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Exhibit 10.E
FEDERAL HOME LOAN BANK OF CINCINNATI
Blanket Agreement for Advances
and
Security Agreement
Cincinnati, Ohio
July 22, 1996
GREAT LAKES BANK whose principal place of business is located at ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ (hereinafter called the "Borrower"), in
consideration of advances (as further defined in Section 2 below) or other
financial accommodations heretofore or at anytime hereafter made or granted by
the FEDERAL HOME LOAN BANK OF CINCINNATI (hereinafter called the "Bank"), hereby
grants to the Bank a security interest in all of the Borrower's assets or rights
to the extent listed and defined in Section 2 below and hereunder, and all
proceeds thereof, to secure the payment of all such advances and all other
indebtedness and liabilities of the Borrower to the Bank, now existing or
hereafter arising, plus interest thereon and all costs of collection and legal
expenses incurred by the Bank in collecting and/or enforcing any of such
liabilities or realizing on the security given hereby (hereinafter collectively
called the "Obligations").
1. APPLICATION AND AUTHORITY FOR ADVANCES; REPAYMENT; INTEREST AFTER
MATURITY. Pursuant to the Federal Home Loan Bank Act of 1932, as amended, and
all relevant rules and regulations in effect thereunder (hereinafter
collectively the "Act"), the Bank makes available loans to its members and
certain qualified non-member mortgagees (hereinafter referred to as "advances").
The procedures and the form of application for such advances shall be as
specified within the "Advance Programs" in effect from time to time as adopted
by the Board of Directors of the Bank as part of its "Credit Policy". The Bank
shall give the Borrower thirty (30) days written notice prior to the effective
date of a change in the Advance Programs or other provisions of the Credit
Policy. The Borrower shall furnish to the Bank a certified copy of a resolution
of the Borrower's Board of Directors (or other governing body) specifying
certain of the Borrower's officers or other employees who are authorized to
apply for, amend and renew such advances from the Bank. Generally, all
applications for advances shall be made by such specified persons in writing,
except that applications may be made by facsimile on the conditions set out in
the Credit Policy only if applications for advances by facsimile are then
permitted by the Credit Policy. However, unless the Bank shall be otherwise
notified by the Borrower in writing, the Bank may honor any form of request,
including an oral request, for disbursements of previously-approved applications
for advances. The Bank's records of such advances to the Borrower shall be
rebuttable evidence of such advance and of the Borrower's agreement to repay
same in accord with the Advance Programs. Further, notwithstanding the
particular repayment schedule or interest rates specified in the Advance
Programs, or within the notice of approval from the Bank as to any such advance,
interest shall be assessed against past-due principal and/or interest (whether
past due because of maturity, acceleration or otherwise), or, at the Bank's
option upon any event of default occurring and continuing hereunder, at a rate
as outlined in the Credit Policy.
2. SECURED PROPERTY LISTING AND DEFINITION. The following collateral
shall be included in the Bank's security interest (as noted in the box by each
category) and all of such items, together with all shares of the Bank owned by
Borrower and such other collateral as may from time to time be specified in
separate agreements between the Bank and the Borrower, or which are pledged to
the Bank or in which the Bank takes a security interest, if any, shall
hereinafter collectively be called the "secured property":
(a) [X] Obligations of the United States of America, or
obligations fully guaranteed by the United States of America, or other
securities approved by the Bank and delivered to the Bank's possession, and all
replacements therefor and proceeds thereof (hereinafter called "Securities
Collateral");
(b) [ ] Specific one to four family residential mortgages
and/or one to four family residential deeds of trust in favor of the Borrower as
mortgagee, and the notes or other instruments evidencing the indebtedness
secured thereby, and complying with the requirements of the Act and all
replacements therefor and proceeds thereof (hereinafter sometimes called
"Specific Mortgage Collateral");
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(c) [X] Specific multi-family residential mortgages and/or
multi-family residential deeds of trust in favor of the Borrower as mortgagee,
and the notes or other instruments evidencing the indebtedness secured thereby,
and complying with the requirements of the Act and all replacements therefor and
proceeds thereof (hereinafter also sometimes called "Specific Mortgage
Collateral");
(d) [X] 100% of the Borrower's mortgage portfolio (i.e., each
and every one to four family residential mortgage or one to four family
residential deed of trust in favor of the Borrower as mortgagee, and the notes
or other instruments evidencing indebtedness secured thereby, complying with the
requirements of the Act and meeting the requirements of Section 5(b) below) and
all replacements therefor and proceeds thereof (hereinafter sometimes called
"Blanket Mortgage Collateral").
