UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of The
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 1,
2014
FIRST CITIZENS BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
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Tennessee
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000-11709
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62-1180360
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(State or other jurisdiction
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(Commission File Number)
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(I.R.S. Employer
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of incorporation)
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Identification No.)
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One First
Citizens Place
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Dyersburg,
Tennessee
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38024
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(Address
of principal executive offices)
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(Zip
Code)
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(731) 285-4410
(Registrants telephone number, including area code)
Check the appropriate box below if
the Form 8-K filing is intended to simultaneously satisfy the filing obligation
of the registrant under any of the following provisions:
¨ Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the
Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to
Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to
Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item
1.01
Entry into a Material Definitive Agreement.
On
October 1, 2014, First Citizens Bancshares, Inc. (the Company) entered into a
Loan Agreement, Pledge and Security Agreement, Promissory Note (Fixed Rate) and
Promissory Note (Floating Rate) (collectively, the Loan Documents) with First
Tennessee Bank, National Association (the Lender), pursuant to which the
Lender has agreed to extend to the Company two five-year term loans in the
aggregate maximum principal amount of $12,000,000 (the Credit Facilities).
The Loan Documents provide that the Credit Facilities will be repaid in
quarterly installments of principal and interest based on a ten-year
amortization schedule at a rate of interest as follows:
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the $6,000,000 five-year fixed rate loan
will accrue interest at a fixed rate of 3.76%; and
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the $6,000,000 five-year floating rate
loan will accrue interest at the 90 day rounded LIBOR plus 2%.
The Credit Facilities are secured by a pledge of 51% of the stock of
First Citizens National Bank, the Companys wholly owned subsidiary. The Loan Documents also contain a number of affirmative and negative
covenants, including limitations on the incurrence of additional debt, liens on
property, guarantees, mergers, consolidations, liquidations and dissolutions,
asset sales, dividends and other payments in respect of our capital stock, relocation
of the Companys principal office, principal banking office, or principal
registered office, and transactions with affiliates. The Company is using the
proceeds of the Credit Facilities to finance a part of the cash portion of the
merger consideration payable to shareholders of Southern Heritage Bancshares,
Inc. as described below.
The
foregoing description of the Loan Documents is not complete and is qualified in
its entirety by reference to the Loan Agreement, Pledge and Security Agreement,
Promissory Note (Fixed Rate) and Promissory Note (Floating Rate), which are
attached to this report as Exhibits 10.1, 10.2, 10.3 and 10.4, respectively,
and are incorporated herein by reference.
Item
2.01
Completion of Acquisition or Disposition
of Assets.
On October 1, 2014, the Company issued a
press release, which is attached hereto as Exhibit 99.1 and incorporated herein
by reference, announcing that on October 1, 2014, the Company completed its previously
announced acquisition of Southern Heritage Bancshares, Inc. (Southern
Heritage) pursuant to the terms of the Agreement and Plan of Merger dated as
of March 20, 2014, as amended (the Merger Agreement). In accordance with the
Merger Agreement, Southern Heritage merged with and into the Company, with the
Company continuing as the surviving corporation (the Merger). As a result of
the Merger, Southern Heritages wholly owned subsidiary, Southern Heritage Bank
(the Bank), became a wholly owned subsidiary of the Company.
As of December 31, 2013, Southern Heritage
had total assets of approximately $237 million and shareholders equity of
approximately $30 million. The Bank is a full service commercial bank with
three locations in Cleveland, Bradley County, Tennessee, and had total loans of
approximately $139 million and deposits of approximately $206 million as of
December 31, 2013.
Following the closing of the Merger, all outstanding shares of Southern Heritage
stock were converted into the right to receive an aggregate of (i)
$16,085,903.75 in cash and (ii) 269,302 shares of Company common stock and
108,356 shares of Company Class A common stock, depending on the class of
Southern Heritage stock held and subject to adjustment as set forth in the
Merger Agreement. Southern Heritage shareholders who hold Southern Heritage
common stock will receive Company common stock and Southern Heritage
shareholders who hold Southern Heritage Class A common stock, Southern Heritage
Class B common stock or Southern Heritage Series A preferred stock will receive
Company Class
A common stock.
Each share of Southern Heritage stock issued and outstanding immediately prior
to the effective time of the Merger was, subject to the election procedures and
adjustments described in the Merger Agreement, converted into the right to
receive (i) $12.25 in cash, plus (ii) 0.2876 of a share of Company stock. In
lieu of the issuance of any fractional shares of Company stock, the Company will
pay to each former Southern Heritage shareholder who would otherwise be entitled
to receive any fractional shares an amount in cash determined by multiplying (i)
$42.60 by (ii) the fraction of a share of Company common stock to which such holder would otherwise be entitled to
receive.
The
foregoing description of the Merger and the Merger Agreement does not purport
to be complete and is qualified in its entirety by reference to the Merger
Agreement, which is filed as Exhibit 2.1 to this report and is incorporated
herein by reference.
Item 5.02 |
Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
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On October 1, 2014, the Company issued a press release, which is attached hereto
as Exhibit 99.1 and incorporated herein by reference, announcing that pursuant
to the terms of the Merger Agreement, on October 1, 2014, effective immediately
following the effective time of the Merger, J. Lee Stewart, Southern Heritages
former President and Chief Executive Officer, was appointed to the Companys
Board of Directors. Mr. Stewart has not yet been appointed to any committees of
the Board. In addition to the stay-pay or retention bonus payment made to Mr.
Stewart pursuant to the Merger Agreement, Mr. Stewart is a party to an
Employment Agreement with the Company that provides for an initial annual base
salary of $180,000, annual performance-based cash incentives and certain
additional incentives. The foregoing description of Mr. Stewarts Employment
Agreement does not purport to be complete and is qualified in its entirety by
reference to the Employment Agreement, which is filed as Exhibit 10.5 to this
report and is incorporated herein by reference.
Item
7.01 Regulation FD Disclosure.
On
October 1, 2014, the Company issued a press release regarding its acquisition
of Southern Heritage. The press release is furnished hereto as
Exhibit 99.1 and incorporated herein by reference.
Item
9.01
Financial Statements and Exhibits.
(d) Exhibits
Exhibit 2.1
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Agreement and Plan of Merger, dated as of March 20, 2014,
by and between First Citizens Bancshares, Inc. and Southern Heritage
Bancshares, Inc., as amended. (a)
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Exhibit 10.1
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Loan Agreement, dated as of October 1, 2014, by and
between First Citizens Bancshares, Inc. and First Tennessee Bank, National
Association.
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Exhibit 10.2
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Pledge and Security Agreement, dated as of October 1,
2014, by and between First Citizens Bancshares, Inc. and First Tennessee Bank,
National Association.
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Exhibit 10.3
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Promissory Note (Fixed Rate), dated as of October 1, 2014,
by and between First Citizens Bancshares, Inc. and First Tennessee Bank,
National Association.
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Exhibit 10.4
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Promissory Note (Floating Rate), dated as of October 1,
2014, by and between First Citizens Bancshares, Inc. and First Tennessee Bank,
National Association.
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Exhibit 10.5
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Employment Agreement by and between First Citizens
Bancshares, Inc. and Lee Stewart dated July 16, 2014. (b)
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Exhibit 99.1
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Press Release dated October 1, 2014.
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(a) |
Incorporated by reference to
Annex A to the Proxy Statement/Prospectus included in First Citizens
Bancshares, Inc.s registration statement on Form S-4/A filed on August 21,
2014 (File No. 333-197512).
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(b) |
Incorporated by reference to Exhibit
10.7 to First Citizens Bancshares, Inc.s registration statement on Form S-4
filed on July 18, 2014 (File No. 333-197512). |
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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FIRST CITIZENS BANCSHARES, INC.
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Date: October 1, 2014
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By:
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/s/ Laura Beth Butler
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Laura Beth Butler
Executive Vice President and
Chief Financial Officer
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Exhibit Index
Exhibit
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Description
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2.1
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Agreement and Plan of Merger, dated as of March 20, 2014,
by and between First Citizens Bancshares, Inc. and Southern Heritage
Bancshares, Inc., as amended. (a)
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10.1
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Loan Agreement, dated as of October 1, 2014, by and
between First Citizens Bancshares, Inc. and First Tennessee Bank, National
Association.
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10.2
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Pledge and Security Agreement, dated as of October 1,
2014, by and between First Citizens Bancshares, Inc. and First Tennessee Bank,
National Association.
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10.3
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Promissory Note (Fixed Rate), dated as of October 1, 2014,
by and between First Citizens Bancshares, Inc. and First Tennessee Bank,
National Association.
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10.4
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Promissory Note (Floating Rate), dated as of October 1,
2014, by and between First Citizens Bancshares, Inc. and First Tennessee Bank,
National Association.
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10.5
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Employment Agreement by and between First Citizens
Bancshares, Inc. and Lee Stewart dated July 16, 2014. (b)
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99.1
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Press Release dated October 1, 2014.
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(a) |
Incorporated by reference to
Annex A to the Proxy Statement/Prospectus included in First Citizens
Bancshares, Inc.s registration statement on Form S-4/A filed on August 21,
2014 (File No. 333-197512).
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(b) |
Incorporated by reference to Exhibit
10.7 to First Citizens Bancshares, Inc.s registration statement on Form S-4
filed on July 18, 2014 (File No. 333-197512). |
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EXHIBIT 10.1
LOAN
AGREEMENT
THIS LOAN
AGREEMENT (as amended, restated or supplemented or otherwise modified from
time to time, hereinafter called the Agreement) made and entered into
this 1st day of October, 2014, (Effective Date) by and between FIRST
CITIZENS BANCSHARES, INC., a Tennessee corporation, (hereinafter called Borrower)
and FIRST TENNESSEE BANK NATIONAL ASSOCIATION, a national banking
association having its principal office located in Memphis, Tennessee (Lender).
W
I T N E S S E T H :
WHEREAS, the
Borrower has requested that Lender provide it with two (2) term loans, each in
the original principal amount of Six Million Dollars ($6,000,000.00), one
bearing interest at a fixed rate and one bearing interest at a floating rate,
as more particularly described herein (collectively, the Loans), and
Lender has agreed to make the Loans on the terms and conditions hereinafter set
forth;
WHEREAS,
Borrower and Lender wish to enter into this Loan Agreement to set forth certain
terms of the Loan and to secure the Loan by a pledge of one hundred two
thousand (102,000) shares of common stock of First Citizens National Bank, a
national bank (the Bank) which constitutes fifty-one percent (51%) of
the authorized and outstanding shares of the Bank, which is a wholly-owned
subsidiary of Borrower.
NOW,
THEREFORE, in consideration of the premises and the mutual agreements,
covenants and conditions herein contained, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto intending to be legally bound hereby
agree as follows:
AGREEMENTS
1. AMOUNT AND TERMS OF BORROWINGS.
1.1 Defined Terms. Any capitalized term used but not defined in the
body of this Agreement shall have the meaning set forth on Appendix A
attached hereto and incorporated herein by reference.
1.2 Loans.
(a) Lender hereby agrees to lend, and Borrower hereby agrees to borrow, upon
the terms and conditions set forth in this Agreement, the principal sum of Six
Million Dollars ($6,000,000.00), as the "Fixed Rate Loan", to
be evidenced by a promissory note (the Fixed Rate Note), as set forth
in Exhibit A-1 and included herein by reference. The Fixed Rate Loan
shall bear interest and be payable in accordance with the terms and provisions
of the Fixed Rate Note. The Fixed Rate Loan shall expire and mature, and the
outstanding principal balance of the Loan and all accrued interest thereon
shall be due and payable, on the Maturity Date.
(b) Lender hereby agrees to lend, and Borrower hereby agrees to borrow,
upon the terms and conditions set forth in this Agreement, the principal sum of
Six Million Dollars ($6,000,000.00), as the "Floating Rate Loan",
to be evidenced by a promissory note (the Floating Rate Note), as set
forth in Exhibit A-2 and included herein by reference. The
Floating Rate Loan shall bear interest and be payable in accordance with the
terms and provisions of the Floating Rate Note. The Floating Rate Loan shall
expire and mature, and the outstanding principal balance of the Floating Rate
Loan and all accrued interest thereon shall be due and payable, on the Maturity
Date.
1.3 Collateral. All
indebtedness and obligations of Borrower to Lender under this Agreement shall
be secured by Lenders lien and security interest in the Collateral. The
pledging of such Collateral shall be evidenced by the Pledge Agreement.
Borrower agrees that all of the rights of Lender with regard to the Pledge
Agreement set forth in this Agreement shall apply to any modification of, or
supplement to this Agreement except to the extent amended thereby.
1.4 Funding. The advance of Fixed Rate Loan and Floating Rate Loan
proceeds hereunder shall be made, upon Borrowers request, by depositing the
same into a demand deposit account with Lender, by wire transfer to
Borrowers account, or in accordance with such other instructions as may be
agreed between Borrower and Lender. The Loans to Borrower shall be made in one
single advance of all principal thereunder, which shall be subject to the terms
and conditions of this Agreement, including but not limited to Sections 2
and 3 hereof.
1.5 Increased Costs Generally.
(a) If any Change in Law shall:
(i)
impose, modify or deem applicable any reserve, special deposit,
compulsory loan, insurance charge or similar requirement against assets of,
deposits with or for the account of, or advances, loans or other credit
extended or participated in by, the Lender;
(ii) subject the Lender to any tax of any kind whatsoever with respect to
this Agreement, or any Loan made by it, or change the basis of taxation of
payments to such Lender in respect thereof; or
(iii) impose on the Lender any other condition, cost or expense affecting this
Agreement or the Loan made by the Lender;
and the result of any of the foregoing shall be to
increase the out-of-pocket cost to the Lender of making, converting to,
continuing or maintaining the Loans, or either of them (or of maintaining its
obligations to make the Loans, or either of them), or to increase the out-of-pocket
cost to the Lender of issuing or maintaining any letter of credit (or of
maintaining its obligation to participate in or to issue any letter of credit),
or to reduce the amount of any sum actually received or receivable by the
Lender hereunder (whether of principal, interest or any other amount) then,
upon written request of the Lender, the Borrower shall promptly pay to the
Lender, as the case may be, such additional amount or amounts as will
compensate the Lender, as the case may be, for such additional out-of-pocket costs
incurred or reductions actually suffered.
(b) Capital Requirements. If Lender reasonably determines that any
Change in Law affecting the Lender or Lenders holding company, if any,
regarding capital requirements, has or would have the effect of reducing the
rate of return on the Lenders capital or on the capital of the Lenders
holding company, if any, as a consequence of this Agreement, the commitment of
the Lender hereunder or the Loans (or either of them) made by the Lender
hereunder, to a below that which the Lender or the Lenders holding company
could have achieved but for such Change in Law (taking into consideration the
Lenders policies and the policies of the Lenders holding company with respect
to capital adequacy), then from time to time upon written request of the
Lender, the Borrower shall promptly pay to the Lender such additional amount or
amounts as will compensate the Lender or the Lenders holding company for any
such reduction actually suffered.
(c) Certificates for Reimbursement. A certificate of the Lender
setting forth the amount or amounts necessary to compensate the Lender or its
holding company, as the case may be, as specified in this Section and delivered
to Borrower, shall be conclusive absent manifest error. The Borrower shall pay
the amount shown as due on any such certificate within ten (10) days after
receipt thereof.
(d) Delay in Requests. Failure or delay on the part of Lender to
demand compensation pursuant to this Section shall not constitute a waiver of
Lenders right to demand such compensation; provided that the Borrower
shall not be required to compensate a Lender pursuant to this Section for any
increased costs incurred or reductions suffered more than six (6) months prior
to the date that the Lender, as the case may be, notifies the Borrower of the
Change in Law giving rise to such increased costs or reductions, and of the
Lenders intention to claim compensation therefor (except that if the Change in
Law giving rise to such increased costs or reductions is retroactive, then the 6-month
period referred to above shall be extended to include the period of retroactive
effect thereof).
2. USE OF PROCEEDS.
2.1 Use of Loan Proceeds. The proceeds of the Loans shall be used by
the Borrower for the sole purpose of funding a portion of the Borrower's
acquisition of Southern Heritage Bancshares, Inc. (the "Target") and
Southern Heritage Bank (the "Target Bank" and such acquisition the
"Acquisition").
