SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) - April 20, 1994
NORTH FORK BANCORPORATION, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-10280 36-3154608
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
9025 Main Road
Mattituck, New York 11952
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (516) 298-5000
Item 5. Other Events
On April 20, 1994 North Fork Bancorporation, Inc.
(the "Registrant") issued in a private placement a $25
million 7.56% Senior Note (the "Note") maturing April 20,
1999 to Allstate Life Insurance Company.
The proceeds were used to retire, prior to maturity,
its $20 million 10.08% Senior Note which was due March
31, 1995 (the "Old Note"). The remainder of the proceeds
less expenses associated with the retirement of the Old
Note will be used for general corporate purposes.
The Note Purchase Agreement pursuant to which the
Note was issued (the "Agreement") contains certain
covenants relating to, among other things, the
maintenance of certain consolidated tangible net worth
and total risk based capital levels, limitations on the
payment of dividends and the repurchase of common stock
and the maintenance of certain non-performing asset
levels.
The foregoing is only a summary of the provisions of
the Note and the Agreement and is qualified in its
entirety by reference to the Agreement which is attached
hereto as Exhibit 10(a), and is incorporated herein by
reference.
Item 7. Financial Statements, Pro Forma Financial
Information and Exhibits.
10(a). Note Purchase Agreement, dated as of April 20,
1994, between the Registrant and Allstate Life
Insurance Company.
SIGNATURE
Pursuant to the requirements of the Securities
Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned
thereunto duly authorized.
Date: April 25, 1994
NORTH FORK BANCORPORATION, INC.
By: Daniel M. Healy
Daniel M. Healy
Executive Vice President
& Chief Financial Officer
Exhibit Index
Exhibit Number Description Page
10(a) Note Purchase Agreement, dated
as of April 20, 1994, between
the Registrant and Allstate Life
Insurance Company
CONFORMED COPY
NORTH FORK BANCORPORATION, INC.
NOTE PURCHASE AGREEMENT
Dated as of April 20, 1994
$25,000,000 in Principal Amount of
7.56% Senior Notes
due April 20, 1999
The following Table of Contents has been inserted for
convenience only and does not constitute a part of the
Note Purchase Agreement.
TABLE OF CONTENTS
NOTE PURCHASE AGREEMENT
Page
SECTION 1 DESCRIPTION OF NOTES AND COMMITMENT
1.1 Description of Notes . . . . . . . ... 1
1.2 Commitment; Closing Date . . . . . . . 2
1.3 Use of Proceeds . . . . . . . . . . . . 3
SECTION 2 PREPAYMENT OF NOTES
2.1 No Required Prepayments . . . . . . . . 3
2.2 Optional Prepayment . .................. 3
2.3 Notice of Prepayments . . . . . . . . . 3
2.4 Surrender of Notes on Prepayment . . . 4
2.5 Direct Payment . . . . . . . . . . . . 4
2.6 Allocation of Prepayments . . . . . . . 4
2.7 Payments Due on Saturdays, Sundays and
Holidays . . . . . . . . . . . . .... 5
2.8 Prepayment on Change in Ownership . . . 5
SECTION 3 REPRESENTATIONS
3.1 Representations of the Company . . . . 7
3.2 Representations of the Purchaser . . . 7
SECTION 4 CLOSING CONDITIONS
4.1 Company Closing Certificate . . . . . . 8
4.2 Legal Opinions . . . . . . . . . . . . 8
4.3 Proceedings and Documents . . . . . . . 12
4.4 Legality of Investment . . . . . . . . 12
4.5 Private Placement Number . . . . . . . 13
4.6 Consents and Approvals . . . . . . . . 13
4.7 Waiver of Conditions . . . . . . . . . 13
SECTION 5 COMPANY AFFIRMATIVE COVENANTS
5.1 Corporate Existence . . . . . . . . . . 13
5.2 Insurance . . . . . . . . . . . . . . . 13
5.3 Taxes, Claims for Labor and
Materials . . . . . . . . . . . . . . 14
5.4 Maintenance of Properties, Etc. . . . . 14
5.5 Financial Information and Reports . . . 15
5.6 Inspection of Properties and Records . 18
5.7 Compliance with Laws . . . . . . . . . 19
5.8 Character of Business . . . . . . . . . 19
5.9 Capital Reserves; Capital . . . . . . . 20
5.10 Rule 144A Information . . . . . . . . . 20
SECTION 6 COMPANY NEGATIVE COVENANTS
6.1 Dividends, Stock Purchases and
Distributions, Etc. . . . . . . . . . 20
6.2 Restrictions on Indebtedness . . . . . 22
6.3 Consolidated Tangible Net Worth;
Risk-Based Capital . . . . . . . . . 23
6.4 Guarantees . . . . . . . . . . . . . . 23
6.5 Mortgages and Liens . . . . . . . . . . 23
6.6 Leases . . . . . . . . . . . . . . . . 24
6.7 Mergers, Consolidations, Sale
of Assets . . . . . . . . . . . . . . 25
6.8 Restrictions on Acquiring Deposit
Taking Institutions . . . . . . . . . . 26
6.9 Preferred Stock of Restricted
Subsidiaries . . . . . . . . . . . . 27
6.10 Disposition of Securities of
Restricted Subsidiaries . . . . . . . 27
6.11 Additional Limitations on Indebtedness
of Restricted Subsidiaries . . . . . 27
6.12 Transactions with Affiliates . . . . . 28
6.13 Designation of Additional Restricted
Subsidiaries . . . . . . . . . . . . 28
6.14 ERISA Compliance . . . . . . . . . . . 29
6.15 Tax Consolidation . . . . . . . . . . . 30
6.16 Acquisition of Notes . . . . . . . . .. 30
6.17 Nonperforming Assets . . . . . . . . . 30
SECTION 7 EVENTS OF DEFAULT AND REMEDIES THEREFOR
7.1 Nature of Events . . . . . . . . . . . 30
7.2 Remedies of Holders of Notes
on Default . . . . . . . . . . . . . 32
7.3 Annulment of Acceleration of Notes . . 33
7.4 Conduct No Waiver; Collection of
Expenses . . . . . . . . . . . . . . 34
7.5 Remedies Cumulative . . . . . . . . . . 34
7.6 Cooperation by the Company . . . . . . 34
7.7 Notice of Default . . . . . . . . . . . 34
SECTION 8 AMENDMENTS, WAIVERS AND CONSENTS
8.1 Matters Subject to Modification . . . . 35
8.2 Binding Effect . . . . . . . . . . . . 36
SECTION 9 FORM OF NOTES, REGISTRATION, TRANSFER, EXCHANGE
AND REPLACEMENT
9.1 Form of Notes . . . . . . . . . . . . . 36
9.2 Note Register . . . . . . . . . . . . . 36
9.3 Issuance of New Notes Upon Exchange
or Transfer . . . . . . . . . . . . . 36
9.4 Replacement of Notes . . . . . . . . . 37
SECTION 10 INTERPRETATION OF AGREEMENT
10.1 Certain Terms Defined . . . . . . . . . 37
10.2 Accounting Principles . . . . . . . . . 51
10.3 Directly or Indirectly . . . . . . . . 51
10.4 Valuation Principles . . . . . . . . . 51
SECTION 11 MISCELLANEOUS
11.1 Expenses . . . . . . . . . . . . . . . 52
11.2 Notices . . . . . . . . . . . . . . . . 52
11.3 Reproduction of Documents . . . . . . . 53
11.4 Successors and Assigns . . . . . . . . 53
11.5 Governing Law . . . . . . . . . . . . . 54
11.6 Headings . . . . . . . . . . . . . . . 54
11.7 Counterparts . . . . . . . . . . . . . 54
11.8 Reliance on and Survival of
Provisions . . . . . . . . . . . . . 54
11.9 Integration and Severability . . . . . 54
APPENDICES:
Annex I - Purchaser Information
Exhibit A - Form of Note
Exhibit B - Form of Company Closing Certificate
Exhibit C - Form of Report on Nonperforming Assets
Annex A - List of Subsidiaries
NORTH FORK BANCORPORATION, INC.
NOTE PURCHASE AGREEMENT
$25,000,000 in Principal Amount of
7.56% Senior Notes
due April 20, 1999
Dated as of April 20, 1994
ALLSTATE LIFE INSURANCE COMPANY
3100 Sanders Road, Suite J2A
Northbrook, Illinois 60062-7154
Attn: Investment Department-
Private Placement Division
Gentlemen:
The undersigned NORTH FORK BANCORPORATION, INC.,
a Delaware corporation (the "Company"), hereby agrees
with you as follows:
SECTION 1 DESCRIPTION OF NOTES AND COMMITMENT
1.1 Description of Notes. (a) The Company has
duly authorized the issuance and sale, on terms
hereinafter provided, of its 7.56% Senior Notes in the
aggregate principal amount of $25,000,000 due April 20,
1999 (herein collectively called the "Notes").
(b) Each Note will have a final maturity of
April 20, 1999, will bear interest (computed on the
basis of a 360-day year of twelve 30-day months) on the
unpaid portion of the principal amount thereof, payable
in semiannual installments on April 20 and October 20
in each year commencing with the October 20 next
succeeding the date of such Note, at the rate of 7.56%
per annum, from the date of such Note until such unpaid
portion of such principal shall have become due and
payable (whether at maturity, by acceleration or
otherwise), and on any overdue portion of such
principal amount, premium, if any, and, to the extent
permitted by applicable law, any overdue payment of
interest, at a rate per annum from time to time equal
to the greater of (i) 9.56% or (ii) the rate of
interest publicly announced by Harris Trust and Savings
Bank in Chicago, Illinois from time to time as its
Prime Rate plus 1% until paid, and will be in
substantially the form of Exhibit A to this Agreement.
(c) Any reference to you in this Agreement
shall in all instances be deemed to include any nominee
of yours on whose behalf you are purchasing the Notes
to be purchased by you. You are sometimes referred to
herein as the "Purchaser."
1.2 Commitment; Closing Date. Subject to the
terms and conditions herein set forth, the Company
agrees to issue and sell to you, and, in reliance upon
the representations and warranties of the Company
contained herein, you agree to purchase from the
Company, Notes in the principal amount set opposite
your name under the heading "Principal Amount of Note
to be Purchased" in Annex I hereto, at a purchase price
of 100% of the principal amount thereof. Such a
purchase and sale shall herein be called the "Closing."
Execution and delivery of the Notes shall take
place at the offices of Messrs. Arnold & Porter, 399
Park Avenue, New York, New York at 9:00 a.m. New York
City time, on the Closing Date, at which time the
Company shall deliver to you, a Note (or, if you shall
have so requested prior to the Closing Date, Notes in
denominations authorized by Section 9.1 of this
Agreement), in each case dated the Closing Date, and in
an aggregate principal amount set opposite your name in
Annex I hereto. Each Note shall be registered in your
name or in such other name or names set forth in
Annex I, as you may have designated to the Company
prior to the Closing Date. The Closing Date shall be
April 20, 1994 or such later date as may be agreed in
writing by the Company and you.
Delivery of the Notes to be purchased by you
shall be against (i) payment of the purchase price
thereof, less the full amount required to prepay in
full the Old Notes (including accrued interest and the
Amended Make-Whole Premium), in immediately available
funds transmitted to North Fork Bank, ABA No. 0214-
0791-2 for credit to North Fork Bancorporation, Inc.,
Account No. 422-400291-7 and (ii) delivery by you of
the Old Notes.
The Amended Make-Whole Premium as of the Closing
Date shall be determined by the Company two (2)
Business Days before the Closing Date, and the Company
shall give you notice on such date of determination of
the amount of such Amended Make-Whole Premium, together
with the calculations by which such amount was
determined.
1.3 Use of Proceeds. As more fully described
in paragraph 19 of the Closing Certificate annexed
hereto as Exhibit B, the net proceeds of the sale of
the Notes will be used by the Company to prepay in full
the Old Notes and for general corporate purposes.
SECTION 2 PREPAYMENT OF NOTES
2.1 No Required Prepayments. Except as
required by Section 2.8 hereof, so long as no Event of
Default has occurred and is continuing, the Notes shall
not be subject to required prepayments.
2.2 Optional Prepayment. The Company may at
its option prepay the Notes at any time, and from time
to time, in whole or in part, but if in part then in
units of $100,000 or integral multiples of $10,000 in
excess thereof, (a) at 100% of the principal amount of
the Notes so to be prepaid, (b) plus accrued interest
thereon to the date fixed for such prepayment, and (c)
plus the Make-Whole Amount.
2.3 Notice of Prepayments. The Company shall
give each Holder of the Notes not less than thirty (30)
days or more than sixty (60) days prior written notice
of any optional prepayment of the Notes pursuant to
Section 2.2 hereof, specifying (a) the date fixed for
the prepayment, (b) the principal amount of the
Holder's Notes to be prepaid on such date, and (c) the
accrued interest applicable to the prepayment. Notice
of prepayment having been so given, the aggregate
principal amount of the Notes specified in such notice,
together with the Make-Whole Amount, if any, and
accrued interest thereon, shall become due and payable
on the specified prepayment date. The Make-Whole
Amount payable with respect to any prepayment pursuant
to Section 2.2 shall be determined by the Company three
(3) Business Days before the prepayment date, and the
Company shall give notice on such date to each Holder
of the Notes of the amount of such Make-Whole Amount
upon its determination, together with the calculations
by which such amount was determined.
2.4 Surrender of Notes on Prepayment. Subject
to Section 2.5 hereof, upon any partial prepayment of a
Note, the Holder thereof shall have the option to, but
shall not be required to, (a) surrender the Note to the
Company pursuant to Section 9.3 hereof in exchange for
a new Note in a principal amount remaining unpaid on
the surrendered Note, or (b) make the Note available to
the Company for notation thereon of the portion of the
principal so prepaid. In case the entire principal
amount of any Note is prepaid, such Note shall be
surrendered to the Company for cancellation and shall
not be reissued.
2.5 Direct Payment. Notwithstanding any other
provision contained in the Notes or this Agreement, the
Company will pay all sums becoming due on each Note
held by you, without setoff or counterclaim, at the
address specified for such purpose by you in Annex I
hereto, by wire transfer of immediately available
funds, or at such other address or by such other method
as you shall have designated by notice to the Company
at least five (5) business days prior to the date of
any payment, in each case without presentment and
without notations being made thereon, except that any
such Note so paid or prepaid in full shall be
surrendered to the Company for cancellation. Any wire
transfer shall identify such payment as "North Fork
Bancorporation, Inc. 7.56% Senior Note due April 20,
1999" and shall identify the payment as principal,
Make-Whole Amount and/or interest. Before selling or
otherwise transferring any Note, you agree that you
will make a notation thereon of the aggregate amount of
all payments of principal theretofore made and of the
date to which interest has been paid. If the
transferee of any Note held by you is an Institutional
Holder or its nominee and shall request the Company to
make all payments on account of such Note by wire
transfer of immediately available funds at an address
specified in such request, the Company will make such
payments in compliance with such request, provided that
such Institutional Holder undertakes in such request
the same obligations in respect of such Note as those
undertaken by you in the immediately preceding
sentence.
2.6 Allocation of Prepayments. If there is
more than one Holder of the Notes and if less than the
entire principal amount of all the Notes outstanding is
to be prepaid, the Company will allocate the aggregate
principal amount to be prepaid, among the outstanding
Notes in proportion to the unpaid principal amounts
thereof, and, to the extent that any proportionate
allocation shall not result in an even multiple of
$1,000, adjustment shall be made in the proportionate
prepayments to the nearest even multiple of $1,000.
2.7 Payments Due on Saturdays, Sundays and
Holidays. In any case where any interest payment date
on the Notes or the date fixed for any prepayment of
any Note shall be on a Saturday, Sunday or a legal
holiday or a day on which banking institutions are
authorized or required by law to close in New York, New
York or Chicago, Illinois, then such payment or
prepayment need not be made on such date but may be
made on the next succeeding business day not a
Saturday, Sunday or a legal holiday or a day upon which
banking institutions are so authorized by law to close,
with the same force and effect as if made on the due
date. The Company will in each year determine in
advance whether any payments in that year would fall on
such dates and will arrange in advance for payment,
including interest payments in full, to be made on such
next succeeding business day.
2.8 Prepayment on Change in Ownership. (a) In
the event that a Change in Ownership shall occur
without the prior written consent of the Holders of all
the Notes at the time outstanding, the Company shall,
within five (5) Business Days after the Company has
obtained knowledge of such Change in Ownership, make a
request in writing to the Holders of the Notes for a
consent to such Change in Ownership and in the event
that the Holder of any Note shall have failed or
refused, for a period of thirty (30) days following the
receipt of such request, to consent in writing to such
Change in Ownership, then the Company shall, within
sixty (60) days after the expiration of such thirty
(30) day period, prepay in whole the principal amount
of and interest accrued on the Notes to the date fixed
for such prepayment of each Holder who has failed or
refused to consent to such Change in Ownership, plus,
to the extent permitted by law, the Make-Whole Amount
that would be payable if the Company then had elected
to prepay the entire outstanding principal amount of
the Notes pursuant to Section 2.2; provided, however,
that the Company shall not be required to make such a
request, and no prior written consent or prepayment
shall be required, in respect of a Change in Ownership,
if at the time of such Change in Ownership and prior to
giving effect thereto, the acquiror (the "Acquiror")
(i) is a bank holding company registered with the
Federal Reserve Board and has substantially all of its
assets and conducts substantially all of its business
in the United States, (ii) complies with the federal
capital adequacy provisions as in effect on the date
hereof and as in effect at the time of such Change in
Ownership, (iii) assumes in writing the punctual
payment of principal, interest and premium, if any, on
the Notes according to their tenor and the due and
punctual performance and observance of all covenants in
this Agreement and the Notes, and (iv) the Acquiror's
senior securities have ratings of "A-" or better from
Standard & Poors Corporation or "A3" or better from
Moody's Investor Services or a rating of "A" or better
from Thomson BankWatch long-term debt rating service
applicable to fixed income securities.
