secured Party
pursuant to Section 5.08 of the Credit Agreement, and (iv) all proceeds of such
capital stock and the FBA Note and all other rights in connection with such
property (collectively the "Collateral").
2. Representations, Warranties and Covenants. Debtor represents,
warrants and covenants that:
(a) Debtor will join with Secured Party in taking any action
required by Secured Party in order to perfect the Security Interest
and to protect the rights and priorities of Secured Party with respect
to the Collateral. To that end, Debtor has delivered to Secured Party
certificates representing all of the shares of capital stock
constituting Collateral, executed and delivered one blank stock power
for each such certificate, and endorsed and delivered to Secured Party
the FBA Note. Debtor will, at Secured Party's request at any one or
more times (i) duly endorse, in blank, each and every additional
security certificate and instrument constituting Collateral by signing
on such certificate or instrument or by signing a separate document of
assignment or transfer; (ii) join with Secured Party in executing any
instructions or agreements with securities intermediaries for the
purpose of obtaining control of any investment property that may
hereafter constitute Collateral; and (iii) instruct the issuer of any
security that may hereafter constitute Collateral to register such
security in the name of Secured Party.
(b) Debtor is the owner of the Collateral free and clear of all
liens, encumbrances, security interests and restrictions except the
Security Interest and any restrictive legend appearing on any security
certificate or any instrument constituting Collateral.
(c) Debtor will keep the Collateral free and clear of all liens,
encumbrances and security interests, except the Security Interest.
(d) Debtor will pay, when due, all taxes and other governmental
charges levied or assessed upon or against any Collateral.
(e) Debtor will upon receipt deliver to Secured Party all
investment property distributed on account of Collateral, such as
stock dividends and securities resulting from stock splits,
reorganizations and recapitalizations. The Security Interest shall
attach to all such proceeds.
3. Events of Default. The occurrence of any Event of Default under the
Credit Agreement shall be an Event of Default hereunder.
4. Remedies Upon Event of Default. Upon the occurrence of an Event of
Default and during the continuance thereof, Secured Party may exercise any one
or more of the rights and remedies specified in the Credit Agreement, and also
any one or more of the following rights or remedies: (i) notify the obligor on
or issuer of any Collateral or any securities intermediary to make payment to
Secured Party of any amounts due or distributable on any Collateral, (ii) in
Debtor's name or Secured Party's name enforce collection of any Collateral by
suit or otherwise, or surrender, release or exchange all or any part of it, or
compromise, extend or renew for any period any obligation evidenced by the
Collateral, (iii) receive and keep in its possession or under its control
subject to the Security Interest all proceeds of Collateral, except that any
money received from the Collateral may, at Secured Party's option, be applied in
reduction of the Obligations; (iv) exercise all voting and other rights as a
holder of any Collateral; (v) exercise and enforce any or all rights and
remedies available upon default to a secured party under the Uniform Commercial
Code, including the right to (A) order any securities intermediary to sell any
Collateral on any established market or over the counter or to cause any
Collateral to be redeemed; (B) give any transfer or redemption order to any
issuer of Collateral; or (C) offer and sell Collateral privately to purchasers
who will agree to take the Collateral for investment and not with a view to
distribution and who will agree to the imposition of restrictive legends on any
certificates representing Collateral, and the right to arrange for a sale which
would otherwise qualify as exempt from registration under the Securities Act of
1933; and if notice to Debtor of any intended disposition of Collateral or any
other intended action is required by law in a particular instance, such notice
shall be deemed commercially reasonable if given at least 10 calendar days prior
to the date of intended disposition or other action; and (vi) exercise or
enforce any or all other rights or remedies available to Secured Party by law or
agreement against any Collateral, against Debtor or against any other person or
property.
5. Secured Party's Duties. Secured Party's duty of care with respect
to Collateral in its possession (as imposed by law) shall be deemed fulfilled if
Secured Party exercises reasonable care in physically safekeeping such
Collateral, or in the case of Collateral in the custody or possession of a
securities intermediary or other third person, exercises reasonable care in the
selection of the securities intermediary or other third person and Secured Party
need not otherwise preserve, protect, insure or care for any Collateral. Secured
Party shall not be obligated to preserve any rights Debtor may have against
prior parties, to exercise at all or in any particular manner any voting rights
which may be available with respect to any Collateral, to realize on the
Collateral at all or in any particular manner or order, or to apply any cash
proceeds of Collateral in any particular order of application. Regardless of the
manner in which Secured Party chooses to exercise control over Collateral
(whether by possession, by agreement with an issuer or Securities Intermediary,
by transferring security entitlements into its own account, or otherwise),
Secured Party shall not be deemed to be under any obligation to Debtor, whether
as fiduciary, trustee, agent or otherwise, except the duty of good faith, the
duties specifically imposed upon Secured Party by this Agreement, and the duties
imposed upon it as a secured party by Articles 1, 8 and 9 of the Uniform
Commercial Code, as in effect in Minnesota.
6. Miscellaneous. Any disposition of Collateral in the manner provided
in Section 4 shall be deemed commercially reasonable. This Agreement can be
waived, modified, amended, terminated or discharged, and the Security Interest
can be released, only explicitly in a writing signed by Secured Party. A waiver
signed by Secured Party shall be effective only in the specific instance and for
the specific purpose given. Mere delay or failure to act shall not preclude the
exercise or enforcement of any of Secured Party's rights or remedies. All rights
and remedies of Secured Party shall be cumulative and may be exercised
singularly or concurrently, at Secured Party's option, and the exercise or
enforcement of any one such right or remedy shall neither be a condition to nor
bar the exercise or enforcement of any other. All notices to be given to Debtor
shall be deemed sufficiently given if delivered or mailed by registered or
certified mail, postage prepaid, to Debtor at the address set forth following
its signature on the signature page of this Agreement or at the most recent
address shown on Secured Party's records. Debtor will reimburse Secured Party
for all expenses (including reasonable attorneys' fees and legal expenses)
incurred by Secured Party in the protection, defense or enforcement of the
Security Interest, including expenses incurred in any litigation or bankruptcy
or insolvency proceedings. This Agreement shall be binding upon and inure to the
benefit of Debtor and Secured Party and their successors and assigns and shall
take effect when signed by Debtor and delivered to Secured Party, and Debtor
waives notice of Secured Party's acceptance hereof. This Agreement shall be
governed by the internal laws of Minnesota and, unless the context otherwise
requires, all terms used herein which are defined in Articles 1, 8 and 9 of the
Uniform Commercial Code, as in effect in Minnesota, shall have the meanings
therein stated. If any provision or application of this Agreement is held
unlawful or unenforceable in any respect, such illegality or unenforceability
shall not affect other provisions or applications which can be given effect, and
this Agreement shall be construed as if the unlawful or unenforceable provision
or application had never been contained herein or prescribed hereby. All
representations and warranties contained in this Agreement shall survive the
execution, delivery and performance of this Agreement and the creation and
payment of the Obligations.
IN WITNESS WHEREOF, Debtor has executed this Agreement as of the day
first above written.
FIRST BANKS, INC.
By
-------------------------------------------
Its
--------------------------------------
Address:
600 James S. McDonnell Blvd.
Mail Code M1-199-014
Hazelwood, MO 63042-2302
EXHIBIT E1
APPLICATION FOR STANDBY LETTER OF CREDIT
TO: WELLS FARGO BANK, NATIONAL ASSOCIATION
- ------------------------------------------------------------------------------------------------------------------------------------
------------------------------ ----------------------------- ------------------------------ ---------------------
DATE FOR WELLS FARGO'S USE ONLY LETTER OF CREDIT NO. DOCUMENT TRACK NO.
------------------------------ ----------------------------- ------------------------------ ---------------------
APPLICANT SIGNING BELOW HEREBY REQUESTS THAT WELLS FARGO BANK, NATIONAL ASSOCIATION ("WELLS FARGO") ISSUE IN WELLS FARGO'S
NAME AN IRREVOCABLE STANDBY LETTER OF CREDIT (THE "CREDIT") ON SUBSTANTIALLY THE TERMS BELOW AND, UNLESS OTHERWISE SPECIFIED BELOW
IN SPECIAL INSTRUCTIONS, FORWARD THE CREDIT BY THE FOLLOWING MEANS TO THE BENEFICIARY DIRECTLY OR THROUGH A BANK SELECTED BY WELLS
FARGO:
|_| FULL CABLE/TELEX |_| COURIER |_| MAIL WITH BRIEF ADVICE BY CABLE/TELEX |_| MAIL |_| OTHER:
- ----------------------------------------------------------------------- ------------------------------------------------------------
ADVISING BANK: (If left blank, Wells Fargo may select) BENEFICIARY: (Name and Address)
- ----------------------------------------------------------------------- ------------------------------------------------------------
PARTY TO BE NAMED AS REQUESTING THE CREDIT: (Name and Address) AMOUNT: (In words)
------------------------------------------------------------
-------------------------------- ---------------------------
(In figures) (Currency)
- ----------------------------------------------------------------------- -------------------------------- ---------------------------
- ----------------------------------------------------------------------- ------------------------------------------------------------
AVAILABILITY: Unless otherwise specified herein, the Credit is to be EXPIRATION DATE:
available with Wells Fargo's issuing office by payment of draft(s) -------------------------------------------
drawn at sight on Wells Fargo or, at Wells Fargo's option, with any
bank(s) or with a bank nominated by Wells Fargo by negotiation of PLACE OF EXPIRATION: Unless otherwise specified herein, the
draft(s) drawn at sight on Wells Fargo. Credit is to expire at Wells Fargo's issuing office or, if
the Credit is available with any bank(s)or with a specific
bank other than Wells Fargo's issuing office, at such place
as Wells Fargo shall elect.
