Exhibit 10.1

 

AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT

 

Dated as of August 3, 2006

 

This Amended and Restated Revolving Credit Agreement (this “Agreement”) is by
and between FIRST COMMUNITY BANCORP, a corporation formed under the laws of the
State of California (“Borrower”), and U.S. BANK NATIONAL ASSOCIATION, a national
banking association (“Lender”), with a banking office at 777 East Wisconsin
Avenue, Milwaukee, Wisconsin 53202.

 

As used in this Agreement, capitalized terms not otherwise defined herein shall
have the meaning assigned to such term as set forth in Section 8.

 

SECTION 1. LOANS

 

SECTION 1.1.      REVOLVING CREDIT LOANS. Subject to the terms and conditions of
this Agreement, Lender agrees to make loans to Borrower, from time to time from
the date of this Agreement through August 2, 2007 (the “Maturity Date”), at such
times and in such amounts, not to exceed SEVENTY MILLION AND NO/100 UNITED
STATES DOLLARS ($70,000,000.00) (the “Commitment”) at any one time outstanding,
as Borrower may request (the “Loan(s)”). During such period Borrower may borrow,
repay and reborrow hereunder. Each borrowing shall be in the amount of at least
$100,000 or the remaining unused amount of the Commitment.

 

SECTION 1.2.      REVOLVING CREDIT NOTE. The Loans shall be evidenced by a
promissory note (the “Note”), substantially in the form of Exhibit A, with
appropriate insertions, dated the date hereof, payable to the order of Lender
and in the original principal amount of the Commitment. Lender may at any time
and from time to time at Lender’s sole option attach a schedule (grid) to the
Note and endorse thereon notations with respect to each Loan specifying the date
and principal amount thereof, the Interest Period (if applicable), the
applicable interest rate and rate option, and the date and amount of each
payment of principal and interest made by Borrower with respect to each such
Loan. Lender’s endorsements as well as its records relating to the Loans shall
be rebuttably presumptive evidence of the outstanding principal and interest on
the Loans, and, in the event of inconsistency, shall prevail over any records of
Borrower and any written confirmations of the Loans given by Borrower. The
principal of the Note shall be payable on or before the Maturity Date.

 

SECTION 1.3.      EXTENSION OF MATURITY DATE. Borrower may request an extension
of the Maturity Date by submitting a request for an extension to Lender (an
“Extension Request”) no more than sixty (60) days prior to the current Maturity
Date. The Extension Request must specify the new Maturity Date requested by
Borrower and the date (which must be at least thirty (30) days after the
Extension Request is delivered to Lender) as of which Lender must respond to the
Extension Request (the “Extension Date”). The new Maturity Date shall be

 

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no more than 364 days after the Maturity Date in effect at the time the
Extension Request is received, including such Maturity Date as one of the days
in the calculation of the days elapsed. If Lender fails to respond to an
Extension Request by the Extension Date, Lender shall be deemed to have denied
the Extension Request. If Lender, in its sole discretion, decides to approve the
Extension Request, Lender shall deliver its written consent to Borrower of such
extension no later than the Extension Date (provided it shall not be liable to
Borrower or any other Person for its failure to do so).

 

SECTION 2. INTEREST AND FEES

 

SECTION 2.1.      INTEREST RATE. Borrower agrees to pay interest on the unpaid
principal amount of the Loans from time to time outstanding hereunder at the
following rates per year:

 

(a)           Before maturity of any Loan, whether by acceleration or otherwise,
at the option of Borrower, subject to the terms hereof at a rate equal to:

 

(i)            The “Prime-Based Rate,” which shall mean the Prime Rate minus
seventy-five hundredths of one percent (-0.75%) per annum;

 

(ii)           “LIBOR,” which shall mean the sum of (A) that fixed rate of
interest per year for deposits with Interest Periods of 1, 3 or 6 months (which
Interest Period Borrower shall select subject to the terms stated herein) in
United States Dollars offered to Lender in or through the London interbank
market at or about 10:00 A.M., London time, two days (during which banks are
generally open in both Chicago and London) before the rate is to take effect in
an amount corresponding to the amount of the requested Loan or portion thereof
and for the London deposit Interest Period requested, divided by one minus any
applicable reserve requirement (expressed as a decimal) on Eurodollar deposits
of the same amount and Interest Period as determined by Lender in its sole
discretion, plus (B) one and one-half percent (+1.50%) per annum; or

 

(iii)          “Federal Funds Rate,” which shall mean the sum of (A) the
weighted average of the rates on overnight Federal funds transactions, with
members of the Federal Reserve System only, arranged by Federal funds brokers,
plus (B) one and one-half percent (+1.50%) per annum. The Federal Funds Rate
shall be determined by Lender on the basis of reports by Federal funds brokers
to, and published daily by, the Federal Reserve Bank of New York in the
Composite Closing Quotations for U.S. Government Securities. If such publication
is unavailable or the Federal Funds Rate is not set forth therein, the Federal
Funds Rate shall be determined on the basis of any other source reasonably
selected by Lender. The Federal Funds Rate applicable each day shall be the
Federal Funds Rate reported as applicable to Federal funds transactions on that
date. In the case of Saturday, Sunday or a legal holiday, the Federal Funds Rate
shall be the rate applicable to Federal funds transactions on the immediately
preceding day for which the Federal Funds Rate is reported.

 

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(b)           After the maturity of any Loan, whether by acceleration or
otherwise, such Loan shall bear interest until paid at a rate equal to two
percent (2%) in addition to the rate in effect immediately prior to maturity
(but not less than the Prime-Based Rate in effect at maturity).

 

SECTION 2.2.      RATE SELECTION. Borrower shall select and change its selection
of the interest rate as among LIBOR, the Federal Funds Rate and the Prime-Based
Rate, as applicable, to apply to at least $100,000 and in integral multiples of
$100,000 thereafter of any Loan or portion thereof, subject to the requirements
herein stated:

 

(a)           At the time any Loan is made;

 

(b)           At the expiration of a particular LIBOR Interest Period selected
for the outstanding principal balance of any Loan or portion of any Loan
currently bearing interest at LIBOR; and

 

(c)           At any time for the outstanding principal balance of any Loan or
portion thereof currently bearing interest at the Prime-Based Rate or the
Federal Funds Rate.

 

SECTION 2.3.      RATE CHANGES AND NOTIFICATIONS.

 

(a)           LIBOR. If Borrower wishes to borrow funds at LIBOR or Borrower
wishes to change the rate of interest on any Loan or portion thereof, within the
limits described above, from any other rate to LIBOR, it shall, at or before
12:00 noon, Chicago time, not less than two Banking Days of Lender prior to the
Banking Day of Lender on which such rate is to take effect, give Lender written
notice thereof, which shall be irrevocable. Such notice shall specify the Loan
or portion thereof to which LIBOR is to apply, and, in addition, the desired
LIBOR Interest Period of 1, 3 or 6 months. Notwithstanding that any LIBOR
Interest Period selected by Borrower may extend beyond the Maturity Date,
Borrower acknowledges and agrees that all amounts owing by Borrower to Lender
under this Agreement in respect of principal, accrued interest, fees and
expenses, including any amounts under section 2.5(c), shall be due and payable
on the Maturity Date.

 

(b)           Federal Funds Rate or Prime-Based Rate. If Borrower wishes to
borrow funds at the Federal Funds Rate or the Prime-Based Rate or to change the
rate of interest on any Loan or any portion thereof, to such rate, it shall, at
or before l2:00 noon, Chicago time, on the date such borrowing or change is to
take effect, which shall be a Banking Day of Lender, give Lender written notice
thereof, which shall be irrevocable. Such notice shall specify the advance and
the desired interest rate option.

 

(c)           Failure to Notify. If Borrower does not notify Lender at the
expiration of a selected Interest Period with respect to any principal
outstanding at LIBOR, then in the absence of such notice Borrower shall be
deemed to have elected to have such principal accrue interest after the
respective LIBOR Interest Period at the Federal Funds Rate. If Borrower does not
notify Lender as to its selection of the interest rate option with respect to
any new Loan, then in the absence of such notice Borrower shall be deemed to
have elected to have such initial advance accrue interest at the Federal Funds
Rate.

 

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SECTION 2.4.      INTEREST PAYMENT DATES. Accrued interest shall be paid in
respect of each portion of principal to which the Federal Funds Rate or
Prime-Based Rate applies on the last day of each month in each year, beginning
with the first of such dates to occur after the date of the first Loan or
portion thereof, at maturity, and upon payment in full, and to each portion of
principal to which any other interest rate option applies, the end of each
respective Interest Period, every three months, at maturity, and upon payment in
full, whichever is earlier or more frequent. After maturity, interest shall be
payable upon demand.

 

SECTION 2.5.      ADDITIONAL PROVISIONS WITH RESPECT TO FEDERAL FUNDS RATE AND
LIBOR LOANS.

 

The selection by Borrower of the Federal Funds Rate or LIBOR and the maintenance
of the Loans or portions thereof at such rate shall be subject to the following
additional terms and conditions:

 

(a)           Availability of Deposits at a Determinable Rate. If, after
Borrower has elected to borrow or maintain any Loan or portion thereof at the
Federal Funds Rate or LIBOR, Lender notifies Borrower that:

 

(i)            United States dollar deposits in the amount and for the maturity
requested are not available to Lender (in the case of LIBOR, in the London
interbank market); or

 

(ii)           Reasonable means do not exist for Lender to determine the Federal
Funds Rate or LIBOR for the amount and maturity requested; all as determined by
Lender in its sole discretion, then the principal subject to the Federal Funds
Rate or LIBOR shall accrue or shall continue to accrue interest at the
Prime-Based Rate.

