Exhibit 10.12

 

Execution Copy

 

AGREED UPON TERMS AND PROCEDURES

 

THESE AGREED UPON TERMS AND PROCEDURES (these “Terms and Procedures”) are dated
as of January 31, 2008, and are agreed to and acknowledged by OLD SECOND
BANCORP, INC., a Delaware corporation (“Borrower”), and LASALLE BANK NATIONAL
ASSOCIATION, a national banking association (“Lender”), in connection with
certain credit facilities provided by Lender to Borrower.

 

R E C I T A L S :

 

A.                                   Borrower is a bank holding company that
owns 100% of the issued and outstanding capital stock of Old Second National
Bank, a national banking association, (the “Bank”), and is acquiring
HeritageBanc, Inc. (“Heritage”), by causing Old Second Acquisition, Inc., a
Delaware corporation and a wholly owned subsidiary of Borrower (“Merger Corp”),
to merge with and into Heritage (the “Merger”) pursuant to the terms and
conditions of an Agreement and Plan of Merger, dated as of November 5, 2007,
among Borrower and Merger Corp and Heritage, and immediately thereafter causing
Heritage Bank, a wholly owned subsidiary of Heritage (“Heritage Bank”), to merge
with and into Old Second National Bank (the “Bank Merger”) pursuant to the terms
and conditions of a Merger Agreement, dated as of November 20, 2007, between the
Bank and Heritage Bank.

 

                                               
B.                                     Borrower has requested that Lender
provide it with three credit facilities in the aggregate principal amount of
$75,500,000 consisting of (a) a term loan in the principal amount of $500,000
(the “Term Loan”), (b) a revolving loan in the principal amount of up to
$30,000,000 and (c) subordinated debt in the principal amount of up to
$45,000,000, to be used to finance the acquisition of Heritage Bank and to
increase the capital of the Bank, with any remaining proceeds to be used for
general corporate purposes.

 

C.                                     These Terms and Procedures have been
agreed upon, executed and delivered by Borrower and Lender pursuant to Sections
2.6 and 2.7 of the Loan Agreement (as defined below).

 

NOW, THEREFORE, in consideration of the mutual covenants, conditions and
agreements and to induce Lender to enter into the Loan Agreement and to make
Loans and other financial accommodations to Borrower, the parties hereby agree
as follows:

 

1.                                      DEFINITIONS. ALL CAPITALIZED TERMS USED
HEREIN THAT ARE NOT OTHERWISE DEFINED HEREIN SHALL HAVE THE MEANINGS ASCRIBED TO
THEM IN THAT CERTAIN LOAN AND SUBORDINATED DEBENTURE PURCHASE AGREEMENT OF EVEN
DATE HEREWITH BETWEEN LENDER AND BORROWER (AS AMENDED, RESTATED, SUPPLEMENTED OR
MODIFIED FROM TIME TO TIME, THE “LOAN AGREEMENT”).

 

2.                                      INTEREST RATES. BORROWER AGREES THAT
MATTERS CONCERNING THE ELECTION, PAYMENT, APPLICATION, ACCRUAL AND COMPUTATION
OF INTEREST AND INTEREST RATES SHALL BE IN ACCORDANCE WITH LENDER’S PRACTICES
SET FORTH HEREIN AND IN THE OTHER LOAN DOCUMENTS.

 

2.1                               INTEREST RATE ELECTION. EACH BORROWING TRANCHE
UNDER ANY LOAN SHALL BEAR INTEREST AS A BASE RATE TRANCHE UNLESS AND UNTIL
BORROWER SHALL OTHERWISE ELECT. BORROWER SHALL MAKE A LIBO RATE OR BASE RATE
ELECTION BY DELIVERING A RATE ELECTION NOTICE (A) NOT LESS THAN ONE BUSINESS DAY
PRIOR TO THE BORROWING DATE, IN THE CASE OF BASE RATE TRANCHE, (B) NOT LESS

 

 

 

