<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D/A
Under the Securities Exchange Act of 1934
(Amendment No. 6)
UNITED TRUST GROUP, INC. (FORMERLY, UNITED TRUST, INC.)
(Name of Issuer)
COMMON STOCK, NO PAR VALUE
(Title of Class of Securities)
913111209
(CUSIP Number)
Jill Martin
First Southern Bancorp, Inc.
P.O. Box 328, Stanford, KY. 40484 (606 365-3555)
December 7, 1999
(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 that is the subject of this Schedule 13D, and is filing this
Schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g) check
the following box [ ]
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CUSIP No. 913111209 13D Page 2 of 13 Pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
First Southern Funding, LLC *
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
WC, BK
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Kentucky
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 822, 679*
SHARES --------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0*
EACH --------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON 822,679*
WITH --------------------------------------------------
10 SHARED DISPOSITIVE POWER
0*
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
822,679*
- --------------------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW 11
EXCLUDES CERTAIN
SHARES (SEE INSTRUCTIONS)
[X]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
25.0%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
CO
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* See response to Item 5
2
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CUSIP No. 913111209 13D Page 3 of 13 Pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
First Southern Bancorp, Inc.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X]
(b) [ ]
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3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
WC, BK
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Kentucky
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 125,825*
SHARES --------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0*
EACH --------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON 125,825*
WITH --------------------------------------------------
10 SHARED DISPOSITIVE POWER
0*
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
125,825*
- --------------------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES
CERTAIN SHARES (SEE INSTRUCTIONS)
[X]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
3.8%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
HC
- --------------------------------------------------------------------------------
* See response to Item 5
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CUSIP No. 913111209 13D Page 4 of 13 Pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Jesse T. Correll
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
AF
- --------------------------------------------------------------------------------
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
United States
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 0
SHARES --------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY See response to Item 5
EACH --------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON 0
WITH --------------------------------------------------
10 SHARED DISPOSITIVE POWER
See response to Item 5
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
See response to Item 5
- --------------------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW 11
EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)
[X]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
See response to Item 5
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IN
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CUSIP No. 913111209 13D Page 5 of 13 Pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
First Southern Capital Corp., LLC
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X]
(b) [ ]
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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
Kentucky
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 183,033*
SHARES --------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0*
EACH --------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON 183,033*
WITH --------------------------------------------------
10 SHARED DISPOSITIVE POWER
0*
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
183,033*
- --------------------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW 11
EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)
[X]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
5.6%
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14 TYPE OF REPORTING PERSON
CO
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* See response to Item 5
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CUSIP No. 913111209 13D Page 6 of 13 Pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
First Southern Investments, LLC
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
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) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Kentucky
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 23,135*
SHARES --------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0*
EACH --------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON 23,135*
WITH --------------------------------------------------
10 SHARED DISPOSITIVE POWER
0*
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON
23,135*
- --------------------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES
CERTAIN SHARES (SEE INSTRUCTIONS)
[X]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
0.7%
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14 TYPE OF REPORTING PERSON
CO
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* See response to Item 5
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Explanatory Note
With this amendment, the reporting persons are updating information in
Items 3 and 5 to reflect recent transactions in shares of common stock of United
Trust Group, Inc. and in Item 4 to reflect a proposed transaction with United
Trust Group, Inc.
ITEM 1. SECURITY AND ISSUER
Not amended.
ITEM 2. IDENTITY AND BACKGROUND
Not amended.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
The amount of funds used in making the purchases of the Common Stock by
each Reporting Person is as follows:
First Southern Bancorp, Inc. $ 1,377,922
First Southern Funding, LLC $ 9,964,035
First Southern Capital Corp, LLC $ 2,339,995
First Southern Investments, LLC $ 291,000
Total $ 13,724,080
Funds used by First Southern Bancorp, Inc.
to purchase Convertible Notes (including
accrued interest) $ 3,108,050
Funds used by First Southern Bancorp, Inc.
to purchase shares of United Income, Inc.,
("UII") which were converted into shares of
Common Stock in the merger of UII into UTI $ 38,760
Aggregate amount* $ 17,119,762
*Excludes acquisition related expenses.
The total amount used by First Southern Bancorp, Inc. to purchase shares of
Common Stock, Convertible Notes and shares of common stock of UII which were
converted into Common Stock was $4,524,732.70.
The Reporting Persons employed working capital to make these purchases
of the Common Stock, including funds on hand and amounts drawn under existing
lines of credit. The lines of credit
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initially extended by Star Bank, NA, have been refinanced and are currently with
National City Bank of Evansville. FSF borrowed $7,783,780 and FSBI borrowed
$1,820,775 in making the purchases.
ITEM 4. PURPOSE OF TRANSACTION
The purpose of the acquisition of shares of Common Stock is for
investment purposes and also for the purpose of acquiring a controlling interest
in UTI by FSF and, indirectly, Mr. Correll.
The Reporting Persons have acquired securities of UTI and intend to
acquire additional shares of Common Stock in accordance with and subject to the
terms and conditions of (a) the Acquisition Agreement, dated April 30, 1998,
between FSF and UTI, as amended May 29, 1998, (b) the Stock Purchase Agreement,
dated April 30, 1998, between FSF and Larry E. Ryherd, (c) the Convertible Note
Purchase Agreement, dated April 30, 1998, between FSF and James E. Melville,
George E. Francis, Brad M. Wilson, Joseph H. Metzger, Theodore C. Miller,
Michael K. Borden and Patricia G. Fowler, and (d) the Option Agreement between
FSF and UTI, dated April 30, 1998 (collectively, these agreements are referred
to as the "Agreements"). These agreements are attached as Exhibit A and are
incorporated herein by reference. Additional shares of Common Stock that will or
may be acquired under these agreements, are as follows:
1. The $2,560,000 of initial face amount of UTI Convertible Notes
purchased pursuant to the Convertible Note Purchase Agreement
(included in Exhibit A hereto as Exhibit 1(d) to the
Acquisition Agreement), are convertible into 204,800 shares of
Common Stock, and, under the Acquisition Agreement, they are
required to be converted into shares of the Common Stock on or
before July 31, 2000.
2. Pursuant to the Option Agreement (included in Exhibit A hereto
as Exhibit 1(e) to the Acquisition Agreement), FSF has the
option to purchase from UTI shares of common stock of UTI for
a purchase price in cash equal to $15 per share, such option
to expire on July 1, 2001. The number of shares of Common
Stock subject to the Option Agreement shall be that number of
shares which, following exercise, and when combined with all
of the other shares then owned by FSF and its affiliates, will
represent a majority of the then outstanding shares of Common
Stock, not to exceed 1,450,000 shares. The maximum number of
shares subject to such option shall be reduced by two shares
for each share that FSF or its affiliates purchase in private
or public transactions subsequent to the closing of the
Acquisition Agreement. FSF may assign its right to purchase
some or all of the shares subject to the Option Agreement to
one or more of its affiliates.
Mr. Correll and FSF also intend to acquire additional shares of Common
Stock, in connection with a proposed transaction with UTI. In the proposed
transaction, UTI would acquire all of the outstanding shares of North Plaza of
Somerset, Inc., by issuing, in exchange for such shares, an aggregate of 681,818
shares of Common Stock. North Plaza of Somerset, Inc. is a closely held company,
substantially all of the shares of which are currently owned by Mr. Correll,
members of his family and companies they control. Mr. Correll,directly and
through a company he controls, and
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FSF are shareholders of North Plaza of Somerset, Inc. and, based on their
current stock ownership in that company, would receive in the proposed
transactions a total of approximately 505,102 shares of Common Stock. A copy of
the non-binding letter of intent executed by UTI and Mr. Correll, on behalf of
the shareholders of North Plaza of Somerset, Inc. is attached as Exhibit G to
this Report.
In addition, one or more of the Reporting Persons have purchased and
may from time to time purchase shares of Common Stock in the open market or in
privately negotiated transactions depending upon, among other things, market
conditions, the market value of the Common Stock and the availability of shares
for sale, the Reporting Person's liquidity and availability of funds or other
similar factors. The Reporting Persons also, from time to time, will evaluate
the structure of their relationship with UTI and the merits of additional
investments in UTI which could include acquisitions of additional securities of
UTI or a business combination involving UTI and one of more of the Reporting
Persons. In any event, FSBI does not presently intend to acquire directly more
than 4.9% of the outstanding Common Stock prior to the time that such an
acquisition is permissible under the Bank Holding Company Act of 1956, as
amended from time to time.
The Acquisition Agreement between UTI and FSF contained covenants
concerning the operation of UTI pending the closing of the transactions
contemplated by that agreement, as well as covenants by UTI and FSF following
the closing, including the following:
1. BOARD OF DIRECTORS. UTI has agreed to cause three persons
designated by FSF to be appointed to the Board of Directors of
UTI effective as of the closing date of the Acquisition
Agreement (November 20, 1998). For each of the three annual
elections of the UTI Board of Directors following the closing,
UTI will cause three persons designated by FSF to be included
in the management slate of directors recommended to the UTI
shareholders for election to Board membership. UTI will not
and will cause the UTI Board of Directors not to take any
action that would increase the size of the Board of Directors
for such three year period. In addition to the three persons
designated, Ward Correll, Jesse Correll's father, is a
Director of UTI.
2. NO ADDITIONAL SHARES. For a period of three years following
the closing of the Acquisition Agreement (November 20, 1998),
UTI will not and will not permit any UTI affiliate to issue
additional shares of capital stock or to issue or agree to
issue any option, warrant or other instrument convertible into
shares of capital stock without prior written consent of FSF.
3. UII NOTE AGREEMENT. UTI agreed to cause United Income, Inc. to
call, as soon as practicable, all of the United Income, Inc.
outstanding convertible debt according to its terms.
4. REPURCHASE OF SHARES. UTI agreed to purchase for a cash price
of $15 per share, the 28,000 shares of Common Stock owned by
Universal Guaranty on or before December 31, 1998.
5. PENDING MERGER. FSF and UTI agreed to proceed with the merger
of UTI and United Income, Inc., which became effective July
26, 1999.
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One or more of the Reporting Persons, directly or through
representatives, have a role in the management of UTI through board
representation and Mr. Correll serves as chief investment officer for the life
insurance subsidiaries of UTI; as a result, they have the ability to influence
UTI and its strategic plans.
Except as described above, the Reporting Persons do not presently have
any plans or proposals which relate to or would result in (i) the acquisition by
any person of additional securities of UTI, or the disposition of securities of
UTI, (ii) an extraordinary corporate transaction involving UTI or its
subsidiaries, (iii) the sale or transfer of a material amount of assets of UTI
or its subsidiaries, (iv) a change in the present board of directors or
management of UTI, (v) a material change in the present capitalization or
dividend policy of UTI, (vi) any other material change in UTI's business or
corporate structure, (vii) a change in UTI's charter or bylaws or other actions
which may impede the acquisition of control of UTI by any person, (viii) a class
of securities of UTI being delisted from a national securities exchange or cease
being authorized to be quoted in an inter-dealer quotation system of a
registered national securities association, (ix) a class of equity securities of
UTI becoming eligible for termination of registration pursuant to Section
12(g)(4) of the Act, or (x) any action similar to those enumerated above.
ITEM 5. I NTEREST IN SECURITIES OF THE ISSUER
(a-b) The beneficial ownership of the Common Stock by each Reporting Person
is as follows. Each Reporting Person has sole voting and dispositive
power over the shares listed opposite the Reporting Person's name,
except as noted:
REPORTING PERSON NUMBER OF SHARES PERCENT<F1>
First Southern Bancorp, Inc 125,825 shares 3.83 %
First Southern Funding, LLC 822,679 shares 25.02 %
First Southern Capital Corp., LLC 183,033 shares 5.57 %
First Southern Investments, LLC 23,135 shares 0.70 %
Total<F2> 1,154,672 shares 35.11 %
<F1> The percentage of outstanding shares is based on 3,288,448 shares
of Common Stock outstanding.
<F2> The Reporting Persons have agreed in principle to act together for
the purpose of acquiring or holding equity securities of UTI.
Therefore, for purposes of this Schedule 13D, each may be deemed
to have acquired beneficial ownership of the equity securities of
UTI beneficially owned by each of the other Reporting Persons. In
addition, by virtue of his ownership of voting securities of FSF
and FSBI, Mr. Correll may be deemed to beneficially own the total
number of shares of Common Stock owned by them, and may be deemed
to share with them the right to vote and to dispose of such
shares. Mr. Correll owns approximately 82% of the outstanding
membership interests of FSF; he owns directly approximately 23%
and companies he controls own approximately 36% of the outstanding
voting stock of FSBI. In addition, he is a manager of First
Southern Capital Corp., LLC and First Southern Funding, LLC.
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The above amounts do not include additional shares of Common
Stock that may be acquired upon exercise of Convertible Notes of UTI
currently held by FSBI, under the Option Agreement or in connection
with the proposed transaction involving the acquisition of North Plaza
of Somerset, Inc. by UTI as described in Item 4 and incorporated herein
by reference:
Convertible Notes* 204,800 shares
Option Agreement 1,450,000 shares (subject to adjustment)
In exchange for shares of
North Plaza of Somerset, Inc.* 505,102 shares Inc.
Beneficial ownership of up to 51% of the outstanding Common Stock by
FSF and its affiliates can be acquired under the Option Agreement.
*Beneficial ownership of these shares is disclaimed at this time.
(c) The following transactions in the Common Stock of the Issuer were
effected since the most recent filing of an amendment to this Schedule
13D by the Reporting Persons:
First Southern Funding, LLC purchased
4,000 shares, at a price of $8.25 per share, through a broker
on October 27, 1999;
2,065 shares, at a price of $8.25 per share, in private
transactions with 12 UTI shareholders on October 28, 1999;
7,000 shares, at a price of $11.00 per share, in a private
transaction with one UTI shareholder on November 1, 1999;
1,613 shares, at a price of $8.25 per share, in private
transactions with 10 UTI shareholders on November 8, 1999;
1,058 shares, at a price of $8.25 per share, in private
transactions with 10 UTI shareholders on November 16, 1999;
930 shares, at a price of $8.25 per share, in private
transactions with 5 UTI shareholders on November 18, 1999;
5,000 shares, at a price of $8.31 per share, through a broker
on November 18, 1999;
5,000 shares, at a price of $8.31 per share, through a broker
on December 8, 1999; and
1,090 shares, at a price of $8.25 per share, in private
transactions with 7 UTI shareholders on December 9, 1999.