 

(b)           Prohibition of Making, Maintaining, or Repayment of Principal at
the Federal Funds Rate or LIBOR. If any treaty, statute, regulation,
interpretation thereof, or any directive, guideline, or otherwise by a central
bank or fiscal authority (whether or not having the force of law) shall either
prohibit or extend the time at which any principal subject to the Federal Funds
Rate or LIBOR may be purchased, maintained, or repaid, then on and as of the
date the prohibition becomes effective, the principal subject to that
prohibition shall continue at the Prime-Based Rate.

 

(c)           Payments of Principal and Interest to be Inclusive of Any Taxes or
Costs. All payments of principal and interest shall include any taxes and costs
incurred by Lender resulting from having principal outstanding hereunder at the
Federal Funds Rate or LIBOR. Without limiting the generality of the preceding
obligation, illustrations of such taxes and costs are:

 

(i)            Taxes (or the withholding of amounts for taxes) of any nature
whatsoever including income, excise, and interest equalization taxes (other than
income taxes imposed by the United States or any state or locality thereof on
the income of Lender), as well as all levies, imposts, duties, or fees whether
now in existence or

 

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resulting from a change in, or promulgation of, any treaty, statute, regulation,
interpretation thereof, or any directive, guideline, or otherwise, by a central
bank or fiscal authority (whether or not having the force of law) or a change in
the basis of, or time of payment of, such taxes and other amounts resulting
therefrom;

 

(ii)           Any reserve or special deposit requirements against assets or
liabilities of, or deposits with or for the account of, Lender with respect to
principal outstanding at LIBOR including those imposed under Regulation D of the
Federal Reserve Board or resulting from a change in, or the promulgation of,
such requirements by treaty, statute, regulation, interpretation thereof, or any
directive, guideline, or otherwise by a central bank or fiscal authority
(whether or not having the force of law);

 

(iii)          Any other costs resulting from compliance with treaties,
statutes, regulations, interpretations, or any directives or guidelines, or
otherwise by a central bank or fiscal authority (whether or not having the force
of law), including capital adequacy regulations;

 

(iv)          Any loss (including loss of anticipated profits) or expense
incurred by reason of the liquidation or re-employment of deposits acquired by
Lender:

 

(A)          To make Loans or a portion thereof or maintain principal
outstanding at the LIBOR or the Federal Funds Rate;

 

(B)           As the result of a voluntary prepayment at a date other than the
Interim Maturity Date selected for principal outstanding at LIBOR;

 

(C)           As the result of a mandatory repayment at a date other than that
Interim Maturity Date selected for principal outstanding at LIBOR as the result
of the occurrence of an Event of Default (as defined in Section 7.1) and the
acceleration of any portion of the indebtedness hereunder; or

 

(D)          As the result of a prohibition on making, maintaining, or repaying
principal outstanding at the Federal Funds Rate or LIBOR.

 

If Lender incurs any such taxes or costs, Borrower, upon demand in writing
specifying such taxes and costs, shall promptly pay them; save for manifest
error Lender’s specification shall be presumptively deemed correct.

 

SECTION 2.6.      BASIS OF COMPUTATION. Interest shall be computed for the
actual number of days elapsed on the basis of a year consisting of 360 days,
including the date a Loan is made and excluding the date a Loan or any portion
thereof is paid or prepaid.

 

SECTION 2.7.      COMMITMENT FEE, REDUCTION OF COMMITMENT. Borrower agrees to
pay Lender a commitment fee (the “Commitment Fee”) in arrears of twenty-five
hundredths of one percent (0.25%) per year on the average daily unused amount of
the Commitment. The Commitment Fee shall commence to accrue on the date of this
Agreement

 

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and shall be paid on the last day of each calendar quarter in each year,
beginning with the first of such dates to occur after the date of this
Agreement, at maturity and upon payment in full. At any time or from time to
time, upon at least ten days’ prior written notice, which shall be irrevocable,
Borrower may reduce the Commitment in the amount of at least $100,000 or in
full; provided that Borrower may not reduce the Commitment below an amount equal
to the aggregate outstanding principal amount of all Loans. Upon any such
reduction of any part of the unused Commitment, any accrued and unpaid
Commitment Fee on the part reduced shall be paid in full as of the date of such
reduction.

 

SECTION 3. PAYMENTS AND PREPAYMENTS

 

SECTION 3.1.      PREPAYMENTS. Borrower may prepay without penalty or premium
any principal bearing interest at the Prime-Based Rate or the Federal Funds
Rate. If Borrower prepays any principal bearing interest at LIBOR in whole or in
part on a date other than the Interim Maturity Date, or if the maturity of any
such LIBOR principal is accelerated, then, to the fullest extent permitted by
law Borrower shall also pay Lender for all losses and expenses incurred by
reason of the liquidation or re-employment of deposits acquired by Lender to
make the Loan or maintain principal outstanding at LIBOR. Upon Lender’s demand
in writing specifying such losses and expenses, Borrower shall promptly pay
them; Lender’s specification shall be deemed correct in the absence of manifest
error. All Loans or portions thereof made at LIBOR shall be conclusively deemed
to have been funded by or on behalf of Lender (in the London interbank market)
by the purchase of deposits corresponding in amount and maturity to the amount
and Interest Periods selected (or deemed to have been selected) by Borrower
under this Agreement. Any partial repayment or prepayment shall be in an amount
equal to the lesser of $500,000 and the outstanding principle balance of the
Loans.

 

SECTION 3.2.      FUNDS. All payments of principal, interest and the Commitment
Fee shall be made in immediately available funds to Lender at its banking office
indicated above or as otherwise directed by Lender.

 

SECTION 4. REPRESENTATIONS AND WARRANTIES

 

To induce Lender to make each of the Loans, Borrower represents and warrants to
Lender that:

 

SECTION 4.1.      ORGANIZATION. Borrower is existing and in good standing as a
duly qualified and organized bank holding company. Borrower and each Subsidiary
is existing and in good standing under the laws of their jurisdiction of
formation, and are duly qualified, in good standing and authorized to do
business in each jurisdiction where failure to do so might have a material
adverse impact on the consolidated assets, condition or prospects of Borrower.
Borrower and each Subsidiary have the power and authority to own their
properties and to carry on their businesses as now being conducted.

 

SECTION 4.2.      AUTHORIZATION; NO CONFLICT. The execution, delivery and
performance of this Agreement, the Pledge Agreement (as defined in Section
5.11), the Note and all related documents and instruments:  (a) are within
Borrower’s powers; (b) have been authorized by all necessary corporate action;
(c) have received any and all necessary

 

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governmental approvals; and (d) do not and will not contravene or conflict with
any provision of law or charter or by-laws of Borrower or any agreement
affecting Borrower or its property. This Agreement, the Pledge Agreement and the
Note when executed and delivered will be, legal, valid and binding obligations
of Borrower, enforceable against Borrower in accordance with their respective
terms.

 

SECTION 4.3.      FINANCIAL STATEMENTS. Borrower has supplied to Lender copies
of its audited consolidated financial statements as of and for the twelve month
period ended December 31, 2005. Such statements have been furnished to Lender,
have been prepared in conformity with generally accepted accounting principles
applied on a basis consistent with that of the preceding fiscal year, except as
disclosed in such statements, and fairly present the financial condition of
Borrower and its Subsidiaries as of such dates and the results of their
operations for the respective periods then ended. Since the date of those
financial statements, no material, adverse change in the business, condition,
properties, assets, operations, or prospects of Borrower or its Subsidiaries has
occurred except as disclosed on Schedule 4.3. There is no known contingent
liability of Borrower or any Subsidiary which is known to be in an amount that
is more than $1,000,000 (excluding loan commitments, letters of credit, and
other contingent liabilities incurred in the ordinary course of the banking
business) in excess of insurance for which the insurer has confirmed coverage in
writing which is not reflected in such financial statements or disclosed on
Schedule 4.3.

 

SECTION 4.4.      TAXES. Borrower and each Subsidiary have filed or caused to be
filed all federal, state and local tax returns which, to the knowledge of
Borrower or such Subsidiary, are required to be filed, and have paid or have
caused to be paid all taxes as shown on such returns or on any assessment
received by them, to the extent that such taxes have become due (except for
current taxes not delinquent and taxes being contested in good faith and by
appropriate proceedings for which adequate reserves have been provided on the
books of Borrower or the appropriate Subsidiary, and as to which no foreclosure,
sale or similar proceedings have been commenced).

 

SECTION 4.5.      LIENS. None of the assets of Borrower or any Subsidiary are
subject to any mortgage, pledge, title retention lien, or other lien,
encumbrance or security interest except:  (a) for current taxes not delinquent
or taxes being contested in good faith and by appropriate proceedings; (b) for
liens arising in the ordinary course of business for sums not due or sums being
contested in good faith and by appropriate proceedings, but not involving any
deposits or loan or portion thereof or borrowed money or the deferred purchase
price of property or services; (c) to the extent specifically shown in the
financial statements referred to in Section 4.3; and (d)  liens and security
interests securing deposits of public funds, repurchase agreements, Federal
funds purchased, trust assets, advances from a Federal Home Loan Bank, discount
window borrowings from a Federal Reserve Bank and other similar liens granted in
the ordinary course of the banking business.

