Exhibit 10(A)



 





Exhibit 10(a)




SECOND AMENDED AND RESTATED

LOAN PARTICIPATION AGREEMENT




     This Second Amended and Restated Loan Participation Agreement (this
“Agreement”) is made and entered into as of March 30, 2004, between The
Huntington National Bank (“Transferor”) and Huntington Preferred Capital
Holdings, Inc., an Indiana corporation (“Transferee”).



RECITALS




     A. The parties have previously entered into a certain Amended and Restated
Loan Participation Agreement, dated as of May 12, 2003 (the “Original
Agreement”), whereby Transferor has transferred and will continue to transfer
to Transferee participation interests in certain loans (the “Loans”) made by
Transferor or an affiliate of Transferor to various borrowers (collectively,
the “Borrowers”), as such Loans have been and may be identified from time to
time by Transferor pursuant to Section 2 below, or substituted for other Loans
previously transferred by Transferor to Transferee, pursuant to such Section 2.



     B. The parties desire to amend and restate the Original Agreement.



AGREEMENT




     1. Definitions.



          (a) “Loan Documents” shall mean any and all loan agreements evidencing or
otherwise relating to any of the Loans, together with any and all commitment
letters, promissory notes, real estate mortgages, assignments and security
agreements, financing statements, pledge agreements, letters of credit,
applications and agreements for standby letters of credit, letter of credit
reimbursement agreements, subordination agreements, waivers, affidavits, fire
and extended coverage insurance policies, guarantees, title insurance policies,
applications, reports, surveys, documents required to be maintained by lenders
pursuant to any applicable federal or state regulations, any and all
amendments, modifications or supplements to any of the foregoing from time to
time, and all other relevant documents pertaining to any of the Loans.



          (b) “Collateral” shall mean the real property, fixtures, equipment,
inventory, accounts, chattel paper, instruments, documents, general
intangibles, securities and all other property and property rights in which
Transferor has been granted a mortgage, lien or security interest in connection
with any of the Loans.



          (c) “Origination Fees” shall mean the origination, commitment, or other
fees collected at the time of origination of a particular Loan.



          (d) “Participation” and “Participation Interest” shall mean the interest
of Transferee in the Loans and in the associated Origination Fees, equal to up
to a one hundred percent (100%) interest in each of the Loans and associated
Origination Fees.



 









 





          (e) “Participation Share,” “Pro Rata Share,” “pro rata,” and “ratably”
shall mean a share in the same proportion as the respective percentage
ownership interests of Transferor and Transferee in the Loans and associated
Origination Fees.



     2. Transfer of Participation Interests; Substitution of Interests.



          (a) Transferee shall from time to time buy from Transferor or from an
affiliate of Transferor, without recourse, a continuing undivided fractional
Participation Interest, and Transferor shall from time to time sell to
Transferee, or cause an affiliate or affiliates of Transferor to sell to
Transferee, such Participation Interests. The purchase price for a particular
Participation Interest transferred shall be Transferee’s Participation Share of
Transferor’s carrying value for the Loan, which is the outstanding principal
balance of the Loan and interest earned thereon but not collected, net of
unearned income, if any, less an allowance for loan losses. Transfers of
Participation Interests by Transferor or an affiliate of Transferor to
Transferee hereunder may, upon the mutual agreement of the parties at the time
any such transfers are made, be made (i) as additional contributions to the
capital of Transferee, (ii) in exchange for the payment of cash by Transferee
to Transferor or appropriate affiliate of Transferor, (iii) in consideration of
the issuance to Transferor or appropriate affiliate of Transferor of shares of
the capital stock of Transferee, or (iv) for such other consideration as the
parties shall mutually agree.



          (b) At the time of any transfer of a Participation Interest, Transferor
will assign to Transferee, without recourse, Transferee’s Participation Share
of Transferor’s beneficial right, title and interest in the Loans and
associated Origination Fees, including any Collateral for the Loans, and any
uncollected payments or collections on account of the Loans. Transferor shall
hold title to the Loans, including any Collateral payments and collections as
agent for Transferee.



          (c) Upon the mutual agreement of the parties, Transferor may from time to
time substitute a Participation Interest in a Loan or group of Loans and the
associated Origination Fees (the “New Loans”) having a fair market value (as
determined by the mutual agreement of the parties) equivalent to the
Participation Interest in a Loan or group of Loans and the associated
Origination Fees previously transferred to Transferee hereunder (the “Old
Loans”), whereupon the Participation Interest previously granted by Transferor
to Transferee in the Old Loans will be canceled and Transferee shall have a
Participation Interest in the New Loans. Such a substitution may be made as
part of a purchase or other transfer of additional Participation Interests in
accordance with paragraph (a) above. Any amounts payable by Transferor to
Transferee hereunder on account of the Old Loans, prorated through the date of
the substitution, shall be paid by Transferor to Transferee at the time of such
substitution.



