EXHIBIT 10.8
AMENDED AND RESTATED CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of July 28, 2000 is by and
between PLACER CAPITAL CO., a California corporation ("PCC"), CALIFORNIA
COMMUNITY BANCSHARES, INC., a Delaware corporation )("CCB" and together with
PCC, collectively, the "Borrowers"), and U.S. BANK NATIONAL ASSOCIATION, a
national banking association (the "Bank").
RECITALS:
A. PCC and the Bank have heretofore entered into a Credit
Agreement dated as of August 10, 1999, which was amended by First Amendment to
Credit Agreement dated as of November 8, 1999 (as so amended, the "Existing
Credit Agreement").
B. PCC's obligations under the Existing Credit Agreement are
further evidenced by a Revolving Note of PCC in favor of the Bank in the maximum
principal amount of $3,000,000 and dated August 10, 1999 (the "Existing
Revolving Note").
C. The Borrowers and the Bank now wish to further amend the
Credit Agreement to, INTER ALIA, add CCB as a Borrower and amend certain
financial covenants, and to amend and restate the Existing Revolving Note in its
entirety.
NOW THEREFORE, the Borrowers and the Bank agree that the
Existing Credit Agreement is hereby amended and restated in its entirety as
follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.1 DEFINED TERMS. As used in this Agreement the
following terms shall have the following respective meanings (and such meanings
shall be equally applicable to both the singular and plural form of the terms
defined, as the context may require):
"ADJUSTED EURODOLLAR RATE": With respect to each Interest
Period applicable to a Eurodollar Rate Advance, the rate (rounded upward, if
necessary, to the next one hundredth of one percent) determined by dividing the
Eurodollar Rate for such Interest Period by 1.00 minus the Eurodollar Reserve
Percentage.
"ADVANCE": Any portion of the outstanding Revolving Loans of
as to which one of the available interest rate options and, if pertinent, an
Interest Period, is applicable. An Advance may be a Eurodollar Rate Advance, a
Negotiated Rate Advance or a Reference Rate Advance.
"AFFILIATE": When used with reference to any Person, (a) each
Person that, directly or indirectly, controls, is controlled by or is under
common control with, the Person referred to, (b) each Person which beneficially
owns or holds, directly or indirectly, five percent or more of any class of
voting stock of the Person referred to (or if the Person referred to is not a
corporation, five percent or more of the equity interest), (c) each Person, five
percent or more of the voting stock (or if such Person is not a corporation,
five percent or more of the equity interest) of which is beneficially owned or
held, directly or indirectly, by the Person referred to, and (d) each of such
Person's officers, directors, joint venturers and partners. The term control
(including the terms "controlled by" and "under common control with") means the
possession, directly, of the power to direct or cause the direction of the
management and policies of the Person in question.
"APPLICABLE MARGIN": With respect to:
(a) Reference Rate Advances -- 0.00%.
(b) Eurodollar Rate Advances -- 2.10%.
(c) Negotiated Rate Advances -- 0.00%
"AVERAGE TOTAL ASSETS": For any fiscal quarter of PSB, an
amount equal to the sum of the actual total assets of PSB as of the last day of
such fiscal quarter plus the actual total assets of PSB as of the last day of
the preceding fiscal quarter, divided by two (2).
"BANK": As defined in the opening paragraph hereof.
"BELVEDERE": Belvedere Capital Partners LLC, a California
limited liability company.
"BOARD": The Board of Governors of the Federal Reserve System
or any successor thereto.
"BORROWER REPRESENTATIVE": CCB. All notices and other
communications given by or to the Borrower Representative, and all actions taken
by the Borrower Representative under or in connection with this Agreement shall
be legally binding on and enforceable against the Borrowers, jointly and
severally, and the Bank may conclusively rely thereon as having been given or
taken, as the case may be, by or to the Borrower Representative on behalf of the
Borrowers.
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"BORROWERS": As defined in the opening paragraph hereof.
"BORROWER LOAN DOCUMENTS": This Agreement, the Revolving Note
and any of the Security Documents to be executed by the Borrowers.
"BUSINESS DAY": Any day (other than a Saturday, Sunday or
legal holiday in the State of Minnesota) on which national banks are permitted
to be open in Minneapolis, Minnesota.
"CCB": As defined in the opening paragraph hereof.
"CCFIF": California Community Financial Institutions Fund
Limited Partnership, a California limited partnership.
"CAPITAL EXPENDITURES": As to any Person for any period, the
sum of all amounts that would, in accordance with GAAP, be included as additions
to property, plant and equipment on a consolidated statement of cash flows for
such Person during such period, in respect of (a) the acquisition, construction,
improvement, replacement or betterment of land, buildings, machinery, equipment
or of any other fixed assets or leaseholds, (b) to the extent related to and not
included in (a) above, materials, contract labor (excluding expenditures
properly chargeable to repairs or maintenance in accordance with GAAP), and (c)
other capital expenditures and other uses recorded as capital expenditures or
similar terms having substantially the same effect.
"CAPITALIZED LEASE": A lease of (or other agreement conveying
the right to use) real or personal property with respect to which at least a
portion of the rent or other amounts thereon constitute Capitalized Lease
Obligations.
"CAPITALIZED LEASE OBLIGATIONS": As to any Person, the
obligations of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) real or personal property which
obligations are required to be classified and accounted for as a capital lease
on a balance sheet of such Person under GAAP (including Statement of Financial
Accounting Standards No. 13 of the Financial Accounting Standards Board), and,
for purposes of this Agreement, the amount of such obligations shall be the
capitalized amount thereof, determined in accordance with GAAP (including such
Statement No. 13).
"CASH RETURN ON ASSETS": For any fiscal quarter of PSB, the
ratio (expressed as a percentage) of (a) an amount equal to the sum of (i) the
Net Income of PSB for such fiscal quarter plus (ii) the non-cash core deposit
intangible and goodwill amortization of PSB for such fiscal quarter, multiplied
by four (4), to (b) the Average Total Assets of PSB for such fiscal quarter.
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"CHANGE OF CONTROL": The occurrence, after the Closing Date,
of any of the following: (a) CCFIF and Belvedere, collectively not owning and
controlling securities of CCB representing more than 51% of the securities of
CCB entitled to vote in the election of directors, (b) there shall not be at
least two Persons who are both principals of Belvedere and officers and/or
directors of CCB, (c) any Person other than CCFIF or Belvedere owning more than
15% of the securities of CCB entitled to vote in the election of directors, or
(d) CCB not owning and controlling securities of PCC representing more than 51%
of the securities of PCC entitled to vote in the election of directors.
"CODE": The Internal Revenue Code of 1986, as amended.
"CONSOLIDATED NET INCOME": The consolidated Net Income of PCC
and the Subsidiaries as determined in accordance with GAAP.
"CONSOLIDATED NET WORTH": The consolidated net worth of PCC
and the Subsidiaries as determined in accordance with GAAP, excluding, however,
loans or advances to and receivables from Affiliates of the Borrowers.
"CONTINGENT OBLIGATION": With respect to any Person at the
time of any determination, without duplication, any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other Person (the "primary obligor") in any
manner, whether directly or otherwise: (a) to purchase or pay (or advance or
supply funds for the purchase or payment of) such Indebtedness or to purchase
(or to advance or supply funds for the purchase of) any direct or indirect
security therefor, (b) to purchase property, securities or services for the
purpose of assuring the owner of such Indebtedness of the payment of such
Indebtedness, (c) to maintain working capital, equity capital or other financial
statement condition of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or otherwise to protect the owner thereof against loss
in respect thereof, or (d) entered into for the purpose of assuring in any
manner the owner of such Indebtedness of the payment of such Indebtedness or to
protect the owner against loss in respect thereof; provided, that the term
"Contingent Obligation" shall not include endorsements for collection or
deposit, in each case in the ordinary course of business.
"CURRENT LIABILITIES": As of any date, the consolidated
current liabilities of CCB and the Subsidiaries, determined in accordance with
GAAP.
"DEFAULT": Any event which, with the giving of notice (whether
such notice is required under Section 7.1, or under some other provision of this
Agreement, or otherwise) or lapse of time, or both, would constitute an Event of
Default.
"ERISA": The Employee Retirement Income Security Act of 1974,
as amended.
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"ERISA AFFILIATE": Any trade or business (whether or not
incorporated) that is a member of a group of which a Borrower is a member and
which is treated as a single employer under Section 414 of the Code.
"EURODOLLAR BUSINESS DAY": A Business Day which is also a day
for trading by and between banks in United States dollar deposits in the
interbank Eurodollar market and a day on which banks are open for business in
New York City.
"EURODOLLAR RATE": With respect to each Interest Period
applicable to a Eurodollar Rate Advance, the average offered rate for deposits
in United States dollars (rounded upward, if necessary, to the nearest 1/16 of
1%) for delivery of such deposits on the first day of such Interest Period, for
the number of days in such Interest Period, which appears on the Reuters Screen
LIBO page as of 10:00 a.m., London time (or such other time as of which such
rate appears) two Eurodollar Business Days prior to the first day of such
Interest Period, or the rate for such deposits determined by the Bank at such
time based on such other published service of general application as shall be
selected by the Bank for such purpose; provided, that in lieu of determining the
rate in the foregoing manner, the Bank may determine the rate based on rates at
which United States dollar deposits are offered to the Bank in the interbank
Eurodollar market at such time for delivery in Immediately Available Funds on
the first day of such Interest Period in an amount approximately equal to the
Advance by the Bank to which such Interest Period is to apply (rounded upward,
if necessary, to the nearest 1/16 of 1%). "Reuters Screen LIBO page" means the
display designated as page "LIBO" on the Reuters Monitor Money Rate Screen (or
such other page as may replace the LIBO page on such service for the purpose of
displaying London interbank offered rates of major banks for United States
dollar deposits).
"EURODOLLAR RATE ADVANCE": An Advance with respect to which
the interest rate is determined by reference to the Adjusted Eurodollar Rate.
"EURODOLLAR RESERVE PERCENTAGE": As of any day, that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board for determining the maximum reserve requirement
(including any basic, supplemental or emergency reserves) for a member bank of
the Federal Reserve System, with deposits comparable in amount to those held by
the Bank, in respect of "Eurocurrency Liabilities" as such term is defined in
Regulation D of the Board. The rate of interest applicable to any outstanding
Eurodollar Rate Advances shall be adjusted automatically on and as of the
effective date of any change in the Eurodollar Reserve Percentage.
"EVENT OF DEFAULT": Any event described in Section 7.1.
"EXISTING CREDIT AGREEMENT": As such term is defined in
Recital A.
"EXISTING REVOLVING NOTE": As such term is defined in Recital
B.
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"EXPENSE REIMBURSEMENT AND BUY-SELL AGREEMENT": That certain
Expense Reimbursement and Buy-Sell Agreement dated as of August 10, 1999 by and
among PLLC, PCC, Xxxxxx X. Xxxxxx and Xxxxxxx X. Xxxxxx, Xx.
"FIXED RATE ADVANCE": A Eurodollar Rate Advance or a
Negotiated Rate Advance.
"GAAP": Generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, which are applicable to the circumstances as of any
date of determination.
"GUARANTEED OBLIGATIONS": As defined in Section 8.17.
"IMMEDIATELY AVAILABLE FUNDS": Funds with good value on the
day and in the city in which payment is received.
"INDEBTEDNESS": With respect to any Person at the time of any
determination, without duplication, all obligations, contingent or otherwise, of
such Person which in accordance with GAAP should be classified upon the balance
sheet of such Person as liabilities, but in any event including: (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (c)
all obligations of such Person upon which interest charges are customarily paid
or accrued, (d) all obligations of such Person under conditional sale or other
title retention agreements relating to property purchased by such Person, (e)
all obligations of such Person issued or assumed as the deferred purchase price
of property or services, (f) all obligations of others secured by any Lien on
property owned or acquired by such Person, whether or not the obligations
secured thereby have been assumed, (g) all Capitalized Lease Obligations of such
Person, (h) all obligations of such Person in respect of interest rate
protection agreements, (i) all obligations of such Person, actual or contingent,
as an account party in respect of letters of credit or bankers' acceptances, (j)
all obligations of any partnership or joint venture as to which such Person is
or may become personally liable, and (k) all Contingent Obligations of such
Person.
"INTEREST PERIOD": (a) With respect to each Eurodollar Rate
Advance, the period commencing on the date of such Advance or on the last day of
the immediately preceding Interest Period, if any, applicable to an outstanding
Advance and ending one, two, three, six, nine or twelve months thereafter, as
the Borrower may elect in the applicable notice of borrowing, continuation or
conversion; PROVIDED THAT:
(1) Any Interest Period that would otherwise end on a
day which is not a Eurodollar Business Day shall be extended to the
next succeeding Eurodollar Business
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Day unless such Eurodollar Business Day falls in another calendar
month, in which case such Interest Period shall end on the next
preceding Eurodollar Business Day;
(2) Any Interest Period that begins on the last
Eurodollar Business Day of a calendar month (or a day for which there
is no numerically corresponding day in the calendar month at the end of
such Interest Period) shall end on the last Eurodollar Business Day of
a calendar month; and
(3) Any Interest Period that would otherwise end
after the Revolving Commitment Ending Date shall end on the Revolving
Commitment Ending Date.
(b) With respect to each Negotiated Rate Advance, the period commencing
on the date of such Advance or on the last day of the immediately preceding
Interest Period, if any, applicable to an outstanding Advance and ending on such
date thereafter, as the Borrower may specify (if the Bank shall so agree in
writing) in the applicable notice of borrowing, continuation or conversion;
PROVIDED THAT:
(1) No Interest Period shall be for less than one
year;
(2) Any Interest Period that would otherwise end on
a day which is not a Business Day shall be extended to the next
succeeding Business Day; and
(3) Any Interest Period that would otherwise end
after the Revolving Commitment Ending Date shall end on the Revolving
Commitment Ending Date.
"LIEN": With respect to any Person, any security interest,
mortgage, pledge, lien, charge, encumbrance, title retention agreement or
analogous instrument or device (including the interest of each lessor under any
Capitalized Lease), in, of or on any assets or properties of such Person, now
owned or hereafter acquired, whether arising by agreement or operation of law..
