<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13D-1(a)
AND AMENDMENTS THERETO FILED PURSUANT RULE 13D-2(a)(AMENDMENT NO. ) (1)
LNB Bancorp, Inc.
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(Name of Issuer)
Shares of Common Stock
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(Title of Class of Securities)
502100-10-0
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(CUSIP Number)
Marc C. Krantz, Kohrman Jackson & Krantz P.L.L., 1375 East 9th Street,
Cleveland, Ohio 44114, 216-736-7204
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(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
April 19, 2000
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box G.
NOTE: Schedules filed in paper format shall include a signed original and
five copies of the schedule including all exhibits. See Rule 13d-7(b) for other
parties to whom copies are to be sent.
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(1) The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to the subject
class of securities, and for any subsequent amendment containing information
which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
1 of 14 Pages
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SCHEDULE 13D
CUSIP NO. 502100-10-0 PAGE 2 OF 14 PAGES
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
TURKEY VULTURE FUND XIII, LTD.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ X ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
WC, OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
OHIO
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NUMBER OF 7 SOLE VOTING POWER
SHARES 10,600
BENEFICIALLY -------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH -------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON 10,600
WITH -------------------------------------
10 SHARED DISPOSITIVE POWER
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
10,600
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
LESS THAN 1%
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14 TYPE OF REPORTING PERSON*
OO
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SCHEDULE 13D
CUSIP NO. 502100-10-0 PAGE 3 OF 14 PAGES
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
GLB BANCORP, INC.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ X ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
OHIO
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NUMBER OF 7 SOLE VOTING POWER
SHARES 129,233
BENEFICIALLY -------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH -------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON 129,233
WITH -------------------------------------
10 SHARED DISPOSITIVE POWER
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
129,233
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.1%
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14 TYPE OF REPORTING PERSON*
CO
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SCHEDULE 13D
CUSIP NO. 502100-10-0 PAGE 4 OF 14 PAGES
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
RICHARD M. OSBORNE TRUST
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ X ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
BK, OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
OHIO
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NUMBER OF 7 SOLE VOTING POWER
SHARES 121,746
BENEFICIALLY -------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH -------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON 121,746
WITH -------------------------------------
10 SHARED DISPOSITIVE POWER
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
121,746
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.9%
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14 TYPE OF REPORTING PERSON*
OO
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<PAGE>
This original Schedule 13D Statement is filed on behalf of Turkey
Vulture Fund XIII, Ltd., an Ohio limited liability company (the "Fund"), GLB
Bancorp, Inc., an Ohio corporation ("GLB"), and the Richard M. Osborne Trust, an
Ohio trust (the "Trust"), for the purpose of reporting certain acquisitions of
shares of common stock, par value $1.00 per share, of LNB Bancorp, Inc., an Ohio
corporation.
Item 1. SECURITY AND ISSUER.
This Schedule 13D Statement relates to the shares of common stock, par
value $1.00 per share (the "Shares"), of LNB Bancorp, Inc., an Ohio corporation
("LNB"), which has its principal executive offices at 457 Broadway, Lorain, Ohio
44052.
Item 2. IDENTITY AND BACKGROUND.
(a) The persons filing this Schedule 13D are (i) Turkey Vulture Fund
XIII, Ltd., an Ohio limited liability company, (ii) GLB Bancorp, Inc., an Ohio
corporation, and (iii) the Richard M. Osborne Trust, an Ohio trust. Richard M.
Osborne is the sole manager of the Fund, Vice-Chairman of the Board of Directors
of GLB, and sole trustee of the Trust.
In accordance with the provisions of General Instruction C to Schedule
13D, information concerning the executive officers and directors of GLB is
included on Schedule A hereto and is incorporated herein by reference. Also set
forth on Schedule A is the name, address, citizenship and principal business of
each corporation in which the occupations of such directors and executive
officers are conducted.
(b) The address of the Fund, the Trust and Mr. Osborne is 8500 Station
Street, Suite 113, Mentor, Ohio 44060. The address of GLB is 7001 Center Street,
Mentor, Ohio 44060.
(c) The principal business of the Fund is to acquire, hold, sell or
otherwise invest in all types of securities and other instruments. GLB is a bank
holding company. The Trust was established by Mr. Osborne for estate planning
purposes. Mr. Osborne's principal occupation is President and Chairman of the
Board of Directors of OsAir, Inc., a property developer and manufacturer of
industrial gases for pipeline delivery. OsAir, Inc. is located at 8500 Station
Street, Suite 113, Mentor, Ohio 44060.
(d) Negative with respect to the Fund, GLB, the Trust, Mr. Osborne and
the directors and executive officers listed on Schedule A.
(e) Negative with respect to the Fund, GLB, the Trust, Mr. Osborne and
the directors and executive officers listed on Schedule A.
5 of 14 Pages
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(f) The Fund is an Ohio limited liability company, GLB is an Ohio
corporation, the Trust is an Ohio trust and Mr. Osborne is a citizen of the
United States of America.
Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The Shares reported herein as having been acquired by the Fund were
acquired for the aggregate purchase price of approximately $1.8 million with a
combination of working capital of the Fund and margin debt from First Union
Securities, Inc. ("First Union"). Interest on the margin debt is computed at a
select rate above the rate banks charge securities brokers ("brokers call money
rate") and is subject to change, without notice, if the brokers call money rate
changes. To the extent permitted by law, First Union has a lien on certain of
the Shares reported herein as having been acquired by the Fund. A copy of the
agreement setting forth the terms of the Fund's First Union margin debt is
attached hereto as Exhibit 7.1.
The Shares reported herein as having been acquired by GLB were acquired
for the aggregate purchase price of approximately $3.5 million with GLB's
working capital.
The Shares reported herein as having been acquired by the Trust were
acquired for the aggregate purchase price of approximately $3.3 million with a
combination of funds borrowed from Fifth Third Bancorp Bank ("FTB") and margin
debt as described above from First Union. The Trust executed a Draw Note on
April 24, 2000, in favor of FTB with an 18 month term, bearing interest at the
rate of 0.5% less than the Prime Rate. A copy of the Draw Note setting forth the
terms of the borrowing arrangement is attached hereto as Exhibit 7.2. Repayment
of the borrowed funds is personally guaranteed by Mr. Osborne and further
secured by a pledge of 121,000 of the Shares reported herein as having been
acquired by the Trust. A copy of the Unlimited Payment Guaranty and Pledge
Agreement setting forth the terms of each are attached hereto as Exhibits 7.3
and 7.4, respectively.
Item 4. PURPOSE OF TRANSACTION.
The Fund, GLB and the Trust purchased the Shares to acquire a minority
interest in LNB for the purposes of investment. Mr. Osborne has met with the
management of LNB to discuss its business strategies, and Mr. Osborne may, in
the future, desire to continue such meetings. The Fund, GLB, the Trust and Mr.
Osborne reserve the right to dispose of or acquire additional Shares and will do
so depending on market conditions, developments with respect to LNB's business
and other relevant factors.
6 of 14 Pages
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Pursuant to the instructions for items (a) through (j) of Item 4 of
Schedule 13D, neither the Fund, GLB, the Trust nor Mr. Osborne presently has
plans or proposals that relate to or would result in any of the following:
(i) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving LNB or any of its subsidiaries;
(ii) the sale or transfer of a material amount of assets of LNB or any
of its subsidiaries;
(iii) a change in the present board of directors or management of the
issuer, including any plans or proposals to change the number or term of
directors or to fill any existing vacancies on the board;
(iv) a material change in the present capitalization or dividend policy
of LNB;
(v) a material change in the business or corporate structure of LNB;
(vi) a change to the Articles of Incorporation or Code of Regulations of
LNB or an impediment to the acquisition of control of LNB by any person;
(vii) the delisting from the National Association of Securities Dealers
Automated Quotation System of the Shares;
(viii) a class of equity securities of LNB becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"); or
(ix) any action similar to any of those enumerated in (i) through (viii)
above.
The Fund, GLB, the Trust and Mr. Osborne reserve the right to modify
their plans and proposals described in this Item 4. Further, subject to
applicable laws and regulations, they may, in the future, formulate plans and
proposals that may result in the occurrence of an event set forth in (i) through
(ix) above or in Item 4 of Schedule 13D.
