Loan Participation Agreement (2003)Full Document 

Start of Preview
                          LOAN PARTICIPATION AGREEMENT

         This Loan Participation Agreement (this "Agreement") is made and
entered into as of May 12, 2003, between THE HUNTINGTON NATIONAL BANK
("Transferor") and HUNTINGTON PREFERRED CAPITAL, INC., an Ohio corporation
("Transferee").

                                    RECITALS

         A.       Transferor desires to transfer to Transferee and Transferee
desires to obtain from Transferor a participation interest in certain loans made
by Transferor to various borrowers (collectively, the "Borrowers"), as such
Loans may be identified from time to time by Transferor pursuant to paragraph 2
below (the "Loans").

         B.       Transferor and Huntington Preferred Capital Holdings, Inc., an
Indiana corporation ("Holdings"), are parties to an Amended and Restated Loan
Participation Agreement, dated as of May 12, 2003 (the "Holdings Participation
Agreement").

         C.       Holdings and HPC Holdings-III, Inc., a Nevada corporation
("HPCH-III"), are parties to a Loan Subparticipation Agreement, dated as of May
12, 2003 (the "HPCH-III Subparticipation Agreement").

         D.       HPCH-III and Transferee are parties to a Loan Subparticipation
Agreement, dated as of May 12, 2003 (the "HPC Subparticipation Agreement").

         E.       Transferor may desire to transfer participation interests in
Loans directly to Transferee without regard to the Holdings Participation
Agreement, the HPCH-III Subparticipation Agreement, and the HPC Subparticipation
Agreement.

         F.       Transferor will service the Loans as hereinafter set forth.

         G.       The parties wish to enter into this Agreement setting forth
their respective rights and obligations with respect to the Loans.

                                    AGREEMENT

         l.       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.

         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 transfer of a Participation Interest,
Transferor assigns 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.


End of Preview