Form 8-K
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
North Carolina 0-15572 56-1421916 ------------------------------ ----------- ---------------------- (State or Other Jurisdiction (Commission (I.R.S. Employer of Incorporation) File Number) Identification Number) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[_] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
First Bancorp
INDEX Page Item 1.01 - Entry into a Material Definitive Agreement 3 Item 9.01 - Financial Statements and Exhibits 3 Signatures 4 Exhibit 99 (a) Advances and Security Agreement Exhibit |
Item 1.01 - Entry into a Material Definitive Agreement
Effective February 15, 2005, the Registrant entered into a new Advances and Security Agreement with the Federal Home Loan Bank of Atlanta ("FHLB") that supercedes previous agreements. This agreement provides for the Registrant to be able to participate in the FHLB's credit programs. In order to borrow under the terms of this agreement, the Registrant must have sufficient levels of collateral acceptable to the FHLB, as defined in the FHLB's collateral policy. Any borrowings that the Registrant obtains from the FHLB are secured by the Registrant's capital stock held in the FHLB, cash balances held at the FHLB, and blanket liens on the Registrant's residential loan portfolio, commercial mortgage loan portfolio, multifamily mortgage loan portfolio and home equity loan portfolio. The amount of credit available to the Registrant under the agreement will vary from time to time depending on the amount of collateral that the Registrant has available to pledge to the FHLB. The aforementioned agreement is attached as Exhibit 99(a).
Item 9.01 - Financial Statements and Exhibits
Exhibit 99(a) - Advances and Security Agreement
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
First Bancorp
February 22, 2005 By: /s/ James H. Garner ------------------------------------- James H. Garner President and Chief Executive Officer |
Exhibit 99(a)
ADVANCES AND SECURITY AGREEMENT
This ADVANCES AND SECURITY AGREEMENT (this "Agreement"), dated as of the earlier of the date of execution by the Bank (as hereinafter defined) and February 15, 2005 is entered into between First Bank, a state bank organized under the laws of and located in the state of North Carolina, having its principal place of business at 341 North Main Street, Troy, NC 27371-3017 (the "Borrower") and the Federal Home Loan Bank of Atlanta, a corporation organized and existing under the laws of the United States, having its principal office at 1475 Peachtree Street, N.E., Atlanta, Georgia 30309 (the "Bank").
WHEREAS, the Borrower desires from time to time to participate in the Bank's credit programs under the terms of this Agreement, and the Bank is authorized to extend credit to the Borrower pursuant to the provisions of the Federal Home Loan Bank Act, as now and hereafter amended, modified, supplemented or restated (the "Act"), and the regulations and guidelines of the Federal Housing Finance Board (the "Board") or any successor entity, as now and hereafter in effect, including all amendments, modifications, supplements and restatements thereto or thereof (collectively, the "Regulations");
WHEREAS, the Bank requires that extensions of credit by the Bank be secured pursuant to this Agreement, and the Borrower and any Obligor (as hereinafter defined) joined to this Agreement from time to time, as provided herein, agree to provide the security the Bank requests in accordance with this Agreement; and
WHEREAS, the Borrower and each other Obligor acknowledges, understands and agrees that (a) the Bank shall not have any obligation or commitment (under this Agreement, the Credit and Collateral Policy, or otherwise) to approve any application by the Borrower for Advances, Credit Products, Derivative Transactions, or Other Products, (b) the terms and conditions of any Advances, Credit Products, Derivative Transactions, or Other Products which the Bank may make or issue, except for any such terms and conditions specified in a Confirmation, may change after the date made or issued, in connection with a modification to the Bank's Credit and Collateral Policy as provided in Section 6.01 of this Agreement, and (c) the Bank, in its sole discretion, may modify the Credit and Collateral Policy from time to time after the date of this Agreement and need not obtain any further consent from any Obligor in order for those modifications to become binding upon each Obligor.
NOW THEREFORE, the Borrower and the Bank agree as follows:
ARTICLE I: DEFINITIONS
(A) "Advances" means any and all loans or other similar extensions of credit, heretofore, now or hereafter granted by the Bank to, on behalf of, or for the account of, the Borrower.
(B) "Affiliate" means an affiliate of the Borrower which (i) has been accepted by the Bank, in its sole discretion, as a person which may pledge collateral to the Bank and otherwise support the obligations of the Borrower to the Bank hereunder and (ii) has entered into a Joinder Agreement. The Affiliate and the Borrower are hereinafter jointly referred to as the "Obligors."
(C) "Application" means an application or other writing, in such form or forms as shall be specified by the Bank from time to time, by which the Borrower requests an Advance or a Credit Product, and by which an Obligor requests a Derivative Transaction or an Other Product.
(D) "Borrowed Money" means, with respect to any Person, without duplication
(a) all indebtedness for borrowed money, (b) all obligations of such Person
evidenced by bonds, debentures, notes or similar instruments, or upon which
interest payments are customarily made, (c) that portion of obligations with
respect to capital leases that is properly classified as a liability on a
balance sheet in conformity with GAAP, (d) any obligations of such Person issued
or assumed as the deferred purchase price of property or services purchased by
such Person (other than trade debt incurred in the ordinary course of business
and due within six months of the incurrence thereof or evidenced by a note or
other instrument), (e) all Borrowed Money of others secured by (or for which the
holder of such Borrowed Money has an existing right, contingent or otherwise, to
be secured by) any lien on, or payable out of the proceeds of production from,
any property or asset owned, held or acquired by such Person regardless of
whether the indebtedness secured thereby shall have been assumed by that Person
or is nonrecourse to the credit of that Person, (f) all guaranty obligations of
such Person in respect of any Borrowed Money of any other person, (g) the
maximum amount of all standby letters of credit issued or bankers' acceptances
facilities created for the account of such Person and, without duplication, all
drafts drawn thereunder (to the extent unreimbursed), (h) the principal balance
outstanding under any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing product plus any
accrued interest thereon, and (i) the Borrowed Money of any partnership or
unincorporated joint venture in which such Person is a general partner or joint
venturer.
(E) "Borrowing Documents" means this Agreement (as amended by any and all Joinder Agreements and any and all Collateral Pledge Amendments), all Applications, all Confirmations, and all Supplemental Documentation.
(F) "Capital Stock" means all of the capital stock in the Bank held by the Borrower and all payments which have been or hereafter are made on account of subscriptions to and all unpaid dividends on such capital stock.
(G) "Collateral" means (i) all property, including the products and proceeds thereof, heretofore assigned, transferred or pledged to the Bank by any Obligor as collateral for an Advance, a Credit Product, a Derivative Transaction, an Other Product or any other Liability prior to the date hereof and (ii) all Capital Stock, Deposits, Residential First Mortgage Collateral, Commercial Mortgage Collateral, Multifamily Mortgage Collateral, Government and Agency Securities Collateral, HELOC and Second Mortgage Collateral, Other Securities Collateral and Other Collateral, including the products and proceeds thereof, which is now or hereafter pledged to the Bank pursuant to Section 3.01 hereof or any Joinder Agreement.
(H) "Collateral Maintenance Level" means the aggregate dollar amount equal to such percentage(s) as the Bank may specify from time to time of all Liabilities (1) for Advances and Credit Products; (2) with respect to Derivative Transactions for which an Obligor is required to maintain Collateral; and (3) with respect to any Other Product or under any Borrowing Documents. The Bank may increase or decrease the Collateral Maintenance Level at any time as provided in the Credit and Collateral Policy, and such increase or decrease, as specified by the Bank, will apply to all existing as well as after-arising Liabilities.
(I) "Collateral Pledge Amendment" means a Collateral Pledge Amendment, substantially in the form attached hereto as Exhibit B, whereby the Obligors and the Bank have agreed to amend the collateral pledge provisions of Section 3.01(ii) hereof as provided therein.
(J) "Commercial Mortgage Collateral" means all notes, bonds, instruments, mortgages, deeds of trust, deeds to secure debt, security agreements, policies and certificates of insurance, guarantees, evidences of recordation, applications, underwriting materials, surveys, appraisals, approvals, permits, notices, opinions of counsel, loan servicing data and all other electronically stored and written records or materials relating to fully-disbursed loans held by any Obligor secured by a first lien on property improved by one or more commercial buildings, together with all rights and interests associated with such loans and documents, including all legal, beneficial, residual and servicing rights, and any endorsements or assignments thereof.
(K) "Confirmation" means a confirmation, in such form or forms as the Bank may generate from time to time, by which the Bank agrees to, confirms and provides any additional terms with respect to any Advance, Credit Product, Derivative Transaction, or Other Product.
(L) "Credit and Collateral Policy" means the policies and procedures of the
Bank governing the administration of its credit and other programs, including
the requirements for maintenance of collateral to secure extensions of credit by
the Bank, as any such policies and procedures may be amended, supplemented,
restated or otherwise modified from time to time hereafter, in accordance with
Section 6.01.
(M) "Credit Products" means any and all commitments or obligations under which the Bank agrees to make payments on behalf of or for the account of the Borrower, including letters of credit, guarantees or other arrangements intended to facilitate transactions between the Borrower and third parties, or under which the Bank enters into a credit or financial accommodation, agreement or other arrangement with the Borrower, irrespective of whether the Bank's obligation is contingent or conditional.
(N) "Deposits" means all deposit accounts maintained by any Obligor with the Bank, all money, cash, checks, drafts, notices, bills, bills of exchange and bonds deposited therein or credited thereto, any increases, renewals, extensions, substitutions and replacements thereof, whether or not deposited in any such deposit account and all statements, certificates, passbooks and instruments representing any such deposit account.
(O) "Derivative Transactions" means all interest rate swaps, all interest rate caps, floors and collars, all currency exchange transactions, all options and all similar transactions entered into between the Bank and any Obligor.
(P) "GAAP" means generally accepted accounting principles.
(Q) "Government and Agency Securities Collateral" means mortgage-backed securities (including participation certificates) issued by the Federal Home Loan Mortgage Corporation or the Federal National Mortgage Association, obligations guaranteed by the Government National Mortgage Association, and obligations issued or guaranteed by the United States or an agency thereof.
(R) "HELOC and Second Mortgage Collateral" means all notes, bonds, instruments, mortgages, deeds of trust, deeds to secure debt, security agreements, policies and certificates of insurance or guarantees, evidences of recordation, applications, underwriting materials, surveys, appraisals, approvals, permits, notices, opinions of counsel and loan servicing data and all other electronically stored and written records or materials relating to home equity lines of credit held by any Obligor, loans held by any Obligor secured by a junior lien on one-to-four unit single-family dwellings, or other similar loans held by any Obligor which have not been fully disbursed, together with all rights and interests associated with such loans and documents, including all legal, beneficial, residual and servicing rights, and any endorsements or assignments thereof.
(S) "Joinder Agreement" means a joinder agreement, substantially in the form attached hereto as Exhibit A, whereby an Obligor has agreed in writing to be primarily, jointly and severally liable for all obligations of all of the Obligors to the Bank under this Agreement and to pledge Collateral satisfactory to the Bank as security for such obligations.
(T) "Lendable Collateral Value" means an amount equal to such percentage as the Bank shall from time to time, in its sole discretion, ascribe in the Credit and Collateral Policy to the market value or unpaid principal balances (as the Bank may specify or define) of Qualifying Collateral.
(U) "Liabilities" means all fees, expenses, obligations, liabilities or indebtedness of any Obligor to the Bank, due or to become due, direct or indirect, absolute or contingent, joint or several, now existing or hereafter at any time created, arising or incurred, under this Agreement, any Application, Confirmation, Supplemental Documentation, Advance, Derivative Transaction, Credit Product, Other Product or Deposit, including any overdrafts or other charges in connection therewith, or under any other obligation for any other service provided by the Bank, including any obligations under indemnification provisions in any agreement or document between any Obligor and the Bank, and any renewal, extension or substitution of any such obligations, liabilities and indebtedness, including reasonable attorneys' fees of the Bank in the collection thereof and the enforcement of any remedies with respect to any Collateral therefor.
(V) "Material Adverse Effect" means (a) a material adverse effect upon the business, operations, properties, assets or condition (financial or otherwise) of any Obligor, or (b) the impairment of the ability of any Obligor to perform its obligations under any Borrowing Document to which it is a party or of Bank to enforce any
Borrowing Document or collect any of the Liabilities. In determining whether any individual event would result in a Material Adverse Effect, notwithstanding that such event does not of itself have such effect, a Material Adverse Effect shall be deemed to have occurred if the cumulative effect of such event and all other then existing events would result in a Material Adverse Effect. In determining whether an event would result in a Material Adverse Effect on any Affiliate, a Material Adverse Effect shall be deemed to have occurred with respect to such Affiliate if the effect of such event would result in a Material Adverse Effect on the Borrower and such Affiliate, taken as a whole.
(W) "Multifamily Mortgage Collateral" means all notes, bonds, instruments, mortgages, deeds of trust, deeds to secure debt, security agreements, policies and certificates of insurance, guarantees, evidences of recordation, applications, underwriting materials, surveys, appraisals, approvals, permits, notices, opinions of counsel, loan servicing data and all other electronically stored and written records or materials relating to the fully-disbursed loans held by any Obligor secured by a first lien on property improved by one or more multifamily buildings, together with all rights and interests associated with such loans and documents, including all legal, beneficial, residual and servicing rights, and any endorsements or assignments thereof.
(X) "Obligors" means, collectively, the Borrower and any Affiliate joined hereunder as provided herein.
(Y) "Other Collateral" means such items of personal property, other than Capital Stock, Deposits, Residential First Mortgage Collateral, Commercial Mortgage Collateral, Multifamily Mortgage Collateral, Government and Agency Securities Collateral, HELOC and Second Mortgage Collateral, and Other Securities Collateral, that are offered by any Obligor as Collateral and are specifically accepted by the Bank as Collateral; provided, Other Collateral may from time to time include specific items of Residential First Mortgage Collateral, Commercial Mortgage Collateral, Multifamily Mortgage Collateral and HELOC and Second Mortgage Collateral which are identified and offered by an Obligor as Collateral and are specifically accepted by the Bank as Collateral.
(Z) "Other Products" means all products and services, other than an Advance, Credit Product or Derivative Transaction, offered by the Bank to any Obligor from time to time, including correspondent banking services, mortgage purchase programs and affordable housing and community investment products and services.
(AA) "Other Securities Collateral" means securities (other than Government and Agency Securities Collateral) representing unsubordinated interests in, or collateralized by first lien security interests in, both the interest and principal payments on first lien residential mortgages.
(BB) "Person" means an individual, partnership, corporation, trust, joint venture, joint stock company, limited liability company, association, unincorporated organization, governmental authority, or any other entity.
(CC) "Qualifying Collateral" means Collateral, other than Capital Stock and Deposits, which is eligible as collateral to support the origination of Advances, Credit Products, Derivative Transactions and Other Products under the terms and conditions of
the Act, the Regulations and the Credit and Collateral Policy, and which satisfies such other requirements for lending as may be established by the Bank.
(DD) "Residential First Mortgage Collateral" means all notes, bonds, instruments, mortgages, deeds of trust, deeds to secure debt, security agreements, policies and certificates of insurance or guarantees, evidences of recordation, applications, underwriting materials, surveys, appraisals, approvals, permits, notices, opinions of counsel and loan servicing data and all other electronically stored and written records or materials relating to fully-disbursed loans held by any Obligor secured by a first lien on one-to-four unit single family dwellings, together with all rights and interests associated with such loans and documents, including all legal, beneficial, residual and servicing rights, and any endorsements or assignments thereof.
(EE) "Supplemental Documentation" means any document, agreement or other writing (other than this Agreement) between the Bank and an Obligor relating to Deposits, Advances, Credit Products, Derivative Transactions and Other Products, including reimbursement agreements, mortgage purchase documents, wire transfer agreements, automated clearinghouse agreements, agreements related to the loans held for sale program, International Swap Dealers Association ("ISDA") master agreements, schedules to ISDA master agreements and credit support annexes to ISDA master agreements.
ARTICLE II: ADVANCES AGREEMENT
not required to be signed by the Borrower applicable to any Advance, Credit
Product, Derivative Transaction or Other Product unless, within the earlier of
(i) any time period specified in any Confirmation or Supplemental Documentation
relating thereto and (ii) five (5) business days of receipt of the final
documents relating to such product or service, the Borrower delivers to the Bank
a written notice specifying the disputed term(s) or condition(s) of the Advance,
Credit Product, Derivative Transaction or Other Product. Upon the request of the
Bank, or as provided in the Credit and Collateral Policy, the Borrower shall
sign and deliver to the Bank a promissory note or notes and such other
Supplemental Documentation in such form as the Bank may reasonably require
evidencing any Advance, Credit Product, Derivative Transaction or Other Product.
Unless otherwise agreed by the Bank in writing, all Advances shall be made by
crediting the Borrower's demand deposit account(s) with the Bank. All Borrowing
Documents shall be deemed to have been executed and delivered in Atlanta,
Georgia, and all payments made under the Borrowing Documents shall be deemed to
have been made in Atlanta, Georgia. The Bank's obligation to fund any portion of
any approved Advance, issue any approved letter of credit, guaranty or financial
accommodation relating to a Credit Product or continue under any Derivative
Transaction or Other Product shall be subject to (i) continuing compliance by
the Obligors with the terms and provisions of this Agreement (ii) there having
occurred no Event of Default hereunder and (iii) the continuing satisfaction by
the Obligors of the credit and collateral considerations of the Bank and the
eligibility requirements and policies prescribed in the Act, the Regulations and
the Credit and Collateral Policy.
overdrafts imposed by the Bank from time to time. All payments with respect to Liabilities shall be applied first to any fees or charges applicable thereto and to interest due thereon, in such order as the Bank may determine, and then to any principal amount thereof that is then due and payable.
ARTICLE III: SECURITY AGREEMENT
(A) The Obligor owns and has marketable title to the Collateral pledged by it hereunder and has the right and authority to grant a security interest in such Collateral and to subject all of such Collateral to this Agreement;
(B) The information given from time to time by the Obligor as to each item of Collateral pledged by it hereunder is true, accurate and complete in all material respects;
(C) The Obligors own Qualifying Collateral with a Lendable Collateral Value at least equal to the Collateral Maintenance Level;
(D) The lien of the Residential First Mortgage Collateral, Commercial Mortgage Collateral and Multifamily Mortgage Collateral on the real property securing such Collateral is a first, prior and perfected lien under applicable law;
(G) To the best knowledge of the Obligor, after reasonable inquiry, no part of any real property or interest in real property that is included within the Collateral contains or is subject to the effects of toxic or hazardous materials or other hazardous substances (including those defined in the Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended, 42 U.S.C. ss.9601, et seq.; the Hazardous Materials Transportation Act, 49 U.S.C. ss.1801 et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. ss.6901 et seq.; and in the regulations adopted and publications promulgated pursuant to said laws) the presence of which could reasonably subject the Bank to any liability under applicable state or Federal law or local ordinance either at any time that such property is pledged to the Bank or upon the enforcement by the Bank of its security interest therein.
(A) The Obligors shall at all times maintain Qualifying Collateral which has a Lendable Collateral Value that is at least equal to the Collateral Maintenance Level. At any time the Obligors fail to maintain such Qualifying Collateral, as reasonably determined by the Bank, in addition to any other remedies of the Bank under this
Agreement, the Obligors agree to assign, transfer and pledge, and grant to the Bank a security interest in, such additional amounts of Collateral as may be deemed necessary by the Bank for its protection in accordance with Section 10(d) of the Act.
(B) All documents and other matters pertaining to the Qualifying Collateral
necessary to meet the requirements of Section 3.03(A), or otherwise reported to
the Bank as Qualifying Collateral for purposes of meeting the requirements of
Section 3.03(A), must be satisfactory to the Bank and, if not, the Bank may
refuse to accept such Qualifying Collateral or may assign such Qualifying
Collateral a Lendable Collateral Value less than the Lendable Collateral Value
otherwise applicable under the Credit and Collateral Policy.
(C) No Obligor shall assign, pledge, transfer, create any lien, encumbrance
or security interest in, sell, or otherwise dispose of any Collateral; provided,
however, (i) an Obligor may sell or otherwise dispose of Collateral not
necessary to meet the requirements of Section 3.03(A) and not otherwise reported
to the Bank as Qualifying Collateral for purposes of meeting the requirements of
Section 3.03(A), so long as (A) no Event of Default has occurred and is
continuing and (B) any sale of Collateral to a person controlling, controlled by
or in common control with any Obligor, except to any other Obligor that also
pledges such Collateral to the Bank, is made at fair market value and on terms
and conditions that are fair and reasonable to such Obligor, and (ii) upon the
written request of the Obligors, the Bank will agree to release such Collateral
as shall be mutually agreeable to the Bank and the Obligors so long as such
Collateral to be released is not necessary to meet the requirements of Section
3.03(A) and not otherwise reported to the Bank as Qualifying Collateral for
purposes of meeting the requirements of Section 3.03(A).
(A) Each Obligor shall hold any Collateral in its possession in such manner as reasonably identifies the security interest of the Bank and as the Bank shall further direct.
(B) Except for Collateral required to be delivered to the Bank or its custodian as required hereunder, Collateral shall be held by each Obligor in its possession (except as otherwise provided herein) in trust for the benefit of, and subject to the direction, and control of, the Bank and shall be physically safeguarded by the Obligor in accordance with reasonable commercial procedures. To the extent that any Obligor enters into any custodial arrangement with respect to the Collateral, the Obligor shall notify the Bank in writing of such arrangement, shall provide the Bank with copies of all agreements evidencing such arrangement, which shall be satisfactory to the Bank in all respects, and shall cause such agreements to provide that the custodian holds the Collateral for the benefit of the Bank and no other person and that the custodian shall accept instructions from the Bank with respect to the Collateral. Without limitation of the foregoing, each Obligor shall take all action necessary or desirable to protect and preserve the Collateral and the Bank's interest therein, including, the collection of payments under all mortgages and under any insurance, assuring that all mortgages are serviced in accordance with the standards of a reasonable and prudent mortgagee and compliance with all requirements with respect to the Collateral set forth in the Credit and Collateral Policy.
(C) Any Collateral which is a security or other investment property shall be delivered to the Bank, together with such assignments, powers and other documents as the Bank shall require in connection with its perfected, first-priority security interest in such Collateral. With respect to any uncertificated securities pledged to the Bank as Collateral hereunder, the delivery requirements contained in this Agreement shall be satisfied by the transfer of a perfected, first-priority security interest in such securities to the Bank, such transfer to be effected in such manner and to be evidenced by such documents as shall be reasonably specified by the Bank.
(A) Promptly upon the Bank's written request, or as provided in the Credit and Collateral Policy, the Obligors shall deliver to the Bank, or to a custodian designated by the Bank, such Qualifying Collateral as may be necessary so that the Lendable Collateral Value of Qualifying Collateral held by the Bank, or such custodian, meets or exceeds the Collateral Maintenance Level at all times. Collateral delivered to the Bank shall be endorsed and assigned, as appropriate, in such form as reasonably specified by the Bank and together with such information with respect to such Collateral as the Bank shall request.
(B) Each Obligor agrees to pay to the Bank such reasonable fees and charges as may be assessed by the Bank to cover the Bank's overhead and other costs relating to the receipt, holding and redelivery of Collateral and other reasonable expenses, disbursements and advances incurred or made by the Bank in connection therewith (including the reasonable compensation and the expenses and disbursements of any custodian, consultant or appraiser that may be appointed by the Bank hereunder, and the agents and legal counsel of the Bank and of such custodian).
(A) At the times provided in the Credit and Collateral Policy, and promptly after any additional requests by the Bank, each Obligor shall deliver to the Bank such information, reports, verification reviews and schedules with respect to the Collateral, the Qualifying Collateral and compliance with this Agreement and the Credit and Collateral Policy as provided in the Credit and Collateral Policy, or as the Bank shall request, all in form and substance as prescribed by the Bank.
(B) Each Obligor shall provide the Bank with such financial reports and other information relating to such Obligor's financial condition as the Bank may reasonably request.
(C) Each Obligor shall give the Bank, its agents and representatives access at reasonable times and locations to the Collateral, and to such Obligor's books and records of account relating to such Collateral, for the purpose of the Bank or its agents and representatives examining, verifying or reconciling the Collateral and such Obligor's reports to the Bank thereon. At the Bank's request, the Obligors shall make any or all documents and information pertaining to the Collateral available to the Bank, its agents and representatives at reasonable times and locations for their inspection and approval. Each Obligor shall make adequate working facilities available to the Bank, its agents and representatives for purposes of such verifications and reviews. Reasonable fees and
charges may be assessed to the Obligors by the Bank to cover overhead and other costs relating to such verifications and reviews, including, any costs and expenses of third parties engaged by the Bank for such purposes.
(D) If any Obligor becomes aware or has reason to believe that the Lendable Collateral Value of such Obligors' Qualifying Collateral has fallen below the Collateral Maintenance Level, that a contingency exists which with the lapse of time could result in such Obligors' failure to meet the Collateral Maintenance Level, or any event has occurred which could reasonably be expected to have a Material Adverse Effect on such Obligor, such Obligor shall immediately notify the Bank.
(E) Each Obligor shall notify the Bank prior to (i) any change in such Obligor's name, charter or other such similar organizational documents filed with any governmental entity, jurisdiction of organization, or form of organization and (ii) any event that could result in a change in such Obligor's "location" as defined in the Uniform Commercial Code.
(A) Each Obligor shall, or the Bank may, in lieu of the Obligor, make, execute, record and deliver such agreements, financing statements, notices, assignments, listings, powers, and other documents with respect to the Collateral and the Bank's first-priority security interest therein and in such form as the Bank may reasonably require. Each Obligor shall, upon request of the Bank, immediately take such actions as the Bank shall deem necessary or appropriate to perfect the Bank's first-priority security interest in the Collateral or otherwise to obtain, preserve, protect, enforce or collect the Collateral or the proceeds thereof.
(B) The Bank may from time to time hereafter require any Obligor to provide representations, warranties, and undertakings, in addition to those contained herein, reasonably related to the securing, perfecting, maintaining or enforcing of the Bank's rights and interests in the Collateral.