3. EVIDENCE OF THE SECURED PROPERTY; MAINTENANCE OF COLLATERAL LEVEL.
The Borrower agrees to deliver to the Bank such evidence of eligibility to
borrow hereunder, its interest in the secured property and of availability of
same for use as collateral pursuant hereto, in accordance with the Credit Policy
and as the Bank may in good faith request. The Borrower agrees that all secured
property shall be subject to audit and verification by or on behalf of the Bank
at the sole expense of the Borrower. The Borrower will at all times maintain, as
minimum secured property hereunder, secured property having an aggregate
collateral value acceptable to the bank, which shall make such determination in
good faith and in conformity with the requirements of Section 5(b) below, and if
the Borrower fails to do so (a) the Borrower will, within three (3) days of
receipt of written notification from the Bank, reduce its unpaid advances or
other Obligations as requested in writing by the Bank or (b) the Borrower, upon
the written request of the Bank, will immediately deposit additional collateral
or agree to additional security interests satisfactory to the Bank.
4. SECURITIES COLLATERAL. If Item 2(a) above is included in the secured
property, the Securities Collateral (or custodial receipts for same acceptable
to the Bank) shall be deposited with the Bank in aggregate principal amounts as
required by the Bank. The Bank, upon the occurrence and during the continuation
of an event of default (should the Bank have not already accelerated the
Obligations), may retain any interest or principal payments collected by it as
to such Securities Collateral and apply same against interest or principal of
the Obligations.
5. MORTGAGE COLLATERAL. The Borrower acknowledges that the Bank is
permitting it to retain in its possession all Specific and Blanket Mortgage
Collateral (together or separately the "Mortgage Collateral") for purposes of
servicing, collection and foreclosure, and the Borrower acknowledges that the
Borrower will hold such Mortgage Collateral, and all proceeds and payments
therefrom in trust as the Bank's security and for the benefit and subject to the
direction and control of the Bank, and upon the following additional terms and
conditions:
(a) At the Bank's request and sole option, the Borrower shall
deliver to the Bank an Assignment of each item of Mortgage Collateral in the
Bank's form for the same. Further, at the Bank's request and sole option, the
Borrower will physically deliver to the Bank all documentation as to Specific
Mortgage Collateral and/or Blanket Mortgage Collateral and/or endorse in favor
of the Bank all or any portion of same. Except as authorized by the Bank, the
Borrower shall not withdraw any Specific Mortgage Collateral prior to its
payment in full of all Obligations. The Borrower shall promptly notify the Bank
in writing (i) whenever the principal payments in excess of ten percent (10%) of
the remaining unpaid balance are made by Borrower's customers on any item of
Specific Mortgage Collateral, (ii) whenever any item of Specific Mortgage
Collateral is paid off in full by Borrower's customers or involved in any
foreclosure action, and/or (iii) whenever any building on property serving as
Specific Mortgage Collateral is damaged by casualty or otherwise in excess of
twenty-five percent (25%) of its appraised value (if the Borrower does not
reasonably believe that such building can be promptly repaired). Such written
notice shall not initially be required where a Borrower's entire mortgage loan
portfolio provides collateral for the Obligations (i.e., if Section 2(d) above
has been utilized by the Borrower).
(b) The aggregate principal balances due under Securities
Collateral and/or Mortgage Collateral shall be maintained at all times by the
Borrower in an amount not less than that percentage of outstanding advances
required by the Credit Policy.
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(c) Upon written direction from the Bank, the Borrower will
deposit all collections from Mortgage Collateral in a separate bank account
designated as required by the Bank as a source of which to withdraw interest and
principal payments on the Obligations.
(d) Unless and until otherwise directed in writing by the Bank
after the occurrence of an event of default and only during the continuation of
such event of default (should the Bank have not accelerated the maturity of the
Obligation involved), the Borrower shall have the right to make and retain all
collections from time to time coming due on Mortgage Collateral, to execute and
deliver satisfactions of or releases of such Mortgage Collateral paid in full,
and to take all necessary legal action to enforce collection of delinquent
payments, including foreclosure, without disclosing this security arrangement
and trust, and to use all collections so made by the Borrower in its ordinary
course of business.
(e)(i) The Borrower agrees to keep and maintain such Mortgage
Collateral free and clear of pledges, liens and encumbrances of others, except
as provided herein. The Borrower shall promptly give the Bank specific and
detailed written notice of any security interest or participation in such
Blanket Mortgage Collateral of third party lenders or others. Such security
interest or participation of third party lenders shall be deemed approved by the
Bank if it does not reply in writing to such notice within thirty (30) days of
same.