 

SECTION 4.6.      ADVERSE CONTRACTS. Neither Borrower nor any Subsidiary is a
party to any agreement or instrument or subject to any charter or other
corporate restriction, nor is it subject to any judgment, decree or order of any
court or governmental body, which may have a material and adverse effect on the
business, assets, liabilities, financial condition, operations or business
prospects of Borrower and its Subsidiaries taken as a whole or on the

 

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ability of Borrower to perform its obligations under this Agreement, the Pledge
Agreement and the Note. Neither Borrower nor any Subsidiary has, nor with
reasonable diligence should have had, knowledge of or notice that it is in
default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any such agreement, instrument,
restriction, judgment, decree or order.

 

SECTION 4.7.      REGULATION U. Borrower is not engaged principally in, nor is
one of Borrower’s important activities, the business of extending credit for the
purpose of purchasing or carrying “margin stock” within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System as now and
from time to time hereinafter in effect.

 

SECTION 4.8.      LITIGATION AND CONTINGENT LIABILITIES. No litigation
(including derivative actions), arbitration proceedings or governmental
proceedings are pending or, to Borrower’s knowledge, threatened against Borrower
which would (singly or in the aggregate), if adversely determined, have a
material and adverse effect on the consolidated assets, financial condition,
continued operations or business of Borrower and its Subsidiaries, except as and
if set forth (including estimates of the dollar amounts involved) in
Schedule 4.8.

 

SECTION 4.9.      FDIC INSURANCE. The deposits of each Subsidiary Bank of
Borrower are insured by the FDIC and no act has occurred which would adversely
affect the status of such Subsidiary Bank as an FDIC insured bank.

 

SECTION 4.10.   INVESTIGATIONS. Neither Borrower nor any Subsidiary Bank is
under investigation by, or is operating under the restrictions imposed by or
agreed to in connection with, any regulatory authority, other than routine
examinations by regulatory authorities having jurisdiction over Borrower or such
Subsidiary Bank.

 

SECTION 4.11.   SUBSIDIARIES. Attached hereto as Schedule 4.11 is a correct and
complete list of all Subsidiaries of Borrower.

 

SECTION 4.12.   BANK HOLDING COMPANY. Borrower has complied in all material
respects with all federal, state and local laws pertaining to bank holding
companies, including without limitation the Bank Holding Company Act of 1956, as
amended, and to the best of its knowledge there are no conditions to its
engaging in the business of being a registered bank holding company.

 

SECTION 4.13.   ERISA.

 

(a)           Borrower and the ERISA Affiliates and the plan administrator of
each Plan (other than a Multiemployer Plan) have fulfilled in all material
respects their respective obligations under ERISA and the Code with respect to
such Plan and such Plan is currently in substantial compliance with the
applicable provisions of ERISA and the Code.

 

(b)           With respect to each Plan, there has been no (i) “reportable
event” within the meaning of Section 4043 of ERISA and the regulations
thereunder which is not subject to the provision for waiver of the 30-day notice
requirement to the PBGC; (ii) failure by Borrower or any ERISA Affiliate to
timely make or properly accrue any contribution

 

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which is due to any Plan; (iii) action under Section 4041(c) of ERISA to
terminate any Pension Plan; (iv) action under Section 4041(b) of ERISA to
terminate any Pension Plan which could require Borrower to incur a liability or
obligations to make a material contribution to such Pension Plan; (v) withdrawal
from any Pension Plan with two or more contributing sponsors or the termination
of any such Pension Plan that could subject the Borrower to material liability
pursuant to Section 4063 or 4064 of ERISA; (vi) institution by PBGC of
proceedings to terminate any Pension Plan, or the occurrence of any event or
condition which might constitute grounds under ERISA for the termination of, or
the appointment of a trustee to administer, any Pension Plan (other than a
Multiemployer Plan); (vii) the imposition on Borrower or any ERISA Affiliate of
liability pursuant to Sections 4062(e), 4069 or 4212 of ERISA; (viii) complete
or partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) by
Borrower or any ERISA Affiliate from any Pension Plan which is a Multiemployer
Plan that is in reorganization or insolvency pursuant to Sections 4241 or 4245
of ERISA, or that has terminated under Sections 4041A or 4042 of ERISA;
(ix) prohibited transaction described in Section 406 of ERISA or 4975 of the
Code which could subject Borrower to the imposition of any material fines,
penalties, taxes or related charges imposed by either Section 4975 of the Code
or Section 502(i) of ERISA; (x) material pending claim (other than routine
claims for benefits) against any Plan (other than a Multiemployer Plan) which
could reasonably be expected to result in material liability; (xi) receipt from
the Internal Revenue Service of notice of the failure of any Plan (other than a
Multiemployer Plan) to qualify under Section 401(a) of the Code, or the failure
of any trust forming part of any Plan (other than a Multiemployer Plan) to fail
to qualify for exemption from taxation under Section 501(a) of the Code, if
applicable; or (xii) imposition of a lien pursuant to Section 401(a)(29) or
412(n) of the Code or Section 302(f) of ERISA.

 

SECTION 4.14.   ENVIRONMENTAL LAWS.

 

(a)           Borrower and each of its Subsidiaries have obtained all permits,
licenses and other authorizations which are required to be obtained by Borrower
or such Subsidiaries, as the case may be, under all Environmental Laws and are
in compliance in all material respects with any applicable Environmental Laws.

 

(b)           Borrower has not received any notice, demand, request for
information, citation, summons, order or complaint, no penalty has been assessed
and no investigation or review is pending or, to Borrower’s knowledge,
threatened by any governmental agency or other Person, in each case, with
respect to any alleged or suspected failure by Borrower or any of its
Subsidiaries to comply in any material respect with any Environmental Laws.

 

(c)           There are no material liens arising under or pursuant to any
Environmental Laws on any of the property owned or, to Borrower’s knowledge,
leased by Borrower or any of its Subsidiaries.

 

(d)           There are no conditions existing currently or, to Borrower’s
knowledge, likely to exist during the term of this Agreement which would subject
Borrower or any of its Subsidiaries or any of their owned property or, to
Borrower’s knowledge, any of their

 

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leased property, to any material lien, damages, penalties, injunctive relief or
cleanup costs under any Environmental Laws or which require or are reasonably
likely to require cleanup, removal, remedial action or other responses pursuant
to Environmental Laws by Borrower and its Subsidiaries.

 

SECTION 4.15.   PLEDGED SHARES. The Pledged Shares (as defined in Section 5.11)
constitute 100% of the issued and outstanding capital stock of Pacific Western
National Bank, have been duly authorized and validly issued and are fully paid
and non-assessable. Borrower owns the Pledged Shares free and clear of all other
interests, liens or encumbrances of any nature whatsoever, other than liens in
favor of Lender.

 

SECTION 5. COVENANTS

 

Until all obligations of Borrower hereunder, under the Pledge Agreement, the
Note and all other related documents and instruments are paid and fulfilled in
full, Borrower agrees that it shall, and shall cause each Subsidiary to, comply
with the following covenants, unless Lender consents otherwise in writing:

 

SECTION 5.1.      EXISTENCE, MERGERS, ETC. Borrower and each Subsidiary shall
preserve and maintain their respective corporate, partnership or joint venture
(as applicable) existence, rights, franchises, licenses and privileges, and will
not liquidate, dissolve, or merge, or consolidate with or into any other entity,
or sell, lease, transfer or otherwise dispose of all or a substantial part of
their assets other than in the ordinary course of business as now conducted,
except that:

 

(a)           Any Subsidiary may merge or consolidate with or into Borrower or
any one or more wholly-owned Subsidiaries;

 

(b)           Any Subsidiary may sell, lease, transfer or otherwise dispose of
any of its assets to Borrower or one or more wholly-owned Subsidiaries;

 

(c)           Any Insignificant Subsidiary may (i) merge or consolidate with any
other Person, (ii) sell, lease, transfer or otherwise dispose of its assets to
another Person or (iii) liquidate or dissolve (“Insignificant Subsidiary” means
a Subsidiary with (1) net income that is less than 2.5% of the consolidated net
income of Borrower and its Subsidiaries for the most recent fiscal quarter ended
for which a consolidated income statement of Borrower is available and
(2) tangible assets that are less than 2.5% of consolidated tangible assets of
Borrower and its Subsidiaries as of the end of the most recent fiscal quarter
ended for which a consolidated balance sheet of Borrower is available); and

 

(d)           Any Subsidiary may merge or consolidate with any other Person
provided that (i) the surviving entity is a Subsidiary of Borrower (ii) before
and after giving effect to such merger or consolidation, no Event of Default or
Unmatured Event of Default exists or is continuing, (iii) following such merger
or consolidation, Borrower shall continue to own the same or greater percentage
of the stock or other ownership interests of such Subsidiary as it owned
immediately prior to such merger or consolidation, (iv) after

 

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giving effect to such merger or consolidation, Borrower is in pro forma
compliance with Section 5.4 of this Agreement and (v) if any Subsidiary who is a
party to such merger or consolidation is a Subsidiary whose shares of capital
stock constitute Pledged Shares under the Pledge Agreement, then after giving
effect to such merger or consolidation, Lender shall continue to have a
perfected first priority security interest in such Pledged Shares subject only
to any liens permitted in Section 5.5(b) hereof; provided, however, this clause
(d) shall not apply to any Insignificant Subsidiary.