"MATERIAL ADVERSE OCCURRENCE": Any occurrence of whatsoever
nature (including, without limitation, any adverse final determination in any
litigation, arbitration, or governmental investigation or proceeding upon which
either (a) an enforcement proceeding shall have been commenced by any creditor
upon a final judgment or order; or (b) there shall be any period of ten (10)
consecutive days during which a stay of enforcement of such judgment or order,
by reason of a pending appeal or otherwise, shall not be in effect) which
materially and adversely affects the financial condition or operations of the
Borrowers, and the Subsidiaries taken as a whole, or materially and adversely
affects PLLC, or materially and adversely impairs the ability of the Borrowers
to perform their material obligations under any of the Borrower Loan Documents.
"MULTIEMPLOYER PLAN": A multiemployer plan, as such term is
defined in Section 4001 (a) (3) of ERISA, which is maintained (on the Closing
Date, within the five years preceding
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the Closing Date, or at any time after the Closing Date) for employees of the
Borrowers or any ERISA Affiliate.
"NEGOTIATED RATE": Such rate per annum as the Borrower
Representative and the Bank may agree upon in writing with respect to all or any
specified portion of the Revolving Loans for a specified Interest Period.
"NEGOTIATED RATE ADVANCE": An Advance with which the interest
rate is determined by reference to a Negotiated Rate.
"NET INCOME": With respect to any Person, the net income of
said Person as determined in accordance with GAAP.
"NON-PERFORMING ASSETS": Individually or collectively, as the
case may be, any loan made by a Borrower or any Subsidiary Bank that is: (a)
ninety (90) days or more past due (either principal or interest) (unless the
same is well-secured and in the process of collection); (b) in non-accrual
status; or (c) listed as "other restructured" or "other renegotiated" in any
report to regulatory authorities; PROVIDED, HOWEVER, that loans classified as
"other restructured" or "other renegotiated" which have been performing in
accordance with their terms for not less than twelve (12) consecutive months
shall not constitute Non-Performing Assets so long as no portion of any
principal or interest payment is more than ninety (90) days past due and so long
as such loan is not placed on non-accrual; PROVIDED, FURTHER, that the portion
of any loan that is subject to a valid and enforceable guaranty of a
governmental agency shall not be included in this definition of Non-Performing
Assets.
"NOTE": The Revolving Note.
"OBLIGATIONS": The Borrowers' obligations in respect of the
due and punctual payment of principal and interest on the Note when and as due,
whether by acceleration or otherwise and all fees (including Revolving
Commitment Fees), expenses, indemnities, reimbursements and other obligations of
the Borrowers under this Agreement or any other Borrower Loan Document, in all
cases whether now existing or hereafter arising or incurred. The Borrowers shall
be jointly and severally liable on the Obligations.
"OREO": Other real estate owned by a Borrower or any of the
Subsidiaries.
"PBGC": The Pension Benefit Guaranty Corporation, established
pursuant to Subtitle A of Title IV of ERISA, and any successor thereto or to the
functions thereof.
"PERSON": Any natural person, corporation, partnership,
limited partnership, limited liability company, joint venture, firm,
association, trust, unincorporated organization, government or governmental
agency or political subdivision or any other entity, whether acting in an
individual, fiduciary or other capacity.
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"PLACER TRUST": Placer Trust, a Delaware statutory business
trust.
"PLAN": Each employee benefit plan (whether in existence on
the Closing Date or thereafter instituted), as such term is defined in Section 3
of ERISA, maintained for the benefit of employees, officers or directors of a
Borrower or of any ERISA Affiliate.
"PLEDGE AGREEMENT": The Pledge Agreement dated as of August
11, 1999 between PCC and the Bank, as the same may be amended, supplemented,
restated or otherwise modified in writing from time to time by PCC and the Bank.
All references to the "Credit Agreement" contained in the Pledge Agreement shall
be deemed to include the Existing Credit Agreement and this Amended and Restated
Credit Agreement as it may be amended, supplemented, restated or otherwise
modified in writing from time to time by the Borrowers and the Bank.
"PLLC": Placer Capital Funding LLC, a Delaware limited
liability company.
"PLLC CREDIT AGREEMENT": The Credit Agreement dated as of
August 10, 1999 between PLLC and the Bank, as the same may be amended,
supplemented, restated or otherwise modified from time to time.
"PLLC PLEDGE AGREEMENT": The Pledge Agreement dated as of
August 10, 1999 between PLLC and the Bank, as the same may be amended,
supplemented, restated or otherwise modified in writing from time to time by
PLLC and the Bank.
"PROHIBITED TRANSACTION": The respective meanings assigned to
such term in Section 4975 of the Code and Section 406 of ERISA.
"PSB": Placer Sierra Bank (formerly known as Placer Savings
Bank), a California commercial bank.
"REFERENCE RATE": The rate of interest from time to time
publicly announced by the Bank as its "reference rate." The Bank may lend to its
customers at rates that are at, above or below the Reference Rate. For purposes
of determining any interest rate hereunder or under any other Borrower Loan
Document which is based on the Reference Rate, such interest rate shall change
as and when the Reference Rate shall change.
"REFERENCE RATE ADVANCE": An Advance with respect to which the
interest rate is determined by reference to the Reference Rate.
"REGULATORY ACTION": Any cease and desist order, letter
agreement, memorandum, or other similar regulatory action taken by a state or
federal banking agency or other Person to which either Borrower or any
Subsidiary Bank is subject.
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"REGULATORY CHANGE": Any change after the Closing Date in
federal, state or foreign laws or regulations or the adoption or making after
such date of any interpretations, directives or requests applying to a class of
banks including the Bank under any federal, state or foreign laws or regulations
(whether or not having the force of law) by any court or governmental or
monetary authority charged with the interpretation or administration thereof.
"REPORTABLE EVENT": A reportable event as defined in Section
4043 of ERISA and the regulations issued under such Section, with respect to a
Plan, excluding, however, such events as to which the PBGC by regulation has
waived the requirement of Section 4043(a) of ERISA that it be notified within 30
days of the occurrence of such event, PROVIDED that a failure to meet the
minimum funding standard of Section 412 of the Code and of Section 302 of ERISA
shall be a Reportable Event regardless of the issuance of any waiver in
accordance with Section 412(d) of the Code.
"REVOLVING COMMITMENT": The agreement of the Bank to make
Revolving Loans to the Borrowers in an aggregate principal amount outstanding at
any time not to exceed the Revolving Commitment Amount upon the terms and
subject to the conditions and limitations of this Agreement.
"REVOLVING COMMITMENT AMOUNT": $3,000,000, but as the same may
be reduced from time to time pursuant to Section 2.9, provided, however, that
the sum of the aggregate principal amount of the Indebtedness of the Borrowers
(including, without limitation, Indebtedness under this Agreement and
Subordinated Debt) plus the aggregate par value of their issued and outstanding
preferred stock shall not exceed $25,573,000 at any time outstanding.
"REVOLVING COMMITMENT ENDING DATE": August 11, 2001, but as
such date may be extended pursuant to Section 2.13.
"REVOLVING COMMITMENT FEES": As defined in Section 2.10.
"REVOLVING LOAN": As defined in Section 2.1.
"REVOLVING LOAN DATE": The date of the making of any Revolving
Loan hereunder.
"REVOLVING MATURITY DATE": The earliest of (a) the Revolving
Commitment Ending Date, (b) the date on which the Revolving Commitment is
terminated pursuant to Section 7.2 hereof or (c) the date on which the Revolving
Commitment Amount is reduced to zero pursuant to Section 2.9 hereof.
"REVOLVING NOTE": A promissory note of the Borrowers in the
form of Exhibit 1.1A hereto.
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"RISK-WEIGHTED ASSETS": With respect to any Person, the value
of the assets of such Person and its Subsidiaries, including adjusted
off-balance sheet items, all as calculated pursuant to risk-based capital
guidelines in effect from time to time with the applicable regulatory agency.
"SECURITY DOCUMENTS": The Pledge Agreement and any other
security agreements, mortgages or other collateral security documents to be
delivered to the Bank in connection with this Agreement and any and all Uniform
Commercial Code financing statements relating thereto.
"SOLVENCY CERTIFICATE": The Solvency Certificate dated August
10, 1999, executed and delivered by J. Xxxxxx Xxxxx, the Chief Financial Officer
of PCC, in connection with the Existing Credit Agreement.
"SOLVENT": With respect to any Person, that as of any date of
determination, (i) the then fair saleable value of the assets of such Person is
(a) greater than the then total amount of liabilities (including contingent,
subordinated, matured and unliquidated liabilities) of such Person and (b)
greater than the amount that will be required to pay such Person's probable
liability on such Person's then existing debts as they become absolute and
matured, (ii) such Person's capital is not unreasonably small in relation to its
business or any contemplated or undertaken transaction, and (iii) such Person
does not intend to incur, or believe or reasonably should have believed that it
will incur, debts beyond its ability to pay such debts as they become due.
"SUBORDINATED DEBT": The Subordinated Note and any other
Indebtedness of the Borrowers, now existing or hereafter created, incurred or
arising, which is subordinated in right of payment to the payment of the
Obligations in a manner and to an extent (a) that the Bank has approved in
writing prior to the creation of such Indebtedness, or (b) as to any
Indebtedness of the Borrowers existing on the date of this Agreement, that the
Bank has approved as Subordinated Debt in a writing delivered by the Bank to the
Borrower Representative on or prior to the Closing Date.
"SUBORDINATED NOTE": The Placer Capital Co. 8% Junior
Subordinated Deferrable Interest Note dated August 10, 1999 in the original
principal amount of $19,073,000 issued by PCC to Placer Trust.
"SUBSIDIARY": Any corporation or other entity of which
securities or other ownership interests having ordinary voting power for the
election of a majority of the board of directors or other Persons performing
similar functions are owned by CCB either directly or through one or more
Subsidiaries.
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"SUBSIDIARY BANKS": Individually or collectively, as the
context may require, PSB, any other Subsidiary Banks shown on Exhibit 4.19
hereto and any additional banks which become Subsidiaries.
"TIER ONE CAPITAL": As of the date of the Agreement, the
meaning set forth under applicable regulations of any regulatory agency having
authority on the date hereof as such regulations are applicable to [the
Borrowers], or if such regulations are amended hereafter to define Tier One
Capital more restrictively, as set forth in such later definition.
"TIER TWO CAPITAL": As of the date of the Agreement, the
meaning set forth under applicable regulations of any regulatory agency having
authority on the date hereof as such regulations are applicable to [the
Borrowers], or if such regulations are amended hereafter to define Tier Two
Capital more restrictively, as set forth in such later definition.
"TOTAL CAPITAL": As determined by the Board, the sum of Tier
One Capital plus Tier Two Capital, less deductions.
"TOTAL LOANS": For any Person, the sum of loans and direct
lease financings, net of unearned income, by such Person and its Subsidiaries on
a consolidated basis.
"TOTAL RISK-WEIGHTED ASSETS": The total of the Risk-Weighted
Assets of PSB as shown on PSB's most recent quarterly call report.
"UNUSED REVOLVING COMMITMENT": As of any date of
determination, the amount by which the Revolving Commitment Amount exceeds the
aggregate principal amount of unpaid Revolving Loans outstanding on such date.
Section 1.2 ACCOUNTING TERMS AND CALCULATIONS. Except as may
be expressly provided to the contrary herein, all accounting terms used herein
shall be interpreted and all accounting determinations hereunder shall be made
in accordance with GAAP. To the extent any change in GAAP affects any
computation or determination required to be made pursuant to this Agreement,
such computation or determination shall be made as if such change in GAAP had
not occurred unless the Borrower Representative and the Bank agree in writing on
an adjustment to such computation or determination to account for such change in
GAAP.
Section 1.3 COMPUTATION OF TIME PERIODS. In this Agreement, in
the computation of a period of time from a specified date to a later specified
date, unless otherwise stated the word "from" means "from and including" and the
word "to" or "until" each means "to but excluding".
Section 1.4 OTHER DEFINITIONAL TERMS. The words "hereof",
"herein" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement. References to
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Sections, Exhibits, schedules and like references are to this Agreement
unless otherwise expressly provided. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without
limitation". Unless the context in which used herein otherwise clearly
requires, "or" has the inclusive meaning represented by the phrase "and/or".
ARTICLE II
TERMS OF THE CREDIT FACILITIES
Section 2.1 REVOLVING COMMITMENTS. On the terms and subject to
the conditions hereof, the Bank agrees to make loans (each, a "Revolving Loan"
and, collectively, the "Revolving Loans") to the Borrowers on a revolving basis
at any time and from time to time from the Closing Date to the Revolving
Maturity Date, during which period the Borrowers may borrow, repay and reborrow
in accordance with the provisions hereof, provided, that the unpaid principal
amount of outstanding Revolving Loans shall not at any time exceed the Revolving
Commitment Amount. A Revolving Loan may be obtained and maintained, at the
election of the Borrowers but subject to the limitations hereof, as a Reference
Rate Advance or one or more Eurodollar Rate Advances, one or note Negotiated
Rate Advances or any combination thereof.