(ii) Whenever it is commercially reasonable, the Borrower
shall obtain the Bank's written approval prior to the actual sale or transfer of
such Mortgage Collateral. However, in case of pledge of a Borrower's entire
mortgage loan collateral portfolio (i.e., notation by the Borrower of Section
2(d) above), and if the Bank has not yet demanded or acquired physical
possession of documentation related to such Mortgage Collateral, and when it is
not commercially reasonable to obtain a release of such Mortgage Collateral
prior to the sale or transfer of mortgages, then the Borrower is not required to
comply with this subsection 5(e)(ii) of the Agreement, provided, the Borrower
submits to the Bank within ten (10) business days after the contractual sale or
transfer date, or any earlier sale or transfer date, a properly executed
original Notice and Release Request in which the Borrower warrants to the Bank
that a mortgage portfolio equal in book value to at least that percentage of
outstanding advances required by the Credit Policy still remains unsold and not
participated in or encumbered by others.
(f) The buildings located on each mortgage property
constituting Mortgage Collateral shall be covered by all risk hazard insurance
and by insurance against all other risks customary and generally required by
residential or multi-family (as the case may be) mortgage lenders in the area in
which the mortgaged property is located in an amount not less than the unpaid
balance due the Borrower by its customer on each such item of Mortgage
Collateral. The Borrower will cause such insurance policies to include the
Borrower and its "successors and assigns" as loss payee under a standard
mortgage endorsement to evidence the Bank's mortgagee/assignee interest therein
and, if the Bank so requires, to give the Bank ten (10) days prior notice of any
policy cancellation. At the Bank's demand, the Borrower will physically deliver
to the Bank any such insurance policies. The Bank may cause any such property to
be insured if the Borrower fails to do so, and any such expense shall be an
additional Obligation hereunder.
6. WARRANTIES AND FURTHER COVENANTS. (a) The Borrower represents and
warrants that: (1) that the Borrower is the true and lawful owner of all the
secured property free and clear of all claims, liens, encumbrances, rights of
set-off, mortgages and security interests of any nature whatsoever (except this
security interest and as may be further specified below); and (2) in the case of
Blanket Mortgage Collateral, percentage participation by or security interests
of third parties shall be limited to those who have consented in writing to the
Bank's security interest hereunder.
(b) Borrower hereby represents and warrants the existence of
all necessary power to enter into and execute this Agreement and that this
Agreement is not in violation of its Articles, Charter, Regulations or By-Laws,
or of any federal, state or local laws or administrative or judicial rulings.
(c) Borrower is either a member of the Bank or a qualified and
eligible nonmember mortgagee with full powers to borrow hereunder.
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(d) Except as permitted under Section 5(e) above, the Borrower
shall not (i) sell, offer to sell or otherwise transfer the secured property,
nor pledge, mortgage or create, or suffer to exist a security interest claim,
lien, encumbrance, right of set-off or security interest of any kind whatsoever
in the secured property or the proceeds or products thereof in favor of any
person other than the Bank without prior written consent of the Bank, or (ii)
transfer physical possession of notes and mortgages constituting Mortgage
Collateral hereunder to any third party without the prior written consent of the
Bank.
(e) Borrower agrees to execute and deliver financing
statements under the Uniform Commercial Code, and statements or amendments
thereof or supplements thereto, recordable Assignments of Mortgage Collateral,
and such other instruments as the Bank may from time to time require in order to
evidence, perfect, secure, preserve, protect and enforce the security interest
hereby granted. The Bank is hereby irrevocably appointed as Attorney-In-Fact for
the Borrower in all matters pertaining to all such perfection, preservation,
protection and enforcement.
(f) Borrower represents and warrants that to the best of its
knowledge the secured property is free from any and all environmental hazards.
Borrower shall indemnify Bank, hold Bank harmless, and, at the option of Bank,
defend Bank with counsel satisfactory to Bank, from all liabilities, costs,
damages, claims or expenses (including attorneys' fees and environmental
consultant's fees), suffered, paid or incurred by Bank resulting from or arising
out of any requirement under any applicable federal, state or local law,
statute, regulation, order, or decree requiring that any release of a hazardous
material, solid waste, pollutant or contaminant at any of the secured property
be remedied, cleaned up or lawfully disposed of.