- ----------------------------------------------------------------------- ------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
DOCUMENT(S): Draft(s) are to be accompanied by: (Attached additional signed sheet(s), if necessary, and label as attachments to this
Application.)
- ------------------------------------------------------------------------------------------------------------------------------------
DRAWING(S): |_| Partial drawings are permitted. (More than one draft may be drawn and presented under the Credit.)
|_| Only one draft may be drawn and presented under the Credit, and:
|_| the draft must be for the full amount of the Credit. |_| the draft may be for less than the full
amount of the Credit.
- ------------------------------------------------------------------------------------------------------------------------------------
SPECIAL INSTRUCTIONS: (Attach additional signed sheet(s), if necessary, and label as attachments to this Application.)
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
TRANSFERABILITY: (If not checked, the Credit will not be transferable.)
|_| The Credit is to be transferable, with transfer charges for: |_| Applicant's account |_| Beneficiary's
account
- ------------------------------------------------------------------------------------------------------------------------------------
INQUIRIES: Direct to: Telephone Number:
- ------------------------------------------------------------------------------------------------------------------------------------
APPLICANT'S AGREEMENT AND SIGNATURE: Applicant's signature here indicates agreement to all the terms and conditions on this
Application and Applicant's agreement that the Credit and its issuance will be governed by (1) the terms and conditions of the
Standby Letter of Credit Agreement between Applicant and Wells Fargo and/or (2) any other agreement signed by Applicant pursuant to
which the Credit is to be issued. This Application is signed by Applicant's duly authorized representative(s) on the date specified
above.
- ----------------------------------------------------------------------------------------------------------------------------------
APPLICANT ADDRESS
- -------------------------------------------- ------------------------------ --------------------------------
AUTHORIZED SIGNATURE TITLE ADDRESS
- -------------------------------------------- ------------------------------ --------------------------------
AUTHORIZED SIGNATURE TITLE ADDRESS
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
(TO BE COMPLETED BY WELLS FARGO BANK, NATIONAL ASSOCIATION)
CREDIT ISSUANCE HAS BEEN APPROVED IN ACCORDANCE WITH WELLS FARGO'S CREDIT POLICIES AND PROCEDURES
- ------------------------------------------------------------------------------------------------------------------------------------
APPROVING OFFICER'S SIGNATURE APPROVING OFFICER'S NAME (Print) APPROVING OFFICER'S OFFICE AU MAC COMMITMENT NO.
(Print)
- ------------------ ----------------------------- ------------------------------ ---------------------- ------------------ ----------
PHONE AFS INTERFACE REQUIRED: STANDALONE TRANSACTION: COLLATERAL CODE PURPOSE CODE DATE
YES |_| NO |_| YES |_| NO |_|
- ------------------ ----------------------------- ------------------------------ ---------------------- ------------------ ----------
SPECIAL INSTRUCTIONS: (Indicate any provisions applicable to the Credit different from those on Applicant's Relationship Management
Instructions Form)
- ------------------------------------------------------------------------------------------------------------------------------------
EXHIBIT E2
STANDBY LETTER OF CREDIT AGREEMENT
To: WELLS FARGO BANK, NATIONAL ASSOCIATION
Applicant hereby requests that you, Wells Fargo Bank, National
Association ("Wells Fargo"), issue in your name one or more standby letters of
credit pursuant to Applications for the issuance of such Credits and the terms
and conditions of this Agreement. Each Credit will be issued at Applicant's
request and for its account, and, unless otherwise specifically provided in any
Loan Document, at your option. Applicant agrees that the terms and conditions in
this Agreement shall apply to each Application and the Credit issued pursuant to
each Application, and to transactions under each Application, each Credit and
this Agreement.
SECTION 1. DEFINITIONS. As used in this Agreement, the following terms
shall have the meanings set forth after each term: "Agreement" means this
---------
Standby Letter of Credit Agreement as it may be revised or amended from time to
time. "Applicant" means collectively each person and/or entity signing this
---------
Agreement as Applicant. "Application" means your printed form titled
-----------
"Application For Standby Letter of Credit" or any other form acceptable to you
on which Applicant applies for the issuance by you of a Credit and/or an
application for amendment of a Credit or any combination of such applications,
as the context may require. "Beneficiary" means the person or entity named on an
-----------
Application as the beneficiary or any transferee of such beneficiary.
"Collateral" means the Property, together with the proceeds of such Property,
----------
securing any or all of Applicant's obligations and liabilities at any time
existing under or in connection with any L/C Document and/or any Loan Document.
"Commission Fee" means the fee, computed at the commission fee rate specified by
--------------
you or specified in any Loan Document, charged by you at the time or times
specified by you on the amount of each Credit and on the amount of each increase
in a Credit for the time period each Credit is outstanding. "Credit" means an
------
instrument or document titled "Irrevocable Standby Letter of Credit" or "Standby
Letter of Credit", or any instrument or document whatever it is titled or
whether or not it is titled functioning as a standby letter of credit, issued
under or pursuant to an Application, and all renewals, extensions and amendments
of such instrument or document.. "Demand" means any sight draft, electronic or
------
telegraphic transmission or other written demand drawn or made, or purported to
be drawn or made, under or in connection with any Credit. "Document" means any
--------
instrument, statement, certificate or other document referred to in or related
to any Credit or required by any Credit to be presented with any Demand.
"Dollars" means the lawful currency at any time for the payment of public or
-------
private debts in the United States of America. "Event of Default" means any of
----------------
the events set forth in Section 13 of this Agreement.. "Expiration Date" means
----------------
the date any Credit expires. "Guarantor" means any person or entity guaranteeing
---------
the payment and/or performance of any or all of Applicant's obligations under or
in connection with any L/C Document and/or any Loan Document. "Holding Company"
---------------
means any company or other entity directly or indirectly controlling you. "L/C
---
Document" means this Agreement, each Application, each Credit, and each Demand.
- --------
"Loan Document" means each and any promissory note, loan agreement, security
--------------
agreement, pledge agreement, guarantee or other agreement or document executed
in connection with, or relating to, any extension of credit under which any
Credit is issued. "Maximum Rate" means the maximum amount of interest (as
-------------
defined by applicable laws), if any, permitted to be paid, taken, reserved,
received, collected or charged under applicable laws, as the same may be amended
or modified from time to time. "Negotiation Fee" means the fee, computed at the
---------------
negotiation fee rate specified by you or specified in any Loan Document, charged
by you on the amount of each Demand paid by you or any other bank specified by
you when each Demand is paid. "Payment Office" means the office specified by you
--------------
or specified in any Loan Document as the office where reimbursements and other
payments under or in connection with any L/C Document are to be made by
Applicant. "Prime Rate" means the rate of interest most recently announced
-----------
within Wells Fargo at its principal office as its Prime Rate, with the
understanding that the Prime Rate is one of Wells Fargo's base rates and serves
as the basis upon which effective rates of interest are calculated for those
loans making reference thereto, and is evidenced by the recording thereof after
its announcement in such internal publication or publications as Wells Fargo may
designate. "Property" means all forms of property, whether tangible or
--------
intangible, real, personal or mixed. "Rate of Exchange" means Wells Fargo's then
----------------
current selling rate of exchange in San Francisco, California for sales of the
currency of payment of any Demand, or of any fees or expenses or other amounts
payable under this Agreement, for cable transfer to the country of which such
currency is the legal tender. "UCP" means the Uniform Customs and Practice for
---
Documentary Credits, an International Chamber of Commerce publication, or any
substitution therefor or replacement thereof. "Unpaid and Undrawn Balance" means
--------------------------
at any time the entire amount which has not been paid by you under all the
Credits issued for Applicant's account, including, without limitation, the
amount of each Demand on which you have not yet effected payment as well as the
amount undrawn under all such Credits. "Wells Fargo & Company" means Wells Fargo
---------------------
& Company, a Delaware corporation.
SECTION 2. HONORING DEMANDS AND DOCUMENTS. You may receive, accept and
honor, as complying with the terms of any Credit, any Demand and any Documents
accompanying such Demand, provided that such Demand and accompanying Documents
appear on their face to comply substantially with the provisions of such Credit
and are, or appear on their face to be, signed or issued by (a) a person or
entity authorized under such Credit to draw, sign or issue such Demand and
accompanying Documents, or (b) an administrator, executor, trustee in
bankruptcy, debtor in possession, assignee for the benefit of creditors,
liquidator, receiver or other legal representative or successor in interest by
operation of law of any such person or entity.
