SIXTH MODIFICATION AGREEMENT AND COVENANT WAIVER
Exhibit 10.1
SIXTH
MODIFICATION AGREEMENT AND COVENANT WAIVER
This
Sixth Modification Agreement and Covenant Waiver (this “Agreement”) is made
as of October 27, 2008 but effective October 28, 2008 (the “Effective Date”), by
and between VINEYARD NATIONAL BANCORP, a California corporation (“Borrower”) and FIRST
TENNESSEE BANK NATIONAL ASSOCIATION (“Lender”). Unless
otherwise set forth herein, all capitalized terms used herein shall have the
meaning given such terms in the Loan Documents (defined below).
WHEREAS, in connection with a loan from Lender to Borrower in the original
principal amount of $70,000,000.00, with a current outstanding principal loan
balance of $48,300,000.00 (the “Loan”), the Borrower
executed and delivered to Lender that certain Amended and Restated Promissory
Note (“Note”)
dated March 29, 2007, that certain Loan Agreement (“Loan Agreement”),
that certain Pledge Agreement together with Addendum to Pledge
Agreement (collectively the “Pledge”), each dated
as of March 17, 2006, that certain Modification Agreement effective as of May
11, 2006 (“First
Modification”), that certain Second Modification Agreement and Covenant
Waiver effective as of March 29, 2007 (“Second
Modification”), that certain Third Modification Agreement and Covenant
Waiver effective as of March 15, 2008 (“Third Modification”),
that certain Fourth Modification Agreement and Covenant Waiver effective as
of
June 30, 2008 (“Fourth
Modification”), that certain Fifth Modification Agreement and Covenant
Waiver dated and effective as of August 29, 2008 (“Fifth Modification”)
and that certain Amendment to Fifth Modification Agreement and Covenant Waiver
dated and effective as of September 23, 2008 (“Amendment to Fifth
Modification”) (this Agreement, the Note, the Loan Agreement, the Pledge,
the First Modification, the Second Modification, the Third Modification, the
Fourth Modification, the Fifth Modification, and the Amendment to Fifth
Modification and any other documents executed by Borrower in connection with
the
Loan are collectively herein referred to as the “Loan
Documents”);
WHEREAS, Borrower desires to extend the maturity date of the Loan through
November 28, 2008;
WHEREAS,
Borrower has requested that
Lender extend the Waivers (as defined in the Fifth Modification and Amendment
to
Fifth Modification) through and including November 28, 2008;
WHEREAS,
subject to the terms and
conditions contained herein, Lender is willing to (i) extend the Maturity Date
of the Loan and (ii) extend the Waivers.
NOW, THEREFORE, FOR MUTUAL CONSIDERATIONS, the receipt and sufficiency of which
is hereby acknowledged, the undersigned Borrower and Lender do hereby modify
the
Loan Documents as follows:
1) Capitalized
Terms. Any
capitalized term used but not defined herein shall have the meaning ascribed
to
it in the Loan Documents. All references to the “Loan Documents” in
the Loan Agreement and any of the other Loan Documents shall include, without
limitation, this Agreement and all other such Loan Documents, as modified by
this Agreement.
2) Extension
of
Maturity Date; Waiver.
Subject to Borrower’s compliance with all representations, warranties, covenants
and agreements contained in this Agreement and all the other Loan Documents
as
modified hereby:
(a) Maturity
Date. The “Maturity Date” set forth in the Loan Agreement and
elsewhere in the Loan Documents is hereby modified to mean November 28, 2008
(the “New Maturity
Date”).
(b) Waivers. Lender
hereby extends the Waivers for a period through and including the New Maturity
Date.
3) Modification
of the
Note. The Note and, where applicable, the other Loan Documents
are hereby modified as follows:
a. Interest
Rate. From and after October 28, 2008 through and including
the New Maturity Date, interest shall accrue on the outstanding principal
balance of the Note at a fixed annual rate equal to the LIBOR Rate, as
hereinafter defined, plus three hundred fifty (350) basis points (LIBOR Rate
+
3.50%). As used herein, the term "LIBOR Rate" refers to the sixty (60) day
London Interbank Offered Rate, as determined by Lender in its sole (but
reasonable) discretion. The LIBOR Rate shall be determined by Lender
as of October 28, 2008 (or, if such date is not a business day, then on the
next
preceding business day). Interest shall be calculated on the basis of
a 360 day year and the actual number of calendar days
elapsed. Notwithstanding anything else in this instrument to the
contrary, in no event shall the maximum rate of interest payable in respect
to
the indebtedness evidenced hereby exceed the maximum rate of interest allowed
to
be charged by applicable law.
b. Payment
Schedule. Said principal and accrued interest thereon shall be
due and payable as hereinafter set forth:
On
the New Maturity Date the entire outstanding principal balance of the Loan,
any
accrued and unpaid interest thereon, and all incurred fees shall be due and
payable without demand.
c. No
New
Advances. Borrower may not reborrow any sums repaid under the
Loan, and Lender has no obligation to advance any new loan proceeds under the
Loan.