3. CONDITIONS TO LOAN CLOSING.
The obligation of
Lender to extend any loan or credit to Borrower under this Agreement is subject
to the strict satisfaction of each of the following conditions:
3.1 No Defaults; Certificate. Borrower and the Bank shall be in full
compliance with all the terms and conditions of this Agreement, and no Event of
Default, nor any event which upon notice or lapse of time or both would
constitute such an Event of Default, shall have occurred and be continuing. At
Lenders request, Lender shall have received from Borrower and the Bank a
certificate, in form and content reasonably acceptable to Lender dated as of
and delivered on the date of the Loans, certifying that (1) the representations
and warranties set forth herein, and the exhibits attached hereto, are
accurate, true and correct on and as of such date, (2) neither the transactions
contemplated hereby or by any other Loan Document will cause or result in any violation
of (or creation of any right in third parties under the provisions of) any laws
restricting or otherwise regulating the use, application or distribution of
corporate funds and assets, and (3) that no Event of Default, nor any event
which upon notice or lapse of time or both would constitute such an Event of
Default, exists.
3.2 Accuracy of Representations and Warranties. At the time of the
initial loan disbursements, the representations and warranties set forth
herein and in any other Loan Document shall be true and correct.
3.3 Corporate Action and Authority. The Borrower shall have
delivered to Lender: (i) a certificate from the Secretary of State of Tennessee
that Borrower is in good standing and certificates from the Secretaries of
State of each other State in which the Borrower is required to be qualified to
do business, certifying the Borrowers good standing as a corporation in each
such State; (ii) a copy of the Resolutions passed by the Borrowers and the
Banks Boards of Directors authorizing the execution and delivery of the
performance of Borrowers obligations under the Loan Documents certified by the
Secretary or Assistant Secretary to be true and correct; and (iii) a
certificate or certificates, dated as of and delivered on the date of the execution
of this Agreement and signed on behalf of the Borrower and the Bank by the
Secretary or Assistant Secretary, certifying the names of the officers
authorized to execute and deliver the Loan Documents on behalf of the Borrower
and the Bank, together with the original, not photocopied, signatures of each
officer. Borrower shall also deliver the same items specified in (i) above
pertaining to the Bank from the appropriate regulatory agency.
3.4 Delivery of Notes, Loan Agreement, Pledge Agreement, and Stock
Certificates. At the time of the extension of the Loans, Borrower shall
have delivered the Loan Documents. The security interest in the Collateral
shall be prior to all other liens.
3.5 Proceedings. The Loan Documents, upon their execution, and all
proceedings in connection with the authorization, execution and delivery of and
the performance of the obligations under the Loan Documents shall be
satisfactory in substance and form to Lender.
3.6 Payment of Fees and Expenses. Borrower shall have paid, at or prior
to the date of the extension of the Loans, all costs and expenses in accordance
with Section 8.9.
3.7 Other Writings. The Lender shall receive such other agreements,
instruments, documents, certificates, affidavits and other writings as Lender
may reasonably require.
3.8 Opinion of Counsel. Borrower shall have delivered to Lender at
Borrowers expense, favorable written opinions of counsel for Borrower dated as
of and delivered on the date of the extension of the Loan, in form and content
acceptable to Lender, as set forth in Exhibit B.
3.9 Financial Statements. Prior to any disbursement under the Loans,
Borrower shall have delivered to Lender, true and exact copies of the
current financial statements of the Borrower, the Bank and all other
Subsidiaries, for 2013 and audit report and opinion of the Borrowers
independent accounting firm, with respect thereto (it being understood that
Lender is relying upon such audit report and opinion in entering into this Loan
Agreement), the unaudited financial statements of Borrower as of June 30, 2014
and the 2013 F.R. Y-6 Annual Report and F.R. Y-9 Parent Company only (and
Consolidated, if applicable) financial statement(s) filed by Borrower with the
Federal Reserve.
3.10 No Material Adverse Change. At the time the Loans are funded
hereunder, there shall have occurred, in the reasonable opinion of Lender, no
material adverse changes in the condition, financial or otherwise, of Borrower
or Bank from that reflected in the financial statements furnished pursuant to Section
3.9 hereof or furnished to Lender from time to time hereafter as required
herein.
4. REPRESENTATIONS AND WARRANTIES.
In
order to induce the Lender to enter into this Agreement and to make the Loans,
the Borrower represents and warrants to the Lender (which representations and
warranties shall survive the delivery of the Loan Documents and the funding of
the Loans) that, as of the date hereof and as of the time of the initial loan
disbursements:
4.1 Corporate Status. Borrower is a corporation duly organized and
existing under the laws of the State of Tennessee, is duly qualified to do
business and is in good standing under the laws of other states where the
Borrower does business and such qualification is required, if any, and has the
corporate power and authority to own its properties and assets and conduct its
affairs and business.
4.2 Corporate Power and Authority. Borrower has full power and
authority to enter into this Agreement, to borrow funds as contemplated herein,
to execute and deliver this Agreement, the Notes and other Loan Documents
executed and delivered by it, and to incur the obligations provided for herein,
all of which have been duly authorized by all necessary corporate action; and
the officer executing each of the Loan Documents is duly authorized to do so by
all necessary corporate action. Any consents or approval of shareholders or
directors of Borrower required as a condition to the execution, delivery, or
validity of any Loan Document have been obtained; and each of said Loan
Documents is the valid, legal, and binding obligation of Borrower enforceable
in accordance with its terms.
4.3 No Violation of Agreements or Law. Except as would not
reasonably be expected to have a Material Adverse Effect, neither Borrower,
Bank, nor any other Subsidiary of Borrower is in default under any indenture,
agreement or instrument to which it is a party or by which it may be bound, nor
in violation of any state or federal statute, rule, ruling, or regulation
governing its operations and the conduct of its business, operations or
financial condition of Borrower, Bank, or any other Subsidiary. Neither the
execution and delivery of the Loan Documents nor the consummation of the
transactions herein contemplated, or compliance with the provisions hereof will
result in the breach of, or constitute a default under, any indenture, material
agreement or other material instrument to which Borrower is a party or by which
it may be bound, or result in the creation or imposition of any lien, charge or
encumbrance upon any of the property of Borrower, or violate any provision of
the charter or bylaws of Borrower, the Bank or any other Subsidiary.
4.4 Compliance With Law; Government Approvals.
(a) Borrower has complied and is complying with all requirements, made all
applications, and submitted all reports required by The Bank Holding Company
Act of 1956, as amended, and any regulations or rulings issued in connection
therewith, and the transaction contemplated hereby will not violate any such
statutes, rules, rulings, or regulations nor will the consummation of said
actions and transactions cause Borrower to be in violation thereof. Borrower
has, if required, made all filings and received all governmental or regulatory
approvals necessary for the consummation of the transactions described herein,
including without limitation the approval of the Board of Governors of the
Federal Reserve System.
(b) Borrower has complied and is complying with all other applicable state
or federal statutes, rules, rulings and regulations except as would not
reasonably be expected to have a Material Adverse Effect. The borrowing of
money and said actions and transactions required hereunder will not violate any
of such statutes, rules, rulings, or regulations.
4.5 Litigation. There are no actions, suits or proceedings pending
or, to the knowledge of the Borrower threatened against the Borrower, the Bank
or any other Subsidiary before any court, arbitrator or governmental or
administrative body or agency which, if adversely determined, would result in
any material and adverse change in the financial condition, business operation,
or properties or assets of the Borrower, the Bank, or any other Subsidiary
except as set forth in Exhibit C.
4.6 Supervisory Action. Neither Borrower, the Bank nor any other
Subsidiary is subject to any Supervisory Action by any federal or state Bank Regulatory
Authority, except as set forth on Schedule 4.6 attached hereto and
incorporated by reference herein.
4.7 Financial Condition. The balance sheets and the related
statements of income of Borrower, the Bank, and the other Subsidiaries and the
financial reports of Borrower, the Bank, and the other Subsidiaries which will
be delivered to Lender pursuant to Section 3.9 hereof are, or will be as
of their respective dates and for the respective periods stated therein,
complete and correctly and fairly present the financial condition of Borrower,
the Bank, and the other Subsidiaries, and the results of their operations,
respectively, in all material respects as of the dates and for the periods
stated therein, and have been, or will be as of their respective dates and for
the respective periods stated therein, prepared in accordance with generally
accepted accounting principles consistently applied throughout the period
involved and consistent with that of the preceding fiscal year or period, as
the case may be. There are no material liabilities of the Borrower, the Bank,
or any other Subsidiary not included in such financial statements. There has
been no material adverse change in the business, properties or condition of
Borrower, the Bank, or the other Subsidiaries since the date of the financial
statement furnished to Lender pursuant to Section 3.9 hereof.
4.8 Tax Liability. Borrower, the Bank, and the other Subsidiaries
have filed all federal and state income tax returns and other material tax
returns, which are required to be filed by them, and have paid all taxes which
have become due pursuant to such returns or pursuant to any assessments
received by Borrower, the Bank, and the other Subsidiaries except (a) as would
not reasonably be expected to have a Material Adverse Effect or impose a lien
on any Collateral or any other material assets of the Borrower, the Bank,
and/or the other Subsidiaries or (b) as are being contested in good faith by
appropriate proceedings and as to which adequate reserves have been provided in
accordance with GAAP.
4.9 Subsidiaries. Borrower has no Subsidiaries and owns stock in no
corporation or banking association (other than stock of entities the accounts
of which would not be consolidated with those of the parent in the parent's
consolidated financial statements) other than the Subsidiaries listed in Exhibit
D.
4.10 Bank Stock. The common stock of the Bank owned by Borrower or
any other Subsidiary of Borrower is duly authorized and validly issued by the
Bank or other Subsidiary. The total number of shares of common stock of the
Bank and each other Subsidiary issued and outstanding as of the date hereof
are all owned by Borrower, the Bank or other Subsidiaries of Borrower. Except
as set forth in Section 6.2 hereof or on Exhibit E,
the stock of the Bank and each other Subsidiary is free and clear of all liens,
encumbrances, security interests; said common stock is fully paid and
non-assessable. There are no outstanding warrants or options to acquire any
common stock of the Bank and any other Subsidiary. There are no outstanding
securities convertible or exchangeable into shares of common stock of any
Subsidiary; and there are no restrictions on the transfer or pledge of any
shares of common stock of any Subsidiary, except as set forth in Section
6.2 hereof or on Exhibit E. Borrower has the right to
pledge and transfer the Collateral and assign the income therefrom without
obtaining the consent of any other person or authority except as set forth in Section
6.2 hereof or on Exhibit E; and the Pledge Agreement
creates for the benefit of Lender a first lien security interest in the
Collateral subject to no other interests or claims.
4.11 Title to Assets; Liens. Borrower and Bank each have good and
marketable title to all its respective properties and assets reflected on the
financial statements referred to herein, except for (i) such assets as have
been disposed of since said date as no longer used or useful in the conduct of
business or as permitted under Section 6.6 hereof and (ii) items
which have been amortized in accordance with GAAP applied on a consistent
basis. There are no liens or encumbrances upon any assets of the Borrower, the
Bank or any other Subsidiaries other than as set forth in Section 6.2
hereof or as disclosed on Exhibit E.
4.12 Options, Warrants, Etc. Related to Shares. Except as set forth
in Exhibit F, there are no options, warrants or other rights
agreements or commitments (including conversion rights and preemptive rights)
obligating the Borrower, the Bank, or any Subsidiary to issue, sell, purchase
or redeem shares of the Borrower, the Bank, or any other Subsidiary or
securities convertible to such shares.
4.13 Environmental Laws.
(a) Except as would not reasonably be expected to have a Material Adverse
Effect, the Borrower and each of its Subsidiaries have obtained all permits,
licenses, and other authorizations which are required under all Environmental
Laws and are in compliance in all respects with all applicable Environmental
Laws.
(b) On or prior to the date hereof, no notice, demand, request for
information, citation, summons, or order has been issued and, to the best
knowledge of the Borrower, no complaint has been filed, no penalty has been
assessed, and no investigation or review is pending or, to the best of the
knowledge of the Borrower, threatened by any governmental or other Person with
respect to any alleged or suspected failure by the Borrower or any of its
Subsidiaries to comply in any material respect with any Environmental Laws.
(c) There are no material Liens arising under or pursuant to any
Environmental Laws on any of the property owned or, to the best knowledge of
the Borrower, leased by the Borrower or any of its Subsidiaries.
(d) There are no conditions existing currently or anticipated to exist
during the term of this Agreement which would reasonably be expected to subject
the Borrower or any of its Subsidiaries or any of their property to any
material Lien, damages, penalties, injunctive relief, or cleanup costs under
any Environmental Laws or which require or are likely to require cleanup,
removal, remedial action, or other responses by the Borrower and its
Subsidiaries pursuant to Environmental Laws.
4.14 Disclosure. The Borrower has disclosed to the Lender (i) all
agreements, instruments and corporate or other restrictions to which it, Bank
or any of the other Subsidiaries is subject, the termination of which could
reasonably be expected to result in a material and adverse change in the
financial condition, business operation, or properties or assets of the
Borrower, the Bank or any of the other Subsidiaries and (ii) all matters known
to it that, individually or in the aggregate, could reasonably be expected to
result in a material and adverse change in the financial condition, business
operation, or properties or assets of the Borrower, the Bank or any of the
other Subsidiaries. No report, financial statement, certificate or other
information furnished (whether in writing or orally) by or on behalf of the
Borrower to Lender in connection with the transactions contemplated hereby and
the negotiation of this Agreement or delivered hereunder or under any other
Loan Document (in each case as modified or supplemented by other information so
furnished) contains any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that,
with respect to projected financial information, the Borrower represents only
that such information was prepared in good faith based upon assumptions
believed to be reasonable at the time.
4.15 Contracts or Restrictions Affecting Borrower and/or Bank.
Neither Borrower nor Bank is a party to any agreement or instrument or subject
to any charter or other corporate restrictions materially adversely affecting
its business, properties or assets, operations or condition (financial or
otherwise).
4.16 No Default. Neither Borrower nor Bank is in default in the
performance, observance or fulfillment of any of the obligations, covenants, or
conditions contained in any agreement or instrument to which it is a party,
which would reasonably be expected to materially and adversely affect the
business or operations of Borrower or the Bank, as the case may be.
4.17 ERISA. Borrower and Bank are in material compliance with all
applicable provisions of ERISA and all other laws, state or federal, applicable
to any employees retirement plan maintained or established by either of them.
4.18 OFAC. Neither the Borrower nor any Subsidiary (a) is an enemy
or an ally of the enemy within the meaning of Section 2 of the Trading with
the Enemy Act of the United States (50 U.S.C. App. §§ 1 et seq.), as amended,
(b) is in violation of (i) the Trading with the Enemy Act, as amended, (ii) any
of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating thereto or (iii) the PATRIOT Act or (c)
is a Sanctioned Person. No part of the proceeds of the Loan hereunder will be
used directly or indirectly to fund any operations in, finance any investments
or activities in or make any payments to, a Sanctioned Person or a Sanctioned
Country.
5. AFFIRMATIVE COVENANTS.
Borrower
covenants and agrees that, until the Notes together with interest thereon are
paid in full, unless specifically waived by the Lender in writing, Borrower will,
or will cause the Bank and other Subsidiaries to:
5.1 Business and Existence; Compliance with Laws. Perform all things
necessary to preserve and keep in full force and effect the existence, rights
and franchises of Borrower, the Bank and the other Subsidiaries, except as
would not reasonably be expected to have a Material Adverse Effect or as
permitted under Section 6.4 hereof, and to comply and cause the
Bank and the other Subsidiaries to comply in all material respects with all
local, state and federal laws and regulations applicable to banks and bank
holding companies, and all laws and regulations of the Local Authorities, and
the provisions and requirements of all franchises, permits, certificates of
compliance and approval issued by regulatory authorities and other like grants
of authority held by the Borrower and the Bank, except as would not reasonably
be expected to have a Material Adverse Effect; and notify Bank immediately (and
in detail) of any actual or alleged failure to comply with or perform, breach,
violation or default under any such laws or regulations or under the terms of
any such franchises or licenses, or grants of authority, the result of which
would constitute a materially adverse effect on the Borrower or the Bank, or
the occurrence or existence of any facts or circumstances which with the
passage of time, the giving of notice or otherwise could create such a breach,
violation or default or could occasion the termination of any such franchises
or grants of authority.
5.2 Maintain Property. Maintain, preserve, and protect all
properties used or useful in the conduct of Borrowers, the Banks, and each
other Subsidiarys business and keep the same in good repair, working order and
condition, except as would not reasonably be expected to have a Material
Adverse Effect.
5.3 Insurance. At all times maintain in force (i) insurance in such
amounts, to such an extent and against such risks, including fire and theft, as
is customary with companies in the same or similar business, (ii) necessary
workmens compensation insurance, fidelity bonds and directors and officers
insurance coverage in amounts satisfactory to Lender, and (iii) such other
insurance as may be required by law; and if required by Lender, deliver to the
Lender a copy of the bonds and policies providing such coverage and a
certificate of Borrowers, the Banks, or each other Subsidiarys chief
executive officer, as the case may be, setting forth the nature of the risks
covered by such insurance, the amount carried with respect to each risk, and
the name of the insurer.