SECTION 3. REIMBURSEMENT FOR PAYMENT OF DEMANDS. Applicant shall
reimburse you for all amounts paid by you on each Demand, including, without
limitation, all such amounts paid by you to any paying, negotiating or other
bank. If in connection with the issuance of any Credit, you agree to pay any
other bank the amount of any payment or negotiation made by such other bank
under such Credit upon your receipt of a cable, telex or other written
telecommunication advising you of such payment or negotiation, or authorize any
other bank to debit your account for the amount of such payment or negotiation,
Applicant agrees to reimburse you for all such amounts paid by you, or debited
to your account with such other bank, even if any Demand or Document specified
in such Credit fails to arrive in whole or in part or if, upon the arrival of
any such Demand or Document, the terms of such Credit have not been complied
with or such Demand or Document does not conform to the requirements of such
Credit or is not otherwise in order.
SECTION 4. FEES AND EXPENSES. Applicant agrees to pay to you (a) all
Commission Fees, Negotiation Fees, cable fees, amendment fees, non-usance fees,
and cancellation fees of, and all out-of-pocket expenses incurred by, you under
or in connection with any L/C Document, and (b) all fees and charges of banks or
other entities other than you under or in connection with any L/C Document if
any Application (i) does not indicate who will pay such fees and charges, (ii)
indicates that such fees and charges are to be paid by Applicant, or (iii)
indicates that such fees and charges are to be paid by the Beneficiary and the
Beneficiary does not, for any reason whatsoever, pay such fees or charges. There
shall be no refund of any portion of any Commission Fee in the event any Credit
is used, reduced, amended, modified or terminated before its Expiration Date.
SECTION 5. DEFAULT INTEREST. Unless otherwise specified in any Loan
Document, or on an Application and agreed to by you, all amounts to be
reimbursed by Applicant to you, and all fees and expenses to be paid by
Applicant to you, and all other amounts due from Applicant to you under or in
connection with any L/C Documents, will bear interest (to the extent permitted
by law), payable on demand, from the date you paid the amounts to be reimbursed
or the date such fees, expenses and other amounts were due until such amounts
are paid in full, at a rate per annum (computed on the basis of a 360-day year,
actual days elapsed) which is the lesser of (a) two percent (2%) above the Prime
Rate in effect from time to time, or (b) the Maximum Rate.
SECTION 6. TIME AND METHOD OF REIMBURSEMENT AND PAYMENT. Unless
otherwise specified in this Section, in any Loan Document, or on an Application
and agreed to by you, all amounts to be reimbursed by Applicant to you, all fees
and expenses to be paid by Applicant to you, and all interest and other amounts
due to you from Applicant under or in connection with any L/C Documents will be
reimbursed or paid at the Payment Office in Dollars in immediately available
funds without setoff or counterclaim (i) on demand or, (ii) at your option by
your debiting any of Applicant's accounts with you, with each such debit being
made without presentment, protest, demand for reimbursement or payment, notice
of dishonor or any other notice whatsoever, all of which are hereby expressly
waived by Applicant. Each such debit will be made at the time each Demand is
paid by you or, if earlier, at the time each amount is paid by you to any
paying, negotiating or other bank, or at the time each fee and expense is to be
paid or any interest or other amount is due under or in connection with any L/C
Documents. If any Demand or any fee, expense, interest or other amount payable
under or in connection with any L/C Documents is payable in a currency other
than Dollars, Applicant agrees to reimburse you for all amounts paid by you on
such Demand, and/or to pay you all such fees, expenses, interest and other
amounts, in one of the three following ways, as determined by you in your sole
discretion in each case: (a) at such place as you shall direct, in such other
currency; or (b) at the Payment Office in the Dollar equivalent of the amount of
such other currency calculated at the Rate of Exchange on the date determined by
you in your sole discretion; or (c) at the Payment Office in the Dollar
equivalent, as determined by you (which determination shall be deemed correct
absent manifest error), of such fees, expenses, interest or other amounts or of
the actual cost to you of paying such Demand. Applicant assumes all political,
economic and other risks of disruptions or interruptions in any currency
exchange.
SECTION 7. AGREEMENTS OF APPLICANT. Applicant agrees that (a) unless
otherwise specifically provided in any Loan Document, you shall not be obligated
at any time to issue any Credit for Applicant's account; (b) unless otherwise
specifically provided in any Loan Document, if any Credit is issued by you for
Applicant's account, you shall not be obligated to issue any further Credit for
Applicant's account or to make other extensions of credit to Applicant or in any
other manner to extend any financial consideration to Applicant; (c) you have
not given Applicant any legal or other advice with regard to any L/C Document or
Loan Document; (d) if you at any time discuss with Applicant the wording for any
Credit, any such discussion will not constitute legal or other advice by you or
any representation or warranty by you that any wording or Credit will satisfy
Applicant's needs; (e) Applicant is responsible for the wording of each Credit,
including, without limitation, any drawing conditions, and will not rely on you
in any way in connection with the wording of any Credit or the structuring of
any transaction related to any Credit; (f) Applicant, and not you, is
responsible for entering into the contracts relating to the Credits between
Applicant and the Beneficiaries and for causing Credits to be issued; (g) you
may, as you deem appropriate, modify or alter and use in any Credit the
terminology contained on the Application for such Credit; (h) unless the
Application for a Credit specifies whether the Documents to be presented with a
Demand under such Credit must be sent to you in one parcel or in two parcels or
may be sent to you in any number of parcels, you may, if you so desire, make
such determination and specify in the Credit whether such Documents must be sent
in one parcel or two parcels or may be sent in any number of parcels; (i) you
shall not be deemed Applicant's agent or the agent of any Beneficiary or any
other user of any Credit, and neither Applicant, nor any Beneficiary nor any
other user of any Credit shall be deemed your agent; (j) Applicant will promptly
examine all Documents and each Credit if and when they are delivered to
Applicant and, in the event of any claim of noncompliance of any Documents or
any Credit with Applicant's instructions or any Application, or in the event of
any other irregularity, Applicant will promptly notify you in writing of such
noncompliance or irregularity; (k) all directions and correspondence relating to
any L/C Document are to be sent at Applicant's risk; (l) if any Credit has a
provision concerning the automatic extension of its Expiration Date, you may, at
your sole option, give notice of nonrenewal of such Credit and if Applicant does
not at any time want such Credit to be renewed Applicant will so notify you at
least fifteen (15) calendar days before you are to notify the Beneficiary of
such Credit or any advising bank of such nonrenewal pursuant to the terms of
such Credit; (m) Applicant will not seek to obtain, apply for, or acquiesce in
any temporary or permanent restraining order, preliminary or permanent
injunction, permanent injunction or any other pretrial or permanent injunctive
or similar relief, restraining, prohibiting or enjoining you, any of your
correspondents or any advising, confirming, negotiating, paying or other bank
from paying or negotiating any Demand or honoring any other obligation under or
in connection with any Credit; and (n) except for Applicant's obligations
specifically affected by the actions referred to in subsection (vi) of this
Section 7(n), Applicant's obligations under or in connection with each L/C
Document and Loan Document shall be absolute, unconditional and irrevocable, and
shall be performed strictly in accordance with the terms of each such L/C
Document and Loan Document under all circumstances whatsoever, including,
without limitation, the following circumstances, the circumstances listed in
Section 12(b) through (dd) of this Agreement, and any other event or
circumstance similar to such circumstances: (A) any lack of validity or
enforceability of any L/C Document, any Loan Document, any Document or any
agreement relating to any of the foregoing; (B) any amendment of or waiver
relating to, or any consent to or departure from, any L/C Document, any Loan
Document or any Document; (C) any release or substitution at any time of any
Property held as Collateral; (D) your failure to deliver to Applicant any
Document you have received with a drawing under a Credit because doing so would,
or is likely to, violate any law, rule or regulation of any government
authority; (E) the existence of any claim, set-off, defense or other right which
Applicant may have at any time against you or any Beneficiary (or any person or
entity for whom any Beneficiary may be acting) or any other person or entity,
whether under or in connection with any L/C Document, any Loan Document, any
Document or any Property referred to in or related to any of the foregoing or
under or in connection with any unrelated transaction; (F) any breach of
contract or other dispute between or among any two or more of you, Applicant,
any Beneficiary, any transferee of any Beneficiary, any person or entity for
whom any Beneficiary or any transferee of any Beneficiary may be acting, or any
other person or entity; or (G) any delay, extension of time, renewal, compromise
or other indulgence granted or agreed to by you with or without notice to
Applicant, or Applicant's approval, in respect of any of Applicant's
indebtedness or other obligations to you under or in connection with any L/C
Document or any Loan Document.
SECTION 8. COMPLIANCE WITH LAWS AND REGULATIONS. Applicant represents
and warrants to you that no Application, Credit or transaction under any
Application and/or Credit will contravene any law or regulation of the
government of the United States or any state thereof. Applicant agrees (a) to
comply with all federal, state and foreign exchange regulations and other
government laws and regulations now or hereafter applicable to any L/C Document,
to any payments under or in connection with any L/C Document, to each
transaction under or in connection with any L/C Document, or to the import,
export, shipping or financing of the Property referred to in or shipped under or
in connection with any Credit, and (b) to reimburse you for such amounts as you
may be required to expend as a result of such laws or regulations, or any change
therein or in the interpretation thereof by any court or administrative or
government authority charged with the administration of such laws or
regulations.