          (d) Each of the Loans which shall be subject to this Agreement shall be
(i) identified on a completed “Certificate of Participation” in the form of
Exhibit A attached hereto, which shall be delivered by Transferor to Transferee
and shall contain at least the name of each Borrower, the date of the
promissory note evidencing each Loan, the original principal amount of each
Loan, the amount of any associated Origination Fees, and the purchase price
associated



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with the same; or (ii) otherwise identified electronically or in the loan
files for the Loans, in a manner that is mutually agreeable to Transferor and
Transferee and sufficient to properly identify the Loans.




     3. Representations and Warranties. At the time of transfer of
Participation Interests to Transferee, Transferor represents and warrants that
Transferor has good title to the Loans and has full right, power, and authority
to grant and convey the Participation in the Loans provided for herein to
Transferee, and, at the time of transfer of Participation Interests to
Transferee, the Loans are free and clear of all encumbrances or other interests
of any other person.



     4. Transferee’s Risk. Transferee acknowledges and agrees that Transferor
has made no representation or warranty and has no responsibility as to: (i)
the collectibility of the Loans; (ii) the Borrowers’ creditworthiness or
financial condition; (iii) the legality, validity, binding effect or
enforceability of the Loan Documents; (iv) the filing, recording or taking of
any other action with respect to the Loan Documents; (v) any other matter
having any relation to the Loans, the Loan Documents, this Agreement, the
Borrowers, or any other person or entity except as otherwise specifically set
forth herein. Transferee acknowledges that Transferor has made available to it
copies of the Loan Documents requested by Transferee. Transferee acknowledges
and agrees that it has made its own independent investigation and determination
with respect to the foregoing matters and accepts full responsibility therefor.
The sale of the Participation Interests by Transferor to Transferee pursuant
to this Agreement shall be and is without recourse of any nature.



     5. Custody and Ownership of Loan Documents and Collateral. Transferor
shall have and maintain physical possession of all the Loan Documents and
Collateral, to the extent that possession is necessary to perfect a security
interest in any Collateral. Transferor shall use reasonable care to safeguard
and protect the Loan Documents and Collateral. Transferor is authorized to
deal with the Loans in Transferor’s own name, subject to the terms and
conditions of this Agreement, and, as far as third parties are concerned, to
act on behalf of Transferee as though Transferor were the sole owner of the
Loans; provided, however, that all of Transferor’s actions with respect to the
Loans will be subject to this Agreement.



     6. Nature of Transferee’s Participation Interest. Transferee’s
obligations hereunder constitute absolute, unconditional and continuing
obligations to make funds or credit available to Transferor for Transferor to
extend credit to any of the Borrowers and pay letters of credit issued for the
account of any of the Borrowers pursuant to the terms of the Loan Documents and
will be unaffected by (i) any amendment or waiver of any term of the Loan
Documents, (ii) any extension, overadvance, indulgence, settlement or
compromise granted or agreed to in relation to the Loan Documents, (iii) the
release of any Collateral or any guaranty of the Loans, (iv) any invalidity,
unenforceability, or insufficiency of the Loan Documents or of any drafts or
other documents submitted in connection with draws under any letters of credit,
(v) any default by or insolvency of any of the Borrowers, (vi) any act or
omission on Transferor’s part relating to this Agreement or the Loan Documents
(absent gross negligence or willful misconduct), (vii) the absence of notice to
Transferee of any of the foregoing, (viii) any requirement that Transferor take
any action against any of the Borrowers or any other person liable on the
Loans, and (ix) any defenses in law or equity which Transferee may have to the
full discharge of its obligation under this Agreement (absent gross negligence
or willful misconduct by Transferor).