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ITEM 6: CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS, OR RELATIONSHIPS
WITH RESPECT TO SECURITIES OF THE ISSUER
See responses to Items 4 and 5 above. Other than (i) the Acquisition
Agreement, the Stock Purchase Agreement, the Convertible Note Purchase
Agreement, and the Option Agreement, all four of which are filed as Exhibit A,
(ii) as described in the responses to Items 4 and 5 above, (iii) the Agreement
of Assignment among the Reporting Persons, dated November 20, 1998, which is
filed as Exhibit E, and incorporated herein by reference, (iv) the Agreement
Among Reporting Persons attached hereto as Exhibit B, and (v) letter of intent
with respect to the proposed acquisition of shares of Common Stock in exchange
for shares of North Plaza of Somerset, Inc., which is attached hereto as Exhibit
G, neither the Reporting Persons nor any of their directors, executive officers
or controlling persons is a party to any contract, arrangement, understanding or
relationship (legal or otherwise) with respect to any security of the Issuer,
including but not limited to transfer or voting of any of the securities,
finder's fees, joint ventures, loan or option arrangements, puts or calls,
guarantees of profits, division of profits or loss, or the giving or withholding
of proxies.
ITEM 7: MATERIAL TO BE FILED AS EXHIBITS
The following exhibits are filed with this Schedule 13D:
Exhibit A Acquisition Agreement between FSF and UTI dated April 30, 1998, as
amended May 29, 1998, including the following exhibits thereto: Stock
Purchase Agreement between FSF and Larry E. Ryherd dated April 30,
1998; Convertible Note Purchase Agreement between FSF and James E.
Melville, George E. Francis, Brad M. Wilson, Joseph H. Metzger,
Theodore C. Miller, Michael K. Borden and Patricia G. Fowler dated
April 30, 1998; and Option Agreement between FSF and UTI dated April
30, 1998
Exhibit B Agreement among Reporting Persons dated January 5, 1999 for the filing
of a single Schedule 13D pursuant to Rule 13d-l(f)(l).
Exhibit C Business Loan Agreement relating to the borrowing of funds by FSF.
Exhibit D Business Loan Agreement relating to the borrowing of funds by FSBI.
Exhibit E Agreement of Assignment among the Reporting Persons dated November 20,
1998
Exhibit F Members of First Southern Investments, LLC
Exhibit G Letter of intent between UTI and Mr. Correll, on behalf of the
shareholders of North Plaza of Somerset, Inc.
Exhibit H Promissory note relating to the borrowing of funds by FSF and FSBI.
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SIGNATURE
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.
December 14, 1999 By: /S/ JESSE T. CORRELL
Jesse T. Correll
Attorney-in-Fact on behalf of each of the Reporting
Persons*
* Pursuant to the Agreement among Reporting Persons dated January 5, 1999, for
the filing of a single Schedule 13D pursuant to Rule 13d-1-(f)(1), each
Reporting Person has authorized Jesse T. Correll to sign on behalf of such
Reporting Person any Schedule 13D or amendments thereto that are required to be
filed on behalf of the Reporting Persons to this Schedule 13D.
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
A* Acquisition Agreement between FSF and UTI dated April 30, 1998,
as amended May 29, 1998, including the following exhibits
thereto: Stock Purchase Agreement between FSF and Larry E.
Ryherd dated April 30, 1998; Convertible Note Purchase
Agreement between FSF and James E. Melville, George E. Francis,
Brad M. Wilson, Joseph H. Metzger, Theodore C. Miller, Michael
K. Borden and Patricia G. Fowler dated April 30, 1998; and
Option Agreement between FSF and UTI dated April 30, 1998
B* Agreement among Reporting Persons dated January 5, 1999 for
the filing of a single Schedule 13D pursuant to Rule
13d-l(f)(l).
C Business Loan Agreement relating to the borrowing of funds by
FSF.
D Business Loan Agreement relating to the borrowing of funds by
FSBI.
E* Agreement of Assignment among the Reporting Persons dated
November 20, 1998
F* Members of First Southern Investments, LLC
G Letter of intent between UTI and Mr. Correll, on behalf of the
shareholders of North Plaza of Somerset, Inc.
H Promissory note relating to the borrowing of funds by FSF and
FSBI.
* Previously filed
<PAGE> 15
Exhibit C
Business Loan Agreement relating to the borrowing of funds by FSF
<PAGE> 16
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Principal Loan Date Maturity Loan No Call Collateral Account Officer Initials
$19,000,000.00 08-20-99 08-20-2000 00100001201 410 16 SGH
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular loan
or item.
- ------------------------------------------------------------------------------------------------------------------------------------
Borrower: FIRST SOUTHERN FUNDING, LLC (TIN: Lender: THE NATIONAL CITY BANK OF EVANSVILLE
61-1233349) COMMERCIAL LOAN DEPARTMENT
99 LANCASTER STREET 21 S.E. THIRD STREET
STANFORD, KY 40484 P.O. BOX 868
EVANSVILLE, IN 47705-0868
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
THIS BUSINESS LOAN AGREEMENT BETWEEN FIRST SOUTHERN FUNDING, LLC ("BORROWER")
AND THE NATIONAL CITY BANK OF EVANSVILLE ("LENDER") IS MADE AND EXECUTED ON THE
FOLLOWING TERMS AND CONDITIONS. BORROWER HAS RECEIVED PRIOR COMMERCIAL LOANS
FROM LENDER OR HAS APPLIED TO LENDER FOR A COMMERCIAL LOAN OR LOANS AND OTHER
FINANCIAL ACCOMMODATIONS, INCLUDING THOSE WHICH MAY BE DESCRIBED ON ANY EXHIBIT
OR SCHEDULE ATTACHED TO THIS AGREEMENT. ALL SUCH LOANS AND FINANCIAL
ACCOMMODATIONS, TOGETHER WITH ALL FUTURE LOANS AND FINANCIAL ACCOMMODATIONS FROM
LENDER TO BORROWER, ARE REFERRED TO IN THIS AGREEMENT INDIVIDUALLY AS THE "LOAN"
AND COLLECTIVELY AS THE "LOANS." BORROWER UNDERSTANDS AND AGREES THAT: (A) IN
GRANTING, RENEWING, OR EXTENDING ANY LOAN, LENDER IS RELYING UPON BORROWER'S
REPRESENTATIONS, WARRANTIES, AND AGREEMENTS, AS SET FORTH IN THIS AGREEMENT; (B)
THE GRANTING, RENEWING, OR EXTENDING OF ANY LOAN BY LENDER AT ALL TIMES SHALL BE
SUBJECT TO LENDER'S SOLE JUDGMENT AND DISCRETION; AND (C) ALL SUCH LOANS SHALL
BE AND SHALL REMAIN SUBJECT TO THE FOLLOWING TERMS AND CONDITIONS OF THIS
AGREEMENT.
TERM. This Agreement shall be effective as of August 20, 1999, and shall
continue thereafter until all Indebtedness of Borrower to Lender has been
performed in full and the parties terminate this Agreement in writing.
DEFINITIONS. The following words shall have the following meanings when used in
this Agreement. Terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code. All references
to dollar amounts shall mean amounts in lawful money of the United States of
America.
AGREEMENT. The word "Agreement" means this Business Loan Agreement, as
this Business Loan Agreement may be amended or modified from time to
time, together with all exhibits and schedules attached to this
Business Loan Agreement from time to time.
BORROWER. The word "Borrower" means FIRST SOUTHERN FUNDING, LLC. The
word "Borrower" also includes, as applicable, all subsidiaries and
affiliates of Borrower as provided below in the paragraph titled
"Subsidiaries and Affiliates."
CERCLA. The word "CERCLA" means the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended.
COLLATERAL. The word "Collateral" means and includes without limitation
all property and assets granted as collateral security for a Loan,
whether real or personal property, whether granted directly or
indirectly, whether granted now or in the future, and whether granted
in the form of a security Interest, mortgage, deed of trust,
assignment, pledge, chattel mortgage, chattel trust, factor's lien,
equipment trust, conditional sale, trust receipt, lien, charge, lien or
title retention contract, lease or consignment intended as a security
device, or any other security or lien interest whatsoever, whether
created by law, contract, or otherwise.
ERISA. The word "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended.
EVENT OF DEFAULT. The words "Event of Default" mean and include without
limitation any of the Events of Default set forth below in the section
titled "EVENTS OF DEFAULT."
GRANTOR. The word "Grantor" means and includes without limitation each
and all of the persons or entities granting a Security Interest in any
Collateral for the Indebtedness, including without limitation all
Borrowers granting such a Security Interest.
GUARANTOR. The word "Guarantor" means and includes without limitation
each and all of the guarantors, sureties, and accommodation parties in
connection with any Indebtedness.
INDEBTEDNESS. The word "Indebtedness" means and includes without
limitation all Loans, together with all other obligations, debts and
liabilities of Borrower to Lender, or any one or more of them, as well
as all claims by Lender against Borrower, or any one or more of them;
whether now or hereafter existing, voluntary or involuntary, due or not
due, absolute or contingent, liquidated or unliquidated; whether
Borrower may be liable individually or jointly with others; whether
Borrower may be obligated as a guarantor, surety, or otherwise; whether
recovery upon such Indebtedness may be or hereafter may become barred
by any statute of limitations; and whether such Indebtedness may be or
hereafter may become otherwise unenforceable.
LENDER. The word "Lender" means THE NATIONAL CITY BANK OF EVANSVILLE,
its successors and assigns.
LOAN. The Word "Loan" or "Loans" means and includes without limitation
any and all commercial loans and financial accommodations from Lender
to Borrower, whether now or hereafter existing, and however evidenced,
including without limitation those loans and financial accommodations
described herein or described on any exhibit or schedule attached to
this Agreement from time to time.
NOTE. The word "Note" means and includes without limitation Borrower's
promissory note or notes, if any, evidencing Borrower's Loan
obligations in favor of Lender, as well as any substitute, replacement
or refinancing note or notes therefor.
PERMITTED LIENS. The words "Permitted Liens" mean: (a) liens and
security interests securing Indebtedness owed by Borrower to Lender;
(b) liens for taxes, assessments, or similar charges either not yet due
or being contested in good faith; (c) liens of materialmen, mechanics,
warehousemen, or carriers, or other like liens arising in the ordinary
course of business and securing obligations which are not yet
delinquent; (d) purchase money liens or purchase money security
interests upon or in any property acquired or held by Borrower in the
ordinary course of business to secure Indebtedness outstanding on the
date of this Agreement or permitted to be incurred under the paragraph
of this Agreement titled "Indebtedness and Liens"; (e) liens and
security interests which, as of the date of this Agreement, have been
disclosed to and approved by the Lender in writing; and (f) those liens
and security interests which in the aggregate constitute an immaterial
and insignificant monetary amount with respect to the net value of
Borrower's assets.
RELATED DOCUMENTS. The words "Related Documents" mean and include
without limitation all promissory notes, credit agreements, loan
agreements, environmental agreements, guaranties, security agreements,
mortgages, deeds of trust, and all other instruments, agreements and
documents, whether now or hereafter existing, executed in connection
with the Indebtedness.
SECURITY AGREEMENT. The words "Security Agreement" mean and include
without limitation any agreements, promises, covenants, arrangements,
understandings or other agreements, whether created by law, contract,
or otherwise, evidencing, governing, representing, or creating a
Security Interest.
SECURITY INTEREST. The words "Security Interest" mean and include
without limitation any type of collateral security, whether in the form
of a lien, charge, mortgage, deed of trust, assignment, pledge, chattel
mortgage, chattel trust, factor's lien, equipment trust, conditional
sale, trust receipt, lien or title retention contract, lease or
consignment intended as a security device, or any other security or
lien interest whatsoever, whether created by law, contract, or
otherwise.
SARA. The word "SARA" means the Superfund Amendments and
Reauthorization Act of 1986 as now or hereafter amended.
CONDITIONS PRECEDENT TO EACH ADVANCE. Lender's obligation to make the initial
Loan Advance and each subsequent Loan Advance under this Agreement shall be
subject to the fulfillment to Lender's satisfaction of all of the conditions set
forth in this Agreement and in the Related Documents.
LOAN DOCUMENTS. Borrower shall provide to Lender in form satisfactory
to Lender the following documents for the Loan: (a) the Note, (b)
Security Agreements granting to Lender security interests in the
Collateral, (c) Financing Statements perfecting Lender's Security
Interests; (d) evidence of insurance as required below; and (e) any
other documents required under this Agreement or by Lender or its
counsel.
BORROWER'S AUTHORIZATION. Borrower shall have provided in form and
substance satisfactory to Lender properly certified resolutions, duly
authorizing the execution and delivery of this Agreement, the Note and
the Related Documents, and such other authorizations and other
documents and instruments as Lender or its counsel, in their sole
discretion, may require.
PAYMENT OF FEES AND EXPENSES. Borrower shall have paid to Lender all
fees, charges, and other expenses which are then due and payable as
specified in this Agreement or any Related Document.
REPRESENTATIONS AND WARRANTIES. The representations and warranties set
forth in this Agreement, in the Related Documents, and in any document
or certificate delivered to Lender under this Agreement are true and
correct.
NO EVENT OF DEFAULT. There shall not exist at the time of any advance a
condition which would constitute an Event of Default under this
Agreement.
REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as
of the date of this Agreement, as of the date of each disbursement of Loan
proceeds, as of the date of any renewal, extension or modification of any Loan,
and at all times any Indebtedness exists:
<PAGE> 17
08-20-1999 BUSINESS LOAN AGREEMENT PAGE 2
Loan No. 00100001201 (CONTINUED)
ORGANIZATION. Borrower is a limited liability company which is duly
organized, validly existing, and in good standing under the laws of the
Commonwealth of Kentucky and is validly existing and in good standing
in all states in which Borrower is doing business. Borrower has the
full power and authority to own its properties and to transact the
businesses in which it is presently engaged or presently proposes to
engage. Borrower also is duly qualified as a foreign limited liability
company and is in good standing in all states in which the failure to
so qualify would have a material adverse effect on its businesses or
financial condition.