SECTION 9. TAXES, RESERVES AND CAPITAL ADEQUACY REQUIREMENTS. In
addition to, and notwithstanding any other provision of any L/C Document or any
Loan Document, in the event that any law, treaty, rule, regulation, guideline,
request, order, directive or determination (whether or not having the force of
law) of or from any government authority, including, without limitation, any
court, central bank or government regulatory authority, or any change therein or
in the interpretation or application thereof, (a) does or shall subject you to
any tax of any kind whatsoever with respect to the L/C Documents, or change the
basis of taxation of payments to you of any amount payable thereunder (except
for changes in the rate of tax on your net income); (b) does or shall impose,
modify or hold applicable any reserve, special deposit, assessment, compulsory
loan, Federal Deposit Insurance Corporation insurance or similar requirement
against assets held by, deposits or other liabilities in or for the account of,
advances or loans by, other credit extended by or any other acquisition of funds
by, any of your offices; (c) does or shall impose, modify or hold applicable any
capital adequacy requirements (whether or not having the force of law); or (d)
does or shall impose on you any other condition; and the result of any of the
foregoing is (i) to increase the cost to you of issuing or maintaining any
Credit or of performing any transaction under any L/C Document, (ii) to reduce
any amount receivable by you under any L/C Document, or (iii) to reduce the rate
of return on your capital or the capital of the Holding Company to a level below
that which you or the Holding Company could have achieved but for any
imposition, modification or application of any capital adequacy requirement
(taking into consideration your policy and the policy of the Holding Company, as
the case may be, with respect to capital adequacy), and any such increase or
reduction is material (as determined by you or the Holding Company, as the case
may be, in your or the Holding Company's sole discretion); then, in any such
case, Applicant agrees to pay to you or the Holding Company, as the case may be,
such amount or amounts as may be necessary to compensate you or the Holding
Company for (A) any such additional cost, (B) any reduction in the amount
received by you under any L/C Document, or (C) to the extent allocable (as
determined by you or the Holding Company, as the case may be, in your or the
Holding Company's sole discretion) to any L/C Document, any reduction in the
rate of return on yourcapital or the capital of the Holding Company.
SECTION 10. COLLATERAL. In addition to, and not in substitution for,
any Property delivered, conveyed, transferred or assigned to you under any Loan
Document as security for any or all of Applicant's obligations and liabilities
to you at any time existing under or in connection with any L/C Document or any
Loan Document, Applicant grants to you a security interest in and to the
following Collateral, whether or not any such Collateral is in your possession
or control or the possession or control of your agents or correspondents or in
transit to, or set apart for, you or your agents or correspondents, until such
time as all Applicant's obligations and liabilities to you at any time existing
under or in connection with each L/C Document and each Loan Document have been
fully paid and discharged, all as security for such obligations and liabilities,
(a) all Applicant's property, claims, demands, right, title and interest in and
to the balance of each of Applicant's deposit accounts with you now or at any
time hereafter existing, and all evidences of such deposit accounts, (b) all
Property belonging to Applicant or in which it may have an interest, now or at
any time hereafter delivered, conveyed, transferred, assigned, pledged or paid
to you or your agents or correspondents in any manner whatsoever, whether as
security or for safekeeping or otherwise, including, without limitation, any
items received for collection or transmission, and the proceeds of such items,
whether or not such Property is in whole or in part released to Applicant on
trust or bailee receipt or otherwise, and (c) where Applicant is more than one
person or entity, all right, title and interest of each of Applicants in and to
all the Property which any of Applicants may now or hereafter obtain as security
for the obligations of any one or more of Applicants to one or more of the
others of Applicants arising under or in connection with the transaction to
which any Credit relates. Further, in addition to, and not in substitution for,
any Property delivered, conveyed, transferred or assigned to you under any Loan
Document as security for any or all of Applicant's obligations and liabilities
to you at any time existing under or in connection with any L/C Document or any
Loan Document, Applicant agrees to deliver, convey, transfer and assign to you
on demand, as security, Property of a value and character satisfactory to you,
(i) if you at any time feel insecure about Applicant's ability or willingness to
repay any amounts which you have paid or may pay in the future on any Demand or
in honoring any other of your obligations under or in connection with any
Credit, or (ii) without limiting the generality of the foregoing, if any
temporary or permanent restraining order, preliminary or permanent injunction,
or any other pretrial or permanent injunctive or similar relief is obtained
restraining, prohibiting or enjoining you, any of your correspondents, or any
advising, confirming, negotiating, paying or other bank from paying or
negotiating any Demand or honoring any other obligation under or in connection
with any Credit. Applicant agrees that the receipt by you or any of your agents
or correspondents at any time of any kind of security, including, without
limitation, cash, shall not be deemed a waiver of any of your rights or powers
under this Agreement. Applicant agrees to sign and deliver to you on demand, all
such deeds of trust, security agreements, financing statements and other
documents as you shall at any time request which are necessary or desirable (in
your sole opinion) to grant to you an effective and perfected security interest
in and to any or all of the Collateral. Applicant agrees to pay all filing and
recording fees related to the perfection of any security interest granted to you
in accordance with this Section. Applicant hereby agrees that any or all of the
Collateral may be held and disposed of as provided in this Agreement by you.
Upon any transfer, sale, delivery, surrender or endorsement of any Document or
Property which is or was part of the Collateral, Applicant will indemnify and
hold you and your agents and correspondents harmless from and against each and
every claim, demand, action or suit which may arise against you or any of your
agents or correspondents by reason of such transfer, sale, delivery, surrender
or endorsement.
SECTION 11. INDEMNIFICATION. Except to the extent caused by your lack
of good faith, and notwithstanding any other provision of this Agreement,
Applicant agrees to reimburse and indemnify you for (a) all amounts paid by you
to any Beneficiary under or in connection with any guarantee or similar
undertaking issued by such Beneficiary to a third party at Applicant's request,
whether such request is communicated directly by Applicant or through you to
such Beneficiary; and (b) all damages, losses, liabilities, actions, claims,
suits, penalties, judgments, obligations, costs or expenses, of any kind
whatsoever and howsoever caused, including, without limitation, attorneys' fees
and interest, paid, suffered or incurred by, or imposed upon, you directly or
indirectly arising out of or in connection with (i) any L/C Document, any Loan
Document, any Document or any Property referred to in or related to any Credit;
(ii) Applicant's failure to comply with any of its obligations under this
Agreement; (iii) the issuance of any Credit; (iv) the transfer of any Credit;
(v) any guarantee or similar undertaking, or any transactions thereunder, issued
by any Beneficiary to a third party at Applicant's request, whether such request
is communicated directly by Applicant or through you to such Beneficiary; (vi)
any communication made by you, on Applicant's instructions, to any Beneficiary
requesting that such Beneficiary issue a guarantee or similar undertaking to a
third party or the issuance of any such guarantee or similar undertaking; (vii)
the collection of any amounts Applicant owes to you under or in connection with
any L/C Document or any Loan Document; (viii) the foreclosure against, or other
enforcement of, any Collateral; (ix) the protection, exercise or enforcement of
your rights and remedies under or in connection with any L/C Document or any
Loan Document; (x) any court decrees or orders, including, without limitation,
temporary or permanent restraining orders, preliminary or permanent injunctions,
or any other pretrial or permanent injunctive or similar relief, restraining,
prohibiting or enjoining or seeking to restrain, prohibit or enjoin you, any of
your correspondents or any advising, confirming, negotiating, paying or other
bank from paying or negotiating any Demand or honoring any other obligation
under or in connection with any Credit; or (xi) any Credit being governed by
laws or rules other than the UCP in effect on the date such Credit is issued.
The indemnity provided in this Section will survive the termination of this
Agreement and the expiration or cancellation of any or all the Credits.