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THAN THREE BUSINESS DAYS PRIOR TO THE BORROWING DATE, IN THE CASE OF A LIBO RATE
TRANCHE, AND (C) IN NO EVENT MORE THAN FIVE BUSINESS DAYS PRIOR TO A BORROWING
DATE, PROVIDED THAT NO MORE THAN ONE LIBO RATE TRANCHE FOR ANY LOAN SHALL BE
OUTSTANDING AT ANY ONE TIME. EACH RATE ELECTION NOTICE SHALL SPECIFY THE
EFFECTIVE DATE FOR THE LIBOR PERIOD TO BE APPLICABLE TO ANY LIBO RATE TRANCHE
WITH RESPECT TO ANY LOAN. THE LIBO RATE SHALL REMAIN FIXED FOR ALL DISBURSEMENTS
MADE UNDER A LOAN THAT BEAR INTEREST BASED ON THE LIBO RATE UNTIL THE NEXT LIBOR
PERIOD COMMENCES. ANY RATE ELECTION NOTICE DELIVERED BY BORROWER SHALL BE
IRREVOCABLE AND MAY NOT BE MODIFIED IN ANY WAY WITHOUT THE PRIOR WRITTEN
APPROVAL OF LENDER. IN ADDITION TO INITIALLY ELECTING TO DESIGNATE A BORROWING
TRANCHE AS A BASE RATE TRANCHE OR A LIBO RATE TRANCHE, BORROWER MAY FURTHER
ELECT, BY DESIGNATION ON A RATE ELECTION NOTICE, (I) TO CONVERT A BASE RATE
TRANCHE OR ANY PORTION THEREOF TO A LIBO RATE TRANCHE, (II) TO CONVERT A LIBO
RATE TRANCHE OR ANY PORTION THEREOF INTO A BASE RATE TRANCHE, OR (III) TO
CONTINUE ANY LIBO RATE TRANCHE OR ANY PORTION THEREOF FOR AN ADDITIONAL LIBOR
PERIOD. IN THE EVENT THAT BORROWER FAILS TO NOTIFY LENDER THAT IT DESIRES TO
CONTINUE ANY LIBO RATE TRANCHE OR ANY PORTION THEREOF BY THE LAST DAY OF THE
APPLICABLE LIBOR PERIOD, BORROWER SHALL BE DEEMED TO HAVE ELECTED TO CONTINUE
THE LIBO RATE TRANCHE IN QUESTION FOR AN ADDITIONAL LIBOR PERIOD EQUAL IN LENGTH
TO THE EXPIRING LIBOR PERIOD. THE LIBOR PERIOD FOR THE CONTINUATION OF ANY LIBO
RATE TRANCHE SHALL COMMENCE ON THE DAY AFTER THE LAST DAY OF THE NEXT PRECEDING
LIBOR PERIOD. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN AND
SUBJECT TO THE DEFAULT INTEREST PROVISIONS CONTAINED HEREIN, IF AN EVENT OF
DEFAULT OCCURS, ALL LIBO RATE TRANCHES WILL CONVERT TO BASE RATE TRANCHES UPON
THE EXPIRATION OF THE LIBOR PERIODS THEREFOR. THE CONVERSION OF A LIBO RATE
TRANCHE TO A BASE RATE TRANCHE PURSUANT TO A DESCRIPTION IN A RATE ELECTION
NOTICE SHALL ONLY OCCUR ON THE LAST BUSINESS DAY OF THE LIBOR PERIOD RELATING TO
SUCH LIBO RATE TRANCHE. LENDER IS HEREBY AUTHORIZED TO RELY UPON A RATE ELECTION
NOTICE DELIVERED BY ANY AUTHORIZED OFFICER OF BORROWER INCLUDING WILLIAM B.
SKOGLUND, PRESIDENT AND CHIEF EXECUTIVE OFFICER, J. DOUGLAS CHEATHAM, EXECUTIVE
VICE PRESIDENT AND CHIEF FINANCIAL OFFICER, AND JAMES L. ECCHER, EXECUTIVE VICE
PRESIDENT AND CHIEF OPERATING OFFICER, WHICH PERSONS ARE BORROWER’S DULY
AUTHORIZED AGENTS, AND SUCH ADDITIONAL AUTHORIZED AGENTS AS ANY OF THE
ABOVE-REFERENCED AUTHORIZED AGENTS OF BORROWER SHALL DESIGNATE, IN WRITING, TO
LENDER.