4) Conditions
of Extension of Maturity Date;
Waiver. Lender’s
agreement
to extend the Maturity Date
and Waivers
is conditioned upon and
subject to the timely satisfaction by Borrower of each of the following
conditions (collectively the “Conditions
of Modification”):
a. Correctness
and
Warranties. Except as expressly modified or waived herein, all
representations and warranties made by Borrower to Lender under this Agreement
and the other Loan Documents (including without limitation all of Borrower’s
representations and warranties set forth in Sections 3.5 and 3.9 of the Loan
Agreement) are and shall remain true and correct through and including the
New
Maturity Date and payment in full of the Loan.
b. No
Defaults
Hereunder. Borrower shall not breach
any promise or covenant contained in this Agreement
and shall not be in default
under any provision of this Agreement or the other Loan Documents(except with respect
to the Waivers, as
waived hereby).
5) Termination
Events. Each of
the following shall constitute a Termination Event and an Event of Default
under
this Agreement and all
other Loan Documents without any further cure or grace period, notwithstanding
anything to the contrary in the Loan Documents (each, a “Termination
Event”):
a. Conditions
of Modification; Compliance. If
Borrower shall fail to comply in a
timely manner with any of the Conditions of Modificationset
forth above.
b. Bankruptcy. If
Borrower shall become a debtor in
bankruptcy by means of either a voluntary or involuntary
petition.
c. Receivership;
Insolvency. If
any kind of receivership or
insolvency proceeding is commenced by or against Borrower.
6) New
Maturity
Date; Acceleration of Loan. Borrower
agrees that the Loan automatically,
and without notice, shall
be immediately all due
and
payable in full upon the
earlier of:
a. New
Maturity Date; or
b. The
occurrence of any Termination Event,
as defined above.
The
entire amount of the
Loan, including all accrued
and unpaid interest, shall
be immediately due and payable upon the earlier to occur
of the New Maturity
Date or the occurrence of any Termination Event,and Lendershall
be entitled immediately to
exercise all of its rights and remedies under the Loan Documents, all without
further notice to Borrower.
7) Representations,
Warranties and Covenants. As an inducement to
Lenderto
enter into this Agreement, Borrower
makes the following representations, warranties and
covenants:
a. Enforceability. The
Loan, this
Agreement, and all
the other Loan Documents are fully
enforceable,
and the Loan is not subject to any defense or counterclaim or any claim of
setoff or recoupment by Borrower.
b. Representation
by Counsel. Borrower
has been represented by, or
advised to consult with, counsel in connection with the negotiation and
execution of this Agreement; this Agreement represents an arms-length
transaction; and Borrower has acted in good faith in the making of this
Agreement.
c. Consents. The
execution and performance of this
Agreement by Borrower does not and will not violate any agreement to which
Borrower is a party, and the execution and performance of this Agreement by
Borrower does not require the consent of any third party, or if the consent
of a
third party is required, such consent has been previously obtained by
Borrower.
d. Saleof
Assets. Through
and including the
New Maturity Date, Borrower
will not dispose of any of its property outside the ordinary course of business
or as otherwiseprovided for
in this Agreement.
e. New
Debt. Through
and including the New Maturity Date,Borrower will not incur
any additional
debt except for unsecured trade debt incurred in the ordinary course of
business without the
prior
written consent of Lender in its sole and absolute
discretion.
f. Impairment. Borrower
will take no
action which would impair its ability to perform its obligations hereunder
or to satisfy
any of the Conditions of Modification.
g. Extension
Fee. Promptly
after with Borrower’s
execution hereof, Borrower shall pay
Lender’s attorneys fees in
connection herewith.
8) Further
Assurances. At
any time and from time to time after the date of thisAgreement,
at the request of
Lender,
Borrower shall, without further
consideration, and at Borrower’s
sole expense, execute and deliver such
documents and instruments, and take such actions, as Lendermay
deem necessary (a) to perfect any of
Lender’s
security interests or liens granted in
any of the Loan Documents, and/or (b) to carry out the purposes and intentions
of this Agreement and the Loan Documents.
9) Effectiveness
of the Loan. This Agreement shall
not
constitute a novation of any of the other Loan Documents, and all the Loan
Documents shall survive the execution of this Agreement and remain in full
force
and effect subject
only to
the Waivers as set forth herein and
to any express
modifications thereto as herein provided. The lien and security
interest on the
Collateral granted pursuant to the Pledge is hereby extended, and the lien
and
security interest on the Collateral shall continue to secure the remaining
amounts outstanding in respect of all indebtedness that may be due and owing
pursuant to the terms of the Loan Documents, including without limitation
principal and interest on all amounts loaned pursuant to the Note. There
are no oral representations or
assurances from Lenderto
Borrower which survive the execution
of this Agreement.