SECTION 12. LIMITATION OF LIABILITY. Notwithstanding any other
provision of this Agreement, neither you nor any of your agents or
correspondents will have any liability to Applicant for any action, neglect or
omission, if done in good faith, under or in connection with any L/C Document,
Loan Document or Credit, including, without limitation, the issuance or any
amendment of any Credit, the failure to issue or amend any Credit, or the
honoring or dishonoring of any Demand under any Credit, and such good faith
action, neglect or omission will bind Applicant. Notwithstanding any other
provision of any L/C Document, in no event shall you or your officers or
directors be liable or responsible, regardless of whether any claim is based on
contract or tort, for (a) any special, consequential, indirect or incidental
damages, including, without limitation, lost profits, arising out of or in
connection with the issuance of any Credit or any action taken or not taken by
you in connection with any L/C Document, any Loan Document, or any Document or
Property referred to in or related to any Credit; (b) the honoring of any Demand
in accordance with any order or directive of any court or government or
regulatory body or entity requiring such honor despite any temporary restraining
order, restraining order, preliminary injunction, permanent injunction or any
type of pretrial or permanent injunctive relief or any similar relief, however
named, restraining, prohibiting or enjoining such honor; (c) the dishonoring of
any Demand in accordance with any legal or other restriction in force at the
time and in the place of presentment or payment; (d) verifying the existence or
reasonableness of any act or condition referenced, or any statement made, in
connection with any drawing or presentment under any Credit; (e) the use which
may be made of any Credit; (f) the validity of any purported transfer of any
Credit or the identity of any purported transferee of any Beneficiary; (g) any
acts or omissions of any Beneficiary or any other user of any Credit; (h) the
form, validity, sufficiency, correctness, genuineness or legal effect of any
Demand or any Document, or of any signatures or endorsements on any Demand or
Document, even if any Demand or any Document should in fact prove to be in any
or all respects invalid, insufficient, fraudulent or forged; (i) payment by you
of any Demand when the Demand and any accompanying Documents appear on their
face to comply substantially with the terms of the Credit to which they relate
or dishonor by you of any Demand when the Demand and any accompanying Documents
do not strictly comply on their face with the terms of the Credit to which they
relate; (j) the failure of any Demand or Document to bear any reference or
adequate reference to the Credit to which it relates; (k) the failure of any
Document to accompany any Demand; (l) the failure of any person or entity to
note the amount of any Demand on the Credit to which it relates or on any
Document; (m) the failure of any person or entity to surrender or take up any
Credit; (n) the failure of any Beneficiary to comply with the terms of any
Credit or to meet the obligations of such Beneficiary to Applicant; (o) the
failure of any person or entity to send or forward Documents if and as required
by the terms of any Credit; (p) any errors, inaccuracies, omissions,
interruptions or delays in transmission or delivery of any messages, directions
or correspondence by mail, cable, telegraph, wireless or otherwise, whether or
not they are in cipher; (q) any notice of nonrenewal of a Credit sent by you not
being received on time or at any time by the Beneficiary of such Credit; (r) any
inaccuracies in the translation of any messages, directions or correspondence;
(s) any Beneficiary's use of the proceeds of any Demand; (t) any Beneficiary's
failure to repay to you or Applicant the proceeds of any Demand if the terms of
any Credit require such repayment; or (u) any act, error, neglect, default,
negligence, gross negligence, omission, willful misconduct, lack of good faith,
insolvency or failure in business of any of your agents or correspondents or of
any advising, confirming, negotiating, paying or other bank. The occurrence of
any one or more of the contingencies referred to in the preceding sentence shall
not affect, impair or prevent the vesting of your rights or powers under this
Agreement or any Loan Document or Applicant's obligation to make reimbursement
or payment to you under this Agreement or any Loan Document. The provisions of
this Section will survive the termination of this Agreement and any Loan
Documents and the expiration or cancellation of any or all the Credits.
SECTION 13. EVENTS OF DEFAULT. Each of the following shall constitute
an Event of Default under this Agreement: (a) Applicant's or any Guarantor's
failure to pay any principal, interest, fee or other amount when due under or in
connection with any L/C Document or any Loan Document; (b) Applicant's failure
to deliver to you Property of a value and character satisfactory to you at any
time you have demanded security from Applicant pursuant to Section 10 of this
Agreement; (c) the occurrence and continuance of any default or defined event of
default under any Loan Document or any other agreement, document or instrument
signed or made by Applicant or any Guarantor in your favor; (d) Applicant's or
any Guarantor's failure to perform or observe any term, covenant or agreement
contained in this Agreement or any Loan Document (other than those referred to
in subsections (a), (b) and (c) of this Section, or the breach of any other
obligation owed by Applicant or any Guarantor to you, and any such failure or
breach shall be impossible to remedy or shall remain unremedied for thirty (30)
calendar days after such failure or breach occurs; (e) any representation,
warranty or certification made or furnished by Applicant or any Guarantor under
or in connection with any L/C Document, any Loan Document or any Collateral, or
as an inducement to you to enter into any L/C Document or Loan Document or to
accept any Collateral, shall be materially false, incorrect or incomplete when
made; (f) any material provision of this Agreement or any Loan Document shall at
any time for any reason cease to be valid and binding on Applicant or any
Guarantor or shall be declared to be null and void, or the validity or
enforceability thereof shall be contested by Applicant, any Guarantor or any
government agency or authority, or Applicant or any Guarantor shall deny that it
has any or further liability or obligation under this Agreement or any Loan
Document; (g) Applicant's or any Guarantor's failure to pay or perform when due
any indebtedness or other obligation Applicant or such Guarantor has to any
person or entity other than you if such failure gives the payee of such
indebtedness or the beneficiary of the performance of such obligation the right
to accelerate the time of payment of such indebtedness or the performance of
such obligation; (h) any guarantee of, or any security covering, any of
Applicant's indebtedness to you arising under or in connection with any L/C
Document or any Loan Document fails to be in full force and effect at any time;
(i) any material adverse change in Applicant's or any Guarantor's financial
condition; (j) Applicant or any Guarantor suspends the transaction of its usual
business or is expelled or suspended from any exchange; (k) Applicant or any
Guarantor dies or is incapacitated; (l) Applicant or any Guarantor dissolves or
liquidates; (m) Applicant or any Guarantor is not generally paying its debts as
they become due; (n) Applicant or any Guarantor becomes insolvent, however such
insolvency may be evidenced, or Applicant or any Guarantor makes any general
assignment for the benefit of creditors; (o) a petition is filed by or against
Applicant or any Guarantor seeking Applicant's or such Guarantor's liquidation
or reorganization under the Bankruptcy Reform Act, Title 11 of the United States
Code, as amended or recodified from time to time, or a similar action is brought
by or against Applicant or any Guarantor under any federal, state or foreign
law; (p) a proceeding is instituted by or against Applicant or any Guarantor for
any relief under any bankruptcy, insolvency or other law relating to the relief
of debtors, reorganization, readjustment or extension of indebtedness or
composition with creditors; (q) a custodian or a receiver is appointed for, or a
writ or order of attachment, execution or garnishment is issued, levied or made
against, any of Applicant's or any Guarantor's Property or assets; (r) an
application is made by any of Applicant's or any Guarantor's judgment creditors
for an order directing you to pay over money or to deliver other of Applicant's
or such Guarantor's Property; or (s) any government authority or any court takes
possession of any substantial part of Applicant's or any Guarantor's Property or
assets or assumes control over Applicant's or any Guarantor's affairs.
SECTION 14. REMEDIES. Upon the occurrence and continuance of any Event
of Default all amounts paid by you on any Demand which have not previously been
repaid to you, together with all interest on such amounts, and the Unpaid and
Undrawn Balance, if any, shall automatically be owing by Applicant to you and
shall be due and payable by Applicant on demand without presentment or any other
notice of any kind, including, without limitation, notice of nonperformance,
notice of protest, protest, notice of dishonor, notice of intention to
accelerate, or notice of acceleration, all of which are expressly waived by
Applicant. Upon payment of the Unpaid and Undrawn Balance to you Applicant shall
have no further legal or equitable interest therein, and you will not be
required to segregate on your books or records the Unpaid and Undrawn Balance
paid by Applicant. After you receive the Unpaid and Undrawn Balance, you agree
to pay to Applicant, upon termination of all of your liability under all the
Credits and Demands, a sum equal to the amount which has not been drawn under
all the Credits less all amounts due and owing to you from Applicant under or in
connection with the L/C Documents and the Loan Documents. Further, upon the
occurrence and continuance of any Event of Default, you may sell immediately,
without demand for payment, advertisement or notice to Applicant, all of which
are hereby expressly waived, any and all Collateral, received or to be received,
at private sale or public auction or at brokers' board or upon any exchange or
otherwise, at your option, in such parcel or parcels, at such times and places,
for such prices and upon such terms and conditions as you may deem proper, and
you may apply the net proceeds of each sale, together with any sums due from you
to Applicant, to the payment of any and all obligations and liabilities due from
Applicant to you under or in connection with the L/C Documents and the Loan
Documents, all without prejudice to your rights against Applicant with respect
to any and all such obligations and liabilities which may be or remain unpaid.
If any such sale be at brokers' board or at public auction or upon any exchange,
you may yourself be a purchaser at such sale free from any right of redemption,
which Applicant hereby expressly waive and release. All your rights and remedies
existing under the L/C Documents and the Loan Documents are in addition to, and
not exclusive of, any rights or remedies otherwise available to you under
applicable law. In addition to any rights now or hereafter granted under
applicable law, and not by way of limitation of any such rights, upon the
occurrence and continuance of any Event of Default, Applicant hereby authorizes
you at any time or from time to time, without notice to Applicant or to any
other person (any such notice being hereby expressly waived by Applicant) and to
the extent permitted by law, to appropriate and to apply any and all Applicant's
deposits (general or special, including, without limitation, indebtedness
evidenced by certificates of deposit) with you or elsewhere, whether matured or
unmatured, and any other indebtedness at any time held or owing by you to or for
Applicant's credit or its account, against and on account of Applicant's
obligations and liabilities to you under or in connection with any of the L/C
Documents or the Loan Documents, irrespective of whether or not you shall have
made any demand for payment of any or all such obligations and liabilities or
declared any or all such obligations and liabilities to be due and payable, and
although any or all such obligations and liabilities shall be contingent or
unmatured.