Item 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) According to the most recently available filing with the Securities
and Exchange Commission by LNB, there are 4,127,161 Shares outstanding.
7 of 14 Pages
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The Fund beneficially owns 10,600 Shares, or less than 1% of the
outstanding Shares. As sole manager of the Fund, Mr. Osborne may be deemed to
beneficially own all such Shares. GLB beneficially owns 129,233 Shares, or
approximately 3.1% of the outstanding Shares. None of the directors or
executive officers listed on Schedule A own Shares individually. The Trust owns
121,746 Shares, or approximately 2.9% of the outstanding Shares. As sole
trustee of the Trust, Mr. Osborne may be deemed to beneficially own all such
Shares.
Because of Mr. Osborne's position with the Fund, GLB and the Trust, each
of them and Mr. Osborne may be deemed to be a group within the meaning of
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). If such persons are deemed to be a group within the meaning of
Section 13(d)(3) of the Exchange Act each may be deemed to beneficially own
261,579 shares, or approximately 6.3% of the outstanding shares. The Fund, GLB,
the Trust, and Mr. Osborne disclaim beneficial ownership of the Shares held by
other members comprising such group.
(b) Mr. Osborne, as sole manager of the Fund, has sole power to vote, or
to direct the voting of, and the sole power to dispose or to direct the
disposition of, the 10,600 Shares owned by the Fund. GLB has sole power to vote,
to direct the voting of, and the sole power to dispose or to direct the
disposition of, the 129,233 Shares owned by GLB. Mr. Osborne, as sole trustee of
the Trust, has the power to vote, or to direct the voting of, and the sole power
to dispose or to direct the disposition of, the 121,746 Shares owned by the
Trust.
(c) During the past 60 days, the Fund purchased 10,600 Shares in open
market transactions as set forth below:
<TABLE>
<CAPTION>
Date Number of Shares Price Per Share
---- ---------------- ---------------
<S> <C> <C>
2/24/00 100 $19.19
2/25/00 100 $19.13
2/25/00 1,000 $19.13
3/01/00 3,000 $20.31
3/02/00 2,500 $19.25
3/09/00 200 $18.91
3/17/00 1,000 $19.13
3/21/00 500 $20.13
3/21/00 100 $19.94
3/22/00 1,400 $19.88
3/29/00 700 $19.96
</TABLE>
During the past 60 days, neither GLB nor any of the directors or
executive officers listed on Schedule A have purchased Shares.
8 of 14 Pages
<PAGE>
During the past 60 days, the Trust purchased 121,746 Shares in an open
market transaction on April 19, 2000. The price per Share was $26.75.
(d) Not Applicable.
(e) Not Applicable.
Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER.
Not Applicable.
Item 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 7.1 General Account Agreement Letter to First Union Securities,
Inc. (successor-in-interest to Kemper Securities, Inc.,
predecessor-in-interest to Everen Securities, Inc.) from
Turkey Vulture Fund XIII, Ltd.
Exhibit 7.2 Draw Note by the Richard M. Osborne Trust, in favor of Fifth
Third Bancorp Bank
Exhibit 7.3 Unlimited Payment Guaranty of Richard M. Osborne to Fifth
Third Bancorp
Exhibit 7.4 Pledge Agreement by the Richard M. Osborne Trust to Fifth
Third Bancorp
Exhibit 7.5 Agreement of Joint Filing
9 of 14 Pages
<PAGE>
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: May 1, 2000 TURKEY VULTURE FUND XIII, LTD.
By: /s/ Richard M. Osborne
---------------------------
Richard M. Osborne, Manager
Dated: May 1, 2000 GLB BANCORP, INC.
By: /s/ Richard T. Flenner, Jr.
----------------------------------
Richard T. Flenner, Jr., President
Dated: May 1, 2000 RICHARD M. OSBORNE TRUST
By: /s/ Richard M. Osborne
----------------------------------
Richard M. Osborne, Trustee
10 of 14 Pages
<PAGE>
Exhibit Index
Exhibit 7.1 General Account Agreement Letter to First Union
Securities, Inc. (successor-in-interest to Kemper
Securities, Inc., predecessor-in-interest to Everen
Securities, Inc.) from Turkey Vulture Fund XIII, Ltd.
Exhibit 7.2 Draw Note by the Richard M. Osborne Trust, in
favor of Fifth Third Bancorp Bank
Exhibit 7.3 Unlimited Payment Guaranty of Richard M. Osborne
to Fifth Third Bancorp
Exhibit 7.4 Pledge Agreement by the Richard M. Osborne Trust
to Fifth Third Bancorp
Exhibit 7.5 Agreement of Joint Filing
11 of 14 Pages
<PAGE>
SCHEDULE A
Name: James A. Brown
(Director)
Citizenship: United States
Business Address: Classic Chevrolet
6877 Center Street
Mentor, OH
Principal Occupation: President and owner, Classic
Chevrolet
Name: James V. Fryan
(Director)
Citizenship: United States
Business Address: GoodTime III
825 East 9th Street
Cleveland, OH
Principal Occupation: Proprietor, GoodTime III
Name: George C. Lott
(Director)
Citizenship: United States
Business Address: 258 South Oval Drive
Chardon, OH
Principal Occupation: Retired, Executive Vice
President, Great Lakes Bank
Name: George X. Mechir
(Director)
Citizenship: United States
Business Address: 1255 Croyden Rd.
Lyndhurst, OH
Principal Occupation: Retired, attorney
Name: Jerome T. Osborne, Sr.
(Director, Chairman of the Board)
Citizenship: United States
Business Address: Osborne, Inc.
7954 Reynolds Road
Mentor, OH
Principal Occupation: President, Osborne, Inc.
12 of 14 Pages
<PAGE>
Name: Richard M. Osborne
(Director, Vice-Chairman of the Board)
Citizenship: United States
Business Address: OsAir, Inc.
8500 Station Street,
Suite 113
Mentor, OH
Principal Occupation: Chief Executive Officer and
President, OsAir, Inc.
Name: Edward R. Pike
(Director)
Citizenship: United States
Business Address: Ed Pike Lincoln-Mercury
9647 Mentor Ave.
Mentor, OH
Principal Occupation: President, Ed Pike
Lincoln-Mercury
Name: Thomas J. Smith
(Director)
Citizenship: United States
Business Address: Liberty Self-Stor, Inc.
8500 Station Street,
Suite 100
Mentor, OH
Principal Occupation: President and Chief Operating
Officer, Liberty Self-Stor, Inc.
Name: Joseph T. Svete
(Director)
Citizenship: United States
Business Address: Svete, McGee and Carrabine, Co., LPA
100 Parker Court
Chardon, OH
Principal Occupation: Attorney
Name: Thomas E. Wheeler
(Director)
Citizenship: United States
Business Address: Component Repairs Technologies,
Inc.
4665 Sherwin Rd.
Willoughby, OH
Principal Occupation: President, Component Repairs
Technologies, Inc.
13 of 14 Pages
<PAGE>
Name: Richard T. Flenner, Jr.
(Director, President and Chief
Executive Officer)
Citizenship: United States
Business Address: GLB Bancorp, Inc.
7001 Center Street
Mentor, OH
Principal Occupation: President and Chief Executive
Officer, GLB Bancorp, Inc.
Name: Andrew L. Meinhold
(Executive Vice-President and
Secretary)
Citizenship: United States
Business Address: GLB Bancorp, Inc.
7001 Center Street
Mentor, OH
Principal Occupation: Executive Vice-President, GLB
Bancorp, Inc.
Name: Cheryl J. Mihitsch
(Treasurer)
Citizenship: United States
Business Address: GLB Bancorp, Inc.
7001 Center Street
Mentor, OH
Principal Occupation: Treasurer, GLB Bancorp, Inc.
14 of 14 Pages
<PAGE>
Exhibit 7.1
GENERAL ACCOUNT AGREEMENT
To: Kemper Securities, Inc.
in account with Kemper Clearing Corp.