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     7. Servicing of the Loans. Transferor shall service the Loans on behalf
of both Transferee and Transferor as follows:



          (a) Except as otherwise specifically set forth in this Agreement,
Transferor will perform the servicing for the Loans or will cause an affiliate
of Transferor to service the Loans in a manner substantially the same as for
similar work performed by Transferor on its own behalf. For this purpose,
servicing shall include all communications with any of the Borrowers and third
parties, making of all advances and issuing of letters of credit provided for
under the Loan Documents (subject to receipt from Transferee of its
Participation Share of each such advance), receipt of all collections under the
Loans and remittance of the same to the party entitled thereto, inspections of
the Collateral, and all other acts incidental thereto. Transferor shall use
good faith efforts, or shall cause its affiliate to use good faith efforts, to
collect all payments due under the Loans as they become due and payable and to
enforce all obligations of the Borrowers to the extent necessary to protect the
interests of Transferor and Transferee. Transferor shall administer all Loan
collections, including any escrows, in accordance with all applicable laws and
regulations. Transferee agrees that such funds may be commingled with
Transferor’s general funds.



          (b) Transferor shall have the right, in the exercise of its reasonable
discretion and in accordance with prudent banking practices, to give consents,
waivers and modifications of the Loan Documents to the same extent as if the
Loans were wholly-owned by Transferor; provided, however, that Transferor shall
not grant or agree to any (i) waiver of any payment default, (ii) extension of
the maturity, (iii) reduction of the rate or rates of interest with respect to
the Loans, (iv) forgiveness or reduction of the principal sum of the Loans, (v)
increase in the lending formula or advance rates, and (vi) waiver of any right
to elect to foreclose on any Loan in default, and (vii) amendment or
modification of the financial covenants contained in the Loan Documents that
would make such financial covenants less restrictive with respect to any of the
Borrowers without the prior written consent of Transferee, except that
Transferor shall be permitted to grant or agree to any of such consents,
waivers or modifications pursuant to and in accordance with guidelines and
limitations provided by Transferee to Transferor in writing from time to time.
Transferor shall have the right to accept payment or prepayment of the whole
principal sum and accrued interest in accordance with the terms of the Loans,
waive prepayment charges in accordance with Transferor’s policy for Loans in
which no participation is granted, and accept additional security for the
Loans.



          (c) On or before the date of execution of the Loan Documents, with respect
to the principal sums already advanced and outstanding pursuant to the Loans as
of such date, and on or before any later date when funds are to be disbursed to
any of the Borrowers pursuant to the Loans or a drawing occurs under any letter
of credit, Transferee shall pay to Transferor its pro rata share, in accordance
with its Participation Interest, of the amount of the disbursement or letter of
credit payment (or, with respect to principal sums already advanced and
outstanding as of the date of the execution of the Loan Documents, the
aggregate principal balance of the Loans as of such date), in funds available
for immediate use, by 2:00 p.m., Columbus, Ohio, time, on the same banking day
on which the advance is made (or, with respect to the principal sums already
advanced and outstanding pursuant to the Loan Documents as of the date of the



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execution of the Loan Documents, provided, however, that Transferor shall
use its best efforts to give Transferee advance notice of such funding request
no later than 10:00 a.m., Columbus, Ohio, time, on such day. If Transferee
fails or refuses to make payment to Transferor as required herein, then
Transferor, without limitation, shall be entitled to pursue all remedies and
rights permitted by this Agreement, law, or equity against Transferee and
further shall be entitled to, but not be required to, (i) fund Transferee’s Pro
Rata Share of the disbursement, and (ii) accrue interest on any unpaid amount
at the Federal Funds Rate, and (iii) withhold from Transferee all interest,
principal, fees and late charges attributable to Transferee’s Pro Rata Share
thereof through the date Transferee funds its Pro Rata Share thereof and pays
the interest due thereon, plus any additional cost or expense, including
without limitation, reasonable attorneys’ fees, incurred by Transferor as a
result of Transferee’s failure to pay, and (iv) offset against Transferee’s Pro
Rata Share all sums received by Transferor in connection with the Loans until
reimbursed by Transferee for such payment and interest thereon. All payments
received by Transferor in respect of the Loans shall be distributed pro rata to
Transferee promptly after Transferor shall have collected such payment or
payments in immediately available funds.




          (d) Transferor and Transferee shall share in proportion to their
Participation Shares in all payments of principal and interest made on the
Loans after the date of transfer of the Participation Interests. Transferor
and Transferee shall share in any prepayment, late charges, or any other fees
or charges associated with the Loans which are actually collected subsequent to
the time of transfer of the associated Participation Interest, in proportion to
their Participation Shares, unless otherwise provided in the servicing fee
arrangement referenced in paragraph 7(h). Transferor shall not be required to
remit any such principal, interest, prepayment, late charge, or any other fee
or charge associated with the Loans, unless it is actually collected from the
Borrowers.



