Document:

ex101.htm

    Exhibit 10.1

     

    AGREEMENT

     

    This
Agreement is made and entered into this 31' day of December, 2009 by and between
the parties stated hereunder;

     

    
      	
              1.  

            	
              Woori
      Private Equity Fund, a company incorporated under the laws of the Republic
      of Korea having its principal office at 20th
      FL, Youngpoong Bldg., Seorin-dong 33, Jongro-gu, Seoul, Korea (the "Woori
    PEF")

            

    

     

    
      	
              2.  

            	
              Cintel
      Corp., a company incorporated under the laws of the State of Nevada having
      its principal office
      at 433 N. Camden Drive, Suite 400, Beverly Hills, CA 90210 USA (the
      "Cintel")

            

    

     

    
      	
              3.  
      

            	
              Cintel,
      Co., Ltd., a company incorporated under the laws of the Republic of Korea
      having its principal
      office at Dohwa-dong 22, Mapo-gu, Seoul, Korea (the "Cintel
      Korea")

               

              (Each
      a "Party", collectively "Parties")

            

    

     

    Recitals

     

    1. 
Woori PEF
entered into Convertible Bonds Subscription Agreement (the "Convertible Bond
Agreement") with Cintel on March 15, 2007, and undertook
the convertible bonds of 60 billion won (the "Convertible
Bonds") issued by Cintel on April 12, 2007.

     

    2. 
Cintel
established the right of pledge on 10,718,080,000 won of the ordinary deposit
account under the name of Cintel in Woori Bank (the "Pledged Deposit") in order to ensure the repayment of
the convertible bonds subscribed by Woori PEF. Thereupon, Cintel offered 501,000
common stock of Phoenix Digital Tech(the "PDT") owned by Cintel, 31.38% of Bonghwang
Semiconductor Yuhan Gongsa(the "PSTS")
and 220,000 common stocks of Bluecom Co., Ltd. ("Bluecom") and 2,644,426 common stock of
BKLCD Co., Ltd.( "BKLCD") owned by Cintel
Korea (the 501,000 common stock of PDT, 31.38% of PSTS, 220,000 common stocks of
Bluecom and 2,644,426 common stocks of BKLCD, collectively the "Pledged
Securities")

     

    3. 
Cintel acknowledges the fact that it is currently in default under the terms of
the Convertible Bond Agreement due to the fact that its subsidiary, PDT of
opening a joint management procedure by financial institutions. So, Parties
shall cure the default, and agree the followings on the condition of the Woori
PEF Investment Committee's approval, and shall perform this Agreement in good
faith.

     

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    Article
1    (Payment of the
Pledged Deposit)

     

    Cintel
hereby agrees to transfer to and authorize the payment of the Pledged Deposit to
Woori PEF, or as Woori PEF may direct. Cintel shall execute such documents as
Woori PEF may direct to provide full access and to facilitate the withdrawal of
the principal and interest of Pledged Deposit by issuing such documents to
facilitate Woori Bank's withdrawal of the principal and interest of Pledged
Deposit including withdrawal slip stamped with the corporation's seal used for
opening the deposit account of the principal and interest of Pledged Deposit
right after signing of the Agreement.

     

    Article
2    (Executing the Sale
and Purchase of Pledged Securities)

     

    (1)
Cintel or Cintel Korea and Woori PEF agree to sell and buy the pledged
securities as follows:

     

    
      	
              the
      sales share

            	
              Seller

            	
              Purchaser

            	
              The
      Purchase price

            
	
              PDT
      common stock 501,000 share

            	
              Cintel

            	
              Woori
      PEF

            	
              9,350,664,000
      won

            
	
              PSTS
      owning 31.38%

            	
              Cintel

            	
              Woori
      PEF

            	
              11,905,481,725
      won

            
	
              Bluecom
      common stock 220,00 share

            	
              Cintel

            	
              Woori
      PEF

            	
              1,896,180,000
      won

            
	
              BKLCD
      common stock 2,644,426 share

            	
              Cintel
      Korea

            	
              Woori
      PEF

            	
              15,866,556,000
      won

            