Section 2.2 PROCEDURE FOR REVOLVING LOANS. Any request by the Borrowers
for a Revolving Loan hereunder shall be made by the Borrower Representative in
writing or by telephone and must be given so as to be received by the Bank not
later than (a) 12:00 noon (Minneapolis time) two Eurodollar Business Days prior
to the requested Revolving Loan Date if such Revolving Loan (or any portion
thereof) is requested as one or more Eurodollar Rate Advances, (b) 12:00 noon
(Minneapolis time) on the requested Revolving Loan Date if such Revolving Loan
(or any portion thereof) is requested as a Reference Rate Advance and (c) 12:00
noon (Minneapolis time) two Eurodollar Business Days prior to the requested
Revolving Loan Date if such Revolving Loan (or any portion thereof) is requested
as one or more Negotiated Rate Advances. Each request for a Revolving Loan
hereunder shall be irrevocable and shall be deemed a representation by the
Borrowers that on the requested Revolving Loan Date and after giving effect to
the requested Revolving Loan the applicable conditions specified in Article III
have been and will be satisfied. Each request for a Revolving Loan hereunder
shall specify (i) the requested Revolving Loan Date, (ii) the amount of
Revolving Loan to be made on such date which shall be in a minimum amount of
$500,000, (iii) whether such Revolving Loan to be funded as a Reference Rate
Advance, one or more Eurodollar Rate Advances, or one or more Negotiated Rate
Advances (and, if such Revolving Loan is to be made with more than one
applicable interest rate choice, specifying the amount to which each interest
rate choice is applicable), and (iv) in the case of Fixed Rate Advances, the
duration of the initial Interest Periods applicable thereto. The Bank may rely
on any telephone request for a Revolving Loan hereunder which it believes in
good faith to be genuine; and the Borrowers hereby waive the right to dispute
the Bank's record of the terms of such telephone request. Unless the Bank
determines that any applicable condition specified in Article III has not been
satisfied (or waived by the Bank in writing in its sole and absolute
discretion), the Bank will make available to the
13
Borrowers at the Bank's principal office in Minneapolis, Minnesota in
Immediately Available Funds not later than 4:00 p.m. (Minneapolis time) on
the requested Revolving Loan Date the amount of the requested Revolving Loan.
Section 2.3 REVOLVING NOTE. The Revolving Loans shall be
evidenced by a single Revolving Note payable to the order of the Bank in a
principal amount equal to the Revolving Commitment Amount originally in effect.
The Bank shall enter in its ledgers and records the amount of each Revolving
Loan, the various Advances made, converted or continued and the payments made
thereon, and the Bank is authorized by the Borrowers to enter on a schedule
attached to the Revolving Note a record of such Revolving Loans, Advances and
payments; provided, however that the failure by the Bank to make any such entry
or any error in making such entry shall not limit or otherwise affect the
obligations of the Borrowers hereunder and on the Revolving Note, and, in all
events, the principal amounts owing by the Borrowers in respect of the Revolving
Note shall be the aggregate amount of all Revolving Loans less all payments of
principal thereof made by the Borrowers.
Section 2.5 CONVERSIONS AND CONTINUATIONS. On the terms and
subject to the limitations hereof, the Borrowers shall have the option at any
time and from time to time to convert all or any portion of the Advances into
Reference Rate Advances, Eurodollar Rate Advances or Negotiated Rate Advances,
or to continue a Fixed Rate Advance as such (subject, however, to the proviso
set forth in the first sentence of Section 2.1); provided, however that a Fixed
Rate Advance may be converted or continued only on the last day of the Interest
Period applicable thereto and no Advance may be converted or continued as a
Fixed Rate Advance if a Default or Event of Default has occurred and is
continuing on the proposed date of continuation or conversion. Advances may be
converted to, or continued as, Fixed Rate Advances only in integral multiples of
$100,000. The Borrower Representative shall give the Bank written notice of any
continuation or conversion of any Advances and such notice must be given so as
to be received by the Bank not later than 12:00 noon (Minneapolis time) two
Eurodollar Business Days prior to requested date of conversion or continuation
in the case of the continuation of, or conversion to, Eurodollar Rate Advances
or Negotiated Rate Advances and not later than 12:00 noon (Minneapolis time) on
the date of the requested conversion to Reference Rate Advances. Each such
notice shall specify (a) the amount to be continued or converted, (b) the date
for the continuation or conversion (which must be (i) the last day of the
preceding Interest Period for any continuation or conversion of Eurodollar Rate
Advances, (ii) a Eurodollar Business Day in the case of conversions to or
continuations as Fixed Advances, and (iii) a Business Day in the case of
conversions to Reference Rate Advances), and (c) in the case of conversions to
or continuations as Fixed Rate Advances, the Interest Period applicable thereto.
Any notice given by the Borrower Representative under this Section shall be
irrevocable. If the Borrower Representative shall fail to notify the Bank of the
continuation of any Fixed Rate Advances or of the conversion of Eurodollar Rate
Advances to Negotiated Rate Advances within the time required by this Section,
such Advances shall, on the last day of the Interest Period applicable thereto,
automatically be converted into Reference Rate Advances of the same principal
amount.
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Section 2.6 INTEREST RATES, INTEREST PAYMENTS AND DEFAULT
INTEREST. Interest shall accrue and be payable on the Revolving Loans as
follows:
(a) Subject to paragraph (c) below, each Eurodollar
Rate Advance shall bear interest on the unpaid principal amount thereof
during the Interest Period applicable thereto at a rate per annum equal
to the sum of (i) the Adjusted Eurodollar Rate for such Interest
Period, plus (ii) the Applicable Margin.
(b) Subject to paragraph (d) below, each Negotiated
Rate Advance shall bear interest on the unpaid principal amount thereof
during the Interest Period applicable thereto at a rate per annum equal
to the applicable Negotiated Rate.
(c) Subject to paragraph (c) below, each Reference
Rate Advance shall bear interest on the unpaid principal amount thereof
at a varying rate per annum equal to the sum of (i) the Reference Rate,
plus (ii) the Applicable Margin.
(d) Upon the occurrence of any Event of Default, each
Advance shall, at the option of the Bank, bear interest until paid in
full at a rate per annum equal to the sum of (i) the Reference Rate,
plus (ii) the Applicable Margin for Reference Rate Advances, plus (iii)
2.0%.
(e) Commencing September 30, 1999, Interest shall be
payable (i) with respect to each Advance, on each March 31, June 30,
September 30 and December 31 and, in the case of a Fixed Rate Advance,
on the last day of the Interest Period applicable thereto; (ii) with
respect to all Advances, upon any permitted prepayment (on the amount
prepaid); and (iii) with respect to all Advances under the Revolving
Note, on the Revolving Maturity Date; provided that interest under
Section 2.6 (d) shall be payable on demand.
Section 2.7 REPAYMENT AND MANDATORY PREPAYMENT. The unpaid
principal amount of all Revolving Loans, together with all accrued and unpaid
interest thereon, shall be due and payable on the Revolving Maturity Date. If at
any time the unpaid principal balance of the Revolving Note exceeds the
Revolving Commitment Amount, the Borrowers shall immediately repay to the Bank
the amount of such excess. Any such payments shall be applied first against
Reference Rate Advances and then to Eurodollar Rate Advances in order starting
with the Eurodollar Rate Advances having the shortest time to the end of the
applicable Interest Period.
Section 2.8 OPTIONAL PREPAYMENTS. The Borrowers may prepay
Fixed Rate Advances in whole or in part at any time, subject, however, to
Sections 2.19 and 2.21. The Borrowers may prepay Reference Rate Advances in
whole or in part at any time without premium or penalty. Any prepayment pursuant
to this Section 2.8 must be accompanied by accrued and unpaid interest on the
amount prepaid. Each partial prepayment shall be in a
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minimum amount of $100,000 or integral multiple thereof. Amounts paid (unless
following an acceleration or upon termination of the Revolving Commitment in
whole) or prepaid on the Revolving Note under this Section 2.8 may be
reborrowed upon the terms and subject to the conditions and limitations of
this Agreement.
Section 2.9 OPTIONAL REDUCTION OF REVOLVING COMMITMENT AMOUNT
OR TERMINATION OF REVOLVING COMMITMENT. The Borrowers may, at any time, upon not
less than five (5) Business Days prior written notice from the Borrower
Representative to the Bank, reduce the Revolving Commitment Amount, ratably,
with any such reduction in a minimum amount of $1,000,000, or, if more, in an
integral multiple thereof; PROVIDED, HOWEVER, that the Borrowers may not at any
time reduce the Revolving Commitment Amount below the unpaid principal balance
of the Revolving Note. The Borrowers may, at any time, upon not less than five
(5) Business Days prior written notice from the Borrower Representative to the
Bank, terminate the Revolving Commitment in its entirety. Upon termination of
the Revolving Commitment pursuant to this Section, the Borrowers shall pay to
the Bank the entire unpaid principal balance outstanding under the Revolving
Note, all accrued and unpaid interest thereon, all unpaid Revolving Commitment
Fees accrued to the date of such termination, any indemnities payable with
respect to Advances pursuant to Section 2.19 and/or Section 2.21 and all other
unpaid obligations of the Borrowers to the Bank hereunder.
Section 2.10 REVOLVING COMMITMENT FEES. The Borrowers shall
pay to the Bank fees (the "Revolving Commitment Fees") in an amount determined
by applying a rate of one-half of one percent (0.50%) per annum to the average
daily Unused Revolving Commitment for the period from the Closing Date for the
Existing Credit Agreement to the Revolving Maturity Date. Such Revolving
Commitment Fees are payable in arrears quarterly on each March 31, June 30,
September 30 and December 31 and on the Revolving Maturity Date.
Section 2.11 COMPUTATION. Revolving Commitment Fees and
interest on Revolving Loans shall be computed on the basis of actual days
elapsed and a year of 360 days.
.
Section 2.12 PAYMENTS. Payments and prepayments of principal
of, and interest on, the Revolving Note and all fees, expenses and other
obligations under this Agreement payable to the Bank shall be made without
setoff or counterclaim in Immediately Available Funds not later than 3:00 p.m.
(Minneapolis time) on the dates called for under this Agreement and the
Revolving Note to the Bank at its main office in Minneapolis, Minnesota. Funds
received after such time shall be deemed to have been received on the next
Business Day. Whenever any payment to be made hereunder or on the Revolving Note
shall be stated to be due on a day which is not a Business Day, such payment
shall be made on the next succeeding Business Day and such extension of time, in
the case of a payment of principal, shall be included in the computation of any
interest on such principal payment.
Section 2.13 EXTENSION OF REVOLVING COMMITMENT ENDING DATE.
The Borrowers may, upon written notice given by the Borrower Representative to
the Bank not more than 60
16
days prior to any current Revolving Commitment Ending Date, request that the
Revolving Commitment Ending Date be extended for a period of 364 days. The
Bank may, in its sole and absolute discretion, agree to any such request for
extension within 30 days (but not later than the last Business Day occurring
prior to the current Revolving Commitment Ending Date) after receipt of such
request but shall not be obligated to do so, and no such agreement on the
part of the Bank shall be effective unless in writing and failure on the part
of the Bank to respond to such request shall be deemed to be a denial of such
request.
Section 2.14 USE OF LOAN PROCEEDS. The proceeds of the
Revolving Loans shall be used for the Borrowers' general business purposes
(including, without limitation, working capital) in a manner not in conflict
with any of the Borrowers' covenants in this Agreement.
Section 2.15 INTEREST RATE NOT ASCERTAINABLE, ETC. If, on or
prior to the date for determining the Adjusted Eurodollar Rate in respect of the
Interest Period for any Eurodollar Rate Advance, the Bank determines (which
determination shall be conclusive and binding, absent manifest error) that:
(a) deposits in dollars (in the applicable amount) are not
being made available to the Bank in the relevant market for such
Interest Period, or
(b) the Adjusted Eurodollar Rate, as the case may be, will not
adequately and fairly reflect the cost to the Bank of funding or
maintaining Eurodollar Rate Advances for such Interest Period,
the Bank shall forthwith give notice to the Borrower Representative of such
determination, whereupon the obligation of the Bank to make or continue, or to
convert any Advances to, Eurodollar Rate Advances shall be suspended until the
Bank notifies the Borrower Representative that the circumstances giving rise to
such suspension no longer exist. While any such suspension continues, all
further Advances by the Bank shall be made with an interest rate option to which
such suspension does not apply. No such suspension shall affect the interest
rate then in effect during the applicable Interest Period for any Eurodollar
Rate Advance outstanding at the time such suspension is imposed.
Section 2.16 INCREASED COST. If any Regulatory Change:
(a) shall subject the Bank to any tax, duty or other
charge with respect to its Fixed Rate Advances, the Revolving Note or
its obligation to make Fixed Rate Advances or shall change the basis of
taxation of payment to the Bank of the principal of or interest on its
Fixed Rate Advances or any other amounts due under this Agreement in
respect of Fixed Rate Advances or its obligation to make Fixed Rate
Advances (except for changes in the rate of tax on the overall net
income of the Bank imposed by the jurisdiction in which the Bank's
principal office is located); or
17
(b) shall impose, modify or deem applicable any
reserve, special deposit or similar requirement (including, without
limitation, any such requirement imposed by the Board, but excluding
with respect to any Eurodollar Rate Advance any such requirement to the
extent included in calculating the applicable Adjusted Eurodollar Rate)
against assets of, deposits with or for the account of, or credit
extended by, the Bank or shall impose on the Bank or on the United
States market for certificates of deposit or the interbank Eurodollar
market any other condition affecting Fixed Rate Advances, the Revolving
Note or its obligation to make Fixed Rate Advances;
and the result of any of the foregoing is to increase the cost to the Bank of
making or maintaining any Fixed Rate Advance, or to reduce the amount of any sum
received or receivable by the Bank under this Agreement or under the Revolving
Note, then, and in each such case, upon thirty (30) days notice to the Borrower
Representative from the Bank of the nature of such Regulatory Change, the
Borrowers shall pay to the Bank such additional amount or amounts as will
compensate the Bank for such increased cost or reduction for the period from and
after the thirtieth (30th) day after such notice is given. A certificate of the
Bank claiming compensation under this Section, setting forth the additional
amount or amounts to be paid to it hereunder and stating in reasonable detail
the basis for the charge and the method of computation, shall be conclusive in
the absence of manifest error. In determining such amount, the Bank may use any
reasonable averaging and attribution methods. Failure on the part of the Bank to
demand compensation for any increased costs or reduction in amounts received or
receivable with respect to any Interest Period shall not constitute a waiver of
the Bank's rights to demand compensation for any increased costs or reduction in
amounts received or receivable in any subsequent Interest Period.
Section 2.17 ILLEGALITY. If any Regulatory Change shall make
it unlawful or impossible for the Bank to make, maintain or fund any Eurodollar
Rate Advances, the Bank shall notify the Borrower Representative, whereupon the
obligation of the Bank to make or continue, or to convert any Advances to
Eurodollar Rate Advances shall be suspended until the Bank notifies the Borrower
Representative that the circumstances giving rise to such suspension no longer
exist. If the Bank determines that it may not lawfully continue to maintain any
Eurodollar Rate Advances to the end of the applicable Interest Periods, all of
the affected Advances shall be automatically converted to Reference Rate
Advances as of the date of the Bank's notice, and upon such conversion the
Borrowers shall indemnify the Bank in accordance with Section 2.19.
