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EXHIBIT (10)O
BROKER LOAN PLEDGE AND SECURITY AGREEMENT
Dated as of August 30, 1996
This Broker Loan Pledge and Security Agreement is executed by the Debtor
in favor of The First National Bank of Chicago.
1. DEFINITIONS.
As used in this Security Agreement:
"Bank" means The First National Bank of Chicago, its branches,
subsidiaries and affiliates and their successors and assigns.
"Collateral" means all of the following, wherever located, in which the
Debtor now has or hereafter acquires any interest including all cash and
noncash proceeds and records relating thereto and all dividends, interest,
income, distributions, collections and any other rights or property which the
owner would be entitled to receive with respect to, or in substitution or
exchange for, any of the following: all Pledged Securities; all deposits with
the Bank; and all other property delivered or pledged to the Bank or in which
the Bank is granted a security interest or which is actually or constructively
held by or in the possession of the Bank or its agent or designee, including,
without limitation, any such property which is in any account with the Bank or
any account which is owned by, pledged to, or controlled by, the Bank with a
clearing corporation, custodian, trust company, bank, broker, clearing company,
Federal Reserve Bank or other entity, and further including, without
limitation, property delivered for safekeeping, collection, pledge or
transmission.
"Collateral Schedule" shall mean the schedules, lists, descriptions or
other communications (including by electronic data entry, telex and facsimile
transmission) delivered or transmitted to the Bank or its agent or designee
pursuant to Section 5 hereof, each of which shall constitute a part of this
Security Agreement.
"Customer Securities" means Securities carried by the Debtor for the
account of any customer within the meaning of Rules 8c1 and 1 5c21 of the
Securities and Exchange Commission.
"Debtor" means the undersigned party designated as "Debtor" on the
signature page hereof.
"Default" means an event described in Section 6 hereof.
"Firm Securities" means Securities owned by the Debtor for its own
account.
"Lien" means any security interest, mortgage, pledge, hypothecation, lien,
claim, charge, encumbrance, title retention agreement or lessor's interest, in
or on any property.
"Obligations" means any and all existing and future indebtedness,
obligation and liability of every kind, nature and character, direct or
indirect, absolute or contingent including all renewals, extensions and
modifications thereof and all fees, costs and expenses incurred by the Bank in
connection with the documentation, administration, collection or enforcement
thereof), of the Debtor to the Bank, howsoever and whensoever created, arising,
evidenced or acquired.
"Pledged Securities" means all Securities delivered to the Bank, its agent
or designee, including without limitation, those held by a depository, clearing
corporation or similar entity.
"Section" means a numbered section of this Security Agreement, unless
another document is specifically referenced.
"Security" and "Securities" shall mean instruments, certificated and
uncertificated securities, stocks, notes, bonds, debentures, government
securities, options, warrants, pass through certificates, and certificates of
deposit and any other security defined as such under the Illinois Uniform
Commercial Code, as amended from time to
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time.
"Security Agreement" means this Broker Loan Pledge and Security Agreement,
as it may be amended from time to time.
The foregoing definitions shall be equally applicable to both the singular
and plural forms of the defined terms.
2. GRANT OF SECURITY INTEREST.
The Debtor hereby pledges and assigns to the Bank and grants to the Bank a
continuing security interest in, and right of offset against, the Collateral to
secure payment of the Obligations provided, however, that Customer Securities
shall secure the Obligations only to the extent described in Section 12 hereof.
3. REPRESENTATIONS AND WARRANTIES.
The Debtor represents and warrants to the Bank that:
3.1. Existence and Standing. The Debtor, if a corporation, is duly
organized and is validly existing and in good standing under the laws of its
jurisdiction of incorporation or organization, and the Debtor has all requisite
authority to conduct its business in each jurisdiction in which its business is
conducted.