Gentlemen:
In consideration of your accepting one or more accounts of the undersigned, it
is agreed as follows:
1. All transactions under this Agreement shall be subject to the
constitution, rules, regulations, customs, usages, rulings and interpretations
of the exchange or market and its clearing house, if any, where executed, and to
all governmental acts and statutes and to rules and regulations made thereunder
insofar as applicable. Whenever any act or statute shall be enacted, or any
regulation shall be made under any act or statute or any rule or regulation
shall be made by any exchange or market of which you are a member, which shall
be applicable to and affect in any manner or be inconsistent with any of the
provisions hereof, the provisions of this Agreement so affected shall be deemed
modified or superseded, as the case may be, by such act, statute, rule or
regulation and all other provisions of this Agreement and the provisions as so
modified shall in all respects continue and be in full force and effect.
2. All orders for the purchase or sale of any property are given by the
undersigned and executed with the express understanding that an actual purchase
or sale is intended and that it is the undersigned's intention and obligation in
every case to deliver certificates or commodities to cover any and all of the
undersigned's sales and in the case of purchases to receive and pay for
certificates or commodities and that the undersigned will do so in compliance
with all applicable regulations.
3. Except as herein otherwise expressly provided, no provision of this
Agreement may be waived, altered, modified, or amended unless such waiver,
alteration, modification or amendment is in writing and signed by a duly
authorized officer of your corporation.
4. All monies, securities, commodities or other property which you may
at any time be carrying for the undersigned or which may at any time be in your
possession for any purpose, including safekeeping, shall be held by you as
security for the payment of any liability of the undersigned to you,
irrespective of whether or not you have made advances in connection with such
securities, commodities or other property, and irrespective of the number of
accounts the undersigned may have with you.
5. All securities and commodities or any other property, now or
hereafter held by you, or carried by you for the undersigned (either
individually or jointly with others) or deposited to secure the same, may be
held in your name or that of any nominee, and may from time to time and without
notice to the undersigned, be carried
Page 7.1-1
<PAGE>
in your general loans and may be pledged, re-pledged, hypothecated, or
re-hypothecated, or loaned by you to either yourselves as brokers or to others,
separately or in common with other securities and commodities or any other
property, for the sum due to you from the undersigned or for a greater sum and
without retaining in your possession and control for delivery a like amount of
similar securities, commodities, or other property.
6. You are authorized to make such advances and to expend such monies
as in your opinion may be required in respect of all transactions hereunder. The
undersigned agrees to pay customary brokerage and commission charges. Debit
balances of the accounts of the undersigned shall be charged with interest in
accordance with your usual custom, and with any increases in rates caused by
money market conditions, and with such other charges as you may make to cover
your facilities and extra services. Credit balances shall not earn interest. It
is understood and agreed that the interest charge made to the undersigned's
account at the close of one charge period will be compounded, that is, added to
the opening balance for the next charge period unless paid, thereby becoming
part of the principal amount and bearing like interest. A statement disclosing
your credit terms currently applicable to margin transactions is set forth as
part of this Agreement, but is subject to change from time to time as set forth
therein.
7. All securities, other property and collateral deposited for the
protection of the undersigned's collateral and/or margin account may be
deposited with the Depository Trust Company or any other recognized clearing
corporation or depository trust company, and may be held in street name and used
there by you until the undersigned shall demand and become entitled to delivery
thereof; you shall have a reasonable time after such a demand for delivery to
ship securities, other property or collateral from New York or from any other
place where they may be to the place where the same are to be delivered to the
undersigned, and shall only be required to deliver securities, other property or
collateral of the same kind and character as originally deposited.
8. You shall not be responsible for delays in the transmission of
orders due to breakdown or failure of transmission or communication facilities,
and you shall not be liable for loss caused directly or indirectly by
governmental restrictions, war, strikes, or any other cause or causes beyond
your reasonable control or anticipation.
9. All orders given by the undersigned for the purchase or sale of
securities or other property, which may be listed on more than one exchange or
market, may be executed on any exchange or market selected by you.
10. Whenever in your discretion you consider it necessary for your
protection, or in the event that one or more of the undersigned by judicially
declared incompetent, or dies, or a petition in bankruptcy or for the
appointment of a receiver is filed by or against one or more of the undersigned,
or an assignment is made by one or more of the undersigned for the benefit of
creditors, or an attachment is levied against one or more of the undersigned's
accounts, or the collateral deposited to protect the
Page 7.1-2
<PAGE>
undersigned's account is determined by you in your absolute and uncontrolled
discretion, and regardless of current market quotations, to be inadequate to
properly secure the account, then, in any such case, any one of which shall be a
default hereunder, you are authorized to close out the account in whole or in
part and in connection therewith you may sell any or all the securities and
commodities or other property which may be in your possession, or which you may
be carrying for the undersigned, or you may buy in any securities, commodities
or property of which the account or accounts of the undersigned may be short, or
cancel any outstanding orders in order to close out the account or accounts of
the undersigned in whole or in part in order to close out any commitment made on
behalf of the undersigned. Such sale, purchase or cancellation may be made
according to your judgement and may be made, at your discretion, on the exchange
or other market where such business is then usually transacted, or at public
auction or at private sale without advertising the same and without notice to
the undersigned or to the personal representatives of the undersigned, and
without prior tender, demand or call of any kind upon the undersigned or upon
the personal representative of the undersigned, and you may purchase the whole
or any part thereof free from any right of redemption, and the undersigned shall
remain liable for any deficiency; it being understood that a prior tender,
demand or call of any kind from you, or prior notice from you, of the time and
place of such sale or purchase shall not be considered a waiver of your right to
sell or buy any securities and/or commodities and/or other property held by you,
or owed you by the undersigned, at any time without prior tender, demand, call
or notice. All costs and expenses of such transaction(s), including commissions
and transfer and stamp taxes, shall be charged to the undersigned.
11. The undersigned understands that you require the maintenance of
certain margin levels in said accounts and that you may, in your discretion,
periodically increase or decrease such requirements. The undersigned will at all
times maintain margins for said accounts in accordance with the then existing
maintenance requirements.
12. You may at any time terminate any accounts of the undersigned with
you and thereupon all amounts advanced by you and other balances owing, with
interest at the current rate, and any and all commissions due under your current
rate schedule, shall be immediately due and payable upon demand. The undersigned
undertakes, at any time upon your demand, to discharge obligations of the
undersigned to you, including obligations with respect to any account guaranteed
by the undersigned, or, in the event of a closing of any account of the
undersigned in whole or in part by you or the undersigned, and/or a similar
closing of any account guaranteed by the undersigned, to pay the deficiency, if
any, and the undersigned agrees to reimburse you for any costs or expenses
incurred by you in collecting such amounts, including reasonable attorney's
fees. No oral agreement or instructions to the contrary shall be recognized.
Page 7.1-3
<PAGE>
13. All transactions for or in connection with the account of the
undersigned shall be deemed to be included in a single account notwithstanding
the fact that such transactions may be segregated on your records into separate
accounts, either severally or jointly with others; and at any time and from time
to time, in your discretion, you may without notice to the undersigned, apply
and/or transfer any or all monies, securities, commodities and/or other property
of the undersigned interchangeably between any accounts of the undersigned or
from any of the undersigned's accounts to any account guaranteed by the
undersigned (other than from Regulated Commodity Accounts.)
14. When placing with you any sell order for short account, the
undersigned will designate it as such and hereby authorizes you to mark such
order as being "short", and when placing with you any order for long account,
will designate it as such and hereby authorizes you to mark such order as being
"long". Any sell order which the undersigned shall designate as being for long
account as above provided, is for securities then owned by the undersigned and,
if such securities are not then deliverable by you from any account of the
undersigned, the placing of such an order shall constitute a representation by
the undersigned that he will deliver them forthwith. Further, in case of the
sale of any security, commodity or other property by you at the direction of the
undersigned and your inability to deliver the same to the purchaser by reason of
failure of the undersigned to supply you therewith in deliverable form subject
to no restrictions on transfer, then and in such event the undersigned
authorizes you, in your discretion to borrow or buy in any security, commodity,
or other property necessary to make delivery thereof, and the undersigned hereby
agrees to be responsible for any loss which you may sustain thereby and any
premiums which you may be required to pay thereon, and for any loss which you
may sustain by reason of your inability to borrow or as a result of your buy in
of such security, commodity or other property sold.
15. In all transactions between you and the undersigned, the
undersigned understands that you are acting as the brokers of the undersigned,
except when you disclose to the undersigned by your formal confirmation or
otherwise in writing that you are acting, with respect to a particular
transaction, as dealers for your own account or as broker for some other person.