AUTHORIZATION. The execution, delivery, and performance of this
Agreement and all Related Documents by Borrower, to the extent to be
executed, delivered or performed by Borrower, have been duly authorized
by all necessary action by Borrower; do not require the consent or
approval of any other person, regulatory authority or governmental
body; and do not conflict with, result in a violation of, or constitute
a default under (a) any provision of its articles of organization,
operating agreement, or any other agreement or other instrument binding
upon Borrower or (b) any law, governmental regulation, court decree, or
order applicable to Borrower.
FINANCIAL INFORMATION. Each financial statement of Borrower supplied to
Lender truly and completely disclosed Borrower's financial condition as
of the date of the statement, and there has been no material adverse
change in Borrower's financial condition subsequent to the date of the
most recent financial statement supplied to Lender. Borrower has no
material contingent obligations except as disclosed in such financial
statements.
LEGAL EFFECT. This Agreement constitutes, and any instrument or
agreement required hereunder to be given by Borrower when delivered
will constitute, legal, valid and binding obligations of Borrower
enforceable against Borrower in accordance with their respective terms.
PROPERTIES. Except as contemplated by this Agreement or as previously
disclosed in Borrower's financial statements or in writing to Lender
and as accepted by Lender, and except for property tax liens for taxes
not presently due and payable, Borrower owns and has good title to all
of Borrower's properties free and clear of all Security Interests, and
has not executed any security documents or financing statements
relating to such properties. All of Borrower's properties are titled in
Borrower's legal name, and Borrower has not used, or filed a financing
statement under, any other name for at least the last five (5) years.
HAZARDOUS SUBSTANCES. The terms "hazardous waste," "hazardous
substance," "disposal," "release," and "threatened release," as used in
this Agreement, shall have the same meanings as set forth in the
"CERCLA," "SARA," the Hazardous Materials Transportation Act, 49 U.S.C.
Section 1801, et seq., the Resource Conservation and Recovery Act, 42
U.S.C. Section 6901, et seq., or other applicable state or Federal
laws, rules, or regulations adopted pursuant to any of the foregoing.
Except as disclosed to and acknowledged by Lender in writing, Borrower
represents and warrants that: (a) During the period of Borrower's
ownership of the properties, there has been no use, generation,
manufacture, storage, treatment, disposal, release or threatened
release of any hazardous waste or substance by any person on, under,
about or from any of the properties. (b) Borrower has no knowledge of,
or reason to believe that there has been (i) any use, generation,
manufacture, storage, treatment, disposal, release, or threatened
release of any hazardous waste or substance on, under, about or from
the properties by any prior owners or occupants of any of the
properties, or (ii) any actual or threatened litigation or claims of
any kind by any person relating to such matters. (c) Neither Borrower
nor any tenant, contractor, agent or other authorized user of any of
the properties shall use, generate, manufacture, store, treat, dispose
of, or release any hazardous waste or substance on, under, about or
from any of the properties; and any such activity shall be conducted in
compliance with all applicable federal, state, and local laws,
regulations, and ordinances, including without limitation those laws,
regulations and ordinances described above. Borrower authorizes Lender
and its agents to enter upon the properties to make such inspections
and tests as Lender may deem appropriate to determine compliance of the
properties with this section of the Agreement. Any inspections or tests
made by Lender shall be at Borrower's expense and for Lender's purposes
only and shall not be construed to create any responsibility or
liability on the part of Lender to Borrower or to any other person. The
representations and warranties contained herein are based on Borrower's
due diligence in investigating the properties for hazardous waste and
hazardous substances. Borrower hereby (a) releases and waives any
future claims against Lender for indemnity or contribution in the event
Borrower becomes liable for cleanup or other costs under any such laws,
and (b) agrees to indemnify and hold harmless Lender against any and
all claims, losses, liabilities, damages, penalties, and expenses which
Lender may directly or indirectly sustain or suffer resulting from a
breach of this section of the Agreement or as a consequence of any use,
generation, manufacture, storage, disposal, release or threatened
release of a hazardous waste or substance on the properties. The
provisions of this section of the Agreement, including the obligation
to indemnify, shall survive the payment of the Indebtedness and the
termination or expiration of this Agreement and shall not be affected
by Lender's acquisition of any interest in any of the properties,
whether by foreclosure or otherwise.
LITIGATION AND CLAIMS. No litigation, claim, investigation,
administrative proceeding or similar action (including those for unpaid
taxes) against Borrower is pending or threatened, and no other event
has occurred which may materially adversely affect Borrower's financial
condition or properties, other than litigation, claims, or other
events, if any, that have been disclosed to and acknowledged by Lender
in writing.
TAXES. To the best of Borrower's knowledge, all tax returns and reports
of Borrower that are or were required to be filed, have been filed, and
all taxes, assessments and other governmental charges have been paid in
full, except those presently being or to be contested by Borrower in
good faith in the ordinary course of business and for which adequate
reserves have been provided.
LIEN PRIORITY. Unless otherwise previously disclosed to Lender in
writing, Borrower has not entered into or granted any Security
Agreements, or permitted the filing or attachment of any Security
Interests on or affecting any of the Collateral directly or indirectly
securing repayment of Borrower's Loan and Note, that would be prior or
that may in any way be superior to Lender's Security Interests and
rights in and to such Collateral.
BINDING EFFECT. This Agreement, the Note, all Security Agreements
directly or indirectly securing repayment of Borrower's Loan and Note
and all of the Related Documents are binding upon Borrower as well as
upon Borrower's successors, representatives and assigns, and are
legally enforceable in accordance with their respective terms.
COMMERCIAL PURPOSES. Borrower intends to use the Loan proceeds solely
for business or commercial related purposes.
EMPLOYEE BENEFIT PLANS. Each employee benefit plan as to which Borrower
may have any liability complies in all material respects with all
applicable requirements of law and regulations, and (i) no Reportable
Event nor Prohibited Transaction (as defined in ERISA) has occurred
with respect to any such plan, (ii) Borrower has not withdrawn from any
such plan or initiated steps to do so, (iii) no steps have been taken
to terminate any such plan, and (iv) there are no unfunded liabilities
other than those previously disclosed to Lender in writing.
LOCATION OF BORROWER'S OFFICES AND RECORDS. Borrower's place of
business, or Borrower's Chief executive office, if Borrower has more
than one place of business, is located at 99 LANCASTER STREET,
STANFORD, KY 40484. Unless Borrower has designated otherwise in writing
this location is also the office or offices where Borrower keeps its
records concerning the Collateral.
INFORMATION. All information heretofore or contemporaneously herewith
furnished by Borrower to Lender for the purposes of or in connection
with this Agreement or any transaction contemplated hereby is, and all
information hereafter furnished by or on behalf of Borrower to Lender
will be, true and accurate in every material respect on the date as of
which such information is dated or certified; and none of such
information is or will be incomplete by omitting to state any material
fact necessary to make such information not misleading.
SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Borrower understands and
agrees that Lender, without independent investigation, is relying upon
the above representations and warranties in extending Loan Advances to
Borrower. Borrower further agrees that the foregoing representations
and warranties shall be continuing in nature and shall remain in full
force and effect until such time as Borrower's indebtedness shall be
paid in full, or until this Agreement shall be terminated in the manner
provided above, whichever is the last to occur.
AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, while
this Agreement is in effect, Borrower will:
LITIGATION. Promptly inform Lender in writing of (a) all material
adverse changes in Borrower's financial condition, and (b) all existing
and all threatened litigation, claims, investigations, administrative
proceedings or similar actions affecting Borrower or any Guarantor
which could materially affect the financial condition of Borrower or
the financial condition of any Guarantor.
FINANCIAL RECORDS. Maintain its books and records in accordance with
generally accepted accounting principles, applied on a consistent
basis, and permit Lender to examine and audit Borrower's books and
records at all reasonable times.
FINANCIAL STATEMENTS. Furnish Lender with, as soon as available, but in
no event later than thirty (30) days after the end of each fiscal year,
Borrower's balance sheet and income statement for the year ended,
prepared by Borrower, and, as soon as available, but in no event later
than thirty (30) days after the end of each fiscal quarter, Borrower's
balance sheet and profit and loss statement for the period ended,
prepared and certified as correct to the best knowledge and belief by
Borrower's chief financial officer or other officer or person
acceptable to Lender. All financial reports required to be provided
under this Agreement shall be prepared in accordance with generally
accepted accounting principles, applied on a consistent basis, and
certified by Borrower as being true and correct.
ADDITIONAL INFORMATION. Furnish such additional information and
statements, lists of assets and liabilities, agings of receivables and
payables, inventory schedules, budgets, forecasts, tax returns, and
other reports with respect to Borrower's financial condition and
business operations as Lender may request from time to time.
INSURANCE. Maintain fire and other risk insurance, public liability
insurance, and such other insurance as Lender may require with respect
to Borrower's properties and operations, in form, amounts, coverages
and with insurance companies reasonably acceptable to Lender. Borrower,
upon request of Lender, will deliver to Lender from time to time the
policies or certificates of insurance in form satisfactory to Lender,
including stipulations that coverages will not be canceled or
diminished without at least ten (10) days' prior written notice to
Lender.
<PAGE> 18
08-20-1999 BUSINESS LOAN AGREEMENT PAGE 3
LOAN NO. 00100001201 (CONTINUED)
INSURANCE REPORTS. Furnish to Lender, upon request of Lender, reports
on each existing insurance policy showing such information as Lender
may reasonably request, including without limitation the following: (a)
the name of the insurer; (b) the risks insured; (c) the amount of the
policy; (d) the properties insured; (e) the then current property
values on the basis of which insurance has been obtained, and the
manner of determining those values; and (f) the expiration date of the
policy. In addition, upon request of Lender (however not more often
than annually), Borrower will have an independent appraiser
satisfactory to Lender determine, as applicable, the actual cash value
or replacement cost of any Collateral. The cost of such appraisal shall
be paid by Borrower.
OTHER AGREEMENTS. Comply with all terms and conditions of all other
agreements, whether now or hereafter existing, between Borrower and any
other party and notify Lender immediately in writing of any default in
connection with any other such agreements.
LOAN PROCEEDS. Use all Loan proceeds solely for Borrower's business
operations, unless specifically consented to the contrary by Lender in
writing.
TAXES, CHARGES AND LIENS. Pay and discharge when due all of its
indebtedness and obligations, including without limitation all
assessments, taxes, governmental charges, levies and liens, of every
kind and nature, imposed upon Borrower or its properties, income, or
profits, prior to the date on which penalties would attach, and all
lawful claims that, if unpaid, might become a lien or charge upon any
of Borrower's properties, income, or profits. Provided however,
Borrower will not be required to pay and discharge any such assessment,
tax, charge, levy, lien or claim so long as (a) the legality of the
same shall be contested in good faith by appropriate proceedings, and
(b) Borrower shall have established on its books adequate reserves with
respect to such contested assessment, tax, charge, levy, lien, or claim
in accordance with generally accepted accounting practices. Borrower,
upon demand of Lender, will furnish to Lender evidence of payment of
the assessments, taxes, charges, levies, liens and claims and will
authorize the appropriate governmental official to deliver to Lender at
any time a written statement of any assessments, taxes, charges,
levies, liens and claims against Borrower's properties, income, or
profits.
PERFORMANCE. Perform and comply with all terms, conditions, and
provisions set forth in this Agreement and in the Related Documents in
a timely manner, and promptly notify Lender if Borrower learns of the
occurrence of any event which constitutes an Event of Default under
this Agreement or under any of the Related Documents.
OPERATIONS. Maintain executive and management personnel with
substantially the same qualifications and experience as the present
executive and management personnel; provide written notice to Lender of
any change in executive and management personnel; conduct its business
affairs in a reasonable and prudent manner and in compliance with all
applicable federal, state and municipal laws, ordinances, rules and
regulations respecting its properties, charters, businesses and
operations, including without limitation, compliance with the Americans
With Disabilities Act and with all minimum funding standards and other
requirements of ERISA and other laws applicable to Borrower's employee
benefit plans.
INSPECTION. Permit employees or agents of Lender at any reasonable time
to inspect any and all Collateral for the Loan or Loans and Borrower's
other properties and to examine or audit Borrower's books, accounts,
and records and to make copies and memoranda of Borrower's books,
accounts, and records. If Borrower now or at any time hereafter
maintains any records (including without limitation computer generated
records and computer software programs for the generation of such
records) in the possession of a third party, Borrower, upon request of
Lender, shall notify such party to permit Lender free access to such
records at all reasonable times and to provide Lender with copies of
any records it my request, all at Borrower's expense.
COMPLIANCE CERTIFICATE. Unless waived in writing by Lender, provide
Lender at least annually and at the time of each disbursement of Loan
proceeds with a certificate executed by Borrower's chief financial
officer, or other officer or person acceptable to Lender, certifying
that the representations and warranties set forth in this Agreement are
true and correct as of the date of the certificate and further
certifying that, as of the date of the certificate, no Event of Default
exists under this Agreement.
ENVIRONMENTAL COMPLIANCE AND REPORTS. Borrower shall comply in all
respects with all environmental protection federal, state and local
laws, statutes, regulations and ordinances; not cause or permit to
exist, as a result of an intentional or unintentional action or
omission on its part or on the part of any third party, on property
owned and/or occupied by Borrower, any environmental activity where
damage may result to the environment, unless such environmental
activity is pursuant to and in compliance with the conditions of a
permit issued by the appropriate federal, state or local governmental
authorities; shall furnish to Lender promptly and in any event within
thirty (30) days after receipt thereof a copy of any notice, summons,
lien, citation, directive, letter or other communication from any
governmental agency or instrumentality concerning any intentional or
unintentional action or omission on Borrower's part in connection with
any environmental activity whether or not there is damage to the
environment and/or other natural resources.