3.2. Authorization, Validity and Enforceability. The execution and
delivery by the Debtor, if a corporation or partnership, of this Security
Agreement has been duly authorized by proper corporate or partnership
proceedings, as applicable, and this Security Agreement constitutes a legal,
valid and binding obligation of the Debtor and creates a security interest
which is enforceable against the Debtor in all now owned and hereafter acquired
Collateral.
3.3. Firm Securities. Each Pledged Security which is a Firm Security will,
at the time of pledge, be owned by the Debtor free and clear of any liens,
security interests or encumbrances, except for the security interest granted to
the Bank hereunder.
3.4. Customer Securities. It is a broker or dealer as defined in the
Securities Exchange Act of 1934, as amended, and that the pledge of the
Securities designated as Customer Securities does not and will not contravene
any provision of Rules 8c1 or 15c21 of the Securities and Exchange Commission
in effect from time to time. The Debtor has full power and authority from each
customer to pledge the Customer Securities and to permit such Securities to be
commingled with securities carried for the account of other customers of the
Debtor.
3.5. Regulation U. In accordance with Section 2(c) of Regulation U of the
Board of Governors of the Federal Reserve System, it is subject to Regulation T
promulgated by such Board of Governors and does not extend or maintain credit
to or for customers except in accordance with the provisions of such Regulation
T. The Debtor further represents and warrants to the Bank that (i) the proceeds
of all extensions of credit constituting the Obligations shall be used for one
or more of the special purposes described in, and shall meet the conditions of,
Section 221.5(c) of Regulation U of such Board of Governors or, if not so used,
(ii) the Obligations will be secured by Collateral having a sufficient value to
comply with Regulation U.
4. COVENANTS.
From the date of this Security Agreement, and thereafter until this
Security Agreement is terminated:
4.1. Inspection. The Debtor will permit the Bank, by its representatives
and agents, to inspect the Collateral, to examine and make copies of the
records of the Debtor relating thereto, and to discuss the Collateral, and the
records of the Debtor with respect thereto with, and to be advised as to the
same by, the Debtor's officers and employees.
4.2. Records and Reports. The Debtor will maintain complete and accurate
books and records with respect to the Collateral, and furnish to the Bank such
reports relating to the Collateral as the Bank may
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from time to time may reasonably request and subject to
confidentiality. With respect to any Collateral which may be held by a third
party, the Debtor shall instruct such party to xxxx its records or take such
other action acceptable to the Bank to reflect the Bank's interest in such
Collateral.
4.3. Financial Statements and Other Actions. The Debtor shall, at its own
expense, keep the Collateral free and clear of all liens, security interests,
claims, or encumbrances, except in favor of the Bank and defend the Bank's
interest in the Collateral against the claims of all persons and entities. The
Debtor will execute and deliver to the Bank all financing statements and other
documents from time to time requested by the Bank in order to maintain a first
perfected security interest in the Collateral
4.4. Uncertificated Securities. If any of the Collateral consists of
uncertificated securities, the Debtor will, or will authorize the Bank to,
cause the appropriate issuers of uncertificated securities constituting
Collateral to xxxx their books and records with the numbers and face amounts of
all uncertificated securities constituting Collateral and all rollovers and
replacements therefor to reflect the Lien of the Bank granted pursuant to this
Security Agreement, or the Debtor will take or cause the issuers or any other
third parties to take such other action or make such notifications as may be
required by applicable law.
4.5. Registration of Pledged Stock. The Bank may, at its option, register
any registerable Collateral in the name of the Bank or its nominee after the
occurrence of a Default.
4.6. Exercise of Right in Pledge Stock. The Debtor will permit the Bank or
its nominee at any time after the occurrence of a Default, without notice, to
exercise all voting and corporate rights relating to the Collateral, including,
without limitation, exchange, subscription or any other rights, privileges or
options pertaining to any shares of the stock pledged as Collateral and the
Pledged Securities as if it were the absolute owner thereof.