 

Borrower and each Subsidiary shall take all steps to become and remain duly
qualified, in good standing and authorized to do business in each jurisdiction
where failure to do so might have a material adverse impact on the consolidated
assets, condition or prospects of Borrower.

 

SECTION 5.2.      REPORTS, CERTIFICATES AND OTHER INFORMATION. Borrower shall
furnish (or cause to be furnished) to Lender:

 

(a)           Interim Reports. Within forty-five (45) days after the end of each
quarter of each fiscal year of Borrower, a copy of an unaudited financial
statement of Borrower and its Subsidiaries prepared on a consolidated basis
consistent with the consolidated financial statements of Borrower and its
Subsidiaries referred to in Section 4.3 above and prepared in accordance with
generally accepted accounting principles, signed by an authorized officer of
Borrower and consisting of at least:  (i) a balance sheet as at the close of
such quarter; and (ii) a statement of earnings and source and application of
funds for such quarter and for the period from the beginning of such fiscal year
to the close of such quarter.

 

(b)           Annual Report. Within ninety (90) days after the end of each
fiscal year of Borrower, a copy of an annual report of Borrower and its
Subsidiaries prepared on a consolidated basis and in conformity with generally
accepted accounting principles applied on a basis consistent with the
consolidated financial statements of Borrower and its Subsidiaries referred to
in Section 4.3 above, duly certified by independent certified public accountants
of recognized standing and accompanied by an opinion without qualification. Such
independent certified public accountants shall be selected by the Audit
Committee of the Board of Directors of Borrower (which Audit Committee members
shall consist solely of independent members of Borrower’s Board of Directors)
using their good faith business judgment.

 

(c)           Certificates. Contemporaneously with the furnishing of a copy of
each annual report and of each quarterly statement provided for in this Section,
a certificate dated the date of such annual report or such quarterly statement
and signed by either the President, the Chief Financial Officer or the Treasurer
of Borrower, to the effect that no Event of Default or Unmatured Event of
Default has occurred and is continuing, or, if there is any such event,
describing it and the steps, if any, being taken to cure it, and containing
(except in the case of the certificate dated the date of the annual report) a
computation of, and showing compliance with, any financial ratio or restriction
contained in this Agreement.

 

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(d)           Reports to SEC. Notification of each filing and report made by
Borrower or any Subsidiary with or to any securities exchange or the Securities
and Exchange Commission which are made publicly available. Such notification
shall be forwarded electronically to Lender via e-mail at such addresses as
Lender shall provide to Borrower and shall indicate where copies of such filings
and reports can be obtained electronically (for avoidance of doubt, Borrower
will notify Lender of any such filings and reports if electronic means of
notification is inoperable). If copies of such documents are not available
electronically, notification of the filing of such documents shall still be
made, and Borrower shall provide a paper copy of such documents to Lender
promptly upon Lender’s request.

 

(e)           Notice of Default, Litigation and ERISA Matters. Immediately upon
learning of the occurrence of any of the following, written notice describing
the same and the steps being taken by Borrower or any Subsidiary affected in
respect thereof:  (i) the occurrence of an Event of Default or an Unmatured
Event of Default; (ii) the institution of, or any adverse determination in, any
litigation, arbitration or governmental proceeding which is material to Borrower
and its Subsidiaries on a consolidated basis; (iii) the occurrence of any event
referred to in Section 4.13(b); or (iv) the issuance of any cease and desist
order, memorandum of understanding, cancellation of insurance, or proposed
disciplinary action from the FDIC or other regulatory entity.

 

(f)            Other Information. From time to time such other information,
financial or otherwise, concerning Borrower or any Subsidiary as Lender may
reasonably request.

 

SECTION 5.3.      INSPECTION. At Borrower’s expense if an Event of Default or
Unmatured Event of Default has occurred or is continuing, Borrower and each
Subsidiary shall permit Lender and its agents at any time during normal business
hours, and upon at least one business day’s prior notice, to inspect their
properties and to inspect and make copies of their books and records. If no
Event of Default or Unmatured Event of Default shall have occurred and be
continuing, Lender may conduct such inspections at any time during normal
business hours and upon reasonable notice to Borrower, and such inspection and
copies shall be at Lender’s expense.

 

SECTION 5.4.      FINANCIAL REQUIREMENTS.

 

(a)           Leverage Ratio. Borrower and each Subsidiary Bank shall maintain
at all times a ratio of Tier 1 Capital to average quarterly assets less all
non-qualified intangible assets of at least five percent (5%), all calculated on
a consolidated basis.

 

(b)           Tier 1 Capital Ratio. Borrower and each Subsidiary Bank shall
maintain at all times a ratio of Tier 1 Capital to risk-weighted assets of not
less than six percent (6%), all calculated on a consolidated basis.

 

(c)           Risk-Based Capital Ratio. Borrower and each Subsidiary Bank shall
maintain at all times a ratio of Total Capital to risk-weighted assets of not
less than ten percent (10%), all calculated on a consolidated basis.

 

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(d)           Nonperforming Assets. All assets of all Subsidiary Banks and other
Subsidiaries classified as “non-performing” (which shall include all loans in
non-accrual status, more than ninety (90) days past due in principal or
interest, restructured or renegotiated, or listed as “other restructured” or
“other real estate owned”) on the FDIC or other regulatory agency call report
shall not exceed at any time three percent (3.0%) of the total loans of Borrower
and its Subsidiaries on a consolidated basis.

 

(e)           Loan Loss Reserves Ratio. Each Subsidiary Bank shall maintain at
all times on a consolidated basis a ratio of (a) the sum of (i) loan loss
reserves plus (ii) reserves for unfunded commitments to (b) non-performing loans
of not less than one hundred percent (100%).

 

(f)            Minimum Tier 1 Capital. Borrower shall maintain a consolidated
minimum Tier 1 Capital equal to at least $125,000,000 at all times.

 

(g)           Total Debt to Tier 1 Capital. Borrower’s total indebtedness for
borrowed money (specifically excluding the indebtedness for borrowed money of
Borrower’s Subsidiaries) shall not at any time exceed thirty-five percent (35%)
of its Tier 1 Capital.

 

(h)           Return on Average Assets. Borrower’s consolidated net income shall
be at least eighty-five hundredths of one percent (0.85%) of its average assets,
calculated on an annualized basis as at the last day of each fiscal quarter of
Borrower; provided, however, that for purposes of determining return on average
assets, customary and reasonable, non-recurring expenses and charges incurred by
Borrower in connection with a permitted acquisition under Sections 5.1 and 5.6
hereof shall be excluded.

 

SECTION 5.5.      INDEBTEDNESS, LIENS AND TAXES. Borrower and each Subsidiary
shall:

 

(a)           Indebtedness. Not incur, permit to remain outstanding, assume or
in any way become committed for indebtedness in respect of borrowed money
(specifically including but not limited to indebtedness in respect of money
borrowed from financial institutions, but excluding deposits), except:  (i)
indebtedness incurred by Borrower under this Agreement, and further indebtedness
of Borrower to Lender or to any other Person; provided that, the aggregate
amount of such indebtedness permitted pursuant to this clause (i) shall not
exceed at any time the lesser of $70,000,000 and an amount which would cause
Borrower to breach its Total Debt to Tier 1 Capital financial covenant in
Section 5.4(g); and provided further, such indebtedness shall be unsecured
except as permitted under Section 5.5(b); (ii) in addition to the indebtedness
permitted under the foregoing clause (i), in the case of Borrower, Trust
Indebtedness and Trust Guarantees, and in the case of any Trust Issue, Trust
Preferred Securities; and (iii) indebtedness incurred by the Subsidiary Banks in
their normal course of business with the Federal Home Loan Bank, any Federal
Reserve Bank or for Federal Funds with correspondent banks for liquidity
management.

 

(b)           Liens. Not create, suffer or permit to exist any lien or
encumbrance of any kind or nature upon any of their assets now or hereafter
owned or acquired (specifically

 

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including but not limited to the capital stock of any of the Subsidiary Banks),
or acquire or agree to acquire any property or assets of any character under any
conditional sale agreement or other title retention agreement, but this Section
shall not be deemed to apply to:  (i) liens existing on the date of this
Agreement and disclosed on Schedule 5.5(b); (ii) liens of landlords,
contractors, laborers or suppliers, tax liens, or liens securing performance or
appeal bonds, or other similar liens or charges arising out of Borrower’s
business, provided that tax liens are removed before related taxes become
delinquent and other liens are promptly removed, in either case unless contested
in good faith and by appropriate proceedings, and as to which adequate reserves
shall have been established and no foreclosure, sale or similar proceedings have
commenced; (iii) liens in favor of Lender; (iv) liens on the assets of any
Subsidiary Bank arising in the ordinary course of the banking business of such
Subsidiary Bank; and (v) liens contemplated by Section 4.5.

 

(c)           Taxes. Pay and discharge all taxes, assessments and governmental
charges or levies imposed upon them, upon their income or profits or upon any
properties belonging to them, prior to the date on which penalties attach
thereto, and all lawful claims for labor, materials and supplies when due,
except that no such tax, assessment, charge, levy or claim need be paid which is
being contested in good faith by appropriate proceedings as to which adequate
reserves shall have been established, and no foreclosure, sale or similar
proceedings have commenced.