You may employ sub-brokers or other agents, as your agents or as agents of the
undersigned, in connection with the execution of any order or the consummation
of any other transaction hereunder, and you shall be responsible only for
reasonable care in their selection.
16. Reports of the execution of orders and statements of the accounts
of the undersigned shall be conclusive if not objected to in writing at once.
17. Communications may be sent to the undersigned at the address of the
undersigned indicated on the last page of this Agreement or at such other
address as the undersigned may hereafter give you in writing, and all
communications so sent, whether by mail, telegraph, messenger or otherwise,
shall be deemed given to the undersigned personally, whether actually received
or not.
Page 7.1-4
<PAGE>
18. The provisions of this Agreement shall in all respects be construed
according to, and the rights and liabilities of the parties hereto shall in all
respects be governed by the laws of the State of Illinois.
19. The provisions of this Agreement shall be continuous and shall
cover individually and collectively all accounts which the undersigned may open
or reopen with you and shall enure to the benefit of yourselves, your successors
and assigns and shall be binding upon the undersigned, and/or the estate,
executors, administrators and assigns of the undersigned.
20. Any order given to you by the undersigned shall be binding upon the
undersigned and his personal representative until you have actual notice of his
death and notice thereof shall not in any way affect your rights under this
Agreement to take any action which you could have taken if the undersigned had
not died.
21. You shall not be liable for refusing to obey any orders given by or
for the undersigned with respect to an account(s) which has or have been the
subject of attachment or sequestration in any legal proceeding against the
undersigned, and you shall be under no obligation to contest the validity of any
such attachment or sequestration.
22. The undersigned agrees to indemnify and to hold you harmless from
any loss, damage or liability arising out of any transaction in which you act,
directly or indirectly as agent of the undersigned, absent any willful or
grossly negligent conduct.
23. Should any valid federal or state law or final determination of any
administrative agency or court of competent jurisdiction affect any provision of
this Agreement, the provision or provisions so affected shall be automatically
conformed to the law or determination and otherwise this Agreement shall
continue in full force and effect.
24. The undersigned understands in connection with this Agreement an
investigation may be made whereby information is obtained through personal
interviews with neighbors, friends or others with whom he is acquainted. This
inquiry includes information as to his character, general reputation, personal
characteristics and mode of living. The undersigned has the right to make a
written request within a reasonable period of time for a complete and accurate
disclosure of additional information concerning the nature and scope of this
investigation.
25. Arbitration Disclosures
Arbitration is final and binding on all parties.
The parties are waiving their right to seek remedies in court, including the
right to jury trial.
Pre-arbitration discovery is generally more limited than and different from
court proceedings.
Page 7.1-5
<PAGE>
The arbitrator's award is not required to include factual findings or legal
reasoning and any party's right to appeal or seek modification of rulings by the
arbitrators is strictly limited.
The panel of arbitrators will typically include a minority of arbitrators who
were or are affiliated with the securities industry.
It is agreed that any claim, dispute or controversy between us or involving any
affiliate of Kemper Securities, Inc. shall be submitted to arbitration conducted
under (i) the provisions of the Constitution and Rules of the Board of Governors
of the New York Stock Exchange, Incorporated as to any matter, or (ii) with
respect to transactions effected on any other stock exchanges, under the
arbitration rules of such stock exchange, or (iii) pursuant to the code of
Arbitration procedures of the National Association of Securities Dealers,
Incorporated, as the undersigned may elect. The award of the arbitrators will be
final and judgement upon the award rendered may be entered in any court, state
or federal, having jurisdiction. Copies of such arbitration rules may be
obtained from Kemper Securities, Inc., or any such organization.
Arbitration must be commenced by service upon the other party of a written
demand for arbitration or a written notice of intention to arbitrate, therein
electing the arbitration tribunal. In the event the undersigned does not much
such election within five (5) days of such demand notice, then the undersigned
authorizes you to do so on behalf of the undersigned.
Credit Terms in Margin Transactions
A finance charge is made by Kemper Clearing Corp. ("KCC") for
extensions of credit to its customers for the purposes of enabling them to
purchase, carry or trade in any security. These finance charges are described in
KCC's monthly statements as "interest". The following is a statement concerning
the method of computation of total finance charges on credit extended to
customers.
A. The annual rate of the interest charged on net debit balances is
computed at a select rate above the brokers call money rate. The
brokers call money rate is the rate banks charge securities brokers. A
higher charge may be levied against an account depending on various
factors such as the evaluation of the commission income generated by
the account, the service required for the account, etc.
B. Interest charges will be calculated monthly on the adjusted debit
balance in an account using a 360 day year basis. Interest charged is
calculated on a settlement date basis.
C. Interest rates will be changed without notice to the customer in
accordance with changes in the brokers call money rate. Interest is
charged monthly, just prior to the statement date.
Page 7.1-6
<PAGE>
D. The daily net balance is determined by combining the daily closing
statement balances in all general (margin) accounts with any free
credit balance in cash accounts.
E. Any mark-to-the-market as a result of a short position,
i.e. any credit that appears in a statement due to short sales
(including short sales against the box) will be used to reduce any
debit balance. Since KCC must borrow the same security in order to
deliver it to the buying broker, this credit is not available to the
customer. Therefore, on a daily basis, the market value of a short
sale is debited against the margin balance in order to arrive at the
adjusted debit balance for interest purposes. The daily closing price
is used to determine any appreciation or depreciation of a security
sold short which will, in turn, adjust the daily net balance. This
practice is known as "marking-to-the-market".
F. The amount of interest charges is based on the following formula:
ADJUSTED DEBIT BALANCE RATE NUMBER OF DAYS
---------------------- ---- --------------
1 X 100 X 360
G. An interest charge (as described in A.) will be charged on all
prepayments resulting from proceeds of sales which are paid to the
customer prior to settlement date of the trade for which negotiable
securities have been received.
H. To the extent permitted by applicable law, all securities in all
accounts are collateral for any debit balances in account with KCC. A
lien is created by these debits to secure the amount of money owed
KCC. In accordance with the terms of the General Account Agreement
which is signed below, securities in accounts can be sold to reduce or
liquidate entirely any debit balances in accounts. The customer may be
required to deposit additional collateral in accordance with the rules
and regulations of the appropriate regulatory bodies and internal
requirements. KCC reserves the right to require additional collateral
at any time it is deemed desirable.
I. The net debit balance in an account may be paid in full at any time,
thereby avoiding further interest charges.
J. The undersigned has read the foregoing in its entirety before signing.
Questions about interest charges should be directed to the Investment
Broker.
Page 7.1-7
<PAGE>
BY SIGNING THIS AGREEMENT, I ACKNOWLEDGE THAT MY SECURITIES MAY
BE LOANED TO YOU OR LOANED OUT TO OTHERS TO THE EXTENT PERMITTED
BY APPLICABLE LAWS AND REGULATIONS.
THIS AGREEMENT CONTAINS A PRE-DISPUTE ARBITRATION CLAUSE SET FORTH IN PARAGRAPH
25 ABOVE. BY MY SIGNATURE BELOW, I ACKNOWLEDGE THAT I HAVE READ AND AGREE TO BE
BOUND BY ALL THE TERMS AND CONDITIONS OF THIS AGREEMENT AND THAT I HAVE RECEIVED
A COPY OF THIS AGREEMENT.
/s/ Richard M. Osborne
- ------------------------------------ -------------------------------------
Dated Signature
/s/ E. Tammy Daye /s/ Richard M. Osborne
- ------------------------------------ -------------------------------------
Witness Signature
Turkey Vulture Fund XIII Ltd. WYO7-7905-7985
- ------------------------------------ -------------------------------------
Account Name Branch I. D. & Account Number
- --------------------------------------------------------------------------------
Home Address
/s/ David Van Duesen
- -------------------- -------------- -------------------------------------
Investment Broker's Signature
Page 7.1-8
<PAGE>
Exhibit 7.2
FIFTH THIRD BANCORP BANK
OHIO AFFILIATES Note: Retain Customer Copy for your records. DRAW
NOTE
OFFICER No #0434 NOTE No
$3,000,000.00
April 24, 2000
--------------
(Effective Date)
Cleveland, Ohio
On or before the Due Date below, the undersigned, a (check one) / /
corporation / / partnership /X/ trust / / limited liability company, for
value received, and if more than one, jointly and severally, promise to pay
to the order of Fifth Third Bank, Northeastern Ohio, 1404 East Ninth Street,
Cleveland, Ohio 44114 (hereinafter referred to as "Bank"), the sum of Three
Million and no/100 Dollars (hereinafter referred to as the "Borrowing") plus
interest as provided herein, less such amounts as shall have been repaid in
accordance with this note. The outstanding balance of this note will appear
on a supplemental bank record and is not necessarily the face amount of this
note. Such record shall be conclusive as to the balance due of this note at
any time.