4.7. Negotiable Form. All Collateral, at the time it becomes part of the
Collateral, will be in negotiable form (either in bearer form, endorsed in
blank, with endorsement guaranteed, or such other form satisfactory to the
Bank, suitable for immediate transfer or registration to the Bank or its
nominee or at its order).
4.8. No Liens. The Debtor will not create, incur or suffer to exist any
lien, pledge, security interest or encumbrance on any of the Collateral except
the security interest created by this Security Agreement. None of the
Collateral will be held at any clearing corporation or clearing bank in an
account over which such clearing corporation or bank has any lien or right of
setoff or if held at a clearing corporation or clearing bank, the Bank shall
determine the collateral value of such Collateral only upon the excess, if any,
of the current market value of such Collateral over the amount of any lien or
right of setoff which such clearing corporation or clearing bank has. If
requested by the Bank, the Debtor will cause such clearing corporation or
clearing bank to from time to time confirm to the Bank the amount of any such
lien or right of setoff.
5. DELIVERY, SUBSTITUTION AND WITHDRAWAL OF COLLATERAL.
5.1. Delivery of Collateral. The Debtor shall promptly deliver to the
Bank, its agent or designee, all Collateral pledged to the Bank pursuant to
this Security Agreement. The Bank agrees that delivery to the Bank may be
accomplished by transfer of Pledged Securities to the account of the Bank at
Depository Trust Company in New York, the Midwest Securities Trust Company in
Chicago or any similar depository acceptable to the Bank and that any direction
by the Debtor to transfer any Securities to the Bank's account with any such
depository or any other action taken in accordance with a depository's
customary procedures regarding pledging of Collateral shall constitute a pledge
by the Debtor of such Securities to the Bank and the confirmation of such
pledge. Debtor further agrees that any agent or designee of the Bank or any
depository or clearing corporation holding the Collateral shall have the right
to deliver any Collateral held by it for the benefit of the Bank to the Bank or
to sell Collateral at the
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direction of the Bank.
5.2. Withdrawal of Collateral. Provided no Default shall exist prior to or
after giving effect thereto, the Debtor may withdraw all or any portion of the
Collateral from time to time if, simultaneously therewith and after giving
effect to any contemporaneous borrowings, repayments, and substitutions of
Collateral the outstanding balance of the Obligations is secured by Securities
of a type acceptable to the Bank having a collateral value determined by the
Bank in its sole discretion to be satisfactory to it. No withdrawal or
substitution of Collateral shall be effective until the Bank shall have
consented to such withdrawal or substitution. Notwithstanding the foregoing,
the Bank shall not be obligated to release any collateral in violation of the
release and substitution rules of Regulation U.
5.3. Sale of Securities. Unless the then outstanding Obligations are
secured by other Securities of a type acceptable to, and having a collateral
value satisfactory to, the Bank, the Debtor shall, promptly upon its receipt of
any proceeds from the sale, pledge or other disposition of any of the
Collateral, and in no event more than 10 days after such proceeds are received
by the Debtor, deliver such proceeds to the Bank to be deposited in the special
collateral! account established pursuant to Section 9.2 after the occurrence of
a Default.
6. DEFAULT.
6.1. The occurrence of any one or more of the following events shall
constitute a Default:
6.1.1. Any representation or warranty made by or on behalf of the
Debtor to the Bank under or in connection with this Security Agreement shall be
materially false as of the date on which made.
6.1.2. The breach by the Debtor of any of the terms or provisions of this
Security Agreement.
6 .1. 3. Any material portion of the Collateral shall be transferred
or otherwise disposed of, either voluntarily or involuntarily, in any manner
not permitted by this Security Agreement or shall be lost, stolen, damaged or
destroyed.
6.1.4. Any Obligation shall not be paid when due, whether at stated
maturity, upon any accelerated maturity or otherwise.
6.1.5. Failure of the Debtor to pay any material indebtedness when
due, or the default by the Debtor in the performance of any other term,
provision or condition contained in any agreement under which any such
indebtedness was created or is governed, the effect of which is to cause, or to
permit the holder or holders of such indebtedness to cause, such indebtedness
to become due prior to its stated maturity.