 

(d)           Guaranties. Not assume, guarantee, endorse or otherwise become or
be responsible in any manner (whether by agreement to purchase any obligations,
stock, assets, goods or services, or to supply or loan any funds, assets, goods
or services, or otherwise) with respect to the obligation of any other Person,
except:  (i) by the endorsement of negotiable instruments for deposit or
collection in the ordinary course of business, issuance of letters of credit or
similar instruments or documents in the ordinary course of business; (ii) in the
case of Borrower, Trust Guarantees; and (iii) guarantees by Borrower of any of
its Subsidiary’s obligations, provided the liability to Borrower on account of
such guarantees shall not in the aggregate exceed $10,000,000 at anytime
outstanding.

 

SECTION 5.6.      INVESTMENTS AND LOANS. Neither Borrower nor any Subsidiary
shall make any loan, advance, extension of credit or capital contribution to, or
purchase or otherwise acquire for consideration, evidences of indebtedness,
capital stock or other securities of any Person, except that Borrower and any
Subsidiary may:

 

(a)           purchase or otherwise acquire and own short-term money market
items;

 

(b)           invest, by way of purchase of securities or capital contributions,
in the Subsidiary Banks or any other bank or banks, and upon Borrower’s purchase
or other acquisition of twenty-five percent (25%) or more of the stock of any
bank, such bank shall thereupon become a “Subsidiary Bank” for all purposes
under this Agreement;

 

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(c)           invest, by way of loan, advance, extension of credit (whether in
the form of lease, conditional sales agreement, or otherwise), purchase of
securities, capital contributions, or otherwise, in Subsidiaries other than
banks or Subsidiary Banks;

 

(d)           invest, by way of purchase of securities or capital contributions,
in other Persons so long as before and after giving effect thereto no Event of
Default or Unmatured Event of Default shall have occurred and be continuing and
the investment is in compliance with Regulation Y of the Federal Reserve Board;
and

 

(e)           in the case of any Trust Issuer, purchase any Trust Indebtedness
and, in the case of Borrower, purchase any common securities of any Trust Issuer
and issue any Trust Guarantees.

 

Nothing in this Section 5.6 shall prohibit a Subsidiary Bank from making
investments, loans, advances, or other extensions of credit in the ordinary
course of the banking business upon such terms as may at the time be customary
in the banking business.

 

SECTION 5.7.      OWNERSHIP OF SUBSIDIARIES. Borrower shall not, and shall not
permit any Subsidiary to, (i) purchase or redeem, or obligate itself to purchase
or redeem, any shares of Borrower’s capital stock, of any class, issued and
outstanding from time to time, or any partnership, joint venture or other equity
interest in Borrower or any Subsidiary; or (ii) declare or pay any dividend
(other than dividends payable in its own common stock or to Borrower) or make
any other distribution in respect of such shares or interest other than to
Borrower, in each case if an Unmatured Event of Default or an Event of Default
shall have occurred and be continuing, or would result therefrom. Except as
provided in Section 5.1, Borrower shall continue to own, directly or indirectly,
the same (or greater) percentage of the stock and partnership, joint venture, or
other equity interest in each Subsidiary that it held on the date of this
Agreement, and no Subsidiary shall issue any additional stock or partnership,
joint venture or other equity interests, options or warrants in respect thereof,
or securities convertible into such securities or interests, other than to
Borrower.

 

SECTION 5.8.      MAINTENANCE OF PROPERTIES. Borrower and each Subsidiary shall
maintain, or cause to be maintained, in good repair, working order and
condition, all their properties (whether owned or held under lease), and from
time to time make or cause to be made all needed and appropriate repairs,
renewals, replacements, additions, and improvements thereto, so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times (for avoidance of doubt, this Section 5.8 does not limit
or restrict Borrower or any Subsidiary from opening, closing or moving any of
their branch offices or other office properties).

 

SECTION 5.9.      INSURANCE. Borrower and each Subsidiary shall maintain
insurance in responsible companies in such amounts and against such risks as is
required by law and such other insurance, in such amount and against such
hazards and liabilities, as is customarily maintained by bank holding companies
and banks similarly situated. Each Subsidiary Bank shall have deposits insured
by the FDIC.

 

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SECTION 5.10.   USE OF PROCEEDS.

 

(a)           General. The proceeds of the Loans shall be used for general
corporate purposes. Neither Borrower nor any Subsidiary shall use or permit any
proceeds of the Loans to be used, either directly or indirectly, for the
purpose, whether immediate, incidental or ultimate, of “purchasing or carrying
any margin stock” within the meaning of Regulations U or X of the Board of
Governors of the Federal Reserve System, as amended from time to time. If
requested by Lender, Borrower and each Subsidiary will furnish to Lender a
statement in conformity with the requirements of Federal Reserve Form U-1. No
part of the proceeds of the Loans will be used for any purpose which violates or
is inconsistent with the provisions of Regulation U or X of the Board of
Governors.

 

(b)           Tender Offers and Going Private. Neither Borrower nor any
Subsidiary shall use (or permit to be used) any proceeds of the Loans to acquire
any security in any transaction which is subject to Section 13 or 14 of the
Securities Exchange Act of 1934, as amended, or any regulations or rulings
thereunder.

 

SECTION 5.11.   COLLATERAL. Borrower and Lender hereby agree that the Loans and
all other obligations owing from time to time from Borrower to Lender under this
Agreement and the Note shall be secured pursuant to that certain Pledge
Agreement, dated as of the date hereof, executed by Borrower in favor of Lender
(as amended, restated, modified or supplemented from time to time, the “Pledge
Agreement”), pursuant to which Borrower has pledged to Lender all of the issued
and outstanding shares of capital stock owned by Borrower of Pacific Western
National Bank (herein collectively referred to as the “Pledged Shares”).

 

SECTION 5.12.   COMPLIANCE WITH LAW. Borrower and each Subsidiary shall comply
with all applicable laws and regulations (whether federal, state or local and
whether statutory, administrative, judicial or otherwise) and with every lawful
governmental order or similar actions (whether administrative or judicial),
specifically including but not limited to all requirements of the Bank Holding
Company Act of 1956, as amended, and with the regulations of the Board of
Governors of the Federal Reserve System relating to bank holding companies.

 

SECTION 6. CONDITIONS OF LENDING

 

SECTION 6.1.      DOCUMENTATION; NO DEFAULT. The obligation of Lender to make
any Loan is subject to the following conditions precedent:

 

(a)           Initial Documentation. Lender shall have received all of the
following concurrently with the execution and delivery hereof, each duly
executed and dated the date hereof or other date satisfactory to Lender, in form
and substance satisfactory to Lender and its counsel, at the expense of
Borrower, and in such number of signed counterparts as Lender may request
(except for the Note, of which only the original shall be signed):

 

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(i)            Note. The Note duly executed.

 

(ii)           Pledge Agreement. The Pledge Agreement duly executed, together
with the original certificates evidencing the Pledged Shares and stock powers,
duly executed in blank.

 

(iii)          Loan Participation Certificate and Agreement. A Loan
Participation Certificate and Agreement dated the date hereof, duly executed by
Lender and The Northern Trust Company, substantially in the form of Exhibit B.

 

(iv)          Resolution; Certificate of Incumbency. A copy of a resolution of
the Board of Directors of Borrower authorizing the execution, delivery and
performance of this Agreement, the Note, the Pledge Agreement and other
documents provided for in this Agreement, certified by the secretary or
assistant secretary of Borrower, together with a certificate of such officer of
Borrower, certifying the names of the officer(s) of Borrower authorized to sign
this Agreement, the Pledge Agreement, the Note and any other documents provided
for in this Agreement, together with a sample of the true signature of each such
Person (Lender may conclusively rely on such certificate until formally advised
by a like certificate of any changes therein).

 

(v)           Governing Documents. A copy of the articles of incorporation and
by-laws of Borrower, certified by the secretary or assistant secretary of
Borrower.

 

(vi)          Certificate of No Default. A certificate signed by an appropriate
officer of Borrower to the effect that: (A) no Event of Default or Unmatured
Event of Default has occurred and is continuing or will result from the making
of the first Loan; and (B) the representations and warranties of Borrower
contained herein are true and correct as at the date of the first Loan as though
made on that date.

 

(vii)         Opinion of Counsel to Borrower. An opinion of counsel to Borrower
substantially in the form of Exhibit C attached hereto.

 

(viii)        Good Standing Certificate. A good standing certificate from
Borrower’s Federal Reserve Bank and from the Secretary of State of California.

 

(ix)           Payoff Letter; UCC-3 Termination Statement. Satisfactory pay-off
letters for all indebtedness, obligations and liabilities of Borrower to The
Northern Trust Company, confirming that all liens and security interests in
favor of The Northern Trust Company upon any of the property of Borrower will be
terminated on the date hereof, together with any UCC-3 Termination Statements
necessary to evidence the release of such liens and security interests.

 

(x)            Termination of the Intercreditor Agreement. An agreement
terminating the Intercreditor and Collateral Agency Agreement dated as of August
15, 2003 entered into between Lender and The Northern Trust Company.

 

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(xi)           Miscellaneous. Such other documents and certificates as Lender
may reasonably request.

 

(b)           Representations and Warranties True. At the date of each Loan,
Borrower’s representations and warranties set forth herein shall be true and
correct as of such date as though made on such date.