 

IF PURSUANT TO THE RATE ELECTION NOTICE RECEIVED BY LENDER PURSUANT TO
SECTION 2.1 HEREOF, THE INITIAL INTEREST PERIOD OF ANY LIBOR RATE TRANCHE
COMMENCES ON ANY DAY OTHER THAN THE FIRST BUSINESS DAY OF ANY MONTH, THEN THE
INITIAL INTEREST PERIOD OF SUCH LIBOR RATE TRANCHE SHALL END ON THE FIRST
BUSINESS DAY OF THE FOLLOWING CALENDAR MONTH, NOTWITHSTANDING THE INTEREST
PERIOD SPECIFIED IN SUCH NOTICE, AND THE LIBOR RATE FOR SUCH LIBOR RATE TRANCHE
SHALL BE EQUAL TO THE LIBOR RATE FOR AN INTEREST PERIOD EQUAL TO THE LENGTH OF
SUCH PARTIAL MONTH.  THEREAFTER, EACH LIBOR RATE TRANCHE SHALL AUTOMATICALLY
RENEW FOR THE INTEREST PERIOD SPECIFIED IN THE INITIAL RATE ELECTION NOTICE
RECEIVED BY LENDER.

 

2.2                               INTEREST PAYMENTS. SUBJECT TO SECTION 2.3
HEREOF AND EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY NOTE, INTEREST ACCRUED
ON EACH BORROWING TRANCHE OR ANY OTHER OUTSTANDING AMOUNT OF THE LOANS SHALL BE
PAYABLE BY BORROWER IN ARREARS ON THE 30TH DAY OF EACH MARCH, JUNE,
SEPTEMBER AND DECEMBER, COMMENCING MARCH 30, 2008, AND ON THE APPLICABLE
MATURITY DATE OF EACH LOAN.

 

2.3                               DEFAULT INTEREST. NOTWITHSTANDING THE RATES OF
INTEREST AND THE PAYMENT DATES SPECIFIED IN THIS SECTION 2, EFFECTIVE
IMMEDIATELY UPON THE OCCURRENCE AND DURING THE CONTINUANCE OF ANY EVENT OF
DEFAULT, THE PRINCIPAL BALANCE OF ANY LOAN THEN OUTSTANDING AND, TO

 

 

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THE EXTENT PERMITTED BY APPLICABLE LAW, ANY INTEREST PAYMENTS NOT PAID WITHIN
TEN (10) DAYS AFTER THE SAME BECOMES DUE SHALL BEAR INTEREST PAYABLE UPON DEMAND
AT A RATE WHICH IS TWO PERCENT (2%) PER ANNUM IN EXCESS OF THE RATE OF INTEREST
OTHERWISE PAYABLE UNDER THESE AGREED UPON TERMS AND PROCEDURES (THE “DEFAULT
RATE”). IN ADDITION, ALL OTHER AMOUNTS DUE LENDER (WHETHER DIRECTLY OR FOR
REIMBURSEMENT) UNDER THESE TERMS AND PROCEDURES OR ANY OF THE OTHER LOAN
DOCUMENTS, IF NOT PAID WHEN DUE OR, IN THE EVENT NO TIME PERIOD IS EXPRESSED, IF
NOT PAID WITHIN FIVE (5) DAYS AFTER WRITTEN NOTICE FROM LENDER THAT THE SAME HAS
BECOME DUE, SHALL THEREAFTER BEAR INTEREST AT THE FOREGOING DEFAULT RATE.
FINALLY, ANY AMOUNT DUE ON A MATURITY DATE WHICH IS NOT THEN PAID SHALL ALSO
BEAR INTEREST THEREAFTER AT THE DEFAULT RATE. NOTWITHSTANDING ANYTHING TO THE
CONTRARY SET FORTH IN THIS SECTION 2.3 OR ELSEWHERE IN THESE TERMS AND
PROCEDURES, THE DEFAULT RATE OF INTEREST SHALL APPLY WITH RESPECT TO AN EVENT OF
DEFAULT RELATING TO THE SUBORDINATED DEBT IF SUCH EVENT OF DEFAULT OCCURS
PURSUANT TO SECTIONS 8.1.1.16 OR 8.1.1.17 OF THE LOAN AGREEMENT OR SUCH EVENT OF
DEFAULT IS ONE WITH RESPECT TO WHICH LENDER WOULD BE ENTITLED TO DECLARE THE
SUBORDINATED DEBENTURE IMMEDIATELY DUE AND PAYABLE PURSUANT TO SECTION 8.6 OF
THE LOAN AGREEMENT.