6.1.6. The Debtor shall (i) have an order for relief entered with
respect to it under the United States Bankruptcy Code, (ii) be unable, or admit
in writing its inability, to pay its debts generally as they become due, (iii)
make an assignment for the benefit of creditors, (iv) apply for, seek, consent
to, or acquiesce in, the appointment of a receiver, trustee, examiner,
liquidator or similar official for it or any substantial part of its property,
(v) institute any proceeding seeking an order for relief under the United
States Bankruptcy Code or seeking to adjudicate it a bankrupt or insolvent, or
seeking dissolution, winding up, liquidation, reorganization, arrangement,
adjustment or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtor or fail to file an
answer or other pleading denying the material allegations of any such
proceeding filed against it, (vi) take any action, corporate or otherwise, to
authorize or effect any of the foregoing actions set forth in this Section
6.1.6 or (vii) fail to object in good faith to any appointment or proceeding
described in Section 6.1.7
6.1.7. Without the application, approval or consent of the Debtor, a
receiver, trustee, examiner, liquidator or similar official shall be appointed
for the Debtor or any substantial part of its
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property, or a proceeding described in Section 6.1.6 shall be instituted
against the Debtor and such appointment continues undischarged or such
proceeding continues undismissed or unstayed for a period of 30 consecutive
days.
6.1.8. The making of an application by the Securities Investor
Protection Corporation for a decree adjudicating that customers of the Debtor
are in need of protection under the Securities Investor Protection Act of 1970,
as amended from time to time and the failure of the Debtor to obtain dismissal
of such application within 30 days.
6.1.9. The Securities and Exchange Commission shall revoke the
registration of the Debtor as a broker-dealer.
6.1.10. [Intentionally omitted.]
6.2. Acceleration and Remedies. If any Default occurs, then, upon the
election of the Bank or, in the case of a Default under Section 6.1.6 or 6.1.7,
without any action on the part of the Bank, the Obligations shall immediately
become due and payable without presentment, demand, protest or notice of any
kind, all of which are hereby expressly waived, and the Bank may exercise any
or all of the rights and remedies provided (i) in this Security Agreement, (ii)
to a secured party when a debtor is in default under a security agreement by
the Illinois Uniform Commercial Code and (iii) by any other applicable law
including, without limitation, any law governing the exercise of a bank's right
of setoff or bankers' lien. With respect to Obligations which are contingent
and cannot be accelerated by their nature, the Bank may require the Debtor to
deposit cash or other acceptable collateral in an amount sufficient to cover
principal and interest which will have accrued by the maturity date on said
Obligations to be held as security for said Obligations in the special
collateral account referred to in Section 9.2. The Bank may also, at its
election, terminate or close-out any futures contracts or commitments the Bank
may have with the Debtor.
6.3. Debtor's Obligations Upon Default. Upon the request of the Bank after
the occurrence of a Default, the Debtor will:
6.3.1. Assembly of Collateral. Assemble and make available to the
Bank the Collateral and all records relating thereto at any place or places
specified by the Bank.
6.3.2. Bank Access. Permit the Bank, by the Bank's representatives
and agents, to enter any premises where all or any part of the Collateral, or
the books and records relating thereto, or both, are located, to take
possession of all or any part of the Collateral and to remove all or any part
of the Collateral.
7. WAIVERS, AMENDMENTS AND REMEDIES.
No delay or omission of the Bank to exercise any right or remedy granted
under this Security Agreement or under applicable law shall impair such right
or remedy or be construed to be a waiver of any Default or an acquiescence
therein, and any single or partial exercise of any such right or remedy shall
not preclude other or further exercise thereof or the exercise of any other
right or remedy, and no waiver, amendment or other variation of the terms,
conditions or provisions of this Security Agreement whatsoever shall be valid
unless in writing signed by the Bank, and then only to the extent in writing
specifically set forth. All rights and remedies contained in this Security
Agreement or by law afforded shall be cumulative and all shall be available to
the Bank until the Obligations have been paid in full.