5.4 Taxes and Liens. Pay and discharge promptly all taxes,
assessments, and governmental charges or levies imposed upon Borrower, the
Bank, or each other Subsidiary or upon any of their respective income and
profits, or their properties, real, personal or mixed, or any part thereof,
before the same shall become delinquent, except as would not reasonably be
expected to have a Material Adverse Effect; provided, however, that Borrower,
the Bank, and each other Subsidiary shall not be required to pay and discharge
or to cause to be paid and discharged any such tax, assessment, charge, levy or
claim so long as the amount or validity thereof shall be contested in good
faith by appropriate proceedings and provided that procedures satisfactory to
Lender are carried out to prevent foreclosure of any lien therefrom.
5.5 Financial Reports and ERISA.
(a) Furnish to Lender as soon as available and in any event within one
hundred twenty (120) days after the end of each calendar year, (1) consolidated
and consolidating balance sheets of Borrower, the Bank, and each other Subsidiary,
as of the end of such year and consolidated and consolidating statements of
income of Borrower, the Bank, and each other Subsidiary for the year then
ended, together with the audit report and opinion of independent Certified
Public Accountants acceptable to the Lender with respect thereto, such audit
report and opinion shall contain no "going concern" or similar exceptions
or qualifications or any qualification or exception as to the scope of such
audit unacceptable to Lender; (2) promptly upon receipt, copies of all
management letters and other written assessments and recommendations, formal or
informal, submitted by the Certified Public Accountants to Borrower or each
Subsidiary; (3) a copy of Borrowers FR Y-9 Parent Company Only (and Consolidated,
if applicable) financial statement(s) and (4) a copy of Borrowers F.R. Y-6
Annual Report promptly upon the filing of the same with the Federal Reserve
Board; and (5) a copy of the Banks Call Report promptly upon the filing with
the appropriate regulatory agency.
(b) Upon senior management of the Borrower obtaining knowledge thereof, the
Borrower will give written notice to the Lender promptly (and in any event
within five (5) business days), of: (1) any event or condition, including, but
not limited to, any Reportable Event, that constitutes, or might reasonably
lead to, an ERISA Event; (2) with respect to any Multiemployer Plan, the
receipt of notice as prescribed in ERISA or otherwise of any withdrawal
liability assessed against the Borrower or any of its ERISA Affiliates, or of a
determination that any Multiemployer Plan is in reorganization or insolvent
(both within the mean of Title IV of ERISA); (3) the failure to make full
payment on or before the due date (including extensions) thereof of all amounts
which the Borrower, the Bank, or any other Subsidiary or any ERISA Affiliate is
required to contribute to each Plan pursuant to its terms and as required to
meet the minimum funding standard set forth in ERISA and the Code with respect
thereto; or (4) any change in the funding status of any Plan that would
reasonably be expected to have a Material Adverse Effect, together with a
description of any such event or condition or a copy of any such notice and a
statement by the chief financial officer of the Borrower briefly setting forth
the details regarding such event, condition, or notice, and the action, if any,
which has been or is being taken or is proposed to be taken by the Borrower
with respect thereto. Promptly upon request, the Borrower shall furnish the
Lender and the Lenders with such additional information concerning any Plan as
may be reasonably requested, including, but not limited to, copies of each
annual report/return (Form 5500 series), as well as all schedules and
attachments thereto required to be filed with the Department of Labor and/or
the Internal Revenue Service pursuant to ERISA and the Code, respectively, for
each plan year (within the meaning of Section 3(39) of ERISA).
(c) Promptly upon the transmission thereof, copies of all material
financial statements, proxy statements, notices, reports and other
communications sent by the Borrower or any other Subsidiary to the shareholders
of the Borrower and any other such communications as may be requested by Lender
and copies of any and all regular or periodic reports, registration statements,
prospectuses or other written communications that the Borrower or the Bank or
any other Subsidiary is or may be required to file with the Securities and
Exchange Commission or any governmental department, bureau, commission or
agency succeeding to the functions of the Securities and Exchange Commission if
any.
(d) With reasonable promptness, such other financial information for the
Borrower or the Bank or any other Subsidiary as Lender may reasonably request.
5.6 Regulatory Examinations. (a) Promptly notify Lender of every
examination by, or any material correspondence, report, memoranda or other
written communication from or with, any federal or state regulatory body or
authority, with respect to the properties, loans, operations and/or condition
of Borrower, the Bank, or any other Subsidiary, and of the receipt by Borrower,
the Bank, or any other Subsidiary of every examination or other report prepared
by such body or authority with respect thereto; and (b) if required by Lender,
fully and completely assist and cooperate with Lender in requesting approval by
such regulatory body or authority of the furnishing to Lender of any such
report, and furnish such report to Lender if such approval is given; provided,
however, that Lender shall take such steps as may be necessary to assure that
all such reports shall remain confidential and shall be used by Lender solely
in connection with the administration of the Loan in accordance with the
provisions of this Agreement.
5.7 Additional Information. Furnish such other information regarding
the operations, business affairs and financial condition of Borrower, the Bank,
and each other Subsidiary as Lender may from time to time reasonably request,
including but not limited to true and exact copies of any monthly management
reports to their respective directors, their respective tax returns, and all
information furnished to shareholders, or any governmental authority, including
the results of any stock valuation performed.
5.8 Right of Inspection. Except to the extent, if any, prohibited by
applicable law, permit any person designated by Lender, to inspect any of the
properties, books and financial and other reports and records of Borrower, the
Bank, and each other Subsidiary, including, but not limited to, all
documentation and records pertaining to the Banks loans, investments and
deposits; and to discuss their affairs; finances and accounts with Borrowers,
the Banks, and each other Subsidiarys principal officers, at all such reasonable
times and as often as Lender may reasonably request. If required by
Lender, Borrower will pay Lender loan fees in an amount determined by Lender to
be necessary to cover the costs of such inspections, including a reasonable
allowance for Lenders overhead as well as out-of-pocket expenses in connection
with such inspection.
5.9 Notice of Default. At the time of Borrowers first knowledge or
notice, furnish the Lender with written notice of the occurrence of any event
or the existence of any condition which constitutes or upon written notice or
lapse of time or both would constitute an Event of Default under the terms of
this Loan Agreement or other Loan Documents or an event of default or default
under any other loan documents for any other loan in excess of One Million
Dollars ($1,000,000.00) to the Borrower, the Bank, or any other Subsidiary.
5.10 Notice of Litigation. Borrower shall notify Lender of any
actions, suits or proceedings instituted by any person against the Borrower,
the Bank or other Subsidiary claiming money damages or other monetary liability
in an amount of One Million Dollars ($1,000,000.00) or more, said notice to be
given within ten days of the first notice to Borrower, the Bank or such other Subsidiary,
as applicable, of the institution of such action, suit or proceeding and to
specify the amount of damages being claimed or other relief being sought, the
nature of the claim, the person instituting the action, suit or proceeding, and
any other significant features of the claim.
5.11 Perfection of Security Interest. The Borrower or other
Subsidiary shall perform such acts as may be necessary, in the reasonable
judgment of Lender, now or in the future, to perfect or continue perfection of
the security interests granted to Lender, or otherwise provided for, under any
and all Loan Documents.
5.12 Dividends to Borrower from the Bank. Borrower shall cause the
Bank and other Subsidiary to pay dividends or otherwise make such cash
contributions at such times and in such amounts, as is necessary to enable
Borrower to meet all of its obligations under the Loan Documents on a timely
basis, including the payment, when due, of each installment of interest and the
payment of principal on the Loan to the extent permitted by law including
applicable bank regulatory agency rules and regulations. Without limiting the
generality of the foregoing, should any prepayment, accelerated payment or
other payment ever be due with respect to the Loan, Borrower shall cause the
Bank and other Subsidiary to pay dividends or otherwise make such additional
distributions to the Borrower as necessary to enable the Borrower to make such
prepayment, accelerated payment or other payment, to the extent permitted by
law including applicable bank regulatory agency rules and regulations.
5.13 Capital Ratio/Equity Capital Adequacy.
(a) Borrower and Bank shall maintain at all times a Well Capitalized
rating as required by any applicable regulatory authority as such requirement
may be revised from time to time.
(b) Bank shall maintain as of each Covenant Compliance Date a Tier 1
Leverage Ratio of not less than eight percent (8%), which covenant shall be
measured as of each Covenant Compliance Date.
5.14 Modified Texas Ratio. As of each Covenant Compliance Date Bank
shall maintain a Modified Texas Ratio of not more than 40%, which covenant
shall be measured as of each Covenant Compliance Date.
5.15 Return on Average Assets. Bank shall maintain an annualized
return on Average Assets of at least 70/100 percent (0.70%) as of each Covenant
Compliance Date, which covenant shall be measured as of each Covenant
Compliance Date. In determining such annualized return, Banks earnings will
be annualized using its year to date earnings.
5.16 Loan to Value Ratio. Borrower and Bank shall maintain at all
times a Loan to Value Ratio of not more than seventy-five percent (75%). As
used herein, the term "Loan to Value Ratio" shall mean the ratio that
(a) the then-outstanding aggregate principal balance of the Loans bears to (b)
the Bank's tangible common equity. Such ratio shall be measured as of the end
of each calendar year.
5.17 Loan Loss Reserves. With respect to the Bank, maintain at all
times loan loss reserves in amounts deemed adequate by all federal and state
regulatory authorities.
5.18 Indemnification. Borrower and Bank shall indemnify the Lender,
and hold it harmless of and from any and all loss, cost, damage or expense, of
every kind and nature, including reasonable attorneys fees, which the Lender
incurs by reason of any violation of any Environmental Laws by Borrower or Bank
or by any predecessors or successors to title to any property of the Borrower
or Bank.
5.19 Compliance Certificate. Furnish Lender a Certificate of
Compliance duly certified by the Chief Executive Officer of Borrower within
forty-five (45) days after the end of each calendar quarter stating that
Borrower and each Bank Subsidiary and the Borrower and all Subsidiaries, as
applicable, are in compliance with all terms, covenants and conditions of this
Loan Agreement and all related Loan Documents, including, but not limited to, Sections
5.1 5.17 of this Agreement. Such Certificate of Compliance shall
be as set forth in Exhibit H and otherwise be in form and
substance satisfactory to Lender.
6. NEGATIVE COVENANTS.
Borrower covenants and
agrees with Lender that Borrower shall comply and cause the Bank and other
Subsidiaries to comply with the following negative covenants unless the prior
written consent of Lender shall be obtained, so long as Borrower may borrow
under this Agreement or so long as any indebtedness remains outstanding under
the Loan Documents:
6.1 Indebtedness. Neither Borrower nor the Bank shall create, incur,
assume or suffer to exist, contingently or otherwise, any indebtedness, except
for the following indebtedness:
(a) The indebtedness of Borrower under the Loan Documents;
(b) Indebtedness owed by the Borrower to the Bank or any other Subsidiary or
by the Bank to the Borrower;
(c) Debt for operating expenses or otherwise incurred by the Bank or any
other Subsidiary in the ordinary course of business;
(d) Purchase money indebtedness and capitalized lease obligations in an
aggregate amount not to exceed $500,000 outstanding at any time and secured
solely by liens on the assets financed or leased pursuant thereto and otherwise
permitted under Section 6.2 hereof;
(e) Unsecured indebtedness constituting obligations of the Borrower or any
Subsidiary other than the Bank under debentures, indentures, trust agreements
and guarantees in connection with the issuance by such person of trust
preferred securities either (i) existing on the date hereof or (ii) incurred
pursuant to the Acquisition or any other acquisition permitted under this
Agreement that, in any case, do not dilute the Collateral and that otherwise would
not reasonably be expected to have an adverse effect upon the priority,
preferences, or rights of the Collateral or the Lender's rights and remedies
with respect thereto;
(f) Unsecured indebtedness of the Borrower and the Subsidiaries in an
aggregate amount outstanding at any time not to exceed $500,000; and
(g) Indebtedness as set forth in Exhibit G and any extensions,
renewals and replacements thereof that do not increase the outstanding
principal amount thereof or shorten the maturity or weighted average life
thereof;
6.2 Mortgages, Liens, Etc. Neither Borrower nor the Bank shall
create, assume or suffer to exist any mortgage, pledge, lien, charge or other
encumbrance of any nature whatsoever on any of its assets, now or hereafter
owned, except for:
(a) Liens in favor of Lender securing payment of the Loans; and
(b)
Permitted Encumbrances.
6.3 Guaranties. Guarantee or otherwise in any way become or be
responsible for the indebtedness or obligations of any other Person (other than
the Borrower, the Bank or any Subsidiary with respect to indebtedness otherwise
permitted by this Agreement), by any means whatsoever, whether by agreement to
purchase the indebtedness of any other Person or agreement for the furnishing
of funds to any other Person through the purchase of goods, supplies or
services (or by way of stock purchase, capital contribution, advance or loan)
for the purpose of paying or discharging the indebtedness of any other Person,
or otherwise, except for the endorsement of negotiable instruments by the
Borrower or Bank in the ordinary course of business for collection.
6.4 Merger, Dissolution, Acquisition of Assets. Borrower shall not
enter into, or permit the Bank or any other Subsidiary to enter into, any
transaction of merger or consolidation, or any reorganization, reclassification
of stock, readjustment or change in capital structure; or acquire, or permit
any Subsidiary to acquire, all of the stock, or other ownership interest,
property or assets of any other person, corporation, partnership or other
entity (other than the Acquisition and any related merger of the Target into
the Borrower where the Borrower is the surviving entity, and any subsequent
merger of the Target Bank into the Bank where the Bank is the surviving entity,
each of which is permitted hereby); provided that, if at the time thereof and
immediately after giving effect thereto on a pro forma basis, no Event of
Default has occurred and is continuing and subject to the restrictions on
additional indebtedness and liens set forth in Sections 6.1 and 6.2
hereof, (a) any Subsidiary (other than the Bank) may merge into or transfer its
property or assets to another Subsidiary and (b) any Subsidiary may acquire all
of the stock or other ownership interests, property or assets of another Person
if (i) the purchase price for all such transactions shall not exceed ten percent
(10%) of the consolidated assets of the Borrower and its Subsidiaries in any
fiscal year of the Borrower and (ii) in the event such acquisition involves a
merger of the acquired entity with an existing Subsidiary, the applicable existing
Subsidiary is the surviving entity after consummation of the transaction.
6.5 Subsidiaries. Except as permitted under Section 6.4
hereof, Borrower shall not create, establish or acquire Subsidiaries or acquire
or own stock or any other interest in any bank other than the Bank and the
Target Bank, or permit the creation, establishment or acquisition of any such
Subsidiaries by any other Subsidiary.
6.6 Sale of Stock, Merger, or Asset Disposition.
(a) Borrower shall not sell, transfer, pledge, assign, or otherwise dispose
of, or otherwise encumber, any of the Borrowers stock of the Bank or, except
as permitted under Section 6.4 hereof, the Borrowers or the
Banks or any other Subsidiarys common Capital Stock in any other Subsidiary
nor permit the Bank or any other Subsidiary to issue additional shares of stock
or rights, options or securities convertible into Capital Stock of the Bank or
any other Subsidiary.
(b) The Borrower will not, nor will it permit any of its Subsidiaries to,
make any material Asset Disposition except in the ordinary course of business.
6.7 Dividends, Redemptions and Other Payments. Borrower shall not
declare or pay any dividends on the stock of Borrower or redeem any stock of
Borrower if an Event of Default has occurred and is continuing under this
Agreement or allow the payment of such a dividend that would create an Event of
Default. The payment of any dividend or the redemption of any stock not
otherwise prohibited shall in all respects comply with the rules and
regulations of the Federal Reserve Board.
6.8 Capital Expenditures. Borrower shall not make or become
committed to make, or permit any Subsidiary to make or to become committed to
make, directly or indirectly, during any calendar year, capital expenditures
which for Borrower and the Subsidiary exceed amounts deemed acceptable to
applicable regulatory authorities or which do not require regulatory approval.
6.9 Relocation. The Borrower shall not cause or permit Borrower or
any Subsidiary to relocate their principal office, principal banking office, or
principal registered office without the written consent of Lender.
6.10 Transactions with Affiliates. The Borrower shall not, nor will
it permit any of its Subsidiaries to, enter into or permit to exist any
transaction or series of transactions with any officer, director, shareholder,
Subsidiary or Affiliate of such person or entity other than (a) normal
compensation and reimbursement of expenses of officers and directors and (b)
except as otherwise specifically limited in this Agreement, other transactions
which satisfy the applicable requirements under Section 23A of the Federal
Reserve Act, 12 USC §371c and Section 23B of the Federal Reserve Act, 12 USC
§371c-1. For purposes of this Agreement, the term affiliates shall have the
same meaning as set forth in applicable bank regulations.