The principal sum outstanding shall bear interest per annum at the rate of 1/2%
LESS than the "Prime Rate" (the rate announced by the Bank from time to time) on
the above Effective Date. In the event of a change in said Prime Rate, the rate
of this note shall be changed immediately to that rate which shall be greater
than the new Prime Rate by the amount stated in this clause. Interest shall be
computed based on a year of 360 days and charged for the actual number of days
elapsed.
Prior to the Due Date, Bank may (but is not obligated to) lend to the
undersigned such amounts as may from time to time be requested by the
undersigned provided that (a) the principal amount borrowed shall not at any
time exceed the Borrowing (b) no Event of Default as defined herein shall exist,
and (c) amounts advanced and repaid may not be reborrowed hereunder.
Interest shall be due and payable: / / At maturity on the Due Date set forth
below;
/X/ On the day of each X Month / / Quarter
beginning May 30, 2000.
Principal shall be due and payable on the Due Date set forth below:
To secure repayment of this note and all modifications, extensions and renewals
thereof', and all other Obligations (as herein defined) of the undersigned to
Bank, the undersigned grants Bank a security interest in all of the
undersigned's, now owned or hereafter acquired interests in all property in
which Bank is at any time, granted a lien for any Obligation, and all property
in possession of Bank including, without limitation, money, securities,
instruments, documents, letters of credit, chattel paper, or other property
delivered to Bank in transit, for safekeeping, or for collection or exchange for
other property, all distributions, dividends, warrants, securities and other
rights in addition to such property, all rights to payment from and claims
against Bank and all proceeds thereof, and all real and personal property
described below ("Collateral") . The undersigned agrees to immediately deliver
such additional dividends, warrants, securities or other property or rights
thereto to Bank immediately upon receipt as additional Collateral and until
delivery to hold same in trust for Bank. The undersigned agrees that the Bank
may, at any time, call for additional Collateral satisfactory to it. All
documents executed in connection with this note and all collateral, including
without limitation the following, further secure the Obligations:
Page 7.2-1
<PAGE>
The Obligations secured by the Collateral (herein, "Obligations") shall include
this note and each and every liability of the undersigned jointly or severally
to Bank and all affiliates of Fifth Third Bancorp however created, direct or
contingent, due or to become due, whether now existing or hereafter arising,
participated in whole or in part, created by trust agreement, lease, overdraft,
agreement, or otherwise, in any manner by the undersigned. The undersigned also
grants Bank a security interest in all of the Collateral as agent for all
affiliates of Fifth Third Bancorp for all Obligations of the undersigned to such
affiliates. Said security interest shall not be enforced to the extent
prohibited by the Truth in Lending Act as implemented by Federal Reserve
Regulation Z.
If this note is a renewal, in whole or in part, of a previous Obligation, file
acceptance by Bank of this note Shall not effectuate a payment but rather a
continuation of the previous Obligation.
Bank may charge and the undersigned agrees to pay, on the above Effective Date,
a note processing fee in an amount determined by Bank.
Events of Default:
This note, and all other Obligations of the undersigned to Bank, shall be and
become immediately due and payable at the option of the Bank, without any demand
or notice whatsoever, upon the occurrence of any of the following described
events, each of which shall constitute any Event of Default:
1) Any failure to make any payment when due of the principal or interest on this
note, the occurrence of any event of default as therein defined on any other
Obligations of the undersigned, or a default in the obligations under any
security documents.
2) The death or dissolution of the undersigned of any endorser or guarantor, or
if the undersigned is a partnership, the death or dissolution of a general
partner.
3) Any failure to submit to Bank current financial information upon request.
4) The creation of any lien (except a lien to Bank) or the issuance of any
attachment against or seizure of any of the property of, or the entry of a
judgment against, file undersigned.
5) In the judgment of Bank, any adverse change occurs in the ability of the
undersigned to repay the Obligations, or the Bank deems itself insecure.
6) An assignment for the benefit of the creditors of, or the commencement of any
bankruptcy, receivership, insolvency, reorganization, or liquidation proceedings
by or against the undersigned or any endorser or guarantor hereof.
7) The institution of any garnishment proceedings by attachment, levy or
otherwise, against any Collateral, deposit balance maintained or any property
deposited with the Bank by the undersigned or any endorser or guarantor hereof.
8) Bank has called for additional security and the undersigned has not furnished
satisfactory additional security on demand.
Upon the occurrence of an Event of Default herein described Bank may, at its
option cease making advances hereunder, declare this note and all other
Obligations of the undersigned to be fully due and payable in their aggregate
amount together with accrued interest plus any applicable prepayment premiums,
fees, and charges.
In addition to any other remedy permitted by law, the Bank may at any time,
without notice, apply the Collateral to this note or such other Obligations,
whether due or not, and Bank may, at its option, proceed to enforce and protect
its rights by an action at law or in equity or by any other appropriate
proceedings. Notwithstanding any other legal or equitable rights of Bank, Bank,
in the Event of Default, is (a) hereby irrevocably appointed and constituted
attorney in fact, with full power of substitution, to exercise all rights of
ownership with respect to Collateral including, but not limited to, the right to
collect all income or other
Page 7.2-2
<PAGE>
distributions arising therefrom and to exercise all voting rights connected with
the Collateral; and (b) is hereby given full power to collect, sell, assign,
transfer and deliver all of said Collateral or any part thereof, or any
substitutes therefor, or any additions thereto, through any private or public
sale without either demand or notice to the undersigned, or any advertisement,
the same being hereby expressly waived, at which sale Bank is authorized to
purchase said property or any part thereof, free from any right of redemption on
the part of the undersigned, which is hereby expressly waived and released. In
case of sale for any cause, after deducting all costs and expenses of every
kind, Bank may apply, as it shall deem proper, the residue of the proceeds of
such sale toward the payment of any one or more or all of the Obligations of the
undersigned, whether due or not due, to Bank; after such application and the
return of any surplus, the undersigned agrees to be and remains liable to Bank
for any and every deficiency after application as aforesaid upon this and any
other Obligation. The undersigned shall pay all costs of collection incurred by
Bank, including its attorney's fees, if this note is referred to an attorney for
collection, whether or not payment is Obtained before entry of judgment which
costs and fees are Obligations secured by the Collateral.
If any payment is not paid when due (whether by acceleration or otherwise) or
within 10 days thereafter, undersigned agrees to pay to Bank a late payment fee
as provided for in any loan agreement or 5% of the payment amount whichever is
greater with a minimum fee of $20.00. After an Event of Default, the undersigned
agrees to pay to Bank a fixed charge of $25.00, or the undersigned agrees that
Bank may, without notice, increase the above stated interest rate by 6%,
whichever is greater. Under no circumstances shall said interest rate be raised
to a rate which shall be in excess of the maximum rate of interest allowable
under the state and/or federal usury laws in force at the time of such change.
The undersigned may prepay all or part of this note, which prepaid amounts shall
be applied to the amounts due in reverse order of their due dates. Upon such
prepayments, including involuntary prepayment by acceleration, (be undersigned
shall pay a premium of 2% of the maximum principal amount permitted under this
note. Partial prepayments shall not excuse any subsequent payment due.
ENTIRE AGREEMENT: The undersigned agrees that there are no conditions or
understandings which are not expressed in this note and the documents referred
to herein.
WAIVER: No failure on the part of the Bank to exercise any of its rights
hereunder shall be deemed a waiver of any such rights or of' any default.
Demand, presentment, protest, notice of dishonor, notice of protest and notice
of default are hereby waived. Each of the undersigned, including but not limited
to all co-makers and accommodation makers of this note, hereby waives all
suretyship defenses including but not limited to all defenses based upon
impairment of collateral and all suretyship defenses described in Section 3-605
of the Uniform Commercial Code, as revised in 1990 (the "UCC:) Such waiver is
entered to the full extent permitted by Section 3-605(i) of the UCC.