In addition to the foregoing, the Company shall
provide to the Holders who shall not have been prepaid
pursuant to this Section 2.8(a) a written notice
setting forth the principal amount of the Notes the
Company was required to prepay.
(b) Any request by the Company required to
be provided to the Holders of the Notes by this Section
2.8 shall set forth:
(i) the name and address of the
Acquiror;
(ii) a description of the business of
the Acquiror;
(iii) an audited balance sheet, audited
income statement and audited statement of cash flows
for each of the three (3) most recently completed
fiscal years of the Acquiror;
(iv) a description of the terms of the
transaction resulting in such Change in Ownership;
(v) a timetable for the consummation of
the transaction resulting in such Change in Ownership,
including the date for the prepayment in whole of the
principal amount of, interest accrued on and premium
applicable to the Notes of Holders failing or refusing
to consent to such Change in Ownership;
(vi) where applicable, a pro forma
consolidated balance sheet of the Acquiror reflecting
the consolidated financial position of the Acquiror
immediately after consummation of the transaction
resulting in such Change in Ownership; and
(vii) such other information and data
concerning the transaction resulting in such Change in
Ownership or the parties thereto as may be reasonably
requested by you.
SECTION 3 REPRESENTATIONS
3.1 Representations of the Company. The
Company represents and warrants that all
representations and warranties set forth in the form of
the Closing Certificate annexed hereto as Exhibit B are
true and correct as of the date of this Agreement and
are hereby incorporated herein by reference with the
same force and effect as though herein set forth in
full.
3.2 Representations of the Purchaser. You
represent and warrant, as follows:
(a) You are an "accredited investor" within
the meaning of Regulation D promulgated under the
Securities Act of 1933.
(b) You hereby acknowledge that you have
made, and are solely responsible for making, your own
independent evaluation of the economic, credit and
other risks involved in your investment in the Notes
and your own independent decision to make such
investment.
(c) You represent that you are purchasing
the Notes for investment for your own account or for a
separate account maintained by you and with no present
intention of distributing or reselling such Notes or
any part thereof to anyone other than an affiliated
entity, subject, nevertheless, to any requirements of
law that the disposition thereof by you shall at all
times be within your control and, without prejudice,
however, to your right at all times to sell or
otherwise dispose of all or any part of the Notes under
a registration statement under the Securities Act of
1933, as amended, or under a registration exemption
available under that Act. It is understood that, in
making the representations set out in paragraph 14 of
the Closing Certificate attached as Exhibit B to this
Agreement, the Company is relying, to the extent
applicable, upon your representation made in this
Section 3.2(a).
(d) You acknowledge that the Notes to be
purchased by you have not been registered under the
Securities Act of 1933, as amended, or the securities
laws of any state, as amended, and you understand that
the Notes to be purchased by you must be held
indefinitely unless they are subsequently registered
under such Securities Act and such laws or an exemption
from such registration is available. Your acquisition
of the Notes to be purchased by you on the Closing Date
shall constitute your reaffirmation of the
representations made in this Section 3.2.
SECTION 4 CLOSING CONDITIONS
Your obligation to purchase and pay for the
Notes to be delivered to you on the Closing Date shall
be subject to the performance by the Company of its
agreements hereunder which by the terms hereof are to
be performed at or prior to the time of delivery of the
Notes and to the following conditions to be satisfied
on or before such Closing Date:
4.1 Company Closing Certificate. You shall
receive from the Company a Closing Certificate dated
the Closing Date, and executed by the President,
Executive Vice President, Senior Vice President or
Treasurer of the Company, in substantially the form
annexed hereto as Exhibit B, the truth and accuracy of
which shall be a condition to your obligation to accept
and pay for the Notes to be purchased by you on the
Closing Date.
4.2 Legal Opinions. (a) You shall receive on
the Closing Date from Messrs. Arnold & Porter of New
York, New York, your special counsel in connection with
the transactions contemplated by this Agreement, their
opinion, dated the Closing Date, in substantially the
following form:
(i) The Company is a duly incorporated
and validly existing corporation in good
standing under the laws of the State of Delaware
and has all requisite corporate power and
corporate authority to conduct the business now
being conducted by it and to execute, deliver
and perform the Agreement and to execute, issue,
sell and deliver the Notes to you.
(ii) The Agreement and the Notes being
purchased by you have been duly authorized by
all necessary corporate action on the part of
the Company, have been duly executed and
delivered by authorized officers of the Company,
and constitute the legal, valid and binding
obligations of the Company enforceable in
accordance with their respective terms, except
to the extent that such enforceability is
limited by bankruptcy, insolvency,
reorganization, moratorium, receivership or
similar laws affecting or relating to the
enforcement of creditors' rights generally or by
equitable principles (regardless of whether
enforcement is sought in a proceeding in equity
or at law).
(iii) It is not necessary, in
connection with the offer, issuance, sale and
delivery of the Notes being purchased by you, to
register the Notes under the Securities Act of
1933, as amended, or to comply with any
provisions of the Trust Indenture Act of 1939,
as amended, assuming the existence of the facts
and circumstances contemplated by the Agreement,
including the truth and accuracy of the
representations set forth in the Agreement.
(iv) Neither the execution, delivery
and performance of the Agreement or the
execution, issuance, sale and delivery of Notes
being purchased by you on the Closing Date, nor
the consummation of the transactions therein
contemplated, nor compliance with the terms,
conditions and provisions thereof, by the
Company will conflict with, or result in a
breach or violation of, the provisions of the
certificate of incorporation or the by-laws of
the Company.
(v) The issuance of the Notes and the
use of the proceeds of the sale of the Notes in
accordance with the provisions of and as
contemplated by the Agreement do not violate or
conflict with Regulation G, T or X of the Board
of Governors of the Federal Reserve System
(12 C.F.R. Chapter II), assuming the truth and
accuracy of the Company's representations and
warranties as to factual matters contained in
paragraph 19 of Exhibit B to the Agreement.
(vi) While said special counsel has
made no independent investigation with respect
to the additional matters covered in the legal
opinion referred to in clause (b) below, it
appears to them to be satisfactory in form and
scope and nothing has come to their attention
that would cause them to believe that you and
they are not entitled to rely on the legal
conclusions expressed therein.
(b) You shall receive on the Closing Date
from Skadden, Arps, Slate, Meagher & Flom, counsel to
the Company, their opinion, dated the Closing Date, in
form and substance satisfactory to you, which opinion
shall cover substantially all matters specified in
clauses (ii) through (v) of (a) above, and shall also
be substantially to the effect that:
(i) Each Bank Restricted Subsidiary is
a banking corporation duly chartered and in good
standing under the jurisdiction of its origin;
and each Bank Restricted Subsidiary has all
requisite corporate power and corporate
authority to carry on its business as now
conducted and to own its property.
(ii) The Company and each of the Bank
Restricted Subsidiaries are duly qualified to do
business in the State of New York.
(iii) The Company has been duly
incorporated and is validly subsisting and is in
good standing under the laws of the State of
Delaware, has all requisite corporate power to
conduct the business now being conducted by it
and to execute, deliver and perform the
Agreement and to execute, issue, sell and
deliver the Notes to you and is registered as a
bank holding company under Section 3(a) of the
Bank Holding Company Act of 1956, as amended.
(iv) No order, authorization, approval,
license, or consent of, or exemption or other
action by, or notice to, registration or filing
with, any United States, New York or Illinois
governmental authority, court, commission,
board, bureau, agency or other judicial or
regulatory authority, and no filing, recording,
publication or registration with any such United
States, New York or Illinois authority is
required in connection with the execution,
delivery and performance by the Company of the
terms and conditions of this Agreement, or in
connection with the issuance, offer, sale and
delivery of the Notes. The opinion set forth in
this paragraph (iv) shall be limited to the
provisions and requirements of the Federal
securities laws and the securities laws of the
States of New York and Illinois.
(v) The execution and delivery by the
Company of this Agreement, the issuance, sale
and delivery of the Notes and the performance by
the Company of its obligations under this
Agreement will not violate or be in conflict
with any law (including, but not limited to any
applicable banking law) of the States of New
York, Illinois or Delaware or the United States.
(vi) All of the outstanding capital
stock of each of the Bank Restricted
Subsidiaries is owned of record by the Company,
and, after due inquiry, nothing has come to the
attention of such counsel that would lead it to
believe that the Company is not also the
beneficial owner of such capital stock.
(vii) To the best knowledge of such
counsel, after due inquiry of officers of the
Company who have knowledge of and customarily
monitor such matters, and members of the law
firms identified to such counsel as the law
firms retained to represent the Company and its
Restricted Subsidiaries in such matters, other
than law firms retained by insurance companies
that are controlling the litigation of such
matters, nothing has come to the attention of
such counsel that would lead them to believe
that, there are any actions, suits,
investigations or proceedings pending against or
affecting the Company or any Restricted
Subsidiary, at law or in equity or before or by
any federal, state, municipal or other
governmental department, commission, board,
bureau, agency or instrumentality or court,
arbitrator or grand jury, domestic or foreign,
which may result, either individually or
collectively, in any material adverse change in
the business, properties, operations or
condition, financial or otherwise, of the
Company and its Restricted Subsidiaries, taken
as a whole, or in the ability of the Company to
perform this Agreement and the Notes.
Such opinion shall also cover such other matters
incident to the transactions contemplated hereby as you
or your special counsel may reasonably request. In
giving their opinion, counsel for the Company may rely,
as to matters of fact, upon certain representations in
this Agreement and upon a certificate or certificates
of an officer or officers of the Company and any
Restricted Subsidiary and, as to the good standing of
the Company or any Restricted Subsidiary, upon
certificates of good standing or similar certificates
issued by appropriate governmental authorities. In
each case such certificates shall be satisfactory to
your special counsel.
4.3 Proceedings and Documents. All proceedings
taken in connection with the transactions contemplated
by this Agreement, and all documents incidental hereto,
shall be satisfactory in form, scope and substance to
you and to your special counsel, and you and your
special counsel shall have received copies (executed or
certified as may be appropriate) of all documents or
proceedings in connection with such transactions,
including, without limitation, copies of the records of
all corporate proceedings in connection therewith and
compliance with the conditions set out in this
Section 4, which you and your special counsel may
reasonably request in connection with such
transactions.
4.4 Legality of Investment. On and as of the
Closing Date, the purchase and payment for the Notes by
you shall qualify as a legal investment for you under
all laws and regulations applicable to investments by
you (without resort to any "basket" or "leeway"
provisions which permit the making of an investment
without restriction as to the character of the
particular investment being made), and such payment and
purchase of the Notes by you shall not subject you to
any penalty or other materially adverse condition in or
pursuant to any such law or regulation. The Company
shall have delivered to you on or prior to the Closing
Date such certificates or other evidence as you may
reasonably request to establish compliance with this
condition.
4.5 Private Placement Number. The Company
shall have obtained a private placement number.
4.6 Consents and Approvals. At the Closing,
all consents, authorizations, orders or approvals
required or sought in connection with the offer and
sale to you and the purchase of the Notes by you shall
have been obtained, and no material adverse terms or
conditions shall have been imposed by any party, or
voluntarily agreed to by any party in connection with
granting any such consent, authorization, order or
approval.
4.7 Waiver of Conditions. If on the Closing
Date the Company fails to tender to you the Notes to be
issued to you on such date or if the conditions
specified in this Section 4 have not been fulfilled,
you may thereupon elect to be relieved of all further
obligations under this Agreement. Without limiting the
foregoing, if the conditions specified in this Section
4 have not been fulfilled, you may waive compliance by
the Company with any such condition to such extent as
you in your sole discretion may determine. Nothing in
this Section 4.7 shall operate to relieve the Company
of any of its obligations hereunder or to waive any of
your rights against the Company.
SECTION 5 COMPANY AFFIRMATIVE COVENANTS
The Company covenants and agrees that:
5.1 Corporate Existence. The Company will
preserve and maintain, and cause each Restricted
Subsidiary to preserve and maintain, its corporate
existence, rights (charter and statutory) and
franchises unless the corporate existence of the
Company or of any Restricted Subsidiary shall be
discontinued as a result of a transaction in accordance
with the provisions of Section 6.7 or Section 6.10
hereof.
5.2 Insurance. The Company will maintain, and
will cause each Restricted Subsidiary to maintain,
insurance coverage by financially sound and reputable
insurance companies or associations, against such
casualties and contingencies, of a character (including
public liability, larceny and embezzlement or other
criminal misappropriation insurance with respect to
Bank Restricted Subsidiaries which are commercial and
savings banks) usually insured against by companies of
established reputation engaged in the same or similar
businesses similarly situated and owning and operating
similar properties, in amounts customarily insured
against by such companies. The Company shall furnish
you on or prior to the Closing Date with a summary of
insurance presently in force in a separate letter.
5.3 Taxes, Claims for Labor and Materials. The
Company will duly pay and discharge, and will cause
each Restricted Subsidiary to duly pay and discharge,
before the same shall become delinquent, all taxes,
assessments and governmental charges, levies or claims
lawfully levied or imposed upon the Company or such
Restricted Subsidiary, respectively, or upon or in
respect of all or any part of the property, assets,
earnings or business of the Company or such Restricted
Subsidiary; provided, however, nothing contained in
this Section 5.3 shall require either the Company or
any Restricted Subsidiary to pay and discharge, or
cause to be paid and discharged, any tax, assessment,
charge, levy or claim so long as the Company or such
Restricted Subsidiary in good faith shall contest the
validity thereof by appropriate proceedings that will
prevent the forfeiture or sale of any property and
shall set aside on its books adequate reserves with
respect thereto to the extent required by generally
accepted accounting principles. The Company will
promptly pay and discharge, and will cause each
Restricted Subsidiary to pay and discharge promptly all
trade accounts payable in accordance with usual and
customary business terms; and all claims for work,
labor or materials, which if unpaid might become a
lien, encumbrance or charge upon any property or assets
of the Company or any Restricted Subsidiary; provided,
however, that nothing contained in this Section 5.3
shall require either the Company or any Restricted
Subsidiary to pay, or cause to be paid, any such
account payable or claim so long as the Company or such
Restricted Subsidiary in good faith shall contest the
validity thereof by appropriate proceedings that will
prevent a forfeiture or sale of any property.
5.4 Maintenance of Properties, Etc. The
Company will maintain, preserve, protect and keep, and
will cause the Restricted Subsidiaries to maintain,
preserve, protect and keep, its and their properties
(whether owned in fee or a leasehold interest)
necessary or desirable in the conduct of the businesses
of the Company and the Restricted Subsidiaries in good
repair, working order and condition and from time to
time will make, or cause to be made, all necessary or
desirable repairs, replacements, renewals, extensions,
betterments, improvements and additions so that at all
times the efficiency thereof required for the business
of the Company and the Restricted Subsidiaries shall be
maintained. The Company will maintain and, cause the
Restricted Subsidiaries to maintain, all material
franchises, licenses and permits necessary for the
conduct of the businesses of the Company and the
Restricted Subsidiaries. Nothing in this Section 5.4
shall prevent the Company or any Restricted Subsidiary
from discontinuing the operation and maintenance of any
such properties if such discontinuance is, in the
judgment of the Company, desirable in the conduct of
its business or the business of any Restricted
Subsidiary and not disadvantageous in any material
respect to the Holders of the Notes. Subject to
compliance with Section 5.8 hereof, the Company or any
Restricted Subsidiary shall not be required to preserve
any such franchise, license or permit if the Company
shall determine that the preservation thereof is no
longer desirable in the business of the Company or any
Restricted Subsidiary, and that the loss thereof is not
disadvantageous in any material respect to the Holders
of the Notes.
5.5 Financial Information and Reports. The
Company will keep, and will cause each Subsidiary to
keep, proper books of record and account in which full,
true and correct entries will be made of all dealings
or transactions of or in relation to the business and
affairs of the Company or such Subsidiary, in
accordance with generally accepted accounting
principles as then in effect, consistently applied, and
will furnish in duplicate to each Holder of the Notes,
the following:
(a) As soon as reasonably possible after
the end of the first, second and third fiscal quarters
of each fiscal year of the Company, and in any event
within forty-five (45) days thereafter, (i)
consolidated balance sheets of (A) the Company and its
Restricted Subsidiaries and (B) the Company and all of
its Subsidiaries, in each case, as at the end of such
quarter, and (ii) consolidated statements of income,
changes in stockholders' equity and changes in cash
flows of (A) the Company and its Restricted
Subsidiaries and (B) the Company and all of its
Subsidiaries for such quarter and, for the portion of
the fiscal year ending with such quarter, setting
forth, in each case, in comparative form the
corresponding figures for the corresponding period of
the preceding fiscal year, all in reasonable detail and
certified as having been prepared in accordance with
generally accepted accounting principles, consistently
applied, and fairly presenting the financial position
of the Company and its Subsidiaries and the results of
operations of the Company and its Subsidiaries subject
to changes resulting from year-end audit adjustments by
the President, the Treasurer or principal financial
officer of the Company.