 

(c)           No Default. At the time of each Loan, and immediately after giving
effect to such Loan, no Event of Default or Unmatured Event of Default shall
have occurred and be continuing at the time of such Loan, or would result from
the making of such Loan.

 

SECTION 6.2.      AUTOMATIC UPDATE OF REPRESENTATIONS AND WARRANTIES AND
NO-DEFAULT CERTIFICATE; CERTIFICATE AT LENDER’S OPTION. The request by Borrower
for any Loan shall be deemed a representation and warranty by Borrower that the
statements in subsections (b) and (c) of Section 6.l are true and correct on and
as at the date of each succeeding Loan, as the case may be. Upon receipt of each
Loan request Lender in its sole discretion shall have the right to request that
Borrower provide to Lender, prior to Lender’s funding of the Loan, a certificate
executed by Borrower’s President, Treasurer, or Chief Financial Officer to such
effect.

 

SECTION 7. DEFAULT

 

SECTION 7.1.      EVENTS OF DEFAULT. The occurrence of any of the following
shall constitute an “Event of Default”:

 

(a)           failure to pay, when and as due, any principal, interest or other
amounts payable hereunder or under the Note; provided that, in the case of
interest only, such failure shall continue for three (3) days after its due
date;

 

(b)           any default, event of default, or similar event shall occur or
continue under any other instrument, document, note or agreement delivered to
Lender in connection with this Agreement, including without limitation, the
Pledge Agreement, and any applicable cure period provided therein shall have
expired; or any such instrument, document, note or agreement shall not be, or
shall cease to be, enforceable in accordance with its terms;

 

(c)           there shall occur any default or event of default, or any event or
condition that might become such with notice or the passage of time or both, or
any similar event, or any event that requires the prepayment of borrowed money
or the acceleration of the maturity thereof, under the terms of any evidence of
indebtedness or other agreement issued or assumed or entered into by Borrower or
any Subsidiary for obligations in an aggregate amount in excess of Two Million
and No/100 United States Dollars ($2,000,000.00), or under the terms of any
indenture, agreement, or instrument under which any such evidence of
indebtedness or other agreement is issued, assumed, secured, or guaranteed, and
such event shall continue beyond any applicable period of grace provided
therein;

 

(d)           any representation, warranty, schedule, certificate, financial
statement, report, notice, or other writing furnished by or on behalf of
Borrower or any Subsidiary to

 

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Lender is false or misleading in any material respect on the date as of which
the facts therein set forth are stated or certified;

 

(e)           Any guaranty of or pledge of collateral security for the Loans
shall be repudiated or become unenforceable or incapable of performance or
Borrower shall fail to pledge and deliver to Lender any share certificate of
Pacific Western National Bank as provided in Section 3(c) of the Pledge
Agreement;

 

(f)            Borrower or any Subsidiary shall fail to comply with Sections
5.l, 5.2(e) and (f), 5.4, 5.5, 5.6, 5.7 and 5.11 hereof; or fail to comply with
or perform any agreement or covenant of Borrower or any Subsidiary contained
herein, which failure does not otherwise constitute an Event of Default, and
such failure shall continue unremedied for thirty (30) days after notice thereof
to Borrower by Lender;

 

(g)           an event or condition specified in Section 4.13(b) shall occur or
exist and if as a result of such event or condition, together with all other
such events or conditions if any, Borrower or any ERISA Affiliate shall incur,
or, in the reasonable opinion of Lender, shall be reasonably likely to incur, a
liability to a Plan, a Multiemployer Plan or the PBGC (or any combination of the
foregoing) which is, in the reasonable determination of Lender, materially
adverse to the consolidated assets, financial condition business or operations
taken as a whole of Borrower and its Subsidiaries;

 

(h)           any Person, or two or more Persons acting in concert, shall
acquire beneficial ownership (within the meaning of Rule 13d-3 of the Securities
and Exchange Commission under the Securities Exchange Act of 1934) of 50% or
more of the outstanding shares of voting stock of Borrower;

 

(i)            any proceeding (judicial or administrative) shall be commenced
against Borrower or any Subsidiary, or with respect to any assets of Borrower or
any Subsidiary which could reasonably be expected to have a material and adverse
effect on the consolidated assets, financial condition, business or operations
of Borrower and its Subsidiaries and which is not dismissed within thirty (30)
days after it is commenced against Borrower or any Subsidiary; or final
judgment(s) and/or settlement(s) in an aggregate amount that is more than FIVE
MILLION UNITED STATES DOLLARS ($5,000,000) in excess of insurance for which the
insurer has confirmed coverage in writing, a copy of which writing has been
furnished to Lender, shall be entered or agreed to in any suit or action
commenced against Borrower or any Subsidiary, and which are not satisfied within
thirty (30) days after they have been entered or agreed to in any suit or action
commenced against Borrower or any Subsidiary;

 

(j)            Borrower shall grant or any Person shall obtain a security
interest in any collateral for the Loans; Borrower or any other Person shall
perfect (or attempt to perfect) such a security interest; a court shall
determine that Lender does not have a first priority security interest in any of
the collateral for the Loans enforceable in accordance with the terms of the
related documents; or any notice of a federal tax lien against Borrower shall be
filed with any public recorder and is not satisfied within thirty (30) days from
the time of such filing, unless Borrower is contesting the validity thereof in
good faith by appropriate

 

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proceedings and has set aside on its books adequate reserves with respect
thereto in accordance with generally accepted accounting principles;

 

(k)           There shall be any material loss or depreciation in the value of
any collateral for the Loans for any reason, or, unless expressly permitted by
the related documents, all or any part of any collateral for the Loans or any
direct, indirect, legal, equitable or beneficial interest therein is assigned,
transferred or sold without Lender’s prior written consent;

 

(l)            any Federal Reserve Bank, the FDIC or other regulatory entity
shall issue or agree to enter into any formal enforcement action with or against
Borrower or any Subsidiary (including, but not limited to, a formal written
agreement, cease and desist order, suspension, removal or prohibition order or
capital directive, but excluding a civil money penalty), or any Federal Reserve
Bank, the FDIC or other regulatory entity shall issue or enter into any informal
enforcement action with or against Borrower or any Subsidiary (including, but
not limited to, a commitment letter, memorandum of understanding or any similar
action) or assess a civil money penalty, which in each case is materially
adverse to the consolidated assets, financial condition, business or operations
of Borrower or any Subsidiary;

 

(m)          Borrower or any Subsidiary (other than an Insignificant Subsidiary)
shall fail to comply with Section 5.1 hereof or shall suspend the transaction of
all or a substantial portion of its usual business or Borrower or any Subsidiary
(other than an Insignificant Subsidiary) shall take any corporation action to
approve or authorize to approve any action or omission that would result in any
of the foregoing;

 

(n)           any bankruptcy, insolvency, reorganization, arrangement,
readjustment or similar proceeding, domestic or foreign, is instituted by or
against Borrower or any Subsidiary, and in the case of an involuntary bankruptcy
proceeding, such proceeding is not dismissed within sixty (60) days (it is
acknowledged and agreed that Lender has no obligation to make Loans during such
cure period); or Borrower or any Subsidiary shall take any steps toward, or to
authorize, such a proceeding; or

 

(o)           Borrower or any Subsidiary shall become insolvent, generally shall
fail or be unable to pay its debts as they mature, shall admit in writing its
inability to pay its debts as they mature, shall make a general assignment for
the benefit of its creditors or shall enter into any composition or similar
agreement.

 

SECTION 7.2.      DEFAULT REMEDIES.

 

(a)           Upon the occurrence and during the continuance of any Event of
Default specified in Section 7.l(a)-(m), Lender at its option may declare the
Note (principal, interest and other amounts) and any other amounts owed to
Lender, including without limitation any accrued but unpaid Commitment Fee,
immediately due and payable without notice or demand of any kind. Upon the
occurrence of any Event of Default specified in Section 7.l(n)-(o), the Note
(principal, interest and other amounts) and any other amounts owed to Lender,
including without limitation any accrued but unpaid Commitment Fee,

 

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shall be immediately and automatically due and payable without action of any
kind on the part of Lender. Upon the occurrence and during the continuance of
any Event of Default, any obligation of Lender to make any Loan shall
immediately and automatically terminate without action of any kind on the part
of Lender, and Lender may exercise any rights and remedies under this Agreement,
the Pledge Agreement, the Note, any related document or instrument, and at law
or in equity.

 

(b)           Lender may, by written notice to Borrower, at any time and from
time to time, waive any Event of Default or Unmatured Event of Default, which
shall be for such period and subject to such conditions as shall be specified in
any such notice. In the case of any such waiver, Lender and Borrower shall be
restored to their former position and rights hereunder, and any Event of Default
or Unmatured Event of Default so waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to or impair any subsequent or other
Event of Default or Unmatured Event of Default. No failure to exercise, and no
delay in exercising, on the part of Lender of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies of Lender herein
provided are cumulative and not exclusive of any rights or remedies provided by
law.

 

SECTION 8. DEFINITIONS

 

SECTION 8.1.      GENERAL. As used herein:

 

(a)           The term “Banking Day” means a day on which Lender is open at its
main office for the purpose of conducting a commercial banking business and is
not authorized to close.

 

(b)           The term “Code” shall mean the Internal Revenue Code of 1986, as
amended form time to time.