ADDITIONAL ASSURANCES. Make, execute and deliver to Lender such
promissory notes, mortgages, deeds of trust, security agreements,
financing statements, instruments, documents and other agreements as
Lender or its attorneys may reasonably request to evidence and secure
the Loans and to perfect all Security Interests.
NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this
Agreement is in effect, Borrower shall not, without the prior written consent of
Lender:
INDEBTEDNESS AND LIENS. (a) Except for trade debt incurred in the
normal course of business and indebtedness to Lender contemplated by
this Agreement, create, incur or assume indebtedness for borrowed
money, including capital leases, (b) except as allowed as a Permitted
Lien, sell transfer, mortgage, assign, pledge, lease, grant a security
interest in, or encumber any of Borrower's assets or (c) sell with
recourse any of Borrower's accounts, except to Lender.
CONTINUITY OF OPERATIONS. (a) Engage in any business activities
substantially different than those in which Borrower is presently
engaged, (b) cease operations, liquidate, merge, transfer, acquire or
consolidate with any other entity, change ownership, change its name,
dissolve or transfer or sell Collateral out of the ordinary course of
business, or (c) make any distribution with respect to any capital
account, whether by reduction of capital or otherwise.
LOANS, ACQUISITIONS AND GUARANTIES. (a) Loan, invest in or advance
money or assets, (b) purchase, create or acquire any interest in any
other enterprise or entity, or (c) incur any obligation as surety or
guarantor other than in the ordinary course of business.
CESSATION OF ADVANCES. If Lender has made any commitment to make any Loan to
Borrower, whether under this Agreement or under any other agreement, Lender
shall have no obligation to make Loan Advances or to disburse Loan proceeds if:
(a) Borrower or any Guarantor is in default under the terms of this Agreement or
any of the Related Documents or any other agreement that Borrower or any
Guarantor has with Lender; (b) Borrower or any Guarantor becomes insolvent,
files a petition in bankruptcy or similar proceedings, or is adjudged a
bankrupt; (c) there occurs a material adverse change in Borrower's financial
condition, in the financial condition of any Guarantor, or in the value of any
Collateral securing any Loan; (d) any Guarantor seeks, claims or otherwise
attempts to limit, modify or revoke such Guarantor's guaranty of the Loan or any
other loan with Lender; or (e) Lender in good faith deems itself insecure, even
though no Event of Default shall have occurred.
RIGHT OF SETOFF. Borrower grants to Lender a contractual security interest in,
and hereby assigns, conveys, delivers, pledges, and transfers to Lender all
Borrower's right, title and interest in and to, Borrower's accounts with Lender
(whether checking, savings, or some other account), including without limitation
all accounts held jointly with someone else and all accounts Borrower may open
in the future, excluding however all IRA and Keogh accounts, and all trust
accounts for which the grant of a security interest would be prohibited by law.
Borrower authorizes Lender, to the extent permitted by applicable law, to charge
or setoff all sums owing on the Indebtedness against any and all such accounts.
EVENTS OF DEFAULT. Each of the following shall constitute an Event of Default
under this Agreement:
DEFAULT ON INDEBTEDNESS. Failure of Borrower to make any payment when
due on the Loans.
OTHER DEFAULTS. Failure of Borrower or any Grantor to comply with or to
perform when due any other term, obligation, covenant or condition
contained in this Agreement or in any of the Related Documents, or
failure of Borrower to comply with or to perform any other term,
obligation, covenant or condition contained in any other agreement
between Lender and Borrower.
DEFAULT IN FAVOR OF THIRD PARTIES. Should Borrower or any Grantor
default under any loan, extension of credit, security agreement,
purchase or sales agreement, or any other agreement, in favor of any
other creditor or person that may materially affect any of Borrower's
property or Borrower's or any Grantor's ability to repay the Loans or
perform their respective obligations under this Agreement or any of the
Related Documents.
FALSE STATEMENTS. Any warranty, representation or statement made or
furnished to Lender by or on behalf of Borrower or any Grantor under
this Agreement or the Related Documents is false or misleading in any
material respect at the time made or furnished, or becomes false or
misleading at any time thereafter.
DEFECTIVE COLLATERALIZATION. This Agreement or any of the Related
Documents ceases to be in full force and effect (including failure of
any Security Agreement to create a valid and perfected Security
Interest) at any time and for any reason.
DEATH OR INSOLVENCY. The dissolution (regardless of whether election to
continue is made), any member withdraws from Borrower, or any other
termination of Borrower's existence as a going business or the death of
any member, the insolvency of Borrower, the appointment of a receiver
for any part of Borrower's property, any assignment for the benefit of
creditors, any type of creditor workout, or the commencement of any
proceeding under any bankruptcy or insolvency laws by or against
Borrower.
<PAGE> 19
08-20-1999 BUSINESS LOAN AGREEMENT PAGE 4
LOAN NO. 00100001201 (CONTINUED)
CREDITOR OR FORFEITURE PROCEEDINGS. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Borrower, any
creditor of any Grantor against any collateral securing the
Indebtedness, or by any governmental agency. This includes a
garnishment, attachment, or levy on or of any of Borrower's deposit
accounts with Lender. However, this Event of Default shall not apply if
there is a good faith dispute by Borrower or Grantor, as the case may
be, as to the validity or reasonableness of the claim which is the
basis of the creditor or forfeiture proceeding, and if Borrower or
Grantor gives Lender written notice of the creditor or forfeiture
proceeding and furnishes reserves or a surety bond for the creditor or
forfeiture proceeding satisfactory to Lender.
ADVERSE CHANGE. A material adverse change occurs in Borrower's
financial condition, or Lender believes the prospect of payment or
performance of the Indebtedness is impaired.
INSECURITY. Lender, in good faith, deems itself insecure.
RIGHT TO CURE. If any default, other than a Default on Indebtedness, is
curable and if Borrower or Grantor, as the case may be, has not been
given a notice of a similar default within the preceding twelve (12)
months, it may be cured (and no Event of Default will have occurred) if
Borrower or Grantor, as the case may be, after receiving written notice
from Lender demanding cure of such default: (a) cures the default
within ten (10) days; or (b) if the cure requires more than ten (10)
days, immediately initiates steps which Lender deems in Lender's sole
discretion to be sufficient to cure the default and thereafter
continues and completes all reasonable and necessary steps sufficient
to produce compliance as soon as reasonably practical.
EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, except where
otherwise provided in this Agreement or the Related Documents, all commitments
and obligations of Lender under this Agreement or the Related Documents or any
other agreement immediately will terminate (including any obligation to make
Loan Advances or disbursements), and, at Lender's option, all Indebtedness
immediately will become due and payable, all without notice of any kind to
Borrower, except that in the case of an Event of Default of the type described
in the "Insolvency" subsection above, such acceleration shall be automatic and
not optional. In addition, Lender shall have all the rights and remedies
provided in the Related Documents or available at law, in equity, or otherwise.
Except as may be prohibited by applicable law, all of the Lender's rights and
remedies shall be cumulative and may be exercised singularly or concurrently.
Election by Lender to pursue any remedy shall not exclude pursuit of any other
remedy, and an election to make expenditures or to take action to perform an
obligation of Borrower or of any Grantor shall not affect Lender's right to
declare a default and to exercise its rights and remedies. All Loans shall be
repaid under all circumstances without relief from any Indiana or other
valuation and appraisement laws.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:
AMENDMENTS. This Agreement, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as to
the matters set forth in this Agreement. No alteration of or amendment
to this Agreement shall be effective unless given in writing and signed
by the party or parties sought to be charged or bound by the alteration
or amendment.
APPLICABLE LAW. THIS AGREEMENT HAS BEEN DELIVERED TO LENDER AND
ACCEPTED BY LENDER IN THE STATE OF INDIANA. IF THERE IS A LAWSUIT,
BORROWER AGREES UPON LENDER'S REQUEST TO SUBMIT TO THE JURISDICTION OF
THE COURTS OF VANDERBURGH COUNTY, THE STATE OF INDIANA. LENDER AND
BORROWER HEREBY WAIVE THE RIGHT TO ANY JURY TRIAL IN ANY ACTION,
PROCEEDING, OR COUNTERCLAIM BROUGHT BY EITHER LENDER OR BORROWER
AGAINST THE OTHER. (INITIAL HERE /S/ JTC) THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
INDIANA.
CAPTION HEADINGS. Caption headings in this Agreement are for
convenience purposes only and are not to be used to interpret or define
the provisions of this Agreement.
CONSENT TO LOAN PARTICIPATION. Borrower agrees and consents to Lender's
sale or transfer, whether now or later, of one or more participation
interests in the Loans to one or more purchasers, whether related or
unrelated to Lender. Lender may provide, without any limitation
whatsoever, to any one or more purchasers, or potential purchasers, any
information or knowledge Lender may have about Borrower or about any
other matter relating to the Loan, and Borrower hereby waives any
rights to privacy it may have with respect to such matters. Borrower
additionally waives any and all notices of sale of participation
interests, as well as all notices of any repurchase of such
participation interests. Borrower also agrees that the purchasers of
any such participation interests will be considered as the absolute
owners of such interests in the Loans and will have all the rights
granted under the participation agreement or agreements governing the
sale of such participation interests. Borrower further waives all
rights of offset or counterclaim that it may have now or later against
Lender or against any purchaser of such a participation interest and
unconditionally agrees that either Lender or such purchaser may enforce
Borrower's obligation under the Loans irrespective of the failure or
insolvency of any holder of any interest in the Loans. Borrower further
agrees that the purchaser of any such participation interests may
enforce its interests irrespective of any personal claims or defenses
that Borrower may have against Lender.
COSTS AND EXPENSES. Borrower agrees to pay upon demand all of Lender's
expenses, including without limitation attorneys' fees, incurred in
connection with the preparation, execution, enforcement, modification
and collection of this Agreement or in connection with the Loans made
pursuant to this Agreement. Lender may pay someone else to help collect
the Loans and to enforce this Agreement, and Borrower will pay that
amount. This includes, subject to any limits under applicable law,
Lender's attorneys' fees and Lender's legal expenses, whether or not
there is a lawsuit, including attorneys' fees for bankruptcy
proceedings (including efforts to modify or vacate any automatic stay
or injunction), appeals, and any anticipated post-judgment collection
services. Borrower also will pay any court costs, in addition to all
other sums provided by law.
NOTICES. All notices required to be given under this Agreement shall be
given in writing, may be sent by telefacsimile (unless otherwise
required by law), and shall be effective when actually delivered or
when deposited with a nationally recognized overnight courier or
deposited in the United States mail, first class, postage prepaid,
addressed to the party to whom the notice is to be given at the address
shown above. Any party may change its address for notices under this
Agreement by giving formal written notice to the other parties,
specifying that the purpose of the notice is to change the party's
address. To the extent permitted by applicable law, if there is more
than one Borrower, notice to any Borrower will constitute notice to all
Borrowers. For notice purposes, Borrower will keep Lender informed at
all times of Borrower's current address(es).
SEVERABILITY. If a court of competent jurisdiction finds any provision
of this Agreement to be invalid or unenforceable as to any person or
circumstance, such finding shall not render that provision invalid or
unenforceable as to any other persons or circumstances. If feasible,
any such offending provision shall be deemed to be modified to be
within the limits of enforceability or validity; however, if the
offending provision cannot be so modified, it shall be stricken and all
other provisions of this Agreement in all other respects shall remain
valid and enforceable.
SUBSIDIARIES AND AFFILIATES OF BORROWER. To the extent the context of
any provisions of this Agreement makes it appropriate, including
without limitation any representation, warranty or covenant, the word
"Borrower" as used herein shall include all subsidiaries and affiliates
of Borrower. Notwithstanding the foregoing however, under no
circumstances shall this Agreement be construed to require Lender to
make any Loan or other financial accommodation to any subsidiary or
affiliate of Borrower.
SUCCESSORS AND ASSIGNS. All covenants and agreements contained by or on
behalf of Borrower shall bind its successors and assigns and shall
inure to the benefit of Lender, its successors and assigns. Borrower
shall not, however, have the right to assign its rights under this
Agreement or any interest therein, without the prior written consent of
Lender.
SURVIVAL. All warranties, representations, and covenants made by
Borrower in this Agreement or in any certificate or other instrument
delivered by Borrower to Lender under this Agreement shall be
considered to have been relied upon by Lender and will survive the
making of the Loan and delivery to Lender of the Related Documents,
regardless of any investigation made by Lender or on Lender's behalf.
TIME IS OF THE ESSENCE. Time is of the essence in the performance of
this Agreement.
WAIVER. Lender shall not be deemed to have waived any rights under this
Agreement unless such waiver is given in writing and signed by Lender.
No delay or omission on the part of Lender in exercising any right
shall operate as a waiver of such right or any other right. A waiver by
Lender of a provision of this Agreement shall not prejudice or
constitute a waiver of Lender's right otherwise to demand strict
compliance with that provision or any other provision of this
Agreement. No prior waiver by Lender, nor any course of dealing between
Lender and Borrower, or between Lender and any Grantor, shall
constitute a waiver of any of Lender's rights or of any obligations of
Borrower or of any Grantor as to any future transactions. Whenever the
consent of Lender is required under this Agreement, the granting of
such consent by Lender in any instance shall not constitute consent in
subsequent instances where such consent is required, and in all cases
such consent may be granted or withheld in the sole discretion of
Lender.
<PAGE> 20
08-20-1999 BUSINESS LOAN AGREEMENT PAGE 5
LOAN NO. 00100001201 (CONTINUED)
BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN
AGREEMENT, AND BORROWER AGREES TO ITS TERMS. THIS AGREEMENT IS DATED AS OF
AUGUST 20, 1999.
BORROWER:
FIRST SOUTHERN FUNDING, LLC
By: /S/ JESS CORRELL
Jess Correll, President and Manager
LENDER:
THE NATIONAL CITY BANK OF EVANSVILLE
By: /S/ MICHAEL S. SUTTON
Authorized Officer
INDEBTEDNESS AND LIENS.
ADDITIONAL PROVISION: Excepted from this provision shall be borrowing from
any affiliates.
