XXXXXX LOAN AGREEMENT
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This Loan Agreement is dated as of October 1, 1998 (the "Agreement") by
and between Xxxxxx X. Xxxxxx, in his capacity as Trustee of the Xxxxxx X. Xxxxxx
Separate Property Trust dated as of September 29, 1997 ("Xxxxxx"), and Zions
Bancorporation ("Zions").
Recitals
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X. Xxxxxx, Zions and a partnership that consists of two limited
liability companies as partners for both of which Xxxxxx is the sole manager
have entered into a Shareholder Agreement dated as of October 1, 1998 (the
"Shareholder Agreement") with respect to an investment in Grossmont Bank, Zions'
California bank subsidiary.
X. Xxxxx has agreed to provide non-recourse financing to Xxxxxx in
connection with Xxxxxx'x individual investment.
NOW, THEREFORE, for good and valuable consideration, the receipt,
adequacy and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
Definitions
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Except as otherwise provided herein, the terms defined in the
Shareholder Agreement, including by reference to the Merger Agreement, shall
have their same respective meanings herein.
ARTICLE II
The Loan
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2.1 Making the Loan. At the Closing, subject to the terms and
conditions hereof, Zions shall loan (the "Loan") to Xxxxxx $14,850,000. The Loan
shall be evidenced by a non-recourse note containing the terms and substantially
in the form of Exhibit A hereto (the "Note").
2.2 Interest. Interest on the Loan shall accrue at a rate equal to the
five-year U.S. Treasury note rate prevailing at the close of business on the
date two business days preceding the Closing (which rate shall be determined by
Zions by reference to The Wall Street Journal or other reliable source, which
determination shall be conclusive absent manifest error) plus 200 basis points,
shall compound annually on the anniversary of the Loan and shall be payable at
maturity or upon prepayment in accordance with Section 2.5 hereof.
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2.3 Maturity. The Loan will mature (the "Maturity Date") on March 31,
2003; provided, that if Zions has received a Buy-Back Notice on or before March
31, 2003, then the Maturity Date of a principal amount of the Loan equal to (i)
the amount of cash consideration received by Xxxxxx pursuant to a purchase by
Zions of Buy-Back Securities shall be the date of such purchase and (ii) the net
proceeds (after taking into account any sales commissions or discounts) from the
sale of any Zions Common Stock received by Xxxxxx pursuant to a purchase by
Zions of Buy-Back Securities shall be the date of such sale, together in each
case (i) and (ii) with accrued and unpaid interest on such principal amount to
such Maturity Date. Anything herein to the contrary notwithstanding, in no event
shall the Maturity Date be later than March 31, 2004, regardless of whether
Xxxxxx has sold any or all of the Zions Common Stock received pursuant to a
purchase by Zions of Buy-Back Securities.
2.4 Collateral. As collateral for the Loan and all amounts payable
hereunder and under the Note, Xxxxxx hereby grants to Zions a security interest
in and lien upon (a) 200,000 shares of Zions Common Stock (the "Zions Shares"),
(b) the Shares of the Interim Bank acquired by Xxxxxx, (c) the Bank Common Stock
acquired by Xxxxxx in the
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Second Merger upon cancellation of the Shares of the Interim Bank and (d) the
proceeds of each of the foregoing (collectively, the "Collateral").
2.5 Prepayment. Xxxxxx may prepay the Loan in whole or in part at any
time, without premium or penalty but with accrued interest on the principal
amount being prepaid to the date of prepayment. Until the Loan is paid in full
Zions will continue to hold the Collateral.
2.6 Nonrecourse. Zions agrees to look only to the Collateral for
repayment of the Loan and the Note, and Xxxxxx shall have no personal liability
therefor.