6.11
Change in Management. Neither the Borrower nor the Bank shall
make any change in its executive management personnel without providing Lender
written notice within ten (10) days after such change becomes effective.
6.12 Charter or By-Law Amendments. Neither Borrower, Bank nor any
other Subsidiary shall adopt, amend or enter into, as applicable, any charter,
articles of incorporation, bylaws (or any amendments thereto) or other
provisions or agreements that would reasonably be expected to have an adverse effect
on the priority, preferences, or rights of the Collateral or the Lender's
rights and remedies with respect thereto.
6.13 No Defaults. Borrower shall not permit or suffer the occurrence
of any event nor allow any Subsidiary or other Affiliate to knowingly permit or
suffer the occurrence of any event which constitutes an event of default under
any indenture or loan agreement for any indebtedness in excess of One Million
Dollars ($1,000,000.00) or with respect to any other material indebtedness of
the Borrower, the Bank, or any other Subsidiary.
7. DEFAULT AND REMEDIES.
7.1 Events of Default. Any one or more of the following events shall
constitute an Event of Default under the terms of this Agreement and the other
Loan Documents:
(a) Defaults in the prompt payment as and when due of the principal of or
interest on the Loans or any fees due under this Loan Agreement within ten (10)
days of the date when due.
(b) Default in compliance with or in the performance or observance of any
term, covenant, obligation, condition, or agreement in this Agreement or any
other Loan Document.
(c) If any representation, warranty or any other statement made or deemed to
be made by the Borrower herein, in any other Loan Document, or in any writing,
certificate, or report or statement at any time furnished to Lender pursuant to
or in connection with this Agreement shall prove to be false or misleading in
any material respect, at the time made or furnished.
(d) Borrower, the Bank or any other Subsidiary shall fail to pay when due
and before the expiration of any grace period, any debt for borrowed money in
an amount greater than One Million Dollars ($1,000,000) which it is primarily
obligated to pay as borrower, or in any other capacity, whether such debt shall
have become due because of acceleration of maturity or otherwise, other than
debt created by the Loan Documents.
(e) An event occurs which constitutes an event of default as defined in the
Note or any other Loan Document; or an event occurs which constitutes an event
of default (following the expiration of applicable grace, notice or cure
periods) under any present or future loan agreement between Lender and Borrower
for any other loan.
(f) The Borrower, the Bank, or any other Subsidiary shall
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(i) |
be unable or admits in writing its inability to pay its debts as they
become due; or
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(ii) |
file a petition in bankruptcy or for reorganization or for the adoption
of an arrangement under the Bankruptcy Act as now or in the future amended, or
file a pleading asking such relief, or have or suffer to be filed an involuntary
petition in bankruptcy against it which is not contested and discharged within
sixty (60) days; or
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(iii) |
make an assignment for the benefit of creditors generally; or
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(iv) |
consent to the appointment of a trustee, custodian, or receiver for all
or a major portion of its property; or
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(v) |
be adjudicated bankrupt or insolvent under any federal or state law; or
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(vi) |
suffer the entry of a court order under any federal or state law
appointing a receiver, custodian, or trustee for all or a major part of its
property or ordering the winding up or liquidation of its affairs, or approving
a petition filed against it under the Bankruptcy Act, as now or in the future
amended; or
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(vii) |
suffer the entry of a final judgment for the payment of money in excess
of One Million Dollars ($1,000,000) and the same shall not be paid or otherwise
discharged or provision made for its discharge within 45 days from the date of
entry thereof or an appeal or other appropriate proceeding for review thereof
shall not be taken within said period and a stay of execution pending such
appeal shall not be obtained; or
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(viii) |
suffer a writ or warrant of attachment or any similar process to be
issued by any court against all or any substantial portion of its property.
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(g) The issuance of any Supervisory Action against the Borrower, the Bank or
other Subsidiaries or the Borrowers, the Banks or the other Subsidiaries
directors, whether temporary or permanent, by or at the request of any bank
regulatory agency, in each case, unless such Supervisory Action would not
reasonably be expected to have a Material Adverse Effect; provided, however,
that notwithstanding anything to the contrary in this Agreement (including
without limitation Section 5.9 hereof), Borrower shall not be
required to disclose the existence of any Supervisory Action to the extent that
such disclosure is prohibited by applicable law or regulation; but further
provided that (i) Section 5.9 of this Agreement shall
nevertheless require Borrower to disclose to Lender the maximum amount of
information legally permissible to be disclosed regarding any such Supervisory
Action and (ii) such Supervisory Action may, even if confidential, constitute
an Event of Default hereunder if Lender becomes aware of such Supervisory
Action through other channels without the violation of applicable law or
regulation;
(h) There shall occur any Change in Control; or
(i) The failure of the Borrower, the Bank, or any other Subsidiary, or the
Borrowers, the Banks, or any other Subsidiarys directors to comply with the
terms of any memorandum of understanding or letter agreement with any bank
regulatory agency, including but not limited to any applicable state bank
regulatory agency, Federal Deposit Insurance Corporation, the Office of the
Comptroller of the Currency, the Office of Thrift Supervision, and the Board of
Governors of the Federal Reserve System and such failure has not been fully
corrected within thirty (30) business days of the Borrowers or the Banks
awareness of its failure to comply, or such longer cure period as the applicable
memorandum of understanding or letter agreement may provide.
7.2 Cure Provisions. If any Event of Default, other than a default
in payment, is curable and if Borrower has not been given a notice of a breach
in the same provision of the Note within the preceding twelve (12) months, it
may be cured if Borrower, after receiving written notice from Lender demanding
cure of such default: (1) cures the default within fifteen (15) days; or (2)
if the cure requires more than fifteen (15) days, immediately initiates steps
which Lender deems in Lenders reasonable discretion to be sufficient to cure
the default and thereafter continues and completes all reasonable and necessary
steps sufficient to product compliance as soon as reasonably practical.
7.3 Remedies on Default. Upon the occurrence of an Event of Default,
Lender may (i) terminate all obligations of Lender to Borrower, the Bank, or
any other Subsidiary including, without limitation, all obligations to lend
money to Borrower under this Agreement, (ii) declare the Notes immediately due
and payable, without presentment, demand, protest, notice of intent to
accelerate and notice of acceleration of the maturity date of this Notes, or
any other notice of any kind, all of which are expressly waived, (iii) declare
immediately due and payable from Borrower the expenses set forth in Section
8.14 hereof, and (iv) pursue any remedy available to it under this
Agreement, the Notes, the Pledge Agreement or any other Loan Document, or
available at law or in equity, concurrently or subsequently, in such order as
the Lender may elect, all of which remedies shall be cumulative.
7.4 Liens; Setoff by Lender. Borrower hereby grants to Lender a
continuing lien for all indebtedness of Borrower to Lender upon any and all of
its monies, securities and other property and the proceeds thereof, now or
hereafter held or received by or in transit to Lender from or for Borrower, and
also upon any and all deposits (general or special, matured or unmatured) and
credits of Borrower against Lender at any time existing. Upon the occurrence of
any Event of Default as specified above, Lender is hereby authorized at any
time and from time to time, without notice to Borrower, the Bank, or the other
Subsidiaries, to set off, appropriate, and apply any and all items hereinabove
referred to against any or all indebtedness of Borrower to Lender under this
Agreement and the other Loan Documents, whether now existing or hereafter
arising. Lender shall give written notice to Borrower of such setoff
appropriation or application after such setoff, appropriation or application
occurs.
8. MISCELLANEOUS.
8.1 No Waiver. No delay or failure on the part of Lender or on the
part of any holder of the Note in the exercise of any right, power or
privilege granted under this Agreement, or under any other Loan Document, or
available at law or in equity, shall impair any such right, power or privilege
or be construed as a waiver of any Event of Default or any acquiescence
therein. No single or partial exercise of any such right, power or privilege
shall preclude the further exercise of such right, power or privilege. No
waiver shall be valid against Lender unless made in writing and signed by
Lender, and then only to the extent expressly specified therein.
8.2 Notices. All notices and communications provided for hereunder
shall be in writing, delivered by hand or sent by first‑class, registered
or certified mail, postage prepaid, or express courier to the following
addresses:
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(1) |
If to Lender: |
First Tennessee Bank National Association |
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165 Madison Avenue |
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Memphis, Tennessee 38103 |
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Attention: Correspondent Services |
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(2) |
If to Borrower: |
First Citizens Bancshares, Inc. |
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One First Citizens Place |
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Dyersburg, Tennessee 38024 |
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Attention: Laura Beth Butler |
Any party hereto may change its address for
notice purposes by notice to the other parties in the manner provided herein.
Notice shall be deemed given when hand delivered or first class, certified or
registered mail, postage prepaid, or when delivered by express courier.
8.3 Governing Law. This Agreement and all other Loan Documents shall
be governed by and interpreted in accordance with the laws of the State of Tennessee except with respect to interest which shall be governed by and construed in
accordance with applicable Federal laws in effect from time to time.
8.4 Survival of Representations and Warranties. All representations,
warranties and covenants contained herein or made by or furnished on behalf of
Borrower, the Bank, or the other Subsidiaries in connection herewith shall
survive the execution and delivery of this Agreement and all other Loan
Documents and the extension or funding of the loan hereunder.
8.5 Descriptive Headings. The descriptive headings of the several
sections of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
8.6 Severability. If any part of any provision contained in this
Agreement or in any other Loan Document shall be invalid or unenforceable under
applicable law, said part shall be ineffective to the extent of such invalidity
only, without in any way affecting the remaining parts of said provision or
the remaining provisions.
8.7 Time is of the Essence. Time is of the essence in interpreting
and performing this Agreement and all other Loan Documents.
8.8 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which,
taken together, shall constitute one and the same instrument.
8.9 Payment of Costs. Borrower shall pay, promptly demand by Lender,
all reasonable out-of-pocket costs, expenses, taxes and fees incurred by Lender
in connection with the preparation, execution and delivery of this Agreement
and all other Loan Documents and the recording and filing and rerecording and
refiling thereof, including, without limitation, the reasonable out-of-pocket costs
and professional fees of counsel for Lender, any and all transfer, mortgage or
other taxes and all recording costs that may be payable. In the future,
Borrower shall pay promptly following written demand by the Lender, all such
costs and expenses incurred by Lender, in connection therewith.
8.10 Successors and Assigns. This Agreement shall bind and inure to
the benefit of Borrower and Lender, and their respective successors and
assigns; provided, however, Borrower, the Bank, and the other Subsidiaries
shall not have any right to assign their rights or obligations hereunder to any
person. Notwithstanding anything in this Agreement to the contrary, Lender
shall have the right, but shall not be obligated, to sell participation in the
loan made pursuant hereto to other banks, financial institutions and investors
in accordance with Section 8.25 hereof.
8.11 Amendments; No Implied Waiver. This Agreement may be amended or
modified, and Borrower, the Bank, and the other Subsidiaries may take any
action herein prohibited, or omit to perform any act herein required to be
performed by it, only if Borrower shall obtain the prior written consent of
Lender to that specific amendment, modification, action or omission to act, and
no course of dealing between Borrower, the Bank, or the other Subsidiaries and
Lender shall operate as a waiver of any right, power or privilege granted to
Lender under this Agreement or under any other Loan Document, or available to
Lender at law or in equity.
8.12 Rights Cumulative. All rights, powers and privileges granted
hereunder shall be cumulative to and shall not be exclusive of any other
rights, powers and privileges granted by any other Loan Document or available
at law or in equity.
8.13 Indemnity. Borrower agrees to protect, indemnify and save
harmless Lender, and all directors, officers, employees and agents of Lender,
from and against any and all (i) claims, demands and causes of action of any
nature whatsoever brought by any Person not a party to this Agreement and
arising from or related or incident to this Agreement or any other Loan
Document, including, without limitation, any liability under federal or state
securities laws arising out of Lenders disposition of all or part of the
Collateral, (ii) costs and expenses incident to the defense of such claims,
demands and causes of action, including, without limitation, reasonable
attorneys fees, and (iii) liabilities, judgments, settlements, penalties and assessments
arising from such claims, demands and causes of action; provided, however, that
Borrower does not agree to indemnify Lender against Lenders own gross
negligence or willful misconduct. The indemnity contained in this section shall
survive the termination of this Agreement.
8.14 Expenses. Borrower agrees to promptly reimburse Lender for (i)
all costs and expenses of collection of the Notes, including reasonable
attorneys fees, and (ii) all expenses incurred by Lender in acting on behalf
of Borrower, the Bank or the other Subsidiaries in accordance with the terms of
this Agreement or to maintain or preserve the value of the Collateral, or
Lenders interest therein pursuant to the Pledge Agreement, or any other Loan
Document. Such sums shall include interest at the Default Rate (as defined in
the Notes) accruing from the date Lender requests such reimbursement until such
amount is paid.
8.15 Usury. It is the intent of the parties hereto not to violate any
federal or state law, rule or regulation pertaining either to usury or to the
contracting for or charging or collecting of interest, and Borrower, the Bank,
and the other Subsidiaries, and Lender agree that, should any provision of this
Agreement, or of either of the Notes, or of any other Loan Document or any act
performed hereunder or thereunder, violate any such law, rule or regulation,
then the excess of interest contracted for or charged or collected over the
maximum lawful rate of interest shall be applied to the outstanding principal
indebtedness due to Lender by Borrower under this Agreement, and if the principal
indebtedness has been paid in full, any remaining excess shall forthwith be
paid to Borrower.
8.16 Jurisdiction and Venue. Borrower, the Bank, and the other
Subsidiaries, and Lender agree, without power of revocation, that any civil
suit or action brought against them as a result of , or which relates to, any
of their obligations under this Agreement or under any other Loan Document may
be brought against them, jointly or singly, in the United States District Court
for the Western District of Tennessee, and Borrower, the Bank, the other
Subsidiaries, and Lender irrevocably submit to the jurisdiction of such court
and irrevocably waive, to the fullest extent permitted by law, any objections
that they may now or hereafter have to the laying of the venue of such civil
suit or action and any claim that such civil suit or action has been brought in
an inconvenient forum, and Borrower, the Bank, and the other Subsidiaries, and
Lender agree that final judgment in any such civil suit or action shall be
conclusive and binding upon them and shall be enforceable against them by suit
upon such judgment in any court of competent jurisdiction.
8.17 Construction. Should any provision of this Agreement require
judicial interpretation, the parties hereto agree that the court interpreting
or construing the same shall not apply a presumption that the terms hereof
shall be more strictly construed against one party by reason of the rule of
construction that a document is to be more strictly construed against the party
who itself or through its agents prepared the same, it being agreed that
Borrower, Lender and their respective agents have participated in the
preparation hereof.
8.18 Holidays. In any case where the date for any action required to
be performed under this Agreement or under any other Loan Document shall be, in
the city where the performance is to be made, a Saturday, a Sunday, a legal
holiday or a day on which banking institutions are authorized by law to close,
then such performance may be made on the next succeeding business day not a
Saturday, a Sunday, a legal holiday or a day on which banking institutions are
authorized by law to close.
8.19 Entire Agreement. This Agreement and the other Loan Documents
executed and delivered contemporaneously herewith, together with the exhibits
attached hereto and thereto, constitute the entire understanding of the parties
with respect to the subject matter hereof, and any other prior or
contemporaneous agreements, whether written or oral, with respect thereto are
expressly superseded hereby. The execution of this Agreement and the other Loan
Documents by Borrower, the Bank, and the other Subsidiaries was not based upon
any facts or materials provided by Lender, nor was Borrower, the Bank, and the
other Subsidiaries induced to execute this Agreement or any other Loan Document
by any representation, statement or analysis made by Lender. In the event that
the provisions of this Loan Agreement shall conflict with provisions of any of
the other Loan Documents, the provisions of this Agreement shall control.
This written Loan Agreement
represents the final agreement between the parties and may not be contradicted
by evidence of prior, contemporaneous, or subsequent oral agreements of the
parties. There are no unwritten oral agreements between the parties.
8.20 Consent. Borrower, the Bank, and the other Subsidiaries hereby
represent and warrant that to the best of Borrowers knowledge there is no
consent from any lender or creditor needed to prevent Borrower, the Bank, or
the other Subsidiaries from being in default by Borrower executing the Notes or
Borrower, the Bank, and the other Subsidiaries executing, this Loan Agreement
or any other loan document associated with this Loan.
8.21
Waiver Of Right To Trial By Jury. EACH PARTY TO THIS AGREEMENT
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION (a) ARISING UNDER THIS AGREEMENT OR ANY OTHER INSTRUMENT,
DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR (b) IN
ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES
HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT OR ANY OTHER INSTRUMENT,
DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR THE
TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL
WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
8.22 Further Assurances. Borrower agrees to furnish a current
financial statement upon the request of Lender from time to time, and further
agrees to execute and deliver all other instruments and take such other actions
as Lender may from time to time reasonably request in order to carry out the
provisions and intent hereof.
