CREDIT AGREEMENT
$15,000,000
by and among
XXXXXXX XXXXX TRUST COMPANY
OF CALIFORNIA
as trustee for the
FREMONT GENERAL CORPORATION
EMPLOYEE STOCK OWNERSHIP TRUST,
THE PLAN COMMITTEE (HEREINAFTER DESCRIBED) ON
BEHALF OF THE FREMONT GENERAL CORPORATION
EMPLOYEE STOCK OWNERSHIP PLAN,
FREMONT GENERAL CORPORATION,
and
FIRST INTERSTATE BANK OF CALIFORNIA
August 10, 1995
CREDIT AGREEMENT
CREDIT AGREEMENT, dated August 10, 1995, by and among MERRIILL XXXXX
TRUST COMPANY OF CALIFORNIA, as directed trustee (and in no other capacity)
("MLT") for the FREMONT GENERAL CORPORATION EMPLOYEE STOCK OWNERSHIP TRUST (the
"TRUST"), the COMMITTEE (the "COMMITTEE") appointed by the Board of Directors of
Fremont General Corporation to administer the FREMONT GENERAL CORPORATION
EMPLOYEE STOCK OWNERSHIP PLAN (the "PLAN") on behalf of the Plan, FREMONT
GENERAL CORPORATION, a Nevada corporation ("FREMONT"), and FIRST INTERSTATE BANK
OF CALIFORNIA, a California banking corporation (the "BANK"). The Plan and the
Trust are sometimes collectively referred to herein as the "ESOP."
RECITALS
A. The Bank made an $11,000,000 term loan (the "TERM LOAN") to the ESOP
pursuant to that certain Term Credit Agreement, dated as of July 15, 1994, by
and among Northern Trust Bank of California, N.A. ("NTB") , as trustee for the
Trust, the Committee, on behalf of the Plan, Fremont, and the Bank (the "TERM
CREDIT AGREEMENT"), for the purpose of refinancing indebtedness owing to Fremont
incurred by the ESOP in connection with the purchase of shares of Fremont
General Corporation Common Stock, $1.00 par value ("EMPLOYER STOCK"). The shares
of Employer Stock currently held by the ESOP and any additional shares purchased
by the ESOP will in turn be allocated to the Plan accounts of the Plan
participants as provided in the ESOP governing documents.
B. The obligations of NTB under the Term Credit Agreement and other
documents and instruments executed in connection therewith were assigned to and
assumed by MLT, pursuant to that certain Assignment and Assumption Agreement,
dated as of August 1, 1994.
C. The outstanding principal balance of the Term Loan, as of May 1, 1995 is
$6,620,233.
D. The ESOP has requested that the Bank (i) make available a non-revolving
credit facility in the principal amount of $15,000,000 to enable the ESOP to
acquire additional shares of Employer Stock from time to time, and (ii) convert
the outstanding principal balance of the Term Loan into an advance under such
credit facility.
E. The ESOP has agreed to pledge certain unallocated Employer Stock as
security for the repayment of the obligations owing under or in connection with
this credit facility. F. The Bank is willing to make the requested credit
facility available upon the terms and conditions set forth in this agreement
(herein called the "AGREEMENT").
NOW, THEREFORE, in consideration of the foregoing recitals, which are
incorporated herein, and intending to be legally bound hereby, the parties
hereto agree as follows:
1. THE CREDIT
1.1 ADVANCES, CONVERSION OF TERM LOAN, AND BORROWING PROCEDURES
(a) ADVANCES. Subject to the terms and conditions set forth in this
Agreement, at any time from the Closing Date through February 29, 1996 (the
"DRAW DOWN TERMINATION DATE"), the Bank shall make advances (each an "ADVANCE"
and collectively the "ADVANCES") to the ESOP in such principal amounts as the
Committee on behalf of the ESOP may request that do not exceed in the aggregate
(together with all previously funded Advances, including but not limited to the
Advance representing the conversion of the Term Loan) Fifteen Million Dollars
($15,000,000) (such sum being herein called the "COMMITMENT" of the Bank). Any
Advances repaid by the ESOP may not be reborrowed. The term "CLOSING DATE" means
the date that all of the conditions precedent to the making of the initial
Advance set forth in this Agreement have been satisfied. If the Closing Date
does not occur on or before August 18, 1995, the Bank shall have no further
obligation to fund any Advances or otherwise perform under this Agreement.
(b) CONVERSION OF TERM LOAN. On the Closing Date, the outstanding
principal balance of the Term Loan shall be deemed automatically converted into
an Advance, without any further action required on the part of the ESOP or the
Bank. The Committee on behalf of the Plan acknowledges and agrees that (i) the
outstanding principal balance of the Term Loan, as of May 1, 1995, is
$6,620,233, and (ii) the ESOP has no defense, counterclaim, offset,
cross-complaint, claim, or demand of any kind or nature whatsoever which can be
asserted to reduce or eliminate all or any part of its liability to repay the
Term Loan. All interest that has accrued on the Term Loan and which remains
unpaid on the Closing Date shall be paid on the first Interest Payment Date that
occurs after the Closing Date (as provided for in the promissory note evidencing
the Term Loan).
(c) BORROWING PROCEDURES. The following procedure shall apply to all
Advances (other than the conversion of the Term Loan into an Advance): Not later
than 12:00 noon, Los Angeles time three (3) Business Days prior to the Business
Day on which a proposed Advance is to be made pursuant to this Section 1. 1, the
Bank must have received, at the Bank's office (at the address set forth on the
signature page of this Agreement), a completed Request for Advance (or a
non-written request confirmed within 24 hours in writing) specifying the date
(which must be a Business Day) of the requested Advance and the amount of the
requested Advance. The term "BUSINESS DAY" shall mean a day other than a
Saturday, Sunday or any day on which commercial banks in California are
authorized or required by law to close. The term "REQUEST FOR ADVANCE" means a
written request for an Advance signed by a person authorized to make the request
on behalf of the ESOP, in form and substance acceptable to the Bank.
(d) FUNDING PROCEDURES. Upon fulfillment of each of the
applicable conditions set forth in Section 3, each Advance shall be remitted to
the ESOP in accordance with instructions provided by the Committee to the Bank
in writing (or in non-written instructions promptly confirmed within 24 hours in
writing); provided, however, that the Bank (i) shall have no obligation to
release the proceeds of an Advance unless the Committee, concurrently with the
release of such proceeds, delivers (or arranges for the delivery of) to the Bank
(or the Bank's agent) the Employer Stock which is purchased with such proceeds,
and (ii) may fund each Advance through its agent (including, but limited to, the
party which will maintain possession of the Employer Stock on behalf of the
Bank).
(e) MINIMUM AND MAXIMUM AMOUNTS OF ADVANCES. The principal amount
of each Advance:
(1) shall be an integral multiple of One Hundred Thousand
Dollars ($100,000), or the full amount of the remaining unfunded Commitment if
such amount is less than $100,000;
(2) shall not exceed the lesser of the purchase price or the
fair market value of the Employer Stock purchased with such Advance (provide
that this clause (2) shall not apply to the Advance which occurs as a result of
the conversion of the Term Loan under paragraph (b) above); and
(3) shall permanently reduce the amount of the Commitment by
a like amount, and at no time shall the principal amount of aggregate funded
Advances (including but not limited to the Advance representing the conversion
of the Term Loan) exceed $15,000,000.