Section 2.18 CAPITAL ADEQUACY. In the event that any
Regulatory Change reduces or shall have the effect of reducing the rate of
return on the Bank's capital or the capital of its parent corporation (by an
amount the Bank deems material) as a consequence of its Revolving Commitment
and/or Advances to a level below that which the Bank or its parent corporation
could have achieved but for such Regulatory Change (taking into account the
Bank's policies and the policies of its parent corporation with respect to
capital adequacy), then, in each such case, upon thirty (30) days notice to the
Borrower Representative from the Bank, the Borrowers shall pay to the Bank
additional amounts sufficient to compensate the Bank or its parent corporation
18
for such reduction for the period from and after the thirtieth (30th) day after
such notice is given. Any determination by the Bank under this Section and any
certificate as to the amount of such reduction given to the Borrower
Representative by the Bank shall be final, conclusive and binding for all
purposes, absent manifest error.
Section 2.19 FUNDING LOSSES; EURODOLLAR RATE ADVANCES. The
Borrowers shall compensate the Bank, upon its written request to the Borrower
Representative, for all losses, expenses and liabilities (including any interest
paid by the Bank to lenders of funds borrowed by it to make or carry Eurodollar
Rate Advances to the extent not recovered by the Bank in connection with the
reemployment of such funds and including loss of anticipated profits) which the
Bank may sustain: (i) if for any reason, other than a default by the Bank, a
funding of a Eurodollar Rate Advance does not occur on the date specified
therefor in the Borrowers' request or notice as to such Advance under Section
2.2 or 2.5, or (ii) if, for whatever reason (including, but not limited to,
mandatory and optional prepayment and acceleration of the maturity of Advances
following an Event of Default), any prepayment or repayment of a Eurodollar Rate
Advance, or a conversion pursuant to Section 2.17, occurs on any day other than
the last day of the Interest Period applicable thereto. The Bank's request for
compensation shall set forth the basis for the amount requested and shall be
final, conclusive and binding, absent manifest error.
Section 2.20 DISCRETION OF BANK AS TO MANNER OF FUNDING. The
Bank shall be entitled to fund and maintain its funding of Eurodollar Rate
Advances in any manner it may elect, it being understood, however, that for the
purposes of this Agreement all determinations hereunder (including, but not
limited to, determinations under Section 2.19) shall be made as if the Bank had
actually funded and maintained each Eurodollar Rate Advance during the Interest
Period for such Advance through the purchase of deposits having a maturity
corresponding to the last day of the Interest Period and bearing an interest
rate equal to the Eurodollar Rate for such Interest Period.
Section 2.21 NEGOTIATED RATE PREPAYMENT INDEMNITY. The
Borrowers acknowledge that the Borrowers have no right to repay any Negotiated
Rate Advance (other than on the last day of the Interest Period with respect to
such Negotiated Rate Advance) without the Bank's consent, which the Bank will
not grant except upon the terms and subject to the conditions hereinafter
provided. The Borrowers further acknowledge that if a Negotiated Rate Advance is
prepaid at a time when interest rates have declined below the levels prevailing
on the date the Revolving Loan was made as or converted to a Negotiated Rate
Advance, the Bank will be harmed by reason of any prepayment, because any
reinvestment of the prepaid funds at the lower rates prevailing on the date of
prepayment will produce a lower return to the Bank. In order to induce the Bank
to agree to accept voluntary prepayments, the Borrowers agree to pay to the Bank
a prepayment indemnity as described in this Section upon any prepayment,
voluntary or involuntary, of any Negotiated Rate Advance made by the Bank.
Because there is no readily available index of rates payable on loans such as
that from the Bank to the Borrowers, nor any assurance that the Bank could
replace a Negotiated Rate Advance with a similar loan, the Borrowers and the
Bank agree that changes in the yields on U.S. government securities provide a
19
reasonable approximation for changes in interest rates generally. For purposes
of this Section, the following terms shall have the meanings given below:
"AVERAGE MATURITY PERIOD": the weighted average time from the
prepayment date to the scheduled maturity of all principal prepaid at any one
time. Average Maturity Period shall be computed by multiplying the dollar amount
of each installment of principal prepaid by the number of days from the
prepayment date until the scheduled maturity of that installment, adding
together the resulting products and dividing the resulting sum by the total
dollar amount of principal being prepaid.
"GOVERNMENT YIELD": as to any date of determination, the
annual yield (converted as necessary to the equivalent semi-annual compound
rate) on U.S. Treasury securities having a maturity date closest to the date
computed by adding the Average Maturity Period to the date of prepayment, as
published in THE WALL STREET JOURNAL (or, if not so published, as determined by
the Bank based on quotations by secondary market dealers selected by the Bank).
"U.S. Treasury securities" means actively traded U.S. Treasury bonds, bills and
notes and, if more than one issue of U.S. Treasury securities is scheduled to
mature at or about the time of such computed date, then to the extent possible
the U.S. Treasury security trading closest to its par value will be chosen as
the basis of the Government Yield.
"INTEREST DIFFERENTIAL": as of the date of any full or partial
prepayment: (i) the applicable Negotiated Rate as in affect on the date of
prepayment MINUS (ii) the sum of (A) the Government Yield as of the date of
prepayment, PLUS (B) the Issuance Spread.
"ISSUANCE SPREAD" means thirty hundredths of one percent
(.30%) per annum.
With the prior written consent of the Bank, Negotiated Rate
Advances may be prepaid in whole or in part at any time, with partial
prepayments in the amount of $100,000 or an integral multiple thereof. Any
partial prepayments shall be applied to installments due under the applicable
Negotiated Rate Advance in the inverse order of their maturity (if such
Negotiated Rate Advance is payable in installments). If at the time of any
prepayment (whether voluntary or involuntary, and specifically including but not
limited to any payment prior to scheduled maturity following acceleration of the
Revolving Loans), the Interest Differential shall exceed zero, such prepayment
shall be accompanied by payment of a prepayment indemnity. The amount of the
prepayment indemnity shall equal the present value (determined by Bank using the
Government Yield as of the date of prepayment as the discount factor) on the
prepayment date of a stream of equal monthly payments in number equal to the
number of whole months (using a thirty-day month) in the Average Maturity
Period. The amount of each such monthly payment shall equal the quotient
obtained by DIVIDING (a) the product of the amount prepaid, TIMES the Interest
Differential, TIMES a fraction, the numerator of which is the number of days in
the Average Maturity Period and the denominator of which is 360, BY (b) the
number of whole months (using a thirty-day month) in the Average Maturity
Period.
20
ARTICLE III
CONDITIONS PRECEDENT
Section 3.1 CONDITIONS OF INITIAL TRANSACTION. The making of
the initial Revolving Loans shall be subject to the prior or simultaneous
fulfillment of the following conditions:
3.1(a) DOCUMENTS. The Bank shall have
received the following:
(i) A Revolving Note drawn to the order of the Bank executed
by duly authorized officers of the Borrowers, which shall
constitute an amendment and restatement of the Existing
Revolving Note.
(ii) The Security Documents duly executed by the respective
parties thereto.
(iii) A copy of the corporate resolutions of each Borrower
authorizing the execution, delivery and performance of the
Borrower Loan Documents, certified by the Secretary or an
Assistant Secretary of such Borrower.
(iv) An incumbency certificate showing the names and titles
and bearing the signatures of the officers of each Borrower
authorized to execute the Borrower Loan Documents and to
request Revolving Loans and conversions and continuations of
Advances hereunder, certified by the Secretary or an Assistant
Secretary of such Borrower.
(v) A copy of the Articles or Certificate of Incorporation of
each Borrower with all amendments thereto, certified by the
appropriate governmental official of the jurisdiction of its
incorporation as of a date satisfactory to the Bank.
(vi) A certificate of good standing for each Borrower in the
jurisdiction of its incorporation, certified by the
appropriate governmental officials as of a date satisfactory
to the Bank.
(vii) A copy of the bylaws of each Borrower, certified by the
Secretary or an Assistant Secretary of the Borrower.
(viii) A certificate of the chief executive officer or chief
financial officer of each Borrower certifying as to the
matters set forth in Sections 3.2 (a) and 3.2 (b) below.
21
(ix) The Borrowers shall have requested Lillick & Xxxxxxx LLP,
their counsel, to prepare a written opinion, addressed to the
Bank, covering the matters set forth in Exhibit 3.1(a)(ix)
hereto, and such opinion shall have been delivered to the
Bank.
3.1(b) COMPLIANCE. The Borrowers shall have performed
and complied with all agreements, terms and conditions contained in
this Agreement required to be performed or complied with by the
Borrowers prior to or simultaneously with the Closing Date.
3.1(c) SECURITY DOCUMENTS. All Security Documents (or
financing statements with respect thereto) shall have been
appropriately filed or recorded to the satisfaction of the Bank; any
pledged collateral shall have been duly delivered to the Bank; and the
priority and perfection of the Liens created by the Security Documents
shall have been established to the satisfaction of the Bank and its
counsel.
3.1(d) OTHER MATTERS. All corporate and legal
proceedings relating to the Borrowers and all instruments and
agreements in connection with the transactions contemplated by this
Agreement shall be satisfactory in scope, form and substance to the
Bank and the Bank's counsel, and the Bank shall have received all
information, original stock certificates or certificates representing
the shares of stock of PSB pledged under the Pledge Agreement together
with stock powers therefor duly executed in blank and undated, and
copies of all documents, including records of corporate proceedings, as
the Bank or such counsel may reasonably have requested in connection
therewith, such documents where appropriate to be certified by proper
corporate or governmental authorities.
3.1(e) FEES AND EXPENSES. The Bank shall have
received all fees and other amounts due and payable by the Borrowers,
including the reasonable fees and expenses of counsel to the Bank
payable pursuant to Section 8.2.
Section 3.2 CONDITIONS PRECEDENT TO ALL REVOLVING LOANS. The
obligation of the Bank to make any Revolving Loan hereunder (including the
initial Revolving Loans) shall be subject to the fulfillment of the following
conditions:
3.2(a) REPRESENTATIONS AND WARRANTIES. The
representations and warranties contained in Article IV shall be true
and correct as of the date hereof and on the date of each Revolving
Loan, with the same force and effect as if made on such date.
3.2(b) NO DEFAULT. No Default or Event of Default
shall have occurred and be continuing on the date hereof and on the
date of each Revolving Loan or will exist after giving effect to the
Revolving Loans made on such date so issued.
22
3.2(c) NOTICES AND REQUESTS. The Bank shall have
received the Borrowers' request for such Revolving Loan as required
under Section 2.2.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
To induce the Bank to enter into this Agreement and to make
Revolving Loans hereunder, the Borrowers represent and warrant to the Bank:
Section 4.1 ORGANIZATION, STANDING, ETC. Each Borrower is a
corporation duly incorporated and validly existing and in good standing under
the laws of the jurisdiction of its incorporation and has all requisite
corporate power and authority to carry on its business as now conducted, to
enter into this Agreement and to issue the Revolving Note and to perform its
obligations under the Borrower Loan Documents. Each Subsidiary is a corporation
duly incorporated and validly existing and in good standing under the laws of
the jurisdiction of its incorporation and has all requisite corporate power and
authority to carry on its business as now conducted. Each Borrower and each
Subsidiary (a) holds all certificates of authority, licenses and permits
necessary to carry on its business as presently conducted in each jurisdiction
in which it is carrying on such business, except where the failure to hold such
certificates, licenses or permits would not have a material adverse effect on
the business, operations, property, assets or condition, financial or otherwise,
of CCB and the Subsidiaries taken as a whole, and (b) is duly qualified and in
good standing as a foreign corporation in each jurisdiction in which the
character of the properties owned, leased or operated by it or the business
conducted by it makes such qualification necessary and the failure so to qualify
would permanently preclude such Borrower or such Subsidiary from enforcing its
rights with respect to any assets or expose such Borrower or such Subsidiary to
any liability, which in either case would be material to CCB and the
Subsidiaries taken as a whole.
Section 4.2 AUTHORIZATION AND VALIDITY. The execution,
delivery and performance by the Borrowers of the Borrower Loan Documents have
been duly authorized by all necessary corporate action by the Borrowers, and
this Agreement constitutes, and the Revolving Note and other Borrower Loan
Documents when executed will constitute, the legal, valid and binding
obligations of the Borrowers, enforceable against the Borrowers in accordance
with their respective terms, subject to limitations as to enforceability which
might result from bankruptcy, insolvency, moratorium and other similar laws
affecting creditors' rights generally and subject to limitations on the
availability of equitable remedies.
Section 4.3 NO CONFLICT; NO DEFAULT. The execution, delivery
and performance by the Borrowers of the Borrower Loan Documents will not (a)
violate any provision of any law, statute, rule or regulation or any order,
writ, judgment, injunction, decree, determination or award of any court,
governmental agency or arbitrator presently in effect having applicability to
the Borrowers, (b) violate or contravene any provision of the Articles or
Certificate of Incorporation
23
or bylaws of either Borrower, or (c) result in a breach of or constitute a
default under any indenture, loan or credit agreement or any other agreement,
lease or instrument to which a Borrower is a party or by which it or any of
its properties may be bound or result in the creation of any Lien thereunder.
No Borrower or any Subsidiary is in default under or in violation of any such
law, statute, rule or regulation, order, writ, judgment, injunction, decree,
determination or award or any such indenture, loan or credit agreement or
other agreement, lease or instrument in any case in which the consequences of
such default or violation could have a material adverse effect on the
business, operations, properties, assets or condition (financial or
otherwise) of CCB and the Subsidiaries taken as a whole.
Section 4.4 GOVERNMENT CONSENT. No order, consent, approval,
license, authorization or validation of, or filing, recording or registration
with, or exemption by, any governmental or public body or authority is required
on the part of the Borrowers to authorize, or is required in connection with the
execution, delivery and performance of, or the legality, validity, binding
effect or enforceability of, the Borrower Loan Documents, except for any
necessary filing or recordation of or with respect to any of the Security
Documents.
