LOAN AGREEMENT
This LOAN AGREEMENT is made and entered into this February 17,
2009, between Cornerstone Financial Corp., a New Jersey corporation (the
"Borrower"), and Atlantic Central Bankers Bank, a Pennsylvania bank (the
"Lender").
SECTION 1. DEFINITIONS.
1.1. Defined Terms. As used herein the following terms shall have the meanings
indicated unless the context otherwise requires:
"Agreement" means this agreement and any future
amendments, modifications or supplements hereto.
"Bank" means Cornerstone Bank, a New Jersey chartered
bank, and any successor thereto by merger or consolidation.
"Business Day" means a day other than a Saturday, a
Sunday or a day on which banks located in Cumberland County,
Pennsylvania are required or authorized to be closed by law, regulation
or executive order.
"Closing Date" means the date of this Agreement.
"Code" means the Internal Revenue Code of 1986, as
amended, and any regulations issued thereunder.
"Collateral" shall have the meaning set forth in the
Pledge Agreement.
"Default" means any event specified in subsection 7.1
hereof, whether or not any requirement for notice or lapse of time or
any other condition has been satisfied.
"Event of Default" means any event specified in
subsection 7.1 hereof, provided that any requirement for notice or
lapse of time or any other condition has been satisfied.
"Federal Reserve" means the Board of Governors of the
Federal Reserve.
"GAAP" means generally accepted accounting principles
as in effect in the United States of America.
"Line of Credit Termination Date" means February 17,
2012.
"Loan" means all advances made under the Line of
Credit as described in subsection 2.1 of this Agreement.
"Loan Account" means the account of Borrower on the
books of Lender in which is recorded all advances under the Loan and
the payments of principal and interest made by Borrower to Lender.
"Loan Documents" means this Agreement, the Note, the
Pledge Agreement, and all other documents executed and delivered by the
Borrower or any other person to evidence, secure or assure payment of
the Loan or any other obligation of the Borrower to the Lender, and any
and all amendments or supplements to, restatements of or substitutions
for any of the foregoing.
"Maturity Date" means February 17, 2012.
"Note" means the promissory note described in
subsection 2.2 of this Agreement.
"Pledge Agreement" means the stock pledge agreement
dated even date herewith between the Borrower and the Lender.
"Proceeds" shall have the meaning provided in the
Pennsylvania Uniform Commercial Code.
"Subordinated Debentures" means the $3,000,000
aggregate principal amount of subordinated indebtedness issued by the
Bank in 2008.
"Subsidiary" means any corporation more than 50% of
the shares of capital stock of which (except for directors' qualifying
shares, if required by law) are at the time owned by the Borrower
and/or one or more Subsidiaries.
1.2. Use of Defined Terms. All terms defined in this Agreement shall have such
defined meanings when used in the Loan Documents and in any certificates,
reports or other documents made or delivered pursuant to this Agreement, unless
the context shall require otherwise.
SECTION 2. AMOUNT AND TERMS OF LOAN.
2.1. Line of Credit.
(a) Subject to, and in accordance with, the terms and conditions of this
Agreement, the Lender agrees to extend credit to the Borrower by making
loans to it, from time to time during the period commencing on the
Closing Date and ending on February 17, 2012 (the "Line of Credit
Termination Date"), in an aggregate amount that shall not exceed
$5,000,000.
(b) Once an advance under the Loan has been repaid, the Borrower may not
reborrow such amount. The Borrower shall notify the Lender orally or in
writing of each proposed borrowing under the Loan not later than 3:00
P.M., Eastern Time on the day of such proposed borrowing.
(c) Under the Loan, $500,000 will be reserved and advanced only to pay
accrued interest on the outstanding principal balance of the Loan.
Prior to the occurrence of an Event of Default, if (i) Borrower has
failed to pay on or before the 15th day of a month the interest accrued
on the Loan during the preceding month, or (ii) the Borrower requests
in writing that the Lender do so, then the Lender shall advance an
amount equal to the accrued and unpaid interest on the outstanding
principal balance of the Loan. The Borrower irrevocably directs the
Lender to make such advance by an entry on the records and books of the
Lender and to credit the Borrower's account for such interest payment.