(b) As soon as available (i) a copy of any
filings by Bank Restricted Subsidiaries with Federal
bank regulatory authorities (excluding any filings
designated as confidential or as restricted in
distribution by any regulatory authority), including
copies of all Consolidated Reports of Condition and
Income for a Bank With Domestic Offices Only and Total
Assets of $300 million or More -FFIEC 032 (the "call"
reports), (ii) quarterly financial reports made
available to management of the Company with respect to
each Bank Restricted Subsidiary, and (iii) if such
reports are otherwise prepared and are made available
to management of the Company, annual financial
statements (audited or unaudited) of Non-Bank
Restricted Subsidiaries.
(c) As soon as reasonably possible after
the end of their respective fiscal years, and in any
event within 120 days thereafter, (i) consolidated
balance sheets of (A) the Company and its Restricted
Subsidiaries and (B) the Company and all of its
Subsidiaries, in each case, as at the end of such
fiscal year, and (ii) consolidated statements of
income, changes in stockholders' equity and changes in
cash flows of (A) the Company and its Restricted
Subsidiaries and (B) the Company and all of its
Subsidiaries for such fiscal year, setting forth, in
each case in comparative form the corresponding figures
for the corresponding period of the preceding fiscal
year, all in reasonable detail and, in the case of all
such consolidated balance sheets and statements of the
Company and its Subsidiaries, an opinion of KPMG Peat
Marwick or another firm of independent public
accountants of recognized national standing selected by
the Company. (The Company will also submit a copy of
the information submitted pursuant to this Section
5.5(c) to the National Association of Insurance
Commissioners, Securities Valuation Office, 195
Broadway, New York, New York 10007.)
(d) Together with the financial reports
delivered pursuant to paragraphs (a) and (c) above, a
certificate of the Company signed by its President,
Treasurer or principal financial officer, (i) to the
effect that the signer thereof has reexamined the terms
and provisions of this Agreement and that, to the best
of his knowledge, at the date of such statement the
Company is not in default in the fulfillment of any of
the terms, covenants, provisions and conditions hereof
and that no Event of Default, or event which, with the
lapse of time or the giving of notice, or both, would
become an Event of Default hereunder, has occurred as
of the date of such statement, or, if the signer is
aware of any such event or Event of Default, he shall
disclose in such statement the nature thereof, and what
action, if any, the Company or such Restricted
Subsidiary has taken or proposes to take with respect
thereto, and (ii) setting forth, in sufficient detail,
the information and computations required to establish
whether or not the Company was in compliance with the
requirements of Sections 5.8, 6.1, 6.2, 6.3, 6.4, 6.5,
6.6, 6.7, 6.9, 6.10, 6.11 and 6.17 hereof during the
periods covered by the financial reports then being
furnished.
(e) Together with the audit report
delivered pursuant to paragraph (c) above, the written
statement of such accountants that in making the
examination necessary to their certification of such
audit report they have obtained no knowledge of the
occurrence of any Event of Default hereunder, or any
event (the occurrence of which is ascertainable by
accountants in the course of normal audit procedures)
which, with the lapse of time or the giving of notice,
or both, would become an Event of Default hereunder or,
if such accountants shall have obtained knowledge of
any such event or Event of Default, they shall disclose
in such statement the nature thereof. The audit report
shall state that the financial statements fairly
present the matters covered thereby in accordance with
generally accepted accounting principles consistently
applied except as stated therein.
(f) Together with the financial reports
delivered pursuant to paragraphs (a) and (c) above,
reports on Nonperforming Assets for the periods covered
by such financial reports and a breakdown of such
assets by portfolio classification substantially in the
form of Exhibit C hereto.
(g) Promptly upon receipt thereof, one copy
of each other report submitted to the Company or any
Restricted Subsidiary by any certified public
accountants in connection with any annual, interim or
special audit made by them of the books of the Company
or any Restricted Subsidiary including management
letters (except documents designated by any regulatory
authority as confidential).
(h) (i) Within two (2) business days after
receipt thereof, copies of any and all notices of
default, demands for payment, or notices that the PBGC
has or may institute proceedings to terminate a Pension
Plan, delivered to the Company or any Related Person by
the PBGC with respect to any Pension Plan and, (ii)
promptly upon their becoming available, copies of
(A) all financial statements, reports, notices and
proxy statements sent by the Company or any of its
Subsidiaries to shareholders, and (B) all annual,
periodic and current reports and all registration
statements (other than registration statements relating
to employee plans or dividend reinvestment plans) filed
by the Company with the Securities and Exchange
Commission or any successor thereto.
(i) As soon as available, during the period
following receipt by the Company of notice from any
Holder that the Notes have been downgraded to an NAIC
rating of 3 or lower until the Company receives notice
from a Holder that such rating has improved to NAIC 2
or better, (i) copies of monthly financial reports
(i.e., copies of the financial information made
available to the Board of Directors of the Company),
(ii) minutes of the meetings of the Board of Directors
of the Company and directors, books and other
information packages prepared for the directors for
such meetings, (iii) on a monthly basis, reports on
Nonperforming Assets and a breakdown of such assets by
portfolio classification substantially in the form of
Exhibit C hereto and (iv) status reports on any
communications between the Company or any Subsidiary
and any regulatory authority.
(j) With reasonable promptness, so long as
you or any other Institutional Holder shall hold any
Note such other data and information as from time to
time may be reasonably requested.
5.6 Inspection of Properties and Records. The
Company agrees that, so long as you or any other
Institutional Holder shall hold any Note, your
representatives or its representatives may visit and
inspect the offices and properties of the Company and
any Restricted Subsidiary during their respective
normal business hours, and may examine and make copies
of all their books of account, records, reports and
papers, and discuss their respective affairs, finances
and accounts of such companies with their respective
officers, employees and independent public accountants
(and by this provision the Company and each Restricted
Subsidiary hereby authorize such accountants to discuss
with you or such Institutional Holder their respective
affairs, finances and accounts) at such reasonable
times and as often as you or it may reasonably request.
Correspondence and other contact with the Company and
its Restricted Subsidiaries with respect to this
provision shall be directed by you or such
Institutional Holder to the office of the chief
financial officer of the Company. All costs, including
without limitation the fees and expenses of the
independent public accountants of the Company and its
Restricted Subsidiaries, incurred by you in connection
with this Section 5.6 shall be for the account of the
Company and its Restricted Subsidiaries if at the time
such cost is incurred an Event of Default or an event
which with notice, lapse of time or both would become
an Event of Default shall have occurred and be
continuing.
5.7 Compliance with Laws. The Company will,
and will cause each Restricted Subsidiary to, comply in
all material respects with all Requirements of Law with
respect to the conduct of their respective businesses
and the ownership of their respective properties,
except to the extent that any of the foregoing are
being contested in good faith by appropriate
proceedings.
5.8 Character of Business. The Company will,
and will cause its Restricted Subsidiaries to, continue
to carry on substantially the same type of business as
was carried on during the fiscal year ended
December 31, 1993 and businesses reasonably related
thereto as permitted by the Bank Holding Company Act of
1956, as amended; and will not, and will not permit a
Restricted Subsidiary to, engage in any business which
would materially change the general overall type of
business previously conducted on a consolidated basis.
At all times at least 90% of the assets of the Company
and its Restricted Subsidiaries will be located and
used in the United States in the banking and trust
business and such other businesses as are permissible
under the provisions of the Bank Holding Company Act of
1956, as amended, applicable to the business of
domestic bank holding companies. The Company will at
all times maintain its status as a domestic bank
holding company under such Act, except that this
sentence shall not prevent the establishment by the
Company at some future date of one or more Non-Bank
Restricted Subsidiaries. Each Bank Restricted
Subsidiary will maintain its qualification as an
"insured bank" under the Federal Deposit Insurance Act
and each Bank Restricted Subsidiary, except as
permitted by Section 6.7 or Section 6.10 hereof, will
maintain at all times its existence as a bank, banking
association, trust corporation, savings bank or savings
and loan association organized under the laws of the
United States of America or any state of the United
States of America engaged in the banking and trust
business; provided that nothing contained in this
Section 5.8 shall prohibit any Bank Restricted
Subsidiary from converting from a federally chartered
bank to a state chartered bank, or from a state
chartered bank to a federally chartered bank.
5.9 Capital Reserves; Capital. The Company and
each of its Bank Restricted Subsidiaries will set aside
reserves in accordance with generally accepted
accounting principles and in accordance with applicable
statutes, and maintain such amounts of capital of such
type or types as may from time to time be required as
minimum capitalization for bank holding companies such
as the Company, and for federally insured depositary
institutions such as each Bank Restricted Subsidiary,
under applicable capital adequacy guidelines or
requirements of Federal and state bank regulatory
agencies.
5.10 Rule 144A Information. The Company hereby
represents and warrants that it is exempt from
providing the information required pursuant to
Rule 144A(d)(4) under the Securities Act in that it is
a reporting company under Section 13 or 15(d) of the
Exchange Act and agrees that if it ceases to be so
exempt, it will take all reasonable action to provide
the information as required pursuant to Rule 144A(d)(4)
under the Securities Act to you or any subsequent
Holder of Notes or, upon your request or the request of
such subsequent Holder, to any prospective purchaser
designated by you or such subsequent Holder.
SECTION 6 COMPANY NEGATIVE COVENANTS
The Company covenants and agrees that:
6.1 Dividends, Stock Purchases and
Distributions, Etc. The Company will not, directly or
indirectly, through any of its Subsidiaries or
otherwise, except as hereinafter provided:
(a) declare, pay or incur, any liability to
make any payment, in cash, property or other assets
(other than shares of its capital stock) as dividends;
or
(b) purchase, redeem, retire or otherwise
acquire for value any shares of its capital stock of
any class or any warrants (except that the Company may
redeem from the original holders thereof any of its
Series A or Series B Warrants issued on July 31, 1992),
rights or options to purchase or acquire any shares of
its capital stock (other than a stock for stock
exchange); or
(c) make any other distribution in respect
of its capital stock;
(such declarations, incurrence or payments of
dividends, purchases, redemptions, retirements or other
acquisition for value of stock and warrants, rights or
options, and all such other distributions being herein
collectively called "Restricted Payments") if an Event
of Default would occur or is existing at either the
time of the declaration or the payment of any such
proposed Restricted Payment or if, after giving effect
thereto, the aggregate amount of all Restricted
Payments made during the period from and after December
31, 1993 to and including the date of the making of the
Restricted Payment in question, would exceed the sum
of:
(i) 30% (or minus 100% in case of a
net deficit) of Consolidated Net Income for such
period (computed on a cumulative basis for the
entire period from December 31, 1993), plus
(ii) the net cash proceeds to the
Company from the issuance of any common stock
after the date hereof (to the extent not used to
acquire or redeem other shares of stock of the
Company as provided below), plus
(iii) $5,000,000, minus
(iv) 50% of the purchase price of any
Restricted Asset that ceases to be a performing
asset until such time that such Restricted Asset
is sold to a third party or returns to
performing status; provided, however, that this
clause (iv) shall not apply to Restricted Assets
that have been formally assigned a final loan
classification rating by the Federal Deposit
Insurance Corporation or the New York State
Banking Department.
Notwithstanding the foregoing, the Company may
acquire or redeem any shares of capital stock out of
the net cash proceeds from a sale of other shares of
stock of the Company within ninety (90) days after such
sale, to the extent such proceeds are not used for
Restricted Payments pursuant to (c)(ii) above.
The Company will not declare any dividend
payable more than sixty (60) days after the date of
declaration. For purposes of this Section 6.1, the
amount of any Restricted Payment which is payable or
distributable in property other than cash or shares of
capital stock of the Company shall be deemed to be the
greater of book value or the fair market value (as
determined in good faith by the Board of Directors of
the Company) of such property as of the date of the
declaration of such Restricted Payment.
6.2 Restrictions on Indebtedness. (a) The
Company will not Incur any Funded Indebtedness or
Short-Term Indebtedness, and will not permit any
Restricted Subsidiary to Incur any Funded Indebtedness,
unless immediately after giving effect to the
Incurrence of such Funded Indebtedness or Short-Term
Indebtedness, Consolidated Funded Indebtedness and
Consolidated Short-Term Indebtedness shall not exceed
45% of the sum of Consolidated Short-Term Indebtedness
plus Consolidated Funded Indebtedness plus Consolidated
Tangible Net Worth of the Company and its Restricted
Subsidiaries.
(b) The Company will not Incur or otherwise
become liable for any Funded Indebtedness unless
immediately after giving effect thereto the
Consolidated Funded Indebtedness shall not exceed 45%
of the sum of Consolidated Funded Indebtedness and
Consolidated Tangible Net Worth of the Company and its
Restricted Subsidiaries.
For purposes of this Section 6.2, Funded
Indebtedness of a Person which becomes a Restricted
Subsidiary and which is outstanding as of the date such
Person becomes a Restricted Subsidiary shall be deemed
to have been Incurred as of such date.
6.3 Consolidated Tangible Net Worth; Risk-Based
Capital. (a) The Company will not in any case permit
Consolidated Tangible Net Worth to be less than 5.5% of
Consolidated Total Assets. In addition, the Company
will not permit Consolidated Tangible Net Worth to be
less than $110,000,000.
(b) The Company will not permit its Risk-
Based Capital Ratio to be less than 10% at any time.
6.4 Guarantees. The Company will not, and will
not permit any Restricted Subsidiary to, become liable
with respect to any Guarantee, except that any Bank
Restricted Subsidiary may become liable with respect to
Guarantees arising in the ordinary course of the
banking or trust business.
6.5 Mortgages and Liens. The Company will not,
and will not permit any Restricted Subsidiary to have
outstanding, any Lien on its property or assets,
whether now owned or hereafter acquired, or upon any
income or profits therefrom, or own or acquire or agree
to acquire property of any kind subject to any Lien,
except the following:
(a) Liens existing on property of a Person
at the time such Person becomes or is merged into a
Restricted Subsidiary;
(b) Liens on property acquired, constructed
or improved by the Company or a Restricted Subsidiary
after the date of this Agreement and created
contemporaneously with or within 180 days of such
acquisition, construction or improvement to secure or
provide for all or a portion of the purchase price of
such property, acquisition, construction or
improvement, provided that the principal amount of the
Indebtedness so secured by such Liens shall not exceed
100% of the lesser of the cost or fair market value of
such property;
(c) Pledges, assignments, or security
devices entered into in connection with the financing
and refinancing by the Company or any Restricted
Subsidiary of customers' leases, mortgages, conditional
sales contracts, accounts receivable, credit cards and
other loans which arise in the ordinary course of the
banking or trust business;
(d) Liens securing taxes, assessments or
governmental charges or levies or the claims or demands
of contractors, materialmen, mechanics, carriers,
warehousemen, landlords and other like Persons,
provided the payment thereof is not at the time
required by Section 5.3 hereof;
(e) Liens incurred or deposits made in the
ordinary course of business in connection with
workmen's compensation, unemployment insurance, old-age
pension, social security and other like laws;
(f) Attachment, judgment, awards and other
similar Liens or title defects which shall not
materially interfere with the business operations of
the Company;
(g) Pledges of securities against deposits
of municipalities or other governmental agencies
created or incurred in the ordinary course of business
in order to receive deposits from such entities; and
(h) Liens securing Excluded Indebtedness;
provided, however, that Consolidated Funded
Indebtedness secured by Liens permitted in (a), (b) and
(c) above shall not exceed 10% of Consolidated Tangible
Net Worth and shall be subject to the restrictions with
respect to Funded Indebtedness contained in Section 6.2
hereof. Notwithstanding any other provisions of this
Section 6.5, the Company will not, and will not permit
any Restricted Subsidiary to, have outstanding any Lien
on the securities of a Bank Restricted Subsidiary.
6.6 Leases. The Company will not, and will not
permit any Restricted Subsidiary to, become liable,
renew or extend as lessee under, or become liable by
Guarantee of the obligations of any other Person as
lessee under, any Long-Term Lease unless, after giving
effect thereto and to any concurrent transactions,
aggregate annual rentals payable during any future
fiscal year under all outstanding Long-Term Leases
would not exceed 7% of Consolidated Tangible Net Worth.
Any corporation which becomes a Restricted
Subsidiary after December 31, 1993 shall be deemed to
become liable, at the time it becomes a Restricted
Subsidiary, under all leases under which it is liable
as lessee, or by Guarantee of the obligations of any
other person as lessee, existing immediately after it
becomes a Restricted Subsidiary.