Section 4.5 FINANCIAL STATEMENTS AND CONDITION. (a) CCB's
audited consolidated financial statements as at December 31, 1999 and its
unaudited financial statements as at March 31, 2000, as heretofore furnished to
the Bank, have been prepared in accordance with GAAP on a consistent basis
(except for the absence of footnotes and subject to year-end audit adjustments
as to the interim statements) and fairly present the financial condition of the
CCB and its Subsidiaries as at such dates and the results of their operations
and changes in financial position for the respective periods then ended. As of
the dates of such financial statements, neither CCB nor any Subsidiary had any
material obligation, contingent liability, liability for taxes or long-term
lease obligation which is not reflected in such financial statements or in the
notes thereto. Since March 31, 2000, there has been no material adverse change
in the business, operations, property, assets or condition, financial or
otherwise, of the CCB and its Subsidiaries taken as a whole.
(b) PCC's audited consolidated financial statements as at
December 31, 1999 and its unaudited financial statements as at March 31, 2000,
as heretofore furnished to the Bank, have been prepared in accordance with GAAP
on a consistent basis (except for the absence of footnotes and subject to
year-end audit adjustments as to the interim statements) and fairly present the
financial condition of the PCC and its Subsidiaries as at such dates and the
results of their operations and changes in financial position for the respective
periods then ended. As of the dates of such financial statements, neither PCC
nor any Subsidiary had any material obligation, contingent liability, liability
for taxes or long-term lease obligation which is not reflected in such financial
statements or in the notes thereto. Since March 31, 2000, there has been no
material adverse change in the business, operations, property, assets or
condition, financial or otherwise, of the PCC and its Subsidiaries taken as a
whole.
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Section 4.6 LITIGATION. There are no actions, suits or
proceedings pending or, to the knowledge of the Borrowers, threatened against or
affecting a Borrower or any Subsidiary or any of their properties before any
court or arbitrator, or any governmental department, board, agency or other
instrumentality which, if determined adversely to such Borrower or such
Subsidiary, would have a material adverse effect on the business, operations,
property or condition (financial or otherwise) of CCB and the Subsidiaries taken
as a whole or on the ability of a Borrower or any Subsidiary to perform its
material obligations under the Borrower Loan Documents.
Section 4.7 ENVIRONMENTAL, HEALTH AND SAFETY LAWS. There does
not exist any violation by a Borrower or any Subsidiary of any applicable
federal, state or local law, rule or regulation or order of any government,
governmental department, board, agency or other instrumentality relating to
environmental pollution, health or safety matters which will or threatens to
impose a material liability on a Borrower or a Subsidiary or which would require
a material expenditure by such Borrower or such Subsidiary to cure. No Borrower
or Subsidiary has received any notice to the effect that any part of its
operations or properties is not in material compliance with any such law, rule,
regulation or order or notice that it or its property is the subject of any
governmental investigation evaluating whether any remedial action is needed to
respond to any release of any toxic or hazardous waste or substance into the
environment, which noncompliance or remedial action could reasonably be expected
to have a material adverse effect on the business, operations, properties,
assets or condition (financial or otherwise) of CCB and the Subsidiaries taken
as a whole. No Borrower has any knowledge that it or its property or any
Subsidiary or the property of any Subsidiary will become subject to
environmental laws or regulations during the term of this Agreement, compliance
with which could reasonably be expected to require Capital Expenditures which
would have a material adverse effect on the business, operations, properties,
assets or condition (financial or otherwise) of CCB and its Subsidiaries taken
as a whole.
Section 4.8 ERISA. Each Plan is in substantial compliance with
all applicable requirements of ERISA and the Code and with all material
applicable rulings and regulations issued under the provisions of ERISA and the
Code setting forth those requirements. No Reportable Event has occurred and is
continuing with respect to any Plan. All of the minimum funding standards
applicable to such Plans have been satisfied and there exists no event or
condition which would reasonably be expected to result in the institution of
proceedings to terminate any Plan under Section 4042 of ERISA. With respect to
each Plan subject to Title IV of ERISA, as of the most recent valuation date for
such Plan, the present value (determined on the basis of reasonable assumptions
employed by the independent actuary for such Plan and previously furnished in
writing to the Bank) of such Plan's projected benefit obligations did not exceed
the fair market value of such Plan's assets.
Section 4.9 FEDERAL RESERVE REGULATIONS. No Borrower or
Subsidiary is engaged principally or as one of its important activities in the
business of extending credit for the purpose of purchasing or carrying margin
stock (as defined in Regulation U of the Board). The
25
value of all margin stock owned by a Borrower does not constitute more than
25% of the value of the assets of such Borrower.
Section 4.10 TITLE TO PROPERTY; LEASES; LIENS; SUBORDINATION.
Each Borrower and each Subsidiary has (a) good and marketable title to its real
properties and (b) good and sufficient title to, or valid, subsisting and
enforceable leasehold interest in, its other material properties, including all
real properties, other properties and assets owned by CCB and its Subsidiaries
(other than property disposed of since the date of such financial statements in
the ordinary course of business). None of such properties is subject to a Lien,
except as allowed under Section 6.11. No Borrower has subordinated any of its
rights under any obligation owing to it to the rights of any other person.
Section 4.11 TAXES. Each Borrower and each Subsidiary has
filed all federal, state and local tax returns required to be filed and has paid
or made provision for the payment of all taxes due and payable pursuant to such
returns and pursuant to any assessments made against it or any of its property
and all other taxes, fees and other charges imposed on it or any of its property
by any governmental authority (other than taxes, fees or charges the amount or
validity of which is currently being contested in good faith by appropriate
proceedings and with respect to which reserves in accordance with GAAP have been
provided on the books of the Borrowers). No tax Liens have been filed and no
material claims are being asserted with respect to any such taxes, fees or
charges. The charges, accruals and reserves on the books of the Borrowers in
respect of taxes and other governmental charges are adequate and no Borrower
knows of any proposed material tax assessment against it or any Subsidiary or
any basis therefor.
Section 4.12 TRADEMARKS, PATENTS. Each Borrower and each
Subsidiary possesses or has the right to use all of the patents, trademarks,
trade names, service marks and copyrights, and applications therefor, and all
technology, know-how, processes, methods and designs used in or necessary for
the conduct of its business, without known conflict with the rights of others.
Section 4.13 BURDENSOME RESTRICTIONS. No Borrower or
Subsidiary is a party to or otherwise bound by any indenture, loan or credit
agreement or any lease or other agreement or instrument or subject to any
charter, corporate or partnership restriction which would foreseeably have a
material adverse effect on the business, properties, assets, operations or
condition (financial or otherwise) of CCB and the Subsidiaries taken as a whole
or on the ability of a Borrower or any Subsidiary to carry out its material
obligations under any Borrower Loan Document.
Section 4.14 FORCE MAJEURE. Since the dates of the most recent
financial statements referred to in Section 4.5, the business, properties and
other assets of the Borrowers and the Subsidiaries have not been materially and
adversely affected in any way as the result of any fire or other casualty,
strike, lockout, or other labor trouble, embargo, sabotage, confiscation,
condemnation, riot, civil disturbance, activity of armed forces or act of God.
26
Section 4.15 INVESTMENT COMPANY ACT. No Borrower or Subsidiary
is an "investment company" or a company "controlled" by an investment company
within the meaning of the Investment Company Act of 1940, as amended.
Section 4.16 PUBLIC UTILITY HOLDING COMPANY ACT. No Borrower
or Subsidiary is a "holding company" or a "subsidiary company" of a holding
company or an "affiliate" of a holding company or of a subsidiary company of a
holding company within the meaning of the Public Utility Holding Company Act of
1935, as amended.
Section 4.17 RETIREMENT BENEFITS. Except as required under
Section 4980B of the Code, Section 601 of ERISA or applicable state law, no
Borrower or Subsidiary is obligated to provide post-retirement medical or
insurance benefits with respect to employees or former employees.
Section 4.18 FULL DISCLOSURE. Subject to the following
sentence, no certificate, written statement, exhibit or report furnished by or
on behalf of the Borrowers in connection with or pursuant to this Agreement
contains any untrue statement of a material fact or omits to state any material
fact necessary in order to make the statements contained therein not misleading.
Certificates or statements furnished by or on behalf of the Borrowers to the
Bank consisting of projections or forecasts of future results or events have
been prepared in good faith and based on good faith estimates and assumptions of
the management of the Borrowers, and the Borrowers have no reason to believe
that such projections or forecasts are not reasonable.
Section 4.19 SUBSIDIARIES; REGULATORY ACTIONS. As of the date
of this Agreement, the only Subsidiaries and Bank Subsidiaries are those listed
on Exhibit 4.19 hereto. No Borrower or Bank Subsidiary is subject to any
Regulatory Action.
Section 4.20 EMPLOYMENT, MANAGEMENT, AND CONSULTING CONTRACTS.
Except as set forth on Exhibit 4.20 attached hereto and made a part hereof, no
Borrower or Subsidiary is a party to any employment, management, or consulting
contracts with any Person other than such a contract terminable at will.
Section 4.21 BANK HOLDING COMPANY ACT. The Borrowers have
complied in all material respects with all federal, state and local laws
pertaining to bank holding companies, including without limitation, the Bank
Holding Company Act of 1956, as amended.
Section 4.22 CAPITAL STOCK. No Borrower or Subsidiary has
issued any unregistered securities in violation of the registration requirements
of the Securities Act of 1933, as amended, or any other law; or violated any
rule, regulation or requirement under the Securities Act of 1933, as amended, or
the Securities Exchange Act of 1934, as amended.
27
Section 4.23 YEAR 2000. The Borrowers have reviewed and
assessed their business operations and computer systems and applications to
address the "year 2000 problem" (that is, that computer applications and
equipment used by the Borrowers, directly or indirectly through third parties,
may have been or may be unable to properly perform date-sensitive functions
before, during and after January 1, 2000). The Borrowers represent and warrant
that the year 2000 problem has not resulted in and will not result in a material
adverse change in the Borrowers' business condition (financial or otherwise),
operations, properties or prospects or ability to repay the Bank. The Borrowers
agree that this representation and warranty will be true and correct on and
shall be deemed made by the Borrowers on each date the Borrower Representative
requests any Revolving Loan or Advance under this Agreement or the Revolving
Note or delivers any information to the Bank. The Borrower Representative shall
promptly deliver to the Bank such information relating to this representation
and warranty as the Bank requests from time to time.
Section 4.24 SOLVENCY. Each Borrower is Solvent and, after
giving effect to the transactions contemplated by this Agreement, each Borrower
will be Solvent. No transfer of property is being made and no Indebtedness is
being incurred in connection with the transactions contemplated by this
Agreement with the intent to hinder, delay or defraud either present or future
creditors of either Borrower or any Affiliate. The conclusions set out in the
Solvency Certificate are true and correct.
ARTICLE V
AFFIRMATIVE COVENANTS
Until any obligation of the Bank hereunder to make the
Revolving Loans shall have expired or been terminated and the Revolving Note and
all of the other Obligations have been paid in full, unless the Bank shall
otherwise consent in writing:
Section 5.1 FINANCIAL STATEMENTS AND REPORTS. The Borrowers
will furnish to the Bank:
5.1(a) As soon as available and in any event within
90 days after the end of each fiscal year of CCB, the consolidated
financial statements of CCB and the Subsidiaries consisting of at least
statements of income, cash flow and changes in stockholders' equity,
and a consolidated balance sheet as at the end of such year, setting
forth in each case in comparative form corresponding figures from the
previous annual audit, certified without qualification by an
independent certified public accountant of recognized national standing
selected by CCB and acceptable to the Bank, together with any
management letters, management reports or other supplementary comments
or reports to CCB or its board of directors furnished by such
accountants.
28
5.1(b) As soon as available and in any event within
45 days after the end of each fiscal quarter, unaudited consolidated
statements of income, cash flow and changes in stockholders' equity for
CCB and the Subsidiaries for such quarter and for the period from the
beginning of such fiscal year to the end of such quarter, and a
consolidated balance sheet of CCB as at the end of such quarter,
setting forth in comparative form figures for the corresponding period
for the preceding fiscal year, accompanied by a certificate signed by
the chief financial officer of CCB stating that such financial
statements present fairly the financial condition of CCB and the
Subsidiaries and that the same have been prepared in accordance with
GAAP (except for the absence of footnotes and subject to year-end audit
adjustments as to the interim statements).
5.1(c) As soon as practicable and in any event within
45 days after the end of each fiscal quarter, a Compliance Certificate
in the form attached hereto as Exhibit 5.1(c) signed by the chief
financial officer or controller of CCB demonstrating in reasonable
detail compliance (or noncompliance, as the case may be) with Sections
6.13, 6.14, 6.15, 6.16, 6.17 and 6.19 as at the end of such quarter and
stating that as at the end of such quarter there did not exist any
Default or Event of Default or, if such Default or Event of Default
existed, specifying the nature and period of existence thereof and what
action the Borrowers proposes to take with respect thereto.
5.1(d) Promptly upon any officer of a Borrower
becoming aware of any Default or Event of Default, a notice describing
the nature thereof and what action such Borrower proposes to take with
respect thereto.
5.1(e) Promptly upon any officer of either Borrower
becoming aware of the occurrence, with respect to any Plan, of any
Reportable Event or any Prohibited Transaction, a notice specifying the
nature thereof and what action such Borrower proposes to take with
respect thereto, and, when received, copies of any notice from PBGC of
intention to terminate or have a trustee appointed for any Plan.
5.1(f) As soon as available, but in any event within
45 days after the last day of each quarterly fiscal period, copies of
the watch lists, problem loan and other loan reports of any Subsidiary
Bank for such quarterly fiscal period, including, without limitation,
the Loan Loss Reserve Adequacy Report and a list of any loans of any
Subsidiary Bank that have been classified as "other restructured" or
"other renegotiated" in any report to any regulatory authority and that
are not listed on the most recent quarterly call report provided to the
Bank.