(f) ADVANCES TO BE EVIDENCED BY NOTE. Each Advance funded by the
Bank (or deemed funded, in the case of the Advance representing the Term Loan)
hereunder shall be evidenced by the Note.
(g) PURPOSE OF ADVANCES. Each Advance shall be requested by the
ESOP and used for the purposes described in Recital D. All Employer Stock
purchased by or on behalf of the ESOP with the proceeds of any Advance shall be
delivered to (concurrently with the release of the proceeds of the Advance by
the Bank) and held by the Bank pursuant to the Amended and Restated Pledge
Agreement.
(h) NO ADVANCES AFTER DRAW DOWN TERMINATION DATE. The Bank shall
not be obligated to make any Advances after the earlier of (i) the Draw Down
Termination Date, or (ii) the date on which the Commitment has reached zero (0)
due to prior fundings (or deemed fundings, in the case of the Advance
representing the Term Loan) of Advances aggregating the sum of $15,000,000.
1.2. NOTE. The Advances shall be evidenced by a single promissory note
(the "(NOTE") in a principal amount equal to the Commitment. The Note shall be
in the form attached hereto as Exhibit 1. The principal balance of the Note
shall be payable in seven (7) equal annual installments. Each principal
installment shall be due on April 1 of each year, beginning April 1, 1996.
Interest shall be payable in arrears as provided in the Note. Each interest
payment date (as provided in the Note for "Prime Rate" Loan Amounts) is herein
referred to individually as a "INTEREST PAYMENT DATE" and collectively as the
"INTEREST PAYMENT DATES." All principal, interest and other costs and charges
remaining outstanding and unpaid on April 1, 2002 shall be due and payable on
that date, or on such earlier date as is provided in ss.5 hereof. Any amounts
repaid may not be reborrowed.
1.3. PREPAYMENTS. The ESOP shall have the right to prepay the Note in
whole at any time or in part from time to time, together with accrued interest
to the date of such prepayment on the principal amount being prepaid, subject to
the terms and conditions of the Note (including, but not limited to, the payment
of additional fees and costs incurred by the Bank in connection with any
prepayment of a portion of the principal balance of the Advances that is
accruing interest at the "LIBO Rate" or the "CD Rate," as provided in the Note).
1.4. PLACE OF PAYMENTS. All payments of principal, interest, fees, or
other amounts payable hereunder or the other Loan Documents (collectively, the
"OBLIGATIONS"), shall be remitted to the Bank at its office located at 000 Xxxx
Xxxxx Xxxxxxxxx, Xxxxx 000, Xxxx Xxxxx, Xxxxxxxxxx 00000, or such other place
selected by the Bank (as provided in a notice to the Committee), in immediately
available funds. Except as provided in the Note, whenever any payment is stated
as due on a day which is not a Business Day, the maturity of such payment shall
be extended to the next succeeding day and interest shall continue to accrue
during such extension. Upon payment in full of the principal of and interest on
the Note and all other amounts payable hereunder and under each other Loan
Document (hereinafter defined), the Bank shall surrender to the Committee the
Note held by it duly marked canceled.
1.5. INTEREST.
(a) ACCRUAL DATE; RATE . The ESOP will pay interest on the unpaid
principal balance of the Advances, to accrue from the date that each Advance is
disbursed until the principal amount thereof is paid in full, at the rates per
annum specified in the Note.
(b) DEFAULT RATE. In the event any Obligations are not paid when
due, such amounts shall accrue interest at the default rate (the "DEFAULT RATE")
described below, payable on demand by the Bank, from and after the date of
occurrence and until such time as such past-due amounts (together with all
accrued and unpaid interest in respect thereof, including interest accruing
under this Section 1.5(b)), have been repaid in full. Such Default Rate shall be
a rate per annum equal to three percent (3.0%) in excess of the "Prime Rate" (as
defined in the Note). If and when all such past-due amounts have been repaid in
full, the charging of the Default Rate shall be suspended.
1.6. INCREASED COST. If the Bank shall have determined that compliance
with any applicable law, governmental rule, regulation or order regarding
capital adequacy of banks or bank holding companies, or any interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by it with any request or directive regarding capital adequacy (whether or not
having the force of law and whether or not failure to comply therewith would be
unlawful) of any such authority, central bank or comparable agency enacted or
effective after the date hereof, has or would have the effect of reducing the
rate of return on the Bank's capital as a consequence of the Bank's obligations
hereunder to a level below that which the Bank could have achieved but for such
compliance (taking into consideration the Bank's policies with respect to
capital adequacy immediately before such compliance and assuming that the Bank's
capital was fully utilized prior to such compliance) by an amount deemed by the
Bank to be material, then, upon demand, the ESOP shall be obligated to pay to
the Bank on the next Interest Payment Date such additional amounts as shall be
sufficient to compensate the Bank for such reduced return. A certificate of an
officer of the Bank setting forth the amount to be paid to it and the basis for
computation thereof hereunder shall constitute prima facie evidence of such
amount. In determining such amount, the Bank may use any reasonable averaging
and attribution methods; provided, however, that the Bank shall allocate all
such costs equitably among its customers similarly affected. The ESOP shall not
be responsible under this Section for changes in the rate of tax on general
income and similar taxes on the overall net income of the Bank. If the Bank
becomes entitled to claim any additional amounts pursuant to this Section, it
shall promptly notify the Committee thereof.
2. REPRESENTATIONS AND WARRANTEES
2.1. REPRESENTATIONS AND WARRANTIES OF THE COMMITTEE. The Committee, on behalf
of the Plan, represents and warrants to the Bank that:
(a) ORGANIZATION, STANDING. The Plan is an "Employee Benefit
Plan" within the meaning of Section 3(3) of the Employee Retirement Income
Security Act of 1974 ("ERISA") and an "Employee Stock Ownership Plan" or "ESOP"
within the meaning of Section 4975(e)(7) of the Internal Revenue Code of 1986,
as amended (the "CODE"). The Plan and the Trust are organized, validly existing,
and in good standing under ERISA and, to the extent applicable, under the laws
of California, and they have the power and authority necessary to own their
assets, carry on their business and enter into and perform their obligations
hereunder, under the Note, and under all related loan documents (this Agreement,
the Note, the Amended and Restated Pledge Agreement (defined in Section 4.15),
the Amended and Restated Contribution and Put Agreement (defined in Section
6.2), the Amended and Restated Custodial Agreement (referred to in Section 3.2)
and all related loan documents, agreements, and instruments, as the same may be
amended, modified or supplemented from time to time, being referred to herein,
individually, as a "LOAN DOCUMENT" and collectively, as the "LOAN DOCUMENTS").