<PAGE> 21
Exhibit D
Business Loan Agreement relating to the borrowing of funds by FSBI.
<PAGE> 22
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BUSINESS LOAN AGREEMENT
- ------------------------------------------------------------------------------------------------------------------------------------
Principal Loan Maturity Loan No. Call Collateral Account Officer Initials
Date BE SGH
$19,000,000.00 8-20-99 8-20-2000 00100001201 212
- ------------------------------------------------------------------------------------------------------------------------------------
References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular
loan or item.
- ------------------------------------------------------------------------------------------------------------------------------------
BORROWER: FIRST SOUTHERN BANCORP, INC. (TIN: LENDER: THE NATIONAL CITY BANK OF EVANSVILLE
61-1129777) COMMERCIAL LOAN DEPARTMENT
99 LANCASTER STREET 21 S.E. THIRD STREET
STANFORD, KY 40484 P.O. BOX 868
EVANSVILLE, IN 47705-0868
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
THIS BUSINESS LOAN AGREEMENT BETWEEN FIRST SOUTHERN BANCORP, INC. ("BORROWER")
AND THE NATIONAL CITY BANK OF EVANSVILLE ("LENDER") IS MADE AND EXECUTED ON THE
FOLLOWING TERMS AND CONDITIONS. BORROWER HAS RECEIVED PRIOR COMMERCIAL LOANS
FROM LENDER OR HAS APPLIED TO LENDER FOR A COMMERCIAL LOAN OR LOANS AND OTHER
FINANCIAL ACCOMMODATIONS, INCLUDING THOSE WHICH MAY BE DESCRIBED ON ANY EXHIBIT
OR SCHEDULE ATTACHED TO THIS AGREEMENT. ALL SUCH LOANS AND FINANCIAL
ACCOMMODATIONS, TOGETHER WITH ALL FUTURE LOANS AND FINANCIAL ACCOMMODATIONS FROM
LENDER TO BORROWER, ARE REFERRED TO IN THIS AGREEMENT INDIVIDUALLY AS THE "LOAN"
AND COLLECTIVELY AS THE "LOANS". BORROWER UNDERSTANDS AND AGREES THAT: (A) IN
GRANTING, RENEWING, OR EXTENDING ANY LOAN, LENDER IS RELYING UPON BORROWER'S
REPRESENTATIONS, WARRANTIES, AND AGREEMENTS, AS SET FORTH IN THIS AGREEMENT; (B)
THE GRANTING, RENEWING, OR EXTENDING OF ANY LOAN BY LENDER AT ALL TIMES SHALL BE
SUBJECT TO LENDER'S SOLE JUDGMENT AND DISCRETION; AND (C) ALL SUCH LOANS SHALL
BE AND SHALL REMAIN SUBJECT TO THE FOLLOWING TERMS AND CONDITIONS OF THIS
AGREEMENT.
TERM. This Agreement shall be effective as of August 20, 1999, and shall
continue thereafter until all Indebtedness of Borrower to Lender has been
performed in full and the parties terminate this Agreement in writing.
DEFINITIONS. The following words shall have the following meanings when used in
this Agreement. Terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code. All references
to dollar amounts shall mean amounts in lawful money of the United States of
America.
AGREEMENT. The word "Agreement" means the Business Loan Agreement, as
this Business Loan Agreement may be amended or modified from time to
time, together with all exhibits and schedules attached to this
Business Loan Agreement from time to time.
BORROWER. The word "Borrower" means FIRST SOUTHERN BANCORP, INC.. The
word "Borrower" also includes, as applicable, all subsidiaries and
affiliates of Borrower as provided below in the paragraph titled
"Subsidiaries and Affiliates."
CERCLA. The word "CERCLA" means the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended.
CASH FLOW. The words "Cash Flow" mean net income after taxes, and
exclusive of extraordinary gains and income, plus depreciation and
amortization.
COLLATERAL. The word "Collateral" means and includes without limitation
all property and assets granted as collateral security for a Loan,
whether real or personal property, whether granted directly or
indirectly, whether granted now or in the future, and whether granted
in the form of a security interest, mortgage, deed of trust,
assignment, pledge, chattel mortgage,, chattel trust, factor's lien,
equipment trust, conditional sale, trust receipt, lien, charge, lien or
title retention contract, lease or consignment intended as a security
device, or any other security or lien interest whatsoever, whether
created by law, contract, or otherwise.
DEBT. The word "Debt" means all of Borrower's liabilities excluding
Subordinated Debt.
ERISA. The word "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended.
EVENT OF DEFAULT. The words "Event of Default" mean and include without
limitation any of the Events of Default set forth below in the section
titled "EVENTS OF DEFAULT".
GRANTOR. The word "Grantor" means and includes without limitation each
and all of the persons or entitles granting a Security Interest in any
Collateral for the Indebtedness, including without limitation all
Borrowers granting such a Security Interest.
GUARANTOR. The word "Guarantor" means and includes without limitation
each and all of the guarantors, sureties, and accommodation parties in
connection with any indebtedness.
INDEBTEDNESS. The word "Indebtedness" means and includes without
limitation all Loans, together with all other obligations, debts and
liabilities of Borrower to Lender, or any one or more of them, as well
as all claims by Lender against Borrower, or any one or more of them;
whether now or hereafter existing, voluntary or involuntary, due or not
due, absolute or contingent, liquidated or unliquidated; whether
Borrower may be liable individually or jointly with others; whether
Borrower may be obligated as a guarantor, surety, or otherwise; whether
recovery upon such Indebtedness may be or hereafter may become barred
by any statute of limitations; and whether such Indebtedness may be or
hereafter may become otherwise enforceable.
LENDER. The word "Lender" means THE NATIONAL CITY BANK OF EVANSVILLE,
its successors and assigns.
LIQUID ASSETS. The words "Liquid Assets" mean Borrower's cash on hand
plus Borrower's readily marketable securities.
LOAN. The word "Loan" or "Loans" means and includes without limitation
any and all commercial loans and financial accommodations from Lender
to Borrower, whether now or hereafter existing, and however evidenced,
including without limitation those loans and financial accommodations
described herein or described on any exhibit or schedule attached to
this Agreement from time to time.
NOTE. The word "Note" means and includes without limitation Borrower's
promissory note or notes, if any, evidencing Borrower's Loan
obligations in favor of Lender, as well as any substitute, replacement
or refinancing note or notes therefor.
PERMITTED LIENS. The words "Permitted Liens" mean: (a) liens and
security interests securing Indebtedness owed by Borrower to Lender;
(b) liens for taxes, assessments, or similar charges either not yet due
or being contested in good faith; (c) liens of materialman, mechanics,
warehouseman, or carriers, or other like liens arising in the ordinary
course of business and securing obligations which are not yet
delinquent; (d) purchase money liens or purchase money security
interests upon or in any property acquired or held by Borrower in the
ordinary course of business to secure Indebtedness outstanding on the
date of this Agreement or permitted to be incurred under the paragraph
of this Agreement titled "Indebtedness and Liens"; (e) liens and
security interests which, as of the date of this Agreement, have been
disclosed to and approved by the Lender in writing; and (f) those liens
and security interests which in the aggregate constitute an immaterial
and insignificant monetary amount with respect to the net value of
Borrower's assets.
RELATED DOCUMENTS. The words "Related Documents" mean and include
without limitation all promissory notes, credit agreements, loan
agreements, environmental agreements, guaranties, security agreements,
mortgages, deeds of trust, and all other instruments, agreements and
documents, whether now or hereafter existing, executed in connection
with the Indebtedness.
SECURITY AGREEMENT. The words "Security Agreement" mean and include
without limitation any agreements, promises, covenants, arrangements,
understandings or other agreements, whether created by law, contract,
or otherwise, evidencing, governing, representing, or creating a
Security Interest.
SECURITY INTEREST. The words "Security Interest" mean and include
without limitation any type of collateral security, whether in the form
of a lien, charge, mortgage, deed of trust, assignment, pledge, chattel
mortgage, chattel trust, factor's lien, equipment trust, conditional
sale, trust receipt, lien or title retention contract, lease or
consignment intended as a security device, or any other security or
lien interest whatsoever, whether created by law, contract or
otherwise.
SARA. The word "SARA" means the Superfund Amendments and
Reauthorization Act of 1986 as now or hereafter amended.
SUBORDINATED DEBT. The words "Subordinated Debt" mean Indebtedness and
liabilities of Borrower which have been subordinated by written
agreement to Indebtedness owed by Borrower to Lender in form and
substance acceptable to Lender.
TANGIBLE NET WORTH. The words "Tangible Net Worth" mean Borrower's
total assets excluding all intangible assets (i.e., goodwill,
trademarks, patents, copyrights, organizational expenses, and similar
intangible items, but including leaseholds and leasehold improvements)
less total Debt.
WORKING CAPITAL. The words "Working Capital" mean Borrower's current
assets, excluding prepaid expenses, less Borrower's current
liabilities.
CONDITIONS PRECEDENT TO EACH ADVANCE. Lender's obligation to make the initial
Loan Advance and each subsequent Loan Advance under this Agreement shall be
subject to the fulfillment to Lender's satisfaction of all of the conditions set
forth in this Agreement and in the Related Documents.
LOAN DOCUMENTS. Borrower shall provide to Lender in form satisfactory
to Lender the following documents for the Loan: (a) the Note, (b)
Security Agreements granting to Lender Security interests in the
Collateral, (c) Financing Statements perfecting Lender's Security
Interests; (d) evidence of insurance as required below; and (e) any
other documents required under this Agreement or by Lender or its
counsel.
BORROWER'S AUTHORIZATION. Borrower shall have provided in form and
substance satisfactory to lender properly certified resolutions, duly
<PAGE> 23
08-20-1999 BUSINESS LOAN AGREEMENT PAGE 2
LOAN NO. 00100001201 (CONTINUED)
authorizing the execution and delivery of this Agreement, the Note and
the Related Documents, and such other authorizations and other
documents and instruments as Lender or its counsel, in their sole
discretion, may require.
PAYMENT OF FEES AND EXPENSES. Borrower shall have paid to Lender all
fees, charges, and other expenses which are then due and payable as
specified in this agreement or any Related Document.
REPRESENTATIONS AND WARRANTIES. The representations and warranties set
forth in this Agreement, in the Related Documents, and in any document
or certificate delivered to Lender under this Agreement are true and
correct.
NO EVENT OF DEFAULT. There shall not exist at any time of any advance a
condition which would constitute an Event of Default under this
Agreement.
REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as
of the date of this Agreement, as of the date of each disbursement of Loan
proceeds, as of the date of any renewal, extension or modification of any Loan,
and at all times any Indebtedness exists:
ORGANIZATION. Borrower is a corporation which is duly organized,
validly existing, and in good standing under the laws of the
Commonwealth of Kentucky and is validly existing and in good standing
in all states in which Borrower is doing business. Borrower has the
full power and authority to own its properties and to transact the
businesses in which it is presently engaged or presently proposes to
engage. Borrower also is duly qualified as a foreign corporation and is
in good standing in all states in which the failure to so qualify would
have a material adverse effect on its businesses or financial
condition.
AUTHORIZATION. The execution, delivery, and performance of this
Agreement and all Related Documents by Borrower, to the extent to be
executed, delivered or performed by Borrower, have been duly authorized
by all necessary action by Borrower; do not require the consent or
approval of any other person, regulatory authority or governmental
body; and do not conflict with, result in a violation of, or constitute
a default under (a) any provision of its articles of incorporation or
organization, or bylaws, or any agreement or other instrument binding
upon Borrower or (b) any law, governmental regulation, court decree, or
order applicable to Borrower.
FINANCIAL INFORMATION. Each financial Statement of Borrower supplied to
Lender truly and completely disclosed Borrower's financial condition as
of the date of the statement, and there has been no material adverse
change in Borrower's financial condition subsequent to the date of the
most recent financial statement supplied to Lender. Borrower has no
material contingent obligations except as disclosed in such financial
statements.
LEGAL EFFECT. This Agreement constitutes, and any instrument or
agreement required hereunder to be given by Borrower when delivered
will constitute, legal, valid and binding obligations of Borrower
enforceable against Borrower in accordance with their respective terms.
PROPERTIES. Except as contemplated by this Agreement or as previously
disclosed in Borrower's financial Statements or in writing to Lender
and as accepted by Lender, and except for property tax liens for taxes
not presently due and payable, Borrower owns and has good title to all
of Borrower's properties free and clear of all Security Interests, and
not executed any security documents or financing statements relating to
such properties. All of properties are titled in Borrower's legal name,
and Borrower has not used, or filed a financing statement under, any
other name for at least five (5) years.
HAZARDOUS SUBSTANCES. The terms "hazardous waste", "hazardous
substance", "disposal", "release", and "threatened release", as used in
this Agreement, shall have the same meanings as set forth in the
"CERCLA", "SARA", the Hazardous Materials Transportation Act, 49 U.S.C.
Section 1801, et seq., the Resource Conservation and Recovery Act, 42
U.S.C. Section 6901, et seq., or other applicable state or Federal
laws, rules, or regulations adopted pursuant to any of the foregoing.