10) Release
and
Waiver. Borrower
hereby acknowledges and stipulates that it has no claims or causes of action
of
any kind whatsoever against Lender. Borrower
represents that it
is entering into this Agreement freely, and with the advice of counsel as to
its
legal alternatives. Borrower hereby releases Lenderfrom
any and all claims, causes of
action, demands and liabilities of any kind whatsoever whether direct or
indirect, fixed or contingent, liquidated or unliquidated, disputed or
undisputed, known or unknown, which Borrower has or may acquire in the future
relating in any way to any event, circumstance, action or failure to act to
the
date of this Agreement. The release by Borrower herein, together with
the other terms and provisions of this Agreement, is executed by Borrower
advisedly and without coercion or duress from Lender,
Borrower having determined that the
execution of this Agreement, and all its terms and provisions are in
Borrower’s
economic best
interest.
11) No
Obligation to Extend; No Waiver. Borrower
acknowledges and agrees that
Lenderis
not obligated and does not agree to
any additional extensions
of the New Maturity Date or any further Waivers except as expressly
set forth
herein. Except as expressly provided herein as to the New Maturity
Date and the Waivers, (i) this Agreement shall not constitute
a waiver by
Lender of
any defaults under the Loan
Documents, (ii) Lender reserves
all of its rights and remedies
under the other Loan Documents, and (iii) all of the
Loan Documents
are in all respects confirmed, ratified and approved and are in full force
and
affect as of the date hereof. No action or course of
dealing on the part of Lender,
its officers, employees, consultants,
or agents, nor any failure or delay by Lender with
respect to exercising any right,
power or privilege of Lender under
the Loan Documents or this
Agreement, shall operate as a waiver thereof, except to the extent expressly
provided herein.
12) Costs
and
Expenses. Borrower agrees to pay
on
demand all out-of-pocket costs and expenses of Lender,
including the fees and out-of-pocket
expenses of counsel for Lender,
in connection with the administration,
enforcement, or protection of Lender’s
rights under this Agreement and/or the
Note and other Loan Documents.
13) Governing
Law. This
Agreement shall be governed by and construed in accordance with the laws of
the
State of Tennessee.
14) Amendments. This
Agreement cannot be
amended, rescinded, supplemented or modified except in writings signed by the
parties hereto.
15) Entire
Agreement. This
Agreement contains the entire agreement of the parties and supersedes any other
discussions or agreements relating to the subject of this
Agreement.
16) Time
of the
Essence.
TIME
IS OF THE ESSENCE OF THIS
AGREEMENT.
17) Counterpart
Signature Pages. This Agreement may be
executed in one or more counterparts and may be delivered by facsimile or
electronic mail, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
[Signatures
on Following
Page]
COUNTERPART
SIGNATURE PAGE
TO
SIXTH
MODIFICATION AGREEMENT AND COVENANT WAIVER
IN
WITNESS WHEREOF, the parties have
executed this Agreement as of the date first above written.
BORROWER:
a Californiacorporation
By: /s/
▇▇▇▇▇▇
▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇
▇▇▇▇▇▇▇
Title: Executive
Vice
President
STATE
OF CALIFORNIA
COUNTY
OF RIVERSIDE
Before
me, ▇▇▇▇▇ ▇▇▇▇▇, Notary Public of
the state and county aforesaid, personally appeared ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, with whom
I
am personally acquainted (or proved to me on the basis of satisfactory
evidence), and who, upon oath, acknowledged himself to be Executive Vice
President (or other officer authorized to execute the instrument) of
VINEYARD
NATIONAL BANCORP, a
California corporation, the within named bargainor, and that he as such
Executive Vice President , executed the foregoing instrument for the
purpose therein contained, by signing the name of the corporation by himself
as
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Executive Vice President .
WITNESS
MY HAND, at office,
this 27th day of October,
2008.
/s/
▇▇▇▇▇
Johns_____________
Notary
Public
My
Commission
Expires:
_June
23,
2011_______________________
COUNTERPART
SIGNATURE PAGE
TO
SIXTH
MODIFICATION AGREEMENT AND COVENANT WAIVER
IN
WITNESS WHEREOF, the parties have
executed this Agreement as of the date first above written.
LENDER:
FIRST
TENNESSEE BANK
NATIONALASSOCIATION,
a national banking
association
By: /s/
▇▇▇▇▇ ▇.
Work
Name:
▇▇▇▇▇ ▇.
Work
Title: Executive
Vice
President
STATE
OF TENNESSEE
COUNTY
OF SHELBY
Before
me, ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Notary
Public of the state and county aforesaid, personally appeared ▇▇▇▇▇ ▇. Work,
with whom I am personally acquainted (or proved to me on the basis of
satisfactory evidence), and who, upon oath, acknowledged himself to be Executive
Vice President (or other officer authorized to execute the instrument) of First
Tennessee Bank National Association, a national banking association, the within
named bargainor, and that he as such Executive Vice President, executed the
foregoing instrument for the purpose therein contained, by signing the name
of
the national banking association by himself as ▇▇▇▇▇ ▇. Work, Executive Vice
President.
WITNESS
MY HAND, at office,
this 28th day of October,
2008.
_/s/
▇. ▇▇▇▇▇▇
Robinson_______________
Notary
Public
My
Commission
Expires:
_April
28,
2009_____________________