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EXHIBIT 10.7
TERM LOAN AGREEMENT
THIS TERM LOAN AGREEMENT ("Agreement") is made and entered into as of the 21ST
day of August, 1997, by and between TEAM FINANCIAL, INC., f/k/a TeamBanc, Inc.,
a Kansas corporation ("Company") and COMMERCE BANK, N.A., a national banking
association ("Bank");
In consideration of the mutual benefits accruing to each of the parties, the
receipt and sufficiency of which is hereby acknowledged, and in further
consideration of the mutual performance of this Agreement, the parties hereto
agree as follows:
ARTICLE I
Definitions
1.01. Base Rate. The per annum variable rate of interest equal to one
percent (1%.) less than the Prime Rate (hereinafter defined), which when used to
compute the rate of interest hereunder shall change as of the date of any change
in said Prime Rate; no representation is made that the Base Rate is the best,
lowest or favored rate of interest.
1.02. Code. The Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder. It is understood that any reference to the
Bank's federal income tax means the Bank or any entity that files a consolidated
federal income tax return with Bank.
1.03. Determination of Taxability. The final adoption of legislation or
regulations, or the issuance of a statutory notice of deficiency or a ruling by
the Internal Revenue Service (except for any such notice or ruling which is
being contested by Company in good faith), a final decision of a court of
competent jurisdiction, or a determination by Bank communicated in writing to
Company together with an opinion of nationally recognized counsel approved by
Bank and selected by Company at the request of Bank, to the effect that 5011 of
the interest on the Term Note (hereinafter defined) is not excludible from the
gross income of the holder for federal income tax purposes for any reason
whatsoever.
1.04. Prime Rate. The per annum rate of interest established from time
to time by Bank for its own internal convenience as its "Prime Rate", which when
used to compute the rate of interest hereunder shall change as of the date of
any change in said Prime Rate; no representation is made that the Prime Rate is
the best, lowest or favored rate of interest.
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1.05. Qualifying Opinion of Counsel. A written opinion, in form and
substance satisfactory to the holder of the Term Note (hereinafter defined),
from recognized tax counsel selected by Company and satisfactory to the holder
of the Term Note, to the effect that (i) at least 50% of the payment of interest
on the Term Note is excludible from the Term Note holder's Federal gross income
during any applicable period, or (ii) while the issue is not free from doubt, if
a court were presented with the issue, it should hold that a least 50%. of each
payment of interest on the Term Note is excludible from the Term Note holder's
federal gross income during the applicable period.
1.06. Taxable Rate. The Taxable Rate shall equal the Base Rate.
ARTICLE II
Term Loan
2.01. Amount. Subject to the terms of this Agreement, Bank agrees to
lend to Company the sum of $1,199,000 (the "Term Loan").
2.02. Term Note. On the Closing Date (hereinafter defined) Company will
execute and deliver its promissory note to Bank, in the principal amount of
$1,199,000, and in form and substance acceptable to Bank (the "Term Note").
2.03. Interest. The Term Note will bear interest at a variable per
annum rate equal to eighty-three percent (83%) of the Base Rate. Accrued
interest shall be calculated on the actual number of days outstanding based on a
year consisting of 365 days, and shall be payable quarterly, in arrears,
commencing December 31, 1997, and continuing on the last day of each March,
June, September and December thereafter, until and including the due date of the
Term Note. Interest after or during the continuation of any Event of Default
under Section 7.01, shall be at a rate equal to three percent (3%) in excess of
the Prime Rate.
In the event of a Determination of Taxability with respect to the Term Note, the
rate of interest on the Term Note shall be adjusted to the Taxable Rate
retroactive to the date on which the interest on the Term Note becomes fully
includable in the gross income of the holder of the Term Note for federal income
tax purposes, whether before or after maturity, payment or prepayment of the
Term Note.
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In addition, if at any time (whether before or after maturity, payment or
prepayment of the Term Note), as a result of the enactment of a new federal tax
law, a change in the Code, or any judicial or administrative interpretation
thereof, (a) any payment of interest or principal or any amount in respect of or
measured in whole or in part by reference to the interest on or principal of, or
any amount of interest on indebtedness attributable or deemed to be attributable
directly or indirectly to the funding or carrying of, the Term Note is, in the
opinion of counsel for the holder of the Term Note, subject to or affected by a
preference tax, an excess profits tax or any other federal tax which changes the
basis of taxation of the payments of interest or principal of the Term Note, or
interest on indebtedness attributable or deemed to be attributable directly or
indirectly to the funding or carrying of the Term Note, to any holder of the
Term Note, or affects any method used or calculation involved in determining any
federal tax, or (b) the deductibility or other tax treatment of any amount
attributable or deemed to be attributable, directly or indirectly, to the
funding or carrying of the Term Note is adversely affected, or (c) the failure
of Bank to receive a Qualifying Opinion of Counsel, requested pursuant to
Section 9.02, then, upon written notice to such effect, that any payment or
amount may have become subject to such preference, excess profits or other
federal tax or such deductibility or other tax treatment shall have been
affected, the Company shall pay to the holder of the Term Note so affected in
immediately available funds an amount which, after reduction by the amount of
all taxes attributable to the inclusion of such amount in the gross income of
the holder of the Term Note under the laws of any federal, state or local
governmental or other taxing authority (computed on the basis that federal taxes
are payable by the holder of the Term Note at the highest marginal tax rate
applicable to business corporations, after taking into account deductions
attributable to the imposition of state and local taxes, and that state and
local taxes are payable by the holder of the Term Note at the highest marginal
statutory rates then applicable to business corporations), shall be equal to the
amount of any such preference, excess profits or other federal taxes and any
interest, penalties, and additions to tax which are payable by the holder of the
Term Note as a consequence of such change (computed on the basis that taxes are
payable by the holder of the Term Note at the highest marginal rate applicable
to business corporations), it being the intent and purpose of the parties hereto
that the profit of the holder of the Term Note with respect to the payment of
interest to it on the Term Note shall not be diminished by any such change in
the Code or any administrative or judicial interpretation thereof (whether
through or as a result of direct or indirect federal
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taxation of a greater percentage of the interest on the Term Note, the
disallowance of a deduction or otherwise).
The percentage of the Base Rate shall be subject to adjustment with each
decrease in the current top marginal federal corporate income tax rate so that
the applicable percentage of Prime Rate based rate resulting therefrom shall be
equal to:
2,106 (1-TR)
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(2-TR)
where "TR" refers to the top marginal federal corporation income tax rate then
in effect. The initial applicable percentage shall be based on a 35% tax rate
applicable to calendar year taxpayers during 1996, so the initial applicable
percentage shall be 83%. Any such change shall be effective as of the effective
date of any such decrease in the top marginal federal corporate income tax rate
then in effect.
No such adjustment under this Section shall cause the rate to be greater than
the Taxable Rate.
2.04. Repayment. The principal of the Term Note shall be payable in
annual installments of $150,000 commencing December 31, 1997, and continuing on
the last day of each December thereafter, until December 31, 2002, when the
outstanding principal balance, together with accrued interest, shall be due and
payable in full.
2.05. Prepayment. Company may prepay the Term Note in full or in part
at any time without the payment of a prepayment fee. Any partial prepayments
shall be applied to the annual principal payments in the inverse order of their
maturities.
2.06. Purpose. Proceeds of the Term Loan shall be used to fund a loan
by Company to the trustee (the "Trustee") of the TeamBanc, Inc. Employees Stock
Ownership Plan (the "Trust"), as established pursuant to the TeamBanc, Inc.
Employees Stock Ownership Plan dated as of November 6, 1992, as amended from
time to time (the "Plan"), pursuant to the agreement between the Bank, the
Company and the Trustee (the "Lending Agreement") and evidenced by a promissory
note (the "ESOP Note") made by the Trustee to Company.
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ARTICLE III
Representations and Warranties
In borrowing hereunder the Company represents and warrants to Bank (which
representations and warranties will survive the delivery of the Term Note and
shall continue so long as any sums remain outstanding under the Term Note or
under this Agreement) that:
3.01. Authorization. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Kansas and
is duly qualified as a foreign corporation and is in good standing in every
other jurisdiction where failure to be so qualified and in good standing would
have a material adverse effect on its business; the Company has all requisite
corporate power and authority to own and operate its properties and to carry on
its business as presently being conducted; the Company has the power to enter
into and to carry out the terms of this Agreement and to execute, deliver and
perform its obligations under this Agreement, the Term Note, and any other
instrument referred to or mentioned herein, and said performance by the Company
of its obligations has been duly authorized by appropriate corporate
proceedings, will not contravene any provisions of law, its Articles of
Incorporation, Bylaws, or any indenture, agreement or other instrument binding
upon the Company, and does not require the consent, approval or authorization of
any governmental agency or third party, except as otherwise specifically
provided herein.