2.2. Line of Credit Note. On the date hereof, the Borrower shall execute and
deliver to the Lender a promissory note of the Borrower, which shall
evidence the Borrower's obligations to repay the principal of, interest
on, and other amounts due in connection with the Line of Credit, and
which shall:
(a) be dated the Closing Date and be payable to the Lender's order in the
principal amount of up to Five Million Dollars ($5,000,000);
(b) bear interest on the unpaid principal amount of any funds advanced and
outstanding under the Line of Credit from the dates of such advances at
an annual rate equal to the greater of (i) a floating annual rate equal
to the prime rate of interest charged by leading commercial banks as
reported in the Wall Street Journal plus twenty-five basis points
(0.25%), or (ii) four and one-quarter percent (4.25%);
(c) be payable as to interest monthly commencing on April 1, 2009, and
continuing on the first day of each month thereafter until payment in
full of the unpaid principal amount of, and all accrued but unpaid
interest thereon;
(d) be payable in full as to the entire unpaid principal balance, all
accrued interest and other sums due thereunder on the sooner of (i) the
Maturity Date; or (ii) upon the occurrence of any Event of Default; and
(e) be secured (and payment thereof shall be assured, as the case may be)
by the Pledge Agreement.
2.3. Loan Account. Lender shall record in the Loan Account, (i) the Loan,
(ii) all payments made by Borrower on account of the Loan, including
without limitation interest payments made pursuant to Section 2.1(c),
and (iii) all other appropriate debits and credits. Each month Lender
shall render to Borrower a statement setting forth the debit balance of
the Loan Account as of the close of the preceding month, together with
a statement of the amount of interest and other charges due Lender as
of that time. Lender shall use reasonable efforts to issue each such
statement at least fifteen days prior to the payment due date to which
it pertains, by mail or email to the Borrower as so instructed thereby.
Absent manifest error, each statement shall be considered correct and
accepted by the Borrower and conclusively binding upon the Borrower
unless the Borrower notifies Lender to the contrary in writing within
thirty (30) days from the receipt of the statement.
2.4. Prepayments. The Borrower at any time and from time to time may
voluntarily prepay the Loan, in whole or in part, without premium or
penalty, upon notification to Lender of such prepayment not later than
10:00 A.M. Eastern Time on the date of prepayment.
2.5. Computation of Interest. Interest shall be calculated on the basis of a
360-day year for actual days elapsed.
2.6. Payments. All payments (including prepayments) by the Borrower
hereunder shall be made at any office of Lender, or such other place or
places as Lender may direct, prior to 3:00 P.M. on the date of payment,
in lawful money of the United States of America, and in immediately
available funds, and, when due or upon instruction from the Borrower,
may be made by debit to the Borrower's general account with the Bank.
SECTION 3. REPRESENTATIONS AND WARRANTIES.
In order to induce Lender to enter into this Agreement and to
make the Loan, the Borrower represents and warrants to Lender that:
3.1. Organization and Qualification of Borrower. The Borrower is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and is duly qualified as a foreign corporation
and in good standing under the laws of each jurisdiction in which the conduct of
its business or the ownership of its assets requires such qualification.
3.2. Organization and Qualification of Bank. The Bank is a New Jersey chartered
bank duly organized, validly existing and in good standing under the laws of the
State of New Jersey and is duly qualified and in good standing under the laws of
each jurisdiction in which the conduct of its business or the ownership of its
assets requires such qualification.
3.3. Power and Authority. The Borrower has the corporate power and authority to
execute, deliver and perform this Agreement, the Note, and the Pledge Agreement,
to borrow under this Agreement and to create the collateral security interests
provided in the Pledge Agreement. No consent of any other party (including
stockholders of the Borrower) and no consent, license, approval or authorization
of, or registration or declaration with, any governmental authority, bureau or
agency is required in connection with the execution, delivery, performance,
validity or enforceability of such agreements.