JURY WAIVER: THE UNDERSIGNED AND ANY ENDORSER OR GUARANTOR HEREOF WAIVE THE
RIGHT TO A TRIAL BY JURY OF ANY MATTERS ARISING OUT OF THIS NOTE OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
The declaration of invalidity of any provision of this note shall not effect any
part of the remainder of the provisions.
Page 7.2-3
<PAGE>
/X/ This note is supplemented by the terms and conditions of Commitment Letter
dated APRIL 24, 2000 between the undersigned and Bank.
DATE DUE: SEPTEMBER 30, 2001 RICHARD M OSBORNE TRUST U /A DATED
ADDRESS: 8500 STATION STREET, SUITE 113 JANUARY 13, 1995
MENTOR, OHIO 44060
By: /s/ Richard M. Osborne, Trustee
Richard M. Osborne, Trustee
Page 7.2-4
<PAGE>
Exhibit 7.3
A FIFTH THIRD BANCORP BANK
OHIO AFFILIATES
Cleveland, Ohio
April 24, 2000
UNLIMITED PAYMENT GUARANTY
--------------------------
RICHARD M. OSBORNE located at___________________________________________________
(hereinafter called "Guarantor"), jointly and severally if more than one,
agree(s) to guarantee the payment of all monies due or which may hereafter
become due to Fifth Third Bank, Northeastern Ohio, 1404 E. Ninth Street,
Cleveland, Ohio 44114 and all affiliates of Fifth Third Bancorp (hereinafter
collectively called "Bank") by RICHARD M. OSBORNE TRUST U/A DATED JANUARY 13,
1995 located at 8500 STATION STREET, SUITE 113, LAKE COUNTY, MENTOR, OHIO 44060
(hereinafter called "Borrower").
1. GUARANTY: In consideration of an extension of a loan, credit or other
financial accommodation given pursuant to a note or notes, or given pursuant to
any extensions or renewals thereof, or pursuant to any other agreements to
extend credit of any kind or nature to Borrower, Guarantor guarantees the prompt
payment when due of all indebtedness and liabilities of Borrower of every kind,
nature, and character including principal and interest and all renewals,
extensions, and modifications thereof (hereinafter collectively called
"Obligation") now existing or which hereafter may be incurred by Borrower to
Bank. The liability of Guarantor hereunder shall be unconditional,
notwithstanding the unenforceability or invalidity of any Obligation of Borrower
and shall survive the adjudication in bankruptcy of Borrower, any compromise of
any Obligation of Borrower to Bank by any order of any federal bankruptcy court
or any other court of competent jurisdiction. In the event of the payment of any
Obligation of Borrower owing to Bank and any subsequent order by a federal
bankruptcy court or any other court of competent jurisdiction that such payment
was fraudulent, preferential, invalid or void for any reason requiring the
repayment by Bank of the sum so paid to Bank to any bankruptcy trustee,
receiver, or other duly appointed representative of Borrower for the benefit of
Borrower or its creditors, Guarantor shall immediately pay to Bank such
Obligation.
2. LIMITATION BY GUARANTOR: Upon Guarantor's written request to Bank, this
payment guaranty shall terminate as to any future new Obligation of Borrower
arising after ninety (90) calendar days subsequent to the date of Bank's written
acknowledgment to Guarantor of receipt of the request. Guarantor shall remain
liable for the guaranty of payment in accordance with the terms hereof of any
Obligation arising on or before ninety (90) calendar days subsequent to the date
of Bank's written acknowledgment including any Obligation arising before said
date but renewed, extended or modified after said date.
3. RELEASE OF GUARANTOR: Without affecting the liability of any of the
undersigned not released, Bank may, without notice to the undersigned, release
and discharge from liability to it any of the undersigned if there be more than
one, or any other guarantor of, or surety for, the payment of any Obligation of
Borrower to Bank.
4. WAIVER OF NOTICE: Guarantor hereby waives notice of any change in the
Obligation, including without limitation renewals, extensions or modifications
of any Obligation of Borrower and hereby waives presentment, demand, protest,
notice of non-payment and notice of dishonor. No delay on the part of Bank in
exercising its rights hereunder shall operate as a waiver of guaranty by
Guarantor or operate as a release of Guarantor's obligations hereunder.
Guarantor agrees that Bank may accept, surrender, or exchange collateral or
security, if any, without notice to Guarantor. Guarantor consents to any
impairment
Page 7.3-1
<PAGE>
of collateral, including without limitation release of the collateral to a third
party or failure to perfect any security interest.
5. WAIVER OF IMPAIRMENT OF COLLATERAL: No Guarantor shall be released or
discharged, either in whole or in part, by Bank's failure or delay to perfect or
continue the perfection of any security interest in any property which secures
the obligations of the Borrower or any of the Guarantors to Bank, or to protect
the property covered by such security interest.
6. SURETYSHIP DEFENSES: Each Guarantor hereby waives all suretyship defenses,
including but not limited to, all defenses set forth in Section 3-605 of the
Uniform Commercial Code, as revised in 1990 (the "UCC") Such waiver is entered
to the full extent permitted by Section 3-605 (i) of the UCC.
7. MISCELLANEOUS PROVISIONS:
a) All rights of Bank shall inure to the benefit of its successors and
assigns and all obligations of' Guarantor shall bind the heirs, executors,
administrators, successors and assigns of Guarantor, and if there be more than
one Guarantor, their obligations shall be joint and several.
b) Guarantor shall promptly notify Bank in writing of any change in mailing
address.
c) Guarantor agrees that expenses and reasonable attorney fees incurred by
Bank as the result of Guarantor's breach of any of the terms and conditions of
this Unlimited Payment Guaranty shall be paid by Guarantor to Bank.
d) Within 90 days after the end of each calendar year and from time to
time, as reasonably requested by Bank, Guarantor agrees to deliver to Bank
updated financial statements of Guarantor in form and substance reasonably
satisfactory to Bank.
e) This Guaranty contains the entire agreement of the parties and no oral
agreement whatsoever, whether made contemporaneously herewith or hereafter,
shall amend, modify or otherwise affect the terms of this Guaranty unless in
writing and signed by the Bank.
f) This Unlimited Payment Guaranty shall be construed in accordance with
the laws of the State of Ohio. Any provision hereof which may prove
unenforceable shall not affect the enforceability of the remainder of the
provisions hereof.
g) Guarantor hereby irrevocably waives all legal and equitable rights to
recover from the Borrower any sums paid by the Guarantor under the terms of this
Guaranty, including without limitation all rights of subrogation and all other
rights that would result in Guarantor being deemed a creditor of Borrower under
the federal Bankruptcy Code or any other law.
h) Each Guarantor agrees that the state and federal courts in the county
and state where the Bank's principal place of business is located or any other
Court in which Bank initiates proceedings will have exclusive jurisdiction over
all matters arising out of this Guaranty.
i) EACH GUARANTOR AND BANK WAIVE, THE RIGHT TO TRIAL BY JURY FOR ANY
MATTERS ARISING IN CONNECTION WITH THIS GUARANTY OR THE, TRANSACTIONS RELATED
THERETO.
j) Each and every Guarantor hereunder authorizes any attorney of record to
appear for them in any court of record in the State of Ohio, after the
Obligation becomes due and payable, whether by its terms or upon default, waive
the issuance and service of process, and release all errors, and confess a
judgment against them in favor of the Bank or any holder of the Obligation, for
the principal amount of the Obligation plus interest as provided for; together
with court costs and attorney's fees. Stay of execution and all exemptions are
hereby waived. Each Guarantor also agrees that the attorney acting for Guarantor
as set forth in this paragraph may be compensated by Bank for such services, and
Guarantor waives any conflict of interest caused by such representation and
compensation arrangement. If the Obligation is referred to an attorney for
collection and the payment is obtained without the entry of a judgment, the
Guarantor shall pay to the Bank or holder of the Obligation its attorney's fees.
This warrant of attorney to confess judgement shall be construed under the laws
of the state of Ohio.
Page 7.3-2
<PAGE>
WARNING: BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL.
IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKE, N AGAINST YOU WITHOUT
YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT FROM YOU
REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR RETURNED
GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WIT THE AGREEMENT, OR ANY
OTHER CAUSE.