3.02. Financial Condition. Except as provided in Schedule 3.02 attached
hereto, the financial statements of Company dated as of December 31, 1996,
copies of which have been furnished to Bank, are complete and correct and fairly
and accurately present the financial condition of Company as at such date and
the results of the operations of Company for the period covered by such
statements, all in accordance with generally accepted accounting principles
consistently applied, and there has been no material adverse change in the
condition (financial or otherwise), business or operations of Company subsequent
thereto.
3.03. Taxes. The Company has filed all required federal, state and
local tax returns and has paid all taxes as shown on said returns to be due
including interest and penalties, or has provided adequate reserves for the
payment thereof. No tax claims have been asserted against Company which remain
unpaid or for which an adequate reserve has not been established.
3.04. Litigation. Other than as set forth in Schedule 3.04 attached
hereto, or as disclosed to Bank in writing prior to the date hereof, the Company
has no actions, suits or proceedings pending or, to its knowledge, threatened
against or affecting it or its properties before any court or governmental
department,
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commission, board, bureau, agency or instrumentality, domestic or foreign,
which, if determined adverse to the Company, might have a material adverse
effect on its financial condition, properties or operations.
3.05. Liability. Except as set forth in Schedule 3.05 attached hereto,
the Company has no liabilities, direct or contingent, except those disclosed in
the financial statements described in Section 3.02 hereof, and those incurred
since December 31, 1996 in the ordinary course of the Company's business which
have been disclosed in writing to Bank. Company is not presently in default, and
no event which, but for the lapse of time or service of notice or both, would
constitute a default has occurred and is continuing under any agreement,
indenture, mortgage, security agreement or other instrument under which the
Company is directly or contingently liable or pursuant to which any of the
assets or properties of Company or any shares of its outstanding capital stock
is encumbered or affected in any way. All stock of the Company has been validly
issued and is fully paid and nonassessable.
3.06. Properties. Company has good, valid and marketable title to all
of its properties shown as assets on its balance sheet. All properties are free
and clear of all liens, mortgages, security interests or other encumbrances
except those which have been disclosed to Bank in writing or disclosed on its
balance sheet.
3.07. Guaranties. Company has no guaranties outstanding, except those
which have been disclosed to Bank in writing.
3.08. Other Agreements. Company is not a party to, subject to, or bound
by any contract, agreement, instrument, charter or corporate restriction which
materially adversely affects its ability to perform its obligations under this
Agreement, the Term Note or other documents or instruments provided for herein.
3.09. Margin Stock. Company is not engaged in the business of extending
credit for the purpose of carrying margin stock within the meaning of Regulation
U of the Board of Governors of the Federal Reserve System. If requested by Bank,
Company will furnish to Bank a statement in conformity with the requirements of
Federal Reserve Form U-1 referred to in Regulation U to the foregoing effect.
3.10. Use of Proceeds. The proceeds of the Term Loan shall be loaned by
Company to the Trustee of the Trust within the meaning of Section 4975(d)(3) of
the Code for the acquisition of "employer securities" (within the meaning of
Section 409(l) of the Code), for
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the repayment of the Term Loan or for the repayment of a prior loan to the
Trustee of the Trust, the proceeds of which were used by the Trust to acquire
"employer securities", and the terms and conditions of such loan by the Company
to the Trustee of the Trust shall comply with all laws and regulations in
respect thereto, including, to the extent applicable, but not limited to,
Regulation G of the Federal Reserve Board, the Code, the Employee Retirement
Security Act of 1974, as amended ("ERISA"), and regulations promulgated
thereunder.
3.11. Plan Qualifications. The Plan is qualified under Section 401(a)
of the Code, the Trust is exempt from tax under Section 501(a) of the Code, and
the consummation of the transactions under this Agreement and the Lending
Agreement will not constitute a prohibited transaction.
3.12. Stock. Except as set forth in Schedule 3.12 attached hereto,
there are no outstanding stock warrants, options, convertible securities or
other agreements that could cause additional stock to be issued or sold.
3.13. Guarantor. The Guarantor (hereinafter defined) has authority, and
has completed all proceedings and obtained all approvals and consents necessary,
to execute, deliver and perform its obligations under the Guaranty (hereinafter
defined). The Guaranty when executed by the Guarantor and delivered to Bank,
shall constitute the legal, valid and binding obligations of the Guarantor,
enforceable in accordance with its terms, except as limited by bankruptcy,
insolvency, reorganization or similar laws affecting the enforcement of
creditors' rights generally. The execution, delivery and performance by the
Guarantor of the Guaranty will not violate any provision of any existing
mortgage, indenture, contract or agreement binding on Guarantor or affecting any
of its properties, and will not result in, or require, the creation or
imposition of any lien on any of its properties or revenues. No litigation,
investigation or proceeding of or before any arbitrator or governmental
authority is pending or threatened by or against the Guarantor or any of its
properties or revenues with respect to the Guaranty, or any of the transactions
contemplated hereby or thereby or which could have a material adverse effect on
the business, operations, assets or financial or other condition of the
Guarantor.
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ARTICLE IV
Affirmative Covenants
The Company covenants and agrees that during the term of this Agreement and
until all of the principal amount of and interest due under the Term Note shall
have been paid in full, unless otherwise agreed to by Bank in advance and in
writing to the contrary, the Company will duly perform and observe each and all
of the covenants and agreements hereinafter set forth:
4.01. Maintenance and Compliance with Laws. The Company will maintain
its corporate existence, rights and franchises and comply with all applicable
statutes, regulations and orders of, and all applicable restrictions imposed by,
all government bodies, and maintain and keep its properties in good repair,
working order and operating condition.
Specifically, Company will comply with all laws and regulations respecting
"Securities Acquisition Loans" (as defined in Section 133 of the Code) to
preserve and protect the tax treatment of the Term Note under Section 133 of
the Code.
4.02. Financial Statements. Company will deliver to Bank the following
financial information of Company, Guarantor (hereinafter defined) and Banks
(hereinafter defined):
(a) Within sixty (60) days after the end of each fiscal quarter of
Company and Guarantor, the respective balance sheets, profit and loss statements
and net worth reconciliations of Company and Guarantor for such accounting
period, and the results of operations since the beginning of the fiscal year,
prepared in accordance with generally accepted principles of accounting applied
on a basis consistent with that of the financial statements for the preceding
fiscal year and certified by the chief financial officer or chief executive
officer of Company and Guarantor, respectively, as truly reflecting the
respective financial positions of Company and Guarantor as of the end of the
accounting period;
(b) Within ninety (90) days after the end of each fiscal year of Company
and Guarantor, the respective annual audited financial statements of Company and
Guarantor, prepared by independent certified public accountants selected by
Company and satisfactory to Bank in conformity with generally accepted
accounting principles applied on a basis consistent with that of the financial
statements for the preceding fiscal year; and
(c) From time to time such further information regarding the financial
condition or business of Company, Guarantor and Banks as Bank may reasonably
request.
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4.03. Inspection of Operations. Company shall permit such persons
designated by Bank to visit and inspect Company's properties, operations,
corporate books and financial records and to discuss Company's affairs, finances
and accounts with Company's principal officers and independent public
accountants, as may be requested from time to time by Bank.
4.04. Insurance. Company shall maintain, at all times, such insurance
covering such risks as is customary for companies of similar character, in
amounts and with companies acceptable to Bank.
4.05. Payment of Indebtedness. Company shall pay or discharge all
indebtedness heretofore or hereafter incurred as the same shall become due and
payable and shall faithfully perform, observe and discharge all covenants,
conditions and obligations which are imposed on it by any and all indentures and
other agreements securing or evidencing such indebtedness or pursuant to which
such indebtedness is issued.
4.06. Taxes and Other Liens. The Company will pay and discharge promptly
all taxes, assessments, and other governmental charges or levies imposed upon it
or upon its income or upon any of its property, real, personal or mixed, or upon
any part thereof, as well as all claims of any kind (including claims for labor,
materials and supplies) which, if unpaid, might by law become a lien or charge
upon any of its property; except any taxes, assessments or levies being
contested in good faith by appropriate legal proceedings and against which, if
requested by the Bank, the Company will set up reserves satisfactory to the
Bank.