8. PROCEEDS.
The proceeds of the Collateral shall be applied by the Bank to payment of
the Obligations in the following order:
(a) FIRST, to payment of all costs and expenses of the Bank incurred
in connection with the collection and enforcement of the Obligations or of the
security interest granted to the Bank pursuant to this Security Agreement;
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(b) SECOND, to payment of the principal of, and unpaid interest and
fees in respect of the Obligations or to the collateralization of all
Obligations which are contingent and cannot by their nature be accelerated
which payments may be applied and reapplied to the Obligations in such order as
the Bank elects, and;
(c) THIRD, the balance, if any, after all of the Obligations have
been satisfied, shall be deposited by the Bank into the Debtor's general
operating account with the Bank, or to such other account as the Debtor may
direct in writing .
9. GENERAL PROVISIONS.
9.1. Disposition of Collateral. After Default, the Bank may dispose of all
or any part of the Collateral in such a manner and upon such terms as the Bank,
in its sole discretion, shall determine. If any notification of a proposed
disposition of the Collateral is required by applicable law, such notice shall
be deemed reasonable if sent to the Debtor, addressed as set forth in Section
10, at least 3 business days prior to any public sale or the time after which
any private sale may be made. The Debtor hereby expressly agrees that the
Pledged Securities are securities of a type customarily sold on a recognized
market and as such, no notice of any sale or disposition of any of the Pledged
Securities need be given unless trading in a particular Security shall have
been suspended or ceased on all recognized markets at such time.
9.2. Special Collateral Account. The Bank may require all cash proceeds of
the Collateral to be deposited in a special noninterest bearing cash collateral
account with the Bank and held there as security for the Obligations except as
provided in Section 5.3. The Debtor shall have no control whatsoever over said
cash collateral account. If no Default has occurred or is continuing, the Bank
shall from time to time deposit the collected balances in said cash collateral
account into the Debtor's general operating account with the Bank or, upon
notice to the Debtor, apply such balances to payment of the Obligations. If any
Default has occurred and is continuing, the Bank may, at its option, apply the
collected balances in said cash collateral account to the payment of the
Obligations whether or not the Obligations shall then be due, or hold said cash
collateral as Collateral hereunder.
9.3. Bank Performance of Debtor Obligations. Without having any obligation
to do so, the Bank may perform or pay any obligation which the Debtor has
agreed to perform or pay in this Security Agreement and the Debtor shall
reimburse the Bank for any amounts paid by the Bank pursuant to this Section.
The Debtor's obligation to reimburse the Bank pursuant to the preceding
sentence shall be an Obligation payable on demand. The Bank shall use its best
efforts to provide the Debtor with prior notice of any action taken by the Bank
under this Section 9.3 but the failure of the Bank to deliver or the Debtor to
receive such notice shall not affect the Debtor's obligation hereunder.
9.4. Authorization for Bank to Take Certain Action. The Debtor irrevocably
authorizes the Bank at any time and from time to time during the term of this
Security Agreement in the sole discretion of the Bank and appoints the Bank as
its attorney in fact to act on behalf of the Debtor (i) to execute on behalf of
the Debtor as debtor and to file financing statements necessary or desirable in
the Bank's sole discretion to perfect and to maintain the perfection and
priority of the Bank's security interest in the Collateral, (ii) to indorse and
collect any cash proceeds of the Collateral, (iii) to file a carbon,
photographic or other reproduction of this Security Agreement or any financing
statement with respect to the Collateral as a financing statement in such
offices as the Bank in its sole discretion deems necessary or desirable to
perfect and to maintain the perfection and priority of the Bank's security
interest in the Collateral, and (iv) to apply the proceeds of any Collateral
received by the Bank to the Obligations as provided in Section 8.