SECTION 15. WAIVERS. No delay, extension of time, renewal, compromise
or other indulgence which may occur or be granted by you under any L/C Document
or any Loan Document shall impair your rights or powers under this Agreement or
any Application. You shall not be deemed to have waived any of your rights under
this Agreement or any Application unless such waiver is in writing signed by
your authorized representative. No such waiver, unless expressly provided
therein, shall be effective as to any transactions which occur subsequent to the
date of such waiver or as to the continuance of any Event of Default after such
waiver. No amendment or modification of this Agreement shall be effective unless
it is in writing signed by Applicant's and your authorized representative(s).
SECTION 16. AMENDMENTS AND MODIFICATIONS TO CREDITS. At Applicant's
verbal or written request, or with Applicant's verbal or written consent, and
without extinguishing or otherwise affecting Applicant's obligations under this
Agreement or any Loan Document, you may with respect to any Credit, in writing
or by any other action, but you will not be obligated to, (a) increase the
amount of such Credit, (b) extend the time for, and amend or modify the terms
and conditions governing, the making and honoring of any Demand or Document or
any other terms and conditions of such Credit, or (c) waive the failure of any
Demand or Document to comply with the terms of such Credit, and any Collateral
pledged or granted to you in connection with such Credit will secure Applicant's
obligations to you with respect to such Credit as amended, modified or waived.
No amendment to, or modification of, the terms of any Credit will become
effective if the Beneficiary of such Credit or any confirming bank objects to
such amendment or modification. If any Credit is amended or modified in
accordance with this Section, Applicant shall be bound by, and obligated under,
the provisions of this Agreement with respect to such Credit as so amended or
modified, and any action taken by you or any advising, confirming, negotiating,
paying or other bank in accordance with such amendment or modification.
SECTION 17. SUCCESSORS AND ASSIGNS. The terms and conditions of this
Agreement and each Application shall bind Applicant's heirs, executors,
administrators, successors and assigns, and all rights, benefits and privileges
conferred on you under or in connection with each L/C Document and each Loan
Document shall be and hereby are extended to, conferred upon and may be enforced
by your successors and assigns. Applicant will not assign this Agreement or
Applicant's obligations or liabilities to you under or in connection with any
L/C Document or Loan Document to any person or entity without your prior written
approval.
SECTION 18. GOVERNING LAW. This Agreement and each Application, and
Applicant's and your performance under this Agreement and each Application,
shall be governed by and be construed in accordance with the laws of the State
of California. Unless you otherwise specifically agree in writing, each Credit,
the opening of each Credit, the performance by you under each Credit, and the
performance by the Beneficiary and any advising, confirming, negotiating, paying
or other bank under each Credit, shall be governed by and be construed in
accordance with the UCP in force on the date of the issuance of each Credit. In
the event that any Credit issued pursuant to this Agreement states that it is
governed by the laws of a jurisdiction other than the State of California, then
your performance under such Credit shall so be governed.
SECTION 19. JURISDICTION AND SERVICE OF PROCESS. Any suit, action or
proceeding against Applicant under or with respect to any L/C Document may, at
your sole option, be brought in (a) the courts of the State of California, (b)
the United States District Courts in California, (c) the courts of Applicant's
jurisdiction of incorporation or principal office, or (d) the courts of the
jurisdiction where any Beneficiary, any advising, confirming, negotiating,
paying or other bank, or any other person or entity has brought any suit, action
or proceeding against you with respect to any Credit or any Demand, and
Applicant hereby submits to the nonexclusive jurisdiction of such courts for the
purpose of any such suit, action, proceeding or judgment and waives any other
preferential jurisdiction by reason of domicile. Applicant will accept joinder
in any suit, action or proceeding brought in any court or jurisdiction against
you by any Beneficiary, any advising, confirming, negotiating, paying or other
bank or any other person or entity with respect to any Credit or any Demand.
Applicant irrevocably waives trial by jury and any objection, including, without
limitation, any objection of the laying of venue or any objection based on the
grounds of forum non conveniens, which Applicant may now or hereafter have to
the bringing of any such action or proceeding. Applicant further waives any
right to transfer or change the venue of any suit, action or proceeding brought
against Applicant by you under or in connection with any L/C Document. Applicant
irrevocably consents to the service of process in any action or proceeding in
any court by the mailing of copies thereof by registered or certified mail,
postage prepaid, to Applicant at its address specified next to its signature on
this Agreement or at such other address as Applicant shall have notified to you
in writing, such service to be effective ten (10) days after such mailing.
SECTION 20. JOINT APPLICANTS. If this Agreement is signed by more than
one person and/or entity as an Applicant, this Agreement and the Applications
shall be the joint and several agreement of all such persons and/or entities and
that all references to "Applicant" or "Applicant's" in this Agreement and the
Applications shall refer to all such persons and/or entities jointly and
severally.
SECTION 21. SEVERABILITY. Any provision of any L/C Document which is
prohibited or unenforceable in any jurisdiction shall be, only as to such
jurisdiction, ineffective to the extent of such prohibition or unenforceability,
but all the remaining provisions of such L/C Document and all the other L/C
Documents shall remain valid.
SECTION 22. HEADINGS. The headings used in this Agreement are for
convenience of reference only and shall not define or limit the provisions of
this Agreement.
SECTION 23. CREDIT AGREEMENT. This Agreement and any related
Application have been entered into pursuant to the Secured Credit Agreement
dated August 22, 2002, among Applicant, as Borrower, Wells Fargo, as Agent, and
other financial institutions (the "Credit Agreement"). For so long as the Credit
Agreement remains in effect, the provisions of Sections 4, 5, 6, 9, 10, 13, 14,
and 15 of this Agreement shall not be effective. In the event that the Credit
Agreement is terminated and any Credit remains outstanding, then the provisions
of Sections 4, 5, 6, 9, 10, 13, 14, and 15 hereof shall thereafter apply to all
outstanding Credits until the obligations of the Applicant thereunder have been
satisfied in full.
ADDITIONAL PROVISIONS APPLICABLE IF THE APPLICANT IS LOCATED IN OREGON
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Section Oregon 1. UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND
COMMITMENTS MADE BY A LENDER AFTER OCTOBER 3, 1989 CONCERNING LOANS AND OTHER
CREDIT EXTENSIONS WHICH ARE NOT FOR PERSONAL, FAMILY, OR HOUSEHOLD PURPOSES OR
SECURED SOLELY BY THE BORROWER'S RESIDENCE MUST BE IN WRITING, EXPRESS
CONSIDERATION, AND BE SIGNED BY THE LENDER TO BE ENFORCEABLE.
ADDITIONAL PROVISIONS APPLICABLE IF THE APPLICANT IS LOCATED IN WASHINGTON
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Section Washington 1. ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN
MONEY, EXTEND CREDIT OR FOREBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT
ENFORCEABLE UNDER WASHINGTON LAW.
ADDITIONAL PROVISIONS APPLICABLE IF THE APPLICANT IS LOCATED IN NEBRASKA
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Section Nebraska 1. ENFORCEABILITY OF WRITTEN TERMS ONLY. A CREDIT
AGREEMENT MUST BE IN WRITING TO BE ENFORCEABLE UNDER NEBRASKA LAW. TO PROTECT
THE PARTIES FROM ANY MISUNDERSTANDINGS OR DISAPPOINTMENTS, ANY CONTRACT,
PROMISE, UNDERTAKING OR OFFER TO FOREBEAR REPAYMENT OF MONEY OR TO MAKE ANY
OTHER FINANCIAL ACCOMMODATION IN CONNECTION WITH THIS LOAN OF MONEY OR GRANT OR
EXTENSION OF CREDIT, OR ANY AMENDMENT OF, CANCELLATION OF, WAIVER OF, OR
SUBSTITUTION FOR ANY OR ALL OF THE TERMS OR PROVISIONS OF ANY INSTRUMENT OR
DOCUMENT EXECUTED IN CONNECTION WITH THIS LOAN OF MONEY OR GRANT OR EXTENSION OF
CREDIT, MUST BE IN WRITING TO BE EFFECTIVE.
ADDITIONAL PROVISIONS APPLICABLE IF THE APPLICANT IS LOCATED IN IOWA
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Section Iowa 1. IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS
AGREEMENT SHOULD BE READ CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE
ENFORCEABLE. NO OTHER TERMS OR ORAL PROMISES NOT CONTAINED IN THIS WRITTEN
CONTRACT MAY BE LEGALLY ENFORCED. YOU MAY CHANGE THE TERMS OF THIS AGREEMENT
ONLY BY ANOTHER WRITTEN AGREEMENT.
Section Iowa 2. By signing this Agreement, Applicant acknowledges
receipt of a copy of this Agreement.
This Agreement is signed by Applicant's duly authorized representative or representatives on the date specified below.
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[Applicant's Name] [Applicant's Name]
By: By:
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Title: Title:
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Signature Signature
Address: Address:
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Date: Date:
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EXHIBIT F
UNION FINANCIAL GUARANTY
Swansea, Illinois
August ____, 2002
This Guaranty is made as of the above date by the undersigned, Union
Financial Group, Ltd., a Delaware corporation, in favor of Wells Fargo Bank,
National Association, a national banking association, as Agent for the "Lenders"
pursuant to the Secured Credit Agreement described below.