Obligor, do any or all things and take any and all actions that are pertinent to the protection of the Bank's interest hereunder and are lawful under applicable law, so long as such rights are exercised in good faith and in a commercially reasonable manner, including, but not limited to, the following:
(A) Terminate any waiver, consent or forbearance given in connection with this Agreement; provided, however, any Event of Default which may result as a consequence of the termination of any such waiver, consent or forbearance shall not be deemed to have occurred unless such Event of Default has not been cured within three days following the termination of such waiver, consent or forbearance;
(B) Notify obligors on any Collateral to make payments or render performance thereon directly to the Bank;
(C) Endorse any Collateral in any Obligor's name;
(D) Enter into any extension, compromise, settlement, or other agreement relating to or affecting any Collateral;
(E) Take any action any Obligor is required to take or which is otherwise reasonably necessary to file a financing statement, take possession of Collateral as described in Section 3.05(A) of this Agreement, obtain control of Collateral or otherwise perfect a security interest in any or all of the Collateral.
(F) Take any action any Obligor is permitted to take in connection with the Collateral that is pertinent to the protection of the Bank's interest hereunder, to the same extent as if the Bank were the originator of the Collateral;
(G) Take control of any funds or other proceeds generated by the Collateral and use the same to reduce Liabilities as they become due;
(H) Cause the Government and Agency Securities Collateral and the Other Securities Collateral to be transferred to its name or the name of its nominee; and
(I) Cause the Collateral to be transferred to its name or the name of its nominee.
Each Obligor hereby appoints the Bank as its true and lawful attorney, for and on behalf of the Obligor and in its name, place and stead, to prepare, execute and record endorsements and assignments to the Bank of all or any item of Collateral, giving or granting to the Bank, as such attorney, full power and authority to do or perform every lawful act necessary or proper in connection therewith as fully as the Obligor might or could do. Each Obligor hereby ratifies and confirms all that the Bank shall lawfully do or cause to be done by virtue of this special power of attorney. This special power of attorney is granted for a period commencing on the date hereof and continuing until the discharge of all Liabilities and all obligations of the Obligors hereunder regardless of any default by any Obligor, is coupled with an interest, and is irrevocable for the period granted. This special power of attorney may be exercised only in accordance with the terms and provisions of this Agreement.
collect all payments when due on all Collateral. If the Bank so requires, after the occurrence of an Event of Default, each Obligor shall hold such collections separate from its other monies in one or more designated cash collateral accounts maintained at the Bank and apply them to the reduction of Liabilities as they become due; otherwise, the Bank consents to the Obligors' use and disposition of all such collections.
ARTICLE IV: ADDITIONAL REPRESENTATIONS,
WARRANTIES AND COVENANTS
(A) Such Obligor is not, and neither the execution of nor the performance of any of the transactions or obligations of such Obligor under this Agreement shall, with the passage of time, the giving of notice or otherwise, cause such Obligor to be: (i) in violation of its charter or articles of incorporation, by-laws, the Act or the Regulations, any other law or administrative regulation, or any court decree, which could reasonably be expected to have a Material Adverse Effect on such Obligor; or (ii) in default under or in breach of any indenture, contract or other instrument or agreement to which such Obligor is a party or by which it or any of its property is bound, which default or breach could reasonably be expected to have a Material Adverse Effect on such Obligor;
(B) Such Obligor has full corporate power and authority and has received all corporate and governmental authorizations and approvals (including those required under the Act and the Regulations) as may be required to enter into and perform its obligations under this Agreement and to obtain any Derivative Transaction or Other Product, and the Borrower has full corporate power and authority and has received all corporate and governmental authorizations and approvals (including those required under the Act and the Regulations) as may be required to borrow each Advance and to obtain each Credit Product, Derivative Transaction and Other Product;
(C) The information given by such Obligor herein or in any Application, Confirmation or Supplemental Documentation, or in any other written statement made in connection with transactions contemplated thereunder, is true, accurate and complete in all material respects;
(D) The name, location (as defined in the Uniform Commercial Code) and corporate form of such Obligor is, and for the lesser of its entity existence or the four months prior to the date of this Agreement has been, the same as set forth in the opening paragraph of this Agreement or in a Joinder Agreement;
(E) All financial statements concerning such Obligor which have been furnished to the Bank or will hereafter be furnished to the Bank pursuant to this Agreement or any Joinder Agreement, have been or will be prepared in accordance with GAAP consistently applied (except as disclosed therein) and do or will present fairly the financial condition of the entities covered thereby as at the dates thereof and the results of their operations for the periods then ended, subject to, in the case of unaudited financial statements, the absence of footnotes and year-end adjustments;
(F) Since the date of the most recent audited financial statements of such Obligor referred to in Section 4.01(E) above, there have been no events or changes in facts or circumstances affecting such Obligor which individually or in the aggregate have had or could reasonably be expected to have a Material Adverse Effect on such Obligor;
(G) (i) Such Obligor is not the subject of any review or audit by any governmental or regulatory investigation concerning the violation or possible violation of any law (except for routine examinations in connection with which no violation or possible violation has been identified by such governmental or regulatory entity) which could reasonably be expected to result in any Material Adverse Effect on such Obligor and (ii) there are no judgments outstanding against such Obligor or affecting any property of such Obligor, nor is there any action, charge, claim, demand, suit, proceeding, petition, governmental investigation or arbitration now pending or, to the best knowledge of such Obligor after due inquiry, threatened against or affecting such Obligor or any property of such Obligor which could reasonably be expected to result in any Material Adverse Effect on such Obligor;
(H) To such Obligor's best knowledge, after reasonable investigation, none of the proceeds of any Advance (or other credit extension hereunder) will be used in connection with any "reportable transaction" within the meaning of Treasury Regulation Section 1.6011-4(b) or in connection with any "potentially abusive tax shelter" within the meaning of Section 6112(b) of the Internal Revenue Code of 1986, as amended; and
(I) Each Borrowing Document is and will remain (notwithstanding any amendment thereto occurring after the date of this Agreement) the legally valid and binding obligation of such Obligor, enforceable in accordance with its terms.
(A) To the extent that the Borrower relies upon the Lendable Collateral Value of Qualifying Collateral owned by an Affiliate in obtaining or maintaining any Advance (or other extension of credit under the Borrowing Documents), the Borrower will use, directly or indirectly, all of the proceeds of such Advance (or other extension of credit) in a manner that shall result in such Affiliate receiving valuable consideration, fair value, fair consideration and reasonable equivalent value in exchange for the pledging of such Qualifying Collateral to the Bank; and
(B) Each Obligor will (a) comply with (i) the requirements of all
applicable laws, rules, regulations and orders of any governmental authority
(including, laws, rules, regulations and orders relating to taxes, employer and
employee contributions, securities, employee retirement and welfare benefits,
environmental protection matters, employee health and safety and credit
protection, anti-predatory and fair lending) as now in effect and which may be
imposed in the future in all jurisdictions in which such Obligor is now doing
business or may hereafter be doing business and (ii) the obligations, covenants
and conditions contained in all binding contracts of such Obligor, as
applicable, other than those laws, rules, regulations, orders and provisions of
such contracts the noncompliance with which could not be reasonably expected to
have, either individually or in the aggregate, a Material Adverse Effect, and
(b) maintain or obtain all licenses, qualifications and permits now held or
hereafter required to be held by such Obligor, for which the
loss, suspension, revocation or failure to obtain or renew, could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. This subsection shall not preclude any Obligor from contesting any taxes or other payments, if they are being diligently contested in good faith in a manner which stays enforcement thereof and if appropriate expense provisions have been recorded in conformity with GAAP.
ARTICLE V: DEFAULT; REMEDIES
(A) Failure of any Obligor to pay when due any interest on or principal of any Liabilities; or
(B) Failure of any Obligor to perform any promise or obligation or to satisfy any condition or liability contained herein, or in any Application, Confirmation or Supplemental Documentation, or the occurrence of a default or an event of default under any Supplemental Documentation; or
(C) Any representation, statement, covenant or warranty made or furnished in any manner to the Bank by or on behalf of any Obligor in connection with this Agreement or any Application, Confirmation, Supplemental Documentation, Liabilities or Collateral was false in any material respect when made or furnished; or
(D) The issuance of any tax, levy, seizure, attachment, garnishment, levy of execution, or other process with respect to the Collateral which has not been stayed within 60 days after the issuance thereof; or
(E) Any suspension of payment by any Obligor to any creditor of sums due under or the occurrence of any event which results in another creditor having the right to accelerate the maturity of any indebtedness of any Obligor under any security agreement, indenture, loan agreement, or comparable undertaking which could reasonably be expected to have a Material Adverse Effect on any Obligor; or
(F) Appointment of a conservator, receiver, or similar official for any Obligor or any subsidiary of any Obligor, of any Obligor's property, entry of a judgment or decree adjudicating any Obligor or any subsidiary of any Obligor insolvent or bankrupt or an assignment by any Obligor or any subsidiary of any Obligor for benefit of creditors; or
(G) Sale by any Obligor of a material part of such Obligor's assets or the taking of any other action by any Obligor to liquidate or dissolve; or
(H) Termination for any reason of the Borrower's membership in the Bank, failure of the Borrower to comply with the stock purchase requirements of the Bank in effect from time to time, or the Borrower's ceasing to be eligible to become a member of the Bank or any Obligor ceasing to be eligible to pledge Collateral or support the obligations of the Borrower hereunder under the Act, the Regulations or the Credit and Collateral Policy; or
(I) Merger, consolidation or other combination of any Obligor with an entity that is not a member of the Bank if the nonmember entity is the surviving entity; or
(J) Any Obligor or any of its respective directors, executive officers or senior officers is criminally indicted or convicted of or under a felony or a crime, each of which involves fraud against or in relation to such Obligor, and such indictment or conviction could reasonably be expected to have a Material Adverse Effect on such Obligor; or
(K) Any event which could reasonably be expected to have a Material Adverse Effect on any Obligor.
For purposes of Section 5.01(G), "material part" means a sale of assets (in one or a series of transactions) by any Obligor, other than in the ordinary course of such Obligor's business, in any given fiscal year, the book value of which exceeds an amount equal to such Obligor's TIER 1 capital, or if TIER 1 capital is not available, total capital as determined by such Obligor's, or the Borrower's, primary regulator, at the close of the immediately preceding fiscal year.