7. EVENTS OF DEFAULT: ACCELERATION. Any one or more of the following
shall constitute events of default hereunder: (a) default by Borrower in the
payment or performance, when due or payable, of any of the Obligations; (b) the
making by the Borrower of any misrepresentation to the Bank hereunder, or
otherwise for the purpose of obtaining loan advances or an extension of same;
(c) failure of the Borrower after request by the Bank to furnish promptly
financial information or to permit promptly the inspection of books or records;
(d) failure of Borrower to perform or observe any of the provisions of this
Agreement or of any other instrument pertaining to the Obligations or secured
property (subject to a ten (10) day cure period after written notice from the
Bank is received by the Borrower); (e) issuance of an injunction or attachment
against property of the Borrower which the Bank in good faith considers
materially adverse to such Borrower's financial condition; (f) appointment of a
receiver or liquidator of any part of the property of the Borrower, or if the
management of Borrower is assumed by any supervisory authority; (g) the
commencement by or against the Borrower of any proceeding under any bankruptcy,
arrangement, reorganization, insolvency or similar law for the relief of
debtors; (h) termination for any reason of Borrower's membership in the Bank or
its status as a nonmember mortgagee and/or state housing finance agency eligible
for advances hereunder; (i) the occurrence of such a change in the condition or
affairs (financial or otherwise) of the Borrower, as in the good faith opinion
of the Bank impairs the Bank's security or increases its risk; or (j) if the
Bank in good ▇▇▇▇▇ ▇▇▇▇▇ itself insecure. Upon occurrence of any of the events
of default and failure by the Borrower to cure within the applicable cure
period, if any, any or all of the Obligations shall, at the option of the Bank
and notwithstanding any time or credit allowed by any instrument evidencing or
document relating to the Obligations, be immediately due and payable without
notice or demand (except for the events of default noted in Subsections (i) and
(j) above, for which the Bank must give written notice to the Borrower). The
Bank may then exercise any one or more of the rights and remedies granted
pursuant to this Agreement and/or the Credit Policy and also exercise any or all
of the rights and remedies afforded to a secured party under the Uniform
Commercial Code as enacted in Ohio or the Borrower's state of operation or to
the Bank under the Act. Upon repossession or recovery of the secured property by
the Bank, it may, after reasonable written notification to the Borrower, sell
the secured property at public or private sale, at which sale the Bank may
become the purchaser. Pending any such action, the Bank may liquidate the
secured property and/or continue to use and exercise rights of ownership
pertaining to the secured property. Borrower does hereby make, constitute and
appoint Bank as its true and lawful attorney-in-fact to deal with the secured
property and, in the Borrower's name and stead to sell, assign, collect,
compromise, settle and release of record any portion of the secured property as
fully as Borrower could do if acting for itself. The Borrower hereby agrees to
be liable to the Bank for any deficiency that may result upon such liquidation
and sale of the secured property and waives all claims for damages by reason of
any seizure, repossession, retention, use or sale of said secured property. The
requirement of reasonable notice, if necessary,
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shall be met if such notice is mailed, postage prepaid, to the first of the
places of business of the Borrower shown in this Agreement at least ten (10)
days before the time of sale or other disposition. While exercising its rights
as a secured party hereunder, including use and receipt of benefits from the
secured property, and provided the Bank's actions are commercially reasonable
under the circumstances or do not constitute negligence or willful misconduct,
the Bank shall not be liable in any fashion to the Borrower or third party
(including without limitation Borrower's customers) for any damages arising from
such use, or any obligations, duties or liabilities of the Borrower in
connection therewith (including without limitation Borrower's contracts,
agreements, guarantees, commitments or warranties).
8. WAIVERS: CONTINUED LIABILITY. The Bank shall not be deemed to have
waived any of its rights in this Agreement or to the secured property unless
such waiver is in writing and signed by the Bank and such waiver shall not
operate as a waiver of any other default or of the same default on a subsequent
occasion. No renewal or extension of time of payment of the Obligations at any
rate of interest, no release, surrender, exchange or modification of the secured
property, no release of any person primarily or secondarily liable on the
Obligations (including any maker, endorser, guarantor or surety), no delay in
enforcement of payment of the Obligations and no delay, omission or forbearance
in exercising any right or power with respect to the Obligations, the secured
property, or this Agreement shall affect the liability of the Borrower to the
Bank.
9. DURATION. The term of this Agreement shall commence with the date
hereof and end on the termination date, which is the date when the Borrower has
paid in full all of the Obligations secured hereby, and either: (i) the Bank
gives written notice to the Borrower that no further loans are to be made
hereunder, or (ii) the Borrower gives written notice to the Bank that it does
not intend to apply for further advances hereunder. Until such termination, this
Agreement shall be a continuing one, and after such termination any liabilities
hereunder of the Borrower to the Bank not satisfied prior to such termination
shall survive and remain in full force and effect until satisfied.