RECITALS
First Banks, Inc. (the "Borrower"), the Agent and certain financial
institutions have executed a secured credit agreement of even date herewith (the
"Secured Credit Agreement"), pursuant to which such financial institutions (the
"Lenders") have agreed to lend up to $90,000,000 to the Borrower and pursuant to
which the Agent has agreed to issue up to $20,000,000 in face amount of standby
letters of credit for the account of the Borrower.
One condition to the Lenders' and Agent's commitment under the Secured
Credit Agreement is that the undersigned execute, deliver and perform this
Guaranty, thereby guaranteeing the payment and performance of all debts,
liabilities and obligations of the Borrower to the Agent and the Lenders arising
out of the Secured Credit Agreement and any extensions, renewals or replacements
thereof (the "Indebtedness").
Now, therefore, in consideration of the premises, the undersigned hereby
agrees as follows:
1. No act or thing need occur to establish the liability of the undersigned
hereunder, and no act or thing, except full payment and discharge of all
Indebtedness, shall in any way exonerate the undersigned or modify, reduce,
limit, or release the liability of the undersigned hereunder.
2. This is an absolute, unconditional and continuing guaranty of payment of
the Indebtedness and shall continue to be in force and be binding upon the
undersigned, whether or not all Indebtedness is paid in full, until this
Guaranty is revoked prospectively as to future transactions, by written notice
actually received by the Agent, and such revocation shall not be effective as to
Indebtedness existing or committed for at the time of actual receipt of such
notice by the Agent, or as to any renewals, extensions and refinancings thereof.
3. If the undersigned shall be dissolved or shall be or become insolvent
then the Agent shall have the right to declare immediately due and payable, and
the undersigned will forthwith pay to the Agent, the full amount of all
Indebtedness, whether due and payable or unmatured. If the undersigned
voluntarily commences or there is commenced involuntarily against the
undersigned a case under the United States Bankruptcy Code, the full amount of
all Indebtedness, whether due and payable or unmatured, shall be immediately due
and payable without demand or notice thereof.
4. The undersigned shall be liable for all Indebtedness, without any
limitation as to amount, plus accrued interest thereon and all attorneys' fees,
collection costs and enforcement expenses referable thereto. Indebtedness may be
created and continued in any amount, whether or not in excess of such principal
amount, without affecting or impairing the liability of the undersigned
hereunder. The Agent may apply any sums received by or available to the Agent on
account of the Indebtedness from Borrower or any other person (except the
undersigned), from their properties, out of any collateral security or from any
other source to payment of the excess. Such application of receipts shall not
reduce, affect or impair the liability of the undersigned hereunder.
5. The undersigned will not exercise or enforce any right of contribution,
reimbursement, recourse or subrogation available to the undersigned against any
person liable to payment of the Indebtedness, or as to any collateral security
therefor, unless and until all of the Indebtedness shall have been fully paid
and discharged.
6. The undersigned will pay or reimburse the Agent for all costs and
expenses (including reasonable attorneys' fees and legal expenses) incurred by
the Agent in connection with the protection, defense or enforcement of this
Guaranty in any litigation or bankruptcy or insolvency proceedings.
7. Whether or not any existing relationship between the undersigned and
Borrower has been changed or ended and whether or not this Guaranty has been
revoked, the Agent may, but shall not be obligated to, enter into transactions
resulting in the creation or continuance of Indebtedness, without any consent or
approval by the undersigned and without any notice to the undersigned. The
liability of the undersigned shall not be affected or impaired by any of the
following acts or things (which the Agent is expressly authorized to do, omit or
suffer from time to time, both before and after revocation of this Guaranty,
without notice to or approval by the undersigned): (i) any acceptance of
collateral security, guarantors, accommodation parties or sureties for any or
all Indebtedness; (ii) any one or more extensions or renewals of Indebtedness
(whether or not for longer than the original period) or any modification of the
interest rates, maturities or other contractual terms applicable to any
Indebtedness; (iii) any waiver or indulgence granted to Borrower, any delay or
lack of diligence in the enforcement of Indebtedness, or any failure to
institute proceedings, file a claim, give any required notices or otherwise
protect any Indebtedness, (iv) any full or partial release of, settlement with,
or agreement not to sue, Borrower or any other guarantor or other person liable
in respect of any Indebtedness; (v) any discharge of any evidence of
Indebtedness or the acceptance of any instrument in renewal thereof or
substitution therefor; (vi) any failure to obtain collateral security (including
rights of setoff) for Indebtedness, or to see to the proper or sufficient
creation and perfection thereof, or to establish the priority thereof, or to
protect, insure, or enforce any collateral security; or any modification,
substitution, discharge, impairment, or loss of any collateral security; (vii)
any foreclosure or enforcement of any collateral security; (viii) any transfer
of any Indebtedness or any evidence thereof; (ix) any order of application of
any payments or credits upon Indebtedness; (x) any election by the Agent under
ss. 1111(b)(2) of the United States Bankruptcy Code.
8. The undersigned waives any and all defenses, claims and discharges of
Borrower, or any other obligor, pertaining to Indebtedness, except the defense
of discharge by payment in full. Without limiting the generality of the
foregoing, the undersigned will not assert, plead or enforce against the Agent
any defense of waiver, release, discharge in bankruptcy, statute of limitations,
res judicata, statute of frauds, anti-deficiency statute, fraud, incapacity,
minority, usury, illegality or unenforceability which may be available to
Borrower or any other person liable in respect of any Indebtedness, or any
setoff available against the Agent to Borrower or any such other person, whether
or not on account of a related transaction. The undersigned expressly agrees
that the undersigned shall be and remain liable for any deficiency remaining
after foreclosure of any mortgage or security interest securing Indebtedness,
whether or not the liability of Borrower or any other obligor for such
deficiency is discharged pursuant to statute or judicial decision.
9. The undersigned waives presentment, demand for payment, notice of
dishonor or nonpayment, and protest of any instrument evidencing Indebtedness.
The Agent shall not be required first to resort for payment of the Indebtedness
to Borrower or other persons or their properties, or first to enforce, realize
upon or exhaust any collateral security for Indebtedness, before enforcing this
Guaranty.
10. If any payment applied by the Agent to Indebtedness is thereafter set
aside, recovered, rescinded or required to be returned for any reason
(including, without limitation, the bankruptcy, insolvency or reorganization of
Borrower or any other obligor), the Indebtedness to which such payment was
applied shall for the purposes of this Guaranty be deemed to have continued in
existence, notwithstanding such application, and this Guaranty shall be
enforceable as to such Indebtedness as fully as if such application had never
been made.
11. The liability of the undersigned under this Guaranty is in addition to
and shall be cumulative with all other liabilities of the undersigned to the
undersigned as guarantor or otherwise, without any limitation as to amount,
unless the instrument or agreement evidencing or creating such other liability
specifically provides to the contrary.
12. This Guaranty shall be effective upon delivery to the Agent, without
further act, condition or acceptance by the Agent, shall be binding upon the
undersigned and the successors and assigns of the undersigned and shall inure to
the benefit of the Agent and the Lenders and their respective participants,
successors and assigns. Any invalidity or unenforceability of any provision or
application of this Guaranty shall not affect other lawful provisions and
application hereof, and to this end the provisions of this Guaranty are declared
to be severable. This Guaranty may not be waived, modified, amended, terminated,
released or otherwise changed except by a writing signed by the undersigned and
the Agent. This Guaranty shall be governed by the laws of the State of
Minnesota. The undersigned waives notice of the Agent's acceptance hereof and
waives the right to a trial by jury in any action based on or pertaining to this
Guaranty.
In witness whereof, the undersigned has executed this Guaranty as of the
day and year first above written.
UNION FINANCIAL GROUP, LTD.
By
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Its
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EXHIBIT G
UNION FINANCIAL SECURITY AGREEMENT
This Agreement is made as of this ___ day of August 2002, by and
between UNION FINANCIAL GROUP, LTD., a Delaware Corporation ("Debtor") and WELLS
FARGO BANK, NATIONAL ASSOCIATION, a national banking association ("Secured
Party").
RECITALS
First Banks, Inc. (the "Borrower"), Secured Party and certain financial
institutions have executed a secured credit agreement of even date herewith (the
"Credit Agreement"), pursuant to which such financial institutions (the
"Lenders") have agreed to lend up to $90,000,000 to Borrower and pursuant to
which Secured Party has agreed to issue up to $20,000,000 in face amount of
standby letters of credit for the account of Borrower.
One condition to the Lenders' and Secured Party's commitments under the
Credit Agreement is that Debtor execute, deliver and perform this Agreement,
thereby granting a security interest to Secured Party, as agent for the Lenders,
in the Collateral described herein.
Now, therefore, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto hereby agree as follows:
1. Security Interest and Collateral. To secure the payment and
performance of the "Obligations," as such term is defined in the Credit
Agreement, Debtor hereby grants Secured Party (for its own account and as agent
for the Lenders) a security interest (the "Security Interest") in (i) all of the
capital stock of First Bank, a Missouri state bank, owned by Debtor, and (ii)
any capital stock that Debtor may hereafter acquire and deliver to Secured Party
pursuant to Section 5.08 of the Credit Agreement, and (iii) all proceeds of such
capital stock and all other rights in connection with such property
(collectively the "Collateral").