3.4. Enforceability. This Agreement, the Note, and the Pledge Agreement
constitute valid obligations of the Borrower, legally binding upon it and
enforceable in accordance with their respective terms, except as such
enforceability may be limited by bankruptcy, insolvency or other laws of general
application relating to or affecting the enforcement of creditors' rights.
3.5. Conflict with Other Instruments. The execution, delivery and performance of
this Agreement, the Note, and the Pledge Agreement will not violate or
contravene any provision of (i) any existing law or regulation or decree of any
court, governmental authority, bureau or agency having jurisdiction over the
Borrower or the Bank , (ii) the Certificate of Incorporation or Charter or
By-Laws of the Borrower or the Bank, or (iii) any mortgage, indenture, security
agreement, contract, undertaking or other agreement to which the Borrower or the
Bank is a party or which purports to be binding upon it or any of its properties
or assets, and will not result in the creation or imposition of any lien,
charge, encumbrance on, or security interest in, any of its properties or assets
pursuant to the provisions of any such mortgage, indenture, security agreement,
contract, undertaking or other agreement, except for the security interest
created by the Pledge Agreement.
3.6. Litigation. There are no actions, suits or proceedings before any court or
governmental department or agency (whether or not purportedly on behalf of the
Borrower) pending or, to the knowledge of the Borrower, threatened (a) with
respect to any of the transactions contemplated by this Agreement or (b) against
or affecting the Borrower or the Bank or any of their respective properties
which, if adversely determined, would have a material adverse effect upon the
financial condition, business or operations of the Borrower or the Bank or the
Borrower's ability to repay the Note.
3.7. Properties. The Borrower owns beneficially and of record all of the
outstanding shares of capital stock of the Bank and has good and marketable
title thereto, free and clear of any security interest, pledge, lien, charge,
encumbrance of any nature whatsoever, except for the lien and security interest
created by the Pledge Agreement
3.8. Default. The Borrower is not in default under any material existing
agreement, and no Default hereunder has occurred and is continuing.
3.9. Taxes. The Borrower and the Bank have filed or caused to be filed all tax
returns (including, without limitation, those relating to Federal and state
income taxes) required to be filed and has paid all taxes shown to be due and
payable on said returns or on any assessments made against either of them (other
than those being contested in good faith by appropriate proceedings for which
adequate reserves have been provided on its books). No tax liens have been filed
against the property or assets of the Borrower or the Bank, and no claims are
being asserted with respect to such taxes which, if adversely determined, would
have a material adverse effect upon the financial condition, business or
operations of the Borrower or the Bank.
3.10. Financial Condition. All balance sheets, profit and loss statements, and
other financial statements of the Borrower and the Bank which have heretofore
been delivered to Lender are true and correct and present fairly, accurately and
completely the consolidated financial position of the Borrower and the Bank and
the results of their respective operations as of the dates and for the periods
for which the same are furnished. All such financial statements have been
prepared in accordance with GAAP applied on a consistent basis. Neither the
Borrower nor any Subsidiary possesses any "loss contingency" (as that term is
defined in Financial Accounting Standards Board, Statement of Financial
Accounting Standards No. 5 - "SFAS 5") which is required to be accrued,
reflected, or reserved against in its balance sheet or disclosed in the
footnotes to such balance sheet and which is not so accrued, reflected or
reserved against or so disclosed. There has been no material adverse change in
the business, properties, operations or condition (financial or otherwise) of
the Borrower or the Bank since the date of the financial statements which were
most recently furnished by the Borrower to Lender. No event has occurred which
could reasonably be expected to interfere substantially with the normal business
operations of the Borrower, except as disclosed in writing to Lender heretofore
or concurrently herewith.
3.11. Use of Proceeds. The proceeds of the Loan shall be used solely as follows:
(i) $4,500,000 of the Loan proceeds shall be used by the Borrower to make loans
or capital contributions to the Bank, and (ii) up to $500,000 of the Loan
proceeds may be used solely to make payments of accrued interest on the Note as
such amounts become payable as provided in Section 2.1(c).