    

    

    (2)The
payment of Purchase Price under paragraph (1) shall be made by offset of the
principal and interest of the Convertible Bonds in the amount that is equivalent
to the Purchase Price. However, with regard to payment of the Purchase Price for
the 2,644,426 common stocks of BKLCD owned by Cintel Korea, such payment shall
be by way of an agreement to offset deemed to be constituted hereby among
Cintel, Cintel Korea, and Woori PEF (the "Offset Agreement")

     

    (3) Cintel
and Woori PEF agree to exchange the signed copies of the (Annexl) Share Purchase
Agreement right after the signing of this Agreement.

     

    (4) The
closing date of each Share Purchase Agreement under paragraph (3) in this
Article shall be, whichever comes first, (i) the date when Woori PEF notifies
Cintel of the offsetting of the principal and interest of the Convertible Bonds
against the Purchase Price and Woori PEF becomes a shareholder
of the Pledged Securities by transferring a title; or (ii) December 31, 2009,
provided, however, that the closing date of the sale and purchase of the PDT
common stock shall be the date after the share purchase agreement of UB
precision common share of 6,210,000 is signed with the party which is designated
by Cintel.

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (5)Woori PEF
may sell and purchase part of its pledged securities on the installment basis,
may notify Purchaser as a third party of it under the Purchase Agreement. in
this case, under the paragraph (3) in the Article, the Purchase Agreement
exchanged shall be deemed to be modified upon the Woori PEF's
notification.

     

    (6)Each
party shall be responsible for such parties payment of any tax and/or public
utilities charge required by the sale and purchase of the Pledged Securities
under applicable tax laws and regulations.

     

    Article
3    (Cintel's
Obligations)

     

    (1)
Cintel agrees to issue a Voting Rights Proxy Agreement (Annex 2) and Power of
Attorney to Transfer a Title (Annex 3) simultaneously with the signing of this
Agreement in order for Woori PEF to lawfully exercise is ownership right and
shareholder right to the Pledged Securities.

     

    (2)
Cintel agrees to ask and provide to Woori PEF resignation letters of directors
and auditors, whom Cintel elected to serve with PDT and Bluecom following the
signing of this agreement, and the sale and purchase of stocks between PDT and
Bluecom is completed.

     

    (3)
Cintel shall have the board of directors of PDT and Bluecom convene a special
shareholders' meeting in order to elect directors and auditors designated by
Woori PEF, immediately after the signing of the Agreement, provided, however,
that such actions shall not be necessary after the directors of PDT and Bluecom
designated by Cintel resign or the title of the stock of PDT and Bluecom is
transferred to Woori PEF.

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    Article
4    (Repayment of the
Principal and Interest of the Convertible Bonds)

     

    (1)  The
principal and interest of the Convertible Bonds to be claimed against Cintel by
Woori PEF shall be the amount which adds 19% compound interest per year to 60
billion won of the Convertible Bonds in the principal amount from the date of
issue of the Bonds until the signing of the Agreement and deducts paid interest
(the "Principal and
Interest").

     

    (2)
Subject to the condition that all obligations referred to in i), ii) and iii)
below shall have been paid, Woori PEF agrees to waive its rights, in respect of
the amount of any redemption obligations that remain after deducting, from the
total principal and interest payable on the Convertible Bonds, the amounts paid
in respect of i), ii) and iii) below (such remaining amounts, hereby agrees that
upon consummation of the transactions contemplated by this Agreement, the
outstanding principal and interest under the Convertible Bonds shall be reduced
by the following: (the "Remaining Principal and
Interest"):

     

    i ) the
principal and interest of the Pledged. Deposit under Article I

     

    ii) the
Total sum of Purchase Price under Article 2

     

    iii) the
amounts of all debt obligations that have become the actual and outstanding (as
opposed to contingent ) debt obligations of PDT under.
PbT'S.surety obligations,

     

    (3)
Notwithstanding the waiver of Remaining Principal and Interest
provided  for in paragraph (2) of the Article, in the event that
Cintel makes any payments to any third-party creditors in respect of unsecured
convertible bond obligations, Cintel shall be obligated to pay Woori PEF such
percentage of the Remaining Principal and Interest as corresponds to the average
ratio of such third parties recovery of the bond claims in relation to the
amounts that remain unpaid.