(b) AUTHORITY, ETC. The making and performance of the Loan
Documents are within the ESOP's power and authority and have been duly
authorized by all necessary corporate action of the Committee. The making and
performance of the Loan Documents do not and under present law will not require
any consent or approval of any Person, do not and under present law will not
violate any law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award, do not violate any provision of the Plan or trust
documents, do not and will not result in any breach of any agreement, lease or
instrument to which the ESOP is a party, by which it is bound or to which any of
its assets is or may be subject, and do not and will not give rise to any lien
or charge upon any of its assets except in favor of the Bank. Exhibit 2 attached
hereto is a copy of the resolutions of the Committee, authorizing MLT (as
trustee on behalf of the Trust) to enter into this Agreement and the other Loan
Documents, and the transactions contemplated pursuant hereto and thereto, and
identifying those representatives of the Committee who are duly authorized to
execute this Agreement and the other Loan Documents on behalf of the ESOP and to
take other actions pursuant hereto and thereto.
The term "PERSON" shall mean any individual, corporation, partnership,
trust, unincorporated association, joint stock company or other legal entity or
organization and any government or agency or political subdivision thereof.
(C) VALIDITY OF DOCUMENTS. Each Loan Document, when executed and
delivered by representatives of the ESOP, will be the legal, valid and binding
obligation of the ESOP enforceable against it in accordance with its terms,
except insofar as the enforceability thereof may be limited by applicable
bankruptcy, insolvency, moratorium, reorganization, receivership, or similar
laws affecting creditors' rights generally, or by principles of equity. No
authorization, consent, approval, license, exemption of or filing or
registration with any court, governmental agency or other tribunal is or under
present law will be necessary to the validity or performance of any Loan
Document.
(d) TITLE TO PROPERTIES. The Plan (through the Trust) owns, and has
good and marketable tide to, all of the assets reflected in its balance sheet as
at December 31, 1993 . or acquired since that date (except property and assets
sold or otherwise disposed of in the ordinary course of business since that
date), subject to no mortgages, security interests, leases, liens or other
encumbrances except those permitted by Section 4.3 hereof.
(e) FINANCIAL STATEMENTS. The ESOP's financial statements, as of
December 31, 1994 for the one-year period then ending, submitted to the Bank in
draft form, are complete and correct in all material respects and fairly present
the financial condition as of the date and for the period referred to, all in
accordance with generally accepted accounting principles consistently
maintained, subject to fiscal year-end audit adjustments. There are no
liabilities, fixed or contingent, which are material but not reflected in such
financial statements other than liabilities arising in the ordinary operation of
the ESOP since December 31, 1994. There has been no material adverse change in
the financial condition or operation of the ESOP since the date of the interim
financial statements except as may have heretofore been disclosed to the Bank in
writing with a copy being attached hereto as Exhibit 3.
The term "GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" shall mean
accounting principles which are (a) consistent with the principles promulgated
or adopted by the Financial Accounting Standards Board and its predecessors as
generally accepted accounting principles, and (b) such that a certified public
accountant would, insofar as the use of accounting principles is pertinent, be
in a position to deliver an unqualified opinion or a qualified opinion in the
manner described in Labor Regulation Section 2520.1038 as to financial
statements in which such principles have been properly and consistently applied.
(f) LITIGATION. Except as set forth in Exhibit 4 hereto, there are
no actions, suits or proceedings pending or threatened against or affecting the
ESOP or any of its assets before any court, government agency, or other
tribunal, which could have a material adverse effect on its operations,
business, assets, liabilities or upon its ability to perform under the Loan
Documents.
(g) NO MATERIALLY ADVERSE CONTRACTS, ETC. The ESOP is not subject to
any legal restriction, or any judgment, decree, order, rule or regulation which
in the judgment of the Committee has or is expected in the future to have a
materially adverse effect on the ESOP's operations, business, assets,
liabilities or upon its ability to perform under the Loan Documents. The ESOP is
not a party to any contract or agreement which in the judgment of the Committee
has or is expected to have any materially adverse effect on the ESOP's business,
except as otherwise reflected in adequate reserves.
(h) COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC. The ESOP is not
violating any provision of any agreement or instrument by which it or any of its
assets is bound or any decree, order, judgment, or, to the knowledge of the
Committee, any statute, license, rule or regulation, in a manner which could
result in the imposition of substantial penalties or materially and adversely
affect the ESOP's operations, business, assets, liabilities or the ESOP's
ability to perform under the Loan Documents.
(i) TAX RETURNS. The ESOP and Fremont (with reference to the ESOP)
have (a) made or filed all federal and state income and all other tax returns,
reports and declarations required by any jurisdiction to which the ESOP is
subject, (b) paid all taxes and other governmental assessments and charges where
the penalty for or the result of any failure to do so would have a material
adverse effect on the ESOP's financial condition as shown or determined to be
due on such returns, reports and declarations, except those being contested in
good faith, and (c) set aside on the ESOP's books provisions reasonably adequate
for the payment of all taxes for periods subsequent to the periods to which such
returns, reports or declarations apply. There are no unpaid taxes in any
material amount claimed to be due by the taxing authority of any jurisdiction,
and the Committee does not know of any basis for any such claim.
(j) ERISA. The ESOP is in compliance with ERISA and the Code, where
applicable, in all material respects. Fremont and/or any ERISA Affiliate has, as
of the date hereof, made all contributions or payments to or under the ESOP
required by law or the terms of the Plan or any other contract or agreement.
For purposes of ERISA matters under this Agreement, "ERISA AFFILIATE"
means any entity that is a member of any group of organizations within the
meaning of Code Sections 414(b), (c), (m) or (o) of which Fremont is a member.
(k) EMPLOYER STOCK. The purchase of the Employer Stock and the
extension of credit by the Bank are for the exclusive benefit of participants of
the ESOP and their beneficiaries.
(0) DISCLOSURE GENERALLY. The representations and statements made by
the Committee on behalf of the ESOP in connection with this credit facility and
the Advances, including but not limited to representations and statements in
each of the Loan Documents, do not and will not contain any untrue statement of
a material fact or omit to state a material fact or any fact necessary to make
the representations made not materially misleading. No written information,
exhibit, report, brochure or financial statement furnished by the Committee to
the Bank in connection with this credit facility, the Advances, or any Loan
Document contains or will contain any material misstatement of fact or omit to
state a material fact or any fact necessary to make the statements contained
therein not misleading.
(m) NOT IN DEFAULT. No Event of Default or other event which, with
the giving of notice or the passage of time or both, would constitute an Event
of Default under any Loan Document has occurred and is continuing.
2.2. REPRESENTATIONS, WARRANTIES AND ROLE OF MLT. MLT represents and
warrants to the Bank that: (i) it is validly existing and in good standing under
the laws of its state of formation, (ii) it is duly qualified to do business and
is in good standing in California, and (iii) under state law it has all
requisite power and authority to execute and deliver the Loan Documents on
behalf of the Trust (as directed by the Committee), and to perform all of its
obligations under the Loan Documents.
Notwithstanding anything to the contrary herein, the Bank, Fremont, and the
Committee acknowledge and agree that (i) MLT is a "directed trustee" with
respect to the ESOP, (ii) MLT is not making any representations or warranties
with respect to the Advances or any matters related to the Advances (except as
expressly stated in this Section 2.2) and MLT shall not be liable for any
misrepresentations or omissions by the ESOP, the Committee, or Fremont made in
connection with the Advances, (iii) MLT has no liability for the Advances or any
other amounts owing under any of the Loan Documents, and (iv) MLT has no
obligation to perform any of the covenants set forth in the Loan Documents
except as directed by the Committee.