3.12. Regulation U. The Borrower is not engaged in the business of extending
credit for the purpose of purchasing or carrying margin stock (within the
meaning of Regulation U of the Board of Governors of the Federal Reserve
System), and no part of the proceeds of the Loan will be used by the Borrower to
purchase or carry any margin stock or to reduce or retire any indebtedness
incurred for such purpose or to extend credit to others for such purpose.
3.13. Operations of Borrower. All operations of the Borrower and the Bank have
been carried on in accordance in all material respects with all applicable laws,
statutes, ordinances, rules and regulations. No investigation by any
governmental authority, federal, state or local, is pending or threatened
against Borrower or the Bank.
SECTION 4. CONDITIONS OF BORROWING.
Prior to making the Loan hereunder, the following conditions
precedent shall have been satisfied:
4.1. Loan Documents. The Borrower shall have delivered or caused to be
delivered to Lender duly executed copies of this Agreement, the Pledge
Agreement, the Note, and all other Loan Documents.
4.2. Corporate Documents. The Borrower shall have delivered to Lender:
(a) copies, certified by the Secretary of the Borrower on the Closing Date,
of (i) the resolutions of the Board of Directors of the Borrower
authorizing and approving the execution, delivery and performance of
the Loan Documents and the borrowings provided for hereunder and the
creation of the collateral security interests for which the Pledge
Agreement provides, and (ii) the Bylaws of the Borrower as in effect on
the Closing Date;
(b) (i) the charter of the Bank as certified by the Department of Banking
and Insurance of the State of New Jersey, and (ii) the Articles or
Certificate of Incorporation of the Borrower as certified by the
Division of Revenue of the Treasury Department of the State of New
Jersey; and
(c) (i) a good standing certificate for the Bank issued by the Department
of Banking and Insurance of the State of New Jersey, and (ii) a good
standing certificate for the Borrower issued by the Division of Revenue
of the Treasury Department of the State of New Jersey.
4.3. Certificate of Incumbency. The President and Secretary of the Borrower
shall have duly executed and delivered to Lender a certificate of
incumbency in a form satisfactory to the Lender.
4.4. Stock Certificates for Shares of Bank. The Borrower shall have
delivered to the Lender stock certificates representing all of the
outstanding shares of capital stock of the Bank, together with stock
powers executed in blank for such stock certificates.
4.5. Legal Opinion. Counsel for the Borrower shall have delivered to Lender
an opinion, dated the Closing Date, addressed to Lender, and
satisfactory in form and substance to Lender.
4.6. Representations and Warranties. The representations and warranties
contained in Section 3 hereof shall be true and correct on and as of
the date of the making of the Loan with the same effect as if made on
and as of such date, and no Event of Default or Default shall be in
existence on the Closing Date or shall occur as a result of the Loan.
4.7. Legal Matters. All legal matters incident to the transactions
contemplated by this Agreement shall be satisfactory to Stevens & Lee,
P.C., counsel for Lender.
4.8. Commitment Letter. The Borrower shall have otherwise complied with all
of the terms and conditions set forth in Lender's commitment letter
dated February 11, 2009, and which are capable of satisfaction on or
prior to the Closing Date.
SECTION 5. AFFIRMATIVE COVENANTS.
