exhibit10-1.htm


    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:

    


    VINEYARD
      NATIONAL
      BANCORP,

    a Californiacorporation

    


    By: /s/
      Donald
      Pelgrim                                                     


    


    Name: Donald
      Pelgrim                                                               


    


    Title: Executive
      Vice
      President                                                               


    


    STATE
      OF CALIFORNIA

    COUNTY
      OF RIVERSIDE

    


    Before
      me, Donna Johns, Notary Public of
      the state and county aforesaid, personally appeared Donald Pelgrim, 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
      Donald Pelgrim, Executive Vice President .

    


    WITNESS
      MY HAND, at office,
      this 27th day of October,
      2008.

    


    


    /s/
      Donna
      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/
      David S.
      Work                                                     


    Name:
      David S.
      Work                                                                                                                    


    


    Title: Executive
      Vice
      President                                                                                                                               


    


    STATE
      OF TENNESSEE

    COUNTY
      OF SHELBY

    


    Before
      me, G. Porter Robinson, Notary
      Public of the state and county aforesaid, personally appeared David S. 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 David S. Work, Executive Vice
      President.

    


    WITNESS
      MY HAND, at office,
      this 28th day of October,
      2008.

    


    


    _/s/
      G. Porter
      Robinson_______________

    Notary
      Public

    


    My
      Commission
      Expires:

    


    _April
      28,
      2009_____________________