4.07. Notice of Defaults. Company shall notify Bank in writing of any
Event of Default (hereinafter defined) hereunder or of any fact, condition, or
event that, only with the giving of notice or passage of time or both, would
become an Event of Default. Company shall notify Bank in writing of any default
under any other indenture, agreement, contract or other instrument to which
Company is a party and of any acceleration of the maturity of any material
indebtedness of Company which default or acceleration could have a material
adverse effect on Company, and Company shall take all necessary steps to remedy
promptly any such default, to protect against any such adverse claim, to defend
any such proceeding and to resolve all such controversies.
4.08. Data to Verify Compliance. Company shall promptly provide Bank with
such data as Bank shall reasonably request to verify the truth of all warranties
and representations and Company's compliance with all covenants.
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4.09. Contributions. Company will make contributions to the Trust
sufficient for the Trust to pay principal and accrued interest on the ESOP Note
in accordance with the schedule of payments set forth therein (such
contributions to be referred to herein as "Scheduled Contributions"). In
addition to the foregoing, and provided that no Event of Default (hereinafter
defined) has occurred or will occur, Company may make contributions to the Trust
in amounts adequate to provide cash to, or to make other payments necessary in
connection with, terminating participants (such contributions to be referred to
herein as "Permitted Contributions"). If Company makes contributions in an
amount in excess of Scheduled Contributions (and Permitted Contributions, if
applicable) ("Excess Contributions"), Company shall cause the Plan Administrator
(as set forth in the Plan) to direct the Trustee to use such Excess
Contributions to prepay the ESOP Note.
4.10. Securities Restrictions. Company shall comply with all restrictions
regarding securities acquired with loan proceeds imposed by the Internal Revenue
Code and United States Treasury Regulations, including, without limitation,
restrictions concerning subjection of the securities to a put, call or other
option or buy-sell or similar arrangement.
4.11. Notification. Company shall notify Bank promptly of any
governmental or judicial action or proceeding that relates directly or
indirectly to the qualification of the Plan under Sections 401(a) or 4975(e)(7)
of the Code, or the participation of the Trust in the transactions contemplated
hereunder.
ARTICLE V
Negative Covenants
Without the prior written consent of Bank, during the term of this Agreement or
until all indebtedness of the Company to Bank has been paid, whichever occurs
last, Company covenants and agrees as follows:
5.01. Liens. Company will not create, incur, assume or suffer to exist
any security interest, mortgage, pledge, lien or other encumbrance upon any of
the Company's properties or assets, whether now owned or hereafter acquired,
except for those granted to Bank and except such purchase money security
interests created or granted by Company in the ordinary course of its business,
consistent with current practices, and except such liens of taxes not in default
or being contested in good faith.
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5.02. Fundamental Changes. Company will not amend its Articles of
Incorporation or Bylaws; wind up, liquidate, or dissolve itself; reorganize,
merge or consolidate with or into, or sell, transfer, convey or lease all or any
part of its property, to another person or entity; sell or assign any accounts
receivable; purchase or otherwise acquire all or substantially all of the assets
of any corporation, partnership, or other entity, or any shares or similar
interest in any other corporate entity; or make any material change in the
executive management of the Company.
5.03. Conduct of Business. Company will not materially alter the
character in which Company conducts its business or the location of such
business or the nature of such business conducted at the date hereof.
5.04. Funded Indebtedness. Company shall not incur additional Funded
Indebtedness (direct, indirect, contingent or otherwise) unless such Funded
Indebtedness is subordinated (in writing and in form and substance satisfactory
to Bank) in all respects to the indebtedness of Company to Bank hereunder. For
purposes of this Agreement, "Funded Indebtedness" shall mean all indebtedness of
Company for borrowed money in excess of $250,000 (individually or in the
aggregate) and which has a maturity of one (1) or more years from the date of
origin, plus all Capitalized Leases (defined as any lease which is required to
be capitalized on the balance sheet of Company) and all guarantees of such
Funded Indebtedness of others, but excluding the indebtedness incurred by
Company in the ordinary course of business which includes (i) deposits, (ii)
Banker's Acceptances, (iii) repurchase agreements, (iv) purchases of Federal
Funds, and (v) Federal Reserve or Federal Home Loan Bank borrowings made in the
ordinary course of business, and pledges, liens or encumbrances required to
secure such indebtedness, provided that Company shall have received Bank's prior
written approval of, and with respect to, the specific assets, or general class
of assets, to be pledged or encumbered by such pledges, liens or encumbrances.
5.05. Issuance of Additional Capital Stock. Company will not issue any
additional capital stock or securities convertible into capital stock or any
warrants or rights to purchase capital stock.
5.06. Investments. Company will not acquire for investment purposes,
investments that would not qualify as "customary and prudent investments",
consistent with the current investment practices of Company.
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5.07. Loans to Affiliates. Shareholders and the Trust. Company will not
directly or indirectly loan amounts to any affiliate or shareholder of Company,
or to any entity controlled by such an affiliate or shareholder, or to the Trust
(whether or not for the purchase of additional employer securities).
5.08. Debt Payments to Shareholders. Except with respect to
unsubordinated debt permitted under Section 5.04 (b) above, Company will not
directly or indirectly make any payments with respect to any indebtedness owing
to any shareholders.
5.09. Dividends. Except to the extent consistent with past practices,
Company will not pay any cash dividends to shareholders of Company.
5.10. Capital Expenditures. Company will not make any capital
expenditures other than those capital expenditures made in the ordinary course
of business, consistent with past Company practices.
5.11. Plan Amendments. No amendments will be made to the Plan without the
prior written consent of Bank, which consent shall not be unreasonably withheld.
ARTICLE VI
Collateral
The obligations and indebtedness of the Company to Bank hereunder or under any
other instrument shall be secured and supported by the following ("Collateral"):
6.01. ESOP Note and Stock. Company shall pledge and endorse to Bank the
ESOP Note and any stock of Company from time to time pledged as security to the
ESOP Note. Such pledge shall be evidenced by a Collateral Assignment in form and
substance acceptable to Bank.
6.02. Bank Stock. Company shall pledge all stock, whether common or
preferred, of Iola Bank and Trust ("Iola Bank"), First National Bank & Trust Co.
(Parsons, Kansas) ("FNB") and TeamBank, N.A. (Paola, Kansas) ("TeamBank") (said
Iola Bank, FNB and TeamBank, together with TeamBank Nebraska [hereinafter
identified], to be sometimes hereinafter collectively referred to as the
"Banks") now owned or hereafter acquired (together with the stock of TeamBank
Nebraska [hereinafter identified] the "Bank Stock"), which as of the date hereof
is as follows:
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Banks Type Shares Ownership Percentage
--------------------------------------------------------------------------------
Xxxx Bank Common 70,000 100.00%
FNB Common 18,000 100.00%
TeamBank Common 100,000 100.00%
Company shall also pledge to Bank all of the outstanding stock, whether common
or preferred, of Team Financial Acquisition Subsidiary, Inc. ("Guarantor"). Such
pledges shall be evidenced by a "Collateral Pledge Agreement", in form and
substance acceptable to Bank, together with stock powers relating thereto.
6.03. Guaranty. There shall be delivered to Bank, as additional support
for the obligations and indebtedness of Company to Bank (as well as all other
obligations owing by Company to Bank, now existing and hereafter arising), the
unconditional, unlimited corporate guarantee of Guarantor. The guaranty shall be
evidenced by a Corporate Guaranty in form and substance acceptable to Bank
("Guaranty"). Guarantor shall pledge all stock, whether common or preferred, of
TeamBank Nebraska (Bellevue, Nebraska) ("TeamBank Nebraska") now owned or
hereafter acquired, which as of the date hereof is as follows:
Banks Type Shares Ownership Percentage
--------------------------------------------------------------------------------
TeamBank Nebraska Common 8,000 100.00%
Such pledge shall be evidenced by a "Collateral Pledge Agreement", in form and
substance acceptable to Bank, together with stock powers relating thereto.
6.04. Other Documents. Company agrees to furnish such information and
to execute such other documents or undertake any other acts as may be reasonably
necessary to perfect and maintain the security interests contemplated by this
Agreement, or as otherwise reasonably requested by Bank from time to time.