3. CONDITIONS TO LENDING
3.1. CONDITIONS TO CLOSING. The obligation of the Bank to make the first
Advance hereunder (including the conversion of the Term Loan into an Advance) is
subject to satisfaction of the following conditions precedent (which are for the
Bank's benefit only, and all of which shall be satisfactory, in form and
substance, to Bank, in Bank's sole discretion):
(a) COMPLIANCE; REPRESENTATION AND WARRANTIES. The ESOP shall
have complied and be in compliance in all material respects with all covenants,
agreements and conditions in each Loan Document, including but not limited to
this Agreement; Fremont shall have complied and be in compliance in all material
respects with all covenants, agreements and conditions in the Amended and
Restated Contribution and Put Agreement and every other Loan Document to which
it is a party; each representation and warranty contained in each Loan Document
shall be true and correct in all material respects; after giving effect to each
Advance, no Event of Default or event, which with the giving of notice or the
lapse of time or both, would constitute an Event of Default shall exist; all
regulatory and other governmental approvals required or advisable in connection
with the execution, delivery and performance of the Loan Documents by the ESOP
and Fremont shall have been obtained; and the Bank shall have received
certificates signed at closing by the Committee on behalf of the ESOP and
Fremont with respect to the foregoing.
(b)RECEIPT OF DOCUMENTS BY THE BANK. The Bank shall have received the following:
(1) EVIDENCE OF AUTHORIZATION. Certified copies of all
corporate or other actions taken by Fremont and the Committee (i) to authorize
the Committee's or the ESOP's execution, delivery and performance of the Loan
Documents and to authorize the Advances hereunder, together with such other
related papers as the Bank shall reasonably require, and (ii) directing MLT as
trustee on behalf of the Trust to execute and deliver the Loan Documents to the
Bank.
(2) EVIDENCE OF FREMONT'S AUTHORIZATION. Certified copies of
all corporate or other action taken by Fremont to authorize Fremont's execution,
delivery and performance of the Amended and Restated Contribution and Put
Agreement and any other Loan Document to which it is a party, together with such
other related papers as the Bank shall reasonably require.
(3) LEGAL OPINIONS. Favorable written opinions of counsel
for the Plan, the Committee, and Fremont which shall be addressed to the Bank
and dated the date hereof, from counsel satisfactory to the Bank.
(4) INCUMBENCY CERTIFICATE-MLT. An incumbency certificate
signed by the secretary or assistant secretary of MLT, together with the true
signature of such officer or officers, upon which the Bank shall be entitled to
rely conclusively until it shall have received a further certificate of the
secretary or assistant secretary amending the prior certificate and submitting
the signature of the officer or officers named in the new certificate.
(5) INCUMBENCY CERTIFICATE-FREMONT. An incumbency
certificate signed by the secretary or assistant secretary of Fremont, together
with the true signature of such officer or officers, upon which the Bank shall
be entitled to rely conclusively until it shall have received a further
certificate of the secretary or assistant secretary amending the prior
certificate and submitting the signature of the officer or officers named in the
new certificate.
(6) CERTIFICATE COMMITTEE. An incumbency certificate signed
by the secretary or assistant secretary of Fremont, together with the true
signatures of the representatives of the Committee, upon which the Bank shall be
entitled to rely conclusively until it shall have received a further certificate
of the secretary or assistant secretary amending the prior certificate and
submitting the signature(s) of the representative(s) named in the new
certificate.
(7) ARTICLES OF INCORPORATION. Copies of Fremont's articles
of incorporation and bylaws, and all supplements and modifications to any of
them, all certified to be true and complete by an officer of Fremont (acceptable
to the Bank).
(8) GOOD STANDING CERTIFICATE. A good standing certificate
for Fremont from the State of California, dated within 10 days of the funding
(or deemed funding) of the initial Advance.
(9) CREDIT AGREEMENT. This Agreement, which has been duly
executed and delivered by MLT for the Trust (at the written direction of the
Committee), the Committee on behalf of the Plan, and Fremont.
(10) NOTE. The Note in the amount of the Commitment which
has been duly executed and delivered by MLT for the Trust (at the written
direction of the Committee), the Committee on behalf of the Plan, and Fremont,
in form and substance as set forth on Exhibit I attached hereto.
(11) AMENDED AND RESTATED PLEDGE AGREEMENT EMPLOYER STOCK.
The Amended and Restated Pledge Agreement duly executed and delivered by MLT for
the Trust (at the written direction of the Committee), the Committee on behalf
of the Plan, and Fremont, in form and substance as set forth on Exhibit 5
attached hereto, and the Employer Stock (described in the Amended and Restated
Pledge Agreement) shall be placed on the Custodial Account (as required by the
Amended and Restated Pledge Agreement).
(12) AMENDED AND RESTATED CONTRIBUTION AND PUT AGREEMENT.
The Amended and Restated Contribution and Put Agreement which has been duly
executed and delivered by Fremont, in form and substance as set forth on Exhibit
6 attached hereto.
(13) AMENDED AND RESTATED CUSTODIAL AGREEMENT. The Amended
and Restated Custodial Agreement which has been duly executed and delivered by
MLT for the Trust (at the written direction of the Committee), the Committee on
behalf of the Plan, and Fremont, in form and substance as set forth on Exhibit 7
attached hereto.
(14) UCC-1 FINANCING STATEMENT. A UCC-1 Financing Statement
relating the collateral pledged to the Bank pursuant to the Amended and Restated
Pledge Agreement which has been duly executed by and delivered by MLT for the
Trust (at the written direction of the Committee) and the Committee on behalf of
the Plan, in form and substance acceptable to the Bank.
(15) OTHER DOCUMENTS. Such other certificates and documents
required to be delivered pursuant hereto.
(16) CLOSING FEE. A closing fee in the amount of $15,000.
Such fee shall be fully eamed and non-refundable regardless of whether the full
amount of the Commitinent is funded.
(17) COSTS AND EXPENSES. Reimbursement from Fremont for all
costs and expenses incurred by the Bank prior to the funding (or deemed funding,
in the case of the conversion of the Term Loan into an Advance) of the initial
Advance, as provided in Section 7.6 of this Agreement.
3.2. CONDITIONS FOR ANY ADVANCE. The obligation of the Bank to make any
Advance is subject to the following additional conditions precedent:
(a) The representations and warranties contained in herein
shall be correct on and as of the date of the Advance as though made on and as
of that date, no Event of Default shall have occurred (other than Events of
Default that have been waived by the Bank in its sole and absolute discretion)
and remain uncured;
(b) The Advance shall be in conformity with all borrowing
procedures set forth in Section 1. 1 and elsewhere in this Agreement; and
(c) The Committee shall, at its sole expense, deliver or
cause to be delivered to the Bank, in form and substance reasonably satisfactory
to the Bank, a Request for Advance, as required by Section 1.1, certifying as to
the matters set forth in Paragraphs "a" and "b" of this Section 3.2, and any
non-written request for the Advance shall be deemed to be a certification by the
Committee on behalf of the ESOP as to the matters set forth in Paragraphs "a"
and "b" of this Section 3.2.