The Borrower covenants and agrees that from and after the
Closing Date and so long as the Note remains outstanding and unpaid, in whole or
in part, it will observe the following covenants unless Lender shall otherwise
consent in writing:
5.1. Financial Statements. The Borrower will furnish to Lender
(a) as soon as available, but in any event not later than 120 days after
the close of each fiscal year of the Borrower, the annual audit report
of the Borrower containing a consolidated balance sheet of the Borrower
and its Subsidiaries as of the end of such fiscal year and related
consolidated statements of income, cash flow, and changes in
shareholders' equity of the Borrower and its Subsidiaries for such
fiscal year, all in reasonable detail, prepared in accordance with GAAP
applied on a consistent basis, and certified without exception or
qualification by independent certified public accountants selected by
the Borrower and satisfactory to Lender;
(b) as soon as available, but in any event not later than 45 days after the
close of each quarter of each fiscal year of the Borrower, a
consolidated balance sheet of the Borrower and its Subsidiaries as at
the end of such quarterly period and related consolidated statement of
income for such quarterly period and for the period from the beginning
of the current fiscal year to the end of such quarterly period,
prepared in accordance with GAAP applied on a consistent basis
(excluding disclosures in footnotes), and certified by the principal
financial or accounting officer of the Borrower (subject to normal
year-end adjustments);
(c) as soon as available, but in any event not later than 45 days after the
close of each quarter of each fiscal year of the Bank, a copy of the
Bank's call report for such quarterly period as required to be filed by
the Bank with the FDIC or other such applicable bank regulatory agency,
prepared in accordance with the applicable rules and regulations of
such bank regulatory agency, and certified by the principal financial
or accounting officer of the Bank (subject to normal year-end
adjustments);
(d) concurrently with the delivery of the financial statements referred to
in clause (a) and (c) above, a certificate of the officer who certified
such statements, setting forth the Bank's (i) total risk-based capital
ratio, (ii) Tier 1 risk-based capital ratio, and (iii) Tier 1 leverage
ratio, computed in accordance with the regulations and policies of the
Federal Reserve; and
(e) from time to time, such additional financial and other information as
Lender may reasonably request.
5.2. Corporate Existence, Properties. The Borrower will maintain, and cause
the Bank to maintain, (a) its corporate existence, its qualification to
do business and its good standing in each jurisdiction in which
qualification is necessary for the proper conduct of its businesses,
(b) all licenses, permits and other authorizations necessary for the
ownership and operation of its properties and businesses, and (c) its
properties in good repair and condition and to make all necessary or
appropriate repairs, renewals, replacements and substitutions, so that
the efficiency of all such property shall at all times be properly
preserved and maintained.
5.3. Insurance. The Borrower will maintain, and will cause the Bank to
maintain, with respect to all its properties, assets and businesses,
insurance with financially sound and reputable insurers against loss or
damage of the kinds customarily insured against by banks and bank
holding companies, in such types and amounts as are customarily carried
under similar circumstances by other banks and bank holding companies
and as are required by Lender.
5.4. Books and Records. The Borrower will maintain, and will cause each
Subsidiary to maintain, accurate and complete records and books of
account with respect to all its operations in accordance with GAAP, and
will permit, and will cause each Subsidiary to permit, officers or
representatives of Lender to examine and make excerpts from such books
and records and to visit and inspect its properties, both real and
personal, at all reasonable times.
5.5. Capital. The Borrower will cause the Bank at all times to be "well
capitalized" as determined in accordance with the regulations of the
Federal Reserve. The Borrower will also cause the Bank to (i) have
total risk-based capital of at least 10% at all times, (ii) to have a
Tier 1 risk-based capital ratio of at least 6.0% at all times, and
(iii) to have a Tier 1 leverage ratio of at least 5.0% at all times
5.6. Use of Proceeds. The Borrower will use advances under the Loan as
described in Section 3.11.
5.7. Notice of Regulatory Action. The Borrower shall promptly notify the
Lender of any action or proposed action taken by any federal or state
bank regulatory agency with respect to the Borrower, the Bank or any of
its directors or officers, including without limitation any cease and
desist order, civil monetary penalty, memorandum of understanding, or
consent agreement.
5.8. Commitment Fees. The Borrower will pay to the Lender in consideration
of the Lender agreeing to provide the credit facility described in
Section 2.1 hereof, a non-refundable fee of $10,000 on the Closing
Date. The Borrower will also pay to the Lender a non-refundable fee of
$25,000 within ten (10) days after the second anniversary of this
Agreement if the Borrower has not repaid the Loan in full on or prior
to such second anniversary.
SECTION 6. NEGATIVE COVENANTS.