ARTICLE VII
Defaults
7.01. Events of Default. The occurrence of one or more of the following
events ("Events of Default" or "Default") shall constitute a Default by the
Company hereunder:
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(a) nonpayment of interest or principal hereunder when payment is due
as herein provided; or
(b) any representation or warranty made by the Company or Guarantor
herein or in any writing furnished in connection with or pursuant to
this Agreement shall prove to be false in any material respect as of
the date on which it is made; or
(c) a breach by Company in the performance or observance of any
agreement, term, covenant or condition contained herein (other than in
(a) above), and such breach shall not have been remedied within thirty
(30) days after written notice thereof shall have been given by Bank to
Company; or
(d) any report, certificate, financial statement or other instrument
furnished in connection with this Agreement shall prove to be false or
misleading in any material respect; or
(e) default in the performance of the obligations of the Company or
Guarantor on any other note, agreement (including but not limited to
security agreements), or obligations owed by the Company or Guarantor
to Bank, which default results in the acceleration of such obligation;
or
(f) any default by the Company or Guarantor under any other contract
for borrowed money which entitles the obligee to accelerate the
maturity thereof, or any failure by the Company or Guarantor to pay any
indebtedness when due, whether by acceleration or otherwise; or
(g) commencement by the Company or Guarantor of a voluntary case under
the Bankruptcy Act or similar law, federal or state, whether now or
hereafter existing; or a trustee or receiver shall be appointed for
Company or Guarantor or all or a substantial part of its properties in
any involuntary proceeding, or any court shall have taken any
jurisdiction of all or a substantial part of the properties of the
Company or Guarantor in any involuntary proceeding for the
reorganization, dissolution, liquidation or winding up of the business
of the Company or Guarantor and such trustee or receiver shall not be
discharged or such jurisdiction relinquished or vacated or stayed on
appeal or otherwise within thirty (30) days; or the Company or
Guarantor shall file a petition or answer consenting to or acquiescing
in a petition against it in bankruptcy or under any chapter of the
Bankruptcy Act or any similar law, state or federal, whether now or
hereafter existing, or such petition filed against the
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Company or Guarantor shall be approved and not vacated or stayed within
thirty (30) days; or the Company or Guarantor shall become insolvent,
or shall make an assignment for the benefit of creditors or shall admit
in writing its inability to pay its debts generally as they become due,
or shall consent to the appointment of a receiver or trustee or
liquidator of all its properties or a substantial part thereof, or
shall have failed within thirty (30) days to pay a bond or otherwise
discharge any judgment or attachment which is not stayed on appeal or
otherwise being contested in good faith; or
(h) Company or Guarantor suffers any judgment, writ of attachment or
execution or similar process to be issued or levied against all or a
substantial part of its property and which is not released, stayed,
bonded or vacated within thirty (30) days; or
(i) The occurrence of a non-exempt "Prohibited Transaction", as defined
in Section 406 of ERISA or in Section 4975 of the Internal Revenue
Code, between the Plan and any other person or entity; or
(j) The failure of the Trust to maintain its status as a "tax exempt
trust" under Section 501 of the Internal Revenue Code, or the failure
of the Plan to maintain its status as a qualified plan under Section
401 or as an employee stock ownership plan under Section 4975 of the
Code.
7.02. Remedies. Upon an Event of Default, Bank may accelerate the
maturity of the Term Loan, with or without notice, and Bank may resort to any
and all security and to any remedy existing at law or in equity for the
collection of the Term Note according to its tenor and enforcement of the
covenants and provisions hereof, and the Bank's resort to any remedy shall not
prevent the concurrent or subsequent employment of any other remedy. In addition
to the remedies provided herein, in the event the Term Note is due and payable
or upon an Event of Default, the Bank shall have the right of setoff, without
demand or notice to anyone, against the funds of the Company on deposit with it.
Notwithstanding anything contained herein to the contrary, Bank shall have no
right of setoff or any claims to any shares of the common stock of Company which
Bank may be holding as custodian on behalf of the Trust or any funds of the
Trust deposited with Bank except such shares as are pledged to secure the ESOP
Note, but only to the extent permitted by law.
10.7-15
16
7.03. Expenses of Collection. All costs, expenses and liabilities
incurred by Bank in collecting or attempting to collect on the Term Note,
including costs and expenses incurred in proposing or selling or otherwise
deriving upon any security, and all reasonable attorneys' fees in connection
with such matters, shall constitute a demand obligation of the Company and shall
bear interest from the date of expenditure until paid at the per annum rate of
three percent (3%) in excess of the Prime Rate.
7.04. Waiver. Any waiver of an Event of Default by Bank shall not
extend to or affect any subsequent Event of Default. No failure or delay by Bank
in exercising any right hereunder shall operate as a waiver, nor shall any
single or partial exercise of any right preclude the exercise of any other right
hereunder.
ARTICLE VIII
Closing; Conditions Precedent
8.01. Closing. "Closing" shall take place at Bank's principal offices
at 0000 Xxxxxx Xxxxxx, Xxxxxx Xxxx, Xxxxxxxx on August 21st, 1997 (the "Closing
Date").
8.02. Conditions Precedent to Closing. As a condition precedent to
Closing, Company shall have delivered to Bank the following documents:
(a) This Agreement and the Term Note, duly executed by the
Company;
(b) The Collateral Assignment, duly executed by the Company;
(c) A fully executed copy of the Lending Agreement;
(d) The Collateral Pledge Agreement, duly executed by the
Company, together with the applicable Bank Stock, and Stock Powers
(executed in blank);
(e) The Guaranty, duly executed by the Guarantor, together with
the applicable Collateral Pledge Agreement, the applicable Bank Stock,
and Stock Powers (executed in blank);
(f) Fully executed copies of all other documents required under
this Agreement and any of the other documents executed in connection
herewith, including, without limitation, the Collateral Assignment;
10.7-16
17
(g) Certified copies of the Bylaws of the Company and Guarantor,
and of each resolution of the Company's and Guarantor's respective
Boards of Directors duly authorizing the execution and delivery of the
applicable loan documents and the Company's and Guarantor's
performance hereunder and thereunder;
(h) Certificates of Good Standing, dated not more than thirty
(30) days prior to the date of this Agreement, for the Company from the
Kansas Secretary of State, and the Guarantor from the Nebraska
Secretary of State, and, if specifically requested by Bank, from the
Secretary of State for each other jurisdiction where the nature of
Company's or Guarantor's respective businesses requires it to be
qualified as a foreign corporation;
(i) An opinion of counsel for Company dated the Closing Date, in
form and substance satisfactory to Bank, substantially to the effect
that (i) Company is a corporation duly organized and existing and in
good standing under the laws of the State of Kansas; (ii) Company has
adequate corporate power and authority to enter into and perform this
Agreement and the Term Note; (iii) that this Agreement, the Term Note,
the Collateral Assignment and the Collateral Pledge Agreement have been
duly authorized, executed and delivered by Company and are legal, valid
and binding instruments enforceable against the Company in accordance
with their respective terms, except as may be limited by laws of
receivership, insolvency and bankruptcy; (iv) that the Plan complies
with all federal and state laws and regulations, including, without
limitation, the Code and ERISA, and regulations promulgated thereunder;
and (v) the Plan is qualified under Section 401(a) of the Code, the
Trust is exempt from tax under Section 501(a) of the Code, and the
consummation of the transactions under this Agreement and the Lending
Agreement will not constitute a prohibited transaction; and
(j) Any other documents, instruments and reports as Bank shall
reasonably request.
Company shall be solely responsible for all costs incurred by it and/or
Bank in connection with satisfying any of the foregoing requirements.
10.7-17
18
ARTICLE IX
Miscellaneous
9.01. Payment on Holidays. Whenever any payment to be made pursuant to
this Agreement or the Term Note shall be stated to be due on a public holiday,
Saturday or Sunday, such payment may be made on the next succeeding business day
and such extension of time shall in such case be included in computing interest,
if any, in connection with such payment.
9.02. Request for Qualifying Opinion of Counsel. If the Bank
determines, in good faith after consultation with its counsel, that there is a
substantial likelihood that it might be required to include more than 50% of the
interest on the Term Note in its gross income, the Bank shall be entitled to
request a Qualifying Opinion of Counsel with respect to such interest for a
period commencing with the date of issuance of the Term Note or for any lesser
period specified in the Bank's request.