     

    Article 5   (Right of First Refusal to Cintel
)

     

    (I) Woori
PEF shall give the right of first refusal on the PSTS shares (hereinafter
referred to as "PSTS common stocks) acquired pursuant to Article 2 to Cintel or
the party designated by Cintel (hereinafter • referred to as "Cintel"),
meanwhile, Cintel shall provide Woori PEF with 100,000 common stocks of BKLCD
without compensation other than Pledged securities until December 31,
2009.

     

    (2) The right
of first refusal of this Article 5-(1) shall be based on the number of stocks
(hereinafter referred to as "the number of stocks sold") which PEF notices to
Cintel after deciding the sale of stock of PSTS to third party. Cintel may
decide if it excises the right of first refusal on the whole number of
stocks
sold. When the right of first refusal is exercised, the sale price shall be the
amount on which Woori PEF sales to a third party, provided, however, that in
case Woori PEF and the third party fail to enter into the contract, the right of
first refusal shall survive regardless of exercise of it.

     

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (3) The right
of first refusal specified on Article 5-0) shall be lapsed unless the title of
100,000 common stocks of BKLCD is transferred to PEF without compensation within
the period set forth on this Article 5-0). In addition, the right shall be
considered to be lapsed if Cintel fails to exercise (It means that the sale
price is paid after the intention to purchase first is expressed) its rights
within two (2) weeks (If over 2weeks are given to third party in relation of the
payment of sale price, the period shall follow the one) after Woori PEF notice
our intention to sale, including the sale price of the PSTS stocks to be
transferred to third parties, provide, however, that in the event PSTS is listed
on the stock market, the right of first refusal specified on this Article 5-0)
shall be lapsed if Cintel fails to exercise the right of first refusal of this
Article 5-(1) at the closing price of notice date until the following day noon
after Woori PEF gives to Cintel the notification of stock sale.

     

    (4) Although
the right of first refusal of Cintel is lapsed pursuant to this Article 5-(3),
the common stocks of BKCLD given to Woori PEF in compensation for the right of
first refusal according to this Article 5-(1) shall not be returned to
Cintel.

    

     

    Article
6    (Amending Agreement
related to the Convertible Bonds)

     

    With
regard to the Convertible Bonds, the Convertible Bonds Agreement made by and
between Woori PEF and Cintel shall be deemed to be modified to reflect the
Agreement.

     

    Cintel
and Woori PEF shall execute Korean versions of this Agreement and the agreements
annexed hereto; provided, however, that in the event of any conflict in
interpretation between the Korean version and the English version of this
Agreement or the agreements annexed hereto, the Korean version shall be
controlling.

     

    Article 7   (Good Faith)

     

    Woori PEF
and Cintel shall cooperate in good faith in order for Parties to perform their
obligations pursuant to the Agreement.

     

    Article 8   (Confidentiality)

     

    Parties
agree that at all times it will hold in strict confidence with regard to the
conclusion, contents, and fulfillment of the Agreement and not disclose to any
third party Confidential Information of the other, except as approved in writing
by the other party to this Agreement.

     

    Each
party agrees that it will not use the Confidential Information for any purpose
that is not related to this Agreement.

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    Article
9    (Effectuation and
Termination)

     

    (1) The
Agreement will come into force on the clay of Woori PEF' s investment
committee's approval and its signature.

    (2) The
Agreement shall be terminated and become void if:

     

    (1) the
Parties mutually so agree in writing;

    (2) a
Party does not perform the obligation provided in the Agreement, and the other
Party requested
the nonfeasant Party to perform the obligation. However, obligation is not
performed within two (2) weeks without due reason; provided, however, that any
action/non-action taken in compliance with an administrative order of relevant
regulatory authorities or in compliance with a decision of the association of
PDT's creditor financial institutions, shall not be deemed to constitute a
failure to perform under this Agreement.