8.23 Execution by Bank. The undersigned Bank is joining this
Agreement for the sole purpose of acknowledging the pledge of its Capital Stock
pursuant to the Pledge Agreement.
8.24 Non-Control. In no event shall the Lenders rights hereunder be
deemed to indicate that the Lender is in control of the business, management or
properties of the Borrower or the Bank or has power over the daily management
functions and operating decisions made by the Borrower and the Bank, all such
rights and powers being hereby expressly reserved to the Borrower and the Bank.
8.25 Assignments and Participations. Lender may sell or offer to sell
the Loans, or either of them, or interests therein to one or more assignees or
participants; provided that, so long as no Event of Default has occurred and is
continuing, any such sale or assignment shall be subject to Borrower's
reasonable consent thereto, but provided further that (a) if Borrower does not provide
a written response to Lender within ten (10) days of Borrower's receipt of
Lender's written request, Borrower shall be deemed to have consented to such
sale, assignment, or participation and (b) Borrower's consent shall not be
required in connection with a sale or assignment in connection with a merger or
sale of all or substantially all of the assets of Lender or a sale of all or
substantially all of the Lender's correspondent banking / bank holding company
loans. Borrower shall execute, acknowledge and deliver any and all instruments
reasonably requested by Lender in connection therewith, and to the extent, if
any, specified in any such assignment or participation, such assignee(s) or
participant(s) shall have the same rights and benefits with respect to the applicable
Loan Documents as such Person(s) would have if such Person(s) were Lender
hereunder. Lender may disseminate any information it now has or hereafter
obtains pertaining to the Loans, or either of them, including any security for
the Loans, or either of them, Borrower, Bank, any other Subsidiary, any of Borrowers,
Banks, or any other Subsidiarys principals, or any guarantor, if any, to any
actual or prospective assignee or participant, to Lenders affiliates, to any
regulatory body having jurisdiction over Lender, to any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating
to Lender and the Loan, or to any other party as necessary or appropriate in
Lenders reasonable judgment.
8.26 Electronic Transmission of Data. Lender and Borrower agree that
certain data related to the Loans (including confidential information,
documents, applications and reports) may be transmitted electronically,
including transmission over the internet to the parties, the parties
affiliates, agents and representatives, and other Persons involved with the
subject matter of this Agreement. Borrower acknowledges and agrees that (a)
there are risks associated with the use of electronic transmission and that
Lender does not control the method of transmittal or service providers, (b)
Lender has no obligation or responsibility whatsoever and assumes no duty or
obligation for the security, receipt or third party interception of any such
transmission, and (c) Borrower and Bank will release, hold harmless and
indemnify Lender from any claim, damage or loss, including that arising in
whole or part from Lenders strict liability or sole, comparative or
contributory negligence, which is related to the electronic transmission of
data.
8.27 USA PATRIOT Act. The Lender hereby notifies the Borrower and any
guarantor that pursuant to the requirements of the PATRIOT Act, it is required
to obtain, verify and record information that identifies the Borrower, which
information includes the name and address of the Borrower and other information
that will allow Lender to identify the Borrower in accordance with the PATRIOT
Act.
8.28 No Inference of Extension Past Maturity Date. Notwithstanding
any other provision herein, the terms, conditions, and requirements provided
for herein that would, by their express terms, be applicable to time periods
after the Maturity Date of the Notes, are not to be interpreted as an inference
that the Lender has agreed to any extension, automatic or otherwise, to the
extension of the Maturity Date. The Lender has not agreed and is under no
obligation to extend the Maturity Date of the Notes, or either of them.
Signature page follows.
Signature Page to Loan Agreement
WITNESS the hand and
seal of the parties hereto through their duly authorized officers as of the
date first above written.
LENDER:
FIRST TENNESSEE BANK NATIONAL
ASSOCIATION
By: /s/ Jeff Agee
Printed Name: Jeff Agee
Title: Chief Executive Officer
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BORROWER:
FIRST CITIZENS BANCSHARES, INC.
By: /s/ Jeff Agee
Printed Name: Jeff Agee
Title: Chief Executive Officer
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The undersigned Bank executes this Loan Agreement for the sole
purpose of acknowledging the pledge of its Capital Stock under the Pledge
Agreement.
BANK:
FIRST CITIZENS NATIONAL BANK
By: /s/ Patrick Wredling
Printed Name: Patrick Wredling
Title: V.P. and Relationship Mgr.
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LIST OF
EXHIBITS
EXHIBIT A-1
EXHIBIT A-2
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FIXED RATE NOTE
FLOATING RATE NOTE
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EXHIBIT B
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BORROWERS COUNSELS OPINION
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EXHIBIT C
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ACTIONS, SUITS, OR
OTHER PROCEEDINGS PENDING OR THREATENED AGAINST OR AFFECTING BORROWER OR ANY
SUBSIDIARY
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EXHIBIT D
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SUBSIDIARIES OF
BORROWER
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EXHIBIT E
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LIENS
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EXHIBIT F
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OPTIONS, WARRANTS OR
OTHER RIGHTS AGREEMENTS OR COMMITMENTS (INCLUDING CONVERSION RIGHTS AND
PREEMPTIVE RIGHTS) OBLIGATING BORROWER OR ANY SUBSIDIARY TO ISSUE, SELL,
PURCHASE OR REDEEM SHARES OR SECURITIES CONVERTIBLE TO SHARES
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EXHIBIT G
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INDEBTEDNESS NOT
AUTHORIZED IN SECTION 6.1
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EXHIBIT H
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COMPLIANCE CERTIFICATE
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APPENDIX A
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DEFINITIONS
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SCHEDULE 4.6
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SUPERVISORY ACTION(S)
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H-1
APPENDIX A
DEFINITIONS
Affiliate
shall have the same meaning assigned to it in applicable bank regulations.
Asset Disposition shall mean the disposition
(including the sale, lease or transfer) of any or all of the assets (including
without limitation any common or preferred stock of the Bank or any other
Subsidiary) of the Borrower or any of its Subsidiaries whether by sale, lease,
transfer or otherwise.
Average Assets shall mean the year-to-date average of total
assets of Bank.
Bank Regulatory Authority shall mean the
Board of Governors of the Federal Reserve System, the Comptroller of the
Currency, the Federal Deposit Insurance Corporation, and all other relevant
bank regulatory authorities (including, without limitation, relevant state bank
regulatory authorities).
Call Report shall mean the Banks Quarterly
Report of Condition and Income.
Capital Stock shall mean any and all shares,
interests, participations or other equivalents (however designated) of capital
stock or equity, whether now outstanding or issued after the date hereof,
including all common stock, preferred stock, partnership interests and limited
liability company member interests.
Change in Control means, at any time after
the date hereof, (a) the acquisition by any Person (other than the Borrower's
employee stock ownership plan if the Borrower obtains appropriate governmental
approvals), or two or more Persons acting in concert, of beneficial ownership
(within the meaning of Rule 13d-3 of the U.S. Securities and Exchange
Commission under the Securities Exchange Act of 1934) of 25% or more of the
outstanding shares of voting stock of the Borrower on a fully diluted basis or
(b) the Borrower shall cease to own one hundred percent (100%) of the
outstanding shares of voting stock of the Bank.
Change in Law means the occurrence, after
the date of this Agreement, of any of the following: (a) the adoption or taking
effect of any law, rule, regulation or treaty by any Governmental Entity, (b)
any change in any law, rule, regulation or treaty or in the administration,
interpretation, implementation or application thereof, in each case, by any
Governmental Entity or (c) the making or issuance of any request, rule,
guideline or directive (whether or not having the force of law) by any
Governmental Entity; provided that notwithstanding anything herein to
the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act
and all requests, rules, guidelines or directives thereunder or issued in
connection therewith and (ii) all requests, rules, regulations, guidelines or
directives promulgated by the Bank for International Settlements, the Basel
Committee on Banking Supervision (or any successor or similar authority) or the
United States or foreign regulatory authorities, in each case pursuant to Basel
III, shall in each case be deemed to be a Change in Law, regardless of the
date enacted, adopted or issued.
Collateral shall mean one hundred two
thousand (102,000) shares of the common stock of the Bank.
Covenant Compliance Date shall mean the last
day of each fiscal quarter of the Borrower.
Environmental Laws shall mean all federal,
state, and local laws, including statutes, regulations, ordinances, codes,
rules, and other governmental restrictions and requirements, relating to the
discharge of air pollutants, water pollutants, or process waste water or
otherwise relating to the environment or hazardous substances or the treatment,
processing, storage, disposal, release, transport, or other handling thereof,
including, but not limited to, the federal Solid Waste Disposal Act, the
federal Clean Air Act, the federal Clean Water Act, the federal Resource
Conservation and Recovery Act, the federal Hazardous Materials Transportation
Act, the federal Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, the federal Toxic Substances Control Act, regulations of
the Nuclear Regulatory Agency, and regulations of any state department of
natural resources or state environmental protection agency, in each case as now
or at any time hereafter in effect.
ERISA shall mean the Employee Retirement
Income Security Act of 1974, as amended, and any successor statute thereto, as
interpreted by the rules and regulations thereunder, all as the same may be in
effect from time to time. References to sections of ERISA shall be construed
also to refer to any successor sections.
ERISA Affiliate means an entity which is
under common control with the Borrower within the meaning of Section
4001(a)(14) of ERISA, or is a member of a group which includes the Borrower and
which is treated as a single employer under Sections 414(b) or (c) of the Code.
ERISA Event means (i) with respect to any
Plan, the occurrence of a Reportable Event or the substantial cessation of
operations (within the meaning of Section 4062(e) of ERISA); (ii) the
withdrawal by the Borrower, the Bank, or any other Subsidiary or any ERISA
Affiliate from a Multiple Employer Plan during a plan year in which it was a
substantial employer (as such term is defined in Section 4001(a)(2) of ERISA),
or the termination of a Multiple Employer Plan; (iii) the distribution of a
notice of intent to terminate or the actual termination of a Plan pursuant to
Section 4041(a)(2) or 4041A of ERISA; (iv) the institution of proceedings to terminate
or the actual termination of a Plan by the PBGC under Section 4042 of ERISA;
(v) any event or condition which might constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer,
any plan; (vi) the complete or partial withdrawal of the Borrower or any of its
Subsidiaries or any ERISA Affiliate from a Multiemployer Plan; (vii) the
conditions for imposition of a lien under Section 302(f) of ERISA exist with
respect to any Plan; or (viii) the adoption of an amendment to any Plan
requiring the provision of security to such Plan pursuant to Section 307 of
ERISA.
Event of Default shall have the meaning
assigned to such term in Section 7.1 of this Agreement.
GAAP shall mean generally accepted accounting
principles applied on a consistent basis, maintained throughout the period
involved.
Governmental Entity means the United States,
any State, and/or any political subdivision, department, agency or
instrumentality of any of the foregoing.
Local Authorities means individually and
collectively the state and local governmental authorities which govern the
business and operations owned or conducted by the Borrower or its Subsidiaries.
Loan Documents shall mean the Note, the
Agreement, the Pledge Agreement, stock certificates issued to Borrower
evidencing the shares pledged pursuant to the Pledge Agreement, stock powers
with respect to such shares pledged as Collateral and any
and all other documents, instruments or agreements evidencing, securing,
guaranteeing or otherwise related to or delivered in connection with the Loan.
"Material Adverse Effect" shall mean
a material and adverse change in or a material adverse effect on (i) the
condition (financial or otherwise), business operation, properties, assets,
liabilities (actual and contingent), or results of operations of the Borrower,
the Bank, or any other Subsidiary, taken as a whole, (ii) the ability of the
Borrower to perform its obligations under the Loan Documents, or (iii) the
validity or enforceability of any of the Loan Documents or the rights or
remedies of the Lender under the Loan Documents.
Maturity Date shall mean October 1, 2019.
"Modified Texas Ratio shall mean a
fraction, expressed as a percentage, where the numerator is Non-Performing
Assets, and where the denominator is the sum of Banks Tier 1 Capital plus the
entire balance of Banks loan loss reserve, all determined on a basis
satisfactory to Lender.
Multiple Employer Plan shall mean a Plan
which is a multiemployer plan as defined in Sections 3(37) or 4001(a)(3) of
ERISA.
Non-Performing Assets shall mean the sum of
(1) all Non-Performing Loans and (2) Other Real Estate Owned listed in Call
Reports and other such assets acquired through foreclosure or other realization
upon collateral or rearrangement or satisfaction of Indebtedness.
Non-Performing Loans shall mean the sum of
(1) all loans classified internally or by a Bank Regulatory Authority as
non-accrual plus (2) loans past due by 90 days or more plus (3) loans for which
the obligee has reduced the agreed interest rate, reduced the principal or
interest obligation, extend the maturity, applied interest payments to reduce
principal, capitalized interest, or otherwise renegotiated the terms of the
obligation based upon the actual or asserted inability of the obligor(s) of
such loans to perform their obligations pursuant to the agreements with the
obligee prior to such modification or renegotiation; provided, however,
that (a) loans for which the Borrower or the Bank has taken additional
collateral satisfactory to it and therefore is prepared to make additional loan
advances or any other loans which have been restructured and are performing in
a manner satisfactory to the Borrower and (b) any portion of a Non-Performing
Loan that is guaranteed by the United States government or an agency thereof in
a manner acceptable to Lender shall not be included in the definition of
Non-Performing Loans (but any un-guaranteed portion of a Non-Performing Loan
covered by item (b) above shall be included as a Non-Performing Loan).
Notes shall mean the Fixed Rate Note and the
Floating Rate Note, collectively, together with any and all renewals,
modifications, extensions and replacements thereof.
Patriot Act means the USA PATRIOT Act (Title
III of Pub. L. 107-56 (signed into law October 26, 2001)), as amended.
Permitted Encumbrances shall mean and
include: (a) liens for taxes, assessments or similar governmental charges not
in default or being contested in good faith by appropriate proceedings; (b)
workmens, vendors, mechanics and materialmens liens and other liens imposed
by law incurred in the ordinary course of business, and easements, zoning
restrictions and encumbrances which are not substantial in character or amount
and do not materially detract from the value or interfere with the intended use
of the properties subject thereto and affected thereby; (c) liens in respect of
pledges or deposits under social security laws, workmens compensation laws,
unemployment insurance or similar legislation and in respect of pledges or
deposits to secure bids, tenders, contracts (other than contracts for the
payment of money), leases or statutory operations; (d) liens on investment
securities used to secure government, public and trust deposits; (e) liens on
any Subsidiary's portfolio of fully disbursed, one-to-four family residential
mortgages, commercial mortgages, farm mortgages, second mortgages and
multi-family residential mortgages to the extent pledged as collateral for FHLB
advances and contingent borrowing purposes; (f) liens, charges and encumbrances
incidental to the conduct of the business of the Subsidiaries incurred in the
ordinary course of business and consistent with past practices; (g) repurchase
agreements, reverse repurchase agreements and other similar transactions
entered into by any Subsidiary in the ordinary course of its banking, deposit
or trust business; and (h) such other liens and encumbrances to which Lender
shall consent in writing, if any.
Person means an individual, partnership,
corporation, limited liability company, trust, unincorporated organization,
association, joint venture or a government or agency or political subdivision
thereof, joint stock company, or non-incorporated organization, or any other
entity of any kind whatsoever.
Plan means any employee benefit plan (as
defined in Section 3(3) of ERISA) which is covered by ERISA and with respect to
which the Borrower, the Bank, or any other Subsidiary or any ERISA Affiliate is
(or, if such plan were terminated at such time, would under Section 4069 of
ERISA be deemed to be) an employer within the meaning of Section 3(5) of
ERISA.
Pledge Agreement shall mean that certain
Pledge and Security Agreement executed by Borrower for the benefit of Lender
dated of even date with this Loan Agreement, pledging the Collateral.
Reportable Event means any of the events set
forth in Section 4043(c) of ERISA, other than those events as to which the
notice requirement has been waived by regulation.
Sanctioned Country means a country subject to
a sanctions program identified on the list maintained by OFAC and available at
http://www.treasury.gov/resource-center/sanctions/Programs/Pages/Programs.aspx,
or as otherwise published from time to time.
Sanctioned Person means (a) a Person named on
the list of Specially Designated Nationals and Blocked Persons maintained by
OFAC available at
http://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx,
or as otherwise published from time to time, or (b) (i) an agency of the
government of a Sanctioned Country, (ii) an organization controlled by a
Sanctioned Country, or (iii) a person resident in a Sanctioned Country, to the
extent subject to a sanctions program administered by the U.S. Department of
Treasurys Office of Foreign Assets Control.