6.7 Mergers, Consolidations, Sale of Assets.
Subject to Sections 6.8 and 6.10 of this Agreement, the
Company will not, and will not permit any Restricted
Subsidiary to, merge into or consolidate with any other
Person, or permit any other Person to merge or
consolidate with it, or sell, lease, transfer, abandon
or dispose of any part of its properties (other than in
the ordinary course of its banking and trust business
and excluding sales, leases or transfers of earning
assets provided that the proceeds are reinvested in
other earning assets of comparable credit quality),
except that if no condition or event shall exist which
constitutes or which, after notice or lapse of time or
both, would constitute an Event of Default, before or
after such transaction, then:
(a) Any Person may be merged into any
Wholly-Owned Restricted Subsidiary and any Restricted
Subsidiary may be consolidated with or merged into any
Wholly-Owned Restricted Subsidiary or into any other
Person which concurrently becomes a Wholly-Owned
Restricted Subsidiary;
(b) The Company may merge into or
consolidate with another corporation if such merger or
consolidation is permissible under all relevant federal
and state laws and complies with all regulatory
restrictions as interpreted by relevant federal and
state regulatory agencies and if the Company is the
survivor or, if the Company is not the survivor, the
survivor (i) is a bank holding company registered with
the Federal Reserve Board and has substantially all of
its assets and conducts substantially all of its
business in the United States, (ii) complies with
federal capital adequacy provisions, (iii) assumes in
writing the punctual payment of principal, interest and
premium, if any, on the Notes according to their tenor
and the due and punctual performance and observance of
all covenants in this Agreement and the Notes,
(iv) would be permitted to Incur at least $1 of
additional Funded Indebtedness pursuant to Section 6.2
hereof immediately after completion of such transaction
and (v) the survivor's senior securities have ratings
of "A-" or better from Standard and Poor's Corporation
or "A3" or better from Moody's Investor Services or a
rating of "A" or better from Thomson BankWatch
long-term debt rating service applicable to fixed
income securities; provided, however, that the Company
may not merge into or consolidate with a Bank
Restricted Subsidiary without the prior written consent
of the Holders;
(c) Any Restricted Subsidiary may sell,
lease, transfer, abandon or otherwise dispose of any
part of its properties to the Company or to any Wholly-
Owned Restricted Subsidiary or to any Person who
concurrently becomes a Wholly-Owned Restricted
Subsidiary; and
(d) The Company and its Restricted
Subsidiaries may sell, lease, transfer, abandon or
otherwise dispose of any part but less than
substantially all of its properties or assets provided
the aggregate amount of all such dispositions (valued
at the greater of book or fair market value) during any
consecutive 12-month period does not exceed 10% of
Consolidated Net Tangible Assets of the Company and its
Restricted Subsidiaries as at the end of the
immediately preceding fiscal year and the properties or
assets disposed of did not generate more than 10% of
the average Consolidated Net Income of the Company and
its Restricted Subsidiaries for the two (2) immediately
preceding fiscal years; provided, however, the
references to 10% referred to in this clause (d) may be
increased to 20% one time during the term of this
Agreement if the net proceeds from the dispositions
permitted under this clause (d) are reinvested within
six-months following the date of such dispositions by
the Company or the Restricted Subsidiary concerned, in
entities which are involved in businesses which are
permitted by the Bank Holding Company Act of 1956, as
amended, which are authorized to operate in states
where the Company is authorized to operate.
6.8 Restrictions on Acquiring Deposit Taking
Institutions. Notwithstanding the provisions of
Section 6.7 hereof, the Company will not merge with,
acquire, or in any way purchase the assets and assume
the liabilities of, and will not permit any Subsidiary
to merge with, acquire or in any way purchase the
assets and assume the liabilities of, any
Deposit-Taking Institution with a CAMEL rating from the
Federal Deposit Insurance Corporation, or a MACRO
rating from the Office of Thrift Supervision, of 4 or 5
without the prior written consent of the Holders of not
less than 50% in aggregate principal amount of the
Notes then outstanding unless the Company or one of its
Subsidiaries is assuming only deposits and the assets
being acquired or purchased (hereinafter referred to as
"Restricted Assets") are performing assets and, after
giving effect to such acquisition or purchase, the
aggregate purchase price of all Restricted Assets
purchased or acquired since the Closing Date by the
Company or any of its Subsidiaries, less the aggregate
purchase price of any of such Restricted Assets
subsequently sold by the Company or any of its
Subsidiaries, shall not exceed $30,000,000 excluding
(x) assets consisting of consumer loans (including,
without limitation, performing first mortgage loans
related to one-to-four family residences), cash,
marketable securities, and real estate or other
property which would, in accordance with generally
accepted accounting principles, be characterized as
"bank premises, leasehold improvements and equipment"
and (y) any loans or other property that the Company or
one of its Subsidiaries has the right to require the
Resolution Trust Company (or any other governmental
agency) to repurchase during a period of not less than
90 days from the date of closing of such acquisition or
purchase.
6.9 Preferred Stock of Restricted Subsidiaries.
The Company will not permit any Restricted Subsidiary
to issue Preferred Stock, any security convertible into
Preferred Stock or options, warrants or rights to
purchase Preferred Stock of any Restricted Subsidiary
except (a) shares held by the Company or a Wholly-Owned
Restricted Subsidiary and (b) shares of Preferred Stock
held by others at the time such Restricted Subsidiary
becomes a Restricted Subsidiary, provided that such
shares of Preferred Stock are not issued or transferred
by the Company or any Restricted Subsidiary to others
in contemplation of, or in connection with, such
Restricted Subsidiary becoming a Restricted Subsidiary.
6.10 Disposition of Securities of Restricted
Subsidiaries. The Company will not, and will not
permit any Restricted Subsidiary to, directly or
indirectly transfer, sell, pledge or otherwise dispose
of any shares of stock or other equity securities (or
warrants, rights or options to acquire stock or other
equity securities) of any Bank Restricted Subsidiary
except, to the extent necessary, to qualify directors.
Neither the Company nor any Restricted
Subsidiary may dispose of less than all the shares of
any Restricted Subsidiary.
6.11 Additional Limitations on Indebtedness of
Restricted Subsidiaries. The Company will not permit
any Restricted Subsidiary to Incur, contingently or
otherwise, any liability in respect of any Indebtedness
for Borrowed Money except:
(a) Excluded Indebtedness; and
(b) Indebtedness Incurred by any Bank
Restricted Subsidiary in the ordinary course of its
banking and trust business or by a Non-Bank Restricted
Subsidiary in the ordinary course of its business
reasonably related to the banking and trust business as
permitted by the Bank Holding Company Act of 1956, as
amended, provided, that, in either case, a Bank
Restricted Subsidiary is the lender and such
Indebtedness complies with the provisions of 12 U.S.C.
SECTION 371c, or if applicable, 12 U.S.C. SECTION 1828(j).
6.12 Transactions with Affiliates. Neither the
Company nor any Restricted Subsidiary will enter into
any transaction with an Affiliate (including, without
limitation, the purchase, sale or exchange of property,
the rendering of any service, the making of any
material investment in an Affiliate or the repayment of
any indebtedness owed to an Affiliate) except in the
ordinary course of business upon terms which are fair
and reasonable to the Company and its Restricted
Subsidiaries and which are not less favorable to the
Company and its Restricted Subsidiaries than would be
obtained in a comparable transaction with a Person not
an Affiliate.
6.13 Designation of Additional Restricted
Subsidiaries. Any Unrestricted Subsidiary may at any
time be designated as a Restricted Subsidiary by
resolution of the Board of Directors of the Company if,
immediately after giving effect to such designation and
any other simultaneous like designations, (i) such
Subsidiary meets the definitional requirements for a
"Restricted Subsidiary" set forth in Section 10.1
hereof, (ii) the Company would be permitted to incur at
least $1 of Funded Indebtedness pursuant to Section 6.2
hereof, and (iii) there would exist no condition or
event constituting an Event of Default or which, after
notice or lapse of time or both, would constitute an
Event of Default. Promptly upon the designation of any
Subsidiary as a Restricted Subsidiary, the Company will
furnish to each Holder of a Note a certified copy of
the resolution effecting such designation, accompanied
by a certificate signed by the Chief Financial Officer
certifying (A) as to the absence of any condition or
event constituting an Event of Default or which, after
notice or lapse of time or both, would constitute an
Event of Default and (B) certifying compliance (and
showing relevant computations) with the provisions of
Sections 5.8, 6.1, 6.2, 6.3, 6.6, 6.7, 6.9, 6.10, 6.11
and 6.17 hereof. Any Subsidiary which shall have been
designated as a Restricted Subsidiary shall remain a
Restricted Subsidiary unless it shall have been sold or
otherwise disposed of in accordance with Sections 6.7
and 6.10 hereof.
6.14 ERISA Compliance. (a) The Company will
cause all Pension Plans maintained by the Company and
its Related Persons to be funded in accordance with
applicable requirements of the Employee Retirement
Income Security Act of 1974, as currently in effect or
as hereafter amended ("ERISA") and the Internal Revenue
Code of 1986, as currently in effect or as hereafter
amended (the "Code").
(b) All material assumptions and methods
used to determine the actuarial valuation of vested
benefits under Pension Plans and the present value of
assets of Pension Plans shall be reasonable in the good
faith judgment of the Company or its consulting actuary
and shall comply in all material respects with all
requirements of law.
(c) Neither the Company nor any Related
Person will at any time permit any Pension Plan
maintained by it to:
(i) engage in any "prohibited
transaction" as such term is defined in
Section 4975 of the Code or described in
Section 406 of ERISA;
(ii) incur any "accumulated funding
deficiency" as such term is defined in
Section 302 of ERISA, whether or not waived or
to fail to satisfy the requirements of
Section 412 of the Code; or
(iii) terminate under circumstances
which result in the imposition of a Lien on the
property of the Company or any Restricted
Subsidiary pursuant to Section 4068 of ERISA.
(d) The Company and its Related Persons
shall timely make any contributions to Multiemployer
Plans required of them by collective bargaining
agreement or applicable law and shall not incur a
partial or complete withdrawal from any Multiemployer
Plan, where such withdrawal results or is likely to
result in a material liability to such plan.
6.15 Tax Consolidation. The Company will not
file or consent to the filing of any consolidated
income tax return with any Person other than a
Subsidiary which is an eligible member of the same
affiliated group of corporations as the Company which
is eligible to file a consolidated Federal income tax
return under the provisions of the Code.
6.16 Acquisition of Notes. Neither the Company
nor any Subsidiary nor any Affiliate will, directly or
indirectly, purchase or otherwise acquire or make any
offer to acquire any outstanding unpaid Notes except by
means of an offer made pro rata, and on the same terms
to all the Holders of Notes. In case the Company
acquires any Notes, such Notes shall thereafter be
canceled and no Notes shall be issued in substitution
therefor.
6.17 Nonperforming Assets. The Nonperforming
Assets of the Company and its Restricted Subsidiaries
shall not exceed (a) 4% of Consolidated Total Assets at
any time prior to April 1, 1995, (b) 3.5% of
Consolidated Total Assets from and after April 1, 1995
and prior to April 1, 1996 and (c) 3% of Consolidated
Total Assets thereafter.
SECTION 7 EVENTS OF DEFAULT AND REMEDIES THEREFOR
7.1 Nature of Events. An "Event of Default"
shall exist if any one or more of the following occurs
and is continuing:
(a) Any payment of principal or premium or
interest on any Note is not made on or before the date
such payment is due; or
(b) Any representation or warranty made by
the Company herein, or made by the Company in any
written statement or certificate furnished by the
Company in connection with the issuance and sale of the
Notes or furnished by the Company pursuant hereto,
proves false in any material respect as of the date of
the issuance or making thereof; or
(c) Default shall occur (i) in the payment
of the principal of or interest on or premium, if any,
on any Indebtedness (other than Indebtedness
represented by the Notes) in excess of $500,000 of the
Company or any Restricted Subsidiary for borrowed
money, as and when the same shall become due and
payable, or (ii) under any mortgage, agreement or other
instrument under or pursuant to which such Indebtedness
of the Company or any Restricted Subsidiary in excess
of $500,000 is issued, or (iii) under any interest rate
swap, exchange, cap or similar hedging agreement if the
aggregate termination value payable by the Company or
any Restricted Subsidiary exceeds $500,000, or (iv) in
the payment of any mandatory dividend on Preferred
Stock in excess of $500,000 of the Company or any
Restricted Subsidiary as and when the same shall become
due and payable; so that, in the case of clause (c)(i),
(c)(ii) or (c)(iii), the holder or holders of such
Indebtedness in excess of $500,000 are then entitled to
accelerate the maturity thereof, regardless of whether
such obligation is actually accelerated or in the case
of clause (c)(iv) the holders of such Preferred Stock
are entitled to elect a majority of the board of
directors of the issuer of such Preferred Stock or to
exercise other rights arising from a failure to pay
dividends; or
(d) Default shall occur in the observance
or performance of any of the covenants or conditions
contained in Sections 5.8 or 6.1 through 6.11 hereof,
inclusive; or
(e) Default shall occur under any other
covenant or provision of this Agreement and such
default shall continue for thirty (30) days; or
(f) Forfeiture of its charter or any
material business franchises by the Company or any
Restricted Subsidiary; or
(g) Any judgments, decrees, writs or
warrants of attachment on property or any similar
process involving in the aggregate a liability of
$500,000 or more shall be entered or filed against the
Company or any Restricted Subsidiary or against any of
their property or assets and shall not have been
vacated, discharged, stayed or bonded pending appeal or
otherwise within thirty (30) days from the entry
thereof; or
(h) The Company or any Restricted
Subsidiary shall (i) be adjudicated insolvent or
bankrupt, or cease, be unable, or admit in writing its
inability, to pay its debts as they mature, or make a
general assignment for the benefit of, or enter into
any composition or arrangement with, creditors; (ii)
apply for, or consent (by admission of material
allegations of a petition or otherwise) to the
appointment of, a receiver, trustee or liquidator of
the Company or any Restricted Subsidiary or of any part
of its properties or assets, or authorize such
application against it and such application shall
continue undismissed for a period of sixty (60) days;
(iii) authorize or file a voluntary petition in
bankruptcy, or apply for or consent (by admission of
material allegations of a petition or otherwise) to the
application of any bankruptcy, reorganization,
arrangement, readjustment of debt, insolvency,
dissolution, liquidation or other similar law of any
jurisdiction, or authorize such application or consent,
or proceedings to such end shall be instituted against
the Company or any Restricted Subsidiary without such
authorization, application or consent and be approved
as properly instituted, remain undismissed for sixty
(60) days or result in adjudication of bankruptcy or
insolvency; or (iv) permit or suffer all or any part of
its properties or assets with a value individually or
in the aggregate in excess of $500,000 to be
sequestered or attached by court order and such order
remains undismissed for sixty (60) days; or
(i) The PBGC shall institute proceedings to
terminate any Pension Plan established or maintained by
the Company or any Related Person or any trust created
thereunder, or a trustee shall be appointed by a United
States District Court pursuant to Section 4042(b) of
ERISA to administer any such Pension Plan (as defined
in Section 3 of ERISA) or any trust created thereunder;
or
(j) Any Termination Event occurs which
could reasonably be expected to subject the Company or
any Related Person to an aggregate liability in excess
of $500,000.
7.2 Remedies of Holders of Notes on Default.
Upon the occurrence and during the continuation of an
Event of Default under Section 7.1(a) above, any Holder
of a Note may declare its Note to be due and payable at
a price equal to the price payable upon redemption
pursuant to SECTION 2.2 (including the Make-Whole Amount, if
any) plus accrued interest to the date of payment.
Upon the occurrence and during the continuation of an
Event of Default under Section 7.1(h) above, all Notes
shall immediately become due and payable at a price
equal to 100% of the principal amount thereof plus
accrued interest to the date of payment of the Notes
plus, to the extent permitted by law, the applicable
Make-Whole Amount. Upon the occurrence and during the
continuation of any other Event of Default, Holders of
Notes representing at least 66-2/3% of the unpaid
principal amount of all Notes then outstanding may
declare all Notes to be due and payable at a price
equal to the price payable upon redemption pursuant to
SECTION 2.2 (including the Make-Whole Amount, if any) plus
accrued interest to the date of payment. No course of
dealing on the part of any Holder of any Note nor any
delay or failure on the part of any Holder of any Note
to exercise any right shall operate as a waiver of such
right or otherwise prejudice such Holder's rights,
powers and remedies. The Company further agrees, to
the extent permitted by law, to pay to the Holder or
Holders of the Notes all costs and expenses incurred by
them in the collection of any Notes upon any default
hereunder or thereon, including reasonable fees and
expenses of such Holder's or Holders' attorneys for all
services rendered in connection therewith.
7.3 Annulment of Acceleration of Notes. The
provisions of the foregoing Section 7.2 are subject to
the condition that if the principal of and accrued
interest on all outstanding Notes have been declared
immediately due and payable by reason of the occurrence
of any Event of Default, the Holder or Holders of 80%
in aggregate principal amount of the Notes then
outstanding may, by written instrument filed with the
Company, rescind and annul such declaration and the
consequences thereof, provided that (a) at the time
such declaration is annulled and rescinded no judgment
or decree has been entered for the payment of any
monies due pursuant to the Notes or this Agreement in
connection therewith; (b) the Company shall have duly
paid (i) all overdue installments of interest on all of
the Notes, (ii) the principal of and premium, if any,
on any Notes which have become due otherwise than by
declaration, and (iii) interest on overdue principal
and premium and (to the extent permitted by applicable
law) on any overdue installments of interest in respect
of the Notes; and (c) each and every other Event of
Default shall have been cured or waived; and provided
further that no such rescission and annulment shall
extend to or affect any subsequent default or Event of
Default or impair any right consequent thereto.