 

(c)           The term “Environmental Laws” shall mean all federal, state and
local laws, including statutes, regulations, ordinances, codes, rules and other
governmental restrictions and requirements, relating to the discharge of air
pollutants, water pollutants or process waste water or otherwise relating to the
environment or hazardous substances or the treatment, processing, storage,
disposal, release, transport or other handling thereof, including, but not
limited to, the federal Solid Waste Disposal Act, the federal Clean Air Act, the
federal Clean Water Act, the federal Resource Conservation and Recovery Act, the
federal Hazardous Materials Transportation Act, the federal Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the federal
Toxic Substances Control Act, regulations of the Nuclear Regulatory Agency, and
regulations of any state department of natural resources or state environmental
protection agency, in each case as now or at any time hereafter in effect.

 

(d)           The term “ERISA” shall mean the Employee Retirement Income
Security Act of 1974, as amended from time to time.

 

(e)           The term “ERISA Affiliate” shall mean any corporation or trade or
business which is a member of the same controlled group of corporations (within
the meaning of

 

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Section 414(b) of the Code) as Borrower or is under common control (within the
meaning of Section 414(c) of the Code) with Borrower.

 

(f)            The term “FDIC” means the Federal Deposit Insurance Corporation
and any successor thereof.

 

(g)           The term “Interest Period” means, with regard to LIBOR Loans, the
amount of days from the date an interest rate is to be in effect to the date
such interest period matures according to its terms.

 

(h)           The term “Interim Maturity Date” means the last day of any
Interest Period.

 

(i)            The term “Multiemployer Plan” shall mean a multiemployer plan
defined as such in Section 3(37) of ERISA to which contributions have been made
by Borrower or any ERISA Affiliate as a “contributing sponsor” (within the
meaning of Section 4001(a)(13) of ERISA).

 

(j)            The term “PBGC” shall mean the Pension Benefit Guaranty
Corporation or any entity succeeding to any or all of its functions under ERISA.

 

(k)           The term “Pension Plan” shall mean any Plan which is a “defined
benefit plan” within the meaning of Section 3(35) of ERISA.

 

(l)            The term “Person” shall mean any individual, corporation,
company, limited liability company, voluntary association, partnership, trust,
estate, unincorporated organization or government (or any agency,
instrumentality or political subdivision thereof).

 

(m)          The term “Plan” shall mean any plan, program or arrangement
covering current or former employees of Borrower or any of its ERISA Affiliates
which constitutes an “employee benefit plan” within the meaning of Section 3(3)
of ERISA.

 

(n)           The term “Prime Rate” means that rate of interest announced from
time to time by Lender called its prime rate, which rate may not at any time be
the lowest rate charged by Lender. Changes in the rate of interest on the Loans
resulting from a change in the Prime Rate shall take effect on the date set
forth in each announcement of a change in the Prime Rate.

 

(o)           The term “Subsidiary” means any corporation, partnership, joint
venture, trust, or other legal entity of which Borrower owns directly or
indirectly twenty-five percent (25%) or more of the outstanding voting stock or
interest, or of which Borrower has effective control, by contract or otherwise.
The term Subsidiary includes each Subsidiary Bank unless stated otherwise
explicitly.

 

(p)           The term “Subsidiary Bank” means each Subsidiary which is a bank.

 

(q)           The term “Tier 1 Capital” means the same as that determined under
the capital formula currently used by the Federal Reserve Board.

 

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(r)            The term “Total Capital” means the same as that determined under
the capital formula currently used by the Federal Reserve Board.

 

(s)           The term “Trust Guarantee” means any guarantee of Borrower of the
Trust Preferred Securities, which guarantee is subordinate and junior in right
of payment to the prior payment of the obligations of Borrower hereunder and
under the Note on terms satisfactory to Lender.

 

(t)            The term “Trust Indebtedness” means indebtedness of Borrower
payable to the Trust Issuer or its transferees (a) which is due not earlier than
the date thirty (30) years after its issuance, (b) which may not be redeemed
earlier than five (5) years after issuance and (c) the payment of which is
subordinate and junior in right of payment to the prior payment of the
obligations of Borrower hereunder and under the Note on terms satisfactory to
Lender.

 

(u)           The term “Trust Issuer” means a wholly-owned Subsidiary of
Borrower which qualifies as a Delaware or Connecticut statutory business trust.

 

(v)           The term “Trust Preferred Securities” means preferred securities
issued by the Trust Issuer (a) which are subject to mandatory redemption not
earlier than the date thirty (30) years after issuance and (b) which may not be
optionally redeemed earlier than five (5) years after issuance.

 

(w)          The term “Unmatured Event of Default” means an event or condition
which would become an Event of Default with notice or the passage of time or
both.

 

Except as and unless otherwise specifically provided herein, all accounting
terms shall have the meanings given to them by generally accepted accounting
principles and shall be applied and all reports required by this Agreement shall
be prepared, in a manner consistent with the financial statements referred to in
Section 4.3 above.

 

SECTION 8.2.      APPLICABILITY OF SUBSIDIARY REFERENCES. Terms hereof
pertaining to any Subsidiary shall apply only during such times as Borrower has
any Subsidiary.

 

SECTION 9. NO INTEREST OVER LEGAL RATE.

 

Borrower does not intend or expect to pay, nor does Lender intend or expect to
charge, accept or collect any interest which, when added to any fee or other
charge upon the principal which may legally be treated as interest, shall be in
excess of the highest lawful rate. If acceleration, prepayment or any other
charges upon the principal or any portion thereof, or any other circumstance,
result in the computation or earning of interest in excess of the highest lawful
rate, then any and all such excess is hereby waived and shall be applied against
the remaining principal balance. Without limiting the generality of the
foregoing, and notwithstanding anything to the contrary contained herein or
otherwise, no deposit of funds shall be required in connection herewith which
will, when deducted from the principal amount outstanding hereunder, cause the
rate of interest hereunder to exceed the highest lawful rate.

 

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SECTION 10. PAYMENTS, ETC.

 

All payments hereunder shall be made in immediately available funds, and shall
be applied first to accrued interest and then to principal; however, if an Event
of Default occurs, Lender may, in its sole discretion, and in such order as it
may choose, apply any payment to interest, principal and/or lawful charges and
expenses then accrued. Borrower shall receive immediate credit on payments
received during Lender’s normal banking hours if made in cash, immediately
available funds, or by debit to available balances in an account at Lender;
otherwise payments shall be credited after clearance through normal banking
channels. Borrower authorizes Lender to charge any account of Borrower
maintained with Lender for any amounts of principal, interest, taxes, duties, or
other charges or amounts due or payable hereunder, with the amount of such
payment subject to availability of collected balances in Lender’s discretion;
unless Borrower instructs otherwise, all Loans shall be made in immediately
available funds and shall be credited to an account(s) of Borrower with Lender.
All payments shall be made without deduction for or on account of any present or
future taxes, duties or other charges levied or imposed on this Agreement, the
Pledge Agreement, the Note, the Loans or the proceeds, Lender or Borrower by any
government or political subdivision thereof. Borrower shall upon request of
Lender pay all such taxes, duties or other charges in addition to principal and
interest, including without limitation all documentary stamp and intangible
taxes, but excluding income taxes based solely on Lender’s income.

 

SECTION 11. SETOFF.

 

At any time after an Event of Default of Unmatured Event of Default shall have
occurred and be continuing, and upon notice to Borrower, any account, deposit or
other indebtedness owing by Lender to Borrower, and any securities or other
property of Borrower delivered to or left in the possession of Lender or its
nominee or bailee, may be set off against and applied in payment of any
obligation hereunder, whether due or not. The setoff provision in this Section
11 shall not be applicable to any accounts (and deposits or property therein)
maintained at Lender in the name of Borrower or any of its Subsidiaries for
which Borrower or such Subsidiaries have established and maintained in trust for
the benefit of any third party (not including, however, any affiliate of
Borrower or any such Subsidiary). Borrower shall be obligated to notify Lender
promptly upon the receipt of any such notice of setoff, and provide supporting
documentation, in form and substance reasonably satisfactory to Lender, to
establish, in the reasonable opinion of Lender, that any account subject to such
setoff is in fact held by Borrower or any of its Subsidiaries, as the case may
be, in trust for the benefit of any third party (not including, however, any
affiliate or Borrower or any such Subsidiary). If Borrower fails to comply with
the foregoing sentence, Lender may assume that its setoff of any account or
other property is valid and permissible.

 

SECTION 12. NOTICES

 

All notices, requests and demands to or upon the respective parties hereto shall
be made, if to Lender, to its office indicated above (Attention:  Jon B. Beggs,
Vice President), and if to Borrower, to its address set forth below, or to such
other address as may be hereafter designated in writing by the respective
parties hereto or, as to Borrower, may appear in Lender’s records. Notices sent
by facsimile transmission shall be deemed to have been given upon electronic

 

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confirmation; notices sent by mail shall be deemed to have been given three (3)
business days after the date when sent by registered or certified mail, postage
prepaid; notices sent by personal delivery or by a nationally recognized
overnight delivery service (e.g., Federal Express) shall be deemed to have been
given when received.

 

SECTION 13. MISCELLANEOUS.