Subsidiaries or individually Subsidiary
shall mean any corporation other than Borrower in an unbroken chain of
corporations beginning with the Borrower with each of the corporations or the
Bank other than the last corporation in the unbroken chain owning fifty percent
(50%) or more of the total combined voting power of all classes of stock in one
of the other corporations or the Bank and are more specifically listed in Exhibit
D attached hereto.
Supervisory Action shall mean and include the
issuance by or at the behest of any Bank Regulatory Authority of a letter
agreement, memorandum of understanding (regardless of whether consented or
agreed to by the party to whom it is addressed), cease and desist order,
injunction, directive, restraining order, formal agreement, notice of charges,
or civil money penalties, against Borrower, the Bank, or any other Subsidiary
or the directors or officers of any of them, whether temporary or permanent.
Swap Contract means (a) any and all rate swap
transactions, basis swaps, credit derivative transactions, forward rate
transactions, commodity swaps, commodity options, forward commodity contracts,
equity or equity index swaps or options, bond or bond price or bond index swaps
or options or forward bond or forward bond price or forward bond index
transactions, interest rate options, forward foreign exchange transactions, cap
transactions, floor transactions, collar transactions, currency swap
transactions, cross-currency rate swap transactions, currency options, spot
contracts, or any other similar transactions or any combination of any of the
foregoing (including any options to enter into any of the foregoing), whether
or not any such transaction is governed by or subject to any master agreement,
and (b) any and all transactions of any kind, and the related confirmations,
which are subject to the terms and conditions of, or governed by, any form of
master agreement published by the International Swaps and Derivatives
Association, Inc., any International Foreign Exchange Master Agreement, or any
other master agreement (any such master agreement, together with any related
schedules, a Master Agreement), including any such obligations or liabilities
under any Master Agreement, together with any related schedule and
confirmation, as amended, supplemented, superseded or replaced from time to
time.
Tier 1 Capital shall have the meaning
included in Appendix A to Title 12, Code of Federal Regulations, Part 225,
Capital Adequacy Guidelines for Bank Holding Companies.
Tier 1 Leverage Ratio shall have the meaning
and be calculated as set forth in Appendix D to Title 12, Code of Federal
Regulations, Part 225, Capital Adequacy Guidelines for Bank Holding Companies.
United States means the government of the
United States of America or any department, agency, division or instrumentality
thereof.
SCHEDULE 4.6
SUPERVISORY ACTION(S)
None.
EXHIBIT 10.2
PLEDGE AND SECURITY AGREEMENT
THIS PLEDGE AND
SECURITY AGREEMENT (Agreement), dated October 1, 2014, by and
between FIRST CITIZENS BANCSHARES, INC., a Tennessee corporation (Pledgor)
and FIRST TENNESSEE BANK NATIONAL ASSOCIATION, having an office and place of
business in Memphis, Tennessee (Lender);
W I T N E S S E T
H:
WHEREAS,
Lender has extended or will extend certain loan and credit facilities to
Pledgor pursuant to that certain Loan Agreement between Lender and Pledgor of
even date herewith (the Loan Agreement), and all capitalized terms
used but not otherwise defined in this Agreement shall have the same meaning as
set out in the Loan Agreement; and
WHEREAS,
pursuant to the Loan Agreement, Lender is willing to extend such loans and credit
facilities to Pledgor only upon Pledgor executing this Agreement for the
purpose of securing all Obligations (as hereinafter defined) of Pledgor to
Lender.
NOW THEREFORE,
in consideration of the foregoing, and to enable Pledgor to obtain loans and other
extensions of credit from Lender and to induce Lender to have transactions with
Pledgor, Pledgor agrees as follows:
1. Pledge. As collateral security for the payment and performance
in full of the Obligations, Pledgor hereby pledges, hypothecates, assigns,
transfers, sets over and delivers unto Lender, and hereby grants to Lender a
first lien security interest in, the collateral described in Schedule A,
together with the proceeds thereof and all cash, additional securities or other
property at any time and from time to time receivable or otherwise
distributable in respect of, in exchange for, or in substitution for any and
all such pledged securities (all such pledged securities, the proceeds thereof,
cash, dividends, additional securities and other property now or hereafter
pledged hereunder are hereinafter collectively called the Pledged
Securities);
TO HAVE AND TO HOLD
the Pledged Securities, together with all rights, titles, interests, powers,
privileges and preferences pertaining or incidental thereto, unto Lender, its
successors and assigns; subject, however, to the terms, covenants and
conditions hereinafter set forth. Pledgee agrees to hold the Pledged
Securities to secure the payment of the Obligations and shall not encumber or
otherwise dispose of such Pledged Securities except in accordance with the
terms and provisions of this Agreement.
Upon delivery to
Lender, the Pledged Securities shall be accompanied by executed stock powers in
blank and by such other instruments or documents as Lender or its counsel may
reasonably request. Each delivery of certificates for such Pledged Securities
shall be accompanied by a schedule showing the number of shares and the numbers
of the certificates theretofore and then pledged hereunder, which schedule shall
be attached hereto as Schedule A and made a part hereof. Each
schedule so delivered shall supersede any prior schedule so delivered.
2. Obligations Secured. This Agreement is made, and the security
interest created hereby is granted to Lender, to secure full payment and
performance of any and all indebtedness and other obligations of Pledgor to
Lender pursuant to the Loan Agreement, direct or contingent, however evidenced
or denominated, and however or whenever incurred, including without limitation indebtedness
pursuant to those two (2) certain Promissory Notes from the Pledgor payable to
the order of the Lender, each being in the principal amount of Six Million
Dollars ($6,000,000.00) and each being dated of even date herewith, as each of
them may be amended from time to time, as well as indebtedness incurred
pursuant to any other past, present or future commitment of Lender to Pledgor
pursuant to the Loan Agreement (all of the foregoing, collectively, the Obligations);
except that the indebtedness and other liabilities secured by this Agreement
shall not include any indebtedness subject to the disclosure requirements of
the Federal Truth-in-Lending Act if at the time such indebtedness is created or
incurred, any legally required disclosure of this security interest shall not
have been made.
3. Representations and Warranties. Pledgor hereby represents and
warrants to Lender (a) that Pledgor is the legal and equitable owner of the
Pledged Securities, that Pledgor has the complete and unconditional authority
to pledge the Pledged Securities being pledged by it, and holds the same free
and clear of all liens, charges, encumbrances and security interests of every
kind and nature; (b) that no consent or approval of any governmental body or
regulatory authority, or of any other party, which was or is necessary to the
validity of this pledge, has not been obtained; and (c) that the Pledged
Securities represent fifty-one percent (51%) of the issued and outstanding
Capital Stock of the Bank. Pledgor further represents and warrants that no
part of the Obligations will be used to purchase or carry any margin stock,
as defined in Regulation U of the Board of Governors of the Federal Reserve
System, 12 CFR § 221.1 et seq.
4. Covenants. Pledgor hereby further covenants and agrees with
Lender as follows, until all Obligations (other than contingent indemnification
Obligations for claims which have not been asserted) have been fully paid and
performed (or unless specifically waived by Lender in writing):
(a) No Disposition, Etc. The Pledgor shall not sell, assign,
transfer, exchange, or otherwise dispose of, or grant any option with respect
to, any of the Pledged Securities, nor will it create, incur or permit to exist
any pledge, lien, mortgage, hypothecation, security interest, charge, option or
any other encumbrance with respect to any of the Pledged Securities, or any
interest therein, or any proceeds thereof, except for the lien and security
interest provided for by this Agreement.
(b) Share Adjustments. All new, substitute, and additional shares,
or other securities, issued by reason of any share dividend, reclassification,
recapitalization, adjustment or other change declared or made in the capital
structure of the Bank (subject to obtaining Lenders prior written consent
thereto as required by the Loan Documents), which are issued in respect of the
Pledged Securities, shall be delivered to and held by Lender under the terms of
this Agreement in the same manner as the Pledged Securities originally pledged
hereunder.
(c) Warrants and Rights. In the event that subscription warrants or
any other rights or options shall be issued in connection with any of the
Pledged Securities (subject to obtaining Lenders prior written consent thereto
as required by the Loan Documents), such warrants, rights, and options shall be
immediately assigned to Lender to be held under the terms of this Agreement in
the same manner as the Pledged Securities originally pledged hereunder.
(d) No Dilution. Pledgor shall not consent to, approve, or permit to
occur any change in the capital structure of the Bank which would result in any
dilution of the percentage of stock ownership represented by the Pledged
Securities as determined on the date hereof.
5. Registration in Nominee Name; Denominations. Lender shall have
the right (in its sole and absolute discretion) to hold the certificates
representing the Pledged Securities in its own name or in the name of the
Pledgor, endorsed or assigned in blank or in favor of Lender. Upon request and
delivery of certificates representing the Pledged Securities to the issuer of
the Pledged Securities, Lender may have such Pledged Securities registered in
the name of Lender or any nominee or nominees of Lender. Lender shall at all
times have the right to exchange the certificates representing Pledged
Securities for certificates of smaller or larger denominations for any purpose
consistent with this Agreement.
6. Dividends. Notwithstanding anything in this Agreement to the
contrary, so long as no Event of Default has occurred that is continuing, all
cash dividends paid in respect of the Pledged Securities, if any, shall be the
property of Pledgor. If any Event of Default occurs, all such cash dividends
shall thereafter be paid to Lender and applied in reduction of the Obligations,
in such order of priority as Lender shall determine in its sole discretion.
7. Voting Rights.
(a) Provided that no Event of Default shall have occurred and be continuing
hereunder or under any other Loan Documents:
(i) Pledgor shall be entitled to exercise or refrain from exercising the
voting rights attributable to the Pledged Securities or any part thereof for
any purpose not inconsistent with the terms and conditions of this Agreement
and the other Loan Documents, and
(ii) Lender will execute and deliver any proxies or other instruments
reasonably requested by Pledgor for the purpose of enabling Pledgor to exercise
the voting rights that it is entitled to exercise pursuant to subparagraph 7(a)(i).
(b) Upon the occurrence and during the continuance of an Event of Default
hereunder or under any other Loan Documents, all rights of Pledgor to exercise
or refrain from exercising the voting rights attributable to the Pledged
Securities or any part thereof pursuant to subparagraph 7(a)(i) or
otherwise shall cease, and Lender and its successors and assigns shall have the
sole right to exercise or refrain from exercising such rights after obtaining
all necessary regulatory approvals. In furtherance of the foregoing, Pledgor
hereby makes, constitutes and appoints Lender and its officers as the proxies
and attorneys-in-fact of and for Pledgor, with full power to exercise or to
refrain from exercising any and all voting rights attributable to the Pledged
Securities upon the occurrence and during the continuance of any such Event of
Default. The foregoing appointment and power, being coupled with an interest,
are irrevocable until the Obligations (other than contingent indemnification
Obligations for claims which have not been asserted) have been fully and
irreversibly satisfied.
8. Remedies Upon Default.
(a) Upon the occurrence of any Event of Default, Lender shall have all of
the rights, powers, privileges, options and remedies of a secured party under
the Uniform Commercial Code as in effect in the State of Tennessee, and without
limiting the foregoing, Lender may (1) collect any and all amounts payable
in respect of the Pledged Securities and exercise any and all rights, powers,
privileges, options and remedies of the holder and owner thereof, and
(2) sell, transfer or negotiate the Pledged Securities, or any part
thereof, at public or private sale, for cash, upon credit or for future
delivery as Lender shall deem appropriate, including without limitation, at
Lenders option, the purchase of all or any part of the Pledged Securities at
any public sale by Lender. Upon consummation of any sale, Lender shall have
the right to assign, transfer and deliver to the purchaser or purchasers
thereof the Pledged Securities so sold. Each such purchaser at any such sale
shall hold the property sold absolutely, free from any claim or right on the
part of Pledgor, and Pledgor hereby waives (to the extent permitted by law) all
rights of redemption, stay or appraisal that Pledgor now has or may at any time
in the future have under any rule of law or statute now existing or hereinafter
enacted. Pledgor hereby expressly waives notice to redeem and notice of the
time, place and manner of such sale, except to the extent notice of sale is be
required by law.
(b) Pledgor recognizes that, by reason of certain prohibitions contained in
the Securities Act of 1933, as amended (the Securities Act),
applicable state securities laws, and other applicable laws, rules and
regulations (including without limitation the rules and regulations of any Bank
Regulatory Authority), Lender may be compelled, with respect to any sale of all
or any part of the Pledged Securities, to limit purchasers to those who agree,
among other things, to acquire such Pledged Securities for their own account,
for investment and not with a view to the distribution or resale thereof.
Pledgor acknowledges that any such private sales may be at prices and on terms
less favorable than those obtainable through a public sale without such
restrictions (including, without limitation, a public offering made pursuant to
a registration statement under the Securities Act), and, notwithstanding such
circumstances, Pledgor agrees that any such private sale shall be deemed to
have been made in a commercially reasonable manner and that Lender shall have
no obligation to engage in public sales and no obligation to delay the sale of
any of the Pledged Securities for the period of time necessary to permit the
issuer thereof to register such sale under the Securities Act or under
applicable state securities laws, even if Pledgor would agree to do so.
(c) If Lender determines to exercise its right to sell any or all of the
Pledged Securities, upon written request, Pledgor from time to time shall, and
shall cause each issuer of the Pledged Securities to be sold hereunder to,
furnish to Lender all such information as Lender may request in order to
determine the number of shares and other instruments included in the Pledged
Securities that may be sold by Lender as exempt transactions under the
Securities Act and the rules of the Securities and Exchange Commission
thereunder, as the same are from time to time in effect.
9. Application of Proceeds. The proceeds of the sale of Pledged
Securities sold pursuant to Section 8, and the proceeds of the
exercise of any of Lenders other remedies hereunder, shall be applied by
Lender as follows:
First:
To the payment of all out-of-pocket costs and expenses incurred by Lender in
connection with any such sale, including, but not limited to, all court costs
and the reasonable fees and expenses of counsel for Lender in connection
therewith, and
Second:
To the payment in full of the Obligations, in such order of priority as Lender
shall determine, in its sole discretion, and
Third:
The excess, if any, shall be paid to Pledgor or any other person lawfully
thereunto entitled.
10. Reimbursement of Lender. Pledgor agrees to reimburse Lender,
upon demand, for all out-of-pocket expenses, including without limitation
reasonable attorneys fees, incurred by it in connection with the
administration and enforcement of this Agreement, and agrees to indemnify
Lender and hold it harmless from and against any and all liability incurred by
it hereunder or in connection herewith, unless such liability shall be due to
willful misconduct or gross negligence on the part of Lender.
11. No Waiver. No failure on the part of Lender to exercise, and no
delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy by Lender preclude any other or further exercise thereof or the
exercise of any other right, power or remedy. All remedies are cumulative and
are not exclusive of any other remedies provided by law.
12. Limitation of Liability. The powers conferred on Lender
hereunder are solely to protect its interests in the Pledged Securities, and
shall not impose any duty upon Lender to exercise any such powers. Except for
the exercise of reasonable care in the custody and preservation of the
certificates or other instruments representing Pledged Securities in its
possession and the accounting for monies actually received by it hereunder,
Lender shall have no duty as to any Pledged Securities. Without limiting the
generality of the foregoing, Lender shall have no responsibility for
(a) ascertaining or taking action with respect to calls, conversions,
exchanges, maturities, tenders or other matters relating to any Pledged
Securities, regardless of whether Lender has or is deemed to have knowledge of
such matters, (b) taking any necessary steps (other than steps in
accordance with the standard of care set forth above to maintain possession of
the certificates or other instruments representing Pledged Securities in its
possession) to preserve rights against any parties with respect to the Pledged
Securities, (c) taking any necessary steps to collect or realize upon any
of the Obligations or any of the Pledged Securities, or (d) initiating any
action to protect the Pledged Securities against the possibility of a decline
in market value. Lender shall be deemed to have exercised reasonable care in
the custody and preservation of the certificates or other instruments
representing Pledged Securities in its possession if such items are accorded
treatment substantially equal to that which Lender accords its own property
consisting of negotiable securities.
13. Counterparts. This Agreement may be executed in multiple
counterparts or copies, each of which shall be deemed an original hereof for
all purposes. One or more counterparts or copies of this Agreement may be
executed by one or more of the parties hereto, and some different counterparts
or copies executed by one or more of the other parties. Each counterpart or
copy hereof executed by any party hereto shall be binding upon the party
executing same even though other parties may execute one or more different
counterparts or copies, and all counterparts or copies hereof so executed shall
constitute but one and the same agreement. Each party hereto, by execution of
one or more counterparts or copies hereof, expressly authorizes and directs any
other party hereto to detach the signature pages and any corresponding
acknowledgment, attestation, witness or similar pages relating thereto from any
such counterpart or copy hereof executed by the authorizing party and affix
same to one or more other identical counterparts or copies hereof so that upon
execution of multiple counterparts or copies hereof by all parties hereto,
there shall be one or more counterparts or copies hereof to which is(are)
attached signature pages containing signatures of all parties hereto and any
corresponding acknowledgment, attestation, witness or similar pages relating
thereto.
14. Binding Agreement. This Agreement and the terms, covenants and
conditions hereof shall be binding upon and inure to the benefit of the parties
hereto and to all holders of indebtedness secured hereby and their respective
successors and assigns.
15. Further Assurances. Pledgor agrees to do such further acts and
things, and to execute and deliver such additional conveyances, assignments,
agreements and instruments (including but not limited to the execution and
delivery and filing of UCC financing statements with respect to the security
interests of this Agreement), as Lender at any time may reasonably request in
connection with the administration and enforcement of this Agreement or
relative to the Pledged Securities or any part thereof or in order to assure
and confirm unto Lender its rights and remedies hereunder.
16. Severability. If any provision of this Agreement or the
application thereof to any person or circumstance shall be invalid or
unenforceable to any extent, the remainder of this Agreement or the application
of such provision to other persons or circumstances shall not be affected thereby
and shall be enforceable to the greatest extent permitted by law.
17. Miscellaneous.
(a) This Agreement shall be governed by and construed according to the laws
of the State of Tennessee, without reference to the conflicts or choice of law
principles thereof.
(b) Neither this Agreement nor any provision hereof may be altered, amended,
modified or changed, nor may any of the Pledged Securities be released, except
by an instrument in writing signed by the party against whom enforcement of
such alteration, amendment, modification, change or release is sought.
(c) The headings in this Agreement are for convenience of reference only,
and shall not be construed as amplifying, limiting or otherwise affecting the
substantive provisions hereof.
(d) Any reference herein to any instrument, document or agreement, by
whatever terminology used, shall be deemed to include any and all past, present
or future amendments, restatements, modifications, supplements, extensions,
renewals or replacements thereof, as the context may require.
(e) All references herein to the preamble, the recitals or sections,
paragraphs, subparagraphs, schedules or exhibits are to the preamble, recitals,
sections, paragraphs, subparagraphs, schedules and exhibits of or to this
Agreement unless otherwise specified. The words hereof, herein and
hereunder and words of similar import, when used in this Agreement, refer to
this Agreement as a whole and not to any particular provision of this
Agreement.
(f) When used herein, (1) the singular shall include the plural, and vice
versa, and the use of the masculine, feminine or neuter gender shall include
all other genders, as appropriate, (2) include, includes and
including shall be deemed to be followed by without limitation regardless
of whether such words or words of like import in fact follow same, and
(3) unless the context clearly indicates otherwise, the disjunctive or
shall include the conjunctive and.
(g) Any reference herein to any law shall be a reference to such law as in
effect from time to time and shall include any rules and regulations
promulgated or published thereunder and published interpretations thereof.
IN WITNESS
WHEREOF, Pledgor and Lender have executed this Agreement, or have caused
this Agreement to be duly executed by a duly authorized officer, all as of the
day first above written.
PLEDGOR:
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FIRST CITIZENS
BANCSHARES, INC.
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By: /s/
Jeff Agee
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Title: Chief
Executive Officer
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LENDER:
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FIRST TENNESSEE BANK NATIONAL
ASSOCIATION
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By: /s/ Patrick
Wredling
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Title: V.P.
and Relationship Mgr.
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SCHEDULE A
Pledged Securities
Issuer
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No. of Shares
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Class
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Certificate
No(s).
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First Citizens National Bank
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102,000
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Common
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5505
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EXHIBIT 10.3
PROMISSORY NOTE (FIXED
RATE)
$6,000,000.00 |
Memphis,
Tennessee
October
1, 2014
|
FOR VALUE RECEIVED, the undersigned, FIRST CITIZENS BANCSHARES, INC., a Tennessee corporation ("Maker"), promises to pay to the order of FIRST TENNESSEE LENDER NATIONAL ASSOCIATION, a national banking association having its principal place of business in Memphis, Tennessee ("Lender"), the principal sum of SIX MILLION DOLLARS ($6,000,000.00), together with interest from date until maturity, upon disbursed and unpaid principal balances, at the rate hereinafter specified, said principal and interest being payable as follows:
the unpaid principal balance hereof shall be payable
in twenty-one (21) consecutive installments of principal and interest,
installment nos. 1 to 20, both inclusive, being in the amount of One
Hundred Eighty Thousand Six Hundred Fifty-Eight and 75/100 Dollars
($180,658.75) each, and installment no. 21 being a balloon payment for the
entire then-unpaid principal balance plus all then-accrued but unpaid interest,
the first of said installments of principal and interest being due and payable
on the fifteenth (15th) day of
December, 2014, and one on the fifteenth (15th) day of each
quarter (i.e., each March 15, June 15, September 15, and December 15)
thereafter until all are fully paid (with the final installment, if not sooner
paid, being due and payable on the 1st day of October, 2019).
This Note is being issued pursuant to
that certain Loan Agreement, dated of even date herewith, between the Maker and
the Lender, as said agreement may be amended or modified (the "Loan
Agreement"). Capitalized terms not otherwise defined herein shall have
the meaning ascribed to such terms in the Loan Agreement.
Interest
shall be charged on the outstanding principal balance from the date advanced
until the full amount of principal due hereunder has been paid at a fixed rate
of 3.76% per annum (the "Contract Rate").
The annual interest rate for this Note is computed on a 365/360 basis; that is, by applying the ratio of the annual interest rate over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding.
In the event that the foregoing provisions
should be construed by a court of competent jurisdiction not to constitute a valid, enforceable designation of a rate of interest or method of determining same, the indebtedness hereby evidenced shall bear interest at the lesser of (a) eighteen percent (18%) per annum or (b) the maximum effective variable contract rate which may be charged by the Lender under applicable law from time to time in effect (the "Maximum Rate).
Notwithstanding the foregoing, upon
the occurrence of an Event of Default (as defined in the Loan Agreement), the Lender, at its option, may charge, and the Maker agrees to pay, interest on disbursed and unpaid principal balances at the default rate (the "Default Rate") per annum equal to the lesser of (a) the Maximum Rate or (b) (i) the Contract Rate plus (ii) four percent (4%).
Any unpaid amounts that were not paid
when due hereunder (whether by acceleration or otherwise) shall bear interest
after maturity at the Default Rate.
For any payment which is not made within ten (10) days of the due date for such payment, the Maker shall pay a late fee. The late fee shall equal five percent (5%) of the unpaid portion of the past-due payment.
This Note is secured by a Pledge and
Security Agreement, and may now or hereafter be secured by other mortgages, trust deeds, assignments, security agreements, or other instruments of pledge or hypothecation.
All installments of interest, and the principal hereof, are payable at the office of First Tennessee Bank National Association, 165 Madison Avenue, Memphis, Tennessee 38103, or at such other place as the holder may designate in writing, in lawful money of the United States of America, which shall be legal tender in payment of all debts and dues, public and private, at the time of payment.
If the Maker shall fail to make payment of any installment of principal or interest, within ten (10) days of its due date, or upon the occurrence of any other Event of Default under the Loan Agreement or any of the other Loan Documents (after giving effect to the cure provisions contained in Section 7.2), then and in any such event, the entire unpaid principal balance of the indebtedness evidenced hereby, together with all interest then accrued, shall, at the absolute option of the holder hereof, at once become due and payable, without demand or notice, the same being expressly waived and Lender may exercise any right, power or remedy permitted by law or equity, or as set forth herein or in the Loan Agreement or any other Loan Document.
If this Note is placed in the hands
of an attorney for collection, by suit or otherwise, or to protect the security
for its payment, or to enforce its collection, or to represent the rights of
the Lender in connection with any loan documentation executed in connection
herewith, or to defend successfully against any claim, cause of action or suit
brought by the Maker against the Lender, the Maker shall pay on demand all
reasonable, out-of-pocket costs of collection and litigation (including court
costs), together with a reasonable attorney's fee. These
include, but are not limited to, the Lender's reasonable attorney's fees and
legal expenses, whether or not there is a lawsuit, including attorney's fees
for bankruptcy proceedings (including efforts to modify or vacate any automatic
stay or injunction) and appeals.
The
Lender and the Maker hereby waive the right to any jury trial in any action,
proceeding, or counterclaim brought by either Lender or Maker against the
other.
To the extent permitted by applicable
law, the Lender reserves a right of setoff in all the Maker's accounts with the
Lender (whether checking, savings, or some other account). This includes all
accounts the Maker may open in the future. However, this does not include any IRA or Keogh accounts, or any
trust accounts for which setoff would be prohibited by law. Upon the occurrence
of an Event of Default, the Maker authorizes the Lender, to the extent
permitted by applicable law, to charge or setoff all sums owing on the
indebtedness against any and all such accounts, and, at the Lender's option, to
administratively freeze all such accounts to allow the Lender to protect the
Lender's charge and setoff rights provided in this paragraph.
To help the government fight the
funding of terrorism and money laundering activities, Federal law requires all
financial institutions to obtain, verify, and record information that
identifies each business entity that opens an account. What this means to
Maker: When Maker opens an account, the Lender will ask for Federal Tax
Identification Number, physical street address, full legal name of the Maker
and other information that will allow the Lender to identify Maker. The Lender
may also ask Maker to provide copies of certain documents that will aid in
confirming this information.
The Maker and any endorsers or
guarantors hereof waive protest, demand, presentment, and notice of dishonor,
and agree that this Note may be extended, in whole or in part, without limit as
to the number of such extensions or the period or periods thereof, without
notice to them and without affecting their liability thereon. Maker agrees
that borrowers, endorsers, guarantors and sureties may be added or released
without notice to Maker and without affecting Makers liability hereunder. The
liability of Maker shall not be affected by the failure of Lender to perfect or
otherwise obtain or maintain the priority or validity of any security interest
in any collateral. The liability of Maker shall be absolute and unconditional
and without regard to the liability of any other party hereto.
It is the intention of the Lender and
the Maker to comply strictly with applicable usury laws; and, accordingly, in
no event and upon no contingency shall the holder hereof ever be entitled to
receive, collect, or apply as interest any interest, fees, charges or other
payments equivalent to interest, in excess of the maximum effective contract
rate which the Lender may lawfully charge under applicable statutes and laws
from time to time in effect; and in the event that the holder hereof ever
receives, collects, or applies as interest any such excess, such amount which,
but for this provision, would be excessive interest, shall be applied to the
reduction of the principal amount of the indebtedness hereby evidenced; and if
the principal amount of the indebtedness evidenced hereby, all lawful interest
thereon and all lawful fees and charges in connection therewith, are paid in
full, any remaining excess shall forthwith be paid to the Maker, or other party
lawfully entitled thereto. All interest paid or agreed to be paid by the Maker
shall, to the maximum extent permitted under applicable law, be amortized,
prorated, allocated and spread throughout the full period until payment in full
of the principal so that the interest hereon for such full period shall not
exceed the maximum amount permitted by applicable law. Any provision hereof,
or of any other agreement between the holder hereof and the Maker, that
operates to bind, obligate, or compel the Maker to pay interest in excess of
such maximum effective contract rate shall be construed to require the payment
of the Maximum Rate only. The provisions of this paragraph shall be given
precedence over any other provision contained herein or in any other agreement
between the holder hereof and the Maker that is in conflict with the provisions
of this paragraph.
This Note shall be governed and
construed according to the statutes and laws of the State of Tennessee from
time to time in effect, except to the extent that Section 85 of
Title 12 of the United States Code (or other applicable federal statute)
may permit the charging of a higher rate of interest than applicable state law,
in which event such applicable federal statute, as amended and supplemented
from time to time shall govern and control the maximum rate of interest
permitted to be charged hereunder; it being intended that, as to the maximum
rate of interest which may be charged, received, and collected hereunder, those
applicable statutes and laws, whether state or federal, from time to time in
effect, which permit the charging of a higher rate of interest, shall govern
and control; provided, always, however, that in no event and under no
circumstances shall the Maker be liable for the payment of interest in excess
of the maximum rate permitted by such applicable law, from time to time in
effect.
Upon three (3) business days' prior written
notice to Bank, Maker shall have the right to prepay the indebtedness evidenced
hereby in whole or in part by paying the principal amount being prepaid (the
"Prepayment Amount") plus accrued interest, plus the Yield
Maintenance Amount (hereinafter defined), if any. The "Yield Maintenance
Amount" shall be equal to one hundred percent (100%) of the present value
(discounted based on the Current Interest Rate Swap Rate (hereinafter defined))
of the difference between (i) the total amount of interest (based on the
Original Interest Rate Swap Rate (hereinafter defined)) which would have
accrued on the Prepayment Amount had such event not occurred, and (ii) the
amount of interest (based on the Current Interest Rate Swap Rate) which would
have accrued on the Prepayment Amount had such event not occurred. The
"Original Interest Rate Swap Rate" is the mid-market quotation for
the maturity date of the Note as quoted by Bloomberg, L.P. on the date that the
loan advance is made by the Bank under the Note. The "Current Interest
Rate Swap Rate" is the mid-market quotation for the same maturity date as
the original maturity of the Note as quoted by Bloomberg, L.P. on the date of
prepayment of the Prepayment Amount.
Lender is hereby authorized to disclose any
financial or other information about Maker to any governmental regulatory body
or agency having jurisdiction over Lender and to any present, future or
prospective participant or successor in interest in any loan or other financial
accommodation made by Lender to Maker. The information provided may include,
without limitation, amounts, terms, balances, payment history, return item
history and any financial or other information about Maker. However, subject
to applicable law, Lender shall use reasonable efforts to protect the
confidentiality of the terms and conditions of the Loan and information about
Maker in all other respects.
The invalidity or unenforceability of any one
or more provisions of this Note shall not render any other provision invalid or
unenforceable. The parties hereto shall negotiate in good faith to replace
such invalid or unenforceable provision with a valid and enforceable provision
to effect the original intent of the parties in a mutually acceptable manner;
provided, however, that if the parties cannot agree on such provision after
negotiating in good faith within a reasonable period of time under the
circumstances, in lieu of any invalid or unenforceable provision, there shall
be added automatically a valid and enforceable provision as similar in terms to
such invalid or unenforceable provision as may be possible.
The covenants, conditions, waivers, releases
and agreements contained in this Note shall bind, and the benefits thereof
shall inure to, the parties hereto and their respective heirs, executors,
administrators, successors and assigns; provided, however, that this Note
cannot be assigned by Maker without the prior written consent of Lender, and
any such assignment or attempted assignment by Maker without consent shall be
void and of no effect with respect to Lender.
Subject to Section 8.25 of the Loan Agreement,
Lender may from time to time sell or assign, in whole or in part, or grant
participations in, the Loan, this Note and/or the obligations evidenced
thereby. The holder of any such sale, assignment or participation, if the
applicable agreement between Lender and such holder so provides, shall be: (a)
entitled to all of the rights, obligations and benefits of Lender; and (b)
deemed to hold and may exercise the rights of setoff or bankers lien with
respect to any and all obligations of such holder to Maker, in each case as
fully as though Maker were directly indebted to such holder.
Maker irrevocably appoints each and every
member and/or officer of Maker as its attorneys upon whom may be served, by
certified mail at the address set forth in the Loan Agreement, or such other
address as may be directed by Maker, in writing, any notice, process or
pleading in any action or proceeding against it arising out of or in connection
with this Note or any other Loan Document; and Maker hereby consents that any
action or proceeding against it be commenced and maintained in any state or
federal court sitting in Memphis, Shelby County, Tennessee, by service of process
on any such owner, partner and/or officer; and Maker agrees that such courts of
the State shall have jurisdiction with respect to the subject matter hereof and
the person of Maker and all collateral securing the obligations of Maker.
Maker agrees not to assert any defense to any action or proceeding initiated by
Lender in any such court based upon improper venue or inconvenient forum.
|
FIRST CITIZENS BANCSHARES, INC.
By: /s/ Jeff Agee
Title: Chief Executive Officer
|
|
MAKER |
EXHIBIT 10.4
PROMISSORY NOTE (FLOATING
RATE)
$6,000,000.00 |
Memphis,
Tennessee
October
1, 2014
|
FOR VALUE RECEIVED, the undersigned, FIRST CITIZENS BANCSHARES, INC., a Tennessee corporation ("Maker"), promises to pay to the order of FIRST TENNESSEE LENDER NATIONAL ASSOCIATION, a national banking association having its principal place of business in Memphis, Tennessee ("Lender"), the principal sum of SIX MILLION DOLLARS ($6,000,000.00), together with interest from date until maturity, upon disbursed and unpaid principal balances, at the rate hereinafter specified, said principal and interest being payable as follows:
the unpaid principal balance hereof shall be payable
in twenty-one (21) consecutive principal installments, installment nos. 1
to 20, both inclusive, being in the amount of One Hundred Fifty Thousand
Dollars ($150,000.00) each, and installment no. 21 being a balloon payment
for the entire then-unpaid principal balance, the first of said installments of
principal being due and payable on the fifteenth (15th) day of December, 2014, and one on the
fifteenth (15th) day of each calendar quarter (i.e., each March 15, June
15, September 15, and December 15) thereafter (each a Payment Date) until all
are fully paid (with the final installment, if not sooner paid, being due and
payable on the 1st day of October, 2019, which shall also be deemed to be
a Payment Date); and interest on the indebtedness hereby evidenced shall be
paid concurrently with the payment of such principal installments.
This Note is being issued pursuant to
that certain Loan Agreement, dated of even date herewith, between the Maker and
the Lender, as said agreement may be amended or modified (the "Loan
Agreement"). Capitalized terms not otherwise defined herein shall have
the meaning ascribed to such terms in the Loan Agreement.
The interest rate on this Note is subject to change from time to time based on
changes in an independent index (the "Index") which is the LIBOR Rate (as
hereinafter defined) adjusted and determined, without notice to Maker, as of the
date of this Note and on each Payment Date hereafter (the "Interest Rate Change
Date"). The "LIBOR Rate" shall mean the London Interbank Offered Rate of
interest for an interest period of three (3) months, which appears on Bloomberg
page BBAM under the column heading "USD"(rounded upward to the next whole
multiple of one sixteenth of one percent (1/16 of 1%)) (the "Index") on the day
that is two (2) London Business Days preceding each Interest Rate Change Date
(the "Reset Date"). If the LIBOR Rate as defined above is not available or
is not published for any Reset Date, then Bank shall, in its reasonable
discretion, choose a substitute source for the LIBOR Rate, which LIBOR Rate plus
the Margin (hereinafter defined) shall become effective on the next Interest
Rate Change Date. "London Business Day" shall mean any day on which
commercial banks in London, England are open for general business. The
Index is not necessarily the lowest rate charged by
Bank on its loans. If the Index becomes unavailable during the term of this loan, Bank may designate a substitute index in its reasonable discretion after notice to Maker. Bank will tell Maker the current Index rate upon Maker's request. The interest rate change will not occur more often than each third (3rd) month. Maker understands that Bank may make loans based on other rates as well. The Index is currently 0.2326% per annum. The interest rate to be applied to the unpaid principal balance of this Note (the Contract Rate) will be the Index (plus a margin of two percent (2%) (the "Margin"), which results in an initial interest rate of 2.2326%. NOTICE: Under no circumstances will the interest rate on the Note be more than the maximum rate allowed by applicable law.
The annual interest rate for this Note is computed on a 365/360 basis; that is, by applying the ratio of the annual interest rate over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding.
In the event that the foregoing provisions
should be construed by a court of competent jurisdiction not to constitute a valid, enforceable designation of a rate of interest or method of determining same, the indebtedness hereby evidenced shall bear interest at the lesser of (a) eighteen percent (18%) per annum or (b) the maximum effective variable contract rate which may be charged by the Lender under applicable law from time to time in effect (the Maximum Rate).
Notwithstanding the foregoing, upon
the occurrence of an Event of Default (as defined in the Loan Agreement), the Lender, at its option, may charge, and the Maker agrees to pay, interest on disbursed and unpaid principal balances at the default rate (the "Default Rate") per annum equal to the lesser of (a) the Maximum Rate or (b) (i) the Contract Rate plus (ii) four percent (4%).
Any unpaid amounts that were not paid
when due hereunder (whether by acceleration or otherwise) shall bear interest
after maturity at the Default Rate.
For any payment which is not made within ten (10) days of the due date for such payment, the Maker shall pay a late fee. The late fee shall equal five percent (5%) of the unpaid portion of the past-due payment.
This Note is secured by a Pledge and
Security Agreement, and may now or hereafter be secured by other mortgages, trust deeds, assignments, security agreements, or other instruments of pledge or hypothecation.
All installments of interest, and the principal hereof, are payable at the office of First Tennessee Bank National Association, 165 Madison Avenue, Memphis, Tennessee 38103, or at such other place as the holder may designate in writing, in lawful money of the United States of America, which shall be legal tender in payment of all debts and dues, public and private, at the time of payment.
If the Maker shall fail to make payment of any installment of principal or interest, within ten (10) days of its due date, or upon the occurrence of any other Event of Default under the Loan Agreement or any of the other Loan Documents (after giving effect to the cure provisions contained in Section 7.2), then and in any such event, the entire unpaid principal balance of the indebtedness evidenced hereby, together with all interest then accrued, shall, at the absolute option of the holder hereof, at once become due and payable, without demand or notice, the same being expressly waived and Lender may exercise any right, power or remedy permitted by law or equity, or as set forth herein or in the Loan Agreement or any other Loan Document.
If this Note is placed in the hands
of an attorney for collection, by suit or otherwise, or to protect the security
for its payment, or to enforce its collection, or to represent the rights of
the Lender in connection with any loan documentation executed in connection
herewith, or to defend successfully against any claim, cause of action or suit
brought by the Maker against the Lender, the Maker shall pay on demand all
reasonable out-of-pocket costs of collection and litigation (including court
costs), together with a reasonable attorney's fee. These
include, but are not limited to, the Lender's reasonable attorney's fees and
legal expenses, whether or not there is a lawsuit, including attorney's fees
for bankruptcy proceedings (including efforts to modify or vacate any automatic
stay or injunction) and appeals.
The
Lender and the Maker hereby waive the right to any jury trial in any action,
proceeding, or counterclaim brought by either Lender or Maker against the
other.
To the extent permitted by applicable
law, the Lender reserves a right of setoff in all the Maker's accounts with the
Lender (whether checking, savings, or some other account). This includes all
accounts the Maker may open in the future. However, this does not include any IRA or Keogh accounts, or any
trust accounts for which setoff would be prohibited by law. Upon the
occurrence of an Event of Default, the Maker authorizes the Lender, to the
extent permitted by applicable law, to charge or setoff all sums owing on the
indebtedness against any and all such accounts, and, at the Lender's option, to
administratively freeze all such accounts to allow the Lender to protect the
Lender's charge and setoff rights provided in this paragraph.
To help the government fight the
funding of terrorism and money laundering activities, Federal law requires all
financial institutions to obtain, verify, and record information that
identifies each business entity that opens an account. What this means to
Maker: When Maker opens an account, the Lender will ask for Federal Tax
Identification Number, physical street address, full legal name of the Maker
and other information that will allow the Lender to identify Maker. The Lender
may also ask Maker to provide copies of certain documents that will aid in confirming
this information.
The Maker and any endorsers or
guarantors hereof waive protest, demand, presentment, and notice of dishonor,
and agree that this Note may be extended, in whole or in part, without limit as
to the number of such extensions or the period or periods thereof, without
notice to them and without affecting their liability thereon. Maker agrees
that borrowers, endorsers, guarantors and sureties may be added or released
without notice to Maker and without affecting Makers liability hereunder. The
liability of Maker shall not be affected by the failure of Lender to perfect or
otherwise obtain or maintain the priority or validity of any security interest
in any collateral. The liability of Maker shall be absolute and unconditional
and without regard to the liability of any other party hereto.
It is the intention of the Lender and
the Maker to comply strictly with applicable usury laws; and, accordingly, in
no event and upon no contingency shall the holder hereof ever be entitled to
receive, collect, or apply as interest any interest, fees, charges or other
payments equivalent to interest, in excess of the maximum effective contract
rate which the Lender may lawfully charge under applicable statutes and laws
from time to time in effect; and in the event that the holder hereof ever
receives, collects, or applies as interest any such excess, such amount which,
but for this provision, would be excessive interest, shall be applied to the
reduction of the principal amount of the indebtedness hereby evidenced; and if
the principal amount of the indebtedness evidenced hereby, all lawful interest
thereon and all lawful fees and charges in connection therewith, are paid in
full, any remaining excess shall forthwith be paid to the Maker, or other party
lawfully entitled thereto. All interest paid or agreed to be paid by the Maker
shall, to the maximum extent permitted under applicable law, be amortized,
prorated, allocated and spread throughout the full period until payment in full
of the principal so that the interest hereon for such full period shall not
exceed the maximum amount permitted by applicable law. Any provision hereof,
or of any other agreement between the holder hereof and the Maker, that
operates to bind, obligate, or compel the Maker to pay interest in excess of
such maximum effective contract rate shall be construed to require the payment
of the Maximum Rate only. The provisions of this paragraph shall be given
precedence over any other provision contained herein or in any other agreement
between the holder hereof and the Maker that is in conflict with the provisions
of this paragraph.
This Note shall be governed and
construed according to the statutes and laws of the State of Tennessee from
time to time in effect, except to the extent that Section 85 of
Title 12 of the United States Code (or other applicable federal statute)
may permit the charging of a higher rate of interest than applicable state law,
in which event such applicable federal statute, as amended and supplemented from
time to time shall govern and control the maximum rate of interest permitted to
be charged hereunder; it being intended that, as to the maximum rate of
interest which may be charged, received, and collected hereunder, those
applicable statutes and laws, whether state or federal, from time to time in
effect, which permit the charging of a higher rate of interest, shall govern
and control; provided, always, however, that in no event and under no
circumstances shall the Maker be liable for the payment of interest in excess
of the maximum rate permitted by such applicable law, from time to time in
effect.
The principal amount of this Note may be
prepaid in whole or in part at any time, and from time to time without penalty
or premium, provided, however, that if a Swap Contract has been entered into by
Maker in connection with this Note, any full or partial prepayments of
principal amounts due under this Note may require termination or adjustment of
the Swap Contract and may result in a payment due from Maker per the terms and
conditions of the Swap Contract.
Lender is hereby authorized to disclose any
financial or other information about Maker to any governmental regulatory body
or agency having jurisdiction over Lender and to any present, future or
prospective participant or successor in interest in any loan or other financial
accommodation made by Lender to Maker. The information provided may include,
without limitation, amounts, terms, balances, payment history, return item
history and any financial or other information about Maker. However, subject
to applicable law, Lender shall use reasonable efforts to protect the
confidentiality of the terms and conditions of the Loan and information about
Maker in all other respects.
The invalidity or unenforceability of any one or
more provisions of this Note shall not render any other provision invalid or
unenforceable. The parties hereto shall negotiate in good faith to replace
such invalid or unenforceable provision with a valid and enforceable provision
to effect the original intent of the parties in a mutually acceptable manner;
provided, however, that if the parties cannot agree on such provision after
negotiating in good faith within a reasonable period of time under the
circumstances, in lieu of any invalid or unenforceable provision, there shall
be added automatically a valid and enforceable provision as similar in terms to
such invalid or unenforceable provision as may be possible.
The covenants, conditions, waivers, releases
and agreements contained in this Note shall bind, and the benefits thereof
shall inure to, the parties hereto and their respective heirs, executors,
administrators, successors and assigns; provided, however, that this Note
cannot be assigned by Maker without the prior written consent of Lender, and any
such assignment or attempted assignment by Maker without consent shall be void
and of no effect with respect to Lender.
Subject to Section 8.25 of the Loan Agreement,
Lender may from time to time sell or assign, in whole or in part, or grant
participations in, the Loan, this Note and/or the obligations evidenced
thereby. The holder of any such sale, assignment or participation, if the
applicable agreement between Lender and such holder so provides, shall be: (a)
entitled to all of the rights, obligations and benefits of Lender; and (b)
deemed to hold and may exercise the rights of setoff or bankers lien with
respect to any and all obligations of such holder to Maker, in each case as
fully as though Maker were directly indebted to such holder.
Maker irrevocably appoints each and every
member and/or officer of Maker as its attorneys upon whom may be served, by
certified mail at the address set forth in the Loan Agreement, or such other
address as may be directed by Maker, in writing, any notice, process or
pleading in any action or proceeding against it arising out of or in connection
with this Note or any other Loan Document; and Maker hereby consents that any
action or proceeding against it be commenced and maintained in any state or
federal court sitting in Memphis, Shelby County, Tennessee, by service of
process on any such owner, partner and/or officer; and Maker agrees that such
courts of the State shall have jurisdiction with respect to the subject matter
hereof and the person of Maker and all collateral securing the obligations of
Maker. Maker agrees not to assert any defense to any action or proceeding
initiated by Lender in any such court based upon improper venue or inconvenient
forum.
|
FIRST CITIZENS BANCSHARES, INC.
By: /s/ Jeff Agee
Title: Chief Executive Officer
|
|
MAKER |
EXHIBIT 99.1
![](fclogo.jpg)
FOR IMMEDIATE RELEASE
First Citizens Bancshares, Inc. Completes
Merger With Southern Heritage Bancshares, Inc.
Dyersburg, Tennessee October 1, 2014 Today First
Citizens Bancshares, Inc. announced the completion of its acquisition of Southern
Heritage Bancshares, Inc., which was merged with and into First Citizens
Bancshares, Inc. The merger resulted in Southern Heritage Bank, a community
bank based in Cleveland, Tennessee, becoming a wholly owned subsidiary of First
Citizens Bancshares, Inc.
With the merger, First Citizens extends its footprint statewide
to include offices in Bradley County, Tennessee and solidifies its position as
the 7th largest Tennessee-based community bank. The combined
organization has approximately $1.5 billion in assets, $1.2 billion
in deposits, 349 associates and 24 branches across 10 Tennessee
counties.
Our bank just celebrated our 125th anniversary
and we are excited about our future, partnered with a strong bank and new
teammates who match our culture and desire for excellence, said Jeff Agee,
First Citizens CEO. Already being well matched in terms of values, financial
performance and strategic goals establishes a solid foundation for success for
our teammates, customers and shareholders.
J. Lee Stewart, Southern Heritages President and Chief
Executive Officer immediately prior to the merger, has joined First Citizens
Board of Directors, expanding the total number of directors to 19. To combine
the success of Southern Heritage Bank in East Tennessee with the solid market
share and highly ranked performance of First Citizens in West and Middle
Tennessee is a strategic move that I believe will greatly enhance shareholder
value, said Mr. Stewart. Our teammates are excited to be a part of First Citizens.
First Citizens was advised by Olsen Palmer LLC and the law
firm of Waller Lansden Dortch & Davis, LLP. Southern Heritage was advised
by FIG Partners, LLC and the law firm of Baker, Donelson, Bearman, Caldwell
& Berkowitz, PC.
About First Citizens
Originally founded in 1889, with $1.2 billion in total assets
and 21 branches throughout west and middle Tennessee, First Citizens is the 7th
largest Tennessee-based banking institution and is the 16th largest
deposit holder in the Volunteer state. For the second year in a row, Seifried
& Brew, a national banking economic and consulting group, included First
Citizens National Bank in the Top 15th percentile of community banks, based on institutions
with assets between $100 million and $5 billion. In November 2013, First
Citizens National Bank was recognized by American Banker magazine as the
6th Best Bank to Work For in the U.S. in the category of banks with assets
less than $3 billion. For more information, visit First Citizens website at
www.firstcnb.com.
Forward-Looking Statements
This press release contains
certain forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements include, but are not limited to,
statements about the financial and other benefits and other effects of the
merger, the extension of First Citizens footprint, the increase in First
Citizens market share, the size of the combined organization and enhancement
of shareholder value. Forward-looking statements can be identified by the use
of the words "anticipate," "believe," "expect,"
"intend," "could," "should," "forward,"
"future," "opportunity" and other words of similar meaning.
These forward-looking statements express management's current expectations or
forecasts of future events and, by their nature, are subject to risks and
uncertainties and there are a number of factors that could cause actual results
to differ materially from those in such statements. Factors that might cause
such a difference include, but are not limited to: expected cost savings,
synergies and financial and other benefits from the merger might not be
realized within the expected time frames and costs or difficulties relating to
integration matters might be greater than expected; market, economic,
operational, liquidity, credit and interest rate risks associated with First
Citizens' and Southern Heritage's businesses, competition, government
legislation and policies; ability of First Citizens to execute its business
plans; changes in the economy which could materially impact credit quality
trends and the ability to generate loans and gather deposits; failure or
circumvention of First Citizens internal controls; failure or disruption of First
Citizens information systems; significant changes in accounting, tax or
regulatory practices or requirements; new legal obligations or liabilities or
unfavorable resolutions of litigations and other matters discussed in this
press release. These forward-looking statements are made only as of the date of
this press release, and First Citizens undertakes no obligation to release
revisions to these forward-looking statements to reflect events or conditions
after the date of this press release.
Source: First Citizens Bancshares, Inc.
First Citizens Bancshares (CE) (USOTC:FIZN)
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