9.5. Specific Performance of Certain Covenants. The Debtor acknowledges
and agrees that a breach of any of the covenants contained in Sections 4.4,
4.8, 5.1, 5.3, 6.3 and 9.2 will cause irreparable injury to the Bank, that the
Bank has no adequate remedy at law in respect of such breaches and therefore
agrees, without
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limiting the right of the Bank to seek and obtain specific performance of other
obligations of the Debtor contained in this Security Agreement, that the
covenants of the Debtor contained in the Sections referred to in this Section
shall be specifically enforceable against the Debtor.
9.6. [Intentionally omitted.]
9. 7 . Dispositions Not Authorized. The Debtor is not authorized to sell
or otherwise dispose of the Collateral except as set forth in Section 5.2 and
notwithstanding any course of dealing between the Debtor and the Bank or other
conduct of the Bank, no authorization to sell or otherwise dispose of the
Collateral (except as set forth in Section 5.2) shall be binding upon the Bank
unless such authorization is in writing signed by the Bank.
9. 8. Definition of Certain Terms. Terms defined in the Illinois Uniform
Commercial Code which are not otherwise defined in this Security Agreement are
used in this Security Agreement as defined in the Illinois Commercial Code as
in effect on the date hereof.
9.9. Benefit of Agreement. The terms and provisions of this Security
Agreement shall be binding upon and inure to the benefit of the Debtor and the
Bank and their respective successors and assigns, except that the Debtor shall
not have the right to assign its rights under this Security Agreement or any
interest herein, without the prior written consent of the Bank
9.10. Survival of Representations. All representations and warranties of
the Debtor contained in this Security Agreement shall survive the execution and
delivery of this Security Agreement.
9. 11 . Taxes and Expenses. Any taxes (excluding income taxes) payable or
ruled payable by Federal or State authority in respect of this Security
Agreement shall be paid by the Debtor, together with interest and penalties, if
any. The Debtor shall reimburse the Bank for any and all out-of-pocket expenses
and interest charges (including reasonable attorneys', auditors' and
accountants' fees and reasonable time charges of attorneys, paralegals,
auditors and accountants who may be employees of the Bank) paid or incurred by
the Bank in connection with the administration, collection and enforcement of
this Security Agreement and in the audit, analysis, administration, collection,
preservation or sale of the Collateral (including the expenses and charges
associated with any periodic or special audit of the Collateral). The
obligations of the Debtor under this Section shall survive termination of this
Security Agreement.
9.12. Headings. The title of and section headings in this Security
Agreement are for convenience of reference only, and shall not govern the
interpretation of any of the terms and provisions of this Security Agreement.
9.13. Termination. This Security Agreement shall continue in effect
(notwithstanding the fact that from time to time there may be no Obligations or
commitments therefore outstanding) until (i) the Bank has received written
notice of its termination from the Debtor and (ii) no Obligations or
commitments of the Bank which would give rise to any Obligations shall be
outstanding.
9.14. Entire Agreement. This Security Agreement embodies the entire
agreement and understanding between the Debtor and the Bank relating to the
Collateral and supersedes all prior agreements and understandings between the
Debtor and the Bank relating to the Collateral.
9.15. Choice of Law. This Security Agreement shall be construed in
accordance with the laws of the State of Illinois applicable to contracts with
national banking associations made and performed wholly in Illinois.
9.16. Indemnity. The Debtor hereby agrees to assume liability for, and
does hereby agree to indemnify and keep harmless the Bank, and its successors,
assigns, agents and employees, from and against any and all liabilities,
damages, penalties, suits, costs, and expenses of any kind and nature, imposed
on, incurred by or asserted
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against the Bank, or its successors, assigns, agents and employees, in any way
relating to or arising out of this Security Agreement, or the purchase,
ownership, delivery, possession, use, sale or other disposition of any
Collateral except for any such events arising out of the gross negligence or
willful misconduct by the Bank, its successors, assigns, agents and employees.