5.1(g) As soon as available, but in any event within
45 days after the last day of each quarterly fiscal period, copies of
the quarterly call reports and other regulatory reports, including,
without limitation FRY-6 and FRY-9 reports, filed by a Borrower or any
Subsidiary with any regulatory authority.
29
5.1(h) Promptly upon receipt by a Borrower or a
Subsidiary Bank, copies of all Regulatory Actions affecting or
pertaining to either Borrower or any Subsidiary to the extent allowed
by law.
5.1(i) As soon as practicable, give written notice to
the Bank of:
(i) The commencement of any litigation against a
Borrower, any Subsidiary or PLLC involving claimed damages in
excess of $500,000 or relating to the transactions
contemplated by this Credit Agreement.
(ii) The commencement of any material arbitration or
governmental proceeding or investigation not previously
disclosed to the Bank which has been instituted or, to the
knowledge of the Borrower, is threatened against a Borrower,
any Subsidiary or PLLC or any of their respective properties
which, if determined adversely to the Borrower, would
constitute a Material Adverse Occurrence.
(iii) Any adverse development which occurs in any
litigation, arbitration or governmental investigation or
proceeding previously disclosed by the Borrowers to the Bank
and which would constitute a Material Adverse Occurrence.
(iv) Any settlement or disposition of any litigation,
arbitration or governmental investigation or proceeding
previously disclosed to the Bank pursuant to this Credit
Agreement.
5.1(j) From time to time, such other information
regarding the business, operation and financial condition of the
Borrowers, the Subsidiaries and PLLC as the Bank may reasonably
request.
Section 5.2 CORPORATE EXISTENCE. Each Borrower will maintain,
and cause each Subsidiary to maintain, its corporate existence in good standing
under the laws of its jurisdiction of incorporation and its qualification to
transact business in each jurisdiction where failure so to qualify would
permanently preclude such Borrower or such Subsidiary from enforcing its rights
with respect to any material asset or would expose such Borrower or such
Subsidiary to any material liability; provided, however, that nothing herein
shall prohibit the merger or liquidation of any Subsidiary allowed under Section
6.1.
Section 5.3 INSURANCE. Each Borrower shall maintain, and shall
cause each Subsidiary to maintain, with financially sound and reputable
insurance companies such insurance as may be required by law and such other
insurance in such amounts and against such hazards as is customary in the case
of reputable firms engaged in the same or similar business and similarly
situated.
30
Section 5.4 PAYMENT OF TAXES AND CLAIMS. Each Borrower shall
file, and cause each Subsidiary to file, all tax returns and reports which are
required by law to be filed by it and will pay, and cause each Subsidiary to
pay, before they become delinquent all taxes, assessments and governmental
charges and levies imposed upon it or its property and all claims or demands of
any kind (including but not limited to those of suppliers, mechanics, carriers,
warehouses, landlords and other like Persons) which, if unpaid, might reasonably
result in the creation of a Lien upon its property; provided that the foregoing
items need not be paid if they are being contested in good faith by appropriate
proceedings, and as long as such Borrower's or such Subsidiary's title to its
property is not materially adversely affected, its use of such property in the
ordinary course of its business is not materially interfered with and adequate
reserves with respect thereto have been set aside on such Borrower's or such
Subsidiary's books in accordance with GAAP.
Section 5.5 INSPECTION. As long as not prohibited by
applicable law, the Borrowers shall permit any Person designated by the Bank to
visit and inspect any of the properties, corporate books and financial records
of the Borrowers and the Subsidiaries, to examine and to make copies of the
books of accounts and other financial records of the Borrowers, and to discuss
the affairs, finances and accounts of the Borrowers with, and to be advised as
to the same by, their officers at such reasonable times (upon at least one
Business Days prior written notice to the Borrower Representative, unless a
Default or Event of Default has occurred and is continuing) and intervals as the
Bank may designate. So long as no Event of Default exists, the expenses of the
Bank for such visits, inspections and examinations shall be at the expense of
the Bank, but any such visits, inspections and examinations made while any Event
of Default is continuing shall be at the expense of the Borrowers.
Section 5.6 MAINTENANCE OF PROPERTIES. Each Borrower will
maintain, and cause each Subsidiary to maintain, its properties used or useful
in the conduct of its business in good condition, repair and working order, and
supplied with all necessary equipment, and make all necessary repairs, renewals,
replacements, betterments and improvements thereto, all as may be necessary so
that the business carried on in connection therewith may be properly and
advantageously conducted at all times.
Section 5.7 BOOKS AND RECORDS. Each Borrower will keep, and
will cause each Subsidiary to keep, adequate and proper records and books of
account in which full and correct entries will be made of its dealings, business
and affairs.
Section 5.8 COMPLIANCE. Each Borrower will comply, and will
cause each Subsidiary to comply, in all material respects with all laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or awards to which
it may be subject; provided, however, that failure so to comply shall not be a
breach of this covenant if such failure does not have, or is not reasonably
expected to have, a materially adverse effect on the properties, business,
prospects or condition (financial or otherwise) of such Borrower or such
Subsidiary and such Borrower or such Subsidiary is acting in good faith and with
reasonable dispatch to cure such noncompliance.
31
Section 5.9 NOTICE OF LITIGATION. The Borrower Representative
will give prompt written notice to the Bank of the commencement of any action,
suit or proceeding before any court or arbitrator or any governmental
department, board, agency or other instrumentality affecting a Borrower or any
Subsidiary or any property of a Borrower or any Subsidiary or to which either
Borrower or any Subsidiary is a party in which an adverse determination or
result could have a material adverse effect on the business, operations,
property or condition (financial or otherwise) of CCB and the Subsidiaries taken
as a whole or have a material adverse effect on the ability of a Borrower or any
Subsidiary to perform its obligations under this Agreement and the other
Borrower Loan Documents, stating the nature and status of such action, suit or
proceeding.
Section 5.10 ERISA. Each Borrower will maintain, and cause
each Subsidiary to maintain, each Plan in compliance with all material
applicable requirements of ERISA and of the Code and with all applicable rulings
and regulations issued under the provisions of ERISA and of the Code and will
not and not permit any of the ERISA Affiliates to (a) engage in any transaction
in connection with which a Borrower or any of the ERISA Affiliates would be
subject to either a civil penalty assessed pursuant to Section 502(i) of ERISA
or a tax imposed by Section 4975 of the Code, in either case in an amount
exceeding $50,000, (b) fail to make full payment when due of all amounts which,
under the provisions of any Plan, either Borrower or any ERISA Affiliate is
required to pay as contributions thereto, or permit to exist any accumulated
funding deficiency (as such term is defined in Section 302 of ERISA and Section
412 of the Code), whether or not waived, with respect to any Plan in an
aggregate amount exceeding $50,000 or (c) fail to make any payments in an
aggregate amount exceeding $50,000 to any Multiemployer Plan that a Borrower or
any of the ERISA Affiliates may be required to make under any agreement relating
to such Multiemployer Plan or any law pertaining thereto.
Section 5.11 ENVIRONMENTAL MATTERS; REPORTING. Each Borrower
will observe and comply with, and cause each Subsidiary to observe and comply
with, all laws, rules, regulations and orders of any government or government
agency relating to health, safety, pollution, hazardous materials or other
environmental matters to the extent noncompliance could result in a material
liability or otherwise have a material adverse effect on CCB and the
Subsidiaries taken as a whole. The Borrower Representative will give the Bank
prompt written notice of any violation as to any environmental matter by a
Borrower or any Subsidiary and of the commencement of any judicial or
administrative proceeding relating to health, safety or environmental matters
(a) in which an adverse determination or result could result in the revocation
of or have a material adverse effect on any operating permits, air emission
permits, water discharge permits, hazardous waste permits or other permits held
by a Borrower or any Subsidiary which are material to the operations of such
Borrower or such Subsidiary, or (b) which will or threatens to impose a material
liability on such Borrower or such Subsidiary to any Person or which will
require a material expenditure by such Borrower or such Subsidiary to cure any
alleged problem or violation.
32
Section 5.12 FURTHER ASSURANCES. Each Borrower shall promptly
correct any defect or error that may be discovered in any Borrower Loan Document
or in the execution, acknowledgment or recordation thereof. Promptly upon
request by the Bank to the Borrower Representative, each Borrower also shall do,
execute, acknowledge, deliver, record, re-record, file, re-file, register and
re-register, any and all deeds, conveyances, mortgages, deeds of trust, trust
deeds, assignments, estoppel certificates, financing statements and
continuations thereof, notices of assignment, transfers, certificates,
assurances and other instruments as the Bank may reasonable require from time to
time in order: (a) to carry out more effectively the purposes of the Borrower
Loan Documents; (b) to perfect and maintain the validity, effectiveness and
priority of any security interests intended to be created by the Borrower Loan
Documents including, without limitation, the delivery of a landlord waiver from
any landlord required by the Bank; and (c) to better assure, convey, grant,
assign, transfer, preserve, protect and confirm unto the Bank the rights granted
now or hereafter intended to be granted to the Bank under any Borrower Loan
Document or under any other instrument executed in connection with any Borrower
Loan Document or that such Borrower may be or become bound to convey, mortgage
or assign to the Bank in order to carry out the intention or facilitate the
performance of the provisions of any Borrower Loan Document. Each Borrower shall
furnish to the Bank evidence satisfactory to the Bank of every such recording,
filing or registration.
Section 5.13. EXPENSE REIMBURSEMENT AND BUY-SELL AGREEMENT. PCC shall
maintain the Expense Reimbursement and Buy-Sell Agreement in full force and
effect, shall not amend or modify the same in any material respect and shall not
cause, suffer or permit to exist any material default or event of default
thereunder.
ARTICLE VI
NEGATIVE COVENANTS
Until any obligation of the Bank hereunder to make the
Revolving Loans shall have expired or been terminated and the Revolving Note and
all of the other Obligations have been paid in full, unless the Bank shall
otherwise consent in writing:
Section 6.1 MERGER; ACQUISITIONS. No Borrower will: merge or
consolidate or enter into any analogous reorganization or transaction with any
Person; liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution); acquire all or substantially all of the stock or the assets of
another Person other than PSB; or permit any Subsidiary to do any of the
foregoing; PROVIDED, HOWEVER, any Subsidiary may be merged with or liquidated
into a Borrower or any wholly-owned Subsidiary (if a Borrower or such
wholly-owned Subsidiary is the surviving corporation).
Section 6.2 DISPOSITION OF ASSETS. No Borrower will, or will
permit any Subsidiary to, directly or indirectly, sell, assign, lease, convey,
transfer or otherwise dispose of
33
(whether in one transaction or a series of transactions) any property
(including accounts and notes receivable, with or without recourse) or enter
into any agreement to do any of the foregoing, except dispositions of assets
in the ordinary course of business.
Section 6.3 PLANS. No Borrower will permit, or will allow any
Subsidiary to permit, any event to occur or condition to exist which would
permit any Plan to terminate under any circumstances which would cause the Lien
provided for in Section 4068 of ERISA to attach to any assets of either Borrower
or any Subsidiary; and no Borrower will permit, as of the most recent valuation
date for any Plan subject to Title IV of ERISA, the present value (determined on
the basis of reasonable assumptions employed by the independent actuary for such
Plan and previously furnished in writing to the Bank) of such Plan's projected
benefit obligations to exceed the fair market value of such Plan's assets.
Section 6.4 CHANGE IN NATURE OF BUSINESS. No Borrower will, or
will permit any Subsidiary to, make any material change in the nature of the
business of such Borrower or such Subsidiary, as carried on at the date hereof.
Section 6.5 SUBSIDIARIES. After the date of this Agreement, no
Borrower will, or will permit any Subsidiary to, form or acquire any corporation
or other entity which would thereby become a Subsidiary.
Section 6.6 NEGATIVE PLEDGES; SUBSIDIARY RESTRICTIONS. No
Borrower will, or will permit any Subsidiary to, enter into any agreement, bond,
note or other instrument with or for the benefit of any Person other than the
Bank which would (i) prohibit such Borrower or such Subsidiary from granting, or
otherwise limit the ability of such Borrower or such Subsidiary to grant, to the
Bank any Lien on any assets or properties of such Borrower or such Subsidiary,
or (ii) require the Borrower or such Subsidiary to xxxxx x Xxxx to any other
Person if such Borrower or such Subsidiary grants any Lien to the Bank. No
Borrower will permit any Subsidiary to place or allow any restriction, directly
or indirectly, on the ability of such Subsidiary to (a) pay dividends or any
distributions on or with respect to such Subsidiary's capital stock or (b) make
loans or other cash payments to such Borrower.
Section 6.7 TRANSACTIONS WITH AFFILIATES. Except for those
transactions which have been previously disclosed to the Bank in writing
(including but not limited to the Expense Reimbursement and Buy-Sell Agreement
and the incurrence by PCC of Subordinated Debt to Placer Trust pursuant to the
Subordinated Note in the aggregate amount of $19,073,000, and the issuance by
PCC of 1 share of 8% preferred stock to PLLC for $3,500,000), no Borrower will
enter into any transaction with any Affiliate, except upon fair and reasonable
terms no less favorable to such Borrower than would obtain in a comparable
arm's-length transaction with a Person not an Affiliate.
34
Section 6.8 ACCOUNTING CHANGES. No Borrower will, or will
permit any Subsidiary to, make any significant change in accounting treatment or
reporting practices, except as required by GAAP, or change its fiscal year or
the fiscal year of any Subsidiary.
Section 6.9 SUBORDINATED DEBT. No Borrower will, or will
permit any Subsidiary to (a) make any scheduled payment of the principal of or
interest on any Subordinated Debt which would be prohibited by the terms of such
Subordinated Debt and any related subordination agreement; (b) directly or
indirectly make any prepayment on or purchase, redeem or defease any
Subordinated Debt or offer to do so (whether such prepayment, purchase or
redemption, or offer with respect thereto, is voluntary or mandatory) unless the
proceeds of such Subordinated Debt are used directly or indirectly to pay off
the Borrowers' obligations to the Bank; (c) amend or cancel the subordination
provisions applicable to any Subordinated Debt; (d) take or omit to take any
action if as a result of such action or omission the subordination of such
Subordinated Debt, or any part thereof, to the Obligations might be terminated,
impaired or adversely affected; or (e) omit to give the Bank prompt notice of
any notice received from any holder of Subordinated Debt, or any trustee
therefor, or of any default under any agreement or instrument relating to any
Subordinated Debt by reason whereof such Subordinated Debt might become or be
declared to be due or payable.