          (e) To the extent not reimbursed by the Borrowers, and without limiting
the obligation of the Borrowers to do so, Transferee agrees to reimburse
Transferor, to the extent of Transferee’s pro rata share, for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever, including
without limitation disbursements necessary in the judgment of Transferor to
preserve or protect any Collateral (but excluding costs of ordinary overhead
and salaried expense of Transferor’s clerical and supervisory personnel), that
may at any time be imposed on, incurred by, or asserted against Transferor in
any way relating to the Loans, the Loan Documents, any letters of credit issued
pursuant to the Loan Documents or the Loan Documents, any collateral, the
transactions contemplated thereby or hereby, or any action taken or omitted by
Transferor under or in connection with any of the foregoing provided, however,
that Transferee shall not be liable for the payment of any portion of the
foregoing which result directly from Transferor’s gross negligence or willful
misconduct. The covenants contained in this paragraph shall survive the
termination of this Agreement and the expiration of any letters of credit
issued pursuant to the Loan Documents.



          (f) Transferor shall at all times keep proper books and records in
accordance with generally accepted accounting principles consistently applied,
reflecting all transactions in connection with the Loans. All such records
shall be accessible for inspection by Transferee at all reasonable times during
Transferor’s business hours. Transferor shall use its best efforts to



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provide the following information to Transferee within a reasonable time
after such information becomes available to Transferor:





               (i) The accrual status of the Loans;




               (ii) The status of principal and interest payments;




               (iii) Financial statements of the Borrowers; and




               (iv) Information regarding the value of the Collateral and
the status of Transferor’s liens.



          (g) Transferor may accept deposits from, make Loans or otherwise extend
credit to any of the Borrowers and generally engage in any kind of banking
relationship with, any of the Borrowers or any other person or entity having
obligations relating to the Loans, the Loan Documents, or any related agreement
and receive payment on such Loans or extensions of credit and otherwise act
with respect thereto freely and without accountability in the same manner as if
this Agreement did not exist. Transferor, without liability, may rely upon the
advice of legal counsel, accountants or other experts (including those retained
by the Borrowers) and upon any written communication or any telephone
conversation which Transferor believes to be genuine and correct or to have
been signed, sent or made by the proper person or entity, shall not be required
to make any inquiry concerning the performance by the Borrowers or any other
person or entity of any of its obligations and liabilities to third parties or
under or in respect of the Loan Documents or the Loans, and shall have no
obligation to make any claim against, or assert any lien upon, any property
held by Transferor or to assert any offset.



          (h) In consideration of the performance of the loan servicing obligations
provided under this paragraph 7, Transferee shall pay to Transferor a loan
servicing fee. The amount and terms of such fee shall be determined by the
mutual agreement of the parties from time to time during the term of this
Agreement and shall be subject to review and adjustment at any time during the
term of this Agreement. Transferor shall provide to Transferee, on or before
the date that is ten days after the end of each month during the term of this
Agreement, a written statement specifying the amount of the servicing fee
payable for the preceding month and the basis for the calculation of such fee.
Transferor shall be entitled to deduct the amount of such fees from any and all
amounts otherwise due and payable by Transferor to Transferee from time to time
under the terms of this Agreement.



     8. Delinquency and Foreclosure. In the event of any default of any of the
Borrowers, which default shall be continuing for more than 30 days, Transferor
shall use its best efforts to give Transferee notice of such default.
Transferor may take such action as it deems advisable, including exercising
Transferee’s right to commence foreclosure actions or accept deeds in lieu of
foreclosure, pursuant to and in accordance with guidelines and limitations
provided by Transferee to Transferor in writing from time to time.
Notwithstanding the above, Transferor shall at all times take such action as
Transferee may recommend in writing to Transferor as necessary to protect the
interests of both Transferor and Transferee, including, but



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not limited to, commencement of foreclosure actions or acceptance of deeds
in lieu of foreclosure.



     9. Participation Not a Security. Transferee represents and warrants to
Transferor that (i) Transferee does not consider the acquisition of its
Participation Interest hereunder to constitute the “purchase” or “sale” of a
“security” within the meaning of the Securities Act of l933, the Securities
Exchange Act of l934 or Rule l0b-5 promulgated thereunder, the Trust Indenture
Act of l939, the securities laws of the State of Ohio, any other applicable
securities statute or law, or any rule or regulations under any of the
foregoing, (ii) such Participation Interests constitute a commercial
transaction by Transferee with Transferor regarding Transferee’s Participation
Interests in the obligations of the Borrowers under the Loans and the
associated Origination Fees and do not represent an “investment” (as that term
is commonly understood) in Transferor or the Borrowers, (iii) Transferee is
purchasing its Participation Interests hereunder for its own account in respect
of a commercial transaction made in the ordinary course of its commercial
banking business and not with a view to or in connection with any subdivision,
resale, or distribution thereof, and (iv) Transferee is engaged in the business
of entering into commercial transactions (including transactions of the nature
contemplated herein and in the Loans), can bear the economic risk related to
the purchase of the same, and has had access to all information deemed
necessary by it in making its decision whether or not to purchase the same.