Accepted by: RICHARD M. OSBORNE , Individually
FIFTH THIRD BANK, NORTHEASTERN 0HIO /s/ Richard M. Osborne
----------------------
By: /s/ David T. Merkel Guarantor(s)
-------------------
David T. Merkel
Vice President ADDRESS OF GUARANTOR(S)
Page 7.3-3
<PAGE>
Exhibit 7.4
PLEDGE AGREEMENT
----------------
This PLEDGE AGREEMENT ("Agreement") is made this 24 day of April, 2000
by and between FIFTH THIRD BANK, NORTHEASTERN OHIO, an Ohio banking corporation
("Pledgee") and RICHARD M. OSBORNE TRUST U/A DATED JANUARY 13, 1995 (the
"Pledgor"), Richard M. Osborne, Trustee.
W I T N E S S E T H :
WHEREAS, Pledgee has agreed to extend credit to Pledgor by virtue of a
Draw Note, dated April 24, 2000, in the principal amount of $3,000,000,
executed by Pledgor and made payable to Pledgee (the "Note");
WHEREAS, Richard M. Osborne (the "Guarantor") has executed and
delivered to Pledgee an Unlimited Payment Guaranty, dated April 24, 2000 (the
"Guaranty"), guarantying the indebtedness of Pledgor owed to Pledgee;
WHEREAS, the Pledgor has agreed to secure the repayment of all
liabilities, obligations and indebtedness of the Pledgor as evidenced by the
Note and the Guaranty, by pledging to Pledgee as collateral for the Note and
Guaranty, the Pledgor's interest in the cash and securities held in the Account
as described below and maintained with Fifth Third Securities, Inc. (the
"Broker");
NOW THEREFORE, in consideration of the foregoing premises, Pledgor and
Pledgee agree as follows:
1. DEFINITIONS. "Obligation(s)" means all loans, advances,
indebtedness, liabilities and obligations of Pledgor and Guarantor owed to each
of Pledgee and the affiliates of Fifth Third Bancorp of every kind and
description whether now existing or hereafter arising including without
limitation, those owed by Pledgor or Guarantor to others and acquired by Pledgee
or any affiliate of Fifth Third Bancorp, by purchase, assignment or otherwise,
and whether direct or indirect, primary or as guarantor or surety, absolute or
contingent, liquidated or unliquidated, matured or unmatured, whether or not
secured by additional collateral, and including without limitation all
liabilities, obligations and indebtedness arising under this Agreement, the
Note, the Guaranty and the other loan documents, all obligations to perform or
forbear from performing acts, all amounts represented by letters of credit now
or hereafter issued by Pledgee for the benefit of or at the request of Pledgor
or Guarantor, and all expenses and attorneys' fees incurred by Pledgee and any
affiliate of Fifth Third Bancorp under this Agreement or any other document or
instrument related to any of the foregoing.
2. PLEDGE. Pledgor pledges, mortgages, assigns, transfers, delivers,
deposits, sets over and confirms as a first priority security interest to
Pledgee and its successors and assigns all of Pledgor's right, title and
interest in and to the Securities, Investment Properties and Financial Assets
listed on Exhibit A attached hereto, as may be amended from time to time, and
held in Account No. _________________ (the "Account") maintained by Broker, and
all income, dividends and other distributions thereon and the proceeds thereof
(collectively, the "Interest"), as collateral security for payment and
performance by the Pledgor and Guarantor of the Obligations. Upon acquisition of
any such additional Interest, Pledgor agrees to deliver to Pledgee, all
documents evidencing the Interest and any additional documentation requested by
Pledgee to perfect and protect Pledgee's interest therein. As used herein,
"Securities", "Investment Properties" and "Financial Assets" shall have the
meanings attributed thereto in the current version of the Uniform Commercial
Code as adopted in the State of Pledgee's principal place of business.
3. MINIMUM FAIR MARKET VALUE. The Pledgor hereby agrees that the fair
market value of the Interest on the date hereof is and at all times during the
term of the Note, will be at least $6,000,000 (the "Minimum Value"). If at
any time the fair market value of the Interest falls below the Minimum Value,
Pledgor agrees to remit
Page 7.4-1
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to Pledgee cash, in an amount, or readily marketable securities, acceptable to
Pledgee, of a value necessary to bring the fair market value of the Interest up
to the Minimum Value.
4. REPRESENTATIONS AND WARRANTIES. Pledgor represents and warrants to
Pledgee that:
(a) Pledgor is the sole holder of record and sole beneficial owner of
the Interest, free and clear of any security interest, pledge, or other lien or
encumbrance (collectively, "Lien");
(b) Pledgor has the right and requisite authority to pledge, mortgage,
assign, transfer, deliver, deposit, set over and confirm the Interest to Pledgee
as provided herein; and
(c) Pledgor has obtained all necessary consents, approvals,
authorizations or orders of any person, corporation, partnership, trust,
governmental entity, or other entity required for the execution and delivery of
this Agreement or the delivery of the Interest to Pledgee as provided herein.
The representations and warranties set forth in this Section 4 shall
survive the execution and delivery of this Agreement.
5. DISTRIBUTIONS. Pledgor and Pledgee hereby agree as follows:
(a) All cash distributions and any and all distributions of other
property paid on or with respect to the Interest (collectively, "Distributions")
shall be subject to the lien and security interest of this Agreement.
(b) Prior to the occurrence of a default or an Event of Default under
any of the Obligations and so long as the Interest will continue to meet the
requirements of Section 3 hereof, Distributions in the form of cash may be paid
to and retained by Pledgor. After the occurrence of a default or an Event of
Default under any of the Obligations, all such cash Distributions and all other
Distributions will be remain in the Account or will be paid to the Pledgee
pursuant to the provisions hereof.
(c) In the event that Pledgor receives any Distribution or any cash
Distribution in violation of the provisions of Sections 5(a) & (b) Pledgor shall
promptly notify Pledgee thereof, will hold such Distribution in trust for the
benefit of Pledgee and, if requested by Pledgee, shall immediately deliver such
Distribution in the form received by Pledgor. In the event that the Distribution
is in the form of a check or other instrument, Pledgor shall provide Pledgee
with all necessary endorsements thereon.
6. COVENANTS. Pledgor covenants and agrees that until payment in full
of all of the Obligations:
(a) Without the prior written consent of Pledgee, Pledgor will not
attempt to or further sell, assign, transfer, mortgage, pledge or otherwise
further encumber any of Pledgor's right in or to the Interest or any unpaid
Distributions or grant a Lien therein to any other party; and
(b) Pledgor will, at Pledgor's expense, obtain, execute, acknowledge
and deliver all such instruments and take all such action necessary (or as
Pledgee may from time to time request) in order to ensure Pledgee shall have and
retain the benefits of the first priority lien and security interest in the
Interest.
Page 7.4-2
<PAGE>
7. REMEDIES.
(a) Pledgee is hereby authorized and empowered, at its election, to
transfer and register in its name or in the name of its nominee the whole or any
part of the Interest, to exercise the voting rights with respect thereto, to
collect and receive all Distributions made thereon, to sell in one or more sales
after 7 days' notice (which notice Pledgor hereby agrees is commercially
reasonable) but without any previous notice or advertisement, the whole or any
part of the Interest and to otherwise act with respect to the Interest as though
Pledgee was the outright owner thereof, Pledgor hereby irrevocably constituting
and appointing Pledgee as the proxy and attorney-in-fact of Pledgor; provided,
however, the Pledgee shall not have any duty to exercise any such right or to
preserve the same and shall not be liable for any failure to do so or for any
delay in doing so. Any sale may be either for cash or upon credit or for future
delivery at such price as Pledgee may deem fair, and Pledgee may be the
purchaser of the whole or any part of the Interest so sold and hold the same
thereafter in its own right free from any claim of the Pledgor or any right of
redemption. Each sale shall be made to the highest bidder, but Pledgee may
reject any bid at such sale which, in its sole discretion, it shall deem
inadequate. Demands of performance, except as otherwise herein specifically
provided for, notices of sale, advertisements and the presence of property at
sale are hereby waived and any sale hereunder may be conducted by an auctioneer
or by any officer or agent of Pledgee.