Section 6.10 INDEBTEDNESS. No Borrower will, or will permit
any Subsidiary to, incur, create, issue, assume or suffer to exist any
Indebtedness, except:
6.10(a) The Obligations.
6.10(b) Subordinated Indebtedness of PCC, in an
aggregate principal amount not to exceed $19,073,000 at any time
outstanding.
6.10(c) Current Liabilities, other than for borrowed
money, incurred in the ordinary course of business.
6.10(d) Indebtedness secured by Liens permitted under
Section 6.11 hereof.
6.10(e) Indebtedness incurred by any Subsidiary Bank
in the ordinary course of business which is consistent with prudent
banking practices.
Section 6.11 LIENS. No Borrower will, or will permit any
Subsidiary to, create, incur, assume or suffer to exist any Lien, or enter into,
or make any commitment to enter into, any arrangement for the acquisition of any
property through conditional sale, lease-purchase or other title retention
agreements, with respect to any property now owned or hereafter acquired by a
Borrower or a Subsidiary, except:
35
6.11(a) Liens granted to the Bank under the Security
Documents to secure the Obligations.
6.11(b) Liens existing on the date of this Agreement
and disclosed on Exhibit 6.11 hereto.
6.11(c) Deposits or pledges to secure payment of
workers' compensation, unemployment insurance, old age pensions or
other social security obligations, in the ordinary course of business
of a Borrower or a Subsidiary.
6.11(d) Liens for taxes, fees, assessments and
governmental charges not delinquent or to the extent that payment
therefor shall not at the time be required to be made in accordance
with the provisions of Section 5.4.
6.11(e) Liens of carriers, warehousemen, mechanics
and materialmen, and other like Liens arising in the ordinary course of
business, for sums not due or to the extent that payment therefor shall
not at the time be required to be made in accordance with the
provisions of Section 5.4.
6.11(f) Liens incurred or deposits or pledges made or
given in connection with, or to secure payment of, indemnity,
performance or other similar bonds.
6.11(g) Liens arising solely by virtue of any
statutory or common law provision relating to banker's liens, rights of
set-off or similar rights and remedies as to deposit accounts or other
funds maintained with a creditor depository institution; PROVIDED THAT
(i) such deposit account is not a dedicated cash collateral account and
is not subject to restriction against access by a Borrower or a
Subsidiary in excess of those set forth by regulations promulgated by
the Board, and (ii) such deposit account is not intended by such
Borrower or any Subsidiary to provide collateral to the depository
institution.
6.11(h) Liens incurred by any Subsidiary Bank in the
ordinary course of business which are consistent with prudent banking
practices.
Section 6.12 CONTINGENT LIABILITIES. No Borrower will, or will
permit any Subsidiary to, be or become liable on any Contingent Obligations
except (i) Contingent Obligations incurred by Subsidiary Banks in the ordinary
course of business which are consistent with prudent banking practices and (ii)
Contingent Obligations existing on the date of this Agreement and described on
Exhibit 6.12.
Section 6.13 NON-PERFORMING ASSETS/TOTAL LOANS AND OREO. PCC
will not permit the ratio of its Subsidiaries' combined Non-Performing Assets to
the sum of their combined Total Loans plus OREO to be more than three percent
(3.00%).
36
Section 6.14 CONSOLIDATED NET WORTH. PCC will not permit its
Consolidated Net Worth to be less than the lesser of (a) the sum of $50,000,000
(excluding preferred securities) plus fifty percent (50%) of Consolidated Net
Income for each fiscal quarter ended on or after September 30, 1999, excluding
the effect of any loss in any such fiscal quarter or (b) $70,000,000.
Section 6.15 CASH RETURN ON ASSETS. The Borrowers will not
permit the Cash Return on Assets to be less than eight-tenths of one percent
(0.80%) for any fiscal quarter beginning after June 30, 2000.
Section 6.16 TOTAL RISK-WEIGHTED CAPITAL RATIO. PCC will not
permit the ratio (expressed as a percentage) of its Total Capital to its Total
Risk-Weighted Assets to be less than eight percent (8.00%).
Section 6.17 LOAN LOSS RESERVES. The Borrowers shall not
permit the ratio (expressed as a percentage) of the Loan Loss Reserves of PSB to
its Non-Performing Assets to be less than 100% at any time.
Section 6.18 LOAN PROCEEDS. The Borrowers will not, and will
not permit any Subsidiary to, use any part of the proceeds of any Revolving Loan
or any Advances directly or indirectly, and whether immediately, incidentally or
ultimately, (a) to purchase or carry margin stock (as defined in Regulation U of
the Board) or to extend credit to others for the purpose of purchasing or
carrying margin stock or to refund Indebtedness originally incurred for such
purpose or (b) for any purpose which entails a violation of, or which is
inconsistent with, the provisions of Regulations U or X of the Board.
Section 6.19 LIMITATION ON INDEBTEDNESS AND PREFERRED STOCK.
The Borrowers will not permit the sum of the aggregate principal amount of their
Indebtedness (including, without limitation, Indebtedness under this Agreement
and Subordinated Debt) plus the aggregate par value of their issued and
outstanding preferred stock to exceed $25,573,000] at any time outstanding.
Section 6.20 LIMITATION ON EXPENSES OF PCC. PCC shall not
incur aggregate expenses, exclusive of interest expense and expenses related to
performance of its obligations under this Agreement or of PLLC under the PLLC
Credit Agreement, in excess of $200,000 in any fiscal year.
37
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
Section 7.1 EVENTS OF DEFAULT. The occurrence of any one or
more of the following events shall constitute an Event of Default:
7.1(a) The Borrowers shall fail to make when due
whether by acceleration or otherwise, any payment of principal on the
Revolving Note, or shall fail to make within seven (7) days of when due
whether by acceleration or otherwise, any payment of interest on the
Revolving Note, or shall fail to pay any other Obligation required to
be made to the Bank pursuant to this Agreement.
7.1(b) Any representation or warranty made by or on
behalf of the Borrowers or any Subsidiary in this Agreement or any
other Borrower Loan Document or by or on behalf of the Borrowers or any
Subsidiary in any certificate, statement, report or document herewith
or hereafter furnished to the Bank pursuant to this Agreement or any
other Borrower Loan Document shall prove to have been false or
misleading in any material respect on the date as of which the facts
set forth are stated or certified.
7.1(c) The Borrowers shall fail to comply with
Sections 5.2 or 5.3 hereof or any Section of Article VI hereof, or PCC
shall fail to comply with Section 5.13 hereof.
7.1(d) The Borrowers shall fail to comply with any
other agreement, covenant, condition, provision or term contained in
this Agreement (other than those hereinabove set forth in this Section
7.1) and such failure to comply shall continue for fifteen (15)
calendar days after whichever of the following dates is the earliest:
(i) the date the Borrower Representative gives notice of such failure
to the Bank, (ii) the date the Borrower Representative should have
given notice of such failure to the Bank pursuant to Section 5.1, or
(iii) the date the Bank gives notice of such failure to the Borrower
Representative.
7.1(e) An "Event of Default" (as defined therein)
shall occur under the Pledge Agreement or the PLLC Pledge Agreement, or
any default (however denominated or defined but subject to applicable
grace and cure periods) shall occur under any other Security Document.
7.1(f) A Borrower or any Subsidiary shall become
insolvent or shall generally not pay its debts as they mature or shall
apply for, shall consent to, or shall acquiesce in the appointment of a
custodian, trustee or receiver of such Borrower or such Subsidiary or
for a substantial part of the property thereof or, in the absence of
such application, consent or acquiescence, a custodian, trustee or
receiver shall be appointed for a Borrower or a Subsidiary or for a
substantial part of the property thereof and shall
38
not be discharged within 60 days, or a Borrower or a Subsidiary shall
make an assignment for the benefit of creditors.
7.1(g) Any bankruptcy, reorganization, debt
arrangement or other proceedings under any bankruptcy or insolvency law
shall be instituted by or against either Borrowers or any Subsidiary,
and, if instituted against a Borrower or any Subsidiary, shall have
been consented to or acquiesced in by such Borrower or such Subsidiary,
or shall remain undismissed for 60 days, or an order for relief shall
have been entered against such Borrower or such Subsidiary.
7.1(h) Any dissolution or liquidation proceeding not
permitted by Section 6.1 shall be instituted by or against a Borrower
or a Subsidiary, and, if instituted against a Borrower or a Subsidiary,
shall be consented to or acquiesced in by such Borrower or such
Subsidiary or shall remain for 45 days undismissed.
7.1(i) A judgment or judgments for the payment of
money in excess of the sum of $100,000 in the aggregate shall be
rendered against a Borrower or a Subsidiary and either (i) the judgment
creditor executes on such judgment or (ii) such judgment remains unpaid
or undischarged for more than 45 days from the date of entry thereof or
such longer period during which execution of such judgment shall be
stayed during an appeal from such judgment.
7.1(j) The maturity of any material Indebtedness of a
Borrower (other than Indebtedness under this Agreement) or a Subsidiary
shall be accelerated, or a Borrower or a Subsidiary shall fail to pay
any such material Indebtedness when due (after the lapse of any
applicable grace period) or, in the case of such Indebtedness payable
on demand, when demanded (after the lapse of any applicable grace
period), or any event shall occur or condition shall exist and shall
continue for more than the period of grace, if any, applicable thereto
and shall have the effect of causing, or permitting the holder of any
such Indebtedness or any trustee or other Person acting on behalf of
such holder to cause, such material Indebtedness to become due prior to
its stated maturity or to realize upon any collateral given as security
therefor. For purposes of this Section, Indebtedness of a Borrower or a
Subsidiary shall be deemed "material" if it exceeds $100,000 as to any
item of Indebtedness or in the aggregate for all items of Indebtedness
with respect to which any of the events described in this Section
7.1(j) has occurred.
7.1(k) Any execution or attachment shall be issued
whereby any substantial part of the property of a Borrower or a
Subsidiary shall be taken or attempted to be taken and the same shall
not have been vacated or stayed within 60 days after the issuance
thereof.
7.1(l) Any Security Document shall, at any time,
cease to be in full force and effect or shall be judicially declared
null and void, or the validity or enforceability
39
thereof shall be contested by a Borrower, or the Bank shall cease to
have a valid and perfected security interest having the priority
contemplated thereunder in all of the collateral described therein,
other than by action or inaction of the Bank if any of the foregoing
shall remain unremedied for ten days or more after receipt of notice
thereof by the Borrower Representative from the Bank.
7.1(m) A Borrower shall deny in writing that it has
any further liability under any Borrower Loan Document.
7.1(n) A Borrower or a Bank Subsidiary shall become
subject to any Regulatory Action.
7.1(o) Any Change of Control shall occur.
7.1(p) An "Event of Default" (as defined therein)
shall occur under the PLLC Credit Agreement.
Section 7.2 REMEDIES. If (a) any Event of Default described in
Sections 7.1(f), (g) or (h) shall occur with respect to a Borrower, the
Revolving Commitment shall automatically terminate and the Revolving Note and
all other Obligations shall automatically become immediately due and payable; or
(b) any other Event of Default shall occur and be continuing, then the Bank may
take any of the following actions: (i) declare the Revolving Commitment
terminated, whereupon the Revolving Commitment shall terminate and (ii) declare
the outstanding unpaid principal balance of the Revolving Note, the accrued and
unpaid interest thereon and all other Obligations to be forthwith due and
payable, whereupon the Revolving Note, all accrued and unpaid interest thereon
and all such Obligations shall immediately become due and payable, in each case
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived, anything in this Agreement or in the Revolving Note
to the contrary notwithstanding. Upon the occurrence of any of the events
described in clause (a) of the preceding sentence, or upon the occurrence of any
of the events described in clause (b) of the preceding sentence the Bank may
exercise all rights and remedies under any of the Borrower Loan Documents, and
enforce all rights and remedies under any applicable law.
Section 7.3 SETOFF. In addition to the remedies set forth in
Section 7.2, upon the occurrence of any Event of Default and thereafter while
the same be continuing, each Borrower hereby irrevocably authorizes the Bank to
set off any Obligations owed to the Bank against all deposits and credits of
such Borrower with, and any and all claims of such Borrower against, the Bank.
Such right shall exist whether or not the Bank shall have made any demand
hereunder or under any other Borrower Loan Document, whether or not the
Obligations, or any part thereof, or deposits and credits held for the account
of a Borrower is or are matured or unmeasured, and regardless of the existence
or adequacy of any collateral, guaranty or any other security, right or remedy
available to the Bank. The Bank agrees that, as promptly as is reasonably
possible after the exercise of any such setoff right, it shall notify the
Borrower
40
Representative of its exercise of such setoff right; provided, however, that
the failure of the Bank to provide such notice shall not affect the validity
of the exercise of such setoff rights. Nothing in this Agreement shall be
deemed a waiver or prohibition of or restriction on the Bank to all rights of
banker's Lien, setoff and counterclaim available pursuant to law.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 MODIFICATIONS. Notwithstanding any provisions to
the contrary herein, any term of this Agreement may be amended with the written
consent of the Borrowers; provided that no amendment, modification or waiver of
any provision of this Agreement or any other Borrower Loan Document or consent
to any departure therefrom by the Borrowers or other party thereto shall in any
event be effective unless the same shall be in writing and signed by the Bank,
and then such amendment, modification, waiver or consent shall be effective only
in the specific instance and for the purpose for which given.