 

This Agreement and any document or instrument executed in connection herewith
shall be governed by and construed in accordance with the internal law of the
State of New York. This Agreement may only be amended, supplemented or modified
at any time by written instrument duly executed by Lender and Borrower. Unless
the context requires otherwise, wherever used herein the singular shall include
the plural and vice versa, and the use of one gender shall also denote the
other. Captions herein are for convenience of reference only and shall not
define or limit any of the terms or provisions hereof; references herein to
Sections or provisions without reference to the document in which they are
contained are references to this Agreement. This Agreement shall bind Borrower,
its successors and assigns, and shall inure to the benefit of Lender, its
successors and assigns, except that Borrower may not transfer or assign any of
its rights or interest hereunder without the prior written consent of Lender.
Borrower agrees to pay upon demand all expenses (including without limitation
reasonable attorneys’ fees, legal costs and expenses, whether in or out of
court, in original or appellate proceedings or in bankruptcy) incurred or paid
by Lender or any holder of the Note in connection with (a) the negotiation,
preparation, execution and delivery of this Agreement, the Note, the Pledge
Agreement and the other documents to be delivered hereunder, (b) any amendment,
modification or waiver of any of the terms of this Agreement, the Pledge
Agreement or the Note, (c) any Event of Default or Unmatured Event of Default
and any enforcement or collection proceedings resulting therefrom, and (d) any
transfer, stamp, documentary or other similar taxes, assessments or charges
levied by any governmental or revenue authority in respect of this Agreement,
the Pledge Agreement, the Note or any other document referred to herein;
provided, that, Borrower shall not be obligated to pay Lender for Lender’s
attorneys’ fees and expenses for the matters described in the foregoing clause
(a) which exceed $7,500. Except as otherwise specifically provided herein,
Borrower expressly and irrevocably waives presentment, protest, demand and
notice of any kind in connection herewith.

 

SECTION 14. ARBITRATION AND WAIVER OF JURY TRIAL

 

(a)           This Section concerns the resolution of any controversies or
claims between Lender and Borrower, whether arising in contract, tort or by
statute, including but not limited to controversies or claims that arise out of
or relate to:  (i) this Agreement (including any renewals, extensions or
modifications); or (ii) any document executed in connection with this Agreement
(collectively, a “Claim”).

 

(b)           At the request of Lender or Borrower, any Claim shall be resolved
by binding arbitration in accordance with the Federal Arbitration Act (Title 9,
U.S. Code) (the “Act”). The Act will apply even though this Agreement provides
that it is governed by the law of a specified state.

 

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(c)           Arbitration proceedings will be determined in accordance with the
Act, the applicable rules and procedures for the arbitration of disputes of JAMS
or any successor thereof (“JAMS”), and the terms of this Section. In the event
of any inconsistency, the terms of this Section shall control.

 

(d)           The arbitration shall be administered by JAMS and conducted,
unless otherwise required by law, in the State of California. All Claims shall
be determined by one arbitrator; however, if Claims exceed Five Million Dollars
($5,000,000), upon the request of Lender or Borrower, the Claims shall be
decided by three arbitrators. All arbitration hearings shall commence within
thirty (30) days of the demand for arbitration and close within thirty (30) days
of commencement and the award of the arbitrator(s) shall be issued within thirty
(30) days of the close of the hearing. However, the arbitrator(s), upon a
showing of good cause, may extend the commencement of the hearing for up to an
additional sixty (60) days. The arbitrator(s) shall provide a concise written
statement of reasons for the award. The arbitration award may be submitted to
any court having jurisdiction to be confirmed and enforced.

 

(e)           The arbitrator(s) will have the authority to decide whether any
Claim is barred by the statute of limitations and, if so, to dismiss the
arbitration on that basis. For purposes of the application of the statute of
limitations, the service on JAMS under applicable JAMS rules of a notice of
Claim is the equivalent of the filing of a lawsuit. Any dispute concerning this
arbitration provision or whether a Claim is arbitrable shall be determined by
the arbitrator(s). The arbitrator(s) shall have the power to award legal fees
pursuant to the terms of this Agreement.

 

(f)            This Section does not limit the right of Lender or Borrower to: 
(i) exercise self-help remedies, such as, but not limited to, setoff;
(ii) initiate judicial or non-judicial foreclosure against any real or personal
property collateral; (iii) exercise any judicial or power of sale rights, or
(iv) act in a court of law to obtain an interim remedy, such as, but not limited
to, injunctive relief, writ of possession or appointment of a receiver, or
additional or supplementary remedies.

 

(g)           The filing of a court action is not intended to constitute a
waiver of the right of any party, including the suing party, thereafter to
require submittal of the Claim to arbitration.

 

(h)           By agreeing to binding arbitration, the parties irrevocably and
voluntarily waive any right they may have to a trial by jury in respect of any
Claim. Furthermore, without intending in any way to limit this Agreement to
arbitrate, to the extent any claim is not arbitrated, the parties irrevocably
and voluntarily waive any right they may have to a trial by jury in respect of
such Claim. This provision is a material inducement for the parties entering
into this Agreement.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.

 

 

 

FIRST COMMUNITY BANCORP

 

 

 

 

 

By:

/s/ Lynn M. Hopkins

 

 

 

Lynn M. Hopkins, Executive Vice President

 

 

 

 

 

Address for notices:

 

 

 

120 Wilshire Blvd.

 

Santa Monica, California 90401

 

Attention:

Vic Santoro

 

 

 

 

 

 

U.S. BANK NATIONAL ASSOCIATION

 

 

 

 

 

By:

/s/ Jon B. Beggs

 

 

 

Jon B. Beggs, Vice President

 

 

 

Signature Page to Amended and Restated Revolving Credit Agreement

 

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EXHIBIT A

 

REVOLVING CREDIT NOTE

 

$70,000,000.00

Milwaukee, Wisconsin

 

August 3, 2006

 

FOR VALUE RECEIVED, on or before the Maturity Date, FIRST COMMUNITY BANCORP, a
corporation formed under the laws of the State of California (“Borrower”),
promises to pay to the order of U.S. BANK NATIONAL ASSOCIATION, a national
banking association (hereafter, together with any subsequent holder hereof,
called “Lender”), at its banking office at 777 East Wisconsin Avenue, Milwaukee,
Wisconsin 53202, or at such other place as Lender may direct, the aggregate
unpaid principal balance of each advance (a “Loan” and collectively the “Loans”)
made by Lender to Borrower hereunder. The total principal amount of Loans
outstanding at any one time hereunder shall not exceed SEVENTY MILLION AND
00/100 UNITED STATES DOLLARS ($70,000,000.00).

 

Lender is hereby authorized by Borrower at any time and from time to time at
Lender’s sole option to attach a schedule (grid) to this Note and to endorse
thereon notations with respect to each Loan specifying the date and principal
amount thereof, and the date and amount of each payment of principal and
interest made by Borrower with respect to each such Loan. Lender’s endorsements
as well as its records relating to Loans shall be rebuttably presumptive
evidence of the outstanding principal and interest on the Loans, and, in the
event of inconsistency, shall prevail over any records of Borrower and any
written confirmations of Loans given by Borrower.

 

Borrower agrees to pay interest on the unpaid principal amount from time to time
outstanding hereunder on the dates and at the rate or rates as set forth in the
Revolving Credit Agreement (as hereinafter defined).

 

Payments of both principal and interest are to be made in immediately available
funds in lawful money of the United States of America.

 

This Note evidences indebtedness incurred under that certain Amended and
Restated Revolving Credit Agreement dated as of the date hereof executed by and
between Borrower and Lender (and, if amended, restated or replaced, all
amendments, restatements and replacements thereto or therefor, if any) (the
“Revolving Credit Agreement;” capitalized terms not otherwise defined herein
have the same meaning herein as in the Revolving Credit Agreement). Reference is
hereby made to the Revolving Credit Agreement for a statement of its terms and
provisions, including without limitation those under which this Note may be paid
prior to its due date or have its due date accelerated. This Note replaces that
certain Revolving Credit Note dated August 4, 2005, in the stated principal
amount of $50,000,000, from Borrower to Lender, and Borrower acknowledges and
agrees that the indebtedness evidenced thereby has not been extinguished and
that no novation has occurred.

 

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Borrower agrees to pay upon demand all expenses (including without limitation
attorneys’ fees, legal costs and expenses, in each case whether in or out of
court, in original or appellate proceedings or in bankruptcy) incurred or paid
by Lender or any holder hereof in connection with the enforcement or
preservation of its rights hereunder or under any document or instrument
executed in connection herewith. Borrower expressly and irrevocably waives
presentment, protest, demand and notice of any kind in connection herewith.

 

This Note is secured by the property described in the Pledge Agreement (as such
term is defined in the Revolving Credit Agreement), to which reference is made
for a description of the collateral provided thereby and the rights of Lender
and Borrower in respect of such collateral.

 

This Note and any document or instrument executed in connection herewith shall
be governed by and construed in accordance with the internal law of the State of
New York. Unless the context requires otherwise, wherever used herein the
singular shall include the plural and vice versa, and the use of one gender
shall also denote the other. Captions herein are for convenience of reference
only and shall not define or limit any of the terms or provisions hereof;
references herein to Sections or provisions without reference to the document in
which they are contained are references to this Note. This Note shall bind
Borrower, its successors and assigns, and shall inure to the benefit of Lender,
its successors and assigns, except that Borrower may not transfer or assign any
of its rights or interest hereunder without the prior written consent of Lender.

 

 

FIRST COMMUNITY BANCORP

 

 

 

BY

 

 

 

Name:

 

 

 

Title:

 

 

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