     

    (3) If the
Agreement is terminated by Cintel's not fulfilling the obligation provided in
the Agreement, Woori PEF may immediately accelerate the remaining principal and
interests of the Convertible Bonds based on
the nonfeasance.

     

    Article
10    (Damages)

     

    A Party
that fails to perform its obligations provided in this Agreement shall
compensate the damage accrued to the other Party. However, the occurrence or
existence of the event or circumstances referred to in either or both of
subparagraphs T.
and of paragraph (2) in Article 9 shall in no way be deemed to constitute
a failure on the part of Woori PEF's to perform any of its obligations
hereunder.

     

    Article
11    (Dispute
Settlement)

     

    Pursuant
to the Agreement, any dispute or claim arising out of or relating to this
Agreement will be amicably settled in principle; otherwise Seoul Central
District Court shall have the exclusive original jurisdiction as a competent
court for a trial in case any action is to be taken.

     

    (Signatures
on Following Page)

     

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    To prove that this Agreement took place, the Agreement should be
prepared in triplicate; and each party shall sign and keep the respective
copy.

     

    
      
        	
                Parties:

                 

                 

              	 	
                 

              	 	
                 

              
	Woori PEF	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	
                /s/
      

              	 	
                 

              	 	
                 

              
	
                 Woori
      Private Equity Fund

                Managing Partner Woori Private Equity

                CEO

              	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	Cintel 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	
                /s/
      Dave K. Han

              	 	
                 

              	 	
                 

              
	
                Dave
      Han

                Cintel
      Corp

                CEO

              	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	Cintel Korea	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	
                /s/
      

              	 	
                 

              	 	
                 

              
	
                Cintel
      Co., Ltd.

                CEOEXHIBIT 10(iiii)

        UNITED STATES OF AMERICA

        BEFORE THE

        BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM

        WASHINGTON, D.C.

        	
                     

                	
                     

                	
                     

                
	
                     

                	
                     

                	
                     

                
	
                    Written Agreement by and among

                	
                     

                	
                     

                
	
                     

                	
                     

                	
                     

                
	
                    NORTH VALLEY BANCORP

                	
                     

                	
                    Docket Nos. 09-158-WA/RB-HC

                
	
                    Redding, California

                	
                     

                	
                                          09-158-WA/RB-SM

                
	
                     

                	
                     

                	
                     

                
	
                    NORTH VALLEY BANK

                	
                     

                	
                     

                
	
                    Redding, California

                	
                     

                	
                     

                
	
                     

                	
                     

                	
                     

                
	
                    and

                	
                     

                	
                     

                
	
                     

                	
                     

                	
                     

                
	
                    FEDERAL RESERVE BANK OF

                	
                     

                	
                     

                
	
                    SAN FRANCISCO

                	
                     

                	
                     

                
	
                    San Francisco, California

                	
                     

                	
                     

                
	
                     

                	
                     

                	
                     

                

                  WHEREAS, in recognition of their common goal to maintain the financial soundness of North Valley Bancorp, Redding, California (“Bancorp”), a registered bank holding company, and its subsidiary bank, North Valley Bank, Redding, California (the “Bank”), a state chartered bank that is a member of the Federal Reserve System, Bancorp, the Bank, and the Federal Reserve Bank of San Francisco
        (the “Reserve Bank”) have mutually agreed to enter into this Written Agreement (the “Agreement”); and

                  WHEREAS, on January 6, 2010, the boards of directors of Bancorp and the Bank, at duly constituted meetings, adopted a resolution authorizing and directing J.M. Wells, Jr., to enter into this Agreement on behalf of Bancorp and the Bank, and consenting to compliance by Bancorp, the Bank, and their institution-affiliated parties, as defined in sections 3(u) and 8(b)(3) of the Federal Deposit Insurance Act, as
        amended (the “FDI Act”) (12 U.S.C. §§ 1813(u) and 1818(b)(3)).