     10. Successors and Assigns. Transferor shall not assign this Agreement in
whole, but may assign to one or more participants all or part of Transferor’s
ownership interest in the Loans. Transferee shall have no right to assign or
further participate any of its Participation Interest to anyone other than a
subsidiary or other affiliate of Transferor or Transferee without the prior
written consent of Transferor. Except as otherwise provided herein, this
Agreement shall be binding upon and inure to the benefit of the respective
successors and assigns of the parties.



     11. Notices. All notices hereunder shall be in writing and shall be
personally delivered to the address or addresses of the party receiving the
notice or mailed to such party at such address or addresses by certified or
registered mail, return receipt requested, postage prepaid. Either party may
change its address or addresses for notices and designate or change the
location in which payments to such party will be made by a notice to the other
party. Notices which are mailed shall be deemed received by the addressee on
the third working day following the date of such mailing. Notices to
Transferor shall be addressed as follows:



	 
	The Huntington National Bank

	41 South High Street

	Columbus, Ohio 43287

	Attention: General Counsel








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Notices to Transferee shall be addressed to Transferee as follows:




	 
	Huntington Preferred Capital Holdings, Inc.

	201 North Illinois, Suite 1800

	Indianapolis, Indiana 46204

	Attention: President








     12. Relationship of Parties. With respect to the purchase and sale of
Participation Interests, Transferor and Transferee shall occupy the
relationship of buyer and seller of a property interest. There is not intended
hereby and shall not be construed to exist any fiduciary relationship between
Transferee and Transferor, or any partnership or joint venture between
Transferee and Transferor. With respect to servicing, Transferor shall be an
independent contractor of Transferee. In no event shall either party be
considered an agent or employee of the other party.



     13. Interpretation. This Agreement and the rights and obligations of the
respective parties hereunder shall be governed by and interpreted in accordance
with the laws of the State of Indiana.



     14. Amendments. This Agreement may not be amended, altered or modified
except by a written instrument signed by both the parties.



[signatures appear on the following page]




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     IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date set forth above.



	 	 	 	 	 	 	 
	 	 	THE HUNTINGTON NATIONAL BANK
	 
	 	 	 	 	 	 
	

	 	By:
	 	/s/ John D. Van Fleet	 	 
	

	 	 	 	
 	 	 
	

	 	 	 	John D. Van Fleet, Senior Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	HUNTINGTON PREFERRED CAPITAL HOLDINGS, INC.
	 
	 	 	 	 	 	 
	

	 	By:
	 	/s/ Cindy L. Keitch	 	 
	

	 	 	 	
 	 	 
	

	 	 	 	Cindy L. Keitch, President	 	 







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Exhibit A




Certificate of Participation




The Huntington National Bank

41 South High Street

Columbus, Ohio 43287



Date: _____________




Huntington Preferred Capital Holdings, Inc.

201 North Illinois, Suite 1800

Indianapolis, Indiana 46204

Attention: President



	 	 	 
	Re:

	 	Second Amended and Restated Loan Participation Agreement
between us dated as of March 30, 2004







Ladies and Gentlemen:



     Pursuant to the terms of the above-referenced Second Amended and Restated
Loan Participation Agreement, this will confirm that, as of this date, we have
transferred and assigned to you a certain undivided interest in the loan or
loans described in the attached schedule, which are hereafter to be subject to
the Second Amended and Restated Loan Participation Agreement.



     This Certificate of Participation is in addition to all previous
Certificates issued pursuant to the Second Amended and Restated Loan
Participation Agreement.



	 	 	 	 	 	 	 
	 	 	Very truly yours,
	 
	 	 	 	 	 	 
	

	 	
 	 	 
	

	 	Name:	 	 	 	 
	

	 	 	 	
 	 	 
	

	 	Title:	 	 	 	 
	

	 	 	 	
 	 	 







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Schedule




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Borrower
	 	Date of Note
	 	Principal Amount
	 	Amount of Origination Fees
	 	Purchase Price

	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 








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