ARTICLE III
Conditions
3.1 The making of the Loan is subject to the conditions that Zions
shall have received the following, each in form and substance satisfactory to
it:
(a) the Note;
(b) a Security Agreement substantially in the form of Exhibit B hereto
(the "Security Agreement");
(c) certificates representing (i) the Zions Shares and (ii) Xxxxxx'x
Shares in the Interim Bank, each duly endorsed in blank or with duly
endorsed blank stock powers;
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(d) a Form FR G-3; and
(e) evidence that all conditions to the Closing pursuant to the
Shareholder Agreement have been, or will with the funding of the Loan, be
satisfied.
ARTICLE IV
Miscellaneous
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4.1 Waiver and Amendment. Any provision of this Agreement may be: (i)
waived in writing by the party benefitted by the provision; or (ii) amended or
modified at any time by an agreement in writing between both parties hereto.
4.2 Counterparts. This Agreement may be executed in counterparts each
of which shall be deemed to constitute an original, but all of which together
shall constitute one and the same instrument.
4.3 Governing Law; Jurisdiction. (A) THIS AGREEMENT SHALL BE GOVERNED
BY, AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF UTAH WITHOUT
GIVING EFFECT TO UTAH CONFLICTS OF LAW PRINCIPLES.
(b) Except as otherwise expressly provided in this Agreement, any suit,
action or proceeding seeking to enforce any provision of, or based on any matter
arising out of or in connection with, this Agreement or the transactions
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contemplated hereby (a "Proceeding") shall only be brought in the United States
District Court for the District of Utah or any other state court sitting in Salt
Lake City, and each of the parties hereto hereby consents to the jurisdiction of
such courts and of the appropriate appellate courts therefrom in any such
Proceeding and irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of the venue of any
such Proceeding in any such court or that any such Proceeding which is brought
in any such court has been brought in an inconvenient forum and irrevocably
agrees that a judgment in any such Proceeding obtained in any such court may be
enforced in the courts of any other jurisdiction. Process in any such Proceeding
may be served on any party anywhere in the world, whether within or without the
jurisdiction of any such court. Without limiting the foregoing, each party
hereto hereby agrees that service of process on such party as provided in
Section 4.6 shall be deemed effective service of process on such party.
4.4 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
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4.5 Expenses. Each party hereto will bear all expenses incurred by it
in connection with this Agreement and the transactions contemplated hereby.
4.6 Notices. All notices, requests, acknowledgments and other
communications hereunder to a party shall be in writing and shall be deemed to
have been duly given when delivered by hand, first-class mail, registered or
certified with return receipt requested, overnight carrier or telecopy (with
receipt confirmed by telephone) to such party at its address set forth below or
such other address as such party may specify by notice to the other party
hereto.
If to Zions:
Zions Bancorporation
Xxx Xxxxx Xxxx, Xxxxx 0000
Xxxx Xxxx Xxxx, Xxxx 00000
Telecopy: (000) 000-0000
Attention: Chief Financial Officer
If to Xxxxxx:
Xxxxxx X. Xxxxxx
Southwest Value Partners
0000 Xxxxxx Xxxxx
Xxxxxx, Xxxxxxx 00000
Telecopy: (000) 000-0000
4.7 Entire Agreement, Etc. This Agreement represents the entire
understanding of the parties hereto with respect to the Loan and the Collateral
therefor and
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supersedes any and all other oral or written agreements heretofore made. All
terms and provisions of the Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors and assigns.
Nothing in this Agreement is intended to confer upon any other Person any rights
or remedies of any nature whatsoever under or by reason of this Agreement.
4.8 Assignment. This Agreement may not be assigned by any party hereto
without the prior written consent of the other party.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
ZIONS BANCORPORATION
By: /s/ Xxxx X.Xxxxxxx
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Name: Xxxx X. Xxxxxxx
Title: Senior Vice
President and Chief
Financial Officer
XXXXXX X. XXXXXX SEPARATE
PROPERTY TRUST DATED AS OF
SEPTEMBER 29, 1997
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx,
as Trustee
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EXHIBIT B
SECURITY AGREEMENT
None.