        

        

        

                  NOW, THEREFORE, Bancorp, the Bank, and the Reserve Bank agree as follows:

        Concentrations of Credit

                  1.          Within 45 days of this Agreement, the Bank shall submit to the Reserve Bank an acceptable written plan to strengthen the Bank’s management of commercial real estate (“CRE”) concentrations, including steps to reduce or mitigate the risk of concentrations. The plan shall be consistent with the Interagency Guidance on Concentrations
        in Commercial Real Estate Lending, Sound Risk Management Practices, dated December 12, 2006 (SR 07-1), and, at a minimum, address, consider, and include:

                               (a)          Continued reduction of concentration of credit risk tolerances or limits by types of loan products, geographic locations, and other common risk characteristics or sensitivities;

                               (b)          documented strategies to manage CRE concentration levels, including a contingency plan to reduce or mitigate concentrations;

                               (c)          enhanced monitoring and reporting of CRE concentrations to management and the board of directors; and

                               (d)          continued performance of strategic planning that considers CRE concentrations in relation to the Bank’s planned growth, projected earnings, and capital plans and overall operations.

        2

        

        

        

        Lending and Credit Administration

                  2.          Within 60 days of this Agreement, the Bank shall submit to the Reserve Bank an acceptable program to enhance lending and credit administration that shall, at a minimum, address, consider, and include:

                               (a)          Ongoing monitoring of, and development of work-out strategies for loans on the Bank’s watch list and problem loans;

                               (b)          standards for interest-only loans; and

                               (c)          standards for the timely movement of loans to non-accrual status.

        Asset Improvement

                  3.          (a)          The Bank shall not, directly or indirectly, extend or renew any credit to or for the benefit of any borrower, including any related interest of the borrower, who is obligated to the Bank in any manner on any extension of credit or portion thereof that has been charged off by the Bank or
        classified, in whole or in part, “loss” in the Report of Examination or in any subsequent report of examination, as long as such credit remains uncollected.

                               (b)          The Bank shall not, directly or indirectly, extend or renew any credit to or for the benefit of any borrower, including any related interest of the borrower, whose extension of credit has been classified “doubtful” or “substandard” in the Report of
        Examination or in any subsequent report of examination, without the prior approval of the board of directors. The board of directors shall document in writing the reasons for the extension of credit or renewal, specifically certifying that: (i) the extension of credit is necessary to protect the Bank’s interest in the ultimate collection of the credit already granted or (ii) the extension of credit is in full compliance with the Bank’s written loan policy, is adequately
        secured, and a thorough credit analysis has been performed indicating that the extension or renewal is reasonable and justified, all necessary loan documentation has been properly and accurately prepared and filed, the extension of credit will not impair the Bank’s interest in obtaining repayment of the already outstanding credit, and the board of directors reasonably believes that the extension of credit or renewal will be repaid according to its terms. The written certification
        shall be made a part of the minutes of the board of directors meetings, and a copy of the signed certification, together with the credit analysis and related information that was used in the determination, shall be retained by the Bank in the borrower’s credit file for subsequent supervisory review. For purposes of this Agreement, the term “related interest” is defined as set forth in section 215.2(n) of Regulation O of the Board of Governors (12 C.F.R. §
        215.2(n)).

        3

        

        

        

                  4.          (a)          Within 60 days of this Agreement, the Bank shall submit to the Reserve Bank an acceptable written plan designed to improve the Bank’s position through repayment, amortization, liquidation, additional collateral, or other means on each loan or other asset in excess of $1,000,000,
        including other real estate owned (“OREO”), that (i) is past due as to principal or interest more than 90 days as of the date of this Agreement; (ii) is on the Bank’s problem loan list; or (iii) was adversely classified in the Report of Examination.

                               (b)          Within 30 days of the date that any additional loan or other asset in excess of $1,000,000, including OREO, becomes past due as to principal or interest for more than 90 days, is on the Bank’s problem loan list, or is adversely classified in any subsequent report of
        examination of the Bank, the Bank shall submit to the Reserve Bank an acceptable written plan to improve the Bank’s position on such loan or asset.