Section 8.2 EXPENSES. Whether or not the transactions
contemplated hereby are consummated, the Borrowers agree to reimburse the Bank
within ten (10) days of demand for all reasonable out-of-pocket expenses paid or
incurred by the Bank (including filing and recording costs and fees and expenses
of Xxxxxx & Xxxxxxx LLP, counsel to the Bank) in connection with the
negotiation, preparation, approval, review, execution, delivery, administration,
amendment, modification and interpretation of this Agreement and the other
Borrower Loan Documents and any commitment letters relating thereto. The
Borrowers shall also reimburse the Bank within ten (10) days of demand for all
reasonable out-of-pocket expenses (including expenses of legal counsel) paid or
incurred by the Bank in connection with the collection and enforcement of this
Agreement and any other Borrower Loan Document. The obligations of the Borrowers
under this Section shall survive any termination of this Agreement.
Section 8.3 WAIVERS, ETC. No failure on the part of the Bank
or the holder of the Revolving Note to exercise and no delay in exercising any
power or right hereunder or under any other Borrower Loan Document shall operate
as a waiver thereof; nor shall any single or partial exercise of any power or
right preclude any other or further exercise thereof or the exercise of any
other power or right. The remedies herein and in the other Borrower Loan
Documents provided are cumulative and not exclusive of any remedies provided by
law.
Section 8.4 NOTICES. Except when telephonic notice is
expressly authorized by this Agreement, any notice or other communication to any
party in connection with this Agreement shall be in writing and shall be sent by
manual delivery, telegram, telex, facsimile transmission, overnight courier or
United States mail (postage prepaid) addressed to such party at the address
specified on the signature page hereof, or at such other address as such party
shall have specified to the other party hereto in writing. All periods of notice
shall be measured from the date of delivery thereof if manually delivered, from
the date of sending thereof if sent by
41
telegram, telex or facsimile transmission, from the first Business Day after
the date of sending if sent by overnight courier, or from four days after the
date of mailing if mailed; provided, however, that any notice to the Bank
under Article II hereof shall be deemed to have been given only when received
by the Bank.
Section 8.5 TAXES. The Borrowers agree to pay, and save the
Bank harmless from all liability for, any stamp or other similar taxes which may
be payable with respect to the execution or delivery of this Agreement or the
issuance of the Revolving Note, which obligation of the Borrowers shall survive
the termination of this Agreement.
Section 8.6 SUCCESSORS AND ASSIGNS; DISPOSITION OF LOANS;
TRANSFEREES. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns, except that a
Borrower may not assign its rights or delegate its obligations hereunder or
under any other Borrower Loan Document without the prior written consent of the
Bank. The Bank may at any time sell, assign, transfer, grant participations in,
or otherwise dispose of any portion of the Revolving Commitment, the Revolving
Loans and/or Advances (each such interest so disposed of being herein called a
"Transferred Interest") to banks or other financial institutions
("Transferees"). The Borrowers agree that each Transferee shall be entitled to
the benefits of Sections 2.15, 2.16, 2.17, 2.18, 2.19, 2.20, 2.21 and 8.2 with
respect to its Transferred Interest and that each Transferee may exercise any
and all rights of banker's Lien, setoff and counterclaim as if such Transferee
were a direct lender to the Borrowers. If the Bank makes any assignment to a
Transferee, then upon notice to the Borrower Representative such Transferee, to
the extent of such assignment (unless otherwise provided therein), shall become
a "Bank" hereunder and shall have all the rights and obligations of the Bank
hereunder to the extent of its Transferred Interest and the Bank shall be
released from its duties and obligations under this Agreement to the extent of
such assignment. Notwithstanding the sale by the Bank of any participation
hereunder, no participant shall be deemed to be or have the rights and
obligations of the Bank hereunder except that any participant shall have a right
of setoff under Section 7.3 as if it were the Bank and the amount of its
participation were owing directly to such participant by the Borrowers.
Section 8.7 CONFIDENTIALITY OF INFORMATION. The Bank shall use
reasonable efforts to assure that information about the Borrowers and their
operations, affairs and financial condition, not generally disclosed to the
public or to trade and other creditors, which is furnished to the Bank pursuant
to the provisions hereof is used only for the purposes of this Agreement and any
other relationship between the Bank and the Borrowers and shall not be divulged
to any Person other than the Bank's Affiliates and the respective officers,
directors, employees and agents of the Bank and its Affiliates, except: (a) to
their attorneys and accountants, (b) in connection with the enforcement of the
rights of the Bank hereunder and under the Revolving Note and the Security
Documents or otherwise in connection with applicable litigation, (c) in
connection with assignments and participations and the solicitation of
prospective assignees and participants referred to in the immediately preceding
Section, and (d) as may otherwise be required or requested by any regulatory
authority having jurisdiction over the Bank or by any
42
applicable law, rule, regulation or judicial process, the opinion of the
Bank's counsel concerning the making of such disclosure to be binding on the
parties hereto. The Bank shall not incur any liability to the Borrowers by
reason of any disclosure permitted by this Section 8.7.
Section 8.8 GOVERNING LAW AND CONSTRUCTION. THE VALIDITY,
CONSTRUCTION AND ENFORCEABILITY OF THIS AGREEMENT AND THE REVOLVING NOTE SHALL
BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF MINNESOTA, WITHOUT GIVING
EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF, BUT GIVING EFFECT TO FEDERAL LAWS
OF THE UNITED STATES APPLICABLE TO NATIONAL BANKS. Whenever possible, each
provision of this Agreement and the other Borrower Loan Documents and any other
statement, instrument or transaction contemplated hereby or thereby or relating
hereto or thereto shall be interpreted in such manner as to be effective and
valid under such applicable law, but, if any provision of this Agreement, the
other Borrower Loan Documents or any other statement, instrument or transaction
contemplated hereby or thereby or relating hereto or thereto shall be held to be
prohibited or invalid under such applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement, the other Borrower Loan Documents or any other statement, instrument
or transaction contemplated hereby or thereby or relating hereto or thereto.
Section 8.9 CONSENT TO JURISDICTION. AT THE OPTION OF THE
BANK, THIS AGREEMENT AND THE OTHER BORROWER LOAN DOCUMENTS MAY BE ENFORCED IN
ANY FEDERAL COURT OR MINNESOTA STATE COURT SITTING IN HENNEPIN COUNTY OR XXXXXX
COUNTY; AND THE BORROWERS CONSENT TO THE JURISDICTION AND VENUE OF ANY SUCH
COURT AND WAIVE ANY ARGUMENT THAT VENUE IN SUCH FORUMS IS NOT CONVENIENT. IN THE
EVENT THAT A BORROWER COMMENCES ANY ACTION IN ANOTHER JURISDICTION OR VENUE
UNDER ANY TORT OR CONTRACT THEORY ARISING DIRECTLY OR INDIRECTLY FROM THE
RELATIONSHIP CREATED BY THIS AGREEMENT, THE BANK AT ITS OPTION SHALL BE ENTITLED
TO HAVE THE CASE TRANSFERRED TO ONE OF THE JURISDICTIONS AND VENUES
ABOVE-DESCRIBED, OR IF SUCH TRANSFER CANNOT BE ACCOMPLISHED UNDER APPLICABLE
LAW, TO HAVE SUCH CASE DISMISSED WITHOUT PREJUDICE.
Section 8.10 WAIVER OF JURY TRIAL. EACH OF THE BORROWERS AND
THE BANK IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER BORROWER
LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
Section 8.11 SURVIVAL OF AGREEMENT. All representations,
warranties, covenants and agreements made by the Borrowers herein or in the
other Borrower Loan Documents and in
43
the certificates or other instruments prepared or delivered in connection
with or pursuant to this Agreement or any other Borrower Loan Document shall
be deemed to have been relied upon by the Bank and shall survive the making
of the Revolving Loans by the Bank and the execution and delivery to the Bank
by the Borrowers of the Revolving Note, regardless of any investigation made
by or on behalf of the Bank, and shall continue in full force and effect as
long as any Obligation is outstanding and unpaid and so long as the Revolving
Commitment has not been terminated; provided, however, that the obligations
of the Borrowers under Section 8.2, 8.5 and 8.12 shall survive payment in
full of the Obligations and the termination of the Revolving Commitment.
Section 8.12 INDEMNIFICATION. Each Borrower hereby agrees to
defend, protect, indemnify and hold harmless the Bank and its Affiliates and the
directors, officers, employees, attorneys and agents of the Bank and its
Affiliates (each of the foregoing being an "Indemnitee" and all of the foregoing
being collectively the "Indemnitees") from and against any and all claims,
actions, damages, liabilities, judgments, costs and expenses (including all
reasonable fees and disbursements of counsel which may be incurred in the
investigation or defense of any matter) imposed upon, incurred by or asserted
against any Indemnitee, whether direct, indirect or consequential and whether
based on any federal, state, local or foreign laws or regulations (including
securities laws, environmental laws, commercial laws and regulations), under
common law or on equitable cause, or on contract or otherwise:
(a) by reason of, relating to or in connection with
the execution, delivery, performance or enforcement of any Borrower
Loan Document, any commitments relating thereto, or any transaction
contemplated by any Borrower Loan Document; or
(b) by reason of, relating to or in connection with
any credit extended or used under the Borrower Loan Documents or any
act done or omitted by any Person, or the exercise of any rights or
remedies thereunder, including the acquisition of any collateral by the
Bank by way of foreclosure of the Lien thereon, deed or xxxx of sale in
lieu of such foreclosure or otherwise;
provided, however, that the Borrowers shall not be liable to any Indemnitee for
any portion of such claims, damages, liabilities and expenses resulting from
such Indemnitee's gross negligence or willful misconduct. In the event this
indemnity is unenforceable as a matter of law as to a particular matter or
consequence referred to herein, it shall be enforceable to the full extent
permitted by law.
This indemnification applies, without limitation, to any act,
omission, event or circumstance existing or occurring on or prior to the latest
of the Revolving Maturity or the date of payment in full of the Obligations,
including specifically Obligations arising under clause (b) of this Section. The
indemnification provisions set forth above shall be in addition to any liability
the Borrowers may otherwise have. Without prejudice to the survival of any other
44
obligation of the Borrowers hereunder the indemnities and obligations of the
Borrowers contained in this Section shall survive the payment in full of the
other Obligations.
Section 8.13 CAPTIONS. The captions or headings herein and any
table of contents hereto are for convenience only and in no way define, limit or
describe the scope or intent of any provision of this Agreement.
Section 8.14 ENTIRE AGREEMENT. This Agreement and the other
Borrower Loan Documents embody the entire agreement and understanding between
the Borrowers and the Bank with respect to the subject matter hereof and
thereof. This Agreement supersedes all prior agreements and understandings
relating to the subject matter hereof. Nothing contained in this Agreement or in
any other Borrower Loan Document, expressed or implied, is intended to confer
upon any Persons other than the parties hereto any rights, remedies, obligations
or liabilities hereunder or thereunder.
Section 8.15 COUNTERPARTS. This Agreement may be executed in
any number of counterparts, all of which taken together shall constitute one and
the same instrument, and any of the parties hereto may execute this Agreement by
signing any such counterpart.
Section 8.16 BORROWER ACKNOWLEDGMENTS. Each Borrower hereby
acknowledges that (a) the Bank has no fiduciary relationship to such Borrower,
the relationship being solely that of debtor and creditor, (b) no joint venture
exists between such Borrower and the Bank, and (c) the Bank undertakes no
responsibility to such Borrower to review or inform such Borrower of any matter
in connection with any phase of the business or operations of such Borrower and
such Borrower shall rely entirely upon its own judgment with respect to its
business, and any review, inspection or supervision of, or information supplied
to, such Borrower by the Bank is for the protection of the Bank and neither such
Borrower nor any third party is entitled to rely thereon.
Section 8.17 BORROWERS' OBLIGATIONS JOINT AND SEVERAL. Each
Borrower shall be jointly and severally liable for the Obligations arising in
connection with Revolving Loans made to it and the Obligations arising in
connection with Revolving Loans made to the other Borrower; PROVIDED, HOWEVER,
that if it is at any time determined that any Borrower is liable as guarantor
(and not as co-obligor or co-borrower) with respect to such Obligations arising
in connection with Revolving Loans made to another Borrower (the "Guaranteed
Obligations"), each Borrower hereby agrees to the terms set forth on Exhibit
8.17 hereto with respect to the Guaranteed Obligations.
Section 8.18. NON-RECOURSE AS TO CERTAIN PERSONS. No present
or future member, manager, officer, advisor, employee, participant or agent of
or in a Borrower or any entity now or hereafter having a direct or indirect
ownership interest in a Borrower (collectively, the "Non-Recourse Parties")
shall have any personal liability, directly or indirectly, under or in
connection with this Agreement or any of the other Borrower Loan Documents, and
the Bank and its
45
successors and assigns and, without limitation, all other persons or
entities, shall look solely to the Borrowers, the Borrowers' assets and the
collateral under the Security Documents for the payment of any claim or for
any performance, and the Bank hereby waives any and all such personal
liability of the Non-Recourse Parties. The limitations of liability provided
in this Section 8.18 are in addition to and not in limitation of, any
limitation on liability applicable to the Non-Recourse Parties provided by
law or by any other contract, agreement or instrument. The foregoing shall
apply to any negligent act or omission of any kind by any such Non-Recourse
Party, PROVIDED, HOWEVER that any Non-Recourse Party shall be liable for its
own individual gross negligence or willful misconduct.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
46
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first above written.
CALIFORNIA COMMUNITY BANCSHARES, INC.
By /s/ Xxxxxx X. Xxxxxx
-----------------------------------------
Xxxxxx X. Xxxxxx
President and Chief Executive Officer
PLACER CAPITAL CO.
By /s/ Xxxxxx X. Xxxxxx
-----------------------------------------
Xxxxxx X. Xxxxxx
President and Chief Executive Officer
Address for Borrowers:
California Community Bancshares, Inc.
Xxx Xxxxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
Attention: J. Xxxxxx Xxxxx
Chief Financial Officer
Telephone: (000) 000-0000
Fax: (000) 000-0000
U.S. BANK NATIONAL ASSOCIATION
By /s/ Xxxx Xxxxxx
-----------------------------------------
Title Assistant Vice President
--------------------------------------
Address:
U.S. Bank Place
000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000-0000
Attention: Xxxx X. Xxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
[SIGNATURE PAGE TO PLACER CAPITAL CO. CREDIT AGREEMENT]
S-1