7.4 Conduct No Waiver; Collection of Expenses.
No course of dealing on the part of any Holder of
Notes, nor any delay or failure on the part of any
Holder of Notes to exercise any of its rights, shall
operate as a waiver of such right or otherwise
prejudice such Holder's rights, powers and remedies.
If the Company fails to pay, when due, the principal
of, the premium, if any, or the interest on, any Note,
or otherwise fails to comply with any other provision
of this Agreement, the Company will pay to the Holders,
to the extent permitted by law, on demand, such further
amounts as shall be sufficient to cover the cost and
expenses, including but not limited to attorneys' fees
and expenses, incurred by such Holders in collecting
any sums due on the Notes or in otherwise enforcing any
of their rights.
7.5 Remedies Cumulative. No right or remedy
conferred upon or reserved to any Holder of Notes under
this Agreement is intended to be exclusive of any other
right or remedy, and every right and remedy shall be
cumulative and in addition to every other right or
remedy given hereunder or now or hereafter existing
under any applicable law. Every right and remedy given
by this Agreement or by applicable law to any Holder of
Notes may be exercised from time to time and as often
as may be deemed expedient by such Holder, as the case
may be.
7.6 Cooperation by the Company. To the extent
that it lawfully may, the Company agrees that it will
not at any time insist upon or plead, or in any manner
whatever claim or take any benefit or advantage of any
applicable present or future stay, extension or
moratorium law, which may affect observance or
performance of the provisions of this Agreement or of
any Note.
7.7 Notice of Default. Upon the occurrence of
(i) Events of Default, (ii) events which with notice,
lapse of time or both would become Events of Default
(provided the occurrence of such events is known by an
Executive Officer of the Company or a Bank Restricted
Subsidiary) or (iii) claimed defaults, the Company will
promptly give the following notices:
(a) The Company will furnish to each Holder
of Notes written notice of the occurrence of an Event
of Default or an event which with notice, lapse of time
or both would become an Event of Default. Such notice
shall specify the nature of such default and what
action the Company has taken or is taking or proposes
to take with respect thereto. If such default is a
default in the performance of the covenant contained in
Section 6.17 hereof, the Company will also furnish to
each Holder of Notes written notice when such default
has been cured.
(b) If the Holder of any Note or of any
other evidence of indebtedness of the Company gives any
notice or takes any other action with respect to a
claimed default, the Company will give written notice
thereof to each Holder of the then outstanding Notes,
describing such Event of Default, event, notice or
action, the nature of the Event of Default, event or
claimed default and specifying the action the Company
or any Restricted Subsidiary proposes to take with
respect thereto.
SECTION 8 AMENDMENTS, WAIVERS AND CONSENTS
8.1 Matters Subject to Modification. No term,
covenant, agreement or condition of this Agreement may
be amended, supplemented or modified, or compliance
therewith waived (either generally or in a particular
instance and either retroactively or prospectively),
except pursuant to one or more written instruments
signed by the Company and the Holders of not less than
66-2/3% in aggregate principal amount of outstanding
Notes; provided, however, no such supplement, waiver,
modification, alteration or amendment shall, without
the consent in writing of the Holders of all of the
Notes at the time outstanding, subordinate or change
the amount of, or the date of final maturity of, the
principal on any of the Notes, or change the time of
payment of principal on any of the Notes, or change the
rate of, or the time of payment of, interest on any of
the Notes, or change the amount of any premium payable
upon any prepayment or payment of the Notes or amend
any provision of Section 7 hereof or this Section 8 or
change the percentage of Holders of Notes required to
approve any such supplement, waiver, modification,
alteration or amendment pursuant to this Section 8.
For the purpose of determining whether Holders
of the requisite principal amount of Notes have made or
concurred in any supplement, waiver, consent, approval,
notice or other communication under this Agreement
(including any supplement, waiver, consent, notice or
other action pursuant to Section 7 of this Agreement),
Notes held in the name of, or owned beneficially by,
the Company or any Subsidiary or Affiliate shall not be
deemed outstanding. The Company will give prompt
notice to all Holders of the Notes of the effectiveness
of any supplement, waiver, modification, alteration or
amendment entered into in accordance with the
provisions of this Section 8.1. Such notice shall
state the terms and conditions of any such supplement,
waiver, modification, alteration or amendment
(including any consideration from the Company), which
shall be identical as to each Holder, and shall be
accompanied by at least two conformed copies of each
written instrument which embodies such supplement,
waiver, modification, alteration or amendment.
8.2 Binding Effect. Any such amendment or
waiver shall apply equally to all the Holders of the
Notes and shall be binding upon them, upon each future
Holder of any Note and upon the Company, whether or not
such Note shall have been marked to indicate such
amendment or waiver. No such amendment or waiver shall
extend to or affect any obligation not expressly
amended or waived or impair any right consequent
thereon.
SECTION 9 FORM OF NOTES, REGISTRATION, TRANSFER, EXCHANGE
AND REPLACEMENT
9.1 Form of Notes. Each Note initially
delivered under this Agreement will be a fully
registered note in the forms attached hereto as
Exhibit A. Each Note will be issuable only in fully
registered form in a denomination of $1,000,000 (or the
remaining outstanding balance thereof, if less than
$1,000,000) or any larger integral multiple of
$100,000.
9.2 Note Register. The Company shall cause to
be kept at its principal office a register (the "Note
Register") for the registration and transfer of the
Notes. The names and addresses of the Holders of
Notes, the transfer thereof and the names and addresses
of the transferees of the Notes shall be registered in
the Note Register.
9.3 Issuance of New Notes Upon Exchange or
Transfer. Upon surrender for exchange or registration
of transfer of a Note at the office of the Company
designated for notices in accordance with Section 11.2
hereof, the Company shall execute and, in exchange
therefor and upon cancellation thereof, shall deliver,
at its expense, one or more new Notes of any authorized
denominations (as described in 9.1 above) requested by
the Holder of the surrendered Note, each dated the date
to which interest has been paid on the Note so
surrendered (or, if no interest has been paid, the date
of such surrendered Note), but in the same aggregate
unpaid principal amount and series as such surrendered
Note, and registered in the name of such Person or
Persons as shall be designated in writing by such
Holder. Every Note surrendered for registration of
transfer shall be duly endorsed, or be accompanied by a
written instrument of transfer duly executed, by the
Holder of such Note or by his attorney duly authorized
in writing. The Company may condition its issuance of
any new Note or Notes in connection with a transfer by
any Person upon the giving by such Person of
representations similar to those in Section 3.2 hereof
and on the payment to it of a sum sufficient to cover
any taxes or other governmental charge imposed in
respect of such transfer.
9.4 Replacement of Notes. Upon receipt of
evidence reasonably satisfactory to the Company of the
loss, theft, mutilation or destruction of a Note and,
in the case of any such loss, theft or destruction,
upon delivery of a bond of indemnity or security in
such form and amount as shall be reasonably
satisfactory to the Company or, in the event of such
mutilation, upon surrender and cancellation of the
Note, the Company, without charge to the Holder
thereof, will make and deliver a new Note of like tenor
and the same series in lieu of such lost, stolen,
destroyed or mutilated Note. If any such lost, stolen
or destroyed Note is owned by you or any other
Institutional Holder whose credit is reasonably
satisfactory to the Company, then the affidavit of an
authorized officer of such owner setting forth the fact
of loss, theft or destruction and of its ownership of
the Note at the time of such loss, theft or destruction
shall be accepted as satisfactory evidence thereof, and
no further indemnity shall be required as a condition
to the execution and delivery of a new Note, other than
a written agreement of such owner (in form reasonably
satisfactory to the Company) to indemnify the Company.
SECTION 10 INTERPRETATION OF AGREEMENT
10.1 Certain Terms Defined. The terms
hereinafter set forth when used herein shall have the
following meanings:
"Affiliate" shall mean each Person (a) which
directly or indirectly through one or more
intermediaries controls, or is controlled by, or is
under common control with, the Company or any
Subsidiary or any director or officer of the Company or
any Subsidiary, (b) which beneficially owns or holds 5%
or more of any class of the Voting Stock of the Company
or any Subsidiary or (c) 5% or more of the Voting Stock
(or in the case of a Person which is not a corporation,
5% or more of the equity interest) of which is
beneficially owned or held by the Company or a
Subsidiary; provided, however, that a director, officer
or employee of the Company or a Subsidiary shall not be
deemed to control, to be controlled by or to be under
common control, for purposes hereof, solely by reason
of such status. The term "control" 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 Stock, by contract or otherwise.
"Agreement" shall mean this Agreement.
"Amended Make-Whole Premium" shall mean, with
respect to the Old Notes, and the Company hereby agrees
with you as the Holder of 100% of the Old Notes
outstanding that Section 2.2 of the Note Purchase
Agreement dated as of September 28, 1990 pursuant to
which the Old Notes were issued is hereby amended to
provide that the make whole premium payable upon
prepayment of the Old Notes shall equal, the amount
that would be payable in connection with a prepayment
of the Old Notes calculated pursuant to the definition
of Make-Whole Amount in this Section 10 of this
Agreement, provided, that if the Reinvestment Rate is
equal to or higher than 10.08%, the Amended Make-Whole
Premium shall be zero, and further provided, that for
purposes of the determination of the Amended Make-Whole
Premium:
"Reinvestment Rate" shall mean 1.00%,
plus the yield on actively-traded U.S.
government securities with a maturity of one
year as set forth on page "USD" of the
Bloomberg Financial Markets Screen (or, if
not available, any other nationally
recognized trading screen reporting on-line
intraday trading in United States government
securities) at 10:00 A.M. (New York City
time) on the second Business Day prior to
the Closing Date, or in the event no such
nationally recognized trading screen
reporting on-line intraday trading in United
States government securities is available,
the arithmetic mean of the two most recent
yields under the heading "Week Ending"
published in the Statistical Release under
the caption "Treasury Constant Maturities"
for the maturity of one year.
"Bank Restricted Subsidiary" shall mean every
Subsidiary:
(a) organized as a federally insured bank,
banking association, banking organization, trust
company, trust corporation, savings bank or savings and
loan association under the laws of the United States of
America or any state of the United States of America,
(b) which conducts substantially all of its
business and has substantially all of its property in
the United States of America, and
(c) of which at least 80% (by number of
votes) of the Voting Stock and 100% of all other
capital stock shall be legally and beneficially owned
by the Company and/or one or more Wholly-Owned
Restricted Subsidiaries.
"Business Day" shall mean a day other than a
Saturday, Sunday or legal holiday or a day on which
banking institutions are authorized or required by law
to close in New York, New York or Chicago, Illinois.
"Capital Lease" shall mean and include any lease
of property, real or personal, which, in accordance
with generally accepted accounting principles would at
the time in question be required to be capitalized on a
balance sheet of the lessee.
"Capital Lease Obligation" shall mean the
capitalized amount at any time of the rental commitment
under a Capital Lease which in accordance with
generally accepted accounting principles would at such
time be required to be shown on a balance sheet.
"Change in Ownership" shall mean (a) the
acquisition, through purchase or otherwise (including
the agreement to act in concert without more), by any
Person or group (including but not limited to a "group"
within the meaning of section 13(d) or 14(d) of the
Securities Exchange Act) directly or indirectly, in one
or more transactions, of the beneficial ownership or
control of securities representing more than 25% of the
combined voting power of the Company's Voting Stock, or
(b) the acquisition by any Person, entity or group
(including but not limited to a "group" within the
meaning of section 13(d) or 14(d) of the Securities
Exchange Act), of the power (whether or not exercised)
to elect a majority of the Company's Board of
Directors. For purposes of this definition,
"beneficial ownership" shall have the meaning set forth
in Rule 13d-3 of the Securities Exchange Act.
"Closing" has the meaning set forth in
Section 1.2 of this Agreement.
"Closing Date" has the meaning set forth in
Section 1.2 of this Agreement.
"Code" has the meaning set forth in Section 6.14
of this Agreement.
"Common Stock" shall mean the common stock of
the Company as the same exists as of the date of this
Agreement or as such stock shall be constituted from
time to time.
"Consolidated Capitalization" shall mean, as of
any date as of which the amount thereof is to be
determined, the total of Consolidated Tangible Net
Worth and Consolidated Funded Indebtedness.
"Consolidated Funded Indebtedness" shall mean
the total of all Funded Indebtedness of the Company and
its Restricted Subsidiaries determined in accordance
with generally accepted accounting principles on a
consolidated basis, after eliminating all intercompany
items.
"Consolidated Net Income" shall mean the income
(or deficit) of the Company and its Restricted
Subsidiaries for the period in question (taken as a
cumulative whole) after deducting all operating
expenses, provisions for all taxes and reserves
(including provisions for reserves for deferred income
taxes) and all other proper deductions, all determined
in accordance with generally accepted accounting
principles on a consolidated basis, after eliminating
all intercompany items and after deducting portions of
income properly attributable to Minority Interests, if
any, in the stock and surplus of Restricted
Subsidiaries, provided that there shall be excluded
(a) the income (or deficit) of any Person accrued prior
to the date it becomes a Restricted Subsidiary or is
merged into or consolidated with the Company or a
Restricted Subsidiary unless such a Person has been
acquired by the Company in a transaction accounted for
as a pooling of interests under generally accepted
accounting principles (in which case, net income shall
include only the income or deficit of such Person
during the year of acquisition), (b) the income of any
Person (other than a Restricted Subsidiary) in which
the Company or any Restricted Subsidiary has an
ownership interest, except to the extent that any such
income has been actually received by the Company or
such Restricted Subsidiary in the form of dividends or
similar distributions, (c) any restoration to income of
any contingency reserve, except to the extent that
provision for such reserve was made out of income
accrued during such period, (d) any extraordinary items
of gain or loss (other than the amount by which the
purchase price paid by the Company or any Subsidiary
for any Restricted Assets exceeds the price for which
such Restricted Assets are subsequently sold by the
Company or such Subsidiary, which shall be deducted
from Consolidated Net Income), and (e) any portion of
the net earnings of any Restricted Subsidiary which for
any reason is unavailable for payment of dividends to
the Company or any other Restricted Subsidiary.
"Consolidated Short-Term Indebtedness" shall
mean the total of all Short-Term Indebtedness of the
Company and its Restricted Subsidiaries determined in
accordance with generally accepted accounting
principles on a consolidated basis, after eliminating
all intercompany items.
"Consolidated Tangible Net Worth" shall mean the
total shareholders equity of the Company and its
Restricted Subsidiaries determined in accordance with
generally accepted accounting principles (without
giving effect to any accounting adjustments from
marking to market any assets held in the "available for
sale" category pursuant to Financial Accounting
Standard 115) less Goodwill (net of amortization) and
other intangibles.
"Consolidated Total Assets" shall mean the
aggregate assets of the Company and its Restricted
Subsidiaries determined in accordance with generally
accepted accounting principles on a consolidated basis
(without giving effect to any accounting adjustments
from marking to market any assets held in the
"available for sale" category pursuant to Financial
Accounting Standard 115) less Goodwill (net of
amortization) and other intangibles.
"Contractual Obligation" means any obligation,
covenant or condition contained in any evidence of
Indebtedness or any agreement or instrument under or
pursuant to which such evidence of Indebtedness has
been issued, or any other agreement or instrument to
which the Company or any Restricted Subsidiary is a
party (whether or not evidencing Indebtedness) or by
which they or any of their properties or assets are
bound.
"Deposit-Taking Institution" shall mean any
Person organized as a federally insured bank, banking
association, trust corporation, savings bank or savings
and loan association under the laws of the United
States of America or any state of the United States of
America.
"ERISA" has the meaning set forth in
Section 6.14 of this Agreement.
"Excluded Indebtedness" shall mean any liability
or obligation of a Bank Restricted Subsidiary with
respect to (i) any deposits with or funds collected by
it, (ii) any banker's acceptance or letter of credit
issued by it, (iii) any check, note, certificate of
deposit, draft or bill of exchange, issued, accepted or
endorsed by it in the ordinary course of its business,
(iv) any discount with, borrowing from, or other
obligation to, any Federal Reserve Bank or the Federal
Deposit Insurance Corporation ("FDIC") or the Federal
Home Loan Bank, which discount or borrowing is in the
ordinary course of its banking or trust business and is
neither considered capital for regulatory purposes nor
incurred in connection with any unusual or
extraordinary "rescue loan" or substantially similar
investment, (v) any agreement, made by it in the
ordinary course of its business, to purchase or
repurchase securities, loans or federal funds or to
participate in any such purchase or repurchases, (vi)
any transactions in the nature of an extension of
credit, whether in the form of commitment, guaranty or
otherwise, undertaken by it for account of a third
party with the application by it of the same banking
considerations and legal lending limits that would be
applicable if the transaction were a loan to such
party, (vii) any transaction in which it acts solely in
a fiduciary or agency capacity, (viii) any pledge of
mortgage assets to the Federal Home Loan Bank, (ix) any
Liens Incurred in the ordinary course of making
payments by, and transferring securities by, wire, (x)
Liens incurred in connection with the acquisition of
property or assets acquired in the ordinary course of
business pursuant to foreclosure proceedings or
pursuant to an acquisition of such property or assets
in lieu of foreclosure or (xi) other obligations to
customers of the Bank Restricted Subsidiary as such
which are not for borrowed money.
