Common use of Asset Review Clause in Contracts

Asset Review. ValliCorp shall continue to engage its ------------ internal asset review examiners to identify potential losses with respect to loans and other assets on the books of ValliCorp and its Subsidiaries and who shall have reviewed all Nonperforming Assets and other classified or criticized assets as of a date within three months preceding the Effective Date. ValliCorp shall promptly provide a copy of such reports to WABC. Between the date of this Agreement and January 31, 1997, all assets of ValliCorp and its Subsidiaries, including classified or criticized and Nonperforming Assets, may be reviewed by WABC and WABC may provide a report thereon to ValliCorp setting forth WABC's grading or other assessment thereof (including accounting treatment and loss recognition) utilizing ValliCorp's regular loan/OREO review criteria consistent with GAAP and RAP. WABC shall use its commercially reasonable efforts to complete such review as promptly as practicable but in any event shall complete such review by January 31, 1997. ValliCorp may either accept and implement WABC's grading or other assessments (including accounting treatment and loss recognition) concerning loans or OREO by January 31, 1997, or, if it does not agree with WABC's conclusions as set forth in the report, refer the matter for resolution by one or more of the independent loan and appraisal experts Previously Disclosed by WABC (the "Independent Loan Reviewer" or "Independent Appraiser") who shall immediately review and/or appraise said loan(s) or OREO utilizing ValliCorp's regular loan/OREO review criteria consistent with GAAP and RAP. The parties agree that if the Independent Loan Reviewer believes it necessary to retain an Independent Appraiser (or if such an Appraiser is required by the penultimate sentence below), the selection and supervision thereof of said Appraiser shall be at the discretion and under the control of the Independent Loan Reviewer. ValliCorp and the ValliCorp Subsidiaries agree to recognize on their books and records all loan losses and record all OREO at their net realizable value (and record related OREO expenses) based on the review/appraisal by the Independent Loan Reviewer or Independent Appraiser no later than March 15, 1997. WABC agrees to accept the views of the Independent Loan Reviewer and Independent Appraiser. Additionally, ValliCorp agrees that through the Effective Date, it and the ValliCorp Subsidiaries shall maintain consistent loan grades with respect to any of their respective loans which have been or are participated to any other ValliCorp Subsidiary or to ValliCorp. With respect to any OREO, based on all known information available from time to time, if it appears that the then current independent appraisals may not be accurate or upon request of and at the expense of WABC, ValliCorp shall immediately obtain updated independent appraisals by an Independent Appraiser (utilizing ValliCorp's regular criteria consistent with GAAP and RAP) and provide copies of all such appraisals to WABC. Any new or additional write-downs or OREO expenses shall be recorded immediately upon receiving any updated independent appraisal.