9.03. Waivers. No omission or delay by the Bank in exercising any
right, power or privilege under this Agreement, the Term Note or any other
documents executed in connection herewith, will impair such right, power or
privilege or be construed to be a waiver of any Event of Default or acquiescence
therein and any single or partial exercise of any right, power or privilege will
not preclude other or further exercise of any other right, power or privilege
and no waiver will be valid unless in writing and signed by Bank and then only
to the extent specified. All remedies herein by law afforded will be cumulative
and will be available to Bank until all indebtedness of Company is paid.
9.04. Binding Effect. This Agreement shall continue until payment in
full of all indebtedness owing hereunder and shall be binding upon Company and
its successors and assigns and shall be binding upon and inure to the benefit of
Bank, its successors and assigns.
9.05. Notices. Any notice, request, authorization, approval or consent
made hereunder shall be in writing and shall be personally delivered or sent by
registered or certified mail, and shall be deemed given when delivered or
postmarked and mailed postage prepaid to the following addresses:
10.7-18
19
IF TO BANK: Commerce Bank, N.A.
0000 Xxxxxx Xxxxxx
P.O. Box 419248
Xxxxxx Xxxx, Xxxxxxxx 00000-0000
Attn: Xxxx Xxxxx
IF TO COMPANY: Team Financial, Inc.
Xxx Xxxxx Xxxxx
X.X. Xxx 000
Xxxxx, Xxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxxxx
Bank and Company may designate a change of address by notice given in accordance
with the provisions of this Subsection at least five (5) days before such change
is to become effective.
9.06. Amendments. The and Bank may from time to time enter into written
agreements supplemental hereto for the purpose of modifying or adding any
provision to this Agreement or changing the rights and privileges of Bank or
Company hereunder. Any such supplemental agreement shall be binding upon the
Company and the Bank and their respective successors and assigns.
9.07. Headings. Article and Section headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose.
9.08. Severability of Provisions. Any provision of this Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or enforceability
without invalidating the remaining provisions hereof or affecting the validity
or enforceability of such provisions in any other jurisdiction.
9.09. Governing Law. This Agreement and all related documents will be
governed by, and construed in accordance with, the laws of the State of
Missouri.
9.10. Counterpart Agreements. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original and all of
which together shall constitute one and the same agreement.
9.11. Statutory Notice. ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY,
EXTEND CREDIT OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT INCLUDING
PROMISES TO EXTEND OR RENEW SUCH DEBT ARE NOT
10.7-19
20
ENFORCEABLE. TO PROTECT YOU (BORROWER) AND US (CREDITOR) FROM MISUNDERSTANDING
OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH COVERING SUCH MATTERS ARE CONTAINED
IN THIS WRITING, WHICH IS THE COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT
BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN WRITING TO MODIFY IT.
BY SIGNING BELOW, YOU AND WE AGREE THAT THERE ARE NO UNWRITTEN ORAL AGREEMENTS
BETWEEN US.
THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK
10.7-20
21
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officers on the day and year first above written.
TEAM FINANCIAL, INC.
By: /s/ Xxxxxxx X. Xxxxxx
------------------------
Title: President
By: /s/ Xxxxxx X. Xxxxxxxxxx
------------------------
Title: Chairman & CEO
COMMERCE BANK, N.A.
By: /s/ Xxxxxxx X. Xxxxx
------------------------
Title: Senior Vice President
10.7-21
22
SCHEDULE 3.02
(FINANCIAL CONDITION)
Company has provided supplemental financial information to Bank in the form of
June 1997 "Y" Reports and call reports each subsidiary bank of TFI.
10.7-22
23
SCHEDULE 3.04
(LITIGATION)
NONE
10.7-23
24
SCHEDULE 3.05
(LIABILITIES)
Distributions from the TeamBanc, Inc. Employees' Stock Ownership Plan can be
made in the form of stock and, in accordance with the plan document and the
Internal Revenue Code, Team Financial, Inc. has an obligation to repurchase such
securities.
10.7-24
25
SCHEDULE 3.12
(STOCK)
Company has previously provided documents relating to its Employee Stock
Purchase Plan acceptable to Bank.
10.7-25
26
AMENDMENT ONE TO TERM LOAN AGREEMENT
THIS AMENDMENT ONE TO TERM LOAN AGREEMENT ("Amendment One") is entered into as
of the 31st day of October, 1997, by and between COMMERCE BANK, N.A. ("Bank")
and TEAM FINANCIAL, INC. "Company").
WITNESSETH:
WHEREAS, pursuant to that certain Term Loan Agreement dated as of August 21,
1997, by and between Bank and Company ("Loan Agreement"), Bank agreed to extend
a Term Loan to Company in the original principal amount of $1,199,000, subject
to certain terms, limitations and conditions contained therein;
WHEREAS, Company has requested that Bank amend one of the Affirmative Covenants
contained in the Loan Agreement; and
WHEREAS, Bank and Company have agreed to amend the Loan Agreement as hereinafter
set forth.
NOW, THEREFORE, for valuable consideration, Bank and Company do hereby mutually
agree as follows:
1. Terms used herein which are defined in the Loan Agreement shall have
the meanings given to them in the Loan Agreement.
2. Section 4.09 of the Loan Agreement is hereby amended to read in its
entirety as follows:
"Contributions. Company will make contributions to the Trust sufficient
for the Trust to pay principal and accrued interest on the ESOP Note in
accordance with the schedule of payments set forth therein (such
contributions to be referred to herein as "Scheduled Contributions").
In addition to the foregoing, and provided that no Event of Default
(hereinafter defined) has occurred or will occur, Company may make
contributions to the Trust (i) in amounts adequate to provide cash to,
or to make other payments necessary in connection with, terminating
participants, and/or (ii) in amounts to be maintained by the Trust "on
deposit" to meet the Trust's distribution and other ordinary course
cash needs, provided such sums "on deposit" shall not exceed $500,000
at any given time (such contributions to be referred to herein as
"Permitted Contributions"). If Company makes contributions in an amount
in excess of Scheduled Contributions (and Permitted Contributions, if
applicable) ("Excess
10.7-26
27
Contributions"), Company shall cause the Plan Administrator (as set
forth in the Plan) to direct the Trustee to use such Excess
Contributions to prepay the ESOP Note.
3. Except as amended herein, all other terms, provisions, conditions
and obligations imposed under the terms of the Loan Agreement shall remain in
full force and effect and are hereby ratified and certified by Bank and Company.
4. This Amendment One shall be governed by, and construed in accordance
with, the laws of the State of Missouri.
IN WITNESS WHEREOF, Bank and Company have executed this Amendment One as of the
date first above written.
COMMERCE BANK, N.A.
By: /s/ Xxxxxxx X. S Xxxxx.
------------------------
Title: Senior Vice President
---------------------
TEAM FINANCIAL, INC.
By: /s/ Xxxxxx X. Xxxxxxxxxx
------------------------
Title: Chairman & CEO
---------------------
By: /s/ Xxxxxxx X. Xxxxxx
------------------------
Title: Treasurer
---------------------
10.7-27
28
TERM NOTE
$1,199,000 August 21, 1997
Principal and Interest Kansas City, Missouri
FOR VALUE RECEIVED, the undersigned, TEAM FINANCIAL, INC., f/k/a TeamBanc,
Inc., a Kansas corporation ("Borrower") hereby promises to pay to the order
of COMMERCE BANK, N.A. ("Bank") the principal sum of One Million One Hundred
Ninety-Nine Thousand Dollars ($1,199,000), payable in annual principal
installments of $150,000 commencing December 31, 1997, and continuing on the
last day of each December thereafter, until December 31, 2002, when the
outstanding principal balance, together with accrued interest, shall be due
and payable in full. This Term Note shall bear interest at a per annum
variable rate equal to eighty-three percent (83%) of the Base Rate (as that
term is defined in the Term Loan Agreement hereinafter identified), to
change with any change in the Base Rate. Accrued interest shall be payable
quarterly, in arrears, commencing December 31, 1997, and continuing on the
last day of each March, June, September and December thereafter, until and
including the due date of this Term Note. Accrued interest shall be
calculated on the actual number of days outstanding based on a year
consisting of 365 days. Both principal and interest are payable in lawful
money of the United States of America to Bank, at its offices at 1000
Walnut, Kansas City, Missouri, in immediately available funds.
This Term Note is the one referred to in, and is entitled to the benefits
of, the Term Loan Agreement dated the date hereof between the Borrower and
the Bank, which Term Loan Agreement contains, among other things, provisions
for acceleration of the maturity hereof upon the happening of certain stated
events; and for an increase in the interest rate, without limitation, in the
event of a Determination of Taxability or upon the occurrence of an Event of
Default. The defined terms used herein shall have the same meaning as used
in the Term Loan Agreement.