The Borrower covenants and agrees that from and after the
Closing Date and so long as the Note remains outstanding and unpaid, in whole or
in part, it will observe the following covenants unless Lender shall otherwise
consent in writing:
6.1. Liens. The Borrower will not create, assume, or suffer to exist any lien,
pledge, charge, security interest or encumbrance of any kind upon any of the
capital stock of the Bank, except the lien and security interest created by the
Pledge Agreement.
6.2. Disposition of Assets. The Borrower will not permit the Bank to liquidate
or dissolve itself (or suffer any liquidation or dissolution), or convey, sell,
lease, pledge, or otherwise transfer or dispose of all or substantially all of
its assets or business.
6.3. Continuance of Business. The Borrower will not engage in any line of
business other than those permitted to be engaged in by a bank holding company.
The Borrower will not permit the Bank to engage in any line of business other
than those permitted to be engaged in by a bank chartered under the laws of the
State of New Jersey.
6.4. Subordinated Debt. Without the prior written consent of the Lender, the
Borrower will not, nor will it permit the Bank to, repay any principal on the
Subordinated Debentures or redeem or repurchase any Subordinated Debentures. The
Borrower may, from time to time, request in writing that the Lender consent to
the Borrower repaying or redeeming all or part of the outstanding principal
amount of the Subordinated Debentures. The Lender will consider any such written
request, but the Lender may withhold its consent in the Lender's absolute and
sole discretion.
SECTION 7. EVENTS OF DEFAULT, REMEDIES.
7.1. Events of Default. The following shall constitute Events of Default:
(a) Nonpayment. Failure by the Borrower to pay the principal of or accrued
interest on the Note or any other instrument evidencing an obligation
of the Borrower to Lender or any other amount payable to Lender,
whether under this Agreement or otherwise, within 15 days after such
amount becomes due.
(b) Falsity of Representations and Warranties. Any representation or
warranty made by the Borrower in this Agreement or in any other Loan
Document or in any certificate, financial or other statement furnished
to the Lender at any time under or in connection with this Agreement or
any other Loan Document shall prove to be false or misleading in any
material respect as of the date when made.
(c) Failure to Perform Certain Covenants. Failure by the Borrower to
observe or perform any other covenants, conditions or provisions
contained in this Agreement, provided that such default shall continue
for a period of 30 days after the earlier of (i) an officer of the
Borrower has knowledge of such default, and (ii) written notice thereof
from Lender to the Borrower.
(d) Default Under Other Obligations. The Borrower or the Bank (i) defaults
in any payment of principal of or interest on any obligations for
borrowed money (other than the Note or any such obligation payable to
Lender) or for the deferred purchase price of property beyond any
period of grace provided with respect thereto, or (ii) defaults in the
performance of any other agreement, term or condition contained in any
such obligation or in any agreement relating thereto, if the effect of
such default is to cause, or to permit the holder or holders of such
obligation (or a trustee on behalf of such holder or holders) to then
cause, such obligation to become due prior to its stated maturity.
(e) Voluntary Bankruptcy, Etc. The commencement by the Borrower of a
voluntary case under the federal bankruptcy laws, as now constituted or
hereafter amended, or any other applicable federal or state bankruptcy,
insolvency, reorganization, rehabilitation or other similar law, or the
consent by it to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or other
similar official) of the Borrower or for any substantial part of its
property, or the making by it of any assignment for the benefit of
creditors, or the failure of the Borrower generally to pay its debts as
such debts become due, or the taking of corporate action by the
Borrower in furtherance of any of the foregoing.
(f) Involuntary Bankruptcy, Etc. The entry of a decree or order for relief
by a court having jurisdiction in the premises in respect of the
Borrower in an involuntary case under the federal bankruptcy laws, as
now or hereafter constituted, or any other applicable federal or state
bankruptcy, insolvency or other similar law, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of the Borrower or for any substantial part of its property,
or ordering the winding-up or liquidation of its affairs and the
continuance of any such decree or order undismissed and in effect for a
period of 60 consecutive days.