9.17. Consent to Jurisdiction and Waiver of Jury Trial. The Debtor hereby
irrevocably submits to the non-exclusive jurisdiction of any United States
federal or Illinois state or local court sitting in Xxxx County, Illinois in
any action or proceedings arising out of or related to this Security Agreement
and hereby irrevocably agrees that all claims in respect of such action or
proceeding may be heard and determined in any such court. The Debtor hereby
waives any rights to jury trial in any action arising hereunder or in
connection herewith.
10. NOTICES.
10.1. Sending Notices. Any notice required or permitted to be given under
this Agreement may be, and shall be deemed, given and sent when deposited in
the United States mail, postage prepaid, or by facsimile, or by standard
overnight carrier, addressed to the Debtor or by hand delivery to the Debtor at
the address set forth on Exhibit "A" hereto as its principal place of business,
and to the Bank at the address set forth under its signature hereto.
10.2. Change in Address for Notices. Each of the Debtor and the Bank may
change the address for service of notice upon it by a notice in writing to the
other.
11. SETOFF
In addition to, and without limitation of, any rights of the Bank under
applicable law, if the Debtor becomes insolvent, however evidenced, or any
Default occurs, any indebtedness from the Bank to the Debtor may be offset and
applied toward the payment of the Obligations, whether or not the Obligations,
or any part thereof, shall then be due.
12. CUSTOMER SECURITIES.
In order that the Debtor may comply with the Rules and Regulations of
the Securities and Exchange Commission under the Securities Exchange
Act of 1934, as amended, concerning the hypothecation of Customer
Securities, the Bank hereby agrees with the Debtor that,
notwithstanding anything to the contrary contained in this Security
Agreement:
(a) None of the Obligations, except Obligations arising out of or in
connection with any credit extended against Customer Securities, shall be
secured by or be any Lien against any Customer Securities.
(b) All of the Obligations, however constituted, shall be secured by all
Firm Securities.
(c) No rehypothecation, assignment or other transfer of any Customers'
Securities or any interest therein shall be made by the Bank except subject to
the limitations contained herein.
IN WITNESS WHEREOF, the Debtor has executed this Security Agreement as of
the date first above written.
FIRST OF AMERICA SECURITIES, INC. ("Debtor")
By: /S/ Xxxxx X. Xxxxxxx
Title: President & CEO
000 X. Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000-0000
Accepted:
THE FIRST NATIONAL BANK OF CHICAGO
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By: /S/ Xxxxxx X. Xxxxxx
Title: Vice President
The First National Bank of Chicago
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxx
Suite No. 0162
MASTER BROKER LOAN NOTE
Chicago, Illinois
Date: August 30, 1996
FOR VALUE RECEIVED, FIRST OF AMERICA SECURITIES, INC. (the "Company")
promises to pay to the order of The First National Bank of Chicago (the
"Bank"), in lawful money of the United States at the office of the Bank at One
First National Plaza, Chicago, Illinois, or as the Bank may otherwise direct
the aggregate outstanding unpaid principal amount of loans ("Loans") advanced
hereunder, together with interest as provided below.
Except as provided in the following paragraph, each Loan hereunder shall
be due and payable on the day following the day on which the Loan is made and
shall bear interest at the rate per annum quoted to the Company by the Bank
("Transaction Rate"), which rate shall be applicable to and in effect for the
day on which it is quoted.
In addition to the Transaction Rate, the Company and the Bank may agree to
a fixed interest rate ("Fixed Rate") and a specific term in excess of one day
for a Loan (a "Fixed Rate Loan") at the time of borrowing. Each such Fixed Rate
Loan shall be due and payable at the specified maturity of such Loan.
Unless another rate is specifically agreed to by the Bank for any Loan, a
Transaction Rate Loan or Fixed Rate Loan not paid when due shall thereafter be
payable on demand and bear interest at a rate equal to the greater of the
corporate base rate of interest announced by the Bank from time to time,
changing when and as the corporate base rate changes or the then applicable
Fixed Rate or Transaction Rate.