The Borrower shall have the right to prepay the principal of this Term Note,
in whole or in part, prior to maturity without premium or penalty. Any
partial prepayments shall be applied to the principal payments in the
inverse order of their maturities.
The Borrower and all endorsers, sureties, guarantors and other persons
liable hereon or who may become liable for the payment hereof, severally
waive demand, presentment, notice of dishonor or nonpayment, notice of
protest and any and all lack of diligence in the enforcement hereof and
hereby assent to each and any extension or postponement of the time of
payment, at or after maturity, or other indulgence and hereby waive any and
all notice thereof.
This Term Note shall be governed by, and construed in accordance with, the
laws of the State of Missouri.
IN WITNESS WHEREOF, Borrower has executed this Term Note as of the day and
year first herein above written.
TEAM FINANCIAL, INC.
By: /s/ Xxxxxx X. Xxxxxxxxxx
------------------------
Title: Chairman/CEO
---------------------
By: /s/ Xxxxxxx X. Xxxxxx
------------------------
Title: President
---------------------
10.7-28
29
COLLATERAL ASSIGNMENT
WHEREAS, TEAM FINANCIAL, INC., f/k/a TeamBanc, Inc. ("Company") and COMMERCE
BANK, N.A. ("Lender") have entered into a Term Loan Agreement (the "Agreement")
of even date herewith;
WHEREAS, the proceeds of the Term Loan to be extended to the Company under the
Agreement will be used by Company to fund a loan by Company to the trustee (the
"Trustee") of the TeamBanc, Inc. Employees Stock Ownership Plan (the "Trust"),
as established pursuant to the TeamBanc, Inc. Employees Stock Ownership Plan
dated as of November 6, 1992, as amended from time to time (the "Plan"),
pursuant to the agreement between the Bank, the Company and the Trustee (the
"Lending Agreement") and evidenced by an ESOP Note (And Pledge Agreement) (the
"ESOP Note") made by the Trustee to Company and secured by a pledge of the
common stock of Company acquired by the Trust; and
WHEREAS, under the terms of the Agreement, Company agreed to pledge to Lender
the ESOP Note, and all common stock of Company from time to time pledged
thereunder, as collateral for its obligations under the Agreement.
NOW, THEREFORE, for valuable consideration, it is agreed as follows:
1. Company hereby pledges, assigns and transfers to Lender all its
right, title and interest in and to the ESOP Note and all common stock of
Company from time to time pledged thereunder.
2. Company agrees that all payments made by the Trust on the ESOP Note
shall be made directly to Lender and applied by Lender to the obligations of the
Trust on the ESOP Note, with a corresponding application to the obligations of
the Company under the Agreement.
3. Lender agrees to be bound by the terms of the ESOP Note with respect
to any required release of the common stock of Company pledged thereunder.
IN WITNESS WHEREOF Company has executed this Collateral Assignment as of the
21st day of August, 1997.
TEAM FINANCIAL, INC.
By: /s/ Xxxxxx X. Xxxxxxxxxx
------------------------
Title: Chairman & CEO
---------------------
By: /s/ Xxxxxxx X. Xxxxxx
------------------------
Title: President
---------------------
Acknowledged this 21St day of August, 1997
COMMERCE BANK, N.A.
By: /s/ Xxxxxxx X. Xxxxx
------------------------
Title: Senior Vice President
---------------------
10.7-29
30
ESOP NOTE
(AND PLEDGE AGREEMENT)
$1,199,000 August 21st, 1997
Principal and Interest Kansas City, Missouri
The undersigned promises to pay to the order of TEAM FINANCIAL, INC., a
Kansas corporation, the principal sum of One Million one Hundred Ninety-Nine
Thousand Dollars ($1,199,000) payable in annual principal installments of
$150,000 commencing December 31, 1997, and continuing on the last day of
each December thereafter, until December 31, 2002, when the outstanding
principal balance, together with accrued interest, shall be due and payable
in full. This ESOP Note shall bear interest at a per annum variable rate
equal to eighty-three percent (83%) of the Base Rate, as that term is
defined in that certain Term Loan Agreement of even date herewith between
Team Financial, Inc. ("Company") and Commerce Bank, N.A. ("Bank"), and shall
change with any change in the Base Rate. Accrued interest shall be payable
quarterly, in arrears, commencing December 31, 1997, and continuing on the
last day of each March, June, September and December thereafter, until and
including the due date of this ESOP Note. Accrued interest shall be
calculated on the actual number of days outstanding based on a year
consisting of 365 days.
The funds advanced hereunder are proceeds of a loan made to Company by Bank
pursuant to the Term Loan Agreement and all terms contained herein shall
have the same meaning as used in the Term Loan Agreement.
The loan evidenced by this ESOP Note is a refinancing of a securities
acquisition loan as defined in Section 133 of the Code and the proceeds of
such loan shall be used solely by the undersigned to refinance that certain
outstanding loan from UMB Bank Kansas ("UMB"), which loan from UMB was made
for the purpose of enabling Trustee to acquire "qualifying employer
securities" as such term is defined in Section 408(e) of the Employee
Retirement Income Security Act of 1974; as amended, and Section 4975(d)(3)
of the Code.
The holder hereof may arrange, adjust (provided, however, no adjustment to
payment dates shall accelerate such payment dates) and extend the times and
amounts of payments of interest and/or principal under this ESOP Note
without notice to or consent of and without releasing any party liable
hereon. All parties hereto consent and agree to waive presentment for
payment, demand for payment, protest and notice of dishonor and to any
extensions, renewals or revisions hereof, and further consent to the release
of
10.7-30
31
any party hereto or any collateral or security for the payment of this ESOP
Note without affecting their liability hereunder.
To secure this ESOP Note the undersigned hereby pledges to the holder of
this ESOP Note the common stock of the Company acquired by the undersigned
with the proceeds of the UMB loan which as of the date of this Agreement,
secures the repayment of such prior UMB loan ("Collateral"). Except with
respect to put options described in the ESOP Plan Documents (but limited to
stock released from the suspense account), at no time during the term of
this ESOP Note shall such stock be subject to any put, call, or other option
or any buy-sell or similar agreement.
The loan evidenced by this ESOP Note is without recourse against the
undersigned. Notwithstanding anything herein to the contrary, neither the
Company nor any other holder of this ESOP Note shall have any right to
assets of the Trust other than (a) the Collateral, (b) contributions (other
than contributions of securities of the Company) that are made to the
undersigned under the Trust to meet its obligations under this ESOP Note,
and (c) earnings attributable to the Collateral and the investment of such
contributions. The undersigned is not obligated to make any payment of
interest or principal on the ESOP Note except to the extent of (i)the sum of
all cash contributions theretofore received by it from the Company to meet
the undersigned's obligation on this ESOP Note and the earnings attributable
to the investment of such contributions, less (ii) all payments of principal
and interest theretofore made by the undersigned on this ESOP Note.
Upon and to the extent of any failure by the undersigned to meet the payment
schedule of this ESOP Note, the holder hereof may at its option require
transfer of such of the Collateral as does not exceed the amount of the
payment default.
The fiscal year of the Plan (the "Plan Year") is January 1 through December
31. For each Plan Year during the duration of the loan evidenced by this
ESOP Note, a portion of the pledged employer securities shall be released
from the pledge. The number of employer securities released will equal the
number of encumbered employer securities held immediately before release for
the current Plan Year multiplied by a fraction. The numerator of the
fraction is the amount of principal and interest paid during the Plan Year.
The denominator of the fraction is the sum of the numerator plus the
principal and interest to be paid for all future Plan Years. The
10.7-31
32
number of Plan Years taken into account hereunder shall be computed without
taking into account any possible extension or renewal periods of the ESOP
Note. For purposes of such calculation, the interest to be paid in future
years shall be computed by using the interest rate applicable as of the end
of the Plan Year. In the event the employer securities are to include more
than one class of securities, the number of securities of each class to be
released for a Plan Year must be determined by applying the same fraction to
each class. At the request of the Trustee, the Company shall execute and
deliver to the Trustee a certificate or certificates representing the number
of pledged shares to be released each Plan Year pursuant to the provisions
of this paragraph.
The undersigned shall have the right to prepay the principal of this ESOP
Note, in whole or in part, prior to maturity without premium or penalty. Any
partial prepayments shall be applied to the monthly principal payments in
the inverse order of their maturities.