(b) If, at the original time or times appointed for the sale of the
whole or any part of the Interest, the highest bid, if there be but one sale,
shall be inadequate to discharge in full all the Obligations, or if the Interest
be offered for sale in lots, if at any of such sales, the highest bid for the
lot offered for sale would indicate to Pledgee, in its discretion, the
likelihood that the proceeds of the sales of all of the Interest will be
insufficient to discharge all the Obligations, the Pledgee may, on one or more
occasions, postpone any of said sales by public announcement at the time of sale
or the time of previous postponement of sale, and no other notice of such
postponement or postponements of sale need be given, any other notice being
hereby waived; provided, however, that any sale or sales made after such
postponement shall be after 7 days' notice to Pledgor.
(c) In the event of any sale(s) hereunder, Pledgee shall, after
deducting all costs or expenses of every kind (including, to the full extent
permitted by law, attorney's fees and disbursements) for care, safekeeping,
collection, sale, delivery or otherwise, apply the residue of the proceeds of
the sale(s) to the payment or reduction, either in whole or in part, of the
Obligations returning the surplus, if any, to Pledgor.
(d) Pledgor agrees that he will not at any time plead, claim or take
the benefit of any appraisal, valuation, stay, extension, moratorium or
redemption law now or hereafter in force in order to prevent or delay the
enforcement of this Agreement, or the absolute sale or transfer to Pledgee of
the whole or any part of the Interest or the possession thereof by any purchaser
at any sale hereunder, and Pledgor waives the benefit of all such laws. Pledgor
agreed that he will not interfere with any right, power and remedy of Pledgee
provided for in this Agreement or now or hereafter existing at law or in equity
or by statute or otherwise, or the exercise or beginning of the exercise by
Pledgee of any one or more of such rights, powers or remedies. No failure or
delay on the part of Pledgee to exercise any such rights, power or remedy and no
notice or demand which may be given to or made upon Pledgor by Pledgee with
respect to any such remedies shall operate as a waiver hereof, or limit or
impair Pledgee's right to take any action or to exercise any power or remedy
hereunder, without notice or demand, or prejudice its rights as against Pledgor
in any respect.
8. WAIVER. No delay on Pledgee's part in exercising any power of sale,
lien, option or other right hereunder, and no notice or demand which may be
given to or made upon Pledgor by Pledgee with respect to any power of sale,
lien, option or other right hereunder, shall constitute a waiver thereof, or
limit or impair Pledgee's right to take any action or to exercise any power of
sale, lien option, or any other right hereunder without notice or
Page 7.4-3
<PAGE>
demand, or prejudice Pledgee's rights as against Pledgor in any respect. In
addition, no action taken by Pledgee hereunder shall in any way impair or limit
Pledgee's right to exercise any or all rights or remedies Pledgee may otherwise
have against Pledgor with respect to any Obligations. This Agreement shall not,
in any manner, be construed as a compromise of any Obligations except to the
extent that a Distribution is applied to reduce the Obligations and then only to
the extent and in the amount of such Distribution actually received by Pledgee.
This is an absolute, unconditional and continuing pledge and will remain in full
force and effect until the Obligations have been fully paid to the Pledgee. This
pledge will extend to and cover renewals of the Obligations and any number of
extensions of time for payment thereof and will not be affected by any
surrender, exchange, acceptance or release by the Pledgee of any other pledge or
any security held by it for any of the Obligations. Notice of acceptance of this
pledge, notice of extensions of credit to the Pledgor from time to time, notice
of default, diligence, presentment, protest, demand for payment, notice of
demand or protest, and any defense based upon a failure of Pledgee to comply
with the notice requirements of the applicable version of Uniform Commercial
Code Section 9-504 are hereby waived. Pledgee, at any time and from time to
time, without the consent of Pledgor, may change the manner, place or terms of
payment of or interest rates on, or change or extend the time of payment of, or
renew or alter, any of the Obligations, without impairing or releasing the
liabilities of Pledgor hereunder. Pledgee in its sole discretion may determine
the reasonableness of the period which may elapse prior to the making of demand
for any payment upon Pledgor, and it need not pursue any of its remedies against
any other party before having recourse against Pledgor under this pledge.
9. INDEMNIFICATION. Pledgor agrees to indemnify and hold Pledgee
harmless from and against any taxes, liabilities, claims and damages, including
reasonable attorney's fees and disbursements, and other expenses incurred or
arising by reason of the taking or the failure to take action by Pledgee, in
good faith, under this Agreement and in respect of any transactions effected in
connection with this Agreement, including without limitation, any taxes payable
in connection with the delivery or registration of the Interest as provided
herein. The obligations of Pledgor under this Section shall survive the
termination of this Agreement.
10. CANCELLATION. Upon payment in full and termination of the
Obligations, Pledgee shall cancel its rights in the Interest under this
Agreement and agrees to execute any documentation necessary to that end. No such
cancellation shall be effective unless in writing.
11. MISCELLANEOUS. This Agreement shall be binding upon Pledgor and
Pledgor's heirs, administrators, successors and assigns, and shall inure to the
benefit of, and be enforceable by, the Pledgee and its successors, transferees
and assigns. None of the terms or provisions of this Agreement may be waived,
altered, modified or amended except in writing duly signed for and on behalf of
the Pledgee and the Pledgor.
12. NOTICES. Any notices under or pursuant to this Agreement shall be
deemed duly sent when delivered by hand or when mailed by registered or
certified mail, return receipt requested, addressed as follows:
(a) If to Pledgee, at:
Fifth Third Bank
1404 East Ninth Street
Cleveland, Ohio 44114
Attention: David T. Merkel
(b) If to Pledgor, at:
Page 7.4-4
<PAGE>
c/o Richard M. Osborne, Trustee
8500 Station Square, Suite 113
Mentor, Ohio 44060
Any party may change such address by sending notice of the change
to the other parties.
13. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, which shall, collectively and separately, constitute one
agreement.
14. GOVERNING LAW; JURISDICTION. All acts and transactions hereunder
and the rights and obligations of the parties hereto shall be governed,
construed and interpreted in accordance with the domestic laws of the state of
Ohio. Pledgor agrees that the state and federal courts in Cuyahoga County, Ohio
or any other court in which Pledgee initiates proceedings have exclusive
jurisdiction over all matters arising out of this Agreement, and that service of
process in any such proceeding shall be effective if mailed to Pledgor at his
address described in the Notices section of this Agreement. PLEDGEE AND PLEDGOR
HEREBY WAIVE THE RIGHT TO TRIAL BY JURY OF ANY MATTERS ARISING OUT OF THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Page 7.4-5
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the 24th day of April, 2000.
PLEDGOR:
RICHARD M. OSBORNE TRUST
U/A DATED JANUARY 13, 1995
By: /s/ Richard M. Osborne, Trustee
--------------------------------------------
Richard M. Osborne, Trustee
PLEDGEE:
FIFTH THIRD BANK, NORTHEASTERN OHIO
By: /s/ David T. Merkel
--------------------------------------------
Its: Vice President
--------------------------------------------
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<PAGE>
EXHIBIT A
LIST OF SECURITIES HELD IN THE ACCOUNT
--------------------------------------
121,000 SHARES OF COMMON STOCK OF Lorain National Bank
501,306 shares of common stock of Pacific Gateway Properties, Inc.
Page 7.4-7
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Exhibit 7.5
AGREEMENT OF JOINT FILING
Pursuant to Rule 13d-1(k) promulgated under the Securities Exchange Act
of 1934, as amended, the undersigned persons hereby agree to file with the
Securities and Exchange Commission, the Statement on Schedule 13D (the
"Statement") to which this Agreement is attached as an exhibit, and agree that
such Statement, as so filed, is filed on behalf of each of them.
This Agreement may be executed in counterparts, each of which when so
executed shall be deemed to be an original, and all of which together shall be
deemed to constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have executed this Agreement.
Dated: May 1, 2000
TURKEY VULTURE FUND XIII, LTD.
By: /s/ RICHARD M. OSBORNE
----------------------------------
Richard M. Osborne, Manager
GLB BANCORP, INC.
By: /s/ RICHARD T. FLENNER, JR.
----------------------------------
Richard T. Flenner, Jr., President
RICHARD M. OSBORNE TRUST
By: /s/ RICHARD M. OSBORNE
----------------------------------
Richard M. Osborne, Trustee
Page 7.5-1