On each business day of the Bank for which the Company desires the Bank to
make a Loan, any person authorized to borrow on behalf of the Company (an
"authorized person") may request by telephone a quote for an interest rate for
such Loan. If the Bank elects to offer a Loan to the Company and if the Company
elects to accept the rate at the time such rate is quoted by the Bank, then the
Bank shall make a Loan at the stipulated rate on such day. Any authorized
person may request a Loan or an interest rate quote hereunder and give the Bank
information relevant to such Loan by telephone or telex. The Company agrees
that, in implementing this arrangement, the Bank is authorized to honor
requests which it believes, in good faith, to emanate from an authorized person
acting pursuant to this note, whether in fact that be the case or not. The
Company will confirm the terms of each Loan by mailing a confirmation letter to
the bank signed by an authorized person.
Each payment of principal hereunder shall be made in immediately available
funds (or clearinghouse funds if the Loan was made in clearinghouse funds).
Interest on all Loans shall be due and payable in immediately available funds
on the last day of each month during which a Loan is outstanding. If any
payment shall become due and payable on a Saturday, Sunday or legal holiday
under the laws or Illinois, such payment shall be made on the next succeeding
business day in Illinois and any such extended time of the payment of principal
shall be included in computing interest at the rate this note bears in
connection with such payment. All interest hereunder shall be computed for the
actual numbers of days elapsed on a 360 day year basis.
Fixed Rate Loans may be prepaid prior to the agreed maturity of that Loan
only upon payment to the Bank of all loss or cost to the
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Bank resulting from such prepayment, including without limitation, any loss or
cost in liquidating or employing deposits acquired to fund or maintain such
Fixed Rate Loan.
The Company hereby authorizes the Bank to record Loans, maturities,
repayments, interest rates and payment dates on the schedule on the reverse
side of this note or otherwise on the Bank's books and records in accordance
with the Bank's usual practices. The obligation of the Company to repay each
Loan made hereunder shall be absolute and unconditional notwithstanding any
failure of the Bank to enter such amounts on such schedule and, in the event of
disagreement as to the terms of a transaction, the Bank's records shall govern,
absent manifest error. The Company hereby authorizes the Bank to deposit the
proceeds of Loans to, and to charge payments of principal and interest against,
the Company's deposit account with the Bank or as otherwise requested by the
Company. All Loans shall be made by the Bank in immediately available funds
unless the Company specifically requests clearinghouse funds when such Loan is
requested.
Nothing in this note shall constitute a commitment to make Loans to the
Company. This Note is secured by that certain Security Agreement dated as of
August 30, 1996 between the Company and the Bank. If any Default under and as
defined in the Security Agreement has occurred and is continuing, the Bank may
declare all unpaid principal and interest on the Loans and unpaid fees
immediately due and payable and any indebtedness from the Bank to the Company
may be offset and applied toward the payment of all unpaid principal, interest
and fees payable hereunder, whether or not such amounts or any part thereof,
shall then be due. The Company expressly waives any presentment, demand,
protest or notice in connection with this note now, or hereafter, required by
applicable law and agrees to pay all costs and expenses of collection. The
Company represents to the Bank, in accordance with Regulation U of the Board of
Governors of the Federal Reserve System, that it is subject to Regulation T
promulgated by such Board of Governors and that it does not extend or maintain
credit to or for customers except in accordance with the provisions of such
Regulation T. This note and all Loans made hereunder, shall, to the extent
permitted by law be secured by all collateral, if any, now or hereafter pledged
by the Company to the Bank together with all proceeds thereof to the extent
permitted by law.
This note shall be governed by the internal laws (and not the law of
conflicts) of the State of Illinois, giving effect, however, to federal laws
applicable to national banks.
FIRST OF AMERICA SECURITIES, INC.
By: /S/ Xxxxx X. Xxxxxxx
Title: President & CEO