"Executive Officer" shall mean (a) each Person
having the title Chairman, President, Chief Executive
Officer, Vice Chairman, Executive Vice President or
Chief Financial Officer, (b) each Person having the
title Senior Vice President or Vice President and (i)
having responsibility for the area of
finance/investments, finance/budget or loan review or
(ii) having as an additional title the title
Controller-Accounting Department or Corporate Secretary
and (c) each Person having a title analogous to any of
the titles referred to in (a) or (b).
"Funded Indebtedness" with respect to any Person
shall mean all Indebtedness of such Person, whether
secured or unsecured, issued or Incurred, which is
required to be shown as liabilities on the balance
sheet in accordance with generally accepted accounting
principles; provided, however, "Funded Indebtedness"
shall not include (i) Short-Term Indebtedness and (ii)
Excluded Indebtedness.
"Goodwill" shall mean the excess of cost over
fair market value of net assets acquired, as determined
in accordance with generally accepted accounting
principles, and reported as such, but in any event
shall not include residual interest receivables, core
deposit premiums or loan servicing rights receivables.
"Guarantee(s)" shall mean all guarantees, sales
with recourse, endorsements (other than for collection
or deposit in the ordinary course of business) and
other obligations (contingent or otherwise) by any
Person (other than Excluded Indebtedness) to pay,
purchase, repurchase or otherwise acquire or become
liable upon or in respect of any Indebtedness of any
other Person, and, without limiting the generality of
the foregoing, all obligations (contingent or
otherwise) by any Person to purchase products, supplies
or other property or services from any other Person
under agreements requiring payment therefor regardless
of the non-delivery or non-furnishing thereof, or to
make investments in any other Person, or to maintain
the capital, working capital, solvency or general
financial conditions of any other Person, or to
indemnify any other Person against and hold him
harmless from damages, losses and liabilities, all
under circumstances intended to enable such other
Person or Persons to discharge any Indebtedness or to
comply with agreements relating to such Indebtedness or
otherwise to assure or protect creditors against loss
in respect of such Indebtedness. The amount of any
Guarantee shall be deemed to be the amount of the
Indebtedness of, or damages, losses or liabilities of,
the other Person or Persons in connection with which
the Guarantee is made or to which it related unless the
obligations under the Guarantee are limited to a
determinable amount, in which case the amount of such
Guarantee shall be deemed to be such determinable
amount. For purposes of this definition, sales with
recourse shall mean either the assumption of any
financial responsibility by way of endorsement,
agreement to repurchase, guarantee, "holdback,"
agreement to indemnify against loss or the like in
respect of a sale of receivables or other obligations,
but customary warranties as to validity, absence of
default and the like shall not constitute recourse.
"Holder," when used in reference to a Note,
shall mean the Person or Persons in whose name such
Note has been registered by the Company pursuant to
Section 9.2 of this Agreement, except that, until such
Note has been so registered, the term "Holder" shall
mean the Person or Persons in whose name such Note was
issued.
"Incur" (including the correlative terms
"incurred," "incurring," "incurs" and "incurrence"),
when used with respect to any Indebtedness, shall mean
create, incur, assume, guarantee or in any manner
become liable in respect of, such Indebtedness.
"Indebtedness" with respect to any Person shall
mean all items, determined in accordance with generally
accepted accounting principles, which would be included
in determining total liabilities as shown on the
liabilities side of the balance sheet of such Person,
including, without limitation (i) all Indebtedness for
Borrowed Money, whether secured or unsecured, (ii)
deferred Indebtedness, whether secured or unsecured,
incurred in connection with the acquisition or carrying
of property, (iii) Guarantees, endorsements (other than
for the purpose of collection in the ordinary course of
business) and other contingent liabilities in respect
of obligations of other Persons, other than (in the
case of the Company) Guarantees of trade obligations of
Restricted Subsidiaries and notes, bills and checks
presented for collection or deposit in the ordinary
course of its business, (iv) Capital Lease Obligations,
and (v) all Indebtedness secured by any Lien existing
on property owned subject to such Lien, whether or not
Indebtedness secured thereby shall have been assumed.
Notwithstanding the foregoing, the term "Indebtedness",
in the case of the Company, shall not include Excluded
Indebtedness or Preferred Stock.
"Indebtedness for Borrowed Money" means any
obligation (a) for borrowed money or (b) evidenced by a
promissory note, debenture or other like written
obligation to pay money or (c) Guarantees of such
Person of any such obligations of other Persons.
"Institutional Holder" shall mean any bank,
banking association, trust corporation, bank or savings
and loan association, insurance company, pension fund,
mutual fund or other similar financial institution.
"Investments" of a Person shall mean all loans,
advances, extensions of credit, capital contributions,
transfers of property, purchases and other acquisitions
from such Person in exchange for any evidence of
indebtedness, stock or other security of another
Person.
"Lien" shall mean: (i) any interest in
property (whether real, personal or mixed and whether
tangible or intangible) which secures an obligation
owed to, or a claim by, a Person other than the owner
of such property, whether such interest is based on the
common law, statute or contract, including, without
limitation, any such interest arising from a mortgage,
charge, pledge, security agreement, conditional sale,
Capital Lease or trust receipt, or arising from a
lease, consignment or bailment given for security
purposes, (ii) any encumbrance upon such property which
does not secure such an obligation, and (iii) any
exception to or defect in the title to or ownership
interest in such property, including, without
limitation, reservations, rights of entry,
possibilities of reverter, encroachments, easements,
rights of way, restrictive covenants, leases and
licenses. For purposes of this Agreement, the Company
or any Subsidiary shall be deemed to be the owner of
any property which it has acquired or holds subject to
a conditional sale agreement, Capital Lease or other
arrangement pursuant to which title to the property has
been retained by or vested in some other Person for
security purposes.
"Long-Term Lease" shall mean any lease of real
or personal property under which the Company or a
Restricted Subsidiary is liable as lessee, or is liable
by Guarantee of the obligations of another Person as
lessee, and having an initial term, including any
period for which the lease may be renewed or extended
at the option of the lessor or lessee, of more than
three years, other than (i) a Capital Lease, (ii) a
lease under which the Company or a Wholly-Owned
Restricted Subsidiary is lessor or (iii) a lease of
data processing, accounting or similar equipment or
vehicles which is reasonably necessary for the conduct
of the business of the Company and its Restricted
Subsidiaries.
"Make-Whole Amount" shall mean in connection
with any prepayment or acceleration of the Notes the
excess, if any, of (a) the aggregate present value as
of the date of such prepayment or acceleration of each
dollar of principal being prepaid or accelerated and
the amount of interest (exclusive of interest accrued
to the date of prepayment) that would have been payable
in respect of such dollar if such prepayment or
acceleration had not been made, determined by
discounting such amounts at the Reinvestment Rate from
the respective dates on which they would have been
payable, over (b) 100% of the principal amount of the
outstanding Notes being prepaid or accelerated. If the
Reinvestment Rate is equal to or higher than 7.56%, the
Make-Whole Amount shall be zero. For purposes of any
determination of the Make-Whole Amount:
"Reinvestment Rate" shall mean 0.50%, plus
the yield on actively-traded U.S. government
securities with a maturity (rounded to the
nearest month) corresponding to the Weighted
Average Life to Maturity of the principal then
being prepaid or paid as set forth on page "USD"
of the Bloomberg Financial Markets Screen (or,
if not available, any other nationally
recognized trading screen reporting on-line
intraday trading in United States government
securities) at 10:00 A.M. (New York City time)
on the date of acceleration or on the third
Business Day prior to the date fixed for
prepayment, or in the event no such nationally
recognized trading screen reporting on-line
intraday trading in United States government
securities is available, the arithmetic mean of
the two most recent yields under the heading
"Week Ending" published in the Statistical
Release under the caption "Treasury Constant
Maturities" for the maturity (rounded to the
nearest month) corresponding to the Weighted
Average Life to Maturity of the principal being
prepaid. If no maturity exactly corresponds to
such Weighted Average Life to Maturity, yields
for the two published maturities most closely
corresponding to such Weighted Average Life to
Maturity shall be calculated pursuant to the
immediately preceding sentence and the
Reinvestment Rate shall be interpolated or
extrapolated from such yields on a straight-line
basis, rounding in each of such relevant periods
to the nearest month.
"Statistical Release" shall mean the then
most recently published statistical release
designated "H.15(519)" or any successor
publication which is published weekly by the
Federal Reserve System and which establishes
yields on actively traded U.S. Government
Securities adjusted to constant maturities or,
if such statistical release is not published at
the time of any determination hereunder, then
such other reasonably comparable index which
shall be designated by the holders of 66-2/3% in
aggregate principal amount of the outstanding
Notes.
"Weighted Average Life to Maturity" of the
principal amount of the Notes being prepaid or
accelerated shall mean, as of the time of any
determination thereof, the number of years obtained by
dividing the then Remaining Dollar-Years of such
principal by the aggregate amount of such principal.
The term "Remaining Dollar Years" of such principal
shall mean the amount obtained by (1) multiplying (x)
the remainder of (i) the amount of principal that would
have become due on each scheduled payment date if such
prepayment or acceleration had not been made, less (ii)
the amount of principal on the Notes scheduled to
become due on such date after giving effect to such
prepayment or acceleration, by (y) the number of years
(calculated to the nearest one-twelfth) which will
elapse between the date of determination and such
scheduled payment date, and (2) totalling the products
obtained in (1).
"Minority Interests" shall mean the value, as
determined in accordance with generally accepted
accounting principles, of capital stock of all
Restricted Subsidiaries held by any Person other than
the Company or its Restricted Subsidiaries.
"Multiemployer Plan" shall mean any
multiemployer plan as such term is defined in
Section 3(37) of ERISA.
"Non-Bank Restricted Subsidiary" shall mean a
Subsidiary, other than a Bank Restricted Subsidiary:
(a) organized under the laws of the United
States of America or a jurisdiction thereof,
(b) which conducts substantially all of its
business and has substantially all of its property in
the United States,
(c) of which at least 80% (by number of
votes) of the Voting Stock shall be legally and
beneficially owned by the Company and/or one or more
Wholly-Owned Restricted Subsidiaries, and
(d) which has been designated as a
Restricted Subsidiary for purposes of this Agreement on
Annex A of Exhibit B hereto or pursuant to Section 6.13
by written notice from the Company to the Holders of
the Notes. Subject to the provisions of Section 6.7
and Section 6.10 hereof, any such designation shall be
irrevocable.
"Nonperforming Assets" shall mean the aggregate
of: (a) non-accrual loans (loans accounted for on a
non-accrual basis); (b) accruing loans which are
contractually past-due 90 days or more as to principal
or interest payments; and (c) other real estate owned
including in-substance foreclosures.
"Notes" and "Note" have the meanings set forth
in Section 1.1 of this Agreement.
"Old Notes" shall mean the 10.08% Senior Notes
of the Company due March 28, 1995, issued to Allstate
Life Insurance Company.
"PBGC" means the Pension Benefit Guaranty
Corporation or any successor.
"Pension Plans" shall mean all "employee pension
benefit plans," as such term is defined in Section 3 of
ERISA (other than Multiemployer Plans), maintained by
the Company and its Related Persons, or with respect to
which the Company or any Related Person is a
"substantial employer" within the meaning of
Section 4001(a)(2) of ERISA, as from time to time in
effect.
"Person" shall mean any individual, corporation,
partnership, joint venture, association, joint-stock
company, trust, unincorporated organization or
government or any agency or political subdivision
thereof.
"Preferred Stock" shall mean any class of
capital stock of a Person with respect to which
mandatory payments are required or with respect to
which a payment (of interest, dividends or return of
capital) has a preference or priority over the making
of a similar payment on any other class of capital
stock of such Person.
"Purchaser" shall have the meaning set forth in
Section 1.1 of this Agreement.
"Related Person" shall mean any Person or trade
or business (whether or not incorporated) which
together with the Company is treated as a "single
employer" within the meaning of Section 4001(b) of
ERISA.
"Requirement of Law" means any term, condition
or provision of any law or statute, or of any rule,
regulation, order, policy and/or guideline, or
agreement with, any federal, state or local
governmental authority applicable to the Company or any
Restricted Subsidiary, or writ, injunction or decree of
any court or government, domestic or foreign, or of any
decision or ruling of any arbitrator, or the
certificate of incorporation or by-laws of the Company
or any Restricted Subsidiary, the breach of which such
term, condition or provision would have a material
adverse effect on the Company or its ability to repay
the Notes pursuant to the terms of this Agreement.
"Restricted Assets" has the meaning set forth in
Section 6.8 of this Agreement.
"Restricted Payments" has the meaning set forth
in Section 6.1 of this Agreement.
"Restricted Subsidiary" shall mean any Bank
Restricted Subsidiary or Non-Bank Restricted
Subsidiary.
"Risk-Based Capital Ratio" shall mean the ratio
of qualifying capital to weighted-risk assets
determined in accordance with the risk-based capital
guidelines adopted by the Board of Governors of the
Federal Reserve System, as such guidelines may be
amended from time to time.
"Securities Exchange Act" shall mean the
Securities Exchange Act of 1934, as amended.
"Short-Term Indebtedness" shall mean all
Indebtedness for Borrowed Money payable on demand or
within one year, other than (a) Indebtedness which is
renewable or extendible at the option of the obligor to
a date more than one (1) year from the date of creation
thereof, (b) current maturities of Funded Indebtedness
and (c) Excluded Indebtedness.
"Subsidiary" shall mean any corporation, trust
or association of which more than 50% (by number of
votes) of the Voting Stock at the time outstanding
shall at the time be owned, directly or indirectly, by
the Company or by any other corporation, association or
trust which is itself a Subsidiary, within the meaning
of this definition, or jointly by the Company and any
one or more such Subsidiaries.
"Termination Event" shall mean (i) the
occurrence of a reportable event (within the meaning of
Section 4043 of ERISA) with respect to any Pension Plan
(other than a reportable event for which the PBGC has
waived the 30-day notice requirement); (ii) the
withdrawal of the Company or any Related Person from a
Pension Plan during a plan year in which the Company or
such Related Person was a "substantial employer" as
defined in Section 4001(a)(2) of ERISA, (iii) the
imposition of an obligation on the Company or any
Related Person under Section 4041 of ERISA to provide
affected parties written notice of intent to terminate
a Pension Plan in a distress termination described in
Section 4041(c) of ERISA; (iv) the institution by the
PBGC of proceedings to terminate a Pension Plan; (v)
any event or condition that constitutes grounds under
Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Pension
Plan; or (vi) the partial or complete withdrawal of the
Company or any Related Person from a Multiemployer
Plan.
"Unrestricted Subsidiary" shall mean any
Subsidiary of the Company which is not a Restricted
Subsidiary.
"Voting Stock" shall mean securities of any
class or classes, the holders of which are entitled at
such time, in the absence of contingencies, to elect a
majority of the corporate directors (or Persons
performing similar functions), managers, trustees or
any other governing body.
"Wholly-Owned Restricted Subsidiary" shall mean
any Restricted Subsidiary of which all of the
outstanding capital stock (excepting directors'
qualifying shares, if any) shall be owned by the
Company and/or one or more other Wholly-Owned
Restricted Subsidiaries.
10.2 Accounting Principles. Where the
character or amount of any asset or liability or item
of income or expense is required to be determined or
any consolidation or other accounting computation is
required to be made for the purposes of this Agreement,
the same shall be done, unless specified otherwise in
this Agreement, in accordance with generally accepted
accounting principles as in effect in the United States
at the time the determination is made to the extent
applicable, except where such principles are
inconsistent with the requirements of this Agreement.
10.3 Directly or Indirectly. Where any
provision in this Agreement refers to action to be
taken by any Person, or which such Person is prohibited
from taking, such provision shall be applicable whether
the action in question is taken directly or indirectly
by such Person.
10.4 Valuation Principles. Except when
expressly to the contrary indicated by the use of terms
such as "fair value," "fair market value" or "market
value," each asset, each liability and each capital
item of any Person, and any quantity derivable by a
computation involving any of such assets, liabilities
or capital items, shall be taken at the net book value
thereof for all purposes of this Agreement. "Net book
value" with respect to any asset, liability or capital
item of any Person shall mean the amount at which the
same is recorded or, in accordance with generally
accepted accounting principles, should have been
recorded in the books of account of such Person, as
reduced by any reserves which have been or, in
accordance with generally accepted accounting
principles, should have been set aside with respect
thereto.
SECTION 11 MISCELLANEOUS
11.1 Expenses. Whether or not the transactions
herein contemplated shall be consummated, the Company
will pay directly all legal fees and expenses of Arnold
& Porter, your special counsel, in connection with the
preparation, execution and delivery of this Agreement
and the transactions contemplated hereby, and all your
reasonable expenses in connection with preparation,
execution and delivery of this Agreement and the
transactions contemplated hereby, including, but not
limited to, your reasonable out-of-pocket expenses,
reasonable fees and expenses of local counsel,
mimeograph and printing costs and charges for shipping
the Notes to be purchased by you (and insurance with
respect to such delivery) to you at your home office or
at such other address as you may designate, and all
similar expenses, including, but not limited to, the
reasonable fees and expenses of your or any Holder's
special counsel, relating to any amendment, supplement,
modification, waiver or consent requested or entered
into pursuant to the provisions hereof, and all
reasonable costs of enforcing your rights or the rights
of each Holder under the Notes and this Agreement,
including, but not limited to, the reasonable fees and
expenses of your or such Holder's special counsel. The
Company also agrees that it will pay and save you
harmless against any and all taxes payable in
connection with the execution and delivery of this
Agreement, the original issuance, sale and delivery of
the Notes and in connection with any amendment,
supplement, waiver or consent of this Agreement or the
Notes, whether or not any Notes are then outstanding
and save you and any subsequent Holders of the Notes
harmless without limitation as to time against any and
all liabilities (including any interest or penalty for
non-payment or delay in payment) with respect to all
such taxes. In addition, the Company agrees to pay all
expenses (including, without limitation, reasonable
fees and expenses of counsel) incurred in connection
with restructuring the terms hereof in the nature of a
work-out. The obligations of the Company under this
Section 11.1 shall survive the retirement of the Notes
and the termination of this Agreement.