This ESOP Note is non-negotiable and it may not be negotiated or assigned by
any holder hereof without the written consent of the undersigned. The
undersigned by execution hereof consents to the negotiation and assignment
of this ESOP Note to the Bank. As used herein, the words "to the order of"
refer only to any subsequent holders for whom such written consent has been
given.
This ESOP Note shall be deemed to have been made and delivered in the State
of Missouri and shall be governed by, and construed in accordance with, the
laws of the State of Missouri. Until advised otherwise by the Bank, this
ESOP Note shall be payable at the offices of Bank at 0000 Xxxxxx, Xxxxxx
Xxxx, Xxxxxxxx.
10.7-32
33
IN WITNESS WHEREOF, the undersigned has executed this ESOP Note as of the
day and year first herein above written.
TEAM FINANCIAL, INC., AS
TRUSTEE UNDER THE TEAMBANC,
INC. EMPLOYEES STOCK OWNERSHIP
PLAN
By: /s/ Xxxxxx X. Xxxxxxxxxx
------------------------
Title: Chairman & CEO
---------------------
By: /s/ Xxxxxxx X. Xxxxxx
------------------------
Title: President
---------------------
PAY TO THE ORDER OF
COMMERCE BANK, N.A.
WITH RECOURSE
TEAM FINANCIAL, INC.
By: /s/ Xxxxxx X. Xxxxxxxxxx
------------------------
Title: Chairman and CEO
---------------------
10.7-33
34
LENDING AGREEMENT
THIS LENDING A LENDING AGREEMENT ("Agreement") is made and entered into as
of the 21st day of August, 1997, by and among COMMERCE BANK, N.A. ("Lender"),
TEAM FINANCIAL, INC., f/k/a TeamBanc, Inc. ("Company"), and TEAM FINANCIAL,
INC., f/k/a TeamBank, Inc. as Trustee (the "Trustee") under the TeamBanc, Inc.
Employees Stock Ownership Plan, as established pursuant to the TeamBanc, Inc.
Employees Stock Ownership Plan dated as of November 6, 1992 as amended from time
to time (the "Plan").
WITNESSETH:
WHEREAS, Lender has agreed to loan $1,199,000 to Company ("Loan"); and
WHEREAS, the parties hereto wish to restrict the use of the proceeds of the
Loan in the manner set forth herein.
NOW, THEREFORE, in consideration of the premises and mutual covenants and
promises herein contained, the adequacy of which is hereby acknowledged, the
parties hereto agree as follows:
USE OF PROCEEDS BY COMPANY
Company agrees that the proceeds of the Loan shall be used for the sole
purpose of lending such proceeds to the Trustee, such loan to be evidenced
by that certain ESOP Note (And Pledge Agreement) of even date herewith made
by the Trustee to the Company (the "ESOP Note"), for the sole purpose of
enabling the Trustee to refinance a prior loan for the purchase by the Plan
of "qualifying employer securities", as such term is defined in Section
408(e) of the Employee Retirement Income Security Act of 1974, as amended,
and Section 4975(d)(3) of the Internal Revenue Code of 1986, as amended.
USE OF PROCEEDS BY TRUSTEE
The Trustee agrees to use the amount loaned to the Trustee by Company, which
amount represents the proceeds of the Loan, for the sole purpose of
refinancing that certain outstanding loan from UMB Bank Kansas ("Prior ESOP
Loan", which loan was made for the purpose of enabling Trustee to acquire
"qualifying employer securities" as defined above).
10.7-34
35
PLEDGE OF SECURITIES
To secure the ESOP Note the Trustee hereby pledges and assigns to Company or
any holder of the ESOP Note all "qualifying employer securities" which, as
of the date of this Agreement, secured the repayment of the Prior ESOP Loan.
The Trustee acknowledges that the ESOP Note and pledged "qualifying employer
securities" will be endorsed and assigned by Company to Lender as collateral
for the Loan.
IN WITNESS WHEREOF, this Agreement has been executed as of the date written
above.
COMMERCE BANK, N.A.
By: /s/ Xxxxxxx Xxxxx
------------------------
Title: Senior Vice President
---------------------
TEAM FINANCIAL, INC.
By: /s/ Xxxxxx X. Xxxxxxxxxx
------------------------
Title: Chairman & CEO
---------------------
By: /s/ Xxxxxxx X. Xxxxxx
------------------------
Title: President
---------------------
TEAM FINANCIAL, INC., as
Trustee Under the TeamBanc, Inc.
Employees Stock Ownership Plan
By: /s/ Xxxxxx X. Xxxxxxxxxx
------------------------
Title: Chairman & CEO
---------------------
By: /s/ Xxxxxxx X. Xxxxxx
------------------------
Title: President
---------------------
10.7-35
36
CORPORATE GUARANTY
August 21st, 1997
TO: COMMERCE BANK, N.A. ("Bank")
The undersigned hereby requests Bank to give, and continue to give, TEAM
FINANCIAL, INC., a Kansas corporation ("Debtor"), from time to time, as Bank
may see fit, financial accommodations and credit, and in consideration
thereof, whether the same has been heretofore given or may hereafter be
given by Bank to Debtor, the undersigned hereby guarantees and promises and
agrees to make prompt payment to Bank, as they severally mature, of all
overdrafts of Debtor, of all loans made or which may be made by Bank to
Debtor, of all moneys paid by Bank for the use or account of Debtor and of
all notes, acceptances and other paper which have been or may be discounted
for, or at the request of, Debtor, whether made, drawn, accepted, endorsed
or not endorsed by Debtor, and whether endorsed with or without recourse,
and of any and all other obligations, of every kind and character, now due
or which may hereafter become due from Debtor to Bank, howsoever created,
arising or evidenced, and also of any and all renewals or extensions of any
of the foregoing (all herein called ,"Liabilities") regardless of any
collateral now held by Bank, or which Bank may hereafter acquire, as
security for any or all of the Liabilities.
It is understood that extensions of time of payment or modifications or
renewals of any of the Liabilities shall not in any way impair the liability
of the undersigned to Bank and that the undersigned will keep posted as to
all matters pertaining to this Corporate Guaranty without notice from Bank.
When any of the Liabilities shall become and remain due and unpaid, the
undersigned will, upon demand, pay to Bank the amount due thereon.
In the event any property of the undersigned of any kind is now, or at any
time hereafter shall be, pledged to or in the possession of Bank, including,
but without limitation, the property described below (if any) and any
deposit or credit balance or other indebtedness credited by or due from Bank
to the undersigned ("Guaranty Collateral"), the undersigned hereby pledges
to and grants to Bank a security interest in and to all such Guaranty
Collateral.
10.7-36
37
Upon the failure of the undersigned to pay any of the Liabilities as agreed
and which are hereby guaranteed, Bank shall then have all of the rights and
remedies of a secured party under the Uniform Commercial Code of Missouri,
including without limitation, the right to sell or otherwise dispose of,
from time to time, any or all of the Guaranty Collateral. Unless the
Guaranty Collateral is of a type to decline speedily in value or is of a
type commonly sold on a recognized market, Bank shall send the undersigned
reasonable notice of the time and place of any public sale or of the date
after which any private sale or other disposition is to be made. The
requirement of such notice shall be met if such notice is mailed, postage
prepaid, to the undersigned at the last address for the undersigned shown on
Bank's records, at least five (5) days before the time of sale or other
disposition. After deducting all costs and expenses of every kind, Bank may
apply the residue of the proceeds of any sale or sales of Guaranty
Collateral to pay any Liabilities and/or any amounts owing hereunder in such
order or preference as Bank may determine.
Before proceeding hereunder against the undersigned, resort need not be made
by Bank to any other security for any or all of the Liabilities whether
pledged by Debtor or by any other person in connection with the Liabilities
or the Guaranty Collateral (collectively, the "Collateral"), nor need Bank
exhaust any remedy against Debtor, nor against any other endorser, surety or
guarantor of the Liabilities.
Notice of the making, renewing or extending time of payment of any of the
Liabilities, and of demand, protest, and notice of nonpayment thereof, and
notice of acceptance hereof, are expressly waived. No substitution, release,
surrender or impairment (including but not limited to failure to perfect a
security interest in any Collateral) of any Collateral, nor the
substitution, release or death of any other party liable for the payment of
any Liabilities, shall affect the liability of the undersigned to Bank. The
undersigned waives all errors and omissions in connection with Bank's
administration of the Liabilities and Collateral. A waiver by Bank of any
right or remedy on any one or more occasions shall not be construed as a bar
to or a waiver of any such right or remedy on future occasions. The
undersigned expressly waives notice of any changes in the terms of the
Liabilities, including interest rate and term.