7.2. Acceleration. (a) Upon the occurrence of an Event of Default, then, and
in such event, Lender may, by written notice to the Borrower, (i) cease
to make any further advances to the Borrower under the Loan, and (ii)
declare the Note and all other instruments evidencing obligations of
the Borrower to Lender to be due and payable, whereupon the principal
amount of all outstanding obligations of the Borrower to Lender,
together with accrued interest thereon, shall become immediately due
and payable without presentment, demand, protest or other notice of any
kind, all of which are hereby expressly waived, anything contained
herein or in the documents evidencing the same to the contrary
notwithstanding.
(b) Any other provision of this Agreement to the contrary notwithstanding,
upon the occurrence of an Event of Default described in paragraphs (e)
or (f) of Section 7.1, (i) the Lender shall have no obligation to make
any loan or advance to the Borrower under this Agreement, and (ii) the
unpaid principal amount of the Note and the interest accrued thereon
and all other obligations of the Borrower to Lender shall automatically
and immediately become due and payable, in all cases without any action
whatsoever on the part of Lender.
7.3. Right of Setoff. Upon the occurrence of an Event of Default, Lender
shall have the right, in addition to all other rights and remedies
available to it, to set off against the unpaid balance of the Note, any
debt owing to the Borrower by Lender and any funds in any deposit
account maintained by the Borrower with Lender.
7.4. No Marshalling, Etc. Required. If an Event of Default shall have
occurred and be continuing, Lender shall not be required to marshal any
present or future security for, or guarantees of, the Note held by it
or to resort to any such security or guarantee in any particular order
and the Borrower waives, to the fullest extent that it lawfully can,
(i) any right it might have to require Lender to pursue any particular
remedy before proceeding against it, and (ii) any right to the benefit
of, or to direct the application of the proceeds of any Collateral
until the Note has been paid in full.
SECTION 8. MISCELLANEOUS.
8.1. No Waiver; Cumulative Remedies. No failure or delay on the part of Lender
in exercising any right, power or privilege hereunder or under the Note or any
of the other Loan Documents shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, power or privilege hereunder or
thereunder preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. Lender shall not be deemed, by any act of
omission or commission, to have waived any of its rights or remedies hereunder
unless such waiver is in writing and signed by Lender, and then only to the
extent specifically set forth in writing. The waiver on one event shall not be
construed as continuing or as a bar to or a waiver of any right or remedy to a
subsequent event. The rights and remedies herein provided are cumulative and not
exclusive of any rights or remedies provided by law.
8.2. Notices. All notices, requests and demands to or upon the respective
parties hereto must be in writing and shall be deemed to have been given or made
(i) three (3) Business Days after deposited in the United States mail, postage
prepaid, registered or certified mail, return receipt requested, (ii) on the
next Business Day if sent by a nationally recognized commercial courier
promising next Business Day delivery and requiring receipt for delivery (such as
Federal Express), or (iii) when hand delivered to the receiving party, addressed
as follows or to such other address as may be hereafter designated in writing by
the respective parties hereto:
If to the Borrower: Cornerstone Financial Corp.
6000 Midlantic Drive, Suite 120S
Mount Laurel, NJ 08054
Attention: Keith Winchester
If to the Lender: Atlantic Central Bankers Bank
1400 Market Street
Camp Hill, PA 17011
Attention: William H. Sayre
8.3. Reimbursement of Lender. The Borrower hereby agrees to reimburse Lender for
its reasonable legal counsel fees incurred in connection with the development,
preparation, and execution of this Agreement and all Exhibits hereto. Such
expenses and counsel fees shall be paid simultaneously with the execution of
this Agreement. The Borrower hereby agrees to reimburse Lender for its
reasonable out-of-pocket expenses, including counsel fees, incurred in
connection with the enforcement of this Agreement and all Exhibits hereto. Such
expenses and counsel fees shall be paid within 15 days after notice by Lender.