 

2.4                               COMPUTATION OF INTEREST. INTEREST SHALL BE
COMPUTED ON THE BASIS OF THE ACTUAL NUMBER OF DAYS ELAPSED IN THE PERIOD DURING
WHICH INTEREST ACCRUES AND A YEAR OF 360 DAYS. IN COMPUTING INTEREST, THE DATE
OF FUNDING SHALL BE INCLUDED AND THE DATE OF PAYMENT SHALL BE EXCLUDED;
PROVIDED, HOWEVER, THAT IF ANY FUNDING IS REPAID ON THE SAME DAY ON WHICH IT IS
MADE, ONE DAY’S INTEREST SHALL BE PAID THEREON. THE PARTIES HERETO INTEND TO
CONFORM STRICTLY TO APPLICABLE USURY LAWS AS IN EFFECT FROM TIME TO TIME DURING
THE TERMS OF THE LOANS. ACCORDINGLY, IF THE TRANSACTION CONTEMPLATED HEREBY
WOULD BE USURIOUS UNDER APPLICABLE LAW (INCLUDING THE LAWS OF THE UNITED STATES
OF AMERICA, OR OF ANY OTHER JURISDICTION WHOSE LAWS MAY BE MANDATORILY
APPLICABLE), THEN, IN THAT EVENT, NOTWITHSTANDING ANYTHING TO THE CONTRARY IN
THIS AGREEMENT OR ANY OF THE NOTES, BORROWER AND LENDER AGREE THAT THE AGGREGATE
OF ALL CONSIDERATION THAT CONSTITUTES INTEREST UNDER APPLICABLE LAW THAT IS
CONTRACTED FOR, CHARGED OR RECEIVED UNDER OR IN CONNECTION WITH THIS AGREEMENT
SHALL UNDER NO CIRCUMSTANCES EXCEED THE MAXIMUM AMOUNT OF INTEREST ALLOWED BY
APPLICABLE LAW, AND ANY EXCESS SHALL BE CREDITED TO BORROWER BY LENDER (OR IF
SUCH CONSIDERATION SHALL HAVE BEEN PAID IN FULL, SUCH EXCESS REFUNDED TO
BORROWER BY LENDER).

 

2.5                               CERTAIN PROVISIONS REGARDING LIBO RATE
TRANCHES.

 

2.5.1                     CHANGES; LEGAL RESTRICTIONS. IN THE EVENT THE ADOPTION
OF OR ANY CHANGE IN ANY LAW, TREATY, RULE, REGULATION, GUIDELINE OR THE
INTERPRETATION OR APPLICATION THEREOF BY A GOVERNMENTAL AUTHORITY (WHETHER OR
NOT HAVING THE FORCE OF LAW AND WHETHER OR NOT THE FAILURE TO COMPLY THEREWITH
WOULD BE UNLAWFUL) EITHER (A) SUBJECTS LENDER TO ANY TAX (OTHER THAN INCOME
TAXES OR FRANCHISE TAXES NOT SPECIFICALLY BASED ON LOAN TRANSACTIONS), DUTY OR
OTHER CHARGE OF ANY KIND WITH RESPECT TO ANY LIBO RATE TRANCHE OR CHANGES THE
BASIS OF TAXATION OF PAYMENTS TO LENDER OF PRINCIPAL, FEES, INTEREST OR ANY
OTHER AMOUNT PAYABLE IN CONNECTION WITH A LIBO RATE TRANCHE, OR (B) IMPOSES ON
LENDER ANY OTHER CONDITION MATERIALLY MORE BURDENSOME IN NATURE, EXTENT OR
CONSEQUENCE THAN THOSE IN EXISTENCE AS OF THE DATE OF THIS AGREEMENT, WHICH
CONDITIONS ARE RELATED TO A LIBO RATE TRANCHE OR LOAN TRANSACTION, AND THE
RESULT OF ANY OF THE FOREGOING IS TO INCREASE THE COST TO LENDER OF MAKING,
RENEWING OR MAINTAINING ANY LIBO RATE TRANCHES OR TO REDUCE ANY AMOUNT
RECEIVABLE THEREUNDER; THEN, IN ANY SUCH CASE, BORROWER SHALL PROMPTLY PAY TO
LENDER, AS APPLICABLE, UPON DEMAND, SUCH AMOUNT OR AMOUNTS AS MAY BE NECESSARY
TO COMPENSATE LENDER FOR ANY SUCH ADDITIONAL COST INCURRED OR REDUCED AMOUNTS
RECEIVED. 

 

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NOTWITHSTANDING THE FOREGOING, ANY INCREASE, CHANGE OR MODIFICATION TO ANY
LOCAL, STATE OR FEDERAL INCOME, FRANCHISE OR SIMILAR TAX WHICH IS NOT
SPECIFICALLY DIRECTED TO OR BASED ON A LIBO RATE TRANCHE OR A LOAN TRANSACTION
SHALL NOT RESULT IN ANY CHANGE IN THE PAYMENTS MADE BY BORROWER.

 

2.5.2                     LIBO RATE LENDING UNLAWFUL. IF LENDER SHALL DETERMINE
(WHICH DETERMINATION SHALL, UPON NOTICE THEREOF TO BORROWER, BE CONCLUSIVE AND
BINDING IN THE ABSENCE OF READILY DEMONSTRABLE ERROR) THAT THE ADOPTION OF OR
ANY CHANGE IN ANY LAW, TREATY, RULE, REGULATION, GUIDELINE OR IN THE
INTERPRETATION OR APPLICATION THEREOF BY ANY GOVERNMENTAL AUTHORITY MAKES IT
UNLAWFUL FOR LENDER TO MAKE OR MAINTAIN ANY LIBO RATE TRANCHE, (A) THE
OBLIGATION OF LENDER TO MAKE OR CONTINUE ANY LIBO RATE TRANCHE SHALL, UPON SUCH
DETERMINATION, FORTHWITH BE SUSPENDED UNTIL LENDER SHALL NOTIFY BORROWER THAT
THE CIRCUMSTANCES CAUSING SUCH SUSPENSION NO LONGER EXIST, AND (B) IF REQUIRED
BY SUCH LAW, INTERPRETATION OR APPLICATION, ALL LIBO RATE TRANCHES SHALL
AUTOMATICALLY CONVERT INTO BASE RATE TRANCHES.

 

2.5.3                     UNASCERTAINABLE INTEREST RATE. IF LENDER SHALL HAVE
DETERMINED IN GOOD FAITH THAT ADEQUATE MEANS DO NOT EXIST FOR ASCERTAINING THE
INTEREST RATE APPLICABLE HEREUNDER TO LIBO RATE TRANCHES, THEN, UPON NOTICE FROM
LENDER TO BORROWER, THE OBLIGATIONS OF LENDER TO MAKE OR CONTINUE LIBO RATE
TRANCHES SHALL FORTHWITH BE SUSPENDED, AND THEREAFTER THE LOAN SHALL CONTINUE AT
THE APPLICABLE BASE RATE UNTIL LENDER SHALL NOTIFY BORROWER THAT THE
CIRCUMSTANCES CAUSING SUCH SUSPENSION NO LONGER EXIST. LENDER WILL GIVE SUCH
NOTICE WHEN IT DETERMINES, IN GOOD FAITH, THAT SUCH CIRCUMSTANCES NO LONGER
EXIST; PROVIDED, HOWEVER, THAT LENDER SHALL NOT HAVE ANY LIABILITY WITH RESPECT
TO ANY DELAY IN GIVING SUCH NOTICE.

 

2.5.4                     FUNDING LOSSES. IN THE EVENT LENDER SHALL INCUR ANY
LOSS OR EXPENSE (INCLUDING, WITHOUT LIMITATION, ANY LOSS OR EXPENSE INCURRED BY
REASON OF THE LIQUIDATION OR REEMPLOYMENT OF DEPOSITS OR OTHER FUNDS ACQUIRED BY
LENDER TO MAKE OR MAINTAIN ANY LIBO RATE TRANCHE) AS A RESULT OF ANY
CONTINUANCE, CONVERSION, REPAYMENT OR PREPAYMENT OF THE PRINCIPAL AMOUNT OF, OR
FAILURE TO MAKE OR TERMINATION OF, ANY LIBO RATE TRANCHE ON A DATE OTHER THAN
THE SCHEDULED LAST DAY OF THE LIBOR PERIOD APPLICABLE THERETO, THEN, UPON THE
WRITTEN NOTICE OF SUCH FROM LENDER TO BORROWER, BORROWER SHALL REIMBURSE LENDER
FOR SUCH LOSS OR EXPENSE WITHIN THREE BUSINESS DAYS AFTER RECEIPT OF SUCH
NOTICE. SUCH WRITTEN NOTICE (WHICH SHALL INCLUDE CALCULATIONS IN REASONABLE
DETAIL) SHALL BE CONCLUSIVE AND BINDING IN THE ABSENCE OF READILY DEMONSTRABLE
ERROR.

 

2.6                               ADDITIONAL INTEREST ON LIBO RATE TRANCHES. SO
LONG AS AND TO THE EXTENT LENDER SHALL BE REQUIRED UNDER REGULATIONS OF THE FRB
TO MAINTAIN RESERVES WITH RESPECT TO LIABILITIES OR ASSETS CONSISTING OF OR
INCLUDING EUROCURRENCY LIABILITIES (AS DEFINED IN THE DEFINITION OF RESERVE
PERCENTAGE), AND LENDER’S PERFORMANCE UNDER THIS AGREEMENT SHALL HAVE GIVEN RISE
TO ADDITIONAL RESERVE REQUIREMENTS FOR LENDER THEREUNDER, BORROWER SHALL PAY TO
LENDER ADDITIONAL INTEREST ON THE UNPAID PRINCIPAL AMOUNT OF EACH LIBO RATE
TRANCHE. SUCH ADDITIONAL INTEREST SHALL ACCRUE FROM THE LATER OF THE DATE SUCH
RESERVE REQUIREMENT COMMENCES AND THE DATE OF THE FIRST DISBURSEMENT UNDER SUCH
LIBO RATE TRANCHE UNTIL THE EARLIER OF THE DATE SUCH RESERVE REQUIREMENT ENDS
AND THE DATE THE PRINCIPAL AMOUNT OF SUCH LIBO RATE TRANCHE IS PAID IN FULL, AT
AN INTEREST RATE PER ANNUM EQUAL AT ALL TIMES TO THE REMAINDER OBTAINED BY
SUBTRACTING (A) THE LIBO RATE FOR THE LIBOR PERIOD FOR SUCH LIBO RATE TRANCHE
FROM (B) THE RATE OBTAINED BY DIVIDING THE LIBO RATE BY A PERCENTAGE EQUAL TO
100% MINUS THE RESERVE PERCENTAGE AS IN EFFECT FROM TIME TO TIME DURING SUCH
LIBOR PERIOD. LENDER SHALL, AS SOON AS PRACTICABLE BUT NOT LATER THAN THE LAST
DAY OF THE LIBOR PERIOD, PROVIDE NOTICE TO BORROWER OF

 

 

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ANY SUCH ADDITIONAL INTEREST ARISING IN CONNECTION WITH SUCH LIBO RATE TRANCHE
AND THE CERTIFICATION OF LENDER THAT THE ADDITIONAL AMOUNT IS DUE AND THAT THE
ADDITIONAL RESERVE REQUIREMENT IS APPLICABLE TO SUCH LIBO RATE TRANCHE. SUCH
ADDITIONAL INTEREST SHALL BE PAYABLE DIRECTLY TO LENDER ON THE DATES SPECIFIED
HEREIN FOR PAYMENT OF INTEREST.

 

2.7                               NOTICE OF CHANGES OR INCREASED COSTS RELATING
TO LIBO RATE TRANCHES. LENDER AGREES THAT, AS PROMPTLY AS REASONABLY PRACTICABLE
AFTER IT BECOMES AWARE OF THE OCCURRENCE OF AN EVENT OR THE EXISTENCE OF A
CONDITION WHICH WOULD CAUSE IT TO BE AFFECTED BY ANY OF THE EVENTS OR CONDITIONS
DESCRIBED IN SECTIONS 2.5 OR 2.6 HEREOF, IT WILL NOTIFY BORROWER OF SUCH EVENT
AND THE POSSIBLE EFFECTS THEREOF, PROVIDED THAT THE FAILURE TO PROVIDE SUCH
NOTICE SHALL NOT AFFECT LENDER’S RIGHTS TO REIMBURSEMENT PROVIDED FOR HEREIN.

 

3.                                      PAYMENTS. BORROWER AGREES THAT MATTERS
CONCERNING PREPAYMENTS, PAYMENTS AND APPLICATION OF PAYMENTS SHALL BE IN
ACCORDANCE WITH LENDER’S PRACTICES SET FORTH HEREIN AND IN THE OTHER LOAN
DOCUMENTS.

 

3.1                               PREPAYMENT. SUBJECT TO SECTION 2.5.4 HEREOF,
BORROWER MAY, UPON AT LEAST ONE (1) BUSINESS DAY’S NOTICE TO LENDER, PREPAY,
WITHOUT PENALTY, ALL OR A PORTION OF THE PRINCIPAL AMOUNT OUTSTANDING UNDER THE
SUBORDINATED DEBT OR THE REVOLVING LOAN IN A MINIMUM AGGREGATE AMOUNT OF $25,000
OR ANY LARGER INTEGRAL MULTIPLE OF $25,000 BY PAYING THE PRINCIPAL AMOUNT TO BE
PREPAID, TOGETHER WITH UNPAID ACCRUED INTEREST THEREON TO THE DATE OF
PREPAYMENT. NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN THIS AGREEMENT
OR IN ANY OTHER LOAN DOCUMENT, PRINCIPAL AMOUNTS OUTSTANDING UNDER THE TERM LOAN
MAY NOT BE PREPAID WITHOUT THE WRITTEN CONSENT AND APPROVAL OF LENDER, WHICH
CONSENT AND APPROVAL MAY BE WITHHELD AT LENDER’S SOLE AND ABSOLUTE DISCRETION;
PROVIDED, HOWEVER, THAT IF ALL AMOUNTS OUTSTANDING UNDER ANY OTHER INDEBTEDNESS
OWING FROM BORROWER TO LENDER HAVE BEEN REPAID AND BORROWER HAS SATISFIED IN
FULL ALL OTHER FINANCIAL OBLIGATIONS TO LENDER, THEN BORROWER MAY PREPAY,
WITHOUT PENALTY OR THE WRITTEN CONSENT AND APPROVAL OF LENDER, ALL OR A PORTION
OF THE PRINCIPAL AMOUNT OUTSTANDING UNDER THE TERM LOAN BY PAYING THE PRINCIPAL
AMOUNT TO BE PREPAID, TOGETHER WITH UNPAID ACCRUED INTEREST THEREON TO THE DATE
OF PREPAYMENT.

 

3.2                               MANNER AND TIME OF PAYMENT. ALL PAYMENTS OF
PRINCIPAL, INTEREST AND FEES HEREUNDER PAYABLE TO LENDER SHALL BE MADE, WITHOUT
CONDITION OR RESERVATION OF RIGHT AND FREE OF SET-OFF OR COUNTERCLAIM, IN U.S.
DOLLARS AND BY WIRE TRANSFER (PURSUANT TO LENDER’S WRITTEN WIRE TRANSFER
INSTRUCTIONS) OF IMMEDIATELY AVAILABLE FUNDS DELIVERED TO LENDER NOT LATER THAN
11:00 A.M. (CHICAGO TIME) ON THE DATE DUE. FUNDS RECEIVED BY LENDER AFTER THAT
TIME AND DATE SHALL BE DEEMED TO HAVE BEEN PAID ON THE NEXT SUCCEEDING BUSINESS
DAY.

 

3.3                               PAYMENTS ON NON-BUSINESS DAYS. WHENEVER ANY
PAYMENT TO BE MADE BY BORROWER HEREUNDER SHALL BE STATED TO BE DUE ON A DAY
WHICH IS NOT A BUSINESS DAY, PAYMENTS SHALL BE MADE ON THE NEXT SUCCEEDING
BUSINESS DAY AND SUCH EXTENSION OF TIME SHALL BE INCLUDED IN THE COMPUTATION OF
THE PAYMENT OF INTEREST HEREUNDER.

 

3.4                               APPLICATION OF PAYMENTS. ALL PAYMENTS RECEIVED
BY LENDER FROM OR ON BEHALF OF BORROWER SHALL FIRST BE APPLIED TO AMOUNTS DUE TO
LENDER TO PAY LENDER’S FEES AND REIMBURSE LENDER’S COSTS AND EXPENSES, INCLUDING
THOSE PURSUANT TO SECTION 5.6 OR SECTION 8.5 OF THE LOAN AGREEMENT AND, SECOND
TO ACCRUED INTEREST UNDER THE SUBORDINATED DEBENTURE, THIRD TO ACCRUED INTEREST
UNDER THE TERM NOTE, FOURTH TO ACCRUED INTEREST UNDER THE REVOLVING NOTE, FIFTH
TO

 

 

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PRINCIPAL AMOUNTS OUTSTANDING UNDER THE REVOLVING NOTE, SIXTH TO PRINCIPAL
AMOUNTS OUTSTANDING UNDER THE SUBORDINATED DEBENTURE AND THEN TO PRINCIPAL
AMOUNTS OUTSTANDING UNDER THE TERM NOTE; PROVIDED, HOWEVER, SUBJECT TO
SECTION 8.6 OF THE LOAN AGREEMENT, THAT AFTER THE DATE ON WHICH THE FINAL
PAYMENT OF PRINCIPAL WITH RESPECT TO ANY LOAN IS DUE OR FOLLOWING AND DURING ANY
EVENT OF DEFAULT, ALL PAYMENTS RECEIVED ON ACCOUNT OF BORROWER’S LIABILITIES
SHALL BE APPLIED IN WHATEVER ORDER, COMBINATION AND AMOUNTS AS LENDER, IN ITS
SOLE AND ABSOLUTE DISCRETION, DECIDES, TO ALL COSTS, EXPENSES AND OTHER
INDEBTEDNESS OWING TO LENDER. NO AMOUNT PAID OR PREPAID ON ANY OF THE NOTES
(OTHER THAN THE REVOLVING NOTE) MAY BE REBORROWED.

 

4.                                      MISCELLANEOUS. THE PROVISIONS OF
SECTION 9 OF THE LOAN AGREEMENT SHALL BE INCORPORATED IN THESE TERMS AND
PROCEDURES AS THOUGH RESTATED HEREIN, MUTATIS MUTANDIS.

 

5.                                      CONFLICTS WITH LOAN AGREEMENT. IN THE
EVENT OF A CONFLICT BETWEEN THE TERMS OF THE LOAN AGREEMENT AND THE TERMS OF
THESE TERMS AND PROCEDURES, THE PROVISIONS OF THESE TERMS AND PROCEDURES SHALL
GOVERN.

 

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IN WITNESS WHEREOF, the undersigned has caused these Terms and Procedures to be
duly executed and delivered as of the day and year first above written.

 

 

 

 

OLD SECOND BANCORP, INC.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

 /s/ William B. Skoglund

 

 

 

Name:

William B. Skoglund

 

 

 

Title:

President, Chief Executive Officer and

 

 

 

 

Chairman

 

 

 

 

 

LASALLE BANK NATIONAL ASSOCIATION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

 /s/ Jeffrey J. Bowden

 

 

 

Name:

Jeffery J. Bowden

 

 

 

Title:

Senior Vice President

 

 

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