In consideration of Bank acting in reliance hereon, the undersigned agrees
that the obligations herein contained with respect to the undersigned and
the rights herein granted shall continue until a written revocation signed
by the undersigned is personally delivered or sent by certified mail, return
receipt requested, to
10.7-37
38
Bank's president or any of Bank's vice presidents. Any such revocation shall
not affect the rights of Bank hereunder with respect to any Liabilities
which arose prior to receipt by Bank of such revocation and all extensions,
renewals and modifications of such prerevocation Liabilities whether before
or after receipt of such revocation, and any interest of Bank in and to any
Collateral shall continue until all such Liabilities have been paid in full.
The undersigned will pay on demand all costs of collection, legal expenses,
and attorneys' fees incurred or paid by Bank in collecting and/or enforcing
this Corporate Guaranty and the Guaranty Collateral, unless prohibited by
applicable law.
Upon payment of any Liabilities by the undersigned, the undersigned shall be
surrogated to the rights of Bank against Debtor to the extent of the payment
made; provided, however, the undersigned hereby postpones and subordinates
its right of subrogation until all Liabilities have been paid in full. The
undersigned further agrees that if a voluntary or involuntary petition in
bankruptcy is filed by or against Debtor, and the undersigned is determined
to be an insider of Debtor under applicable bankruptcy law, then in such
event the undersigned forever waives any right of subrogation against Debtor
on account of payment made pursuant to this Corporate Guaranty.
The undersigned agrees that, if at any time all or any part of any payment
previously applied by Bank on any of the Liabilities must be returned by the
Bank for any reason, whether by court order, administrative order, or
settlement, the undersigned shall remain liable for the full amount returned
(except to the extent limited herein) as if such amount had never been
received by Bank, notwithstanding any termination of this Corporate Guaranty
or the cancellation of any agreement evidencing the Liabilities.
The undersigned agrees to provide to Bank, from time to time, such
information regarding the financial position, condition or business of the
undersigned, as the Bank may reasonably request.
This Corporate Guaranty shall remain fully enforceable irrespective of any
defense which the Debtor may assert on the Liabilities, including but not
limited to failure of consideration and statute of frauds.
The undersigned has unconditionally delivered this Corporate Guaranty to
Bank and failure to sign this or any other guaranty by any other person
shall not discharge the liability of the undersigned under this Corporate
Guaranty.
10.7-38
39
The undersigned acknowledges that it will derive a direct and substantial
benefit from the making of the loan from Bank to Debtor as described herein.
This Corporate Guaranty shall be governed by, and construed in accordance
with, the laws of Missouri, shall inure to the benefit of Bank, its
successors and assigns, and shall be binding upon the undersigned and the
successors and assigns of the undersigned.
TEAM FINANCIAL ACQUISITION
SUBSIDIARY, INC.
By: /s/ Xxxxxx X. Xxxxxxxxxx
------------------------
Title: Chairman/CEO
---------------------
By: /s/ Xxxxxxx X. Xxxxxx
------------------------
Title: President
---------------------
10.7-39
40
COMMERCE BANK
COLLATERAL PLEDGE AGREEMENT
The undersigned and each of the undersigned pledge and grant to Commerce Bank,
N.A. /s/ Commerce Bank, N.A. ("Bank") a security interest in all property of the
undersigned, or either of them, of any kind or description, which now or
hereafter is delivered to Bank or in the possession of Bank or anyone on behalf
of Bank, including, but not limited to, the following property and including any
deposit or credit balance or other indebtedness due from Bank to the undersigned
or either of them "Collateral"):
STOCK
The security interest granted hereunder shall secure all obligations of the
undersigned, or either of them, to Bank howsoever created, evidenced or arising.
whether direct or indirect, absolute or contingent, now existing or hereafter
arising, due or to become due ("Liabilities").
Upon default of any obligation secured hereby, Bank shall have all of the rights
and remedies of a secured party under the Uniform Commercial Code of Missouri.
Any notice required by such law shall be deemed reasonable if such notice is
mailed, postage prepaid, to the undersigned at the last address of undersigned
appearing on the records of Bank at least 10 days prior to the event for which
notice is required. After such deductions as may be authorized by law, the
proceeds of any sale of collateral may be applied to liabilities of the
undersigned in such order or preference as Bank in its sole discretion may
determine.
Prior to default Bank may direct that any sums payable on account of the
collateral be payable to Bank, Bank or its transferee may, at any time, in its
sole discretion compromise, settle or extend the time of payment of any demands
or obligations represented by any of the collateral pledged hereunder. Neither
Bank nor subsequent holder shall be under any liability or obligation to take
any steps whatsoever to fix any liability upon or to collect or enforce payment
of any Obligation pledged as collateral hereunder whether by giving any notice,
presenting, demanding payments, protesting, instituting suit or otherwise.
If Bank should at any time be of the opinion that the Collateral is not
sufficient or has declined or may decline in value or should Bank deem itself
insecure, then Bank may demand additional security satisfactory to Bank, and the
undersigned promises to furnish such additional security satisfactory to Bank
forthwith.
With respect to any liability of the undersigned arising out of endorsement,
guarantee, suretyship, or accommodation, the undersigned
10.7-40
41
hereby consent to any and all renewals or extensions and whether one or more or
for the same or different term, consent to the release or substitution of any
collateral securing such obligation.
Executed and delivered this 21st day of August, 1997.
PLEDGOR Team Financial, Inc.
By: /s/ Xxxxxx X. Xxxxxxxxxx
----------------------------
/s/ Xxxxxxx X. Xxxxxx
--------------------------------
Title: Chairman & CEO President
-------------------------
10.7-41
42
COMMERCE BANK
COLLATERAL PLEDGE AGREEMENT
The undersigned and each of the undersigned pledge and grant to Commerce Bank,
N.A. /s/ Commerce Bank, N.A. a security interest in all property of the
undersigned, or either Of them, of any kind or description, which now or
hereafter is delivered to Bank or in the possession of Bank or anyone on behalf
of Bank, including, but not limited to, the following property and including any
deposit or credit balance or other indebtedness due from Bank to the undersigned
or either of them ("Collateral"):
STOCK
The security interest granted hereunder shall secure all obligations of the
undersigned, or either of them. to Bank howsoever created, evidenced or arising,
whether direct or indirect, absolute or contingent, now existing or hereafter
arising due or to become due ("Liabilities").
Upon default of any obligation secured hereby. Bank shall have all of the rights
and remedies of a secured party under the Uniform Commercial Code of Missouri.
Any notice required by such law shall be deemed reasonable if such notice is
mailed, postage prepaid, to the undersigned at the last address of undersigned
appearing on the records of Bank at least 10 days prior to the event for which
notice is required. After such deductions as may be authorized by law, the
proceeds of any sale of collateral may be applied to liabilities of the
undersigned in such order or preference as Bank in its sole discretion may
determine.
Prior to default Bank may direct that any sums payable on account of the
collateral be payable to Bank, Bank or its transferee may, at any time, in its
sole discretion compromise, settle or extend the time of payment of any demands
or obligations represented by any of the collateral Pledged hereunder. Neither
Bank nor subsequent holder shall be under any liability or obligation to take
any steps whatsoever to fix any liability upon or to collect or enforce payment
of any obligation pledged as collateral hereunder whether by giving any notice,
presenting demanding payments, protesting, instituting suit or otherwise.
If Bank should at any time be of the opinion that the Collateral is not
sufficient or has declined or may decline in value or should Bank deem itself
insecure, then Bank may demand additional security satisfactory to Bank, and the
undersigned promises to furnish such additional security satisfactory to Bank
forthwith.
With respect to any liability of the undersigned arising out of endorsement,
guarantee, suretyship, or accommodation, the undersigned
10.7-42
43
hereby consent bo any and all renewals or extensions and whether one or more or
for the same or different term, consent to the release or substitution of any
collateral securing such obligation.
Executed and delivered this 21st day of August, 1997.
PLEDGOR Team Acquisition Subsidiary, Inc.
By: /s/ Xxxxxx X. Xxxxxxxxxx
-----------------------------
/s/ Xxxxxxx X. Xxxxxx
---------------------------------
Title: Chairman & CEO President
--------------------------
10.7-43