Section 5.02 Acceleration; Other Remedies. Upon the occurrence of an Event of Default, in addition to any other remedies provided herein, in any Supplemental Documentation or at law or in equity, the Bank may at its option, by a notice to the Borrower, declare all or any part(s) of the Liabilities and accrued interest thereon, including any prepayment fees or charges which are applicable thereto, to be immediately due and payable, without presentment, demand, protest, or any further notice. Furthermore, upon the occurrence of an Event of Default, the Bank shall have all of the rights and remedies provided by applicable law, which shall include, but not be limited to, all of the remedies of a secured party under the Uniform Commercial Code as in effect in the State of Georgia. In addition, the Bank may take immediate possession of any of the Collateral or any part thereof wherever the same may be found. The Bank may sell, assign and deliver the Collateral or any part thereof at public or private sale for such price as the Bank deems appropriate without any liability for any loss due to decrease in the market value of the Collateral during the period held. The Bank shall have the right to purchase all or part of the Collateral at such sale. If the Collateral includes insurance or securities which will be redeemed by the issuer upon surrender, or any accounts or deposits in the possession of the Bank, the Bank may realize upon such Collateral without notice to any Obligor. If any notification of intended disposition of any of the Collateral is required by applicable law, such notification shall be deemed reasonable and properly given if given as provided by applicable law or in accordance with Section 6.06 hereof at least ten days before any such disposition. The proceeds of any sale shall be applied in the order that the Bank, in its sole discretion, may choose, subject to applicable law. Each Obligor agrees that the Bank may exercise any and all of its rights of setoff upon the occurrence of an Event of Default. Notwithstanding any other provision hereof, upon the occurrence of any Event of Default at any time when all or part of the Liabilities shall be the subject of a guarantee by a third party for the Bank's benefit, and there shall be other outstanding obligations of any Obligor to the Bank that are not so guaranteed, but that are secured by the Collateral, then any sums realized by the Bank from the Collateral, or from any other collateral pledged or furnished to the Bank by any Obligor under any other agreement, shall be applied first to the satisfaction of such other nonguaranteed obligations and then to such Obligor's guaranteed obligations hereunder. Each Obligor agrees to pay all the costs and expenses of the
Bank in the collection of the Liabilities and enforcement of the Bank's rights and remedies in case of default, including, reasonable attorneys' fees. The Bank shall, to the extent required by law, apply any surplus, after (i) payment of the Liabilities, (ii) provision for repayment to the Bank of any amounts to be paid or advanced under Other Credit Products, and (iii) payment of all costs of collection and enforcement, to the claims of person(s) legally entitled thereto, with any remaining surplus paid to the Borrower. Each Obligor shall be liable to the Bank for any deficiency remaining.
ARTICLE VI: MISCELLANEOUS
Section 6.02 Assignment. Each Obligor hereby gives the Bank the full right, power and authority to pledge or assign to any party all or part of the Liabilities, together with all or any part of the Collateral, as security for consolidated Federal Home Loan Bank obligations issued pursuant to the provisions of the Act or for any other purpose authorized by the Act, the Regulations or the Federal Housing Finance Board. In case of any such pledge or assignment, the Bank shall have no further responsibility with respect to Collateral transferred to the pledgee or assignee. The Obligors may not (whether
voluntarily, involuntarily, by operation of law or otherwise) assign or transfer any of their rights or obligations hereunder or with respect to any Advance, Credit Product, Derivative Transaction or Other Product without the express prior written consent of the Bank. The Bank may at any time, upon notice to the Borrower and subject to applicable law, sell, assign, grant participations in, or otherwise transfer to any other person, firm or corporation, including another Federal Home Loan Bank, all or part of the Liabilities outstanding hereunder. Each Obligor hereby acknowledges and agrees that any such disposition shall give rise to a direct obligation of the Obligor to such assignee, participant or transferee. Each Obligor hereby authorizes the Bank and each assignee, participant or transferee, in case of default by any Obligor hereunder, to proceed directly, by right of setoff, banker's lien, or otherwise, against any assets of any Obligor which may at the time of such default be in the respective hands of the Bank or any such assignee, participant or transferee. Each Obligor further agrees that the Bank may furnish any information pertaining to any Obligor which is in the possession of the Bank to any prospective assignee, participant or transferee to assist it in evaluating such assignment, participation or transfer provided that any non-public information reasonably designated in writing to the Bank by any Obligor as constituting non-public information shall be furnished to such prospective assignee, participant or transferee on a confidential basis. Nothing contained herein shall be deemed to grant to any third party any rights hereunder.
jurisdiction of the United States District Court for the Northern District of Georgia or, if such action or proceeding may not be brought in Federal court, the jurisdiction of the courts of the State of Georgia located in the City of Atlanta.
and any Application, Confirmation and Supplemental Documentation are declared to be severable.
[Signatures appear on following page.]
IN WITNESS WHEREOF, Borrower and Bank have caused this Agreement to be signed in their names by their duly authorized officers as of the date first above mentioned.
First Bank
By: /s/ Eric P. Credle ------------------ Name: Eric P. Credle -------------- Title: Cheif Financial Officer ----------------------- By: /s/ Lee C. McLaurin ------------------- Name: Lee C. McLaurin --------------- Title: SVP-Controller -------------- |
FEDERAL HOME LOAN BANK OF ATLANTA
By: /s/ Charles I. Abbitt --------------------- Name: Charles I. Abbitt ----------------- Title: Senior Vice President --------------------- By: /s/ Allan Siegel ---------------- Name: Allan Siegel ------------ Title: Vice President -------------- |