2. Representations, Warranties and Covenants. Debtor represents,
warrants and covenants that:
(a) Debtor will join with Secured Party in taking any action
required by Secured Party in order to perfect the Security Interest
and to protect the rights and priorities of Secured Party with respect
to the Collateral. To that end, Debtor has delivered to Secured Party
certificates representing all of the shares of capital stock
constituting Collateral and executed and delivered one blank stock
power for each such certificate. Debtor will, at Secured Party's
request at any one or more times (i) duly endorse, in blank, each and
every additional security certificate and instrument constituting
Collateral by signing on such certificate or instrument or by signing
a separate document of assignment or transfer; (ii) join with Secured
Party in executing any instructions or agreements with securities
intermediaries for the purpose of obtaining control of any investment
property that may hereafter constitute Collateral; and (iii) instruct
the issuer of any security that may hereafter constitute Collateral to
register such security in the name of Secured Party.
(b) Debtor is the owner of the Collateral free and clear of all
liens, encumbrances, security interests and restrictions except the
Security Interest and any restrictive legend appearing on any security
certificate or any instrument constituting Collateral.
(c) Debtor will keep the Collateral free and clear of all liens,
encumbrances and security interests, except the Security Interest.
(d) Debtor will pay, when due, all taxes and other governmental
charges levied or assessed upon or against any Collateral.
(e) Debtor will upon receipt deliver to Secured Party all
investment property distributed on account of Collateral, such as
stock dividends and securities resulting from stock splits,
reorganizations and recapitalizations. The Security Interest shall
attach to all such proceeds.
3. Events of Default. The occurrence of any Event of Default under the
Credit Agreement shall be an Event of Default hereunder.
4. Remedies Upon Event of Default. Upon the occurrence of an Event of
Default and during the continuance thereof, Secured Party may exercise any one
or more of the rights and remedies specified in the Credit Agreement, and also
any one or more of the following rights or remedies: (i) notify the obligor on
or issuer of any Collateral or any securities intermediary to make payment to
Secured Party of any amounts due or distributable on any Collateral, (ii)
receive and keep in its possession or under its control subject to the Security
Interest all proceeds of Collateral, except that any money received from the
Collateral may, at Secured Party's option, be applied in reduction of the
Obligations; (iii) exercise all voting and other rights as a holder of any
Collateral; (iv) exercise and enforce any or all rights and remedies available
upon default to a secured party under the Uniform Commercial Code, including the
right to (A) order any securities intermediary to sell any Collateral on any
established market or over the counter or to cause any Collateral to be
redeemed; (B) give any transfer or redemption order to any issuer of Collateral;
or (C) offer and sell Collateral privately to purchasers who will agree to take
the Collateral for investment and not with a view to distribution and who will
agree to the imposition of restrictive legends on any certificates representing
Collateral, and the right to arrange for a sale which would otherwise qualify as
exempt from registration under the Securities Act of 1933; and if notice to
Debtor of any intended disposition of Collateral or any other intended action is
required by law in a particular instance, such notice shall be deemed
commercially reasonable if given at least 10 calendar days prior to the date of
intended disposition or other action; and (v) exercise or enforce any or all
other rights or remedies available to Secured Party by law or agreement against
any Collateral, against Debtor or against any other person or property.
5. Secured Party's Duties. Secured Party's duty of care with respect to
Collateral in its possession (as imposed by law) shall be deemed fulfilled if
Secured Party exercises reasonable care in physically safekeeping such
Collateral, or in the case of Collateral in the custody or possession of a
securities intermediary or other third person, exercises reasonable care in the
selection of the securities intermediary or other third person and Secured Party
need not otherwise preserve, protect, insure or care for any Collateral. Secured
Party shall not be obligated to preserve any rights Debtor may have against
prior parties, to exercise at all or in any particular manner any voting rights
which may be available with respect to any Collateral, to realize on the
Collateral at all or in any particular manner or order, or to apply any cash
proceeds of Collateral in any particular order of application. Regardless of the
manner in which Secured Party chooses to exercise control over Collateral
(whether by possession, by agreement with an issuer or Securities Intermediary,
by transferring security entitlements into its own account, or otherwise),
Secured Party shall not be deemed to be under any obligation to Debtor, whether
as fiduciary, trustee, agent or otherwise, except the duty of good faith, the
duties specifically imposed upon Secured Party by this Agreement, and the duties
imposed upon it as a secured party by Articles 1, 8 and 9 of the Uniform
Commercial Code, as in effect in Minnesota.
6. Miscellaneous. Any disposition of Collateral in the manner provided
in Section 4 shall be deemed commercially reasonable. This Agreement can be
waived, modified, amended, terminated or discharged, and the Security Interest
can be released, only explicitly in a writing signed by Secured Party. A waiver
signed by Secured Party shall be effective only in the specific instance and for
the specific purpose given. Mere delay or failure to act shall not preclude the
exercise or enforcement of any of Secured Party's rights or remedies. All rights
and remedies of Secured Party shall be cumulative and may be exercised
singularly or concurrently, at Secured Party's option, and the exercise or
enforcement of any one such right or remedy shall neither be a condition to nor
bar the exercise or enforcement of any other. All notices to be given to Debtor
shall be deemed sufficiently given if delivered or mailed by registered or
certified mail, postage prepaid, to Debtor at the address set forth following
its signature on the signature page of this Agreement or at the most recent
address shown on Secured Party's records. Debtor will reimburse Secured Party
for all expenses (including reasonable attorneys' fees and legal expenses)
incurred by Secured Party in the protection, defense or enforcement of the
Security Interest, including expenses incurred in any litigation or bankruptcy
or insolvency proceedings. This Agreement shall be binding upon and inure to the
benefit of Debtor and Secured Party and their successors and assigns and shall
take effect when signed by Debtor and delivered to Secured Party, and Debtor
waives notice of Secured Party's acceptance hereof. This Agreement shall be
governed by the internal laws of Minnesota and, unless the context otherwise
requires, all terms used herein which are defined in Articles 1, 8 and 9 of the
Uniform Commercial Code, as in effect in Minnesota, shall have the meanings
therein stated. If any provision or application of this Agreement is held
unlawful or unenforceable in any respect, such illegality or unenforceability
shall not affect other provisions or applications which can be given effect, and
this Agreement shall be construed as if the unlawful or unenforceable provision
or application had never been contained herein or prescribed hereby. All
representations and warranties contained in this Agreement shall survive the
execution, delivery and performance of this Agreement and the creation and
payment of the Obligations.
IN WITNESS WHEREOF, Debtor has executed this Agreement as of the day
first above written.
UNION FINANCIAL GROUP, LTD.
Address:
4387 North Illinois Street By
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Swansea, IL 62226 Its
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EXHIBIT H
PERMISSIBLE SECURITIES
The following qualify as "Permissible Securities:"
Valuation Percentage
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A. Cash 100%
B. (x) Negotiable debt obligations issued by the U.S. Treasury Department or the
Government National Mortgage Association ("Ginnie Mae"), or (y) mortgage-backed
securities issued by Ginnie Mae (but with respect to either (x) or (y) excluding
interest only or principal only stripped securities, securities representing
residual interests in mortgage pools, and securities that are not listed on a
national securities exchange or regularly quoted in a national quotation
service) and in each case having a remaining maturity of:
(i) less than one year 100%
(ii) one year or greater but less than 10 years 98%
(iii) ten years or longer 95%
C. (x) Negotiable debt obligations issued by the Federal Home Loan Mortgage
Association ("Freddie Mac") or (y) mortgage-backed securities issued by Freddie
Mac but excluding interest only or principal only stripped securities,
securities representing residual interests in mortgage pools, and securities
that are not listed on a national securities exchange or regularly quoted in a
national quotation service. 95%
EXHIBIT I
Notice of Permitted Acquisition
This Notice is being submitted on this ___ day of ________, 200__,
pursuant to Section 5.10 of the Secured Credit Agreement dated as of August 22,
2002 (the "Credit Agreement"), by and among Wells Fargo Bank, National
Association (the "Agent"), the Lenders that are parties thereto, and First
Banks, Inc., as Borrower. Capitalized terms used but not defined herein shall
have the meanings set forth in the Credit Agreement.
The undersigned officer of the Borrower hereby notifies the Lenders
that [the Borrower] [_________ (name of Subsidiary)] has entered into an
agreement to purchase [______% of the voting common stock] [all of the assets of
the business] [all of the assets of the ____ branch(s)] of
__________________________________ (name and organizational details of acquired
entity). A brief description of the transaction, including the form of the
acquisition, amount and nature of the consideration, and expected date of
completion, is attached to this Notice as Annex A.
The undersigned officer hereby certifies to the Lenders that:
A. The representations and warranties contained in Article IV of the
Credit Agreement are correct as of the date hereof and will be
correct after giving effect to the proposed acquisition, except
to the extent that the same relate specifically to an earlier
date; and
B. No Default or Event of Default has occurred and is continuing, or
will occur as a result of the proposed acquisition.
This will confirm that First Banks, Inc. will provide copies to the
Agent of any applications to regulatory agencies submitted in connection with
the proposed acquisition.
Signed as of the day and year first above written.
FIRST BANKS, INC.
By
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[name and office held]