3.3. RELEASE OF TERM L0AN DOCUMENTS. Upon satisfaction of all conditions
precedent set forth in Section 3.1 above, all of the documents, agreements and
instruments evidencing or relating to the Term Loan shall be deemed superseded
in their entirety by this Agreement and the other Loan Documents and of no
further force or effect, except as follows: (i) all collateral held for the Term
Loan shall be collateral for the Obligations, and (ii) the UCC-1 Financing
Statement filed with the California Secretary State on July 21, 1994, as
Instrument No. 94148037, shall remain in full force and effect and shall pertain
the continuing security interest described herein and the other Loan Documents.
4. COVENANT'S OF THE COMMITTEE
The Committee, on behalf of the Plan, agrees that, so long as any amount
payable under any Loan Document (including but not limited to the Note) remains
unpaid it will, or will cause the Plan or the Trust to, as applicable, do the
following:
4.1. REPORTING REQUIREMENTS.
(a) ANNUAL FINANCIAL STATEMENTS. As soon as available but in any event within
120 days after the end of each plan year, the Committee will deliver to the Bank
financial statements of the ESOP for such plan year. "FINANCIAL STATEMENTS"
shall include a Statement of Net Assets Available for Plan Benefits and the
Related Statements of Changes in Net Assets Available for Plan Benefits for the
fiscal year and the immediately preceding fiscal year in comparative form.
Financial Statements shall be in reasonable detail with appropriate notes and be
prepared in accordance with generally accepted accounting principles applied on
a consistent basis. Annual Financial Statements shall be certified (without any
qualification except a qualification as described in Labor Regulation Section
2520.103-8, exception or limiting statement or disclosure deemed material by the
Bank) by independent public accountants of nationally recognized standing who
shall be acceptable to the Bank, which acceptance shall not be unreasonably
withheld.
(b) ANNUAL DEFAULT CERTIFICATES. Each annual financial statement
will be accompanied by a certificate, in the form of Exhibit 8 attached hereto,
signed by an authorized representative of the Committee (acceptable to the Bank)
stating whether in his opinion an Event of Default or event which with notice or
lapse of time or both would become an Event of Default exists on the date of
said certificate together with a statement of the details and action taken or to
be taken if any Event of Default or event exists. Each annual financial
statement also will be accompanied by a statement of the firm of independent
public accountants which reported on statements of the ESOP to the effect that
in the course of, and based solely upon, their regular audit of the financial
statements of the ESOP nothing came to their attention which caused them to
believe that on the date of such statements any Event of Default or event
existed or, in the alternative, that an Event of Default or event existed and
setting forth the details thereof.
(C) INTERIM DEFAULT CERTIFICATE. An authorized representative of
the Committee (acceptable to the Bank) will deliver to the Bank forthwith upon
occurrence of any Event of Default or event which with notice or lapse of time
or both would become an Event of Default a certificate stating the details and
action taken or to be taken with respect thereto.
(d) OTHER STATEMETNS AND REPORTS. Promptly following request by
the Bank, the ESOP also will furnish such additional information, reports or
statements as the Bank from time to time may reasonably request.
4.2. FUNDED DEBT. The ESOP will not incur, create, assume, guarantee,
extend the maturity of or suffer to exist any Funded Debt. The term "FUNDED
DEBT" shall mean all indebtedness incurred through the borrowing of money or the
obtaining of credit (but excluding trade credit, open accounts, daylight
overdrafts and similar liabilities incurred in the ordinary course of business),
as the same may properly appear on a balance sheet of the ESOP prepared in
accordance with generally accepted accounting principles.
4.3. LIENS. The ESOP will not create, assume, incur or suffer to
exist any mortgage, pledge, encumbrance, security interest, lien or charge of
any kind upon any of the ESOP's properties whether now owned or hereafter
acquired, or upon any income or profits therefrom, or acquire any property
pursuant to any conditional sale, lease purchase or other title retention
agreement, provided that the mortgages, liens, and other encumbrances presently
existing (as of the date of this Agreement) which are listed on Exhibit 9 hereto
shall be permitted.
4.4. SALE OF ASSETS; MAINTENANCE OF PROPERTIES. The ESOP will not sell,
lease, transfer or otherwise dispose of assets during any single fiscal year
(other than in the ordinary course of the ESOP's business). The ESOP wfll
maintain, preserve, and keep all its properties and assets necessary or useful
in its operations in good working order and condition.
4.5. DISSOLUTION; CONSOLIDATION: MERGER: MODIFY PLAN. The ESOP
will not (a) dissolve, (b) enter into any merger or consolidation with or
acquire all or substantially all of the assets of any other Person, or (c) amend
or modify its plan document or trust agreement in any manner that would
adversely affect its obligations under this Agreement.
4.6. LOANS. The ESOP will not make any advance, loan or extension
of credit to or become a guarantor or surety for any Person.
4.7. ESOP EXISTENCE. The ESOP will maintain itself in good
standing as a trust under the jurisdiction of its adoption, as an Employee
Benefit Plan under Section 3(3) of ERISA and qualify and remain qualified as an
ESOP within the meaning of Section 4975(e)(7) of the Code.
4.8. INSURANCE. The ESOP or Fremont will maintain a fiduciary bond
as described in Section 412 of ERISA.
4.9. COMPLIANCE WITH LAWS. The ESOP will comply in all material
respects with all applicable laws, rules, regulations and orders of any
governmental authority to which it may be subject, including but not limited to
ERISA and the Code.
4.10. NOTICE OF MATERIAL CLAIMS AND LITIGATION. The Committee will
notify the Bank within five (5) Business Days after becoming aware of the
commencement of any claims (other than claims under a policy of insurance in
amounts which, together with any interest accrued thereon, do not exceed the
face value of such policy), actions, suits, proceedings or investigations of any
kind pending or threatened against it in an amount in excess of $500,000, before
any court, tribunal or administrative agency or board or which, if adversely
determined, might, either in any case or in the aggregate, materially adversely
affect the ESOP's assets or materially impair the ESOP's right to carry on its
activities substantially as now conducted, or which question the validity of
this Agreement or the Note or any action taken or to be taken pursuant hereto or
thereto.
4.11. BOOKS AND RECORDS. The ESOP will keep adequate records and
books of account in which complete and correct entries will be made in
accordance with generally accepted accounting principles, reflecting all its
financial transactions, and such records and books shall include such
information as is reasonable and customary for an ESOP within the meaning of
Section 4975(e)(7) of the Code. Solely to provide the Bank with the requisite
information to assure compliance with this Agreement, it will permit the Bank or
the representative of the Bank during business hours after prior notice to
examine and make copies of and abstracts from the relevant records and books of
account of the ESOP, visit the offices of Fremont, and discuss the affairs,
finances, assets and accounts of the ESOP with the ESOP's independent
accountants and the officers holding the positions identified on the incumbency
certificate delivered under Section 3.2.
4.12. EMPLOYEE BENEFIT PLANS MATTERS. The ESOP will comply in all
material respects with the provisions of ERISA and the Code to the extent
applicable.