11.2 Notices. Except as otherwise expressly
provided herein, all communications provided for
hereunder shall be in writing and (i) if to you, shall
be deemed to have been given or made upon actual
delivery to, or when mailed by registered or certified
mail, postage prepaid, addressed to you at your address
for notices appearing in Annex I hereto or to such
other address as you may in writing designate, (ii) if
to any other Holder, shall be deemed to have been given
or made upon actual delivery to, or, when mailed by
registered or certified mail, postage prepaid, to such
address as the such other Holder may designate in
writing to the Company, (iii) if to the Company, shall
be deemed to have been given or made upon actual
delivery to, or, when telecopied, or, when mailed by
registered or certified mail, postage prepaid, to North
Fork Bancorporation, Inc., 9025 Route 25, Mattituck,
New York 11952, Attention: Chief Financial Officer, or
to such other address as the Company may in writing
designate.
11.3 Reproduction of Documents. This Agreement
and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications
which may hereafter be executed, (b) documents received
by you at the closing of the purchase of the Notes
(except the Notes themselves) and (c) financial
statements, certificates and other information
previously or hereafter furnished to you, may be
reproduced by you by any photographic, photostatic,
microfilm, microcard, miniature photographic or other
similar process, and you may destroy any original
document so reproduced. The Company agrees and
stipulates that any such reproduction which is legible
shall be admissible in evidence as the original itself
in any judicial or administrative proceeding (whether
or not the original is in existence and whether or not
such reproduction was made by you in the regular course
of business) and that any enlargement, facsimile or
further reproduction of such reproduction shall
likewise be admissible in evidence; provided that
nothing herein contained shall preclude the Company
from objecting to the admission of any reproduction on
the basis that such reproduction is not accurate, has
been altered, is otherwise incomplete or is otherwise
inadmissible.
11.4 Successors and Assigns. All covenants,
agreements, representations and warranties made herein
shall bind, and inure to the benefit of, the parties
hereto and their respective successors and assigns.
Except as otherwise provided herein, all provisions of
this Agreement are intended for the benefit of all
Holders, from time to time, of the Notes issued
pursuant hereto and shall be enforceable by any such
Holder, whether or not an express assignment to such
Holder of rights under this Agreement has been made by
you, or any of your successors and assigns.
11.5 Governing Law. This Agreement and the
Notes issued hereunder shall be governed by and
construed and interpreted in accordance with the laws
of the State of New York, without regard to the law
thereof with respect to conflict of laws. No provision
of this Agreement may be waived, changed or modified,
or the discharge thereof acknowledged, orally, but only
by an agreement in writing signed by the party against
whom the enforcement of any waiver, change,
modification or discharge is sought.
11.6 Headings. The headings of the sections
and clauses of this Agreement are inserted for
convenience only and shall not be deemed to constitute
a part of this Agreement.
11.7 Counterparts. This Agreement may be
executed simultaneously in two (2) or more
counterparts, each of which shall be deemed an
original, and it shall not be necessary in making proof
of this Agreement to produce or account for more than
one such counterpart or reproduction thereof permitted
by Section 11.3 of this Agreement.
11.8 Reliance on and Survival of Provisions.
All covenants, agreements, representations, warranties
and statements made by the Company herein and in any
certificate, written statement, document or other
instrument furnished by or on behalf of you or the
Company in connection with the negotiation of this
Agreement, the sale of the Notes or the Company's
performance of its obligations hereunder or thereunder
or otherwise furnished to you in compliance with this
Agreement (i) shall be deemed to be material and to
have been relied upon you, notwithstanding any
investigation heretofore or hereafter made by you or on
your behalf and (ii) shall survive the delivery of this
Agreement and the issuance and delivery of the Notes
and the payment thereof.
11.9 Integration and Severability. This
Agreement embodies the entire agreement and
understanding between you and the Company, and
supersedes all prior agreements and understandings
relating to the subject matter hereof. In case any one
or more of the provisions or terms contained in this
Agreement or in any Note, or any application thereof,
shall be invalid, illegal or unenforceable in any
respect in any jurisdiction, the validity, legality and
enforceability of the remaining provisions contained
herein and therein, and any other application thereof,
shall not in any way be affected or impaired thereby,
and any such invalidity, illegality or unenforceability
in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
If the foregoing is satisfactory to you, will
you please sign the form of acceptance on the enclosed
counterparts of this Agreement and forward the same to
the Company, whereupon this Agreement will become a
binding agreement between us in accordance with its
terms.
Very truly yours,
NORTH FORK BANCORPORATION, INC.
By /s/ Daniel M. Healy
Title: Executive Vice
President and Chief
Financial Officer
Accepted as of April 20, 1994
ALLSTATE LIFE INSURANCE COMPANY
By /s/ Patricia W. Wilson
Name: Patricia W. Wilson
By /s/ Gary W. Fridley
Name: Gary W. Fridley
Authorized Signatories
- ---------------------------------------------------------------------------
ANNEX I
PURCHASER INFORMATION
Principal
Amount
Name, Address and of Note to be
Payment Instructions Purchased
ALLSTATE LIFE INSURANCE COMPANY $25,000,000
Note registered in the name of: Tax I.D. #36-2554642
ALLSTATE LIFE INSURANCE COMPANY
All payments by Fedwire transfer of immediately
available funds, identifying the name of the Issuer
(and the Credit, if any), the Private Placement Number
preceded by "DPP" and the payment as principal,
interest or premium, in the format as follows:
BBK = Harris Trust and Savings Bank
ABA #071000288
BNF = Allstate Life Insurance Company
Collection Account #168-117-0
ORG = North Fork Bancorporation, Inc.
OBI = DPP - (Enter Private Placement No., if available)
- Payment Due Date (MM/DD/YY) -
P________ (Enter "P" and amount of principal
being
remitted, for example, P5000000.00) -
I________ (Enter "I" and amount of interest being
remitted, for example, I225000.00)
All notices of scheduled payments and written
confirmations of such wire transfer to be sent to:
Allstate Insurance Company
Investment Operations - Private Placements
3075 Sanders Road, STE G4A
Northbrook, IL 60062-7127
Telephone: (708) 402-8709
Telecopy: (708) 402-7331
All financial reports, compliance certificates and all
other written communications, including notice of
prepayments, to be sent to:
Allstate Life Insurance Company
Private Placements Department
3100 Sanders Road, STE J2A
Northbrook, Illinois 60062-7154
- ---------------------------------------------------------------------------
EXHIBIT A
NORTH FORK BANCORPORATION, INC.
7.56% Senior Note
Due April 20, 1999
THIS NOTE HAS NOT BEEN REGISTERED
PURSUANT TO THE SECURITIES ACT OF 1933,
AS AMENDED, OR THE SECURITIES LAWS OF
ANY STATE. THIS NOTE MAY BE OFFERED OR SOLD ONLY IF
REGISTERED UNDER SAID ACT AND SUCH LAWS OR IF
AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
THIS NOTE MAY BE SUBJECT TO A HOME OFFICE
PAYMENT AGREEMENT AND ACCORDINGLY ANY PROSPECTIVE
PURCHASER HEREOF SHOULD FIRST VERIFY THE UNPAID
PRINCIPAL AMOUNT HEREOF WITH THE COMPANY.
Registered Note No. R-1 April 20, 1994
$25,000,000 Private Placement No.
65942*AC8
NORTH FORK BANCORPORATION, INC., a Delaware
corporation (the "Company"), for value received, hereby
promises to pay to ALLSTATE LIFE INSURANCE COMPANY or
registered assigns, the principal amount of TWENTY-FIVE
MILLION DOLLARS ($25,000,000.00), or so much thereof as
shall not have been prepaid, on April 20, 1999 and to
pay interest (computed on the basis of a 360-day year
of twelve 30-day months) on the unpaid principal amount
hereof from the date of this Note at a rate of 7.56%
per annum semiannually on October 20 and April 20 in
each year, commencing with the October 20 next
succeeding the date hereof, until the principal amount
hereof or any portion of such principal amount shall
become due and payable (whether at maturity, by
acceleration or otherwise). The Company also promises
to pay on demand interest on any overdue portion of
principal or premium (and, to the extent not prohibited
by applicable law on any overdue installment of
interest) until paid at a rate per annum from time to
time equal to the greater of (a) 9.56% or (b) the rate
of interest publicly announced by Harris Trust and
Savings Bank from time to time in Chicago, Illinois as
its Prime Rate plus 1%.
The principal hereof and premium, if any, and
interest shall be payable, in such coin or currency of
the United States of America as at the time of payment
is legal tender for the payment of public and private
debts by such method and at said office as determined
pursuant to the Purchase Agreement.
This Note is one of the "7.56% Senior Notes" of
the Company in the aggregate principal amount of
$25,000,000 (the "Notes") issued under and pursuant to
the terms and provisions of the Note Purchase
Agreement, dated as of April 15, 1994 (the "Purchase
Agreement"), entered into by the Company with the
Purchaser named in Annex I to said Purchase Agreement.
The provisions of the Purchase Agreement are hereby
incorporated in this Note to the same extent as if set
forth herein.
This Note is not a deposit and is not insured by
a federal agency.
This Note and any other Note may be declared due
prior to its expressed maturity date, and certain
prepayments are permitted to be made hereon, with
premium, all in the events, on the terms and in the
manner as provided in the Purchase Agreement.
In case an Event of Default (as defined in the
Purchase Agreement) shall happen and be continuing, the
principal of this Note may be declared due and payable
in the manner and with the effect provided in the
Purchase Agreement.
Should the indebtedness represented by this Note
or any part thereof be collected in any proceeding
provided for in the Purchase Agreement or be placed in
the hands of attorneys for collection, the Company
agrees to pay, in addition to the principal, premium,
if any, and interest due and payable hereon, all
reasonable costs of collecting this Note, including
reasonable attorneys' fees and expenses.
This Note and the Purchase Agreement have been
executed and delivered in the State of New York and are
governed by and are to be construed and interpreted in
accordance with the laws of the State of New York,
without regard to the law thereof with respect to
conflict of laws.
NORTH FORK BANCORPORATION, INC.
By
Name:
Title:
- ---------------------------------------------------------------------------
EXHIBIT B
[FORM OF COMPANY CLOSING CERTIFICATE]
CLOSING CERTIFICATE
ALLSTATE LIFE INSURANCE COMPANY
3100 Sanders Road, Suite J2A
Northbrook, Illinois 60062-7154
Attn: Investment Department-
Private Placement Division
Gentlemen:
NORTH FORK BANCORPORATION, INC., a Delaware
corporation (the "Company"), as an inducement to and as
part of the consideration for your purchase on this
date of 7.56% Senior Notes (the "Notes") of the Company
pursuant to the Note Purchase Agreement, dated as of
April 20, 1994 (the "Agreement"), between you and the
Company, and in compliance with the Agreement, hereby
represents and warrants to you as follows:
1. Corporate Organization and Authority.
The Company is a corporation duly organized and
validly existing in good standing under the laws
of the State of Delaware and is registered as a
bank holding company under Section 3(a)(1) of
the Bank Holding Company Act of 1956, as
amended, and has requisite power and authority
to carry on its business now being conducted by
it and as currently proposed to be conducted, to
execute, perform and deliver the Agreement and
to execute, issue and sell the Notes as
contemplated in the Agreement. All of the
shares of capital stock of the Company have been
duly and validly issued and are fully paid and
nonassessable.
2. Qualification to Do Business. The
Company is duly licensed to do business and
qualified as a foreign corporation in all
jurisdictions where the nature of its business
or the character of its properties requires such
qualification.
3. Subsidiaries. The Company has no
Subsidiaries except those listed in Annex A
hereto. Except as otherwise indicated, each of
such Subsidiaries is hereby designated a
Restricted Subsidiary. Each Restricted
Subsidiary, designated as such in Annex A
hereto, is duly organized and validly existing
in good standing under the laws of its
jurisdiction of incorporation or organization.
Each such Restricted Subsidiary is duly
qualified or licensed to do business and is
qualified as a foreign corporation in each other
jurisdiction where the nature of its business or
operations or character of its properties
requires such qualification or licensing, and
each such Restricted Subsidiary has all
requisite power and authority to carry on its
business as now conducted and to own its
properties. The Company and/or one or more
Restricted Subsidiaries have good and marketable
title to all of the shares of the Voting Stock
of each Restricted Subsidiary, free and clear in
each case of any lien or encumbrance, and all
such shares have been duly and validly issued
and are fully paid and nonassessable, except
that the shares of North Fork Bank are
assessable under SECTION 114 of the New York Banking
Law.
4. Financial Statements and Other
Information. There has heretofore been
delivered to you the following:
(a) Annual Reports to Shareholders of
the Company for each of the years
ending December 31, 1990 through
December 31, 1993, including
therein the Consolidated
Statements of Condition of the
Company and its Subsidiaries as of
such dates and the related
Consolidated Statements of Income,
Consolidated Statements of Changes
in Financial Condition and
Consolidated Statements of
Shareholders' Equity for the
fiscal years ended on said dates,
certified by KPMG Peat Marwick,
independent public accountants;
(b) The Company's Form 10-K Report for
the year ending December 31, 1993,
as filed with the Securities and
Exchange Commission;
(c) (i) copies of monthly financial
reports (i.e., copies of the
financial information made
available to the Board of
Directors of the Company), (ii)
minutes of the meetings of the
Board of Directors of the Company
and directors, books and other
information packages prepared for
the directors for such meetings,
(iii) a report on Nonperforming
Assets and a breakdown of such
assets by portfolio classification
substantially in the form of
Exhibit C to the Agreement and
(iv) status reports on any
communications between the Company
or any Subsidiary and any
regulatory authority, all for the
month ended January 31, 1994; and
(d) FDIC Consolidated Reports of
Condition and Income for a Bank
With Domestic Offices Only and
Total Assets of $300 Million or
More (-FFIEC 032) with respect to
North Fork Bank for the quarterly
period ended December 31, 1993.
The financial statements and reports
included in the above were prepared in
accordance with generally accepted
accounting principles consistently applied
throughout the periods involved (except, in
the case of monthly financial statements,
for the absence of footnotes), are correct
and complete and fairly present the
financial condition and results of
operations of the Company and the
Subsidiaries covered by such reports for
and as of the end of the periods covered.
5. No Adverse Change. Since December 31,
1993, there has been no material adverse change
in the condition, financial or otherwise, of the
Company from that set forth in its balance sheet
as at said date or of the Company and its
Subsidiaries on a consolidated basis from that
set forth in the consolidated balance sheet as
at said date, which balance sheets are included
in the financial statements described in the
foregoing Paragraph 4 hereof.
6. No Pending Material Litigation or
Proceedings. There are no actions, suits,
proceedings, inquiries or investigations pending
or threatened against or affecting the Company
or any Subsidiary or the financial condition,
business or properties of the Company or any
Subsidiary, at law or in equity or before or by
any federal, state, municipal or other
governmental department, commission, board,
bureau, agency or instrumentality or court,
arbitrator or grand jury, domestic or foreign,
which may result, either individually or
collectively, in any material adverse change in
the business, properties, operations or
condition, financial or otherwise, of the
Company and its Subsidiaries taken as a whole or
in the ability of the Company to perform the
Agreement and the Notes.
7. Compliance with Law; Contractual
Obligation. (a) Neither the Company nor any
Subsidiary is in default under any Requirement
of Law on the part of the Company or any
Subsidiary.
(b) Neither the issue and sale of the
Notes by the Company nor its use of the proceeds
thereof as contemplated by the Agreement will
violate any regulation of the United States
Treasury Department contained in 31 C.F.R.,
Subtitle B, Chapter V, as amended, including,
without limitation, the Foreign Assets Control
Regulations, the Cuban Assets Control
Regulations, the Libyan Sanctions Regulations,
the Iranian Transactions Regulations, the Iraqi
Sanctions Regulations, the Haitian Transactions
Regulations and the Federal Republic of
Yugoslavia (Serbia and Montenegro) Sanctions
Regulations.
(c) Neither the Company nor any
Subsidiary is a party to any Contractual
Obligation or subject to any Requirement of Law
which presently materially and adversely
affects, or (so far as the Company can now
reasonably foresee) in the future may materially
and adversely affect, the business, operations,
properties or assets, or the condition,
financial or otherwise, of the Company or any
Subsidiary or the ability of the Company to
perform the Agreement or to pay when due, in
accordance with the terms of the Notes and the
Agreement, the principal of, and premium, if
any, and interest on, the Notes. Neither the
Company nor any Subsidiary is a party to any
Contractual Obligation (other than this
Agreement) which restricts its right or ability
to Incur Short Term Indebtedness or Funded
Indebtedness or to make payments on such
Indebtedness.