Except as disclosed to and acknowledged by Lender in writing, Borrower
represents and warrants that: (a) During the period of Borrower's
ownership of the properties, there has been no use, generation,
manufacture, storage, treatment, disposal, release, or threatened
release of any hazardous waste or substance by any person on, under,
about or from any of the properties. (b) Borrower has no knowledge of,
or reason to believe that there has been (i) any use, generation,
manufacture, storage, treatment, disposal, release, threatened release
of any hazardous waste or substance on, under, about or from the
properties by any other prior owners or occupants of any of the
properties, or (ii) any actual or threatened litigation or claims of
any kind by any person relating to such matters. (c) Neither Borrower
nor any tenant, contractor, agent or other authorized user of any of
the properties shall use, generate, manufacture, store, treat, dispose
of, or release any hazardous waste or substance on, under, about or
from any of the properties; and any such activity shall be conducted in
compliance with all applicable federal, state, and local laws,
regulations, and ordinances, including without limitation those laws,
regulations and ordinances described above. Borrower authorizes Lender
and its agents to enter upon the properties to make such inspections
and tests as Lender may deem appropriate to determine compliance of the
properties with this section of the Agreement. Any inspections or tests
made by Lender shall be at Borrower's expense and for lender's purposes
only and shall not be construed to create any responsibility or
liability on the part of Lender to Borrower or to any other person. The
representations and warranties contained herein are based on Borrower's
due diligence in investigating the properties for hazardous waste and
hazardous substances. Borrower hereby (a) releases and waives any
future claims against Lender for indemnity or contribution in the event
Borrower becomes liable for cleanup or other costs under any such laws,
and (b) agrees to indemnify and hold harmless Lender against any and
all claims, losses, liabilities, damages, penalties, and expenses which
Lender may directly or indirectly sustain or suffer resulting from a
breach of this section of the Agreement or as a consequence of any use,
generation, manufacture, storage, disposal, release or threatened
release of a hazardous waste or substance on the properties. The
provisions of this section of the Agreement, including the obligation
to indemnify, shall survive the payment of the Indebtedness and the
termination or expiration of this Agreement and shall not be affected
by Lender's acquisition of any interest in any of the properties,
whether by foreclosure or otherwise.
LITIGATION AND CLAIMS. No litigation, claim, investigation,
administrative proceeding or similar action (including those for unpaid
taxes) against Borrower is pending or threatened, and no other event
has occurred which may materially adversely affect Borrower's financial
condition or properties, other than litigation, claims, or other
events, if any, that have been disclosed to and acknowledged by Lender
in writing.
TAXES. To the best of Borrower's knowledge, all tax returns and reports
of Borrower that are or were required to be filed, have been filed, and
all taxes, assessments and other governmental charges have been paid in
full, except those presently being or to be contested by Borrower in
good faith in the ordinary course of business and for which adequate
reserves have been provided.
LIEN PRIORITY. Unless otherwise previously disclosed to Lender in
writing, Borrower has not entered into or granted any Security
Agreements, or permitted the filing or attachment of any Security
Interests on or affecting any of the Collateral directly or indirectly
securing repayment of Borrower's Loan and Note, that would be prior or
that may in any way be superior to Lender's Security Interests and
rights in and to such Collateral.
BINDING EFFECT. This Agreement, the Note, all Security Agreements
directly or indirectly securing repayment of Borrower's Loan and Note
and all of the Related Documents are binding upon Borrower as well as
upon Borrower's successors, representatives and assigns, and are
legally enforceable in accordance with their respective terms.
COMMERCIAL PURPOSES. borrower intends to use the Loan proceeds solely
for business or commercial related purposes.
EMPLOYEE BENEFIT PLANS. Each employee benefit plan as to which Borrower
may have any liability complies in all material respects with all
applicable requirements of law and regulations, and (i) no Reportable
Event nor Prohibited Transaction (as defined in ERISA) has occurred
with respect to any such plan, (ii) Borrower has not withdrawn from any
such plan or initiated steps to do so, (iii) no steps have been taken
to terminate any such plan, and (iv) there are no unfunded liabilities
other than those previously disclosed to Lender in writing.
LOCATION OF BORROWER'S OFFICES AND RECORDS. Borrower's place of
business, or Borrower's Chief executive office, if Borrower has more
than one place of business is located at 99 LANCASTER STREET, STANFORD,
KY 40484. Unless Borrower has designated otherwise in writing this
location is also the office or offices where Borrower keeps its records
concerning the Collateral.
INFORMATION. All information heretofore or contemporaneously herewith
furnished by Borrower to lender for the purposes of or in connection
with this Agreement or any transaction contemplated hereby is, and all
information hereafter furnished by or on behalf of Borrower to Lender
will be, true and accurate in every material respect on the date as of
which such information is dated or certified; and none of such
information is or will be incomplete by omitting to state any material
fact necessary to make such information not misleading.
SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Borrower understands and
agrees that Lender, without independent investigation, is relying upon
the above representations and warranties in extending Loan Advances to
Borrower. Borrower further agrees that the foregoing representations
and warranties shall be continuing in nature and shall remain in full
force and effect until such time as Borrower's Indebtedness shall be
paid in full, or until this Agreement shall be terminated in the manner
provided above, whichever is the last to occur.
AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, while
this Agreement is in effect, Borrower will:
LITIGATION. Promptly inform Lender in writing of (a) all material
adverse changes in Borrower's financial condition, and (b) all existing
and all threatened litigation, claims, investigations, administrative
proceedings or similar actions affecting Borrower or any Guarantor
which could materially affect the financial condition of Borrower or
the financial condition of any Guarantor.
FINANCIAL RECORDS. Maintain its books and records in accordance with
generally accepted accounting principles, applied on a consistent
basis, an permit Lender to examine and audit Borrower's books and
records at all reasonable times.
<PAGE> 24
08-20-1999 BUSINESS LOAN AGREEMENT PAGE 3
LOAN NO. 00100001201 (CONTINUED)
FINANCIAL STATEMENTS. Furnish Lender with, as soon as available, but in
no event later than thirty (30) days after the end of each fiscal year,
Borrower's balance sheet and income statement for the year ended,
prepared by Borrower, and, as soon as available, but in no event later
than thirty (30) days after the end of each fiscal quarter, Borrower's
balance sheet and profit and loss statement for the period ended,
prepared and certified as correct to the best knowledge and belief by
Borrower's chief financial officer or other officer or person
acceptable to Lender. All financial reports required to be provided
under this Agreement shall be prepared in accordance with generally
accepted accounting principles, applied on a consistent basis, and
certified by Borrower as being true and correct.
ADDITIONAL INFORMATION. Furnish such additional information and
statements, lists of assets and liabilities, agings of receivables and
payables, inventory schedules, budgets, forecasts, tax returns, and
other reports with respect to Borrower's financial condition and
business operations as Lender may request from time to time.
FINANCIAL COVENANTS AND RATIOS. Comply with the following covenants and
ratios:
TANGIBLE NET WORTH. Maintain a minimum Tangible Net Worth of
not less than $30,000,000. Except as provided above, all
computations made to determine compliance with the
requirements contained in this paragraph shall be made in
accordance with generally accepted accounting principles,
applied on a consistent basis, and certified by Borrower as
being true and correct.
INSURANCE. Maintain fire and other risk insurance, public
liability insurance, and such other insurance as Lender may
require with respect to Borrower's properties and operations,
in form, amounts, coverages and with insurance companies
reasonably acceptable to lender. Borrower, upon request of
Lender, will deliver to Lender from time to time the policies
or certificates of insurance in form satisfactory to Lender,
including stipulations that coverages will not be canceled or
diminished without at least ten (10) days' prior written
notice to Lender.
INSURANCE REPORTS. Furnish to Lender, upon request of Lender, reports
on each existing insurance policy showing such information as Lender
may reasonably request, including without limitation the following: (a)
the name of the insurer; (b) the risks insured; (c) the amount of the
policy; (d) the properties insured; (e) the then current property
values on the basis of which insurance has been obtained, and the
manner of determining those values; and (f) the expiration date of the
policy. In addition, upon request of Lender (however not more often
than annually), Borrower will have an independent appraiser
satisfactory to lender determine, as applicable, the actual cash value
or replacement cost of any Collateral. The cost of such appraisal shall
be paid by Borrower.
OTHER AGREEMENTS. Comply with all terms and conditions of all other
agreements, whether now or hereafter existing, between Borrower and any
other party and notify Lender immediately in writing of any default in
connection with any other such agreements.
LOAN PROCEEDS. Use all Loan proceeds solely for Borrower's business
operations, unless specifically consented to the contrary by Lender in
writing.
TAXES, CHARGES AND LIENS. Pay and discharge when due all of its
indebtedness and obligations, including without limitation all
assessments, taxes, governmental charges, levies and liens, of every
kind and nature, imposed upon Borrower or its properties, income, or
profits, prior to the date on which penalties would attach, and law
lawful claims that, if unpaid, might become a lien or charge upon any
of Borrower's properties, income, or profits. Provided however,
Borrower will not be required to pay and discharge any such assessment,
tax, charge, levy, lien or claim so long as (a) the legality of the
same shall be contested in good faith by appropriate proceedings, and
(b) Borrower shall have established on its books adequate reserves with
respect to such contested assessment, tax, charge, levy, lien, or claim
in accordance with generally accepted accounting practices. Borrower,
upon demand of Lender, will furnish to lender evidence of payment of
the assessments, taxes, charges, levies, liens and claims and will
authorize the appropriate governmental official to deliver to lender at
any time a written statement of any assessments, taxes, charges,
levies, liens and claims against Borrower's properties, income, or
profits.
PERFORMANCE. Perform and comply with all terms, conditions, and
provisions set forth in this Agreement and in the Related Documents in
a timely manner, and promptly notify Lender if Borrower learns of the
occurrence of any event which constitutes an Event of Default under
this Agreement or under any of the Related Documents.
OPERATIONS. Maintain executive and management personnel with
substantially the same qualifications and experience as the present
executive and management personnel; provide written notice to Lender of
any change in executive and management personnel; conduct its business
affairs in a reasonable and prudent manner and in compliance with all
applicable federal, state and municipal laws, ordinances, rules and
regulations respecting its properties, charters, businesses and
operations, including without limitation, compliance with the Americans
With Disabilities Act and with all minimum funding standards and other
requirements of ERISA and other laws applicable to Borrower's employee
benefit plans.
INSPECTION. Permit employees or agents of Lender at any reasonable time
to inspect any and all Collateral for the Loan or Loans and Borrower's
other properties and to examine or audit Borrower's books, accounts,
and records and to make copies and memoranda of Borrower's books,
accounts, and records. If Borrower now or at any time hereafter
maintains any records (including without limitation computer generated
records and computer software programs for the generation of such
records) in the possession of a third party, Borrower upon request of
Lender, shall notify such party to permit Lender free access to such
records at all reasonable times and to provide Lender with copies of
any records it may request, all at Borrower's expense.
COMPLIANCE CERTIFICATE. Unless waived by Lender, provide Lender at
least annually and at the time of each disbursement of Loan proceeds
with a certificate executed by Borrower's chief financial officer, or
other officer or person acceptable to lender, certifying that the
representations and warranties set forth in this Agreement are true and
correct as of the date of the certificate and further certifying that,
as of the date of the certificate and further certifying that, as of
the date of the certificate, no Even of Default exists under this
Agreement.
ENVIRONMENTAL COMPLIANCE AND REPORTS. Borrower shall comply in all
respects with all environmental protection federal, state and local
laws, statutes, regulations and ordinances; not cause or permit to
exist, as a result of an intentional or unintentional action or
omission on its part or on the part of any third party, on property
owned and/or occupied by Borrower, any environmental activity where
damage may result to the environment, unless such environmental
activity is pursuant to and in compliance with the conditions of a
permit issued by the appropriate federal, state or local governmental
authorities; shall furnish to Lender promptly and in any event within
thirty (30) days after receipt thereof a copy of any notice, summons,
lien, citation, directive, letter or other communication from any
governmental agency or instrumentality concerning any intentional or
unintentional action or omission on Borrower's part in connection with
any environmental activity whether or not there is damage to the
environment and/or other natural resources.
ADDITIONAL ASSURANCES. Make, execute and deliver to Lender such
promissory notes, mortgages, deeds of trust, security agreements,
financing statements, instruments, documents and other agreements as
Lender or its attorneys may reasonably request to evidence and secure
the Loans and to perfect all Security Interests.
NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this
Agreement is in effect, Borrower shall not, without the prior written consent of
Lender:
INDEBTEDNESS AND LIENS. (a) Except for trade debt incurred in the
normal course of business and indebtedness to Lender contemplated by
this Agreement, create, incur or assume ndebtedness for borrowed money,
including capital leases, (b) except as allowed as a Permitted Lien,
sell, transfer, mortgage, assign, pledge, lease, grant a security
interest in, or encumber any of Borrower's assets, or (c) sell with
recourse any of Borrower's assets, or (c) sell with recourse any of
Borrower's accounts, except to Lender.
CONTINUITY OF OPERATIONS. (a) Engage in any business activities
substantially different than those in which Borrower is presently
engaged, (b) cease operations, liquidate, merge, transfer, acquire or
consolidate with any other entity, change ownership, change its name,
dissolve or transfer or sell Collateral out of the ordinary course of
business, (c) pay any dividends on Borrower's stock (other than
dividends payable in its stock), provided, however that notwithstanding
the foregoing, but only so long as no Event of Default has occurred and
is continuing or would result from the payment of dividends, if
Borrower is a "Subchapter S Corporation" (as defined in the Internal
Revenue Code of 1986, as amended), Borrower may pay cash dividends on
its stock to its shareholders from time to time in amounts necessary to
enable the shareholders to pay income taxes and make estimated income
tax payments to satisfy their liabilities under federal and state law
which arise solely from their status as Shareholders of a Subchapter S
Corporation because of their ownership of shares of stock of Borrowers,
or (d) purchase or retire any of Borrower's outstanding shares or alter
or amend Borrower's capital structure.
LOANS, ACQUISITIONS AND GUARANTIES. (a) Loan, invest in or advance
money or assets, (b) purchase, create or acquire any interest in any
other enterprise or entity, or (c) incur any obligation as surety or
guarantor other than in the ordinary course of business.
CESSATION OF ADVANCES. If Lender has made any commitment to make any Loan to
Borrower, whether under this Agreement or under any other agreement, Lender
shall have no obligation to make Loan Advances or to disburse Loan proceeds if:
(a) Borrower or any Guarantor is in default under the terms of this Agreement or
any of the Related Documents or any other agreement that Borrower or any
Guarantor has with Lender; (b) Borrower or any Guarantor becomes insolvent,
files a petition in bankruptcy or similar proceedings, or is adjudged a
bankrupt; (c) there occurs a material adverse change in Borrower's financial
condition, in the financial condition of any Guarantor, or in the value of any
Collateral securing any Loan; (d) any Guarantor seeks, claims or otherwise
attempts to limit, modify or revoke such Guarantor's guaranty of the Loan or any
other loan with Lender; or (e) Lender in good faith deems itself insecure, even
though no Event of Default shall have occurred.