4.13. TAXES AND CLAIMS. The ESOP will pay and discharge promptly
all taxes, assessments, governmental charges, levies, and claims imposed upon it
or upon its income or profits or upon any properties belonging to it, prior to
the date on which penalties would be imposed, provided that the ESOP shall not
be required to pay any such tax, assessment, charge, levy or claim if the
amount, applicability or validity thereof shall currently be contested in good
faith and by proper proceedings and if the ESOP shall have set aside on its
books and shall maintain adequate reserves for the payment of the same in
conformity with generally accepted accounting principles.
4.14. CHANGES IN TRUSTEE. The Committee will not change the
trustee for the ESOP,without notifying the Bank (within 30 days of any such
change).
4.15. USE OF PROCEEDS. The ESOP shall use the proceeds of the
Advances (other than the Advance representing the conversion of the Term Loan)
solely for the purpose of acquiring additional shares of Employer Stock. The
Obligations hereunder will be secured by a pledge (on a first priority lien
basis) of Employer Stock pursuant to a pledge agreement in form and substance as
set forth on Exhibit 5 hereto (the "AMENDED AND RESTATED PLEDGE AGREEMENT". The
ESOP will ensure that the use of proceeds of each Advance complies with the
Code. The ESOP will not use any of the proceeds of any Advances to pay for
administrative or operating costs or expenses of the ESOP.
4.16. PERFORMANCE OF LOAN DOCUMENTS; FURTHER ASSURANCES. The ESOP
will duly and punctually perform each and every obligation under each Loan
Document and execute and deliver all such other and further instruments, and do
and perform all such further acts and things as the Bank may reasonably request
to assure to the Bank the rights and benefits afforded by the Loan Documents or
which are intended so to be afforded.
5. DEFAULT; REMEDIES
5.1. EVENTS OF DEFAULT; REMEDIES. The ESOP shall be in default
under this Agreement and the other Loan Documents if any one or more of the
following events ("EVENT OF DEFAULT") occurs and continues past any grace period
applicable thereto:
(a) PRINCIPAL OR INTEREST. The ESOP fails to pay (i) any
installment of principal of the Note when it is due and payable, (ii) any
interest payable on the Note within three business days following the scheduled
payment date therefor, or (iii) any other amounts payable hereunder within 30
days following the respective due dates thereof (whether at maturity, by notice
of intention to prepay, or otherwise).
(b) NO NOTICE COVENANTS OR AGREEMENTS. The ESOP fails to observe
or perform any covenant or agreement contained in Sections 4. 1 (a), 4. 1 (d),
4.5, 4.7, 4.9, 4.12, or 4.15 of this Agreement without regard to whether or not
any notice of such failure has been given by the Bank.
(c) NOTICE COVENANTS. The ESOP falls to observe or perform any
covenant or agreement contained in any Loan Document other than those
contemplated in clause (b) above for 30 days after written notice thereof has
been given by the Bank specifying the default and requiring that it be remedied.
(d) REPRESENTATIONS WARRANTIES, ETC. Any representation or
warranty made by the ESOP in any Loan Document or any statement or
representation made in any certificate, report or opinion delivered in
connection with any Loan Document shall prove to have been incorrect in any
material respect when made.
(e) OTHER DEFAULTS. Any obligation of the ESOP to any Person
becomes or is declared to be due and payable prior to its stated maturity or any
event of default shall have occurred the effect of which permits payment of any
such obligation to be demanded prior to its stated maturity and which would have
a material adverse effect on its financial condition, business or operations.
(f) JUDGMENTS. Any judgments against the ESOP or any judicial
liens or attachments against its assets or property for amounts in excess of
$500,000 in the aggregate remain unpaid, unstayed on appeal, undischarged,
unbonded and undismissed for a period of 30 days.
(g) ERISA. If (1) the ESOP shall cease to have "qualified" status
under the Code, (2) any excise tax or tax lien shall be incurred in connection
with or by the ESOP resulting in material liability, (3) any claim in excess of
$500,000 shall be incurred with respect to or by the ESOP other than in the
ordinary operation of the ESOP, (4) any "PROHIBITED TRANSACTION" as defined by
the Code or ERISA with respect to the ESOP shall have occurred resulting in
material liability, (5) any material liability shall be incurred in connection
with a failure to make timely reports and filings with respect to or by the
ESOP, or (6) any other thing shall have occurred with respect to the ESOP, the
result of which (in any one of the foregoing clauses (1) through (5), any
combination of said clauses, or otherwise) (whether the liability is direct or
indirect, current or deferred, fixed or contingent) is that the ESOP, in the
reasonable judgment of the Bank, has or is likely to incur liabilities of
$500,000 or more.
(h) MATERIAL ADVERSE CHANGE. A material adverse change in the
financial condition of the ESOP shall have occuffed or any other event or
circumstance shall have occurred or otherwise exist which in the reasonable
determination of the Bank, made in good faith, could have a material adverse
effect on the ESOP.
THEN, and in every such event, the Bank may (in accordance with
the requirements of the Code and ERISA), in its sole discretion by written
notice to the Committee, (i) terminate the Commitment (and cease making any
Advances), (ii) declare the Note together with accrued interest thereon and all
other amounts payable under any Loan Document to be, and the Note shall
thereupon become, due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the ESOP, and/or (iii)
enforce any and all of the Bank's rights or remedies provided by this Agreement,
the Note, the Amended and Restated Pledge Agreement, the Amended and Restated
Contribution and Put Agreement, or any other Loan Document, or any other rights
or remedies afforded by law or in equity, all of which can be pursued
independently or in any combination. The rights, powers and remedies provided
for in this Agreement in favor of the Bank shall (i) not be deemed exclusive,
but shall be cumulative, and shall be in addition to all other rights and
remedies in favor of the Bank existing at law or in equity, including without
limitation all of the rights, powers and remedies available to a secured
creditor under the Uniform Commercial Code as in effect in California or any
other appropriate jurisdiction, and (ii) be subject to the requirements of ERISA
and the Code.
6. COLLATERAL; AMENDED AND RESTATED CONTRIBUTION AND PUT AREEMENT;
NON-RECOURSE OBLIGATION
6.1. PLEDGE OF EMPLOYER STOCK. Pursuant to the Amended and Restated
Pledge Agreement, the Note shall be secured by a pledge of Employer Stock as
described in the Amended and Restated Pledge Agreement. As of the Closing Date,
the number of shares of Employer Stock pledged to the Bank is listed on the
exhibit(s) attached to the Amended and Restated Pledge Agreement. The number of
shares of Employer Stock which will stand as security for the Obligations
hereunder may increase or decrease from time to time depending on the Advances
made hereunder and the principal amount of the Advances that are repaid from
time to time. So long as no Event of Default has occurred and is continuing, the
Bank will release Employer Stock from its lien in accordance with the provisions
of the Amended and Restated Pledge Agreement.