8. ERISA. Neither the purchase of the
Notes to be purchased by you nor the
consummation of any of the other transactions
contemplated by the Agreement is or will result
in the Company or any Subsidiary engaging in a
"prohibited transaction" within the meaning of
Section 4975 of the Code or Section 406 of
ERISA. There exists with respect to all
employee benefit plans or trusts established or
maintained by the Company and any Related Person
for its employees (such plans and trusts are
herein referred to as the "Plans"): (i) no
material accumulated funding deficiency within
the meaning of ERISA; (ii) no termination of any
Plan which would result in a material liability
to the PBGC or any "reportable event," as the
term is defined in ERISA, or other condition
which might constitute grounds under Section
4042(a) of ERISA for termination of any Plan by
the PBGC; and (iii) no "prohibited transaction,"
as that term is defined in ERISA, which could
subject any Plan or the Company or any Related
Person to any material tax or penalty on
prohibited transactions imposed by Section 4975
of the Code or any other material loss or
liability. The Company has delivered to you a
complete and correct list of (i) all of the
Plans and (ii) all employee benefit plans with
respect to which the Company's or an affiliate's
securities are "employer securities" within the
meaning of Section 407(d)(1) of ERISA. The
present value of all benefit liabilities (as
defined in Section 4001(a)(16)) of ERISA under
each employee pension benefit plan maintained by
the Company and its Related Persons, or in which
employees of the Company or any Related Person
are entitled to participate, as from time to
time in effect (herein called the "Pension
Plans"), did not, as of the last annual
valuation date for each such plan, exceed the
fair market value of the assets of each such
Pension Plan allocable to such benefit
liabilities and there has been no material
adverse change in the funded status of any of
the Pension Plans since such most recent annual
valuation date. There exist with respect to the
Company or any Related Person no Multiemployer
Plans. As used in this Paragraph 8, the terms
"employee benefit plans," "employee pension
benefit plans" and "persons" shall have the
respective meanings assigned to such terms in
Section 3 of ERISA, and the term "affiliate"
shall have the meaning assigned to such term in
Section 407(d)(7) of ERISA.
9. Title to Properties. The Company and
its Subsidiaries have good and marketable title
to all of their property reflected in the
balance sheet as of December 31, 1993 included
in the financial statements referred to in
Paragraph 4 hereof and to all property purported
to have been acquired subsequent to such date
(other than any such property sold or otherwise
disposed of subsequent to such date in the
ordinary course of business). None of the
respective property of the Company and its
Subsidiaries reflected in the consolidated
balance sheet as at December 31, 1993 included
in the financial statements referred to in
Paragraph 4 hereof, or acquired by the Company
or its Subsidiaries after such date, is held by
the Company or its Subsidiaries (i) under any
lease or as leasehold improvements, or (ii)
subject to any Lien other than those which in
the aggregate are not material, except, in each
case, as disclosed on, or in the notes to, the
consolidated balance sheet as at December 31,
1993 included in the financial statements
referred to in Paragraph 4 hereof. To the best
knowledge of the Company, after reasonable
investigation, no financing statement under the
Uniform Commercial Code which names the Company
as debtor is on file in any jurisdiction, and
the Company has not signed any financing
statement or any security agreement authorizing
any secured party thereunder to file any such
financing statement after the date hereof except
equipment leases and other secured transactions
that are not substantial in amount.
10. Leases. The Company and the Subsidiaries
enjoy peaceful and undisturbed possession under all
material leases under which the Company or any such
Subsidiary is a lessee or is operating. None of such
leases contains any unusual or burdensome provision
which might materially adversely affect the operation
or use of the property so leased. All of such leases
are valid and subsisting and none of them is in
default.
11. Franchises, Patents, and Trademarks
and Other Rights. The Company and the
Subsidiaries have all material franchises,
permits, licenses and other authority as are
necessary to enable them to conduct the
businesses of the Company and the Subsidiaries
as now being conducted and as proposed to be
conducted, and none of them is in default under
(i) any of such franchises, permits, licenses or
other authority or (ii) any Long-Term Lease to
which it is a party, as lessee. The Company and
the Subsidiaries own or possess all patents,
trademarks, service marks, trade names,
copyrights, licenses and rights with respect to
the foregoing necessary for the present conduct
of the businesses of the Company and the
Subsidiaries, without any known conflict with
the rights of others which might result in any
material adverse change in the business,
properties, operations or condition, financial
or otherwise, of the Company and its
Subsidiaries, taken as a whole.
12. Sale Is Valid and Authorized. The
sale of the Notes by the Company, the execution
and delivery of the Agreement and compliance by
the Company with all of the provisions of the
Agreement (a) are within the corporate powers of
the Company and (b) have been duly authorized by
proper corporate action. The Agreement and the
Notes, once purchased, are the legal, valid and
binding obligations of the Company enforceable
against the Company in accordance with their
respective terms and will not result in any
breach of any of the provisions of, or
constitute a default under, or result in the
creation of any lien or encumbrance upon any
properties or assets of the Company or any
Subsidiary under the provisions of any
Contractual Obligation, charter instrument, by-
law or other agreement or instrument to which
the Company or any Subsidiary is a party or by
which it may be bound.
13. No Defaults. No event has occurred
and no condition exists which, upon the issue of
the Notes, would constitute an Event of Default,
or with the lapse of time or the giving of
notice or both would become an Event of Default,
under the Agreement.
14. Governmental Consents. Based in part
upon your representations contained in Section
3.2 of the Agreement, neither the nature of the
Company or any Subsidiary, their businesses or
properties, nor any relationship between the
Company or any Subsidiary and any other Person,
nor any circumstances in connection with the
offer, issue, sale or delivery of the Notes, is
such as to require an order, permission,
consent, approval or authorization of, or
filing, registration or qualification with, any
federal, state, municipal or other governmental
department, commission, board, bureau, agency or
regulatory authority, domestic or foreign, on
the part of the Company or any Subsidiary in
connection with the execution, delivery or
performance of the Agreement and the Notes.
15. Other Consents and Approvals. The
Company has obtained all necessary consents,
approvals and waivers from, and has made all
necessary notifications to, stockholders,
creditors, lessors and other non-governmental
persons, in connection with the execution and
delivery of the Agreement and the Notes and the
consummation of the transactions therein
contemplated.
16. Taxes. All tax returns required to be
filed by the Company and any Subsidiary in any
jurisdiction have been duly filed, and all
taxes, assessments, fees and other governmental
charges or levies imposed upon the Company or
any Subsidiary or upon any of their respective
properties, assets, income, profits or
franchises, which are due and payable, have been
duly paid or are being contested in good faith
by appropriate proceedings, and adequate
reserves for such taxes, assessments, fees,
charges and levies have been established in
accordance with generally accepted accounting
principles. Such returns have been examined or
closed through the year 1989. The Company does
not know of any proposed additional tax
assessment against it or any Subsidiary nor of
any basis for one which would have a material
adverse effect on the Company and its
Subsidiaries, taken as a whole. The provisions
for taxes on the books of the Company and its
Subsidiaries are adequate for all open years and
for the current fiscal period.
17. Status Under Certain Statutes.
Neither the Company nor any Subsidiary is (i) a
"public utility company" or a "holding company,"
or an "affiliate" or a "subsidiary company" of a
"holding company," or an "affiliate" of such a
"subsidiary company," as such terms are defined
in the Public Utility Holding Company Act of
1935, as amended, or (ii) a "public utility" as
defined in the Federal Power Act, as amended, or
(iii) an "investment company" or an "affiliated
person" thereof or an "affiliated person" of any
such "affiliated person," as such terms are
defined in the Investment Company Act of 1940,
as amended.
18. Private Offering. Neither the Company
nor, to the best knowledge of the Company, any
other Person acting on behalf of the Company in
connection with the offering of the Notes, has
offered any of the Notes or any similar security
of the Company for sale to, or solicited offers
to buy any thereof from, or otherwise approached
or negotiated with respect thereto with, any
prospective purchaser, other than you. The
Company agrees that neither the Company nor any
other Person acting on the Company's
authorization will offer the Notes or any part
thereof or any similar securities for issue or
sale to, or solicit any offer to acquire any of
the same from, anyone so as to bring the
issuance and sale of the Notes within the
provisions of Section 5 of the Securities Act of
1933, as amended.
19. Use of Proceeds. The net proceeds of
the sale of the Notes will be used to prepay in
full all amounts payable on account of the Old
Notes and for general corporate purposes. None
of the transactions contemplated in the
Agreement (including, without limitation
thereof, the use of the proceeds from the sale
of the Notes) will violate or result in a
violation of Section 7 of the Securities
Exchange Act of 1934, as amended, or any rules
and regulations issued pursuant thereto,
including, without limitation, Regulations G, T
and X of the Board of Governors of the Federal
Reserve System (12 C.F.R., Chapter II). The
Company will not use any such proceeds to carry
or purchase any "margin stock" within the
meaning of said Regulation G and none of such
proceeds will be used to purchase, carry, reduce
or refinance any borrowing the proceeds of which
were used to purchase or carry, any such "margin
stock" in violation of Regulations G, T and X.
20. Condition of Property. All of the
facilities of the Company and Subsidiaries
material to the operations thereof are in sound
operating condition and repair, normal wear and
tear excepted.
21. Books and Records. The Company and
each Subsidiary maintain books of account,
records, reports and papers which, in reasonable
detail, accurately and fairly reflect the
transactions and disposition of its assets, and
maintain a system of internal accounting
controls sufficient to provide reasonable
assurances that (a) transactions are executed in
accordance with management's general or specific
authorization; (b) transactions are recorded as
necessary (i) to permit preparation of financial
statements in accordance with generally accepted
accounting principles, and (ii) to maintain
accountability for assets; (c) access to assets
is permitted only in accordance with
management's general or specific authorization;
and (d) the recorded accountability for assets
is compared with the existing assets at
reasonable intervals and appropriate action is
taken with respect to any differences.
22. Full Disclosure. Any written
statements or documents furnished by the Company
to you in connection with the negotiation of the
Agreement and the sale to you of the Notes do
not contain any untrue statement of a material
fact or omit to state a material fact necessary
to make the statements contained therein or
herein not misleading. There is no fact which
the Company has not disclosed to you in writing
which materially and adversely affects or, so
far as the Company can now reasonably foresee,
will materially and adversely affect the
business, property, assets, operations or
condition (financial or otherwise) of the
Company or any Subsidiary, or the ability to
perform its obligations under and in respect of
the Agreement and the Notes.
23. Supplemental Information. The
information set forth on Annex A hereto is true
and complete in all material respects.
All capitalized terms used herein without
definition shall have the meanings ascribed to them by
the Agreement.
IN WITNESS WHEREOF, this Certificate is executed
and delivered this 20th day of April, 1994.
NORTH FORK BANCORPORATION, INC.
By
Name:
Title:
- ---------------------------------------------------------------------------
Exhibit C
North Fork Bancorporation, Inc.
DELINQUENCIES BY LOAN TYPE ADJUSTED:
<TABLE>
<CAPTION>
December 1993
Description Current 30 days 60 days 90 days Non-accrual Total
<S> <C> <C> <C> <C> <C> <C>
Comm., Fin. &
Agricultural 228,925,393 3,969,869 7,008,169 1,065,996 16,181,733 257,151,160
89.02% 1.54% 2.73% 0.41% 6.29% 100.00%
Mtg.Loans-
Residential 349,471,027 4,953,779 1,557,969 745,445 6,914,581 363,642,801
96.10% 1.36% 0.43% 0.20% 1.90% 100.00%
Mtg.Loans-
Commercial 264,325,037 12,418,763 8,853,597 0 6,559,950 292,157,347
90.47% 4.25% 3.03% 0.00% 2.25% 100.00%
Mtg. Loans-
Construction 12,953,740 578,519 4,555,843 0 1,739,543 19,827,645
65.33% 2.92% 22.98% 0.00% 8.77% 100.00%
Land Development 31,329,206 2,164,828 2,000,000 0 1,666,634 37,160,668
84.31% 5.83% 5.38% 0.00% 4.48% 100.00%
Consumer Loans 58,681,772 695,233 25,450 0 420,784 59,823,239
98.09% 1.16% 0.04% 0.00% 0.70% 100.00%
Total Loans 945,686,176 24,780,991 24,001,028 1,811,441 33,483,224 1,029,762,860
91.84% 2.41% 2.33% 0.18% 3.25% 100.00%
November 1993
Description Current 30 days 60 days 90 days Non-accrual Total
Comm., Fin. &
Agricultural 215,452,033 7,403,875 9,283,793 6,030,468 14,988,180 253,158,349
85.11% 2.92% 3.67% 2.38% 5.92% 100.00%
Mtg.Loans-
Residential 340,452,986 5,876,483 1,568,514 341,866 7,666,375 355,906,224
95.66% 1.65% 0.44% 0.10% 2.15% 100.00%
Mtg.Loans-
Commercial 259,430,570 12,754,357 10,405,252 1,013,935 8,604,058 292,208,172
88.78% 4.36% 3.56% 0.35% 2.94% 100.00%
Mtg. Loans-
Construction 10,671,515 203,236 4,755,843 0 1,739,543 17,370,137
61.44% 1.17% 27.38% 0.00% 10.01% 100.00%
Land Development 28,818,100 587,997 4,667,800 905,000 3,351,081 38,329,978
75.18% 1.53% 12.18% 2.36% 8.74% 100.00%
Consumer Loans 58,226,342 800,545 190,027 157,132 364,705 59,738,751
97.47% 1.34% 0.32% 0.26% 0.61% 100.00%
Total Loans 913,051,546 27,626,493 30,871,229 8,448,401 36,713,942 1,016,711,610
89.80% 2.72% 3.04% 0.83% 3.61% 100.00%
</TABLE>
North Fork Bancorporation, Inc.
December 1993
Non-Performing Assets:
Percentages based on gross loans plus other real estate owned
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Qtr.Ending Qtr.Ending Qtr.Ending Qtr.Ending
Dec. 1993 % Sept. 1993 June 1993 Mar. 1993 12/31/92
Total 90+Days
Past Due 1,811,441 0.17% 2,725,941 2,113,773 3,756,805 5,424,690
Non-Accrual Loans 33,483,224 3.18% 36,866,076 46,298,371 50,510,944 59,670,266
Total Non-Performing 35,294,665 3.36% 39,592,017 48,412,144 54,267,749 65,094,956
In-Substance Foreclosure 14,472,481 1.38% 21,767,445 35,967,569 46,300,195 51,331,588
Other Real Estate Owned 7,426,056 0.71% 16,248,261 12,741,346 10,171,683 10,051,532
Total Non-Performing
Assets 57,193,202 5.44% 77,607,723 97,121,059 110,739,627 126,478,076
________________________________________________________________________
Renegotiated Loans 17,963,119 17,737,158 18,094,214 17,828,879 18,412,958
</TABLE>
North Fork Bancorporation, Inc.
RECONCILIATION OF THE ALLOWANCE FOR LOANS LOSSES December 1993
Ending Balance as of November 30, 1993 $ 46,513,144
ADD: Transfers (166,667)
ADD: Recoveries,
Loans Secured by Real Estate:
Construction and Land Development 7,500
1-4 Family Residential Properties 10,920
Commercial Properties 114,096
Commercial and Industrial Loans 903,538
Consumer Loans 41,835
Adjustment to Recoveries 0
_________
Total Recoveries 1,077,888
LESS: Charge-offs,
Loans Secured by Real Estate:
Construction and Land Development 310,500
1-4 Family Residential Properties 25,000
Commercial Properties 393,407
Commercial and Industrial Loans 2,862,035
Consumer Loans 207,957
Adjustment to Charge-offs 0
_________
Total Charge-offs 3,798,900
Ending Balance as of December 31, 1993 $ 46,625,465
YEAR TO DATE TOTALS: December 1993
Recoveries:
Loans Secured by Real Estate:
Construction and Land Development $ 110,351
1-4 Family Residential Properties 49,583
Commercial Properties 709,512
Commercial and Industrial Loans 2,300,781
Consumer Loans 506,084
_________
Total $ 3,676,305
Charge-offs:
Loans Secured by Real Estate:
Construction and Land Development 1,162,403
1-4 Family Residential Properties 2,500,000
Commercial Properties 6,556,046
Commercial and Industrial Loans 10,114,913
Consumer Loans 1,214,235
__________
Total 21,548,010
Net Charge-offs:
Loans Secured by Real Estate:
Construction and Land Development 1,052,052
1-4 Family Residential Properties 2,450,829
Commercial Properties 5,846,535
Commercial and Industrial Loans 7,814,132
Consumer Loans 708,152
__________
Total $ 17,871,705
- ---------------------------------------------------------------------------
ANNEX A
LIST OF SUBSIDIARIES
North Fork Bank
NFB Development Corp. (1)
AcuData Service Corp. (2)
North Fork Leasing Corp.
North Fork Capital Corp.
First Settler Corporation (1)
Howard Enterprises (1)
North Fork Information Services, Inc. (1)(2)
North Fork Loan Service Corp. (1)(2)
Cutcho Corp. (1)
Compass Investment Services Corp.
Claire Elm (1)(2)
Long Island Mortgage Corp. (1)
North Interim
1 subsidiary of North Fork Bank
2 inactive subsidiary