<PAGE> 25
08-20-1999 BUSINESS LOAN AGREEMENT PAGE 4
LOAN NO. 00100001201 (CONTINUED)
FINANCIAL REPORTING. BORROWER WILL PROVIDE QUARTERLY CALL REPORTS TO LENDER
WITHIN 50 DAYS OF THE END OF EACH FISCAL QUARTER. IN ADDITION, FIRST SOUTHERN
NATIONAL BANK WILL PROVIDE QUARTERLY CALL REPORTS WITHIN 35 DAYS OF EACH FISCAL
QUARTER.
ADDITIONAL PROVISIONS. EXCEPTED FROM THIS PROVISION SHALL BE BORROWING FROM ANY
AFFILIATES. IN ADDITION, BANCORP LINE OF CREDIT IN THE AMOUNT OF TWO MILLION
($2,000,000.00) WITH FIRST NATIONAL BANK OF THE CUMBERLANDS IN LIVINGSTON,
TENNESSEE SHALL ALSO BE EXCEPTED.
RIGHT OF SETOFF. Borrower grants to Lender a contractual security interest in,
and hereby assigns, conveys, delivers, pledges, and transfers to Lender all of
Borrower's right, title and interest in and to, Borrower's accounts with Lender
(whether checking, savings, or some other account), including without limitation
all accounts held jointly with someone else and all accounts Borrower may open
in the future, excluding however all IRA and Keogh accounts, and all trust
accounts for which the grant of a security interest would be prohibited by law.
Borrower authorizes Lender, to the extent permitted by applicable law, to charge
or setoff all sums owing on the Indebtedness against any and all such accounts.
EVENTS OF DEFAULT. Each of the following shall constitute an Event of Default
under this Agreement:
DEFAULT ON INDEBTEDNESS. Failure of Borrower to make any payment when
due on the Loans.
OTHER DEFAULTS. Failure of Borrower or any Grantor to comply with or to
perform when due any other term, obligation, covenant or condition
contained in this Agreement or in any of the Related Documents, or
failure of Borrower to comply with or to perform any other term,
obligation, covenant or condition contained in any other agreement
between Lender and Borrower.
DEFAULT IN FAVOR OF THIRD PARTIES. Should Borrower or any Grantor
default under any loan, extension of credit, security agreement,
purchase or sales agreement, or any other agreement, in favor of any
other creditor or person that may materially affect any of Borrower's
property or Borrower's or any Grantor's ability to repay the Loans
or perform their respective obligations under this Agreement or any of
the Related Documents.
FALSE STATEMENTS. Any warranty, representation or statement made or
furnished to Lender by or on behalf of Borrower or any Grantor under
this Agreement or the Related Documents is false or misleading in any
material respect at the time made or furnished, or becomes false or
misleading at any time thereafter.
DEFECTIVE COLLATERALIZATION. This Agreement or any of the Related
Documents ceases to be in full force and effect (including failure of
any Security Agreement to create a valid and perfected Security
Interest) at any time and for any reason.
INSOLVENCY. The dissolution or termination of Borrower's existence as a
going business, the insolvency of Borrower, the appointment of a
receiver for any part of Borrower's property, any assignment for the
benefit of creditors, any type of creditor workout, or the commencement
of any proceeding under any bankruptcy or insolvency laws by or against
Borrower.
CREDITOR OR FORFEITURE PROCEEDINGS. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Borrower, any
creditor of any Grantor against any collateral securing the
Indebtedness, or by any governmental agency. This includes a
garnishment, attachment, or levy on or of any of Borrower's deposit
accounts with Lender. However, this Event of Default shall not apply if
there is a good faith dispute by Borrower or Grantor, as the case may
be, as to the validity or reasonableness of the claim which is the
basis of the creditor or forfeiture proceeding, and if Borrower or
Grantor gives Lender written notice of the creditor or forfeiture
proceeding and furnishes reserves or a surety bond for the creditor or
forfeiture proceeding satisfactory to Lender.
CHANGE IN OWNERSHIP. Any change in ownership of twenty-five percent
(25%) or more of the common stock of Borrower.
ADVERSE CHANGE. A material adverse change occurs in Borrower's
financial condition, or Lender believes the prospect of payment or
performance of the Indebtedness is impaired.
INSECURITY. Lender, in good faith, deems itself insecure.
RIGHT TO CURE. If any default, other than a Default on Indebtedness, is
curable and if Borrower or Grantor, as the case may be, has not been
given a notice of a similar default within the preceding twelve (12)
months, it may be cured (and no Event of Default will have occurred) if
Borrower or Grantor, as the case may be, after receiving written notice
from Lender demanding cure of such default: (a) cures the default
within ten (10) days; or (b) if the cure requires more than ten (10)
days, immediately initiates steps which Lender deems in Lender's sole
discretion to be sufficient to cure the default and thereafter
continues and completes all reasonable and necessary steps sufficient
to produce compliance as soon as reasonable practical.
EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, except where
otherwise provided in this Agreement or the Related Documents, all commitments
and obligations of Lender under this Agreement or the Related Documents or any
other agreement immediately will terminate (including any obligation to make
Loan Advances or disbursements), and, at Lender's option, all Indebtedness
immediately will become due and payable, all without notice of any kind to
Borrower, except that in the case of an Event of Default of the type described
in the "Insolvency" subsection above, such acceleration shall be automatic and
not optional. In addition, Lender shall have all the rights and remedies
provided in the Related Documents or available at law, inequity, or otherwise.
Except as may be prohibited by applicable law, all of Lender's rights and
remedies shall be cumulative and may be exercised singularly or concurrently.
Election by Lender to pursue any remedy shall not exclude pursuit of any other
remedy, and an election to make expenditures or to take action to perform an
obligation of Borrower or of any Grantor shall not affect Lender's right to
declare a default and to exercise its rights and remedies. All Loans shall be
repaid under all circumstances without relief from any Indiana or other
valuation and appraisement laws.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:
AMENDMENTS. This Agreement, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as to
the matters set forth in this Agreement. No alteration of or amendment
to this Agreement shall be effective unless given in writing and signed
by the party or parties sought to be charged or bound by the alteration
or amendment.
APPLICABLE LAW. THIS AGREEMENT HAS BEEN DELIVERED TO LENDER AND
ACCEPTED BY LENDER IN THE STATE OF INDIANA. IF THERE IS A LAWSUIT,
BORROWER AGREES UPON LENDER'S REQUEST TO SUBMIT TO THE JURISDICTION OF
THE COURTS OF VANDERBURGH COUNTY, THE STATE OF INDIANA. LENDER AND
BORROWER HEREBY WAIVE THE RIGHT TO ANY JURY TRIAL IN ANY ACTION,
PROCEEDING, OR COUNTERCLAIM BROUGHT BY EITHER LENDER OR BORROWER
AGAINST THE OTHER. (INITIAL HERE /S/ JTC) THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
INDIANA.
CAPTION HEADINGS. Caption headings in this Agreement are for
convenience purposes only and are not to be used to interpret or define
the provisions of this Agreement.
MULTIPLE PARTIES; CORPORATE AUTHORITY. All obligations of Borrower
under this Agreement shall be joint and several, and all references to
Borrower shall mean each and every Borrower. This means that each of
the persons signing below is responsible for all obligations in this
Agreement.
CONSENT TO LOAN PARTICIPATION. Borrower agrees and consents to Lender's
sale or transfer, whether now or later, of one or more participation
interests in the Loans to one or more purchasers, whether related or
unrelated to Lender. Lender may provide, without any limitation
whatsoever, to any one or more purchasers, or potential purchasers, any
information or knowledge Lender may have about Borrower or about any
other matter relating to the Loan, and Borrower hereby waives any
rights to privacy it may have with respect to such matters. Borrower
additionally waives any and all notices of sale of participation
interests, as well as all notices of any repurchase of such
participation interests. Borrower also agrees that the purchasers of
any such participation interests will be considered as the absolute
owners of such interests in the Loans and will have all the rights
granted under the participation agreement or agreements governing the
sale of such participation interests. Borrower further waives all
rights of offset or counterclaim that it may have now or later against
Lender or against any purchaser of such a participation interest and
unconditionally agrees that either Lender or such purchaser may enforce
Borrower's obligation under the Loans irrespective of the failure or
insolvency of any holder of any interest in the Loans. Borrower further
agrees that the purchaser of any such participation interests may
enforce its interests irrespective of any personal claims or defenses
that Borrower may have against Lender.
COSTS AND EXPENSES. Borrower agrees to pay upon demand all of Lender's
expenses, including without limitation attorneys' fees, incurred in
connection with preparation, execution, enforcement, modification and
collection of this Agreement or in connection with the Loans made
pursuant to this Agreement. Lender may pay someone else to help collect
the Loans and to enforce this Agreement, and Borrower will pay that
amount. This includes, subject to any limits under applicable law,
Lender's attorneys' fees and Lender's legal expenses, whether or not
there is a lawsuit, including attorneys' fees for bankruptcy
proceedings (including efforts to modify or vacate any automatic stay
or injunction), appeals, and any anticipated post-judgment collection
services. Borrower also will pay any court costs, in addition to all
other sums provided by law.
NOTICES. All notices required to be given under this Agreement shall be
given in writing, may be sent by telefacsimile (unless otherwise
required by law), and shall be effective when actually delivered or
when deposited with a nationally recognized overnight courier or
deposited in the United States mail, first class, postage prepaid,
addressed to the party to whom the notice is to be given at the address
shown above. Any party may
<PAGE> 26
08-20-1999 BUSINESS LOAN AGREEMENT PAGE 5
LOAN NO. 00100001201 (CONTINUED)
change its address for notices under this Agreement by giving formal
written notice to the other parties, specifying that the purpose of the
notice is to change the party's address. To the extent permitted by
applicable law, if there is more than one Borrower, notice to any
Borrower will constitute notice to all Borrowers. For notice purposes,
Borrower will keep Lender informed at all times of Borrower's current
address(es).
SEVERABILITY. If a court of competent jurisdiction finds any provision
of this Agreement to be invalid or unenforceable as to any person or
circumstance, such finding shall not render that provision invalid or
unenforceable as to any other persons or circumstances. If feasible,
any such offending provision shall be deemed to be modified to be
within the limits of enforceability or validity; however, if the
offending provision cannot be so modified, it shall be stricken and all
other provisions of this Agreement in all other respects shall remain
valid and enforceable.
SUBSIDIARIES AND AFFILIATES OF BORROWER. To the extent the context of
any provisions of this Agreement makes it appropriate, including
without limitation any representation, warranty or covenant, the word
"Borrower" as used herein shall include all subsidiaries and affiliates
of Borrower. Notwithstanding the foregoing however, under no
circumstances shall this Agreement be construed to require Lender to
make any Loan or other financial accommodation to any subsidiary or
affiliate of Borrower.
SUCCESSORS AND ASSIGNS. All covenants and agreements contained by or on
behalf of Borrower shall bind its successors and assigns and shall
inure to the benefit of Lender, its successors and assigns. Borrower
shall not, however, have the right to assign its rights under this
Agreement or any interest therein, without the prior written consent of
Lender.
SURVIVAL. All warranties, representations, and covenants made by
Borrower in this Agreement or in any certificate or other instrument
delivered by Borrower to Lender under this Agreement shall be
considered to have been relied upon by Lender and will survive the
making of the Loan and delivery to Lender of the Related Documents,
regardless of any investigation made by Lender or on Lender's behalf.
TIME IS OF THE ESSENCE. Time is of the essence in the performance of
this Agreement.
WAIVER. Lender shall not be deemed to have waived any rights under this
Agreement unless such waiver is given in writing and signed by Lender.
No delay or omission on the part of Lender in exercising any right
shall operate as a waiver of such right or any other right. A waiver by
Lender of a provision of this Agreement shall not prejudice or
constitute a waiver of Lender's right otherwise to demand strict
compliance with that provision or any other provision of this
Agreement. No prior waiver by Lender, nor any course of dealing between
Lender and Borrower, or between Lender and any Grantor, shall
constitute a waiver of any of Lender's rights or of any obligations of
Borrower or of any Grantor as to any future transactions. Whenever the
consent of Lender is required under this Agreement, the granting of
such consent by Lender in any instance shall not constitute continuing
consent in subsequent instances where such consent is required, and in
all cases such consent may be granted or withheld in the sole
discretion of Lender.
BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN
AGREEMENT, AND BORROWER AGREES TO ITS TERMS. THIS AGREEMENT IS DATED AS OF
AUGUST 20, 1999.
BORROWER:
FIRST SOUTHERN BANCORP, INC.
By: /S/ JESS CORRELL
JESS CORRELL, President
LENDER:
THE NATIONAL CITY BANK OF EVANSVILLE
By: /S/ MICHAEL S. SUTTON
Authorized Officer
<PAGE> 27
Exhibit G
Letter of intent between UTI and Mr. Correll, on behalf of the
shareholders of North Plaza of Somerset, Inc.
<PAGE> 28
EXHIBIT G
December 7, 1999
United Trust Group, Inc.
5250 South Sixth Street Road
Springfield, IL 62703
Gentlemen:
This letter sets forth our understanding concerning the acquisition of United
Trust Group, Inc. ("UTG") of 100% of the outstanding shares of common stock of
North Plaza of Somerset, Inc. ("North Plaza). The acquisition would be
accomplished by UTG issuing 681,818 shares of its common stock to the
shareholders of North Plaza in exchange for all of the outstanding shares of
North Plaza.
The transaction would be evidenced by an acquisition agreement that will have
representations, warranties, terms and conditions customary for transactions of
a similar size and nature, including:
1. The acquisition qualifying as a tax-free reorganization
pursuant to the provisions of the Internal Revenue Code.
2. North Plaza having good and unencumbered title to those assets
set forth on Exhibit A attached hereto.
3. North Plaza having no liabilities as of the closing of the
transaction except for those identified in Exhibit A.
4. The parties having received all regulatory approvals and
clearances and all applicable waiting periods having expired.
5. The Board of Directors of UTG having approved the acquisition.
6. Each of the shareholders of North Plaza having executed the
acquisition agreement.