6.2. AMENDED AND RESTATED CONTRIBUTION AND PUT AGREEMENT. Pursuant to an
Amended and Restated Contribution and Put Agreement in form and substance as set
forth on Exhibit 6 hereto (the "AMENDED AND RESTATED CONTRIBUTION AND PUT
AGREEMENT"), Fremont shall, among other things, (i) agree to make annual
contributions to the ESOP in an amount sufficient enough to satisfy principal,
interest and other sums due with respect to the Obligations, and (ii) upon the
election of the Bank after the occurrence and during the continuation of an
Event of Default under this Agreement or the Amended and Restated Contribution
and Put Agreement, purchase the Obligations and assume all obligations of the
Bank under this Agreement and the other Loan Documents without recourse or any
representation and warranty.
6.3. NON-RECOURSE OBLIGATION. Except as specifically set forth below, the
ESOP and MLT (hereinafter collectively called "Exculpated Parties") shall have
no liability for the payment of principal, interest, charges or other amounts
due hereunder or under any other Loan Document. Upon an Event of Default herein
or in any other Loan Document, or upon acceleration of the principal balance of
the Advances, the Exculpated Parties' legal responsibility for the repayment of
the Obligations or for any such Event of Default shall be limited to (i)
Employer Stock and other assets, if any, pledged pursuant to the Amended and
Restated Pledge Agreement, (ii) any contributions (other than contributions of
Employer Stock) made by the Employer (as defined in the plan) to permit the
trustee of the ESOP to meet the obligations of the ESOP under this Agreement or
the other Loan Documents, (iii) earnings attributable to such contributions and
the investment thereof, and (iv) such other assets of the ESOP as to which
recourse to repay the Obligations is not prohibited by law. This provision,
limiting the liability of the Exculpated Parties, shall not limit or impair the
rights of the Bank to pursue those other remedies which it may have hereunder or
under any other Loan Document that are not prohibited by law, including but not
limited to, the right to take possession of any collateral, or to foreclose and
to sell such collateral, nor shall it impair the Bank's right to enforce
liability against successors in title or assigns of the Exculpated Parties who
have assumed the indebtedness evidenced hereby (so long as the exercise of any
such remedies does not materially adversely affect the "exempt" status of the
Obligations under the Code). Nothing herein shall be construed as altering,
modifying or discharging the obligations or liabilities of Fremont under the
Loan Documents or any other Person (other than the ESOP and MLT as specifically
set forth above).
7. MISCELLANEOUS
7.1. WAIVERS. No failure or delay on the part of the Bank (or any other
holder of the Note) in exercising any right, power or remedy under any Loan
Document shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right, power or remedy preclude any other further exercise
thereof or the exercise of any other right, power or remedy under any Loan
Document. The remedies provided under the Loan Documents are cumulative and not
exclusive of any remedies provided by law.
7.2. AMENDMENTS. No amendment, modification, termination or waiver of
any Loan Document or any provision thereof nor any consent to any departure by
the ESOP, the Committee, or Fremont therefrom shall be effective unless the same
shall have been approved by the Bank, be in writing and be signed by the Bank
and then any such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given. No notice to or demand on
the ESOP, the Committee, or Fremont shall entitle the ESOP, the Committee, or
Fremont to any other or further notice or demand in similar or other
circumstances.
7.3. ASSIGNMENT. Each Loan Document shall bind and inure to the benefit
of the ESOP, Fremont, and the Bank and their respective successors and assigns,
except that the ESOP and Fremont shall not have the right to assign any of their
rights or obligations under any Loan Document. Except as specifically stated in
the Amended and Restated Contribution and Put Agreement (with respect to
Fremont), no Person not a party to any Loan Document is intended to be benefited
thereby. Notwithstanding any other provision of this Agreement or the other Loan
Documents, there shall be no restrictions on the Bank's right to assign, sell,
transfer, pledge or participate all or any part of the Obligations or the rights
or obligations of the Bank under the Loan Documents.
7.4. NOTICES. All notices, requests, demands, directions, declarations
and other communications between the Bank, Fremont, the Committee, and the ESOP
provided for in any Loan Document shall, except as otherwise expressly provided,
be mailed by registered or certified mail, return receipt requested, or
telegraphed, or delivered in hand or by facsimile transmission to the other
party at its address indicated by its signature on the signature page hereto.
The foregoing shall be effective when deposited in the mails, postage prepaid,
addressed as aforesaid and shall whenever sent by telegram or delivered in hand
or by facsimile transmission be effective when received. Any party may change
its address by a communication in accordance herewith.
7.5. FURTHER ASSURANCES. The ESOP, the Committee, and/or Fremont shall,
at Fremont's expense and without expense to the Bank, execute and deliver such
further acts and documents as the Bank from time to time reasonably requires for
the assuring and confirming unto the Bank the rights hereby created or intended
now or hereafter so to be, or for carrying out the intention or facilitating the
performance of the terms of any Loan Document. Fremont acknowledges and agrees
that the expense of any of the foregoing shall be for its account.
7.6. EXPENSES OF THE BANK. Fremont shall pay on demand all costs and
expenses of the Bank in connection with the negotiation, preparation, execution,
delivery, administration (exclusive of general overhead expenses), amendment,
waiver and enforcement of this Agreement and any other Loan Document and any
matter related thereto, and any litigation or dispute with respect thereto
(including but not limited to any bankruptcy or similar proceedings), including
without limitation filing fees, search fees, appraisal fees and other
out-of-pocket expenses, the estimated allocated costs and expenses of in-house
appraisers, legal counsel and legal staff and other professional services, and
the reasonable fees and out-of-pocket expenses of any legal counsel, independent
public accountants and other outside experts. With respect to any litigation,
arbitration or reference between the parties hereto in connection with any Loan
Document, the losing party shall pay to the prevailing party the reasonable fees
and out-of-pocket expenses of legal counsel to the prevailing party in
connection therewith. Fremont shall pay any and all documentary and other taxes
(other than income or gross receipts taxes generally applicable to banks) and
all costs, expenses, fees and charges payable or determined to be payable in
connection with the execution, delivery, filing or recording of this Agreement,
any other Loan Document or any other instrument or writing to be delivered
hereunder or thereunder, or in connection with any transaction pursuant hereto
or thereto, and shall reimburse, hold harmless and indemnify the Bank from and
against any and all loss, liability or legal or other expense with respect to or
resulting from any delay in paying or failure to pay any tax, cost, expense, fee
or charge or that any of them may suffer or incur by reason of the failure of
the ESOP to perform any of its obligations under this Agreement or any Loan
Document. Any amount payable to the Bank under this Section 7.6 shall, from the
date of demand for payment, and any other amount payable to the Bank under the
Loan Documents which is not paid when due or within any applicable grace period
shall, thereafter, bear interest at the Default Rate.
7.7. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties of the ESOP, the Committee, MLT, and Fremont contained in this
Agreement or in any other Loan Document, or in any certificate or other writing
delivered by or on behalf of the Plan, the Trust, the Committee, MLT or Fremont
pursuant to any Loan Document, will survive the making and repayment of the
Advances under this Agreement and the execution and delivery of the Note, and
have been or will be relied upon by the Bank, notwithstanding any investigation
made by or on behalf of the Bank.