                               (c)          Within 30 days after the end of each calendar quarter thereafter, the Bank shall submit a written progress report to the Reserve Bank to update each asset improvement plan, which shall include, at a minimum, the carrying value of the loan or other asset and changes in the
        nature and value of supporting collateral, along with a copy of the Bank’s current problem loan list, a list of all loan renewals and extensions without full collection of interest in the last quarter, and past due/non-accrual report.

        4

        

        

        

        Allowance for Loan and Lease Losses

                  5.          (a)          The Bank shall, within 30 days from the receipt of any federal or state report of examination, charge off all assets classified “loss” unless otherwise approved in writing by the Reserve Bank.

                               (b)          The Bank shall maintain a sound process for determining, documenting, and recording an adequate ALLL in accordance with regulatory reporting instructions and relevant supervisory guidance, including the Interagency Policy Statements on the Allowance for Loan and Lease
        Losses, dated July 2, 2001 (SR 01-17 (Sup)) and December 13, 2006 (SR 06-17).

                               (c)          Within 60 days of this Agreement, the Bank shall submit to the Reserve Bank an acceptable written program for the maintenance of an adequate ALLL. The program shall include policies and procedures to ensure adherence to the Bank’s ALLL methodology and provide for
        periodic reviews and updates to the ALLL methodology, as appropriate. The program shall also provide for a review of the ALLL by the board of directors on at least a quarterly calendar basis. Any deficiency found in the ALLL shall be remedied in the quarter it is discovered, prior to the filing of the Consolidated Reports of Condition and Income, by additional provisions. The board of directors shall maintain written documentation of its review, including the factors considered and
        conclusions reached by the Bank in determining the adequacy of the ALLL. During the term of this Agreement, the Bank shall submit to the Reserve Bank, within 30 days after the end of each calendar quarter, a written report regarding the board of directors’ quarterly review of the ALLL and a description of any changes to the methodology used in determining the amount of ALLL for that quarter.

        5

        

        

        

        Capital Plan

                  6.         Within 60 days of this Agreement, Bancorp shall submit to the Reserve Bank an acceptable written plan to maintain sufficient capital at Bancorp, on a consolidated basis, and Bancorp and the Bank shall jointly submit to the Reserve Bank an acceptable written plan to maintain sufficient capital at the Bank, as a separate legal entity on a stand-alone basis.
        These plans shall, at a minimum, address, consider, and include:

                               (a)          Bancorp’s current and future capital needs, including compliance with the Capital Adequacy Guidelines for Bank Holding Companies: Risk-Based Measure and Tier 1 Leverage Measure, Appendices A and D of Regulation Y of the Board of Governors (12 C.F.R. Part 225, App. A
        and D);

                               (b)          the Bank’s current and future capital needs, including compliance with the Capital Adequacy Guidelines for State Member Banks: Risk-Based Measure and Tier 1 Leverage Measure, Appendices A and B of Regulation H of the Board of Governors (12 C.F.R. Part 208, App. A
        and B);

                               (c)          the adequacy of the Bank’s capital, taking into account the volume of classified credits, concentrations of credit, ALLL, current and projected asset growth, and projected retained earnings;

                               (d)          the source and timing of additional funds to fulfill the consolidated organization’s and the Bank’s future capital requirements; and

                               (e)          the requirements of section 225.4(a) of Regulation Y of the Board of Governors (12 C.F.R. § 225.4(a)) that Bancorp serve as a source of strength to the Bank.

        6

        

        

        

                  7.          Bancorp and the Bank shall notify the Reserve Bank, in writing, no more than 30 days after the end of any quarter in which any of Bancorp’s consolidated capital ratios or the Bank’s capital ratios (total risk-based, Tier 1 risk-based, or leverage) fall below the approved capital plan’s minimum ratios. Together with the
        notification, Bancorp and the Bank shall submit an acceptable written plan that details the steps Bancorp or the Bank, as appropriate, will take to increase Bancorp’s or the Bank’s capital ratios to or above the approved capital plan’s minimums.

        Strategic Plan and Budget

                  8.          (a)          Within 60 days of this Agreement, the Bank shall submit to the Reserve Bank a written business plan for 2010 to improve the Bank’s earnings and overall condition. The plan, at a minimum, shall provide for or describe:

        (i)          A realistic and comprehensive budget for calendar year 2010, including income statement and balance sheet projections; and

        (ii)         a description of the operating assumptions that form the basis for, and adequately support, major projected income, expense, and balance sheet components.

                                (b)        A business plan and budget for each calendar year subsequent to 2010 shall be submitted to the Reserve Bank at least 30 days prior to the beginning of that calendar year.

        7

        

        

        

        Dividends and Distributions

                  9.          (a)          Bancorp and the Bank shall not declare or pay any dividends without the prior written approval of the Reserve Bank and the Director of the Division of Banking Supervision and Regulation of the Board of Governors (“Director”).

                               (b)          Bancorp shall not take any other form of payment representing a reduction in capital from the Bank without the prior written approval of the Reserve Bank.

                               (c)          Bancorp and its nonbank subsidiaries shall not make any distributions of interest, principal, or other sums on subordinated debentures or trust preferred securities without the prior written approval of the Reserve Bank and the Director.

                               (d)          All requests for prior approval shall be received at least 30 days prior to the proposed dividend declaration date, proposed distribution on subordinated debentures, and required notice of deferral on trust preferred securities. All requests shall contain, at a minimum,
        current and projected information, as appropriate, on the parent’s capital, earnings, and cash flow; the Bank’s capital, asset quality, earnings and loan loss reserve needs; and identification of the sources of funds for the proposed payment or distribution. For requests to declare or pay dividends, Bancorp and the Bank, as appropriate, must also demonstrate that the requested declaration or payment of dividends is consistent with the Board of Governors’ Policy
        Statement on the Payment of Cash Dividends by State Member Banks and Bank Holding Companies, dated November 14, 1985 (Federal Reserve Regulatory Service, 4-877 at page 4-323).

        Debt and Stock Redemption

                  10.         (a)          Bancorp and its nonbank subsidiaries shall not, directly or indirectly, incur, increase, or guarantee any debt without the prior written approval of the Reserve Bank. All requests for prior written approval shall contain, but not be limited to, a statement regarding the purpose of the debt,
        the terms of the debt, and the planned source(s) for debt repayment, and an analysis of the cash flow resources available to meet such debt repayment.

        8

        

        

        

                               (b)          Bancorp shall not, directly or indirectly, purchase or redeem any shares of its stock without the prior written approval of the Reserve Bank.

        Compliance with Laws and Regulations

                  11.        In appointing any new director or senior executive officer, or changing the responsibilities of any senior executive officer so that the officer would assume a different senior executive officer position, Bancorp and the Bank shall comply with the notice provisions of section 32 of the FDI Act (12 U.S.C. § 1831i) and Subpart H of Regulation Y of the Board
        of Governors (12 C.F.R. §§ 225.71 et seq.).

                  12.        Bancorp and the Bank shall comply with the restrictions on indemnification and severance payments of section 18(k) of the FDI Act (12 U.S.C. § 1828(k)) and Part 359 of the Federal Deposit Insurance Corporation’s regulations (12 C.F.R. Part 359).

        Progress Reports

                  13.        Within 30 days after the end of each calendar quarter following the date of this Agreement, Bancorp and the Bank shall submit to the Reserve Bank written progress reports detailing the form and manner of all actions taken to secure compliance with this Agreement and the results thereof.

        Approval and Implementation of Plans and Programs

                  14.        (a)          The Bank and, as applicable, Bancorp shall submit written plans and programs that are acceptable to the Reserve Bank within the applicable time periods set forth in paragraphs 1, 2, 4(a), 4(b), 5(c), 6, and 7 of this Agreement.

        9

        

        

        

                               (b)          Within 10 days of approval by the Reserve Bank, the Bank and, as applicable, Bancorp shall adopt the approved plans and programs. Upon adoption, the Bank and, as applicable, Bancorp shall promptly implement the approved plans and programs, and thereafter fully comply with
        them.