10. ATTORNEY-IN-FACT. Borrower hereby appoints the Bank its irrevocable
attorney-in-fact, with full power of substitution, in its name or otherwise, but
at the Borrower's sole cost and expense (i) to transfer any shares of stock or
Securities Collateral hereby or otherwise secured to Bank into the name of the
Bank or its designee or assignee, (ii) to endorse on behalf of the Borrower any
promissory notes or other instruments delivered by the Borrower to the Bank,
(iii) to execute and/or record such documents and instruments as the Bank, in
its sole judgment, deems necessary or appropriate to further evidence or perfect
or affect a transfer of the security interest granted to the Bank herein or
otherwise, and (iv) to record this Agreement as a power of attorney where the
Bank deems appropriate.
11. NOTICE. (a) Any written notice, approval, or direction provided for
in this Agreement to be given by the Bank to the Borrower shall include and be
satisfied by notice given to the Borrower by: (i) hand delivery, regular first
class mail, or any other form of physical delivery, or (ii) facsimile, whether
or not receipt of such facsimile is confirmed with the Borrower or a follow-up
hard copy is mailed or otherwise physically delivered to the Borrower, and (b)
any written notice provided for in this Agreement to be given by the Borrower to
the Bank shall only include and be satisfied by notice given to the Bank by: (i)
registered or certified mail (postage prepaid, return receipt requested) or some
other form of delivery whereby receipt is confirmed, or (ii) facsimile, but only
if receipt by the Bank is confirmed by the Borrower and a follow-up hard copy is
delivered to the Bank by the means specified in subsection (b)(i) of this
Section 11.
12. GENERAL. All rights and liabilities hereunder shall be governed and
limited by and construed in accordance with the Act and the laws of the State of
Ohio (matters related to eligibility for advances and the rate of interest
assessed by the Bank on advances or other Obligations shall be governed solely
by the Act). This Agreement shall inure to the benefit and bind the Bank and the
Borrower and their respective successors and assigns. Any provision hereof which
may prove limited or unenforceable under any laws or judicial rulings shall not
affect the validity or enforcement of the remainder of the provision or of any
other provision.
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FEDERAL HOME LOAN Borrower:
OF CINCINNATI
GREAT LAKES BANK
By /s/ Vice President
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its Vice President By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., President
By /s/ Assistant Vice President
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its Assistant Vice President And /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Senior Vice
President
July 24, 1996
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FEDERAL HOME LOAN BANK OF CINCINNATI
P.O. BOX 598
CINCINNATI, OHIO
RESOLUTION FOR ADVANCES
"RESOLVED, that any two (2) of the following persons who are duly qualified
officers or other employee of the borrower:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
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(Name) (Signature)
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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(Name) (Signature)
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
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(Name) (Signature)
be and they hereby are authorized to borrow from time to time under an Agreement
for Advances with the Federal Home Loan Bank of Cincinnati such sum or sums, as
any two (2) may determine, on its usual forms for loans or advances, and to
execute an application for the advances obtained from time to time and to make
and execute such other agreements and do all things necessary as may be
required, provided only, that the advances from said Bank shall at no time
exceed in aggregate unpaid principal the maximum permitted to this borrower by
the Federal Home Loan Bank Act, or any other Act or regulation applicable to
this borrower. This authorization shall be construed as effective until receipt
by said Bank of written notice of its amendment or revocation."
I, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, hereby certify that I am the duly elected, qualified and
acting secretary of GREAT LAKES BANK, MENTOR, OHIO and that the above and
foregoing Resolution was duly adopted by the Board of Directors of said Borrower
at a regular meeting or duly called special meeting held on the 16 day of JULY,
1996, at which a quorum was present, and that the said Resolution was adopted in
accordance with statutory and charter requirements and is duly recorded in the
minutes of said meeting.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the
borrower this 16 day of JULY, 1996.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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(Secretary)
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STATE OF OHIO )
) SS:
COUNTY OF LAKE )
On this July 22, 1996, before me appeared ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., to
me personally known, who being by me duly sworn, did say that he or she is
President of the above-named Borrower, a corporation; that the seal affixed to
the foregoing instrument is the corporate seal of said corporation; that said
instrument was signed and sealed on behalf of said corporation by authority of
its Board of Directors; and said President acknowledged said instrument to be
the free act and deed of said corporation and his or her free act and deed as
such officer, for the uses and purposes in said instrument mentioned.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Notary Public, ▇▇▇▇▇ ▇. ▇▇▇▇▇
Lake County, State of Ohio
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