7.8. ENTIRE AGREEMENT. This Agreement, together with the other Loan
Documents, comprises the complete and integrated agreement of the parties on the
subject matter hereof and supercedes all prior agreements, written or oral, on
the subject matter hereof The Loan Documents were drafted with the joint
participation of the Committee (on behalf of the Plan), Fremont, MLT (on behalf
of the Trust, and at the direction of the Committee), and the Bank and shall be
construed neither against nor in favor of any such party, but rather in
accordance with the fair meaning thereof.
7.9. SEVERABILITY. Any provision of any Loan Document which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
affecting the validity or enforceability of the remainder of such Loan Document
or the enforceability of such provision in any other jurisdiction.
7.10. TIME OF THE ESSENCE. Time is of the essence of the Loan Documents.
7.11. CAPTIONS. Captions in the Loan Documents are included for
convenience of reference only and shall not constitute a part of any Loan
Document for any other purpose.
7.12. KNOWLEDGE. "To the knowledge of means, when modifying a
representation, warranty or other statement of any Person, that the fact or
situation described therein is known by the Person making the representation,
warranty or other statement, or with the exercise of reasonable due diligence
under the circumstances (in accordance with the standard of what a reasonable
man in similar circumstances would have done) should have been known by the
Person.
7.13. USE OF DEFINED TERMS. Any defined term used in the plural shall
refer to all members of the relevant class, and any defined term used in the
singular shall refer to any number of the members of the relevant class.
7.14. ACCOUNTING TERMS. All accounting terms not specifically defined in
this Agreement shall be construed in conformity with, and all financial data
required to be submitted by this Agreement shall be prepared in conformity with,
general accepted accounting principles, except as otherwise specifically
provided herein.
7.15. EXHIBITS. All exhibits to this Agreement, as existing at the time
of execution of this Agreement or as supplemented, modified or amended from time
to time, are incorporated into this Agreement by this reference as though fully
set forth herein.
7.16. CROSS-REFERENCES. All references to specific Sections, Paragraphs,
and Exhibits shall be deemed references to the Sections, Paragraphs, and
Exhibits of this Agreement, unless such reference specifically or by context
refers to a different document.
7.17. COUNTERPARTS; EFFECTIVENESS: This Agreement and any amendment
hereto or waiver hereof may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument. This Agreement and any amendments
hereto or waivers hereof shall become effective when the Bank shall have
received counterparts signed by both parties hereto.
7.18. GOVERNING LAW. The Loan Documents and all rights and obligations of
the parties thereunder shall be governed by and be construed and enforced in
accordance with ERISA, and other applicable federal laws and with the laws of
California.
7.19. VENUE: JURISDICTION: JURY TRIAL WAIVER. THE PLAN, THE TRUST,
FREMONT, AND THE BANK, AND EACH OF THEM, HEREBY:
(a) CONSENT TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT
LOCATED IN CALIFORNIA;
(b) AGREE THAT THE EXCLUSIVE VENUE OF ANY PROCEEDING RESPECTING
THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS, THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AND OF ANY DISPUTE
(INCLUDING ANY TORT CLAIMS ARISING IN CONNECTION WITH THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS) BETWEEN THE PLAN,
THE TRUST, AND/OR FREMONT, ON THE ONE HAND, AND THE BANK, ON THE OTHER, SHALL BE
A COURT OF COMPETENT JURISDICTION LOCATED IN LOS ANGELES COUNTY, CALIFORNIA; AND
(c) IRREVOCABLY WAIVE THEIR RIGHT TO A JURY TRIAL IN ANY ACTION OR
PROCEEDING BASED UPON, OR RELATED TO (INCLUDING ANY TORT CLAIMS ARISING IN
CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT), THE SUBJECT
MATTER OF THE LOAN DOCUMENTS OR THE OBLIGATIONS. THE FOREGOING WAIVER OF TRIAL
BY JURY IS KNOWINGLY, INTENTIONALLY, AND VOLUNTARILY MADE BY THE PLAN, THE
TRUST, FREMONT AND THE BANK, AND EACH OF THEM ACKNOWLEDGES THAT NO PERSON ACTING
ON BEHALF OF EITHER HAS MADE ANY REPRESENTATIONS OF FACT TO INDUCE THIS WAIVER
OF TRIAL BY JURY OR IN ANY WAY TO MODIFY OR NULLIFY ITS EFFECT. THE PLAN, THE
TRUST, FREMONT, AND THE BANK FURTHER ACKNOWLEDGE THAT THEY HAVE BEEN REPRESENTED
(OR HAVE HAD THE OPPORTUNITY TO BE REPRESENTED) IN THE SIGNING OF THIS AGREEMENT
AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, SELECTED OF THEIR
OWN FREE WILL, AND THAT THEY HAVE HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER
WITH COUNSEL. THE PLAN, THE TRUST, FREMONT, AND THE BANK FURTHER ACKNOWLEDGE
THAT THEY HAVE READ AND UNDERSTAND THE MEANING AND RAMIFICATION OF THIS
PROVISION.
IN WITNESS WHEREOF, MLT on behalf of the Trust (and at the direction of
the Committee), the Committee on behalf of the Plan, Fremont, and the Bank have
caused this Agreement to be executed by their proper corporate officers
thereunto duly authorized as of the day and year first above written.
000 Xxxxxxxx Xxxxxx, 0xx Xx.-Xxxx XXXXXX XXXXX TRUST COMPANY OF
Somerset, New Jersey 08873 CALIFORNIA AS TRUSTEE FOR
Attn: Xxxxx Xxxxx THE FREMONT GENERAL CORPORATION
Telecopier No.: 000-000-0000 EMPLOYEE STOCK OWNERSHIP TRUST
By: XXXXX XXXXX
__________________________________
Print Name: Xxxxx Xxxxx
Title: Trust Officer
0000 Xxxxx Xxxxxx Xxxxxxxxx XXXXXXX GENERAL CORPORATION, ON
Xxxxx Xxxxxx, Xxxxxxxxxx 00000 BEHALF OF ITSELF
Attn: Xxxxx X. Xxxxxx
Telecopier No.: 000-000-0000
By: XXXXX X. XXXXXX
___________________________________
Print Name: Xxxxx X. Xxxxxx
Title: Treasurer and Chief Financial Officer
2020 Santa Xxxxxx Boulevard COMMITTE FOR THE FREMONT GENERAL EMPLOYEE
Xxxxx Xxxxxx, Xxxxxxxxxx 00000 STOCK OWNERSHIP PLAN, ON BEHALF OF THE
Attn: Xxxxx X. Xxxxxx FREMONT GENERAL CORPORATION EMPLOYEE
Telecopier No.: 000-000-0000 STOCK OWNERSHIP PLAN
By: XXXXXXX X. XXXXXX
____________________________________
Print Name: Xxxxxxx X. Xxxxxx
Title: Member of Committee
South Bay Commercial Center FIRST INTERSTATE BANK OF CALIFORNIA
000 Xxxx Xxxxx Xxxxxxxxx
Xxxxx 000
Xxxx Xxxxx, Xxxxxxxxxx 00000 BY: XXXXX XXXXXX
_____________________________________
Attn: Xxxxx Xxxxxx Print Name: Xxxxx Xxxxxx
Telecopier No.: 000-000-0000 Title: Vice President