7. There having been no material adverse change in the business,
operations, financial condition or prospects of UTG or North
Plaza prior to closing.
<PAGE> 29
United Trust Group, Inc.
December 7, 1999
Page 2
The parties acknowledge that, because of the share ownership of Jess Correll in
North Plaza and UTG, a premerger notification filing must be made with the U.S.
Department of Justice and Federal Trade Commission pursuant to the Hart Scott
Rodino Antitrust Improvements Act. The parties agree to cooperate in the
preparation and submission of such filing. The parties also acknowledge that the
shares of common stock issued by UTG will be restricted securities.
This letter is not intended to create a legally binding obligation on the part
of any of the parties. It is intended merely as an expression of the preliminary
understandings and designs of the parties.
If the foregoing accurately describes our understanding, please execute this
letter in the space provided below.
HAVE READ AND AGREED TO THIS
7th DAY OF DECEMBER, 1999.
United Trust Group, Inc.
By: /S/ GEORGE E. FRANCIS /S/ JESS CORRELL
GEORGE E. FRANCIS JESS CORRELL, for and on
Executive Vice President behalf of the shareholders
and Secretary of North Plaza of Somerset, Inc.
<PAGE> 30
Exhibit H
PROMISSORY NOTE
$19,000,000 Evansville, Indiana
August 20, 1999
ON OR BEFORE AUGUST 20, 2000, FOR VALUE RECEIVED, the
undersigned, FIRST SOUTHERN BANCORP, INC., a Kentucky corporation (the
"Corporation"), and FIRST SOUTHERN FUNDING, LLC, a Kentucky limited liability
company (the "LLC"), (together, the "MAKERS"), promise to pay to the order of
THE NATIONAL CITY BANK OF EVANSVILLE, a national banking association ("BANK") at
its main banking office in Evansville, Indiana, or at such other place as may be
designated in writing, from time to time, by the holder ("Holder") of this
Promissory Note ("Note"), the principal sum of Nineteen Million Dollars
($19,000,000), or so much thereof as may be advanced to or for the benefit of
MAKERS, together with interest on the unpaid principal balance thereof from time
to time outstanding, computed on the basis of a 360-day year and paid for actual
days elapsed at a per annum rate equal to one percent (1.0%) below the Prime
Rate most recently published in the "Money Rates" section of the WALL STREET
JOURNAL, to be adjusted from time to time as the date of each published change
in the Prime Rate; ("Note Interest Rate") from the date hereof until the said
principal sum shall be fully repaid.
Terms, Provisions and Conditions
1. Each of the MAKERS shall be liable hereunder for the amounts
actually advanced to or for the benefit of that MAKER plus interest, costs and
attorneys fees but not for the amounts advanced to or for the benefit of the
other MAKER. Each of the MAKERS shall pay regular and successive monthly
installments of interest ONLY on the amounts actually advanced to or for the
benefit of that MAKER commencing on September 20, 1999, and continuing
thereafter on the same day of each successive calendar month thereafter until
August 20, 2000, at which time the entire unpaid balance of principal and
interest owing hereunder shall become due and payable. All sums due and payable
hereunder shall be paid with attorney's fees and all other costs of collection
and litigation, and without relief from valuation and appraisement laws. Any
installment payment not made within ten (10) days of the date when due shall be
subject to a late charge of five percent (5%) of the amount of the installment.
2. This Note is a master note made, executed and delivered by the
MAKERS to the BANK to evidence a revolving line of credit, as it may exist from
time to time, arising from periodic loan advances made by the BANK to or for the
benefit of the MAKERS. Repayments of principal from time to time shall be
credited against the indebtedness evidenced by this Note, but shall not
extinguish this Note in whole
<PAGE> 31
or in part. The unpaid principal balance may increase and decrease as loan
advancements and repayments are made hereunder, and this Note shall evidence all
of the indebtedness of MAKERS from time to time existing even though the
aggregate principal accumulative loan advances hereunder may exceed the BANK'S
maximum commitment as stated herein. Advances by the BANK hereunder may be made
at either the oral or written request of either Jess Correll ("Correll") or
Randall Attkisson ("Attkisson"), or Jill Martin, respectively the President,
Vice President/Treasurer and Secretary of LLC, acting alone and designating the
MAKER requesting the advance, until written notice of the revocation of such
authority is received by the BANK. Any advance hereunder shall be conclusively
presumed to have been made to or for the benefit of the designated MAKER when
made:
(a) by credit to Account Number _________ of Corporation at BANK
regardless of the fact that persons other than those
authorized hereunder may have authority to draw against such
account; or
(b) by credit to Account Number _________ of LLC at BANK
regardless of the fact that persons other than those
authorized hereunder may have authority to draw against such
account; or
(c) by the BANK's check made payable to the designated MAKER.
The BANK shall be entitled to rely upon the direction of Correll or Attkisson
with respect to advances to or for the benefit of either of the MAKERS without
duty of inquiry.
3. This Note is secured by the following:
(a) Pledge Agreement of at least 75% of the outstanding stock of
First Southern Bancorp, Inc. of even date herewith from the
shareholders, as pledgor, to the BANK, as pledgee;
(b) Business Loan Agreements executed by MAKERS of even date
herewith.
Such documents, the Note and any others from time to time given to evidence and
secure the Note are sometimes referred to herein and in the Pledge Agreement and
the Collateral Assignment of LLC Interest as the "Credit Documents", and such
term shall be deemed to include any and all amendments, modifications,
supplements, extensions and renewals of them or any of them.
2
<PAGE> 32
4. The Holder shall record on its books and records, with
respect to each of the MAKERS, the date and amount of each disbursement and each
payment on this Note made from time to time; and such books and records shall be
presumed to state correctly the balance of this Note, both principal and
interest, unless and until the MAKER proves to the contrary.
5. This Note may be prepaid at any time in whole or in part at
any time without penalty or premium.
6. The MAKERS shall not be entitled to the cancellation,
surrender or release of this Note unless and until all obligations hereunder and
under the Credit Documents shall have been paid, discharged and fully satisfied.
7. All payments hereunder shall be applied first to interest due,
and any balance shall be applied in reduction of principal. In no event shall
the interest paid or agreed to be paid hereunder (including all other amounts
taken, reserved or charged pursuant to this Note or any of the Credit Documents
that under applicable law are deemed to constitute an interest charge) exceed
the highest lawful rate permissible under applicable law; and if under any
circumstance whatsoever fulfillment of any provision of this Note at the time
performance of the provision shall be due shall involve transcending the limit
of validity prescribed by applicable law, then, IPSO FACTO the obligation to be
fulfilled shall be reduced to the limit of such validity, and if from any
circumstance the Holder should receive as interest an amount that would exceed
the highest lawful rate allowable under applicable law, such amount that would
be excessive interest shall be applied to the reduction of the unpaid principal
balance of this Note and not to the payment of interest, or if such excess
interest exceeds the unpaid principl balance, such excess shall be refunded to
the MAKERS.
8. All payments of principal and/or interest hereunder shall be
made in lawful money of the United States of America that is legal tender for
public and private debts at the time of payment.
9. At the election of the Holder, and without further notice, the
entire principal balance of this Note, together with all accrued interest
thereon, shall be and become immediately due and payable upon any of the
following events of default:
(a) failure to pay principal or interest when the same shall
become due and such failure continues for a period of thirty
(30) days after written notice to MAKERS;
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(b) Holder, in good faith believes the prospect of payment or
performance is impaired;
(c) the MAKERS, or either of them, adopt a plan of liquidation or
dissolution;
(d) the MAKERS, or either of them, default on any other obligation
to the BANK;
(e) the MAKERS, or either of them, suffer a material adverse
change in financial condition or become insolvent;
(f) the filing of a petition against either of the MAKERS for
relief under any state or federal insolvency laws, including
the Bankruptcy Code;
(g) the acceleration of the maturity of any of the obligations of
MAKERS, or either of them, to any other creditors; or
(h) upon the occurrence of any event of default as defined in the
Credit Documents,
subject in any case to compliance by the Holder with any notice requirements and
any rights of the MAKERS to cure any such event of default; and thereupon the
Holder shall have and may exercise any and all rights and remedies available at
law or in equity, together with such other rights and remedies provided in the
Credit Documents, and thereafter interest shall accrue and be due and payable on
the entire principal balance of this Note at that rate of interest which is
equal to two percent (2%) in excess of the Note Interest Rate in effect at the
time (the "Default Interest Rate").
10. The remedies of the Holder, as provided herein or in the
Credit Documents, shall be cumulative and concurrent, and may be pursued
singularly, successively or together, at the sole discretion of the Holder, and
may be exercised as often as occasion therefor shall arise. No act or omission
or commission of the Holder, including specifically any failure to exercise any
right, remedy or recourse, shall be deemed to be a waiver or release of the
same, such waiver or release to be effected only through a written document
executed by the Holder, and then only to the extent specifically provided for
therein. A waiver or release with reference to any one event shall not be
construed as continuing or as a bar to or as a waiver or release of any
subsequent right, remedy or recourse as to a subsequent event.
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11. MAKER agrees to pay all taxes or duties assessed upon any
property, real or personal, secured by the Credit Documents, and upon any of the
indebtedness evidenced hereby, and to pay all costs, expenses and attorney's
fees actually incurred by the Holder in any proceeding for the collection of any
of the indebtedness evidenced hereby, in any foreclosure or other realization
under the Credit Documents, in protecting or sustaining the lien and security
interests intended to be afforded the Holder by the Credit Documents or in any
litigation or controversy arising from or connected with this Note or the Credit
Documents.
12. Each and every maker, endorser, guarantor, surety, co-signor
or accommodation party of this Note and all others who may become liable for the
payment of all or any part of the obligations evidenced hereby, do hereby waive
all valuation and appraisement procedures, demand, present for payment, protest,
notice of protest and notice of nonpayment of this Note, dishonor and notice of
dishonor, and do hereby consent to any number of renewals or extensions of the
time of payment hereof and to any number of modifications or amendments of the
terms of the Note and/or Credit Documents and agree that any such modifications,
renewals or extensions may be made without notice to any of said persons or
entities, and without affecting their liability hereon or in respect hereof, and
further consent to the release of any part or parts or all of the security for
the payment hereof, lack of diligence or delays in connection or enforcement of
this Note, notice of intention to accelerate, the taking of additional security
or other indulgences or forbearance and to the release of anyone liable hereon,
all without affecting the liability of any other person or persons, firms,
corporations or other entities liable for the payment of this Note.
13. Payment of this Note may not be changed or terminated orally.
14. If any provision of this Note or any payments required of the
MAKERS hereunder pursuant to the terms hereof shall be invalid or unenforceable
to any extent, the remainder of this Note and any other payments hereunder shall
not be affected thereby and shall be enforceable to the extent permitted by law.
15. This Note shall be construed in accordance with the laws of
the state of Indiana. Venue of any action brought for the purpose of enforcement
of this Note shall be in any of the courts of general jurisdiction in
Vanderburgh County, Indiana.
16. Whenever used herein, the singular shall include the plural,
the plural the singular and the use of any gender shall include all genders.
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17. THE MAKERS AND BANK HEREBY WAIVE TRIAL BY JURY IN ANY
ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM, WHETHER IN CONTRACT OR TORT, AT LAW
OR IN EQUITY, ARISING OUT OF OR IN ANY WAY RELATED TO THIS NOTE. NO OFFICER OF
BANK HAS AUTHORITY TO WAIVE, CONDITION OR MODIFY THIS PROVISION.
18. The MAKERS represent the following in connection with their
computers and computer-related operations. MAKERS have (i) undertaken a detailed
inventory, review and assessment of all areas within their business and
operations that could be adversely affected by the failure of MAKERS or either
of them to be Year 2000 compliant on a timely basis, (ii) are developing a
detailed plan and timetable for becoming Year 2000 compliant on a timely basis,
and (iii) will implement that plan in accordance with such timetable in all
material respects. MAKERS reasonably anticipate that they will be Year 2000
compliant on a timely basis, but in any event no later than December 31, 1999.
19. Corporation is a corporation duly organized and existing and
in good standing under the laws of the state of Kentucky and, where required by
law, is now, and will at all times be in good standing under the laws of its
state of incorporation and the laws of any other jurisdiction in which it may be
carrying on business. The execution, delivery and performance hereof have been
duly authorized and all necessary action needed to effectuate the execution,
delivery and performance hereof has been taken and done.
20. LLC is a limited liability company duly organized and existing
and in good standing under the laws of the state of Kentucky and, where required
by law, is now, and will at all times be in good standing under the laws of its
state of organization and the laws of any other jurisdiction in which it may be
carrying on business. The execution, delivery and performance hereof have been
duly authorized and all necessary action needed to effectuate the execution,
delivery and performance hereof has been taken and done.
21. THIS NOTE WILL NOT HAVE FULLY AMORTIZED AT MATURITY. BANK IS
UNDER NO OBLIGATION TO REFINANCE THIS NOTE UPON MATURITY. THE MAKERS WILL,
THEREFORE, BE REQUIRED TO MAKE PAYMENT IN FULL AT MATURITY FROM OTHER ASSETS OR
TO FIND A LENDER WILLING TO LEND THE FUNDS NECESSARY TO PAY THIS NOTE. IN ITS
SOLE DISCRETION, BANK MAY ELECT TO LEND SUCH FUNDS AND CHARGE A RENEWAL FEE.
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22. Neither Corporation nor LLC shall sell, transfer, assign,
pledge or encumber or permit any levy or lien against any shares of stock now
owned or later acquired in First Southern National Bank or United Trust, Inc. or
any affiliate, without the prior written consent of BANK. If any such stock
interest is sold, transferred, assigned, pledged, or encumbered, by operation of
law or otherwise, without the prior written consent of the Holder hereof, the
entire unpaid principal balance and interest on this Note shall be immediately
due and payable.
FIRST SOUTHERN BANCORP, INC.
By: /S/ JESS CORRELL
Jess Correll, President
FIRST SOUTHERN FUNDING, LLC
By: /S/ JESS CORRELL
Jess Correll, President and Manager
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