                               (c)          During the term of this Agreement, the approved plans and programs shall not be amended or rescinded without the prior written approval of the Reserve Bank.

        Communications

        	
                     

                	
                     

                	
                     

                
	
                              15.

                	
                    All communications regarding this Agreement shall be sent to:

                
	
                     

                	
                     

                
	
                     

                	
                    (a)

                	
                    Mr. Joe Lozano

                
	
                     

                	
                     

                	
                    Examining Officer

                
	
                     

                	
                     

                	
                    Banking Supervision and Regulation

                
	
                     

                	
                     

                	
                    Federal Reserve Bank of San Francisco

                
	
                     

                	
                     

                	
                    101 Market Street, Mail Stop 920

                
	
                     

                	
                     

                	
                    San Francisco, California 94105

                
	
                     

                	
                     

                	
                     

                
	
                     

                	
                    (b)

                	
                    Mr. J. M. Wells, Jr.

                
	
                     

                	
                     

                	
                    Chairman of the Board

                
	
                     

                	
                     

                	
                    North Valley Bancorp and

                
	
                     

                	
                     

                	
                    North Valley Bank

                
	
                     

                	
                     

                	
                    300 Park Marina Circle

                
	
                     

                	
                     

                	
                    Redding, California 96001

                

        Miscellaneous

                  16.          Notwithstanding any provision of this Agreement, the Reserve Bank may, in its sole discretion, grant written extensions of time to Bancorp and the Bank to comply with any provision of this Agreement.

                  17.          The provisions of this Agreement shall be binding upon Bancorp, the Bank, and their institution-affiliated parties, in their capacities as such, and their successors and assigns.

                  18.          Each provision of this Agreement shall remain effective and enforceable until stayed, modified, terminated, or suspended in writing by the Reserve Bank.

        10

        

        

        

                  19.          The provisions of this Agreement shall not bar, estop, or otherwise prevent the Board of Governors, the Reserve Bank, or any other federal or state agency from taking any other action affecting Bancorp, the Bank, or any of their current or former institution-affiliated parties and their successors and assigns.

                  20.          Pursuant to section 50 of the FDI Act (12 U.S.C. § 1831aa), this Agreement is enforceable by the Board of Governors under section 8 of the FDI Act (12 U.S.C. § 1818).

                  IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the 6th day of January, 2010.

        	
                     

                	
                     

                	
                     

                	
                     

                	
                     

                	
                     

                
	
                    NORTH VALLEY BANCORP

                	
                     

                	
                    FEDERAL RESERVE BANK

                    OF SAN FRANCISCO

                	
                     

                
	
                     

                	
                     

                	
                     

                	
                     

                	
                     

                	
                     

                
	
                    By:

                	
                    /s/ J. M. Wells, Jr.

                	
                     

                	
                    By:

                	
                    /s/ Kevin Zerbe

                	
                     

                
	
                     

                	 	
                     

                	
                     

                	 	
                     

                
	
                     

                	
                    J. M. Wells, Jr.

                	
                     

                	
                     

                	
                    Kevin Zerbe

                	
                     

                
	
                     

                	
                    Chairman of the Board

                	
                     

                	
                     

                	
                    Vice President

                	
                     

                
	
                     

                	
                     

                	
                     

                	
                     

                	
                     

                	
                     

                
	
                    NORTH VALLEY BANK

                	
                     

                	
                     

                	
                     

                	
                     

                
	
                     

                	
                     

                	
                     

                	
                     

                	
                     

                	
                     

                
	
                    By:

                	
                    /s/ J. M. Wells, Jr.

                	
                     

                	
                     

                	
                     

                	
                     

                
	
                     

                	 	
                     

                	
                     

                	
                     

                	
                     

                
	
                     

                	
                    J. M. Wells, Jr.

                	
                     

                	
                     

                	
                     

                	
                     

                
	
                     

                	
                    Chairman of the Board

                	
                     

                	
                     

                	
                     

                	
                     

                

        11

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