Asset Review. ValliCorp (i) KSB shall continue to engage its ------------ internal asset review examiners to identify potential losses with respect to loans and other assets on the books of ValliCorp and its Subsidiaries and who assets. KSB shall have reviewed all Nonperforming Assets nonperforming assets and other classified or criticized assets as of a date within three months preceding the Effective Date. ValliCorp KSB shall promptly provide a copy of reports of such reports reviews to WABC. Between the date of this Agreement and January 31, 1997, all All assets of ValliCorp and its Subsidiaries, including classified or criticized and Nonperforming Assets, KSB may be reviewed by WABC as part of its ongoing due diligence and WABC may provide a report thereon to ValliCorp KSB setting forth WABC's grading or other assessment thereof (including accounting treatment and loss recognition). (ii) utilizing ValliCorp's regular loan/OREO review criteria consistent with GAAP and RAP. WABC shall use its commercially reasonable efforts to complete such review as promptly as practicable but in any event shall complete such review by January 31, 1997. ValliCorp KSB may either accept and implement WABC's grading or other assessments (including accounting treatment and loss recognition) concerning loans or OREO by January 31OREO. In case of any dispute between WABC and KSB with respect to classification or grading of loans, 1997the amount of reserve appropriate for a classified loan or the adequacy of KSB's allowance for loan losses in accordance with the terms of this Agreement, orWABC and KSB shall use their best efforts to resolve such dispute. If they do not resolve the dispute, if it does not agree with WABC's conclusions as set forth in the report, KSB and WABC shall refer the matter for resolution by one or more of the independent a mutually agreed third party experienced in reviewing loans and loan and appraisal experts Previously Disclosed by WABC portfolios (the "Independent Loan Reviewer" or "). (iii) The Independent Appraiser") who Loan Reviewer shall immediately review and/or appraise said loan(s) or OREO utilizing ValliCorp's regular loan/OREO review criteria consistent with GAAP GAAP, applicable regulatory accounting principles ("RAP") and RAPrelated standards as enforced by the FRB. The parties agree that if If the Independent Loan Reviewer believes it necessary to retain an Independent Appraiser (or if such an Appraiser is required by the penultimate sentence below)independent appraiser, the selection WABC and supervision thereof of said Appraiser KSB shall be at the discretion and under the control mutually agree on a qualified third party experienced in appraising properties of the kind in question (the "Independent Loan Reviewer. ValliCorp and the ValliCorp Subsidiaries agree Appraiser"). (iv) KSB agrees to recognize on their its books and records all additional loan provisions and loan losses and record all OREO at their net realizable value (and record related OREO expenses) based on the review/appraisal by the Independent Loan Reviewer or Independent Appraiser no later than March 15, 1997. WABC agrees to accept the views last day of month in which the Independent Loan Reviewer and Independent Appraiser. Additionally, ValliCorp agrees that through the Effective Date, it and the ValliCorp Subsidiaries shall maintain consistent loan grades with respect to any of their respective loans which have been or are participated to any other ValliCorp Subsidiary or to ValliCorpdetermination is made. With respect to any OREO, based on all known information available from time to time, if it appears that the KSB's then current independent appraisals may not be accurate or upon request of and at the expense of WABC, ValliCorp KSB shall immediately obtain updated independent appraisals by an Independent Appraiser (utilizing ValliCorp's regular criteria consistent with GAAP and RAP) and provide copies of all such appraisals to WABC. Any new or additional write-downs or OREO expenses shall be recorded immediately upon receiving any updated independent appraisal. WABC and KSB agree to accept the views of the Independent Loan Reviewer and Independent Appraiser with respect to loan grades, loan provisions, collateral and OREO values and related matters under this section. When this method results in a determination that a loan or asset should have a reserve amount or an additional reserve amount associated with it, the reserve shall be created by an addition to the allowance for loan losses and not by a reallocation of amounts in the existing allowance. The parties agree that adjustments made under this section shall be deemed consistent with GAAP. (v) WABC has conducted a review of certain of KSB's loans, and WABC and KSB have reached a compromise on appropriate grades and reserves with respect to those loans on a separate schedule. Notwithstanding clauses (i) to (iv) above, the grading of and reserve for those loans shall not be changed or subject to review by the Independent Loan Reviewer in the absence of a material change in the payment performance or prospects for continued payment of such loans. If any such material change occurs, those loans shall be subject to review in the same manner as all other loans. (vi) Except as provided otherwise above, KSB and WABC shall each pay one half of all fees and expenses of the Independent Loan Reviewer and any Independent Appraiser.

Asset Review. ValliCorp shall continue to engage its ------------ internal asset review examiners to identify potential losses with respect to loans and other assets on the books of ValliCorp and its Subsidiaries and who shall have reviewed all Nonperforming Assets and other classified or criticized assets as of a date within three months preceding the Effective Date. ValliCorp shall promptly provide a copy of such reports to WABC. Between the date of this Agreement and January 31, 1997, all assets of ValliCorp and its Subsidiaries, including classified or criticized and Nonperforming Assets, may be reviewed by WABC and WABC may provide a report thereon to ValliCorp setting forth WABC's grading or other assessment thereof (including accounting treatment and loss recognition) utilizing ValliCorp's regular loan/OREO review criteria consistent with GAAP and RAP. WABC shall use its commercially reasonable efforts to complete such review as promptly as practicable but in any event shall complete such review by January 31, 1997. ValliCorp may either accept and implement WABC's grading or other assessments (including accounting treatment and loss recognition) concerning loans or OREO by January 31, 1997, or, if it does not agree with WABC's conclusions as set forth in the report, refer the matter for resolution by one or more of the independent loan and appraisal experts Previously Disclosed by WABC (the "Independent Loan Reviewer" or "Independent Appraiser") who shall immediately review and/or appraise said loan(s) or OREO utilizing ValliCorp's regular loan/OREO review criteria consistent with GAAP and RAP. The parties agree that if the Independent Loan Reviewer believes it necessary to retain an Independent Appraiser (or if such an Appraiser is required by the penultimate sentence below), the selection and supervision thereof of said Appraiser shall be at the discretion and under the control of the Independent Loan Reviewer. ValliCorp and the ValliCorp Subsidiaries agree to recognize on their books and records all loan losses and record all OREO at their net realizable value (and record related OREO expenses) based on the review/appraisal by the Independent Loan Reviewer or Independent Appraiser no later than March 15, 1997. WABC agrees to accept -58- 64 the views of the Independent Loan Reviewer and Independent Appraiser. Additionally, ValliCorp agrees that through the Effective Date, it and the ValliCorp Subsidiaries shall maintain consistent loan grades with respect to any of their respective loans which have been or are participated to any other ValliCorp Subsidiary or to ValliCorp. With respect to any OREO, based on all known information available from time to time, if it appears that the then current independent appraisals may not be accurate or upon request of and at the expense of WABC, ValliCorp shall immediately obtain updated independent appraisals by an Independent Appraiser (utilizing ValliCorp's regular criteria consistent with GAAP and RAP) and provide copies of all such appraisals to WABC. Any new or additional write-downs or OREO expenses shall be recorded immediately upon receiving any updated independent appraisal.