8.4. Payment of Expenses and Taxes. In addition to payment of the expenses and
counsel fees provided for in subsection 8.3, the Borrower agrees to pay, and to
save Lender harmless from any delay in paying, stamp and other similar taxes, if
any, which may be payable or determined to be payable in connection with the
execution and delivery of this Agreement and all Exhibits hereto or any
modification of any thereof or any waiver or consent under or in respect of any
thereof.
8.5. Survival of Representations and Warranties. All representations,
warranties, covenants and agreements made in this Agreement and in any
certificates delivered pursuant hereto shall survive the execution and delivery
of this Agreement, the making of the Loan hereunder and the issuance of the
Note, and the provisions of subsections 8.3 and 8.4 hereof shall survive payment
of the Note and all other instruments evidencing obligations of the Borrower to
Lender.
8.6. Participations. The Borrower agrees that Lender may grant participations to
others in the Loan.
8.7. Successors. This Agreement shall be binding upon and inure to the benefit
of the Borrower and Lender and their respective successors and assigns, except
that the Borrower may not assign or transfer its rights hereunder without the
prior written consent of Lender.
8.8. Construction. This Agreement and the rights and obligations of the parties
hereunder and thereunder shall be governed by, and construed and interpreted in
accordance with, the laws of the Commonwealth of Pennsylvania.
8.9. Severability. Any provision contained in this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provisions in any other jurisdiction.
8.10. Waiver of Trial by Jury. Each party to this Agreement agrees that any
suit, action, or proceeding, whether claim or counterclaim, brought or
instituted by any party hereto or any successor or assign of any party on or
with respect to this Agreement or any other document which in any way relates,
directly or indirectly, to the Loan or any event, transaction, or occurrence
arising out of or in any way connected with the Loan, or the dealings of the
parties with respect thereto, shall be tried only by a court and not by a jury.
EACH PARTY HEREBY EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH
SUIT, ACTION, OR PROCEEDING. THE BORROWER ACKNOWLEDGES AND AGREES THAT THIS
SECTION 8.10 IS A SPECIFIC AND MATERIAL ASPECT OF THIS AGREEMENT BETWEEN THE
PARTIES AND THAT THE LENDER WOULD NOT EXTEND THE LOANS TO THE BORROWER IF THIS
WAIVER OF JURY TRIAL SECTION WERE NOT A PART OF THIS AGREEMENT.
8.11. Indemnity. The Borrower hereby agrees, whether or not any of the
transactions contemplated in the Loan Documents shall be consummated, to pay,
assume liability for, and indemnify, protect, defend, save and keep harmless the
Lender from and against, any and all liabilities, obligations, losses, damages,
settlements, claims, actions, suits, penalties, costs and expenses (including,
but not limited to, legal and investigative fees and expenses) of whatsoever
kind and nature, including, but not limited to claims based upon negligence,
strict or absolute liability, liability in tort, latent and other defects
(whether or not discoverable), and any claim for patent, trademark or copyright
infringement which may from time to time be imposed on, incurred by or asserted
against the Lender (whether or not any such claim is also indemnified or insured
against by any other person) in any way relating to or resulting from this
Agreement, any Loan Document, or any of the transactions contemplated herein or
therein. The provisions of this Section 8.11 (i) shall not apply if a court of
law having jurisdiction over the Lender finds in a nonappealable order that such
liabilities, obligations, losses, damages, costs and expenses arise out of the
gross negligence or willful misconduct of the Lender, and (ii) shall survive the
payoff, release, foreclosure or other disposition, as applicable, of this
Agreement, the Loan, any other obligations evidenced by the Loan Documents, or
the Collateral.
8.12. Entire Agreement. This Agreement and the Loan Documents represent the
entire agreement between the Lender and the Borrower with respect to the
financing transactions to which they relate, and cannot be changed or amended
except by an agreement in writing signed by the party against whom enforcement
of the change or amendment is sought.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
Cornerstone Financial Corp.
By
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Name:
Title:
Atlantic Central Bankers Bank
By
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Name:
Title: