Document:

Exhibit 10.1

Exhibit 10.1

AMENDED AND RESTATED CREDIT AGREEMENT

among

PMC COMMERCIAL TRUST

and

FIRST WESTERN SBLC, INC.,

as Borrowers

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,

as Administrative Agent

And

THE LENDERS NAMED HEREIN,

as Lenders

DECEMBER 28, 2010

$30,000,000 SENIOR REVOLVING CREDIT FACILITIES

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	SECTION 1. DEFINITIONS AND TERMS
	 	 	1	 
	1.1 Definitions
	 	 	1	 
	1.2 Time References
	 	 	18	 
	1.3 Other References
	 	 	18	 
	1.4 Accounting Principles
	 	 	19	 
	 
	 	 	 	 
	SECTION 2. COMMITMENTS
	 	 	19	 
	2.1 PMC Revolving Facility
	 	 	19	 
	2.2 PMC Borrowing Procedure
	 	 	19	 
	2.3 PMC Borrowing Requests
	 	 	20	 
	2.4 Reduction or Termination of PMC Commitment
	 	 	20	 
	2.5 First Western Revolving Facility
	 	 	20	 
	2.6 First Western Borrowing Procedure
	 	 	21	 
	2.7 First Western Borrowing Requests
	 	 	21	 
	2.8 Reduction or Termination of First Western Commitment
	 	 	22	 
	 
	 	 	 	 
	SECTION 3. TERMS OF PAYMENT
	 	 	22	 
	3.1 Notes and Payments
	 	 	22	 
	3.2 Interest and Principal Payments
	 	 	23	 
	3.3 Interest Options
	 	 	24	 
	3.4 Quotation of Rates
	 	 	24	 
	3.5 Default Rate
	 	 	24	 
	3.6 Interest Recapture
	 	 	24	 
	3.7 Interest Calculations
	 	 	25	 
	3.8 Maximum Rate
	 	 	25	 
	3.9 Interest Periods
	 	 	26	 
	3.10 Conversions
	 	 	26	 
	3.11 Order of Application
	 	 	26	 
	3.12 Sharing of Payments, Etc.
	 	 	27	 
	3.13 Offset
	 	 	27	 
	3.14 Booking Borrowings
	 	 	27	 
	3.15 Basis Unavailable or Inadequate for LIBOR Rate
	 	 	28	 
	3.16 Additional Costs
	 	 	28	 
	3.17 Change in Governmental Requirements
	 	 	29	 
	3.18 Consequential Loss
	 	 	30	 
	3.19 Foreign Lenders, Participants, and Purchasers
	 	 	30	 
	 
	 	 	 	 
	SECTION 4. FEES
	 	 	30	 
	4.1 Treatment of Fees
	 	 	30	 
	4.2 Fees of Administrative Agent
	 	 	30	 
	4.3 Upfront Fees
	 	 	31	 
	4.4 Commitment Fee
	 	 	31	 

 

i

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	SECTION 5. CONDITIONS PRECEDENT
	 	 	31	 
	5.1 Initial Advances
	 	 	31	 
	5.2 All Borrowings
	 	 	33	 
	 
	 	 	 	 
	SECTION 6. REPRESENTATIONS AND WARRANTIES
	 	 	33	 
	6.1 Purpose and Regulation U
	 	 	33	 
	6.2 Corporate Existence, Good Standing, Authority and Locations
	 	 	34	 
	6.3 Subsidiaries and Names
	 	 	34	 
	6.4 Authorization and Contravention
	 	 	34	 
	6.5 Binding Effect
	 	 	35	 
	6.6 Financials
	 	 	35	 
	6.7 Solvency
	 	 	35	 
	6.8 Litigation
	 	 	35	 
	6.9 Taxes
	 	 	35	 
	6.10 Environmental Matters
	 	 	35	 
	6.11 Employee Plans
	 	 	36	 
	6.12 Properties; Liens
	 	 	36	 
	6.13 Government Regulations
	 	 	36	 
	6.14 Transactions with Affiliates
	 	 	37	 
	6.15 Debt
	 	 	37	 
	6.16 Leases
	 	 	37	 
	6.17 Labor Matters
	 	 	37	 
	6.18 Intellectual Property
	 	 	37	 
	6.19 Insurance
	 	 	37	 
	6.20 Full Disclosure
	 	 	37	 
	 
	 	 	 	 
	SECTION 7. AFFIRMATIVE COVENANTS
	 	 	38	 
	7.1 Certain Items Furnished
	 	 	38	 
	7.2 Use of Credit
	 	 	40	 
	7.3 Books and Records
	 	 	40	 
	7.4 Inspections
	 	 	40	 
	7.5 Taxes
	 	 	40	 
	7.6 Payment of Obligation
	 	 	40	 
	7.7 Expenses
	 	 	41	 
	7.8 Maintenance of Existence, Assets and Business
	 	 	41	 
	7.9 Insurance
	 	 	41	 
	7.10 Compliance with Governmental Requirements
	 	 	41	 
	7.11 Indemnification
	 	 	42	 
	7.12 Mortgage Loan Approval, Collection and Servicing Standards
	 	 	44	 
	7.13 Negative Pledge
	 	 	44	 
	7.14 Collateral
	 	 	44	 

 

ii

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	SECTION 8. NEGATIVE COVENANTS
	 	 	45	 
	8.1 Payroll Taxes
	 	 	45	 
	8.2 Debt
	 	 	45	 
	8.3 Liens
	 	 	46	 
	8.4 Employee Plans
	 	 	47	 
	8.5 Transactions with Affiliates
	 	 	47	 
	8.6 Compliance with Governmental Requirements and Documents
	 	 	47	 
	8.7 Investments
	 	 	48	 
	8.8 Qualifying Real Estate and REO Property
	 	 	49	 
	8.9 Distributions; Other Payments
	 	 	49	 
	8.10 Disposition of Assets
	 	 	49	 
	8.11 Mergers, Consolidations and Dissolutions
	 	 	49	 
	8.12 Assignment
	 	 	49	 
	8.13 Fiscal Year and Accounting Methods
	 	 	49	 
	8.14 New Businesses
	 	 	49	 
	8.15 Government Regulations
	 	 	49	 
	8.16 Financial Contracts
	 	 	49	 
	8.17 Strict Compliance
	 	 	50	 
	8.18 Amendments to Qualified Intercompany Debt
	 	 	50	 
	8.19 Non-Performing Loans
	 	 	50	 
	 
	 	 	 	 
	SECTION 9. FINANCIAL COVENANTS
	 	 	50	 
	9.1 Minimum Net Worth
	 	 	50	 
	9.2 Maximum Leverage Ratio
	 	 	50	 
	9.3 Maximum Non-Performing Loan Ratio
	 	 	50	 
	9.4 Maximum Charge-Off Ratio
	 	 	50	 
	9.5 Non-Hotel/Motel Loans
	 	 	50	 
	9.6 Minimum Asset Coverage Ratio
	 	 	51	 
	 
	 	 	 	 
	SECTION 10. EVENT OF DEFAULT
	 	 	51	 
	10.1 Payment of Obligation
	 	 	51	 
	10.2 Covenants
	 	 	51	 
	10.3 Debtor Relief
	 	 	51	 
	10.4 Judgments and Attachments
	 	 	51	 
	10.5 Government Action
	 	 	52	 
	10.6 Misrepresentation
	 	 	52	 
	10.7 Ownership of Other Companies
	 	 	52	 
	10.8 Change of Control of PMC
	 	 	52	 
	10.9 Change in Management
	 	 	52	 
	10.10 Other Funded Debt
	 	 	52	 
	10.11 Rate Management Transactions
	 	 	52	 
	10.12 Validity and Enforceability of Credit Documents
	 	 	52	 
	10.13 Material Agreement Default or Cancellation
	 	 	53	 
	10.14 Environmental Matters
	 	 	53	 
	10.15 Employee Benefit Plans
	 	 	53	 

 

iii

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	SECTION 11. RIGHTS AND REMEDIES
	 	 	54	 
	11.1 Remedies Upon Event of Default
	 	 	54	 
	11.2 Company Waivers
	 	 	55	 
	11.3 Performance by Administrative Agent
	 	 	55	 
	11.4 Not in Control
	 	 	55	 
	11.5 Course of Dealing
	 	 	56	 
	11.6 Cumulative Rights
	 	 	56	 
	11.7 Application of Proceeds
	 	 	56	 
	11.8 Certain Proceedings
	 	 	56	 
	11.9 Expenditures by Administrative Agent or Lenders
	 	 	56	 
	 
	 	 	 	 
	SECTION 12. ADMINISTRATIVE AGENT AND LENDERS
	 	 	57	 
	12.1 Administrative Agent
	 	 	57	 
	12.2 Expenses
	 	 	58	 
	12.3 Proportionate Absorption of Losses
	 	 	58	 
	12.4 Delegation of Duties; Reliance
	 	 	59	 
	12.5 Limitation of Administrative Agent’s Liability
	 	 	59	 
	12.6 Event of Default
	 	 	60	 
	12.7 Limitation of Liability
	 	 	60	 
	12.8 Relationship of Lenders
	 	 	60	 
	12.9 Benefits of Agreement
	 	 	61	 
	 
	 	 	 	 
	SECTION 13. BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
	 	 	61	 
	13.1 Successors and Assigns
	 	 	61	 
	13.2 Participations
	 	 	61	 
	13.3 Assignments
	 	 	62	 
	13.4 Dissemination of Information
	 	 	63	 
	13.5 Tax Treatment
	 	 	63	 
	 
	 	 	 	 
	SECTION 14. MISCELLANEOUS
	 	 	63	 
	14.1 Nonbusiness Days
	 	 	63	 
	14.2 Communications
	 	 	63	 
	14.3 Form and Number of Documents
	 	 	64	 
	14.4 Exceptions to Covenants
	 	 	64	 
	14.5 Survival
	 	 	64	 
	14.6 Governing Governmental Requirements
	 	 	64	 
	14.7 Invalid Provisions
	 	 	64	 
	14.8 Conflicts Between Credit Documents
	 	 	64	 
	14.9 Discharge Only Upon Payment in Full; Reinstatement in Certain Circumstances
	 	 	64	 
	14.10 Amendments, Consents, Conflicts, and Waivers
	 	 	65	 
	14.11 Multiple Counterparts
	 	 	65	 
	14.12 VENUE, SERVICE OF PROCESS, AND JURY TRIAL
	 	 	66	 
	14.13 Entirety
	 	 	67	 
	14.14 Amendment and Restatement
	 	 	67	 

 

iv

 

SCHEDULES

	 	 	 	 	 
	Schedule 2

	 	—
	 	Lenders and Commitments
	Schedule 6.3

	 	—
	 	Information Regarding Companies
	Schedule 6.8

	 	—
	 	Litigation
	Schedule 8.2

	 	—
	 	Existing Debt
	Schedule 8.3

	 	—
	 	Existing Liens
	 	 	 	 	 
	EXHIBITS
	 	 	 	 	 
	Exhibit A

	 	—
	 	Revolving Note
	Exhibit B

	 	—
	 	Borrowing Request
	Exhibit C

	 	—
	 	Conversion Notice
	Exhibit D

	 	—
	 	Compliance Certificate
	Exhibit E

	 	—
	 	Assignment Agreement

 

v

 

AMENDED AND RESTATED CREDIT AGREEMENT

THIS AMENDED AND RESTATED CREDIT AGREEMENT is entered into as of December 28, 2010, among PMC
COMMERCIAL TRUST, a real estate investment trust organized under the laws of the State of Texas
(“PMC”), FIRST WESTERN SBLC, Inc., a Florida corporation (“First Western”; together
with PMC, the “Borrowers” and individually, a “Borrower”), certain Lenders (defined
below) and JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, a national banking association
(successor-in-interest to Bank One, NA), as Administrative Agent (defined below) for itself and the
other Lenders.

PRELIMINARY STATEMENT:

A. PMC, the Administrative Agent and the Lenders have entered into that certain Credit
Agreement dated as of February 29, 2004, as amended through the date hereof (as amended, the
“Existing Credit Agreement”).

B. PMC and First Western have requested and the Administrative Agent and the Lenders have
agreed to restructure the revolving credit facility, to add First Western as a Borrower and to
amend, modify and restate the Existing Credit Agreement upon the terms and conditions hereinafter
set forth.

ACCORDINGLY, for adequate and sufficient consideration, the receipt of which is hereby
acknowledged, Borrowers, Administrative Agent and Lenders agree as follows:

SECTION 1. DEFINITIONS AND TERMS.

1.1 Definitions. As used in the Credit Documents:

“Adjusted One Month LIBOR Rate” means, with respect to a CBFR Borrowing for any day,
an interest rate per annum equal to the sum of (i) 2.50% plus (ii) the LIBOR Rate for one month
Interest Period on such day (or if such day is not a Business Day, the immediately preceding
Business Day); provided that, for the avoidance of doubt, the LIBOR Rate for any day shall be based
on the rate appearing on the Reuters Screen LIBOR01 Page (or on any successor or substitute page)
at approximately 11:00 a.m. London time on such day.

“Administrative Agent” means JPMorgan Chase Bank, National Association
(successor-in-interest to Bank One, NA) (or its successors appointed under Section 12),
acting as administrative, managing and syndication agent for Lenders under the Credit Documents.

“Affiliate” of a Person means any other Person who directly or indirectly controls, is
controlled by, or is under common control with that Person. For purposes of this definition (a)
“control,” “controlled by,” and “under common control with” mean possession, directly or
indirectly, of power to direct or cause the direction of management or policies (whether through
ownership of voting securities or other interests, by contract or otherwise) and (b) the Companies
are “Affiliates” of each other.

 

 

 

“Applicable Margin” means, for any day, the margin of interest under or over the CB
Floating Rate or the LIBOR Rate, as the case may be, that is applicable when the CB Floating
Rate or LIBOR Rate, as applicable, is determined under this agreement, which margin of
interest shall be as follows:

	 	 	 	 	 
	Type of Borrowing	 	Applicable Margin	 
	CB Floating Rate
	 	 	0.00	%
	LIBOR Rate
	 	 	3.00	%

“Asset Coverage Ratio” means, at any time the ratio of (i) the sum of (A) unencumbered
cash and cash equivalents of Borrowers, plus (B) eighty five percent (85%) of the aggregate
outstanding principal balance of whole unencumbered Performing Commercial Loans then owned by any
Borrower, plus (C) fifty percent (50%) of the retained interest consisting of interest only strip
and excess collateralized portions only to (ii) the outstanding principal amount of all Funded Debt
for which any Borrower is obligated (other than any Qualified Intercompany Debt and any preferred
stock of PMC Investment Corporation).

“Asset Securitization” means any transaction or series of transactions that may be
entered into by any Company pursuant to which such Company or any of its Subsidiaries may sell,
convey or otherwise transfer any of their assets to a Special Purpose Entity, and pursuant to which
the Special Purpose Entity will, in turn, pay to such Company a portion of the proceeds of a
secured loan or debt offering to public or private investors (with such secured loan or debt
offering being, among other things, non recourse to such Company).

“Assignment” means any assignment described in Section 13.3.

“Borrower” is defined in the preamble to this agreement.

“Borrowing” means any amount disbursed (a) by one or more Lenders to or on behalf of
any Borrower under the Credit Documents, either as an original disbursement of funds or a renewal,
extension, modification or continuation of an amount outstanding, or (b) by any Lender in
accordance with, and to satisfy a Company’s obligations under, any Credit Document.

“Borrowing Date” is defined in Section 2.2(a).

“Borrowing Request” means a request, subject to Section 2.2(a) in the case of
a request by PMC and Section 2.6(a) in the case of a request by First Western,
substantially in the form of Exhibit B and otherwise in form and scope acceptable to
Administrative Agent.

“Business Day” means (a) for purposes of any LIBOR Rate Borrowing, a day when
commercial banks are open for international business in London, England, and (b) for all other
purposes, any day other than Saturday, Sunday and any other day that most commercial banks in Texas
are closed.

“Capital Lease” means any capital lease or sublease which should be capitalized on a
balance sheet in accordance with GAAP.

 

2

 

“Cash Flow” shall mean for the Companies, for the applicable period, an amount equal
to (a) EBITDA, less (b) Distributions, plus (c) principal amounts repaid to a Borrower with respect
to Mortgage Loans and Commercial Loans, less (d) Interest Expense, less (e) payments of principal
made by a Borrower with respect to its Debt other than the Obligation; provided that in the case of
any Debt with balloon payments due during such period, Cash Flow shall be calculated based on
payments that would be due during such period pursuant to a hypothetical 15-year amortization of
such balloon payments.

“CB Floating Rate” means the Prime Rate; provided that the CB Floating Rate shall, on
any day, not be less than the Adjusted One Month LIBOR Rate. The CB Floating Rate is a variable
rate and any change in the CB Floating Rate due to any change in the Prime Rate or the Adjusted One
Month LIBOR Rate is effective from and including the effective date of such change in the Prime
Rate or the Adjusted One Month LIBOR Rate, respectively.

“CBFR Borrowing” means a Borrowing bearing interest at the sum of the CB Floating Rate
plus the Applicable Margin for CBFR Borrowings.

“CDO Subsidiary” means a Subsidiary (i) of which all of the issued and outstanding
common equity interests are held by PMC or one or more of its wholly-owned Subsidiaries, (ii) which
is formed for the sole purpose of issuing preferred securities to an unrelated third party, and
(iii) which has no assets other than its rights as payee in respect of Qualified Intercompany Debt.

“CERCLA” means the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, 42 U.S.C. §§9601 et seq.

“Change of Control” means the acquisition by any Person, or two or more Persons acting
in concert, of beneficial ownership (within the meaning of Rule 13d-3 of the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as amended) of 20% or more of the
outstanding shares of beneficial interest of PMC having voting rights.

“Charge-Off Ratio” means a fraction, expressed as a percentage, the numerator of which
is the sum of the total amounts charged off by PMC with respect to its Mortgage Loans (less any
such amounts subsequently recovered) during the applicable period of determination, and the
denominator of which is the aggregate average principal balance of all of PMC’s Mortgage Loans for
such period.

“Closing Date” means the date upon which this agreement has been executed by
Borrowers, Lenders and Administrative Agent and all conditions precedent specified in Section
5.1 have been satisfied or waived.

“Code” means the Internal Revenue Code of 1986.

“Collateral” is defined in Section 1.01 of the Security Agreement.

“Commercial Loan Obligor” means each Person who is obligated or liable for the payment
or performance of all or any portion of a Commercial Loan.

 

3

 

“Commercial Loans” means loans made by any Company to any Person (other than an
Affiliate of the Companies) for business or commercial purposes and not for family consumer or
household use, which loans are secured by real property or personal property.

“Commitment Percentage” means, for any Lender, the proportion (stated as a percentage)
that its Commitment bears to the total Commitments of all Lenders.

“Commitment Usage” means, at the time of any determination thereof, the aggregate
Principal Debt.

“Commitments” means, collectively, the PMC Commitment and the First Western
Commitment.

“Committed Sum” means, for any Lender, the amount (subject to reduction or
cancellation as provided in this agreement) stated beside its name on Schedule 2, as such
amount may be adjusted pursuant to permitted assignments of such Lender’s Rights as reflected from
time to time on the most recently amended Schedule 2, if any, delivered by Administrative
Agent pursuant to this agreement.

“Companies” means at any time, PMC, First Western and each of their respective
subsidiaries (other than any Special Purpose Entities).

“Compliance Certificate” means a certificate substantially in the form of Exhibit
D, and otherwise in form and scope satisfactory to Administrative Agent, and signed by a
Responsible Officer of PMC.

“Consequential Loss” means any loss, expense or reduction in yield (but not any
Applicable Margin) that any Lender reasonably incurs because (a) a Borrower fails or refuses (for
any reason whatsoever other than a default by Administrative Agent or a Lender claiming that loss,
expense or reduction in yield) to take any Borrowing that it has requested under this agreement or
(b) a Borrower prepays or pays any Borrowing or converts any Borrowing to a Borrowing of another
Type, in each case, other than on the last day of the applicable Interest Period.

“Consolidated Companies” means, at any time, PMC and each of its Subsidiaries
(including any Special Purpose Entities that, according to GAAP, are required to be shown on PMC’s
consolidated Financials).

“Construction Loan” means any Mortgage Loan with respect to which the loan funds are
used to finance the construction, renovation or improvement of one or more Projects (provided that
such Mortgage Loan will no longer constitute a Construction Loan once the construction, renovation
or improvement of such Project or Projects is completed, if the Mortgage Loan is structured so as
to convert automatically to a permanent loan upon completion of the construction period).

“Conversion Notice” means a notice and request from a Borrower to Administrative
Agent, subject to Section 3.10, substantially in the form of Exhibit C, and
otherwise in form and scope satisfactory to Administrative Agent.

 

4

 

“Credit Documents” means (a) this agreement, certificates and reports delivered under
this agreement, and exhibits and schedules to this agreement, (b) all agreements, documents, and
instruments in favor of Administrative Agent or Lenders (or Administrative Agent on behalf of
Lenders) ever delivered under this agreement or otherwise delivered in connection with all or any
part of the Obligation (other than Assignments), and (c) all renewals, extensions, modifications
and restatements of, and amendments and supplements to, any of the foregoing, which are made in
accordance with the provisions of the respective Credit Documents.

“Current Financials,” unless otherwise specified:

(a) means either (i) the Consolidated Companies’ consolidated Financials for the year
ended December 31, 2009, or (ii) at any time after annual Financials are first delivered
under Section 7.1(a), the Consolidated Companies’ annual Financials then most
recently delivered to Administrative Agent under Section 7.1(a), together with the
Consolidated Companies’ quarterly Financials then most recently delivered to Administrative
Agent under Section 7.1(b); but

(b) does not include the results of operation and cash flows for any Consolidated
Company for the time period before it becomes a member of PMC’s consolidated group.

“Debt” means, with respect to any Person on any date of determination (without
duplication), (a) all obligations for borrowed money, (b) all obligations evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations to pay the deferred purchase price of
property or services, except trade accounts payable arising in the ordinary course of business,
which are paid when due in accordance with ordinary course payment terms or which are being
contested in good faith in appropriate proceedings, (d) all obligations arising under acceptance
facilities or facilities for the discount or sale of accounts or loans receivable, (e) all direct
or contingent obligations in respect of letters of credit, (f) Capital Lease obligations, (g)
liabilities secured (or for which the holder of any obligations or liabilities has an existing
Right, contingent or otherwise, to be so secured) by any Lien existing on property owned or
acquired by that Person and (h) all guaranties, endorsements and other contingent obligations for
liabilities, obligations or the maintenance of the financial condition of others, including
obligations to repurchase or purchase properties or to maintain or cause to maintain any financial
condition. For purposes of this agreement, “Debt” shall not include amounts consisting of cash
proceeds received by any Person from the government guaranteed loans sold for premiums and excess
spread that are required by GAAP to be reflected on the balance sheet of such Person as secured
borrowings.

“Debtor Relief Laws” means the Bankruptcy Code of the United States of America and all
other applicable laws providing for liquidation, conservatorship, bankruptcy, moratorium,
rearrangement, receivership, insolvency, reorganization, or suspension of payments or similar
Governmental Requirements affecting creditors’ Rights.

“Default Rate” means, for any day, an annual interest rate equal to the lesser of
either (a) the CB Floating Rate on such day plus 3.0% or (b) the Maximum Rate.

 

5

 

“Delinquent Loans” means, at any time, the sum of (i) the aggregate unpaid principal
amount of Commercial Loans and Mortgage Loans owned by any Company which are 31 or more days
delinquent (whether under the initial payment plan or a modified payment plan established pursuant
to a workout), plus (ii) assets acquired in satisfaction of debt, including any assets acquired
through foreclosure, by deed in lieu of foreclosure, liquidation or other similar actions, plus
(iii) Commercial Loans and Mortgage Loans then subject to any legal suit, arbitration proceeding or
other similar action or proceeding.

“Deposit Box” is defined in Section 7.14.

“Distribution” means, with respect to any shares of any beneficial interests, capital
stock or other equity securities issued by a Person (a) the retirement, redemption, purchase,
repurchase or other acquisition for value of those securities, (b) the declaration or payment of
any dividend on or with respect to those securities, (c) any loan or advance by that Person to, or
other investment by that Person in, the holder of any of those securities and (d) any other payment
by that Person with respect to those securities.

“EBITDA” means, with respect to any Person and for any period (without duplication) an
amount equal to (a) Net Income, plus (b) to the extent deducted in calculating Net Income, the sum
of (i) Interest Expense, plus (ii) Tax expense, plus (iii) depreciation and amortization from its
continuing operations, minus (c) to the extent included in calculating Net Income, any gains that
are extraordinary items.

“Employee Plan” means any employee pension benefit plan (a) covered by Title IV of
ERISA and established or maintained by any Borrower or any ERISA Affiliate (other than a
Multiemployer Plan) or (b) established or maintained by any Borrower or any ERISA Affiliate or to
which any Borrower or any ERISA Affiliate contributes, under the Governmental Requirements of any
foreign country.

“Environmental Investigation” means any health, safety or environmental site
assessment, investigation, study, review, audit, compliance audit or compliance review conducted at
any time or from time to time (whether at the request of Administrative Agent or any Lender, upon
the order or request of any Governmental Authority, or at the voluntary instigation of any Company
or Affiliate of any Company or otherwise) concerning any Real Property or the business operations
or activities of any Company or Affiliate of any Company, including, without limitation, (a) air,
soil, groundwater or surface water sampling and monitoring, (b) repair, cleanup, remediation, or
detoxification, (c) preparation and implementation of any closure, remedial, spill, emergency or
other plans, and (d) any health, safety or environmental compliance audit or review.

“Environmental Law” means any applicable Governmental Requirement that relates to (a)
the condition of air, ground or surface water, soil, or other environmental media, (b) the
environment or natural resources, (c) safety or health, (d) the regulation of any contaminants,
wastes, and Hazardous Substances, including, without limitation, CERCLA, OSHA, the Hazardous
Materials Transportation Act (49 U.S.C. § 1801 et seq.), the Resource Conservation and Recovery Act
(42 U.S.C. § 6901 et seq.), the Clean Water Act (33 U.S.C. § 1251 et seq.), the Clean Air Act (42
U.S.C. § 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. § 2601 et seq.), the Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C. § 136 et seq.), the
Emergency Planning and Community Right-to-Know Act (42 U.S.C. § 11001 et seq.), the Safe Drinking
Water Act (42 U.S.C. § 201 and § 300f et seq.), the Rivers and Harbors Act (33 U.S.C. § 401 et
seq.), the Oil Pollution Act (33 U.S.C. § 2701 et seq.), state and local Governmental Requirements,
and any future Governmental Requirements which may be enacted or adopted, in each case, now
existing or hereafter adopted, which are analogous to any of the preceding referenced requirements,
or (e) the Release or threatened Release of Hazardous Substances.

 

6

 

“Environmental Liability” means any liability, loss, fine, penalty, charge, lien,
damage, cost or expense of any kind to the extent that it results directly or indirectly, in whole
or in part, (a) from the violation of any Environmental Law, (b) from the Release or threatened
Release of any Hazardous Substance, (c) from removal, remediation, or other actions in response to
the Release or threatened Release of any Hazardous Substance, (d) from actual or threatened damages
to natural resources, (e) from the imposition of injunctive relief or other orders, (f) from
personal injury, death, or property damage which occurs as a result of any Company’s use, storage,
handling, or Release or threatened Release of a Hazardous Substance, or (g) from any Environmental
Investigation performed at, on, or for any Real Property.

“Environmental Lien” means any Lien imposed as a result of the operation of any
Environmental Law.

“Environmental Permit” means any permit or license from any Person defined in
clause (a) of the definition of Governmental Authority that is required under any
Environmental Law for the lawful conduct of any business, process or other activity.

“Equity Issuance” means the issuance by PMC of any shares of any class of beneficial
interests, stock, warrants, options or other equity interests, whether pursuant to a public
offering or otherwise, but does not include (a) any present and future shares of beneficial
interests, stock, options or warrants issued to employees or trust managers of PMC or (b) any
present and future shares of beneficial interests, stock, options or warrants issued in respect of
any dividend reinvestment plan established and maintained by PMC.

“ERISA” means the Employee Retirement Income Security Act of 1974.

“ERISA Affiliate” means any Person that, for purposes of Title IV of ERISA, is a
member of any Borrower’s controlled group or is under common control with any Borrower within the
meaning of Section 414 of the Code (which provisions are deemed by this agreement to apply to
Foreign Persons).

“Event of Default” is defined in Section 10.

“Existing Credit Agreement” is defined in the recitals of this agreement.

“Existing Debt” is defined in Section 8.2(a).

“Existing Liens” is defined in Section 8.3(b).

 

7

 

“Federal Funds Rate” means, for any day, the annual rate (rounded upwards, if
necessary, to the nearest 0.01%) determined by Administrative Agent (which determination is
conclusive and binding, absent manifest error) to be equal to (a) the weighted average of the rates
on overnight federal funds transactions with member banks of the Federal Reserve System arranged by
federal funds brokers on that day, as published by the Federal Reserve Bank of New York on the next
Business Day or (b) if the rates referred to in the preceding clause (a) are not published
for any day, the average of the quotations at approximately 10:00 a.m. received by Administrative
Agent from three federal funds brokers of recognized standing selected by Administrative Agent in
its sole discretion.

“Financial Contract” of a Person means (i) any exchange-traded or over-the-counter
futures, forward, swap or option contract or other financial instrument with similar
characteristics, or (ii) any Rate Management Transaction.

“Financials” of a Person means balance sheets, profit and loss statements,
reconciliations of capital and surplus, and statements of cash flow prepared (a) according to GAAP
(subject to year-end audit adjustments with respect to interim Financials) and (b) except as stated
in Section 1.4, in comparative form to prior year-end figures or corresponding periods of
the preceding fiscal year or other relevant period, as applicable.

“First Western” is defined in the preamble to this agreement.

“First Western Commitment” means an amount (subject to reduction or cancellation as
herein provided) equal to $7,500,000.00.

“First Western Revolving Facility” means the revolving line of credit facility
described in Section 2.5.

“First Western Revolving Note” means one of the promissory notes executed by First
Western in favor of a Lender pursuant to this agreement, substantially in the form of Exhibit
A and otherwise in form and scope acceptable to Administrative Agent and that Lender.

“Foreign” means, in respect of any Person, a Person organized under the Governmental
Requirements of a jurisdiction other than, or domiciled outside of, the United States of America or
one of its states, territories, commonwealths, or possessions.

“Funded Debt” means, at any time and without duplication, the sum of (a) the balance
of any obligation for borrowed money that is required by GAAP to be shown as a liability, plus (b)
total net rentals (net of any interest, Taxes, or other expenses included in those rentals) payable
under Capital Leases. For purposes of this agreement, “Funded Debt” shall not include (i) any Debt
incurred by a Special Purpose Entity in connection with an Asset Securitization, so long as such
Debt is non recourse to PMC in all respects or (ii) amounts consisting of cash proceeds received by
any Person from the government guaranteed loans sold for premiums and excess spread that are
required by GAAP to be reflected on the balance sheet of such Person as secured borrowings.

“Funds from Operations” means net income determined in accordance with GAAP, plus, to
the extent deducted in calculating such net income, depreciation and amortization expense.

 

8

 

“GAAP” means generally accepted accounting principles of the Accounting Principles
Board of the American Institute of Certified Public Accountants and the Financial Accounting
Standards Board that are applicable from time to time.

“Governmental Authority” means any (a) local, state, territorial, federal or Foreign
judicial, executive, regulatory, administrative, legislative or governmental agency, board, bureau,
commission, department or other instrumentality, (b) private arbitration board or panel or (c)
central bank.

“Governmental Requirements” means all applicable statutes, laws, treaties, ordinances,
rules, regulations, orders, writs, injunctions, decrees, judgments, opinions and interpretations of
any Governmental Authority.

“Guaranty” means any guaranty agreement executed by PMC or any other Company in favor
of the Administrative Agent for the benefit of itself and the Lenders pursuant to this agreement,
all in form and scope acceptable to Administrative Agent.

“Hazardous Substance” means (a) any substance that is reasonably expected to require
removal, remediation, or other response under any Environmental Law, (b) any substance that is
designated, defined or classified as a hazardous waste, hazardous material, pollutant, contaminant,
explosive, corrosive, flammable, infectious, carcinogenic, mutagenic, radioactive, dangerous, or
toxic or hazardous substance under any Environmental Law, including, without limitation, any
hazardous substance within the meaning of § 101(14) of CERCLA, (c) petroleum, oil, gasoline,
natural gas, fuel oil, motor oil, waste oil, diesel fuel, jet fuel, and other petroleum
hydrocarbons, (d) asbestos and asbestos-containing materials in any form, (e) polychlorinated
biphenyls; (f) urea formaldehyde foam, or (g) any substance the presence of which on any Real
Property either (i) poses or threatens to pose a hazard to the health or safety of persons or to
the environment, or (ii) could reasonably be expected to constitute a health or safety hazard to
persons or the environment if emanated or migrated from the Real Property.

“Interest Expense” means, with respect to any Person and for any period (without
duplication), all interest on that Person’s Debts, whether paid in cash or accrued as a liability
and payable in cash during any subsequent period (including, without limitation, the interest
component of Capital Leases), as determined by GAAP.

“Interest Period” is determined in accordance with Section 3.9.

“Investment” means, in respect of any Person, any loan, advance, extension of credit
or capital contribution to that Person, any investment in that Person, or any purchase or
commitment to purchase any equity securities or Debt issued by that Person or substantially all of
the assets or a division or other business unit of that Person.

“JPMorgan Chase” means JPMorgan Chase Bank, National Association, in its individual
capacity as a Lender, and its successors and assigns.

“Lender Lien” means any present or future first priority Lien securing the Obligation
and assigned, conveyed, or granted to or created in favor of Administrative Agent for the benefit
of Lenders.

 

9

 

“Lenders” means the financial institutions (including, without limitation,
Administrative Agent in respect of its share of Borrowings) named on Schedule 2 or on the
most recently amended Schedule 2, if any, delivered by Administrative Agent under this
agreement, and, subject to this agreement, their respective successors and assigns (but not any
Participant who is not otherwise a party to this agreement).

“LIBOR Rate” means, for a LIBOR Rate Borrowing and for the relevant Interest Period,
the annual interest rate (rounded upward, if necessary, to the nearest 0.01%) equal to the quotient
obtained by dividing (a) the rate that deposits in United States dollars are offered to
Administrative Agent in the London interbank market at approximately 11:00 a.m. London, England
time two Business Days before the first day of that Interest Period as shown on Reuters Screen
LIBOR01, formerly known as Page 3750 of the Moneyline Telerate Service (together with any successor
or substitute, the “Service”), or such other page or pages as may replace such pages on the
Service for the purpose of displaying such rate (provided that if such rate is not available on the
Service then such offered rate shall be otherwise independently determined by Administrative Agent
from an alternate, substantially similar independent service available to Administrative Agent or
shall be calculated by Administrative Agent by a substantially similar methodology as that
theretofore used to determine such offered rate in the Service) in an amount comparable to that
LIBOR Rate Borrowing and having a maturity approximately equal to that Interest Period by (b) one
minus the Reserve Requirement (expressed as a decimal) applicable to the relevant Interest Period.

“LIBOR Rate Borrowing” means a Borrowing bearing interest at the sum of the LIBOR Rate
plus the Applicable Margin for LIBOR Rate Borrowings.

“Lien” means any lien, mortgage, security interest, pledge, assignment, charge, title
retention agreement or encumbrance of any kind and any other arrangement for a creditor’s claim to
be satisfied from assets or proceeds prior to the claims of other creditors or the owners (other
than title of the lessor under an operating lease).

“Litigation” means any action, proceeding, investigation or hearing by or before any
Governmental Authority.

“Loan Obligor” means any Mortgage Loan Obligor and/or Commercial Loan Obligor.

“Material Adverse Event” means any circumstance or event that, individually or
collectively, is reasonably expected to result (at any time before the Commitment is fully canceled
or terminated and the Obligation is fully paid and performed) in any (a) material impairment of (i)
the ability of any Borrower or any other Company to perform any of its payment or other material
obligations under any Credit Document or (ii) the ability of Administrative Agent or any Lender to
enforce any of those obligations or Rights under the Credit Documents, (b) material and adverse
effect on the business, management or financial condition of Borrowers or of the Companies as a
whole, as represented to Lenders in the Current Financials, or (c) Event of Default or Potential
Default.

 

10

 

“Maximum Amount” and “Maximum Rate” respectively mean, for a Lender, the
maximum non-usurious amount and the maximum non-usurious rate of interest that, under
applicable Governmental Requirements of the State of Texas or federal laws of the United
States of America (as applicable), that Lender is permitted to contract for, charge, take, reserve
or receive on the Obligation.

“Mortgage” means a mortgage, deed of trust or trust deed that grants a perfected
first-priority Lien (or a second- or third-priority Lien in the case of Second-Lien Loans and
Third-Lien Loans, respectively) on a Project.

“Mortgage Loan” means a commercial mortgage loan (i.e. not for family, consumer or
household use) that is evidenced by a valid promissory note and is secured by a Mortgage.

“Mortgage Loan Documents” means, with respect to each Mortgage Loan, the documents
designated as such on Schedule 5.2.

“Mortgage Loan Obligor” means each Person who is obligated or liable for the payment
or performance of all or any portion of a Mortgage Loan.

“Mortgage Loans in Liquidation” means those Mortgage Loans with respect to which the
Mortgage Loan Obligor has failed to respond to PMC’s demand and acceleration letters, and to which
PMC has determined that the best course of action is to liquidate the Mortgage Loan in order to
foreclose on the collateral securing the same and has commenced such foreclosure action.

“Mortgage Loans in Litigation” means those Mortgage Loans with respect to which the
Mortgage Loan Obligors have ceased making regularly scheduled payments and are not responding to
PMC’s collection efforts, thereby requiring legal action to collect the Mortgage Loan. If the
Mortgage Loan Obligor brings the loan current in accordance with the original terms thereof, the
Mortgage Loan may be returned to the status of an Eligible Mortgage Loan. If, however, the terms
of such Mortgage Loan are restructured, the Mortgage Loan will be converted to a Workout Loan (i.e.
no longer a Mortgage Loan in Litigation). Furthermore, should an alternative repayment agreement
be established, the Mortgage Loan in Litigation will be considered a Workout Loan (i.e. no longer a
Mortgage Loan in Litigation).

“Multiemployer Plan” means a multiemployer plan as defined in Sections 3(37) or
4001(a)(3) of ERISA or Section 414(f) of the Code (or any similar type of plan established or
regulated under the Governmental Requirements of any foreign country) to which any Borrower or any
ERISA Affiliate is making, or has made, or is accruing, or has accrued, an obligation to make
contributions.

“Net Income” of any Person means that Person’s profit or loss determined in accordance
with GAAP.

“Net Proceeds” means the net proceeds, whether received in cash or otherwise, received
before, on or after the date of consummation of a subject transaction, by any Company from such
transaction, after payment of (a) all usual and customary brokerage commissions and all other
reasonable fees and expenses related to such transaction (including, without limitation, reasonable
attorney’s fees and closing costs), and (b) any Debt (other than the Obligation)
relating to the assets being sold which must be repaid in connection with such subject
transaction.

 

11

 

“Net Worth” means, for any Person, total beneficiaries’ or stockholders’ equity, as
applicable, as determined in accordance with GAAP.

“Non-Performing Loans” means (a) all of PMC’s Delinquent Loans, (b) all of PMC’s
Mortgage Loans with respect to which a default has occurred as to the payment of any installment of
principal or interest or another monetary default has occurred under any Mortgage Loan Document
related thereto and such default has not been cured for more than thirty (30) days, (c) all of
PMC’s Mortgage Loans in Litigation, (d) all of PMC’s Mortgage Loans in Liquidation, and (e) all of
PMC’s Mortgage Loans with respect to which any Mortgage Loan Obligor has not paid its Debts as they
mature or has made a general assignment for the benefit of creditors or with respect to whom
proceedings in bankruptcy or for reorganization or liquidation under the bankruptcy code or under
any other state or federal law for the relief of debtors has been commenced by or against such
Mortgage Loan Obligor and shall not have been discharged within thirty (30) days of the
commencement thereof or for whom (or for whose assets) a receiver, trustee or custodian shall have
been appointed or who may die, be dissolved or who may involuntarily suspend the transaction of its
business. Notwithstanding the foregoing, Non-Performing Loans shall not at any time include any
Delinquent Loans or Mortgage Loans that would otherwise satisfy the criteria in clauses (a)
through (e) above but are owned by Special Purpose Entity and are non-recourse to PMC.

“Notes” means, at the time of any determination thereof, all outstanding and unpaid
Revolving Notes.

“Obligation” means (a) all present and future Debts, liabilities and obligations of
any Company to Administrative Agent, or any Lender and related to any Credit Document, whether
principal, interest, fees, costs, attorneys’ fees or otherwise, (b) all present and future Rate
Management Obligations, (c) any of the foregoing amounts that would become due but for the
operation of 11 U.S.C. § 502 and 503 or any other provision of Title 11 of the United States Code,
(d) all present and future pre- and post-maturity interest on any of the foregoing, including all
post-petition interest if any Company voluntarily or involuntarily files for protection under any
Debtor Relief Law, and (e) renewals, extensions, rearrangements and modifications of any character
whatsoever of any the foregoing.

“Organizational Documents” means, for any Person, the documents for its formation and
organization, which, for example, (a) for a corporation are its corporate charter and bylaws, (b)
for a partnership are its certificate of partnership (if applicable) and partnership agreement, (c)
for a limited liability company are its certificate of formation or organization and its operating
agreement, regulations or the like and (d) for a trust is the trust agreement, declaration of
trust, indenture or bylaws under which it is created.

“OSHA” means the Occupational Safety and Health Act of 1970, 29 U.S.C. § 651 et seq.

“Participant” is defined in Section 13.2(a).

“PBGC” means the Pension Benefit Guaranty Corporation.

 

12

 

“Performing Commercial Loan” means a Commercial Loan with respect to which (i) no
payment of principal or interest is 31 days or more past due (whether under the initial payment
plan or a modified payment plan established pursuant to a workout), and (ii) there is no claim of
fraud in connection with the origination of such Commercial Loan.

“Permitted Asset Sale” means (a) any sale of assets which are obsolete or are no
longer in use and which are not significant to the continuation of the Companies’ business, (b) any
sale of REO Property, (c) upon prior written notice to Administrative Agent, any sale and
disposition from any Company to any other Company provided, in all respects, such sale and
disposition is in the ordinary course of business on current market terms, is otherwise subject to
Section 8.5, and provided further, if such sale and disposition is made in connection with
an Asset Securitization, a prepayment on the Obligation is made in accordance with Section
3.2(c), and (c) any other sales and dispositions approved in advance by Administrative Agent.

“Permitted Debt” is defined in Section 8.2.

“Permitted Investments” is defined in Section 8.7.

“Permitted Liens” is defined in Section 8.3.

“Permitted Project Liens” means, with respect to any Project or other collateral, (a)
Liens for Taxes and/or assessments which are being contested by the applicable Mortgage Loan
Obligor, (i) in accordance with the applicable Mortgage and (ii) by appropriate legal proceedings
conducted in good faith and with due diligence if, but only if, such proceedings suspend the
collection of all amounts secured by such Lien and neither the Project nor any rent or other income
therefrom or collateral securing the Mortgage Loan or any part thereof or interest therein shall be
in any danger of being sold, forfeited, lost or interfered with, and the Mortgage Loan Obligor
provides security satisfactory to PMC for the payment of all amounts secured by any such Lien and
any and all losses, costs and expenses that may be incurred in connection therewith, (b) Liens
relating to leased equipment (e.g., signs, vending machines, etc.) located on the premises of a
Project, so long as such Liens cover only such leased equipment, and (c) Liens which secure Debt
that is fully subordinated as to right of payment and to the payment of the Mortgage Loan, and
without limiting the foregoing, no payments may be made on such other Debt except for regularly
scheduled payments of principal and interest, which may be made if no default or event which, with
the giving of notice or the passage of time or both, would constitute a default then exists under
the Mortgage Loan. If the making of such principal or interest payments will not result in default
or potential default and such Debt is subject to an agreement by the holder thereof, that if such
holder receives any payment with respect to such other Debt, other than the principal and interest
installments permitted above, such payments will be held in trust for the benefit of PMC and will
be paid to PMC for application upon the Mortgage Loan, such other Debt shall permit the Mortgage
Loan to be renewed, extended and modified without the consent of the holder thereof and without
impairing the subordination of such other Debt to payment of the Mortgage Loan. The Liens securing
such other Debt shall be made expressly subordinate and inferior to all Liens securing the Mortgage
Loan, and such subordination agreement shall be recorded in the real property records of the state
and county where the Project which secures the Mortgage Loan is located.

 

13

 

“Person” means any individual, entity or Governmental Authority.

“PMC” is defined in the preamble to this agreement.

“PMC Capital” means PMC Capital, Inc., a Florida corporation.

“PMC Commitment” means an amount (subject to reduction or cancellation as herein
provided) equal to (a) $30,000,000.00, minus (b) the lesser of (i) the First Western Commitment or
(ii) the Commitment Usage under the First Western Revolving Facility.

“PMC Revolving Facility” means the revolving line of credit facility described in
Section 2.1.

“PMC Revolving Note” means one of the promissory notes executed by PMC in favor of a
Lender pursuant to this agreement, substantially in the form of Exhibit A and otherwise in
form and scope acceptable to Administrative Agent and that Lender.

“PMC Security Agreement” is defined in Section 10.2.

“Potential Default” means any event, occurrence or circumstance the existence of
which, upon any required notice, time lapse, or both, could become an Event of Default.

“Prime Rate” means the rate of interest per annum publicly announced from time to time
by JPMorgan Chase as its prime rate. The Prime Rate is a variable rate and each change in the
Prime Rate is effective from and including the date the change is announced as being effective.
THE PRIME RATE IS A REFERENCE RATE AND MAY NOT BE JPMORGAN CHASE’S LOWEST RATE.

“Principal Debt” means, at any time, the unpaid principal balance of all Borrowings.

“Pro Rata” and “Pro Rata Part” mean, at any time and for any Lender, the
proportion (stated as a percentage) that the Principal Debt owed to it bears to the total Principal
Debt owed to all Lenders.

“Projects” means the commercial real estate projects owned from time to time by Loan
Obligors which are subject to perfected Liens which secure Mortgage Loans or Commercial Loans owned
by PMC. The term “Project” means and includes the land and all appurtenances, servitudes,
easements, rights, privileges, prescriptions and advantages belonging or in any way appertaining to
the land and all buildings, fixtures, improvements, equipment and other property, whether real,
personal or mixed, located upon the land or used or intended to be used in connection with the land
or buildings, fixtures or improvements thereon.

“Purchaser” is defined in Section 13.3.

“Qualified Intercompany Debt” means any unsecured indebtedness, in a principal amount
not to exceed $100,000,000, owing by PMC to a CDO Subsidiary from time to time and evidenced by one
or more promissory notes or other evidences of indebtedness, which indicate that such indebtedness
is subordinated to the Obligation (such subordination to be on terms
reasonably acceptable to the Administrative Agent). In any case, PMC shall deliver the
promissory notes or other documents evidencing the terms of such indebtedness, containing all the
materially final or substantially final terms, to the Administrative Agent at least 5 Business Days
in advance of the incurrence of any Qualified Intercompany Debt.

 

14

 

“Qualifying Real Estate” means any real estate which produces income from rental of
improvements, other than (a) raw land, (b) single tenant retail properties, or (c) industrial
properties. For purposes of this agreement, “Qualifying Real Estate” does not include any REO
Property.

“Rate Management Obligations” of a Person means any and all obligations of such
Person, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or
acquired (including all renewals, extensions and modifications thereof and substitutions therefor)
under (i) any and all Rate Management Transactions, and (ii) any and all cancellations, buy backs,
reversals, terminations or assignments of any Rate Management Transactions.

“Rate Management Transaction” means any transaction (including an agreement with
respect thereto) now existing or hereafter entered into between any Borrower and any Lender or any
Affiliate thereof which is a rate swap, basis swap, forward rate transaction, commodity swap,
commodity option, equity or equity index swap, equity or equity index option, bond option, interest
rate option, foreign exchange transaction, cap transaction, floor transaction, collar transaction,
forward transaction, currency swap transaction, cross-currency rate swap transaction, currency
option or any other similar transaction (including any option with respect to any of these
transactions) or any combination thereof, whether linked to one or more interest rates, foreign
currencies, commodity prices, equity prices or other financial measures.

“REIT” means a “real estate investment trust” as defined in the Code.

“Real Estate Purchase Limitations” means the limitation on the dollar amount that PMC
may pay for the purchase of Qualifying Real Estate, which shall be (a) $10,000,000 (inclusive of
costs and related improvements) in the aggregate for all items of Qualifying Real Estate purchased
by PMC on or after August 16, 1999, and (b) $3,000,000 (inclusive of costs and related
improvements) for any one item of Qualifying Real Estate.

“Real Property” means any land, buildings, fixtures and other improvements to land now
or in the future directly or indirectly owned by any Company, leased to or otherwise operated by
any Company or subleased by any Company to any other Person.

“Regulation D” means Regulation D of the Board of Governors of the Federal Reserve
System as from time to time in effect and any successor thereto or other regulation or official
interpretation of said Board of Governors relating to reserve requirements applicable to member
banks of the Federal Reserve System.

“Regulation U” means Regulation U of the Board of Governors of the Federal Reserve
System as from time to time in effect and any successor or other regulation or official
interpretation of said Board of Governors relating to the extension of credit by banks for the
purpose of purchasing or carrying margin stocks applicable to member banks of the Federal
Reserve System.

 

15

 

“Release” means any “release” as defined under any Environmental Law.

“Renegotiated Loan” means any Mortgage Loan with respect to which the applicable
Mortgage Loan Obligor has had insufficient cash flow or negative economic events which have
diminished its ability to make timely or complete payments and PMC has given its concurrence to an
alternative schedule of repayment.

“REO Property” means real property acquired through foreclosure, deed-in-lieu of
foreclosure, workout of a loan transaction secured by such real estate or similar process.

“Reportable Event” means a reportable event as defined in Section 4043 of ERISA and
the regulations issued under such section, with respect to an Employee Plan, excluding, however,
such events as to which the PBGC has by regulation waived the requirement of Section 4043(a) of
ERISA that it be notified within 30 days of the occurrence of such event, provided, however, that a
failure to meet the minimum funding standard of Section 412 of the Code and of Section 302 of ERISA
shall be a Reportable Event regardless of any such waiver of the notice requirement in accordance
with either Section 4043(a) of ERISA or Section 412(d) of the Code.

“Representatives” means, with respect to a Person, its representatives, officers,
directors, employees, accountants, attorneys, insurers, shareholders and agents.

“Required Lenders” means any combination of one or more Lenders holding (directly or
indirectly) at least either (i) 66 2/3% of the total Commitments while there is no Principal Debt,
or (ii) 66 2/3% of the Principal Debt while there is any Principal Debt.

“Reserve Requirement” means, for any LIBOR Rate Borrowing and for the relevant
Interest Period, the total reserve requirements (including all basic, supplemental, emergency,
special, marginal and other reserves required by applicable Governmental Requirements, including,
without limitation, Regulation D) applicable to eurocurrency fundings or liabilities, as of the
first day of that Interest Period, in amount and maturity of such Borrowing.

“Responsible Officer” means a Borrower’s chairman, president, chief executive officer,
chief financial officer, executive vice president or, with respect to non-financial matters, its
general counsel.

“Revolving Notes” means collectively, the PMC Revolving Note and the First Western
Revolving Note.

“Rights” means rights, remedies, powers, privileges and benefits.

“SBIC” means a Person that is a Small Business Investment Company as licensed by the
U.S. Small Business Administration.

 

16

 

“Second-Lien Loan” means a Mortgage Loan secured by a Mortgage granting a
second-priority Lien on a Project, subject only to the first-priority Lien on the same project in
favor of PMC.

“Security Agreement” means any security agreement executed by PMC or any other Company
in favor of the Administrative Agent for the benefit of itself and the Lenders pursuant to this
agreement, all in form and scope acceptable to Administrative Agent, including without limitation,
the PMC Security Agreement.

“Segmented Loan” means any Mortgage Loan which has been segmented into parts for
securitization purposes.

“Solvent” means, as to any Person, that (a) the aggregate fair market value of such
Person’s assets exceeds its liabilities (whether contingent, subordinated, unmatured, unliquidated,
or otherwise), (b) such Person has sufficient cash flow to enable it to pay its debts as they
mature and (c) such Person does not have unreasonably small capital to conduct its businesses.

“Special Purpose Entity” means a special purpose Wholly-owned Subsidiary of PMC,
created in connection with the transactions contemplated by an Asset Securitization, which engages
in no activities, has no material liabilities, and owns no other assets, other than those
incidental to such Asset Securitization.

“Stated Termination Date” means December 31, 2011.

“Structured Financing” means a financing arrangement whereby (a) the obligor is a
Special Purpose Entity, (b) PMC has no obligation to pay the indebtedness or any other obligations
arising thereunder, and (c) the obligees thereunder have no recourse against any of the Companies
(other than the Special Purpose Entity involved in the financing) or their assets.

“Subsidiary” of any Person means any other Person of which (a) more than 50% (in
number of votes) of the stock (or equivalent interests) is owned of record or beneficially,
directly or indirectly, by that Person or (b) such Person serves as a general partner or in a
similar capacity. Unless otherwise specified or the context otherwise requires,
“Subsidiary” refers to a Subsidiary of PMC.

“Taxes” means, for any Person, taxes, assessments or other governmental charges or
levies imposed upon it, its income or any of its properties, franchises or assets.

“Termination Date” means the earlier of (a) the Stated Termination Date or (b) the
effective date that the Lenders’ commitments to lend under this agreement are fully canceled or
terminated.

“Third-Lien Loan” means a Mortgage Loan secured by a Mortgage granting a
third-priority Lien on a Project, subject only to the first- and second-priority Liens on the same
project in favor of Borrower.

 

17

 

“Total Liabilities” means, at any time and for the Consolidated Companies, all
liabilities properly reflected on the Consolidated Companies’ consolidated balance sheet in
accordance with GAAP (other than any Qualified Intercompany Debt).

“Type” means any type of Borrowing determined with respect to the applicable interest
option.

“UCC” means the Uniform Commercial Code as enacted in Texas or other applicable
jurisdictions.

“Wholly-owned” when used in connection with any Subsidiary shall mean a Subsidiary of
which all of the issued and outstanding shares of stock (or equivalent interests) are owned by PMC
or one or more of its Wholly-owned Subsidiaries.

“Workout Loans” means (a) those Mortgage Loans with respect to which the Mortgage Loan
Obligors have had insufficient cash flow and/or negative economic events which have diminished
their ability to make timely and/or complete payments and PMC has given its concurrence to an
alternative schedule of repayment, and (b) those Mortgage Loans previously classified as Loans in
Litigation which have been brought current by the Mortgage Loan Obligors. Workout Loans will be
maintained in this category for a minimum of six (6) months and will be designated as performing
(and therefore no longer a Workout Loan) if, based upon payment history under the revised plan (or
existing payment plan with respect to Mortgage Loans previously classified as Mortgage Loans in
Litigation which have been brought current), financial information when available, and PMC’s
professional opinion of each situation, it appears that it is no longer a problem loan.

1.2 Time References. Unless otherwise specified, in the Credit Documents (a) time
references (e.g., 10:00 a.m.) are to time in Dallas, Texas, and (b) in calculating a period from
one date to another, the word “from” means “from and including” and the word “to” or “until” means
“to but excluding.”

1.3 Other References. Unless otherwise specified, in the Credit Documents (a) where
appropriate, the singular includes the plural and vice versa, and words of any gender include each
other gender, (b) heading and caption references may not be construed in interpreting provisions,
(c) monetary references are to currency of the United States of America, (d) section, paragraph,
annex, schedule, exhibit and similar references are to the particular Credit Document in which they
are used, (e) references to “telecopy,” “telefax,” “facsimile,” “fax” or similar terms are to
facsimile or telecopy transmissions, (f) references to “including” mean including without limiting
the generality of any description preceding that word, (g) the rule of construction that references
to general items, following references to specific items are limited to the same type or character
of those specific items is not applicable in the Credit Documents, (h) references to any Person
include that Person’s heirs, personal representatives, successors, trustees, receivers and
permitted assigns, (i) references to any Governmental Requirement include every amendment or
supplement to it, rule and regulation adopted under it, and successor or replacement for it and (j)
references to any Credit Document or other document include every renewal and extension of it,
amendment, modification and supplement to it, and replacement or substitution for it, as each is
made in accordance with the applicable provisions of such Credit Document.

 

18

 

1.4 Accounting Principles. Unless otherwise specified, in the Credit Documents (a)
GAAP determines all accounting and financial terms and compliance with financial covenants, (b)
GAAP in effect on the date of this agreement determines compliance with financial covenants, (c)
all accounting principles applied in a current period must be comparable in all material respects
to those applied during the preceding comparable period and (d) while the Financials for the
Companies are on a consolidated basis, (i) all accounting and financial terms and compliance with
reporting covenants must be on a consolidated basis, as applicable and (ii) compliance with
financial covenants must be on a consolidated basis.

SECTION 2. COMMITMENTS.

2.1 PMC Revolving Facility. Subject to and in reliance upon the terms, conditions,
representations and warranties in the Credit Documents, each Lender severally and not jointly
agrees to lend to PMC such Lender’s Commitment Percentage of one or more Borrowings under the PMC
Revolving Facility not to exceed such Lender’s Committed Sum, which, subject to the Credit
Documents, PMC may borrow, repay and reborrow under this agreement, provided that (a) each such
Borrowing must occur on a Business Day and no later than the Business Day immediately preceding the
Termination Date, (b) each such Borrowing shall be in an amount not less than $500,000 or a greater
integral multiple of $100,000, (c) on any date of determination, the Commitment Usage under the PMC
Revolving Facility shall never exceed the PMC Commitment and (d) on any date of determination, the
Commitment Usage under the Commitments shall never exceed $30,000,000.

2.2 PMC Borrowing Procedure. The following procedures apply to all Borrowings under
the PMC Revolving Facility:

(a) Borrowing Request. PMC may request a Borrowing only by making or
delivering a Borrowing Request to Administrative Agent, which is irrevocable and binding on
PMC, stating the Type, amount and, if applicable, Interest Period for each Borrowing and
which must be received by Administrative Agent no later than (i) 10:00 a.m. on the second
Business Day before the date on which funds are requested (the “Borrowing Date”) for
any LIBOR Rate Borrowing or (ii) 10:00 a.m. on the Borrowing Date for any CBFR Borrowing.
Administrative Agent shall promptly notify each Lender of any Borrowing Request.

(b) Funding. Each Lender shall remit its Commitment Percentage of each
requested Borrowing to Administrative Agent’s principal office in Dallas, Texas, in funds
that are available for immediate use by Administrative Agent by 2:00 p.m. on the applicable
Borrowing Date. Subject to receipt of those funds, Administrative Agent shall (unless to
its actual knowledge any of the applicable conditions precedent have not been satisfied by
PMC or waived by the requisite Lenders under Section 14.10) make those funds
available to PMC by (at PMC’s option) (i) wiring the funds to or for the account of PMC at
the direction of PMC or (ii) depositing the funds in PMC’s account with Administrative
Agent.

 

19

 

(c) Funding Assumed. Absent contrary written notice from a Lender,
Administrative Agent may assume that each Lender has made its Commitment
Percentage of the requested Borrowing available to Administrative Agent on the
applicable Borrowing Date, and Administrative Agent may, in reliance upon such assumption
(but shall not be required to), make available to PMC a corresponding amount. If a Lender
fails to make its Commitment Percentage of any requested Borrowing available to
Administrative Agent on the applicable Borrowing Date, Administrative Agent may recover the
applicable amount on demand, (i) from that Lender together with interest, commencing on the
Borrowing Date and ending on (but excluding) the date Administrative Agent recovers the
amount from that Lender, at an annual interest rate equal to the Federal Funds Rate, or (ii)
if that Lender fails to pay its amount upon demand, then from PMC. No Lender is responsible
for the failure of any other Lender to make its Commitment Percentage of any Borrowing;
however, failure of any Lender to make its Commitment Percentage of any Borrowing does not
excuse any other Lender from making its Commitment Percentage of any Borrowing.

2.3 PMC Borrowing Requests. Each Borrowing Request constitutes a representation and
warranty by PMC that as of the Borrowing Date, all of the conditions precedent for that Borrowing
in Section 5 have been satisfied.

2.4 Reduction or Termination of PMC Commitment. Without premium or penalty, and upon
giving not less than three Business Days prior written and irrevocable notice to Administrative
Agent, PMC may terminate in whole or in part the unused portion of the PMC Commitment; provided
that: (a) each partial termination shall be in an amount of not less than $5,000,000 or a greater
integral multiple of $2,500,000; (b) the amount of the PMC Commitment may not be reduced below the
Commitment Usage at such time; (c) the amount of the PMC Commitment may not be reduced below the
First Western Commitment; and (d) each reduction shall be allocated among the Lenders in accordance
with their respective Commitment Percentages. Promptly after receipt of such notice of termination
or reduction, Administrative Agent shall notify each Lender of the proposed cancellation or
reduction. Such termination or partial reduction of the PMC Commitment shall be effective on the
Business Day specified in Borrower’s notice (which date must be at least three Business Days after
Borrower’s delivery of such notice). In the event that the PMC Commitment is reduced to zero at a
time when there is no outstanding Principal Debt, this agreement shall be terminated (except for
any indemnification or expense reimbursement provisions in this agreement which survive the
termination of this agreement) and all commitment fees and other fees then earned and unpaid
hereunder and all other amounts constituting part of the Obligation then due and owing shall be
immediately due and payable, without notice or demand by Administrative Agent or any Lender.

2.5 First Western Revolving Facility. Subject to and in reliance upon the terms,
conditions, representations and warranties in the Credit Documents, each Lender severally and not
jointly agrees to lend to First Western such Lender’s Commitment Percentage of one or more
Borrowings under the First Western Revolving Facility not to exceed such Lender’s Committed Sum,
which, subject to the Credit Documents, First Western may borrow, repay and reborrow under this
agreement, provided that (a) each such Borrowing must occur on a Business Day and no later than the
Business Day immediately preceding the Termination Date, (b) each such Borrowing shall be in an
amount not less than $500,000 or a greater integral multiple of $100,000, (c) on any date of
determination, the Commitment Usage under the First Western Revolving Facility shall never exceed
the First Western Commitment, (d) on any date of
determination, the Commitment Usage under the PMC Revolving Facility shall never exceed the
PMC Commitment, and (e) on any date of determination, the Commitment Usage under the Commitments
shall never exceed $30,000,000.

 

20

 

2.6 First Western Borrowing Procedure. The following procedures apply to all
Borrowings under the First Western Revolving Facility:

(a) Borrowing Request. First Western may request a Borrowing only by making or
delivering a Borrowing Request to Administrative Agent, which is irrevocable and binding on
First Western, stating the Type, amount and, if applicable, Interest Period for each
Borrowing and which must be received by Administrative Agent no later than (i) 10:00 a.m. on
the second Business Day before the Borrowing Date for any LIBOR Rate Borrowing or (ii) 10:00
a.m. on the Borrowing Date for any CBFR Borrowing. Administrative Agent shall promptly
notify each Lender of any Borrowing Request.

(b) Funding. Each Lender shall remit its Commitment Percentage of each
requested Borrowing to Administrative Agent’s principal office in Dallas, Texas, in funds
that are available for immediate use by Administrative Agent by 2:00 p.m. on the applicable
Borrowing Date. Subject to receipt of those funds, Administrative Agent shall (unless to
its actual knowledge any of the applicable conditions precedent have not been satisfied by
First Western or waived by the requisite Lenders under Section 14.10) make those
funds available to First Western by (at First Western’s option) (i) wiring the funds to or
for the account of First Western at the direction of First Western or (ii) depositing the
funds in First Western’s account with Administrative Agent.

(c) Funding Assumed. Absent contrary written notice from a Lender,
Administrative Agent may assume that each Lender has made its Commitment Percentage of the
requested Borrowing available to Administrative Agent on the applicable Borrowing Date, and
Administrative Agent may, in reliance upon such assumption (but shall not be required to),
make available to First Western a corresponding amount. If a Lender fails to make its
Commitment Percentage of any requested Borrowing available to Administrative Agent on the
applicable Borrowing Date, Administrative Agent may recover the applicable amount on demand,
(i) from that Lender together with interest, commencing on the Borrowing Date and ending on
(but excluding) the date Administrative Agent recovers the amount from that Lender, at an
annual interest rate equal to the Federal Funds Rate, or (ii) if that Lender fails to pay
its amount upon demand, then from First Western. No Lender is responsible for the failure
of any other Lender to make its Commitment Percentage of any Borrowing; however, failure of
any Lender to make its Commitment Percentage of any Borrowing does not excuse any other
Lender from making its Commitment Percentage of any Borrowing.

2.7 First Western Borrowing Requests. Each Borrowing Request constitutes a
representation and warranty by First Western that as of the Borrowing Date, all of the conditions
precedent for that Borrowing in Section 5 have been satisfied.

 

21

 

2.8 Reduction or Termination of First Western Commitment. Without premium or penalty,
and upon giving not less than three Business Days prior written and irrevocable notice to
Administrative Agent, First Western may terminate in whole or in part the unused portion of
the First Western Commitment; provided that: (a) each partial termination shall be in an amount of
not less than $5,000,000 or a greater integral multiple of $2,500,000; (b) the amount of the First
Western Commitment may not be reduced below the Commitment Usage under the First Western Revolving
Facility at such time; and (c) each reduction shall be allocated among the Lenders in accordance
with their respective Commitment Percentages. Promptly after receipt of such notice of termination
or reduction, Administrative Agent shall notify each Lender of the proposed cancellation or
reduction. Such termination or partial reduction of the First Western Commitment shall be
effective on the Business Day specified in First Western’s notice (which date must be at least
three Business Days after First Western’s delivery of such notice).

SECTION 3. TERMS OF PAYMENT.

3.1 Notes and Payments.

(a) Notes. The Principal Debt outstanding under the PMC Revolving Facility
shall be evidenced by the PMC Revolving Notes, one payable to each Lender in the maximum
stated principal amount of its Committed Sum under the PMC Revolving Facility as of the
Closing Date. The Principal Debt outstanding under the First Western Revolving Facility
shall be evidenced by the First Western Revolving Notes, one payable to each Lender in the
maximum stated principal amount of its Committed Sum under the First Western Revolving
Facility as of the Closing Date.

(b) Payment. Each Borrower must make each payment and prepayment on the
Obligation to Administrative Agent’s principal office in Dallas, Texas in immediately
available funds by 1:00 p.m. on the day due; otherwise, but subject to Section 3.8,
those funds continue to accrue interest as if they were received on the next Business Day.
Administrative Agent shall promptly pay to each Lender the part of any payment or prepayment
to which that Lender is entitled under this agreement on the same day Administrative Agent
is deemed to receive the funds from such Borrower.

(c) Payment Assumed. Unless Administrative Agent has received notice from a
Borrower prior to the date on which any payment is due under this agreement, that such
Borrower will not make that payment in full, Administrative Agent may assume that such
Borrower has made the full payment due and Administrative Agent may, in reliance upon that
assumption, cause to be distributed to each Lender on that date the amount then due to each
Lender. If and to the extent any Borrower does not make the full payment due to
Administrative Agent, each Lender shall repay Administrative Agent on demand the amount
distributed to that Lender by Administrative Agent, together with interest for each day from
the date that Lender received payment from Administrative Agent until the date that Lender
repays Administrative Agent (unless such repayment is made on the same day as such
distribution), at an interest rate equal to the Federal Funds Rate.

 

22

 

3.2 Interest and Principal Payments.

(a) Interest. Interest on each LIBOR Rate Borrowing shall be due and payable
as it accrues on the last day of its respective Interest Period and on the
Termination Date; provided that if any Interest Period is a period greater than three
months, then accrued interest shall also be due and payable on the date three months after
the commencement of such Interest Period. Interest on each CBFR Borrowing shall be due and
payable as it accrues on the last day of each month (commencing on the first of those dates
that follows the Closing Date), and on the Termination Date.

(b) Principal. The Principal Debt under the PMC Revolving Facility and the
First Western Revolving Facility is due and payable on the Termination Date. After giving
Administrative Agent advance written notice of the intent to prepay, any Borrower may
voluntarily prepay all or any part of the Principal Debt from time to time and at any time,
in whole or in part, without premium or penalty; provided that: (i) such notice must be
received by Administrative Agent by 10:00 a.m. on (A) the third Business Day preceding the
date of prepayment of a LIBOR Rate Borrowing, and (B) one Business Day preceding the date of
prepayment of a CBFR Borrowing; (ii) each such partial prepayment must be in a minimum
amount of at least $500,000 or a greater integral multiple of $100,000 thereof (if a LIBOR
Rate Borrowing or a CBFR Borrowing); (iii) all accrued interest on the Obligation must also
be paid in full, to the date of such prepayment; and (iv) such Borrower shall pay any
related Consequential Loss within ten (10) days after demand therefor. Each notice of
prepayment shall specify the prepayment date, the facility or the subfacility hereunder
being prepaid, the Type of Borrowing(s) and amount(s) of such Borrowing(s) to be prepaid and
shall constitute a binding obligation of the applicable Borrower to make a prepayment on the
date stated therein.

(c) Mandatory Prepayments. Each Borrower shall make mandatory prepayments on
the Obligation to Administrative Agent in the following amounts (without duplication):

(i) On any date of determination, if the Commitment Usage under the PMC
Revolving Facility exceeds the PMC Commitment then in effect, then PMC shall make a
mandatory prepayment of the Principal Debt under the PMC Revolving Facility in at
least the amount of any such excess, together with (A) all accrued and unpaid
interest on the principal amount so prepaid and (B) any Consequential Loss arising
as a result thereof. On any date of determination, if the Commitment Usage under
the First Western Revolving Facility exceeds the First Western Commitment then in
effect, then First Western shall make a mandatory prepayment of the Principal Debt
under the First Western Revolving Facility in at least the amount of any such
excess, together with (x) all accrued and unpaid interest on the principal amount so
prepaid and (y) any Consequential Loss arising as a result thereof.

(ii) 100% of the Net Proceeds from any sale (subject in all respects to
Section 8.10) of assets by any Borrower, other than any sale of assets which
are obsolete or are no longer in use and which are not significant to the
continuation of such Borrower’s business;

(iii) 100% of the Net Proceeds received by the Companies in connection with any
Structured Financing or Asset Securitization; and

(iv) 100% of the Net Proceeds from any Debt incurred as permitted by
Section 8.2(a)(iv).

 

23

 

Mandatory prepayments made pursuant to clauses (ii) — (iv) above (together with any
related Consequential Loss) are payable on the same Business Day on which the proceeds of
such sale, securitization or issuance are received by any Borrower, and must be made
together with (A) all accrued and unpaid interest on the principal amount so prepaid and (B)
any Consequential Loss arising as a result thereof. If the amount of any mandatory
prepayment required hereunder is greater than the then-outstanding Obligation, any such
excess may be retained by such Borrower.

3.3 Interest Options. Except that the LIBOR Rate may not be selected when an Event of
Default or Potential Default exists, and except as otherwise provided in this agreement, Borrowings
bear interest at an annual rate equal to the lesser of (a) the CB Floating Rate plus the Applicable
Margin or the LIBOR Rate plus the Applicable Margin (in each case as designated or deemed
designated by Borrower), as the case may be and (b) the Maximum Rate. Each change in the CB
Floating Rate, LIBOR Rate or Maximum Rate is effective, without notice to any Borrower or any other
Person, upon the effective date of change. If a Borrower does not designate the Type for a
requested Borrowing, then the requested Borrowing shall be deemed to be a LIBOR Rate Borrowing with
an Interest Period of one month (unless the LIBOR Rate is unavailable because of the conditions
described in Sections 3.15 or 3.17, in which case the requested Borrowing will be
deemed a CBFR Borrowing).

3.4 Quotation of Rates. Any Borrower may call Administrative Agent before delivering
a Borrowing Request to receive an indication of the interest rates then in effect, but the
indicated rates do not bind Administrative Agent or Lenders or affect the interest rate that is
actually in effect when such Borrower makes a Borrowing Request or on the Borrowing Date.

3.5 Default Rate. All past-due Principal Debt and, unless prohibited by applicable
Government Requirements, past-due interest accruing on the Principal Debt shall, at Administrative
Agent’s option, bear interest on the amount thereof from time to time outstanding from the date due
(stated or by acceleration) at the Default Rate until paid, regardless of whether payment is made
before or after entry of a judgment.

3.6 Interest Recapture. If the designated interest rate applicable to any Borrowing
exceeds the Maximum Rate, the interest rate on that Borrowing is limited to the Maximum Rate, but
any subsequent reductions in the designated rate shall not reduce the interest rate thereon below
the Maximum Rate until the total amount of accrued interest equals the amount of interest that
would have accrued if that designated rate had always been in effect. If at maturity (stated or by
acceleration), or at final payment of the Notes, the total interest paid or accrued is less than
the interest that would have accrued if the designated rates had always been in effect, then, at
that time and to the extent not prohibited by applicable Governmental Requirements, each Borrower
shall pay an amount equal to the difference between (a) the lesser of the amount of interest that
would have accrued if the designated rates had always been in effect and the amount of interest
that would have accrued if the Maximum Rate had always been in effect, and (b) the amount of
interest actually paid or accrued on the Notes.

 

24

 

3.7 Interest Calculations. Interest on all Borrowings will be calculated on the basis
of actual number of days (including the first day but excluding the last day) elapsed but computed
as if each calendar year consisted of (a) 360 days in the case of LIBOR Borrowings or CBFR
Borrowings calculated with reference to the Federal Funds Rate (unless such calculation would
result in the interest on the Borrowings exceeding the Maximum Rate in which event such interest
shall be calculated on the basis of a year of 365 or 366 days, as the case may be) and (b) 365 or
366 days, as the case may be, in the case of CBFR Borrowings calculated with reference to
Administrative Agent’s base rate of interest. All interest rate determinations and calculations by
Administrative Agent are conclusive and binding absent manifest error.

3.8 Maximum Rate. It is the intent of Administrative Agent, Lenders and Borrowers in
the execution and performance of the Credit Documents to remain in strict compliance with
applicable Governmental Requirements from time to time in effect, including applicable laws
limiting the amount or rate of interest. Administrative Agent, Lenders and Borrowers stipulate and
agree that none of the terms and provisions contained in the Credit Documents shall ever be
construed to create a contract to pay for the use, forbearance or detention of money with interest
at a rate or in an amount in excess of the Maximum Rate or Maximum Amount. For purposes of the
Credit Documents, “interest” shall include the aggregate of all charges which constitute interest
under applicable Governmental Requirements that are contracted for, charged, reserved, received or
paid under the Credit Documents. No Borrower shall ever be required to pay unearned interest and
shall never be required to pay interest at a rate or in an amount in excess of the Maximum Rate or
Maximum Amount, and the provisions of this section shall control over all other provisions of the
Credit Documents, and of any other instrument pertaining to or securing the Obligation, which may
be in actual or apparent conflict herewith. If the Obligation is prepaid, or if the maturity of
the Obligation is accelerated for any reason, or if under any contingency the effective rate or
amount of interest which would otherwise be payable under the Credit Documents would exceed the
Maximum Rate or Maximum Amount, or in the event any Lender or any holder of the Notes shall charge,
contract for, take, reserve or receive monies that are deemed to constitute interest which would,
in the absence of this provision, increase the effective rate or amount of interest payable under
the Credit Documents to a rate or amount in excess of that permitted to be charged, contracted for,
taken, reserved or received under applicable Governmental Requirements then in effect, then the
principal amount of the Obligation or the amount of interest which would otherwise be payable under
the Notes or both shall be reduced to the amount allowed under applicable Governmental Requirements
as now or hereinafter construed by the courts having jurisdiction, and all such moneys so charged,
contracted for, taken, reserved or received that are deemed to constitute interest in excess of the
Maximum Rate shall immediately be returned to or credited to the account of Borrowers upon such
determination. Administrative Agent, Lenders and Borrowers further stipulate and agree that,
without limitation of the foregoing, all calculations of the rate or amount of interest contracted
for, charged, taken, reserved or received under the Credit Documents which are made for the purpose
of determining whether such rate or amount exceeds the Maximum Rate or Maximum Amount, shall be
made to the extent not prohibited by applicable Governmental Requirements, by amortizing,
prorating, allocating and spreading during the period of the full stated term of the Notes, all
interest at any time contracted for, charged, taken, reserved or received from Borrowers or
otherwise by Lenders or any other holder of the Notes. If the Governmental Requirements of the
State of Texas are applicable for purposes of determining the
“Maximum Rate” or the “Maximum Amount,” then those terms mean the indicated
rate ceiling from time to time in effect under Chapter 303 of the Texas Finance Code, as amended.

 

25

 

3.9 Interest Periods. When any Borrower requests any LIBOR Rate Borrowing, such
Borrower may elect the applicable interest period (each an “Interest Period”), which may
be, at such Borrower’s option, one, three or six months, subject to the following conditions: (a)
the initial Interest Period for a LIBOR Rate Borrowing commences on the applicable Borrowing Date
or conversion date, and each subsequent Interest Period applicable to any Borrowing commences on
the day when the next preceding applicable Interest Period expires; (b) if any Interest Period for
a LIBOR Rate Borrowing begins on a day for which no numerically corresponding Business Day in the
calendar month at the end of the Interest Period exists, then the Interest Period ends on the last
Business Day of that calendar month; (c) if such Borrower is required to pay any portion of a LIBOR
Rate Borrowing before the end of its Interest Period in order to comply with the payment provisions
of the Credit Documents, such Borrower shall also pay any related Consequential Loss; (d) no
Interest Period for any portion of Principal Debt may extend beyond the scheduled repayment date
for that portion of Principal Debt; and (e) no more than four Interest Periods may be in effect at
one time.

3.10 Conversions. Subject to the dollar limits of Sections 2.1 and
2.5 and provided that no Borrower may convert to or select a new Interest Period for a
LIBOR Rate Borrowing at any time when an Event of Default exists, any Borrower may (a) convert a
LIBOR Rate Borrowing on the last day of the applicable Interest Period to a CBFR Borrowing, (b)
convert a CBFR Borrowing at any time to a LIBOR Rate Borrowing and (c) elect a new Interest Period
for a LIBOR Rate Borrowing. That election may be made by telephonic request to Administrative
Agent no later than 10:00 a.m. on the second Business Day before the conversion date or the last
day of the Interest Period, as the case may be (for conversion to a LIBOR Rate Borrowing or
election of a new Interest Period), and no later than 10:00 a.m. on the last day of the Interest
Period (for conversion to a CBFR Borrowing). Each Borrower shall provide a Conversion Notice to
Administrative Agent no later than two days after the date of the conversion or election. Absent a
Borrower’s telephonic request for conversion or election of a new Interest Period or if an Event of
Default exists, then, a LIBOR Rate Borrowing shall be deemed converted to a CBFR Borrowing
effective when the applicable Interest Period expires.

3.11 Order of Application.

(a) No Event of Default. Payments and prepayments of the Obligation shall be
applied in the order and manner specified in this agreement; provided, however, if no order
is otherwise specified in this agreement and no Event of Default or Potential Default has
occurred and is continuing, payments and prepayments of the Obligation shall be applied
first to fees, second to accrued interest then due and payable on the Principal Debt, and
then to the remaining Obligation in the order and manner as any Borrower may direct.

 

26

 

(b) Event of Default or No Direction. If an Event of Default or Potential
Default has occurred and is continuing (or if any Borrower fails to give direction as
permitted under Section 3.11(a)), any payment or prepayment (including proceeds from
the exercise of any Rights) shall be applied in the following order: (i) to all fees and
expenses for which Administrative Agent or Lenders have not been paid or reimbursed in
accordance with the Credit Documents (and if such payment or prepayment is less than all
unpaid or unreimbursed fees and expenses, then the payment or prepayment shall be paid
against unpaid and unreimbursed fees and expenses in the order of incurrence or due date);
(ii) to accrued interest on the Principal Debt; (iii) to the remaining Principal Debt in
such order as Required Lenders may elect (provided that Required Lenders will apply such
proceeds in an order that will minimize any Consequential Loss); and (iv) to the remaining
Obligation in the order and manner Required Lenders deem appropriate.

(c) Pro Rata. Each payment or prepayment shall be distributed to each Lender
in accordance with its Pro Rata Part of that payment or prepayment.

3.12 Sharing of Payments, Etc. If any Lender obtains any payment or prepayment with
respect to the Obligation (whether voluntary, involuntary, or otherwise, including, without
limitation, as a result of exercising its Rights under Section 3.13) that exceeds the part
of that payment or prepayment that it is then entitled to receive under the Credit Documents, then
that Lender shall purchase from the other Lenders participations that will cause the purchasing
Lender to share the excess payment or prepayment ratably with each other Lender. If all or any
portion of any excess payment or prepayment is subsequently recovered from the purchasing Lender,
then the purchase shall be rescinded and the purchase price restored to the extent of the recovery.
Each Borrower agrees that any Lender purchasing a participation from another Lender under this
section may, to the fullest extent permitted by applicable Governmental Requirements, exercise all
of its Rights of payment (including the Right of offset) with respect to that participation as
fully as if that Lender were the direct creditor of such Borrower in the amount of that
participation.

3.13 Offset. If an Event of Default exists, to the extent not prohibited by
applicable Governmental Requirements, each Lender may exercise (for the benefit of all Lenders in
accordance with Section 3.12) the Rights of offset and banker’s lien against each and every
account and other property, or any interest therein, that any Company may now or hereafter have
with, or which is now or hereafter in the possession of, that Lender to the extent of the full
amount of the Obligation owed (directly or participated) to it, provided, however, no such right of
offset or banker’s lien may be exercised against any account of any Special Purpose Entity.

3.14 Booking Borrowings. To the extent permitted by applicable Governmental
Requirements, any Lender may make, carry, or transfer its Borrowings at, to, or for the account of
any of its branch offices or the office or branch of any of its Affiliates. However, no Affiliate
or branch is entitled to receive any greater payment under Section 3.16 than the transferor
Lender would have been entitled to receive with respect to those Borrowings, and a transfer may not
be made if, as a direct result of it, Section 3.15 or 3.17 would apply to any of
the Obligation. If any of the conditions of Sections 3.16 or 3.17 ever apply to a
Lender, that Lender shall, to the extent possible, carry or transfer its Borrowings at, to, or for
the account of any of its branch offices or the office or branch of any of its Affiliates so long
as the transfer is consistent with the other provisions of this section, does not create any burden
or adverse circumstance for that Lender that would not otherwise exist, and eliminates or
ameliorates the conditions of Sections 3.16 or 3.17, as applicable.

 

27

 

3.15 Basis Unavailable or Inadequate for LIBOR Rate. If on or before any date when a
LIBOR Rate is to be determined for a Borrowing, Administrative Agent or any Lender determines (and
Required Lenders agree with that determination) that the basis for determining the applicable rate
is not available or that the resulting rate does not accurately reflect the cost to Lenders of
making or converting Borrowings at that rate for the applicable Interest Period, then
Administrative Agent shall promptly notify Borrowers and Lenders of that determination (which is
conclusive and binding on each Borrower absent manifest error), and the applicable Borrowing shall
bear interest at the sum of the CB Floating Rate plus the Applicable Margin. Until Administrative
Agent notifies Borrowers that those circumstances giving rise to such notice no longer exist,
Lenders’ commitments under this agreement to make, or to convert to, LIBOR Rate Borrowings, as the
case may be, shall be suspended.

3.16 Additional Costs. Each Lender severally and not jointly agrees to notify
Administrative Agent, the other Lenders, and Borrowers within 180 days after it has actual
knowledge that any circumstances exist that would give rise to any payment obligation by Borrowers
under clauses (a) through (c) below. Although no Lender shall have any liability
to Administrative Agent, any other Lender, or any Company for its failure to give that notice, no
Borrower is obligated to pay any amounts under those clauses that arise, accrue or are imposed more
than 180 days before that notice to the extent that notice is applicable to those amounts. To
demand payment under this section, any such Lender must generally be making similar demand for
similar additional costs under credit agreements to which it is party that contain similar
provisions to this section.

(a) Reserves. With respect to any LIBOR Rate Borrowing (i) if any change in
any present Governmental Requirement, any change in the interpretation or application of any
present Governmental Requirement, or any future Governmental Requirement imposes, modifies
or deems applicable (or if compliance by any Lender with any requirement of any Governmental
Authority results in) any requirement that any reserves (including, without limitation, any
marginal, emergency, supplemental, or special reserves) be maintained (other than any
reserve included in the Reserve Requirement) and if (ii) those reserves reduce any sums
receivable by that Lender under this agreement or increase the costs incurred by Lender in
advancing or maintaining any portion of any LIBOR Rate Borrowing, then (iii) that Lender
(through Administrative Agent) shall deliver to Borrowers a certificate setting forth in
reasonable detail the calculation of the amount necessary to compensate it for its reduction
or increase (which certificate is conclusive and binding absent manifest error), and (iv)
Borrowers shall pay that amount to that Lender within five Business Days after demand. The
provisions of and undertakings and indemnifications in this clause (a) survive the
satisfaction and payment of the Obligation and termination of this agreement.

 

28

 

(b) Capital Adequacy. With respect to any Borrowing, if any change in any
present Governmental Requirement, any change in the interpretation or application of any
present Governmental Requirement, or any future Governmental Requirement regarding capital
adequacy, or if compliance by Administrative Agent or any Lender with any request, directive
or requirement imposed in the future by any Governmental Authority regarding capital
adequacy, or if any change in its written policies or in the risk category of this
transaction, in any of the foregoing events or circumstances, reduces the rate of
return on its capital as a consequence of its obligations under this agreement to a
level below that which it otherwise could have achieved (taking into consideration its
policies with respect to capital adequacy) by an amount deemed by it to be material (and it
may, in determining the amount, utilize reasonable assumptions and allocations of costs and
expenses and use any reasonable averaging or attribution method), then (unless the effect is
already reflected in the rate of interest then applicable under this agreement)
Administrative Agent or that Lender (through Administrative Agent) shall notify Borrowers
and deliver to Borrowers a certificate setting forth in reasonable detail the calculation of
the amount necessary to compensate it (which certificate is conclusive and binding absent
manifest error), and Borrowers shall pay that amount to Administrative Agent or that Lender
within five Business Days after demand. The provisions of and undertakings and
indemnification in this clause (b) shall survive the satisfaction and payment of the
Obligation and termination of this agreement.

(c) Taxes. Any Taxes payable by Administrative Agent or any Lender or ruled by
a Governmental Authority to be payable by Administrative Agent or any Lender in respect of
this agreement or any other Credit Document shall, if permitted by applicable Governmental
Requirements, be paid by Borrowers, together with interest and penalties, if any, except for
Taxes payable on or measured by the overall net income of Administrative Agent or that
Lender (or any other Person with whom Administrative Agent or that Lender files a
consolidated, combined, unitary, or similar Tax return) and except for interest and
penalties incurred as a result of the gross negligence or willful misconduct of
Administrative Agent or that Lender. Administrative Agent or that Lender (through
Administrative Agent) shall notify Borrowers and deliver to Borrowers a certificate setting
forth in reasonable detail the calculation of the amount of Taxes payable, which certificate
is conclusive and binding (absent manifest error), and Borrowers shall pay that amount to
Administrative Agent for its account or the account of that Lender, as the case may be,
within ten Business Days after demand. If Administrative Agent or that Lender subsequently
receives a refund of the Taxes paid to it by Borrowers, then the recipient shall promptly
pay the refund to Borrowers.

3.17 Change in Governmental Requirements. If any Governmental Requirement makes it
unlawful for any Lender to make or maintain LIBOR Rate Borrowings, then that Lender shall promptly
notify Borrowers and Administrative Agent, and (a) as to undisbursed funds, that requested
Borrowing shall be made as a CBFR Borrowing and (b) as to any outstanding Borrowing (i) if
maintaining the Borrowing until the last day of the applicable Interest Period is unlawful, the
Borrowing shall be converted to a CBFR Borrowing as of the date of notice, in which event Borrowers
will be required to pay any related Consequential Loss or (ii) if not prohibited by applicable
Governmental Requirements, the Borrowing shall be converted to a CBFR Borrowing as of the last day
of the applicable Interest Period or (iii) if any conversion will not resolve the unlawfulness,
Borrowers shall promptly prepay the Borrowing, without penalty but with related Consequential Loss.

 

29

 

3.18 Consequential Loss. Each Borrower shall indemnify each Lender against, and pay
to it upon demand, any Consequential Loss of that Lender. When any Lender demands that any
Borrower pay any Consequential Loss, that Lender shall deliver to such Borrower and Administrative
Agent a certificate setting forth in reasonable detail the basis for imposing
Consequential Loss and the calculation of the amount, which calculation is conclusive and
binding absent manifest error. The provisions of and undertakings and indemnification in this
Section survive the satisfaction and payment of the Obligation and termination of this agreement.

3.19 Foreign Lenders, Participants, and Purchasers. Each Lender, Participant (by
accepting a participation interest under this agreement), and Purchaser (by executing an
Assignment) that is not organized under the Governmental Requirements of the United States of
America or one of its states (a) represents to Administrative Agent and Borrowers that (i) no Taxes
are required to be withheld by Administrative Agent or any Borrower with respect to any payments to
be made to it in respect of the Obligation and (ii) it has furnished to Administrative Agent and
Borrowers two duly completed copies of either U.S. Internal Revenue Service Form 4224, Form 1001,
Form W-8, or any other form acceptable to Administrative Agent and Borrowers that entitles it to a
complete exemption from U.S. federal withholding Tax on all interest or fee payments under the
Credit Documents, and (b) covenants to (i) provide Administrative Agent and Borrowers a new Form
4224, Form 1001, Form W-8, or other form acceptable to Administrative Agent and Borrowers upon the
expiration or obsolescence according to applicable Governmental Requirements of any previously
delivered form, duly executed and completed by it, entitling it to a complete exemption from U.S.
federal withholding Tax on all interest and fee payments under the Credit Documents, and (ii)
comply from time to time with all applicable Governmental Requirements with regard to the
withholding Tax exemption. If any of the foregoing is not true at any time or the applicable forms
are not provided, then Borrowers and Administrative Agent (without duplication) may deduct and
withhold from interest and fee payments under the Credit Documents any Tax at the maximum rate
under the Code or other applicable Governmental Requirement, and amounts so deducted and withheld
shall be treated as paid to that Lender, Participant, or Purchaser, as the case may be, for all
purposes under the Credit Documents.

SECTION 4. FEES.

4.1 Treatment of Fees. Except as otherwise provided by applicable Governmental
Requirements, the fees described in this Section 4 (a) do not constitute compensation for
the use, detention, or forbearance of money, (b) are in addition to, and not in lieu of, interest
and expenses otherwise described in this agreement, (c) shall be payable in accordance with
Section 3, (d) shall be non refundable, (e) shall, to the fullest extent permitted by
applicable Governmental Requirements, bear interest, if not paid when due, at the Default Rate, and
(f) shall be calculated on the basis of actual number of days (including the first day but
excluding the last day) elapsed, but computed as if each calendar year consisted of 360 days,
unless such computation would result in interest being computed in excess of the Maximum Rate in
which event such computation shall be made on the basis of a year of 365 or, 366 days, as the case
may be.

4.2 Fees of Administrative Agent. Each Borrower shall pay to Administrative Agent,
for its own account, fees in such amounts and upon such payment terms as may be separately agreed
upon by Administrative Agent and such Borrower in writing.

 

30

 

4.3 Upfront Fees. On the Closing Date, each Borrower shall pay to each initial Lender
upfront fees in amounts separately agreed to between such Borrower and each such Lender.

4.4 Commitment Fee. Following the Closing Date, PMC shall pay to Administrative
Agent, for the ratable account of Lenders, a commitment fee, payable in installments in arrears, on
each March 31, June 30, September 30, and December 31 and on the Termination Date, commencing
December 31, 2010. Each installment shall be in an amount equal to 0.375% multiplied by the amount
by which (a) the average daily Commitments (which amount, for purposes of calculating the
commitment fee hereunder, shall not exceed $30,000,000) exceeds (b) the average daily Commitment
Usage, in each case during the period from and including the last payment date to and excluding the
payment date for such installment, provided that each such installment shall be calculated in
accordance with Section 4.1(f). Solely for the purposes of this Section 4.4,
“ratable” shall mean, for any period of calculation, with respect to any Lender, that proportion
which (x) the average daily unused Committed Sum of such Lender during such period bears to (y) the
amount of the average daily unused Commitments (which amount shall not exceed $30,000,000) during
such period.

SECTION 5. CONDITIONS PRECEDENT.

5.1 Initial Advances. The obligation of Lenders to make the initial advances under
this agreement is subject to the condition precedent that, on or before the date of such advance,
Administrative Agent and Lenders have received, there shall have been performed and there shall
exist, the documents, actions and other matters set forth below, each in form, scope and substance,
and (as applicable) dated as of a date, satisfactory to Administrative Agent and Lenders:

(a) Credit Agreement. This agreement duly executed by Borrowers,
Administrative Agent and each initial Lender;

(b) Revolving Notes. The Revolving Notes duly executed and delivered by
Borrowers;

(c) Guaranty. The Guaranty duly executed and delivered by PMC;

(d) PMC Resolutions. Resolutions of PMC approving the execution, delivery and
performance of this agreement, the PMC Revolving Notes and the other Credit Documents to
which it is a party and the transactions contemplated herein and therein, duly adopted by
PMC’s Board of Trust Managers and accompanied by a certificate of the Secretary or Assistant
Secretary of PMC stating that the resolutions are true and correct, have not been altered or
repealed and are in full force and effect;

(e) First Western Resolutions. Resolutions of First Western approving the
execution, delivery and performance of this agreement, the First Western Revolving Note and
the other Credit Documents to which it is a party and the transactions contemplated herein
and therein, duly adopted by First Western’s Board of Directors and accompanied by a
certificate of the Secretary or Assistant Secretary of First Western stating that the
resolutions are true and correct, have not been altered or repealed and are in full
force and effect;

 

31

 

(f) PMC Incumbency Certificates. Signed certificates of the Secretary or
Assistant Secretary of PMC certifying the names of the officers of PMC authorized to sign
each of the Credit Documents to which it is a party and the other documents or certificates
to be delivered pursuant to the Credit Documents by PMC, together with the true signatures
of each such officer. Administrative Agent and Lenders may conclusively rely on each such
certificate until they receive, and have had a reasonable opportunity to act upon, a further
certificate of the Secretary or Assistant Secretary of PMC canceling or amending the prior
certificate and submitting the signatures of the officers named in the further certificate;

(g) First Western Incumbency Certificates. Signed certificates of the
Secretary or Assistant Secretary of First Western certifying the names of the officers of
First Western authorized to sign each of the Credit Documents to which it is a party and the
other documents or certificates to be delivered pursuant to the Credit Documents by First
Western, together with the true signatures of each such officer. Administrative Agent and
Lenders may conclusively rely on each such certificate until they receive, and have had a
reasonable opportunity to act upon, a further certificate of the Secretary or Assistant
Secretary of First Western canceling or amending the prior certificate and submitting the
signatures of the officers named in the further certificate;

(h) Bring Down Certificates. A bring down certificate of the Secretary or
Assistant Secretary of each Borrower certifying that the declaration of trust, articles of
incorporation, and bylaws, as applicable of such Borrower have not been modified in any
respect from the copies previously provided to the Administrative Agent and the Lenders in
connection with the Existing Credit Agreement;

(i) Payments to Administrative Agent. The payment to Administrative Agent of:
(i) all fees to be received by Administrative Agent pursuant to this agreement or any other
Credit Document, and (ii) all third-party costs incurred in connection with this agreement,
including all reasonable attorneys’ fees, costs and out-of-pocket expenses of Administrative
Agent’s counsel incurred or estimated to have been incurred through the Closing Date in
connection with the preparation, execution and delivery of the Credit Documents and the
consummation of the transactions contemplated thereby;

(j) Opinion of Counsel. A favorable opinion addressed to Administrative Agent
and Lenders, in form and substance satisfactory to Administrative Agent, from outside legal
counsel to Borrowers; and

(k) Additional Information. Such other documents, instruments, reports,
opinions and information as reasonably required by Administrative Agent, any Lender and
their respective counsel.

 

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5.2 All Borrowings. The obligation of Lenders to extend Borrowings under this
agreement (including the initial advances) is subject to the following conditions precedent:

(a) No Default or Potential Default. As of the date of the making of the
Borrowing, there exists no Event of Default or Potential Default;

(b) Compliance with Credit Agreement. Each Company has performed and complied
with all agreements and conditions contained in this agreement and each other Credit
Document that are required to be performed or complied with by it before or at the date of
the Borrowing;

(c) No Material Adverse Event. As of the date of making the Borrowing, no
Material Adverse Event has occurred and is continuing;

(d) Representations and Warranties. The representations and warranties
contained in Section 6 and the other Credit Documents are true in all respects on
the date of, and after giving effect to, the Borrowing, with the same force and effect as
though made on and as of that date; and

(e) Borrowing Request. Administrative Agent has timely received from a
Borrower a properly completed Borrowing Request, executed by a Responsible Officer of such
Borrower.

SECTION 6. REPRESENTATIONS AND WARRANTIES. Each Borrower represents and warrants to Administrative
Agent and Lenders as follows:

6.1 Purpose and Regulation U.

(a) Subject to the other provisions in the Credit Documents, including, without
limitation, clause (b) below, the proceeds of all Borrowings under the PMC Revolving
Facility will be used either (i) to finance PMC’s Mortgage Loan origination, (ii) to finance
PMC’s Commercial Loan origination, or (iii) for general corporate purposes. Subject to the
other provisions in the Credit Documents, including, without limitation, clause (b)
below, the proceeds of all Borrowings under the First Western Revolving Facility will be
used either (x) to finance First Western’s Commercial Loan origination under the 7(a) Loan
Program of the U.S. Small Business Administration or (y) for general corporate purposes.

(b) The proceeds of the PMC Revolving Facility will be used by PMC solely for the
purposes specified in Section 6.1(a). The proceeds of the First Western Revolving
Facility will be used by First Western solely for the purposes specified in Section
6.1(a). None of such proceeds will be used for the purpose of purchasing or carrying
any “margin stock” as defined in Regulation U, or for the purpose of reducing or retiring
any indebtedness which was originally incurred to purchase or carry a margin stock or for
any other purpose which might constitute this transaction a “purpose credit” within the
meaning of such Regulation U. No Company is engaged in the business of extending credit for
the purpose of purchasing or carrying margin stocks. No Company, nor any Person acting on
behalf of any Company, has taken or will take any action that might cause the Notes or any
of the other Credit Documents, including this Credit Agreement, to violate Regulation U or
any other regulations of the Board of Governors of the Federal Reserve System or to violate
Section 7 of the Securities Exchange Act of 1934, as
amended, or any rule or regulation thereunder, in each case as now in effect or as the
same may hereinafter be in effect.

 

33

 

(c) No portion of any advance or loan made hereunder shall be used directly or
indirectly to purchase ineligible securities, as defined by applicable regulations of the
Federal Reserve Board, underwritten by any affiliate of JPMorgan Chase & Co. or any
affiliate of any other Lender during the underwriting period and for 30 days thereafter.

6.2 Corporate Existence, Good Standing, Authority and Locations. PMC is a real estate
investment trust duly organized, validly existing and in good standing under the laws of the State
of Texas. First Western is a corporation duly incorporated, validly existing and in good standing
under the laws of the State of Florida. Except where the failure to qualify would not result in a
Material Adverse Event, each Borrower is duly qualified to transact business and is in good
standing in each jurisdiction where the nature and extent of its business and properties require
due qualification and good standing (and each of such jurisdictions is identified in Schedule
6.3). Each Borrower possesses all requisite authority and power to conduct its business as is
now being conducted and as proposed to be conducted (including under the Credit Documents) and to
own and operate its assets as now owned and operated and as proposed to be owned and operated
(including under the Credit Documents). Each Borrower’s chief executive office and other principal
offices are described on Schedule 6.3. The present location of each Borrower’s books and
records concerning accounts and accounts receivable is at its chief executive office.

6.3 Subsidiaries and Names. Schedule 6.3 describes (a) each Company, (b)
every name or trade name used by each Company during the four-month period before the date of this
agreement (or during the period such Company has been a Subsidiary, if shorter) and (c) every
change of each Company’s name during the four month period before the date of this agreement. All
of the outstanding shares of beneficial interests, capital stock or similar voting interests of
each Company are (i) duly authorized, validly issued, fully paid and nonassessable, (ii) owned of
record and beneficially as described in Schedule 6.3, free and clear of any Liens, and
(iii) not subject to any warrant, option or other acquisition Right of any Person or subject to any
voting, ownership or transfer restriction except (1) restrictions imposed by securities laws and
general corporate laws and (2) restrictions expressly noted in the certificates evidencing such
shares.

6.4 Authorization and Contravention. The execution and delivery by each Borrower of
each Credit Document to which it is a party and the performance by it of its obligations under
those Credit Documents (a) are within its trust or corporate power, (b) have been duly authorized
by all necessary trust or corporate action, (c) require no consent of, action by, or filing with,
any Governmental Authority (except any action or filing that has been taken or made or consent that
has been received, and is completed and in final form and full force and effect, on or before the
Closing Date), (d) do not violate any provision of its Organizational Documents, (e) do not violate
any provision of any Governmental Requirement applicable to it or result in any breach of, or
default under, any material agreement of the Companies, or (f) result in, or requires the
imposition of, any Liens on any property of any Company, other than in favor of Administrative
Agent for Lenders.

 

34

 

6.5 Binding Effect. Upon execution by each Borrower of each Credit Document to which
it is a party, each such Credit Document will constitute a legal and binding obligation of such
Borrower, enforceable against such Borrower in accordance with that Credit Document’s terms, except
as that enforceability may be limited by Debtor Relief Laws and general principles of equity.

6.6 Financials. The Current Financials were prepared in accordance with GAAP and
present fairly, in all material respects, the Companies’ consolidated (if applicable) financial
condition, results of operations and cash flows as of, and for the portion of the fiscal year
ending on, their dates (subject only to normal year-end adjustments for interim statements).
Except for transactions directly related to, or specifically contemplated or expressly permitted
by, the Credit Documents, no material adverse changes have occurred in the Companies’ consolidated
(if applicable) financial condition from that shown in the Current Financials.

6.7 Solvency. On each Borrowing Date, each Borrower is, and after giving effect to
the requested Borrowing will be, Solvent.

6.8 Litigation.

(a) Except as shown on Schedule 6.8, no Company is subject to, or aware of the
threat of, any Litigation involving any Company, or any of their respective properties,
which if adversely determined against any of them, reasonably could be expected to result in
a Material Adverse Event, and

(b) No outstanding and unpaid judgments against any Company exist that reasonably could
be expected to result in a Material Adverse Event.

6.9 Taxes.

(a) Except where the non-compliance of any of the following reasonably could not be
expected to result in a Material Adverse Event, (i) all returns, reports and other
information of each Company required to be filed in respect to a present or future liability
for any Taxes have been prepared in compliance with all requisite Governmental Requirements,
and as so prepared, have been properly filed (or extensions have been granted) and (ii) all
Taxes imposed upon each Company that are due and payable have been timely and fully paid
except as are being contested as permitted by Section 7.5.

(b) PMC qualifies as a “real estate investment trust” for all purposes under the Code.

6.10 Environmental Matters.

(a) No Company has received notice from any Governmental Authority that it has any
actual or potential Environmental Liability, and no Company has knowledge that it has any
Environmental Liability, which actual or potential Environmental Liability in either case
reasonably could be expected to constitute a Material Adverse Event.

 

35

 

(b) No Company has received notice from any Governmental Authority that any Real
Property is affected by, and no Company has knowledge that any Real Property is affected by,
any Release of any Hazardous Substance which reasonably could be expected to constitute a
Material Adverse Event.

(c) No Company knows of any environmental conditions or circumstances adversely
affecting any material portion of the collateral securing any of the Commercial Loans or
Mortgage Loans. The Companies have taken all steps required under applicable Governmental
Requirements to determine that all of the Projects securing the Mortgage Loans are in
compliance with all applicable Governmental Requirements.

6.11 Employee Plans. Except where not a Material Adverse Event (a) no Employee Plan
subject to ERISA has incurred an “accumulated funding deficiency” (as defined in Section 302 of
ERISA or Section 512 of the Code), (b) neither any Company nor any ERISA Affiliate has incurred
liability (except for liabilities for premiums that have been paid or that are not past due) under
ERISA to the PBGC in connection with any Employee Plan, (c) neither any Company nor any ERISA
Affiliate has withdrawn in whole or in part from participation in a Multiemployer Plan in a manner
that has given rise to a withdrawal liability under Title IV of ERISA, (d) neither any Company nor
any ERISA Affiliate has engaged in any “prohibited transaction” (as defined in Section 406 of ERISA
or Section 4975 of the Code), (e) no “reportable event” (as defined in Section 4043 of ERISA) has
occurred excluding events for which the notice requirement is waived under applicable PBGC
regulations, (f) neither any Company nor any ERISA Affiliate has any liability, or is subject to
any Lien, under ERISA or the Code to or on account of any Employee Plan, (g) each Employee Plan
subject to ERISA and the Code complies in all material respects, both in form and operation, with
ERISA and the Code and (h) no Multiemployer Plan subject to the Code is in reorganization within
the meaning of Section 418 of the Code.

6.12 Properties; Liens. Each Company has good and marketable title to all its
property reflected on the Current Financials except for property that is obsolete or that has been
disposed of in the ordinary course of business between the date of the Current Financials and the
date of this agreement or, after the date of this agreement, as permitted by Section 8.10.
No Lien exists on any property of any Company except Permitted Liens and Permitted Project Liens.
Except for the Credit Documents, no Company is party or subject to any agreement, instrument or
order which in any way restricts any Company’s ability to allow Liens to exist upon any of its
assets.

6.13 Government Regulations.

(a) No Company is subject to regulation under the Investment Company Act of 1940, as
amended, or the Public Utility Holding Company Act of 1935, as amended.

(b) Each of the Companies has complied with all applicable Governmental Requirements of
any Governmental Authority having jurisdiction over the conduct of their respective
businesses or the ownership of their respective property.

 

36

 

6.14 Transactions with Affiliates. Except for transactions with other Companies as
permitted by Section 8.5, no Company is a party to a transaction (other than of an
inconsequential nature) with any of its Affiliates.

6.15 Debt. No Company has any Debt except Permitted Debt.

6.16 Leases. Except where it could not reasonably be expected to result in a Material
Adverse Event, (a) each Company enjoys peaceful and undisturbed possession under all leases
necessary or desirable for the operation of its properties and assets and (b) all material leases
under which any Company is a lessee are in full force and effect.

6.17 Labor Matters. Except where it could not reasonably be expected to result in a
Material Adverse Event (a) no actual or threatened strikes, labor disputes, slow downs, walkouts,
work stoppages or other concerted interruptions of operations that involve any employees employed
at any time in connection with the business activities or operations at any Real Property exist,
(b) hours worked by and payment made to the employees of any Company have not been in violation of
the Fair Labor Standards Act or any other applicable Governmental Requirements pertaining to labor
matters, (c) all payments due from any Company for employee health and welfare insurance,
including, without limitation, workers compensation insurance, have been paid or accrued as a
liability on its books and (d) the business activities and operations of each Company are in
compliance with OSHA and other applicable health and safety Governmental Requirements.

6.18 Intellectual Property. Except where it could not reasonably be expected to
result in a Material Adverse Event, (a) each Company owns or has the right to use all material
licenses, patents, patent applications, copyrights, service marks, trademarks, trademark
applications, trade names, trade secrets and other intellectual property rights necessary or
desirable to continue to conduct its businesses as presently conducted by it and proposed to be
conducted by it immediately after the date of this agreement, (b) each Company is conducting its
business without infringement or claim of infringement of any license, patent, copyright, service
mark, trademark, trade name, trade secret or other intellectual property right of others and (c) no
infringement or claim of infringement by others of any material license, patent, copyright, service
mark, trademark, trade name, trade secret or other intellectual property of any Company exists.

6.19 Insurance. Each Company maintains the insurance required by Section 7.9.

6.20 Full Disclosure. All information furnished to Administrative Agent or Lenders by
or on behalf of any Company in connection with the Credit Documents was, and all information
furnished to Administrative Agent or Lenders in the future by or on behalf of any Company will be,
in each case, when so furnished, true, complete and accurate in all material respects or where
estimates or projections were or will be therein made and so designated, based on good faith,
reasonable estimates or projections on the date the information is stated or certified.

 

37

 

SECTION 7. AFFIRMATIVE COVENANTS.

7.1 Certain Items Furnished. Each Borrower shall furnish the following to
Administrative Agent (with sufficient copies for each Lender):

(a) PMC Annual Financials, Etc. Promptly after preparation but no later than
90 days after the last day of each fiscal year of PMC, audited Financials showing the
Companies’ consolidated and consolidating financial condition and results of operations as
of, and for the year ended on, that last day, accompanied by (i) the opinion, without
qualification, of a nationally recognized firm of independent certified public accountants
acceptable to Required Lenders, based on an audit using generally accepted auditing
standards, that the consolidated portion of those Financials were prepared in accordance
with GAAP and present fairly, in all material respects, the Companies’ consolidated
financial condition and results of operations and (ii) with respect to the period covered by
such Financials, a Compliance Certificate.

(b) PMC Quarterly Financials, Etc. Promptly after preparation but no later
than 60 days after the last day of each fiscal quarter of PMC, Financials showing the
Companies’ consolidated financial condition and results of operations for that fiscal
quarter and for the period from the beginning of the current fiscal year to the last day of
that fiscal quarter, accompanied by a Compliance Certificate with respect to the period
covered by such Financials.

(c) SEC Filings. Promptly after preparation, but in any event (i) within 60
days after the end of each of the first three fiscal quarters of PMC, an accurate and
complete copy of PMC’s Form 10-Q as filed with the Securities and Exchange Commission, (ii)
within 90 days after the end of each fiscal year of PMC, an accurate and complete copy of
PMC’s Form 10-K as filed with the Securities and Exchange Commission, and (iii) promptly
upon their becoming available, accurate and complete copies of all registration statements,
other reports (including those on Form 8-K) and statements and schedules filed by PMC with
any securities exchange, the Securities and Exchange Commission or any other similar
Governmental Authority.

(d) Quarterly Managed Loan Reports. Promptly after preparation, but no later
than 60 days after the last day of each fiscal quarter, a schedule of all PMC’s Mortgage
Loans, each such report to be in form and scope acceptable to Administrative Agent,
including, without limitation, setting forth information identifying (i) all Mortgage Loans
with respect to which a default has occurred as to the payment of any installment of
principal or interest or other monetary default has occurred under any Mortgage Loan
Document related thereto and such default has not been cured for more than 30 days, (ii)
Mortgage Loans in Liquidation, (iii) Mortgage Loans in Litigation, (iv) any other
Non-Performing Loans, (v) Renegotiated Loans, (vi) Construction Loans, and (vii) Segmented
Loans.

 

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(e) Annual Financial Projections. Promptly after preparation but no later than
45 days after the last day of each fiscal year of PMC, annual financial projections for the
Companies prepared by PMC, in form and substance reasonably acceptable to
Administrative Agent, setting forth management’s projections for the next succeeding
fiscal year.

(f) Quarterly Loan Listings. Promptly after preparation, but not later than 60
days after the last day of each fiscal quarter, (i) a statement identifying the original
documentation evidencing the Commercial Loans, the Mortgage Loans and all other loans owned
by PMC and deposited into the Deposit Box as of the end of such fiscal quarter and (ii) a
detailed loan listing of each Company as of the end of such fiscal quarter, in detail
satisfactory to Administrative Agent.

(g) Employee Plans. As soon as possible and within 20 days after PMC knows
that a Reportable Event has occurred, or that the PBGC has instituted or will institute
proceedings under ERISA to terminate that Employee Plan, deliver a certificate of a
Responsible Officer of PMC setting forth details as to that Reportable Event and the action
which any Borrower or an ERISA Affiliate, as the case may be, proposes to take with respect
to it, together with a copy of any notice of that Reportable Event which may be required to
be filed with the PBGC, or any notice delivered by the PBGC evidencing its intent to
institute those proceedings or any notice to the PBGC that the Employee Plan is to be
terminated, as the case may be. For all purposes of this section, each Borrower is deemed
to have all knowledge of all facts attributable to the plan administrator under ERISA.

(h) Project Lease Information. Promptly when requested by Administrative Agent
or any Lender, correct and complete copies of all leases covering all or any portion of any
Project, together with a rent roll covering such leases in form and substance reasonably
required by Administrative Agent and certified to by the applicable Mortgage Loan Obligor as
being true, correct and complete in all material respects.

(i) Other Notices. Promptly after PMC knows or receives any notification
thereof (whichever shall first occur), notice of (a) the existence and status of any
Litigation or Environmental Liability that if determined adversely to any Company, could
reasonably be expected to result in a Material Adverse Event, (b) any material Litigation
that questions the validity of any Lien which secures or purports or is intended to secure
any Mortgage Loan Document relating to any Mortgage Loan, any Lien which secures or purports
or is intended to secure any Mortgage Loan or any Project Document relating to any Mortgage
Loan, (c) any change in any fact or circumstance (other than of an inconsequential nature)
represented or warranted by any Company in any Credit Document, (d) any challenge by the
Internal Revenue Service with respect to PMC’s status as a REIT, (e) an Event of Default,
Potential Default or Material Adverse Event, specifying the nature thereof and what action
the Companies have taken, are taking and propose to take and (f) any notice of a “default,”
“event of default” or “potential default” from any other creditor of the Companies, with a
copy thereof immediately delivered to Administrative Agent, together with an explanation
from PMC, in detail satisfactory to Administrative Agent, regarding the notice and effect of
such notice.

 

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(j) First Western Annual Financials. (i) To the extent required to be prepared
by any Governmental Authority, promptly after preparation but no later than 90 days
after the last day of each fiscal year of First Western, audited Financials showing
First Western’s consolidated financial condition and results of operations as of, and for
the year ended on, that last day, accompanied by the opinion, without qualification, of a
nationally recognized firm of independent certified public accountants acceptable to
Required Lenders, based on an audit using generally accepted auditing standards, that the
consolidated portion of those Financials were prepared in accordance with GAAP and present
fairly, in all material respects, First Western’s consolidated financial condition and
results of operations or (ii) otherwise, promptly after preparation but no later than 90
days after the last day of each fiscal year of First Western, Financials showing First
Western’s consolidated financial condition and results of operations as of, and for the year
ended on, that last day.

(k) Other Information. Promptly when reasonably requested by Administrative
Agent or any Lender, such additional information (not otherwise required to be furnished
under this agreement) regarding (a) any Company’s business affairs, assets, liabilities,
results of operation and financial condition, (b) any Mortgage Loan, or (c) any Mortgage
Loan Document, any Project Document or any Project which secures a Mortgage Loan as
Administrative Agent or any Lender may request (all in form and substance satisfactory to
Administrative Agent or that Lender).

7.2 Use of Credit. Each Borrower shall use the proceeds of Borrowings only for the
purposes represented in this agreement.

7.3 Books and Records. Each Company shall maintain books, records and accounts
necessary to prepare Financials in accordance with GAAP.

7.4 Inspections. Upon reasonable request and advance notice (but during the pendency
of an Event of Default, no advance notice is required), each Company shall allow Administrative
Agent or any Lender (or their respective Representatives) to inspect any of that Company’s
properties, to review reports, files and other records and to make and take away copies, to conduct
tests or investigations and to discuss any of its affairs, conditions and finances with its other
creditors, directors, officers, employees, outside accountants or representatives from time to
time, during reasonable business hours (but during the pendency of an Event of Default, at any
time). Without limiting the foregoing, the Companies shall allow Administrative Agent to perform
field examinations to test such systems and controls of the Companies as it deems appropriate.
Each Borrower shall promptly reimburse Administrative Agent and Lenders for the reasonable expenses
of such inspections and field examinations.

7.5 Taxes. Each Company shall promptly pay when due any and all Taxes, except Taxes
that are being contested in good faith by lawful proceedings diligently conducted, against which
reserve or other provision required by GAAP has been made and in respect of which levy and
execution of any Lien sufficient to be enforced has been and continues to be stayed.

7.6 Payment of Obligation. Each Company shall promptly pay (or renew and extend) all
of its obligations as they become due (unless the obligations, other than the Obligation or any
part thereof, are being contested in good faith by appropriate proceedings).

 

40

 

7.7 Expenses. Within ten Business Days after demand accompanied by an invoice
describing the costs, fees and expenses in reasonable detail, each Borrower shall pay (a) all
costs, fees and expenses paid or incurred by or on behalf of Administrative Agent incident to any
Credit Document (including, without limitation, the reasonable fees and expenses of Administrative
Agent’s counsel in connection with the negotiation, preparation, delivery and execution of the
Credit Documents and any related amendment, waiver or consent) and (b) all reasonable costs and
expenses incurred by Administrative Agent in connection with the enforcement of the obligations of
any Company under the Credit Documents or the exercise of any Rights under the Credit Documents
(including, without limitation, reasonable allocated costs of in-house counsel, other reasonable
attorneys’ fees and court costs), all of which are part of the Obligation, bearing interest (if not
paid within ten Business Days after demand accompanied by an invoice describing the costs, fees and
expenses in reasonable detail) on the portion thereof from time to time unpaid at the Default Rate
until paid.

7.8 Maintenance of Existence, Assets and Business. Each Company shall (a) maintain
its trust, corporate or partnership (as applicable) existence and good standing in its state of
incorporation or formation (as applicable) and (b) except where the failure to perform any of the
following could not reasonably be expected to result in a Material Adverse Event (i) maintain its
authority to transact business and good standing in all other states, (ii) maintain all licenses,
permits and franchises necessary or desirable for its business and (iii) keep all of its assets
that are useful in and necessary to its business in good working order and condition (ordinary wear
and tear excepted) and make all necessary repairs and replacements.

7.9 Insurance. Each Company shall, at its cost and expense, maintain with financially
sound, responsible and reputable insurance companies or associations, or as to workers’
compensation or similar insurance, with an insurance fund or by self-insurance authorized by the
jurisdictions in which it operates, insurance concerning its properties and businesses against
casualties and contingencies and of types and in amounts (and with co-insurance and deductibles) as
is customary in the case of similar businesses. In addition, each Borrower shall and shall cause
each other Company to, (a) name Administrative Agent as additional insured on all general and
comprehensive liability insurance, (b) deliver copies of the policies and endorsements for the
insurance required by this Section 7.9 to Administrative Agent promptly after issuance and
renewal of each and (c) cause each policy of insurance to provide that it will not be cancelled or
modified (as to term, coverage, scope, property or risks covered, change or addition of loss payee
or additional insured or otherwise) without 30 days prior written notice to Administrative Agent.

7.10 Compliance with Governmental Requirements. Each Company shall (a) operate and
manage its businesses and otherwise conduct its affairs in compliance with all Governmental
Requirements (including without limitation, all Environmental Laws and Environmental Permits)
except to the extent noncompliance reasonably could be expected not to constitute a Material
Adverse Event, (b) promptly deliver to Administrative Agent a copy of any notice received from any
Governmental Authority alleging that any Company is not in compliance with any Governmental
Requirements (including any Environmental Laws or Environmental Permits) if the allegation
reasonably could constitute a Material Adverse Event and (c) promptly deliver to Administrative
Agent a copy of any notice received from any Governmental Authority alleging
that any Company has any potential Environmental Liability if the allegation reasonably could
constitute a Material Adverse Event.

 

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7.11 Indemnification.

(a) AS USED IN THIS SECTION: (I) “INDEMNITOR” MEANS EACH BORROWER AND EACH
OTHER COMPANY; (II) “INDEMNITEE” MEANS ADMINISTRATIVE AGENT, EACH LENDER, EACH
PRESENT AND FUTURE AFFILIATE OF ADMINISTRATIVE AGENT AND EACH LENDER, EACH PRESENT AND
FUTURE REPRESENTATIVE OF ADMINISTRATIVE AGENT AND EACH LENDER OR ANY OF THOSE AFFILIATES AND
EACH PRESENT AND FUTURE SUCCESSOR AND ASSIGN OF ADMINISTRATIVE AGENT AND EACH LENDER OR ANY
OF THOSE AFFILIATES OR REPRESENTATIVES; AND (III) “INDEMNIFIED LIABILITIES” MEANS
ALL PRESENT AND FUTURE, KNOWN AND UNKNOWN, FIXED AND CONTINGENT, ADMINISTRATIVE,
INVESTIGATIVE, JUDICIAL AND OTHER CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION,
INVESTIGATIONS, SUITS, PROCEEDINGS, AMOUNTS PAID IN SETTLEMENT, DAMAGES, JUDGMENTS,
PENALTIES, COURT COSTS, LIABILITIES AND OBLIGATIONS, AND ALL PRESENT AND FUTURE COSTS,
EXPENSES AND DISBURSEMENTS (INCLUDING ALL REASONABLE ATTORNEYS’ FEES AND EXPENSES WHETHER OR
NOT SUIT OR OTHER PROCEEDING EXISTS OR ANY INDEMNITEE IS PARTY TO ANY SUIT OR OTHER
PROCEEDING) IN ANY WAY RELATED TO ANY OF THE FOREGOING, THAT MAY AT ANY TIME BE IMPOSED ON,
INCURRED BY, OR ASSERTED AGAINST, ANY INDEMNITEE AND IN ANY WAY RELATING TO OR ARISING OUT
OF ANY (1) CREDIT DOCUMENT OR TRANSACTION CONTEMPLATED BY ANY CREDIT DOCUMENT, (2)
ENVIRONMENTAL LIABILITY IN ANY WAY RELATED TO ANY COMPANY, OR ACT, OMISSION, STATUS,
OWNERSHIP, OR OTHER RELATIONSHIP, CONDITION, OR CIRCUMSTANCE CONTEMPLATED BY, CREATED UNDER,
OR ARISING PURSUANT TO OR IN CONNECTION WITH ANY CREDIT DOCUMENT, OR (3) INDEMNITEE’S
SOLE OR CONCURRENT ORDINARY NEGLIGENCE.

(b) EACH INDEMNITOR AGREES, JOINTLY AND SEVERALLY, TO INDEMNIFY PROTECT AND DEFEND EACH
INDEMNITEE FROM AND AGAINST, HOLD EACH INDEMNITEE HARMLESS FROM AND AGAINST, AND ON DEMAND
PAY OR REIMBURSE EACH INDEMNITEE FOR, ALL INDEMNIFIED LIABILITIES.

 

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(c) THE FOREGOING PROVISIONS (I) ARE NOT LIMITED IN AMOUNT EVEN IF THAT AMOUNT EXCEEDS
THE OBLIGATION, (II) INCLUDE, WITHOUT LIMITATION, REASONABLE FEES AND EXPENSES OF ATTORNEYS
AND OTHER COSTS AND EXPENSES OF LITIGATION OR PREPARING FOR LITIGATION AND DAMAGES OR INJURY
TO PERSONS, PROPERTY, OR NATURAL RESOURCES ARISING UNDER ANY
STATUTORY OR COMMON LAW GOVERNMENTAL REQUIREMENT, PUNITIVE DAMAGES, FINES, AND OTHER
PENALTIES, AND (III) ARE NOT AFFECTED BY THE SOURCE OR ORIGIN OF ANY HAZARDOUS SUBSTANCE,
AND (IV) ARE NOT AFFECTED BY ANY INDEMNITEE’S INVESTIGATION, ACTUAL OR CONSTRUCTIVE
KNOWLEDGE, COURSE OF DEALING, OR WAIVER.

(d) HOWEVER, NO INDEMNITEE IS ENTITLED TO BE INDEMNIFIED UNDER THE CREDIT DOCUMENTS FOR
ITS OWN FRAUD, GROSS NEGLIGENCE, OR WILLFUL MISCONDUCT.

(e) ALTHOUGH FAILURE TO DO SO DOES NOT REDUCE OR IMPAIR ANY INDEMNITOR’S OBLIGATIONS
UNDER THIS SECTION, EACH INDEMNITEE SHALL PROMPTLY NOTIFY BORROWERS OF ANY EVENT ABOUT WHICH
THE INDEMNITEE HAS RECEIVED WRITTEN NOTICE AND THAT IS REASONABLY LIKELY TO RESULT IN ANY
INDEMNIFIED LIABILITY. EACH INDEMNITOR MAY, AT ITS OWN COST AND EXPENSE, PARTICIPATE IN THE
DEFENSE IN ANY PROCEEDING INVOLVING ANY INDEMNIFIED LIABILITY. IF NO EVENT OF DEFAULT OR
POTENTIAL DEFAULT EXISTS, INDEMNITORS MAY ASSUME THE DEFENSE IN THAT PROCEEDING ON BEHALF OF
THE APPLICABLE INDEMNITEES, INCLUDING THE EMPLOYMENT OF COUNSEL IF FIRST APPROVED (WHICH
APPROVAL MAY NOT BE UNREASONABLY WITHHELD) BY THE APPLICABLE INDEMNITEES. IF INDEMNITORS
ASSUME ANY DEFENSE, THEY SHALL KEEP THE APPLICABLE INDEMNITEES FULLY ADVISED OF THE STATUS
OF, AND SHALL CONSULT WITH, AND RECEIVE THE CONCURRENCE OF, THOSE INDEMNITEES BEFORE TAKING
ANY MATERIAL POSITION IN RESPECT OF, THAT PROCEEDING. IF INDEMNITORS CONSENT, IF AN EVENT
OF DEFAULT, POTENTIAL DEFAULT OR MATERIAL ADVERSE EVENT EXISTS OR IF ANY INDEMNITEE
REASONABLY DETERMINES THAT AN ACTUAL CONFLICT OF INTERESTS EXISTS BETWEEN INDEMNITORS AND
THAT INDEMNITEE WITH RESPECT TO THE SUBJECT MATTER OF THE PROCEEDING OR THAT INDEMNITORS ARE
NOT DILIGENTLY PURSUING THE DEFENSE, THEN (I) THAT INDEMNITEE MAY, AT INDEMNITORS’ JOINT AND
SEVERAL EXPENSE, EMPLOY COUNSEL TO REPRESENT THAT INDEMNITEE THAT IS SEPARATE FROM COUNSEL
FOR INDEMNITORS OR ANY OTHER PERSON IN THAT PROCEEDING AND (II) INDEMNITORS ARE NO LONGER
ENTITLED TO ASSUME THE DEFENSE ON BEHALF OF THAT INDEMNITEE. NO INDEMNITOR MAY AGREE TO THE
SETTLEMENT OF ANY INDEMNIFIED LIABILITY, OR ANY MATTERS OR ISSUES MATERIAL TO OR NECESSARY
FOR THE RESOLUTION OF ANY SUCH LIABILITY, WITHOUT THE PRIOR WRITTEN CONSENT OF THE
APPLICABLE INDEMNITEES UNLESS, AS AGREED TO IN WRITING BY AN INDEMNITEE, THAT SETTLEMENT
FULLY RELIEVES THOSE INDEMNITEES OF ANY LIABILITY WHATSOEVER FOR THAT INDEMNIFIED LIABILITY.
IF AN INDEMNITEE AGREES TO THE
SETTLEMENT OF ANY INDEMNIFIED LIABILITY WITHOUT THE PRIOR WRITTEN CONSENT OF
INDEMNITORS (WHICH CONSENT MAY NOT BE UNREASONABLY WITHHELD), THEN INDEMNITORS ARE NO LONGER
OBLIGATED FOR THAT INDEMNIFIED LIABILITY IN RESPECT OF THAT INDEMNITEE.

 

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7.12 Mortgage Loan Approval, Collection and Servicing Standards. Each Borrower shall
follow the loan approval, collection and servicing policies and standards in effect as of the
Closing Date, except for immaterial changes in such policies and standards or changes in such
policies and standards disclosed to and approved in writing by Administrative Agent and Lenders.

7.13 Negative Pledge. Each Borrower hereby covenants and agrees (and agrees to cause
each other Company) not to directly or indirectly create, incur, grant, suffer, or permit to be
created or incurred any Lien on any of the respective assets of such Companies, other than
Permitted Liens and Permitted Project Liens. Furthermore, in the event that, notwithstanding the
foregoing, any such Liens (other than Permitted Liens and Permitted Project Liens) are granted,
incurred, or created, then, in addition to the other Rights granted to Administrative Agent and
Lenders hereunder or under applicable Governmental Requirements, (a) the Companies hereby grant to
Administrative Agent and Lenders an equal and ratable Lien in and to the property so encumbered,
(b) any Person receiving the benefit of any such additional Liens shall be deemed to receive any
such grant or conveyance of Liens for the ratable and pari passu benefit of Lenders and
Administrative Agent and shall be deemed the bailee and agent for such Lenders for the sole purpose
of holding any such collateral and Liens and perfecting Liens in favor of Administrative Agent and
Lenders with respect thereto, and (c) upon the request of Administrative Agent, each Company shall
execute, and shall request the other Person to execute, all such documents and take all actions
requested by Required Lenders to more fully evidence and create such ratable, pari passu Liens in
favor of Lenders and Administrative Agent.

7.14 Collateral. To secure full and complete payment and performance of the
Obligations, PMC has granted and conveyed to and create in favor of, the Administrative Agent for
the ratable benefit of the Lenders a continuing first priority perfected Lien in, to and on all of
the Collateral. PMC shall (a) deposit and keep the original documentation evidencing the
Collateral in safety deposit box number 5125 maintained with JPMorgan Chase (the “Deposit
Box”) and located at Preston Center, 8111 Preston Road, Dallas, Texas 75225, (b) duly indorse
each note or other instrument evidencing the Collateral together with any other instruments of
transfer or assignment reasonably requested by Administrative Agent, all in form and scope
reasonably acceptable to Administrative Agent, and (c) take such other actions as Administrative
Agent reasonably deems necessary to establish a valid, enforceable and perfected first priority
security interest in the Collateral.

 

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SECTION 8. NEGATIVE COVENANTS.

For so long as any Lender is committed to lend under this agreement and until the Obligation
has been fully paid and performed, each Borrower covenants and agrees with Administrative Agent and
Lenders as follows:

8.1 Payroll Taxes. No Company may directly or indirectly use any proceeds of any
Borrowing (a) for any purpose other than as represented in this agreement, or (b) for the payment
of wages of employees unless a timely payment to or deposit with the United States of America of
all amounts of Tax required to be deducted and withheld with respect to such wages is also made.

8.2 Debt. No Company may:

(a) Create, incur or suffer to exist (directly or indirectly) any direct, indirect,
fixed or contingent liability for any Debt except the following (the “Permitted
Debt”):

(i) the Obligation;

(ii) Debt existing on the Closing Date, as more particularly described on
Schedule 8.2 (the “Existing Debt”);

(iii) either (A) any Debt arising under or in connection with any Structured
Financing that is entered into as a result of an Asset Securitization or (B) any
Qualified Intercompany Debt;

(iv) Debt under debentures issued by a Company to an SBIC in an aggregate
amount not to exceed $25,000,000 at any one time outstanding (including any such
Debt existing on the Closing Date and described on Schedule 8.2), but in any
case having recourse to PMC, having the following general attributes: (A) such
indebtedness is secured solely by liens on parcels of Qualifying Real Estate; (B)
the loan documents evidencing such indebtedness do not contain covenants or other
agreements that are more restrictive than those found in the Credit Documents, do
not cross-default to the Credit Documents, and are otherwise in form and substance
acceptable to Administrative Agent and Required Lenders; and (C) no Event of Default
or Potential Default has occurred and is continuing when any such Debt is to be
incurred, and no Event of Default or Potential Default would be created by such
incurrence. Prior to the incurrence of any Debt permitted by this clause
(iv), PMC shall deliver a written notice to Administrative Agent of its intent
to incur such Debt, the proposed obligor, proposed obligee, amount, rate and
scheduled amortization of such proposed Debt. PMC shall also provide any other
information requested by Administrative Agent and Lenders with respect to such
proposed financing, including, without limitation, copies of the loan documents
evidencing the proposed financing; and

(v) indebtedness and other obligations arising under Rate Management
Transactions contemplated by this agreement.

(b) Prepay, purchase, repurchase, defease or redeem, or cause to be prepaid, purchased,
repurchased, defeased or redeemed, any principal of, or any premium (if any) or interest on,
any of its Debt (including, without limitation, any Qualified Intercompany Debt), or fund or
cause to be funded any sinking or similar fund for any such Debt (including, without
limitation, any Qualified Intercompany Debt), except for:

(i) the Obligation;

 

45

 

(ii) any Debt (other than any Qualified Intercompany Debt) permitted under
Section 8.2(a)(iv) above in connection with the sale of the underlying real
property to a third party in an arm’s-length transaction, so long as all prepayments
required by Section 3.2(c) are made simultaneously therewith;

(iii) With the consent of the Administrative Agent, any Debt owed by a Special
Purpose Entity (other than any CDO Subsidiary) incurred in connection with an Asset
Securitization, so long as (A) such Debt has been reduced to 15% or less of its
original principal amount, (B) such prepayment fully extinguishes such Debt, (C) no
Potential Default or Event of Default then exists or would be created by such
prepayment, and (D) all remaining Mortgage Loans and related assets of such Special
Purpose Entity are promptly transferred to PMC; or

(iv) in the case of Qualified Intercompany Debt, any payments expressly
permitted by Section 8.2(c) below.

(c) Prepay, purchase, repurchase, defease or redeem or cause to be prepaid, purchased,
repurchased, defeased or redeemed, any principal of, or any premium (if any) or interest on,
any of its Qualified Intercompany Debt, or fund or cause to be funded any sinking or similar
fund for any Qualified Intercompany Debt. Notwithstanding the foregoing, (i) PMC may make
regularly scheduled interest payments on its Qualified Intercompany Debt and payments of
principal on its Qualified Intercompany Debt upon its stated maturity unless (A) an Event of
Default has occurred and is continuing under Section 10.1 as a result of a failure
to make a payment of principal or interest under any Note or under Section 10.11 as
a result of any nonpayment of any Rate Management Obligation when due, or (B) the maturity
of the Obligation has been accelerated pursuant to either Section 11.1(a) or
11.1(b) hereof, and (ii) PMC may make other principal payments or prepayments of
Qualified Intercompany Debt (and payment of accrued interest thereon), at its option, at any
time prior to the stated maturity thereof, unless an Event of Default has occurred and is
then continuing.

8.3 Liens. No Company may (a) create, incur or suffer or permit to be created or
incurred or to exist any Lien upon any of its properties except a Permitted Lien or (b) enter into
or permit to exist any arrangement or agreement that directly or indirectly prohibits any Company
from creating or incurring any Lien on any of its assets or properties except (i) the Credit
Documents, (ii) any lease that places a Lien prohibition on only the property subject to that
lease, and (iii) arrangements and agreements that apply only to property subject to Permitted
Liens. The following are “Permitted Liens”:

(a) Lender Liens;

(b) Liens existing on the Closing Date, as more particularly described on Schedule
8.3 (the “Existing Liens”);

(c) Liens on the assets owned by any Special Purpose Entity, which Liens are created
under or in connection with a Structured Financing permitted by this agreement;

 

46

 

(d) Liens on parcels of Qualifying Real Estate securing Debt permitted by Section
8.2(a)(iv);

(e) Any interest or title of a lessor in property being leased under an operating lease
that does not constitute Debt;

(f) Liens arising under Rate Management Transactions permitted by this agreement;

(g) Banker’s Liens and Rights of setoff or recoupment;

(h) Pledges or deposits made to secure any Company’s payment of workers’ compensation,
unemployment insurance or other forms of governmental insurance or benefits or to
participate in any fund in connection with workers’ compensation, unemployment insurance,
pensions or other social security programs;

(i) Zoning and similar restrictions on the use of, and easements, restrictions,
covenants, title defects and similar encumbrances on, Real Property that do not impair the
use of such Real Property (other than of an inconsequential nature) and that are not
violated by existing or proposed structures or land use; and

(j) If no Lien has been filed in any jurisdiction or agreed to (i) claims and Liens for
Taxes not yet due and payable, (ii) statutory mechanic’s Liens and materialman’s Liens for
services or materials and similar statutory Liens incident to construction and maintenance
of Real Property, in each case for which payment is not yet due and payable, (iii) statutory
landlord’s Liens for rental not yet due and payable and (iv) statutory Liens of warehousemen
and carriers and similar statutory Liens securing obligations that are not yet due and
payable.

8.4 Employee Plans. No Company may permit any of the events or circumstances
described in Section 6.11 to exist or occur except where the failure to perform the
foregoing could not reasonably be expected to result in a Material Adverse Event.

8.5 Transactions with Affiliates. No Company may enter into any transaction with any
of its Affiliates except (a) Asset Securitizations, but only so long as (i) no Event of Default or
Potential Default has occurred and is continuing at the time of such Asset Securitization, and (ii)
all mandatory prepayments on the Obligation required by Section 3.2(c) are made in
connection therewith, (b) the issuance of Qualified Intercompany Debt, and (c) other transactions
(other than Investments) in the ordinary course of business and upon fair and reasonable terms not
materially less favorable than it could obtain or could become entitled to in an arm’s length
transaction with a Person that was not its Affiliate.

8.6 Compliance with Governmental Requirements and Documents. No Company shall (a)
violate the provisions of any Governmental Requirements (including, without limitation, OSHA and
Environmental Laws) applicable to it or of any material agreement to which it is a party or by
which any of its property is subject or bound if that violation alone, or when aggregated with all
other violations, reasonably could be expected to result in a Material Adverse Event, (b) violate
any provision of its Organizational Documents or (c) repeal, replace or amend
any provision of its Organizational Documents if that action reasonably could be expected to
result in a Material Adverse Event.

 

47

 

8.7 Investments. No Company may make any Investments except the following (the
“Permitted Investments”):

(a) (i) Readily marketable, direct, full faith and credit obligations of the United
States of America or obligations guaranteed by the full faith and credit of the United
States of America and (ii) readily marketable obligations of an agency or instrumentality
of, or corporation owned, controlled or sponsored by, the United States of America that are
generally considered in the securities industry to be implicit obligations of the United
States of America, in each case, due within one year after the acquisition of it
(collectively, “Government Securities”);

(b) Readily marketable direct obligations of any state of the United States of America
given on the date of such investment a credit rating of at least Aa by Moody’s Investors
Service, Inc. or AA by Standard & Poor’s Corporation, in each case due within one year from
the making of the investment;

(c) Certificates of deposit issued by, bank deposits in, eurodollar deposits through,
bankers’ acceptances of, and repurchase agreements covering Government Securities executed
by, (i) any Lender or (ii) any bank incorporated under the Governmental Requirements of the
United States of America or any of its states and given on the date of the investment a
short term certificate of deposit credit rating of at least P-2 by Moody’s Investors
Service, Inc., or A-2 by Standard & Poor’s Corporation, in each case due within one year
after the date of the making of the investment;

(d) Certificates of deposit issued by, bank deposits in, eurodollar deposits through,
bankers’ acceptances of, and repurchase agreements covering Government Securities executed
by, any branch or office located in the United States of America of a bank incorporated
under the Governmental Requirements of any jurisdiction outside the United States of America
having on the date of the investment a short term certificate of deposit credit rating of a
least P-2 by Moody’s Investors Service, Inc., or A-2 by Standard & Poor’s Corporation, in
each case due within one year after the date of the making of the investment;

(e) Commercial paper maturing in 270 days or less from the date of issuance and rated
P-1 or better by Moody’s Investors Service, Inc., or A-1 or better by Standard & Poors
Corporation;

(f) Money market instruments and mutual funds rated AAA by Standard & Poors Corporation
or given one of the two highest credit rankings for such investments by any other
nationally-recognized rating service; and

(g) Customary capital contributions or similar investments relating to the formation of
any Subsidiary of that Company.

 

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8.8 Qualifying Real Estate and REO Property. PMC may not purchase any real property
or any hotel/motel project other than (a) Qualifying Real Estate, provided that no Qualifying Real
Estate shall be acquired in excess of any applicable Real Estate Purchase Limitation and (b) REO
Property.

8.9 Distributions; Other Payments. No Company shall enter into or permit to exist any
arrangement or agreement which directly or indirectly prohibits any such Company from declaring,
making or paying, directly or indirectly, any Distribution to PMC. No Company shall, directly or
indirectly, declare, make or pay any Distributions except for:

(a) Distributions to PMC from any other Company and Distributions by any CDO Subsidiary
to any of its owners; and

(b) if no Event of Default or Potential Default exists or would exist after giving
effect to the Distribution, and so long as any such Distributions are made in the ordinary
course of business consistent with sound business practices, the following Distributions by
PMC: (i) Distributions declared or paid during any fiscal year which do not exceed 100% of
Funds from Operations for that fiscal year and (ii) up to an aggregate of $2,000,000 of
other Distributions made or declared after December 29, 2010.

8.10 Disposition of Assets. No Company may sell, assign, lease, transfer or otherwise
dispose of any of its assets (including, without limitation, equity interests in any other Company)
other than pursuant to a Permitted Asset Sale.

8.11 Mergers, Consolidations and Dissolutions. No Company may merge or consolidate
with any other Person, or acquire, in one or a series of related transactions, all or substantially
all of the equity or assets of any Person; provided that, notwithstanding the foregoing, so long as
no Event of Default then exists or would be created by such transaction, PMC may from time to time
acquire substantially all of the assets of any of the Special Purpose Entities that have repaid in
full all of the indebtedness and other obligations incurred by them in connection with an Asset
Securitization. In addition, no Company may dissolve or convert to any other form of entity.

8.12 Assignment. No Company may assign or transfer any of its Rights, duties or
obligations under any of the Credit Documents.

8.13 Fiscal Year and Accounting Methods. No Company may change either its fiscal year
for accounting purposes or any material aspect of its method of accounting.

8.14 New Businesses. No Company may engage in any business except the businesses in
which it is presently engaged and any other reasonably related business.

8.15 Government Regulations. No Company may conduct its business in a way that it
becomes regulated under the Investment Company Act of 1940, as amended, or the Public Utility
Holding Company Act of 2005, as amended.

8.16 Financial Contracts. No Company will enter into or remain liable upon any
Financial Contract, except the Rate Management Transactions contemplated by this agreement.

 

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8.17 Strict Compliance. No Company may indirectly do anything that it may not
directly do under any covenant in any Credit Document.

8.18 Amendments to Qualified Intercompany Debt. Without the prior written consent of
the Administrative Agent, no Company may amend, restate or otherwise modify any of the terms of any
Qualified Intercompany Debt which relate to the subordination of such Qualified Intercompany Debt
to the Obligations.

8.19 Non-Performing Loans. Notwithstanding anything to the contrary contained herein,
no Company may support, guaranty, purchase, repurchase, repay, sell, transfer, liquidate or
otherwise dispose of any Commercial Loans or Mortgage Loans owned by any Special Purpose Entity
except (a) upon the Administrative Agent’s prior written consent, (b) as permitted under
Section 8.2(b)(iii) or (c) pursuant to its servicing obligation in the ordinary course of
its business so long as, in the case of this clause (c), such Company is entitled to
reimbursement of a substantial portion of any expenses or any other amounts paid by such Company in
connection thereto; provided however, this Section 8.19 shall not prohibit or restrict any
Company, in its capacity as servicer, from selling, transferring, liquidating or otherwise
disposing of any Commercial Loans or Mortgage Loans owned by any Special Purpose Entity for or on
behalf of such Special Purpose Entity and in the name of such Special Purpose Entity or its nominee
pursuant to such Company’s servicing agreements.

SECTION 9. FINANCIAL COVENANTS.

For so long as any Lender is committed to lend under this agreement, and until the Obligation
has been fully paid and performed, PMC covenants and agrees with Administrative Agent and Lenders
as follows:

9.1 Minimum Net Worth. The Companies’ consolidated Net Worth shall not at any time be
less than the sum of (a) $145,000,000, plus (b) 100% of the Net Proceeds from any Equity Issuances
by PMC after December 29, 2009.

9.2 Maximum Leverage Ratio. The ratio of the Consolidated Companies’ consolidated
Total Liabilities to the Consolidated Companies’ consolidated Net Worth shall not at any time
exceed 2.00 to 1.00.

9.3 Maximum Non-Performing Loan Ratio. The ratio of the outstanding principal balance
of the Companies’ consolidated Non-Performing Loans to the Companies’ consolidated Net Worth shall
at all times be less than 0.15 to 1.00; provided that PMC’s compliance with this covenant will only
be required on days on which there is outstanding Principal Debt.

9.4 Maximum Charge-Off Ratio. The Companies’ consolidated Charge-Off Ratio shall at
all times be less than 2.0%, to be determined for compliance reporting purposes as of the last day
of each fiscal quarter of the Companies for the four quarters then ended.

9.5 Non-Hotel/Motel Loans. PMC will not, at any time, permit the aggregate principal
balance of its Mortgage Loans which are secured by Projects which are not hotels or motels to
exceed an amount equal to (a) 15% of the aggregate principal balance of all of its
Mortgage Loans less (b) the aggregate loan loss reserve established by PMC with respect to its
Mortgage Loans.

 

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9.6 Minimum Asset Coverage Ratio. The Asset Coverage Ratio shall at all times (but
calculated for compliance reporting purposes as of the last day of each fiscal quarter of PMC) be
greater than or equal to 1.25 to 1.00 for the Borrowers.

SECTION 10. EVENT OF DEFAULT.

The term “Event of Default” means the occurrence of any one or more of the following:

10.1 Payment of Obligation. Any Borrower’s failure or refusal to pay (a) principal of
its Note, or any part thereof, on or before the date when due (including any required mandatory
prepayment when due) or (b) any other part of the Obligation on or before 5 days after the date
due.

10.2 Covenants. Any Company’s failure or refusal to punctually and properly perform,
observe and comply with any of the covenants in Sections 8 and 9 and in Sections
4.01 and 4.05 of the Security Agreement dated as of December 29, 2009 executed by PMC in favor of
Administrative Agent (as the same may be amended, restated or modified from time to time, the
“PMC Security Agreement”). It shall also constitute an Event of Default if any Company
fails or refuses to punctually and properly perform, observe and comply with any covenant or
agreement in any Credit Document (other than covenants to pay the Obligation and covenants set
forth in Sections 8 and 9 and in Sections 4.01 and 4.05 of the PMC Security
Agreement) applicable to it, and that failure or refusal continues for 15 days after that Company
has, or with the exercise of reasonable diligence should have had, notice of that failure or
refusal; provided, however, that with respect to the failure or refusal to perform any such
covenant or agreement, no Borrower shall be entitled to an opportunity to cure any such failure or
refusal if such failure or refusal is either not capable of being cured by such Borrower or if the
same covenant has already been breached more than two times during the twelve months preceding such
breach.

10.3 Debtor Relief. Any Company (a) is not Solvent, (b) fails to pay its debts
generally as they become due, (c) voluntarily seeks, consents to or acquiesces in the benefit of
any Debtor Relief Law, other than as a creditor or claimant, or (d) becomes a party to or is made
the subject of any proceeding provided for by any Debtor Relief Law, other than as a creditor or
claimant, that could suspend or otherwise adversely affect the Rights of Administrative Agent or
any Lender under the Credit Documents (unless, in the event such proceeding is involuntary, the
petition instituting same is dismissed within 60 days after its filing).

10.4 Judgments and Attachments. Any Company fails, within 10 days after entry, to
pay, bond, or otherwise discharge any one or more judgments or orders for the payment of money (not
paid or fully covered by insurance) in excess of $1,000,000 (individually or collectively) or the
equivalent thereof in another currency or currencies, or any warrant of attachment, sequestration,
or similar proceeding against any Company’s assets having a value (individually or collectively) of
$1,000,000 or the equivalent thereof in another currency or currencies, which is not either (a)
stayed on appeals; (b) being diligently contested in good faith
by appropriate proceedings with adequate reserves having been set aside on the books of such
Company in accordance with GAAP, or (c) dismissed by a court of competent jurisdiction.

 

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10.5 Government Action. Unless otherwise covered by any event described in
Section 10.4, (a) the entry or issuance of an order by any Governmental Authority
(including the United States Justice Department) seeking to cause any Company to divest a
significant portion of its assets under any antitrust, restraint of trade, unfair competition,
industry regulation or similar Governmental Requirements, or (b) the commencement of any action or
proceeding by any Governmental Authority (i) for the purpose of condemning, seizing or otherwise
appropriating, or taking custody or control of all or any substantial portion of, any Company’s
assets or (ii) which asserts any material violation by, or material liability against, any Company
based on any Environmental Law.

10.6 Misrepresentation. Any representation or warranty made by any Company in any
Credit Document, or any financial data or other information now or hereafter furnished to
Administrative Agent or Lenders by or on behalf of any Borrower, at any time proves to have been
false, incorrect or misleading in any material respect when made.

10.7 Ownership of Other Companies. Except as a result of transactions permitted by
this agreement, any Company (other than PMC or any CDO Subsidiary) fails to constitute the direct
or indirect wholly owned Subsidiary of PMC.

10.8 Change of Control of PMC. Any Change of Control shall occur.

10.9 Change in Management. Any material change in the management of PMC or the
Companies as a whole, including, without limitation, any two or more of the following are no longer
employed by PMC in the same or similar capacities as they are on the Closing Date: Lance Rosemore,
Jan Salit or Barry Berlin.

10.10 Other Funded Debt. In respect of any Funded Debt of any Company (other than the
Obligation) (a) any Company fails to make any payment when due, (b) any default or other event or
condition occurs or exists beyond the applicable grace or cure period, the effect of which is to
permit any holder of that Funded Debt to cause (whether or not it elects to cause) any of such
Funded Debt to become due before its stated maturity or regularly scheduled payment dates, or (c)
any of that Funded Debt is declared to be due and payable or required to be prepaid by any Company
before its stated maturity.

10.11 Rate Management Transactions. Nonpayment by PMC of any Rate Management
Obligation when due or the breach by PMC of any term, provision or condition contained in any Rate
Management Transaction.

10.12 Validity and Enforceability of Credit Documents. Any Credit Document ceases to
be in full force and effect or is declared to be null and void, or the validity or enforceability
of any Credit Document or any Lender Lien is contested by any Company or any other Person, or any
Company or any other Person asserts the absence of, or denies that it has, any liability or
obligations under any Credit Document to which it is a party except in accordance with that
document’s express provisions, or any Lender Lien shall fail to constitute a valid, perfected first
priority lien in favor of Administrative Agent for Lenders, except in accordance with the
express provisions of any applicable Credit Document.

 

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10.13 Material Agreement Default or Cancellation. The default under, or breach or
cancellation of, any agreement or other contractual arrangement to which any Company is a party or
beneficiary or by which any of its property is bound or subject, which reasonably could be expected
to result in any (a) significant impairment of (i) the ability of PMC or any other Company to
perform any of its payment or other material obligations under any Credit Document or (ii) the
ability of Administrative Agent or Lenders to enforce any of those obligations or any of their
respective Rights under the Credit Documents, (b) significant and adverse effect on the business,
management or financial condition of the PMC or of the Companies as a whole, as represented to
Lenders in the Financials then most recently received by them or (c) event or circumstance that
could result in an Event of Default or Potential Default pursuant to Sections 10.1 through
10.15 (inclusive).

10.14 Environmental Matters. Any of the following shall occur and Required Lenders
determine, in good faith, that (a) such occurrence could materially and adversely affect the
business or operations of PMC or its ability to pay its debts as they come due or to pay or perform
any of the Obligation, and (b) the aggregate liability of PMC resulting from such occurrences could
exceed $1,000,000: (i) the failure of any Loan Obligor or other owner of any Project which secures
a Mortgage Loan or Commercial Loan to obtain and maintain any environmental permit, certificate,
license approval, registration, or authorization required under any Environmental Law; (ii) any
Loan Obligor or other owner of a Project which secures a Mortgage Loan or Commercial Loan is or may
be potentially responsible or liable with respect to any investigation or clean up of any
threatened or actual release of any Hazardous Substance with respect to such Project; (iii) a
Release of any Hazardous Substance has occurred at, on or under any Project which secures any
Mortgage Loan or Commercial Loan; (iv) any oral or written notification of a Release of Hazardous
Substance has been filed by or on behalf of PMC or any Loan Obligor or in relation to any Project
which secures any Mortgage Loan or Commercial Loan; (v) any Project which secures any Mortgage Loan
or Commercial Loan is or will be listed or is proposed for listing on the National Priority List
promulgated pursuant to CERCLA, any related Governmental Requirement or on any federal or state
list of sites requiring investigation or clean up; (vi) any Environmental Lien shall exist on any
Project which secures any Mortgage Loan or Commercial Loan; or (vii) any governmental action shall
have been taken or be in process or pending which could subject any Project which secures any
Mortgage Loan or Commercial Loan to any Environmental Lien.

10.15 Employee Benefit Plans. (a) A Reportable Event or Reportable Events, or a
failure to make a required installment or other payment (within the meaning of Section 412(n)(1) of
the Code), shall have occurred with respect to any Employee Plan or Plans that is expected to
result in liability of any Borrower to the PBGC or to an Employee Plan in an aggregate amount
exceeding $1,000,000 and, within 30 days after the reporting of any such Reportable Event to
Administrative Agent or after the receipt by Administrative Agent of a statement required pursuant
to Section 7.1(g), Administrative Agent shall have notified such Borrower in writing that
(i) Required Lenders have made a reasonable determination that, on the basis of such Reportable
Event or Reportable Events or the failure to make a required payment, there are grounds under Title
IV of ERISA for the termination of such Employee Plan or Plans by

 

53

 

the PBGC, or the appointment by the appropriate United States district court of a trustee to
administer such Employee Plan or Plans or the imposition of a Lien pursuant to section 412(n) of
the Code in favor of an Employee Plan and (ii) as a result thereof, an Event of Default exists
hereunder; or (b) any Borrower or any ERISA Affiliate has provided to any affected party a 60 day
notice of intent to terminate an Employee Plan pursuant to a distress termination in accordance
with section 4041(c) of ERISA if the liability expected to be incurred as a result of such
termination will exceed $1,000,000; or (c) a trustee shall be appointed by a United States district
court to administer any such Employee Plan; or (d) the PBGC shall institute proceedings (including
giving notice of intent thereof) to terminate any such Employee Plan; or (e) (i) any Borrower or
any ERISA Affiliate shall have been notified by the sponsor of a Multiemployer Plan that is has
incurred withdrawal liability (within the meaning of section 4201 of ERISA to such Multiemployer
Plan), (ii) such Borrower or such ERISA Affiliate does not have reasonable grounds for contesting
such withdrawal liability or is not contesting such withdrawal liability in a timely and
appropriate manner and (iii) the amount of such withdrawal liability specified in such notice, when
aggregated with all other amounts required to be paid to Multiemployer Plans in connection with
withdrawal liabilities (determined as of the date or dates of such notification), exceeds
$1,000,000; or (f) any Borrower or any ERISA Affiliate shall have been notified by the sponsor of a
Multiemployer Plan that such Multiemployer Plan is in reorganization or is being terminated, within
the meaning of Title IV of ERISA, if solely as a result of such reorganization or termination the
aggregate annual contributions of any Borrower and its ERISA Affiliates to all Multiemployer Plans
that are then in reorganization or have been or are being terminated have been or will be increased
over the amounts required to be contributed to such Multiemployer Plans for their most recently
completed plan years by an amount exceeding $1,000,000.

SECTION 11. RIGHTS AND REMEDIES.

11.1 Remedies Upon Event of Default.

(a) Debtor Relief. If an Event of Default exists under Section 10.3,
the commitment to extend credit under this agreement automatically terminates and the entire
unpaid principal balance of the Obligation, together with all interest accrued thereon, and
all other amounts then accrued and unpaid, automatically become and shall be due and payable
without any action of any kind whatsoever.

(b) Other Events of Default. If any Event of Default exists, Administrative
Agent may (with the consent of, and must, upon the request of Required Lenders), do any one
or more of the following: (i) If the maturity of the Obligation has not already been
accelerated under Section 11.1(a), declare the entire unpaid principal balance of
all or any part of the Obligation, together with all interest accrued thereon, and all other
amounts then accrued and unpaid, immediately due and payable, whereupon it is due and
payable; (ii) terminate the commitments of Lenders to extend credit under this agreement;
(iii) reduce any claim to judgment; (iv) require the Companies to open and maintain a
secured lockbox account for the receipt of the Companies’ accounts receivables; notes
receivable and other receivables; and (v) exercise any and all other legal or equitable
Rights afforded by the Credit Documents, by applicable Governmental Requirements or
otherwise at law or in equity.

 

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(c) Offset. If an Event of Default exists, to the extent not prohibited by
applicable Governmental Requirements, each Lender may exercise the Rights of offset and
banker’s lien against each and every account and other property, or any interest therein,
which any Company may now or hereafter have with, or which is now or hereafter in the
possession of, that Lender to the extent of the full amount of the Obligation owed to that
Lender, provided, however, no such right of offset or banker’s lien may be exercised against
any account of a Special Purpose Entity.

11.2 Company Waivers. To the extent not prohibited by applicable Governmental
Requirements, each Borrower and each other Company waives, in respect to any action taken by
Administrative Agent or Lenders at any time and from time to time pursuant to Section 11.1,
presentment, demand for payment, protest, acceleration, notice of protest and nonpayment, notice of
intention to accelerate, notice of acceleration, and all other notices and acts, and agrees that
its liability with respect to all or any part of the Obligation is not affected by any renewal or
extension in the time of payment of all or any part of the Obligation, by any indulgence, increase
or other modification to, or by any release or change in any security for the payment of, all or
any part of the Obligation.

11.3 Performance by Administrative Agent. If any Company’s covenant, duty or
agreement is not performed in accordance with the terms of the Credit Documents, Administrative
Agent may at its option (but subject to the approval of Required Lenders), perform or attempt to
perform that covenant, duty or agreement on behalf of that Company, and any amount expended by or
on behalf of Administrative Agent in its performance or attempted performance is payable by the
Companies, jointly and severally, to Administrative Agent on demand, becomes part of the
Obligation, and bears interest on the portion thereof from time to time unpaid at the Default Rate
from the date of Administrative Agent’s expenditure until paid. However, Administrative Agent does
not assume and shall never have, except by its express written consent, any liability or
responsibility for the performance of any Company’s covenants, duties or agreements.
Notwithstanding the forgoing, unless an Event of Default then exists, Administrative Agent shall
not take any such action without requesting that a Borrower take such action on its own behalf.

11.4 Not in Control. Nothing in any Credit Document gives or may be deemed to give to
Administrative Agent or any Lender the Right to exercise control over any Company’s Real Property,
other assets, affairs or management or to preclude or interfere with any Company’s compliance with
any Governmental Requirement or require any act or omission by any Company that may be harmful to
Persons or property. Any “Material Adverse Event” or other materiality or substantiality qualifier
of any representation, warranty, covenant, agreement or other provision of any Credit Document is
included for credit documentation purposes only and does not imply and should not be deemed to mean
that Administrative Agent or any Lender acquiesces in any non compliance by any Company with any
applicable Governmental Requirement, document, or otherwise or does not expect the Companies to
promptly, diligently and continuously carry out all appropriate removal, remediation, compliance,
closure or other activities required or appropriate in accordance with all Environmental Laws.
Administrative Agent’s and Lenders’ power is limited to the Rights provided in, or referred to by,
the Credit Documents. All of those Rights exist solely to assure payment and performance of the
Obligation in accordance with the terms of the Credit Documents, and may be exercised in a
manner determined to be appropriate by Administrative Agent or Lenders in their sole business
judgment.

 

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11.5 Course of Dealing. The acceptance by Administrative Agent or Lenders of any
partial payment on the Obligation is not a waiver of any Event of Default then existing. No waiver
by Administrative Agent, Required Lenders or Lenders of any Event of Default is a waiver of any
other then existing or subsequent Event of Default. No delay or omission by Administrative Agent,
Required Lenders or Lenders in exercising any Right under the Credit Documents impairs that Right
or is a waiver thereof or any acquiescence therein, nor will any single or partial exercise of any
Right preclude other or further exercise thereof or the exercise of any other Right under the
Credit Documents or otherwise.

11.6 Cumulative Rights. All Rights available to Administrative Agent, Required
Lenders and Lenders under the Credit Documents are cumulative of and in addition to all other
Rights granted to Administrative Agent, Required Lenders and Lenders at law or in equity, whether
or not the Obligation is due and payable and whether or not Administrative Agent, Required Lenders
or Lenders have instituted any suit for collection, foreclosure, or other action in connection with
the Credit Documents.

11.7 Application of Proceeds. Any and all proceeds ever received by Administrative
Agent or Lenders from the exercise of any Rights pertaining to the Obligation shall be applied to
the Obligation according to Section 3.

11.8 Certain Proceedings. Each Borrower shall promptly execute and deliver, or cause
the execution and delivery of, all applications, certificates, instruments, registration
statements, and all other documents and papers Administrative Agent or Required Lenders reasonably
request in connection with the obtaining of any consent, approval, registration (other than
securities law registrations), qualification, permit, license or authorization of any Governmental
Authority or other Person necessary or appropriate for the effective exercise of any Rights under
the Credit Documents. Because each Borrower agrees that Administrative Agent’s and Required
Lenders’ remedies under applicable Governmental Requirements for failure of such Borrower to comply
with the provisions of this section would be inadequate and that failure would not be adequately
compensable in damages, each Borrower agrees that the covenants of this section may be specifically
enforced.

11.9 Expenditures by Administrative Agent or Lenders. Any sums spent by
Administrative Agent or any Lender in the exercise of any Right under any Credit Document is
payable by the Companies to Administrative Agent within 10 days of written demand, becomes part of
the Obligation, and bears interest on the portion thereof from time to time unpaid at the Default
Rate from the date spent until the date repaid.

 

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SECTION 12. ADMINISTRATIVE AGENT AND LENDERS.

12.1 Administrative Agent.

(a) Appointment. Each Lender appoints Administrative Agent (including, without
limitation, each successor Administrative Agent in accordance with this Section 12)
as its nominee and agent to act in its name and on its behalf (and Administrative
Agent and each such successor accepts that appointment): (i) To act as its nominee and
on its behalf in and under all Credit Documents; (ii) to arrange the means whereby its funds
are to be made available to any Borrower under the Credit Documents; (iii) to take any
action that it properly requests under the Credit Documents (subject to the concurrence of
other Lenders as may be required under the Credit Documents); (iv) to receive all documents
and items to be furnished to it under the Credit Documents; (v) to promptly distribute to it
all material information, requests, documents, and items received from any Borrower under
the Credit Documents; (vi) to promptly distribute to it its ratable part of each payment or
prepayment (whether voluntary, as proceeds of collateral upon or after foreclosure, as
proceeds of insurance thereon, or otherwise) in accordance with the terms of the Credit
Documents; and (vii) to deliver to the appropriate Persons requests, demands, approvals, and
consents received from it. However, Administrative Agent may not be required to take any
action that exposes it to personal liability or that is contrary to any Credit Document or
applicable Governmental Requirements.

(b) Successor. Administrative Agent may assign all of its Rights and
obligations as Administrative Agent under the Credit Documents to any of its Affiliates,
which Affiliate shall then be the successor Administrative Agent under the Credit Documents.
Administrative Agent may also voluntarily resign and shall resign upon the request of
Required Lenders for cause (i.e., Administrative Agent is continuing to fail to perform its
responsibilities as Administrative Agent under the Credit Documents). If the initial or any
successor Administrative Agent ever ceases to be a party to this agreement or if the initial
or any successor Administrative Agent ever resigns (whether voluntarily or at the request of
Required Lenders), then Required Lenders shall (which, if no Event of Default or Potential
Default exists, is subject to Borrower’s approval that may not be unreasonably withheld)
appoint the successor Administrative Agent from among Lenders (other than the resigning
Administrative Agent). If Required Lenders fail to appoint a successor Administrative Agent
within 30 days after the resigning Administrative Agent has given notice of resignation or
Required Lenders have removed the resigning Administrative Agent, then the resigning
Administrative Agent may, on behalf of Lenders, appoint a successor Administrative Agent,
which must be a commercial bank having a combined capital and surplus of at least
$1,000,000,000 (as shown on its most recently published statement of condition). Upon its
acceptance of appointment as successor Administrative Agent, the successor Administrative
Agent succeeds to and becomes vested with all of the Rights of the prior Administrative
Agent, and the prior Administrative Agent is discharged from its duties and obligations of
Administrative Agent under the Credit Documents, and each Lender shall execute the documents
that any Lender, the resigning or removed Administrative Agent, or the successor
Administrative Agent reasonably request to reflect the change. After any Administrative
Agent’s resignation or removal as Administrative Agent under the Credit Documents, the
provisions of this section inure to its benefit as to any actions taken or not taken by it
while it was Administrative Agent under the Credit Documents.

 

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(c) Rights as Lender. Administrative Agent, in its capacity as a Lender, has
the same Rights under the Credit Documents as any other Lender and may exercise those Rights
as if it were not acting as Administrative Agent. The term “Lender”, unless the
context otherwise indicates, includes Administrative Agent. Administrative Agent’s
resignation or removal does not impair or otherwise affect any Rights that it has or
may have in its capacity as an individual Lender. Each Lender and each Borrower agree that
Administrative Agent is not a fiduciary for Lenders or for Borrowers but is simply acting in
the capacity described in this agreement to alleviate administrative burdens for Borrowers
and Lenders, that Administrative Agent has no duties or responsibilities to Lenders or
Borrowers except those expressly set forth in the Credit Documents, and that Administrative
Agent in its capacity as a Lender has the same Rights as any other Lender.

(d) Other Activities. Administrative Agent or any Lender may now or in the
future be engaged in one or more loan, letter of credit, leasing, or other financing
transactions with any Borrower, act as trustee or depositary for any Borrower, or otherwise
be engaged in other transactions with any Borrower (collectively, the “other
activities”) not the subject of the Credit Documents. Without limiting the Rights of
Lenders specifically set forth in the Credit Documents, neither Administrative Agent nor any
Lender is responsible to account to the other Lenders for those other activities, and no
Lender shall have any interest in any other Lender’s activities, any present or future
guaranties by or for the account of any Borrower that are not contemplated by or included in
the Credit Documents, any present or future offset exercised by Administrative Agent or any
Lender in respect of those other activities, any present or future property taken as
security for any of those other activities, or any property now or hereafter in
Administrative Agent’s or any other Lender’s possession or control that may be or become
security for the obligations of any Borrower arising under the Credit Documents by reason of
the general description of indebtedness secured or of property contained in any other
agreements, documents, or instruments related to any of those other activities (but, if any
payments in respect of those guaranties or that property or the proceeds thereof is applied
by Administrative Agent or any Lender to reduce the Obligation, then each Lender is entitled
to share ratably in the application as provided in the Credit Documents).

12.2 Expenses. Each Lender shall pay its Pro Rata Part of any reasonable expenses
(including, without limitation, court costs, reasonable attorneys’ fees and other costs of
collection) incurred by Administrative Agent (while acting in such capacity) in connection with any
of the Credit Documents if Administrative Agent is not reimbursed from other sources within 30 days
after incurrence. Each Lender is entitled to receive its Pro Rata Part of any reimbursement that
it makes to Administrative Agent if Administrative Agent is subsequently reimbursed from other
sources.

12.3 Proportionate Absorption of Losses. Except as otherwise provided in the Credit
Documents, nothing in the Credit Documents gives any Lender any advantage over any other Lender
insofar as the Obligation is concerned or relieves any Lender from ratably absorbing any losses
sustained with respect to the Obligation (except to the extent unilateral actions or inactions by
any Lender result in any Borrower or any other obligor on the Obligation having any credit,
allowance, setoff, defense, or counterclaim solely with respect to all or any part of that Lender’s
Pro Rata Part of the Obligation).

 

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12.4 Delegation of Duties; Reliance. Lenders may perform any of their duties or
exercise any of their Rights under the Credit Documents by or through Administrative Agent,
and Lenders and Administrative Agent may perform any of their duties or exercise any of their
Rights under the Credit Documents by or through their respective Representatives. Administrative
Agent, Lenders, and their respective Representatives (a) are entitled to rely upon (and shall be
protected in relying upon) any written or oral statement believed by it or them to be genuine and
correct and to have been signed or made by the proper Person and, with respect to legal matters,
upon opinion of counsel selected by Administrative Agent or that Lender (but nothing in this
clause (a) permits Administrative Agent to rely on (i) oral statements if a writing is
required by this agreement or (ii) any other writing if a specific writing is required by this
agreement), (b) are entitled to deem and treat each Lender as the owner and holder of its portion
of the Obligation for all purposes until, written notice of the assignment or transfer is given to
and received by Administrative Agent (and any request, authorization, consent, or approval of any
Lender is conclusive and binding on each subsequent holder, assignee, or transferee of or
Participant in that Lender’s portion of the Obligation until that notice is given and received),
(c) are not deemed to have notice of the occurrence of an Event of Default unless a responsible
officer of Administrative Agent, who handles matters associated with the Credit Documents and
transactions thereunder, has actual knowledge or Administrative Agent has been notified by a Lender
or a Borrower, and (d) are entitled to consult with legal counsel (including counsel for Borrower),
independent accountants, and other experts selected by Administrative Agent and are not liable for
any action taken or not taken in good faith by it in accordance with the advice of counsel,
accountants, or experts.

12.5 Limitation of Administrative Agent’s Liability.

(a) Exculpation. Neither Administrative Agent nor any of its Affiliates or
Representatives will be liable for any action taken or omitted to be taken by it or them
under the Credit Documents in good faith and believed by it or them to be within the
discretion or power conferred upon it or them by the Credit Documents or be responsible for
the consequences of any error of judgment (except for fraud, gross negligence, or willful
misconduct), and neither Administrative Agent nor any of its Affiliates or Representatives
has a fiduciary relationship with any Lender by virtue of the Credit Documents (but nothing
in this agreement negates the obligation of Administrative Agent to account for funds
received by it for the account of any Lender).

(b) Indemnity. Unless indemnified to its satisfaction against loss, cost,
liability, and expense, Administrative Agent may not be compelled to do any act under the
Credit Documents or to take any action toward the execution or enforcement of the powers
thereby created or to prosecute or defend any suit in respect of the Credit Documents. If
Administrative Agent requests instructions from Lenders, or Required Lenders, as the case
may be, with respect to any act or action in connection with any Credit Document,
Administrative Agent is entitled to refrain (without incurring any liability to any Person
by so refraining) from that act or action unless and until it has received instructions. In
no event, however, may Administrative Agent or any of its Representatives be required to
take any action that it or they determine could incur for it or them criminal or onerous
civil liability. Without limiting the generality of the foregoing, no Lender has any right
of action against Administrative Agent as a result of Administrative Agent’s acting or
refraining from acting under this agreement in accordance with instructions of Required
Lenders.

 

59

 

(c) Reliance. Administrative Agent is not responsible to any Lender or any
Participant for, and each Lender represents and warrants that it has not relied upon
Administrative Agent in respect of, (i) the creditworthiness of any Company and the risks
involved to that Lender, (ii) the effectiveness, enforceability, genuineness, validity, or
the due execution of any Credit Document (except by Administrative Agent), (iii) any
representation, warranty, document, certificate, report, or statement made therein (except
by Administrative Agent) or furnished thereunder or in connection therewith, (iv) the
adequacy of any collateral now or hereafter securing the Obligation or the existence,
priority, or perfection of any Lien now or hereafter granted or purported to be granted on
the collateral under any Credit Document, or (v) observation of or compliance with any of
the terms, covenants, or conditions of any Credit Document on the part of any Company. EACH
LENDER AGREES TO INDEMNIFY ADMINISTRATIVE AGENT AND ITS REPRESENTATIVES AND HOLD THEM
HARMLESS FROM AND AGAINST (BUT LIMITED TO SUCH LENDER’S COMMITMENT PERCENTAGE OF) ANY AND
ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS,
REASONABLE EXPENSES, AND REASONABLE DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER THAT MAY
BE IMPOSED ON, ASSERTED AGAINST, OR INCURRED BY THEM IN ANY WAY RELATING TO OR ARISING OUT
OF THE CREDIT DOCUMENTS OR ANY ACTION TAKEN OR OMITTED BY THEM UNDER THE CREDIT DOCUMENTS IF
ADMINISTRATIVE AGENT AND ITS REPRESENTATIVES ARE NOT REIMBURSED FOR SUCH AMOUNTS BY ANY
COMPANY. ALTHOUGH ADMINISTRATIVE AGENT AND ITS REPRESENTATIVES HAVE THE RIGHT TO BE
INDEMNIFIED UNDER THIS AGREEMENT FOR ITS OR THEIR OWN ORDINARY NEGLIGENCE, ADMINISTRATIVE
AGENT AND ITS REPRESENTATIVES DO NOT HAVE THE RIGHT TO BE INDEMNIFIED UNDER THIS AGREEMENT
FOR ITS OR THEIR OWN FRAUD, GROSS NEGLIGENCE, OR WILLFUL MISCONDUCT.

12.6 Event of Default. While an Event of Default exists, Lenders agree to promptly
confer in order that Required Lenders or Lenders, as the case may be, may agree upon a course of
action for the enforcement of the Rights of Lenders. Administrative Agent is entitled to act or
refrain from taking any action (without incurring any liability to any Person for so acting or
refraining) unless and until it has received instructions from Required Lenders. In actions with
respect to any Company’s property, Administrative Agent is acting for the ratable benefit of each
Lender.

12.7 Limitation of Liability. No Lender or any Participant will incur any liability
to any other Lender or Participant except for acts or omissions in bad faith, and neither
Administrative Agent nor any Lender or Participant will incur any liability to any other Person for
any act or omission of any other Lender or any Participant.

12.8 Relationship of Lenders. The Credit Documents do not create a partnership or
joint venture among Administrative Agent and Lenders or among Lenders.

 

60

 

12.9 Benefits of Agreement. None of the provisions of this section inure to the
benefit of any Company or any other Person except Administrative Agent and Lenders. Therefore, no
Company or any other Person is entitled to rely upon, or entitled to raise as a defense, in any
manner whatsoever, the failure of Administrative Agent or any Lender to comply with these
provisions.

SECTION 13. BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS.

13.1 Successors and Assigns. The terms and provisions of the Credit Documents shall
be binding upon and inure to the benefit of Borrowers and the Lenders and their respective
successors and assigns, except that (i) no Borrower shall have the right to assign its rights or
obligations under the Credit Documents and (ii) any assignment by any Lender must be made in
compliance with Section 13.3. The parties to this agreement acknowledge that clause
(ii) of this Section 13.1 relates only to absolute assignments and does not prohibit
assignments creating security interests, including, without limitation, any pledge or assignment by
any Lender of all or any portion of its rights under this agreement and any Note to a Federal
Reserve Bank; provided, however, that no such pledge or assignment creating a security interest
shall release the transferor Lender from its obligations hereunder unless and until the parties
thereto have complied with the provisions of Section 13.3. The Administrative Agent may
treat the Person which made any loan or which holds any Note as the owner thereof for all purposes
hereof unless and until such Person complies with Section 13.3; provided, however, that the
Administrative Agent may in its discretion (but shall not be required to) follow instructions from
the Person which made any loan or which holds any Note to direct payments relating to such loan or
Note to another Person. Any assignee of the rights to any loan or any Note agrees by acceptance of
such assignment to be bound by all the terms and provisions of the Credit Documents. Any request,
authority or consent of any Person, who at the time of making such request or giving such authority
or consent is the owner of the rights to any loan (whether or not a Note has been issued in
evidence thereof), shall be conclusive and binding on any subsequent holder or assignee of the
rights to such loan.

13.2 Participations.

(a) Permitted Participants; Effect. Any Lender may, in the ordinary course of
its business and in accordance with applicable law, at any time sell to one or more banks or
other entities (“Participants”) participating interests in any loan owing to such
Lender, any Note held by such Lender, any Commitment of such Lender or any other interest of
such Lender under the Credit Documents. In the event of any such sale by a Lender of
participating interests to a Participant, such Lender’s obligations under the Credit
Documents shall remain unchanged, such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, such Lender shall remain the owner
of its loans and the holder of any Note issued to it in evidence thereof for all purposes
under the Credit Documents, all amounts payable by each Borrower under this agreement shall
be determined as if such Lender had not sold such participating interests, and Borrowers and
Administrative Agent shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under the Credit Documents.

 

61

 

(b) Voting Rights. Each Lender shall retain the sole right to approve, without
the consent of any Participant, any amendment, modification or waiver of any provision of
the Credit Documents other than any amendment, modification or waiver with respect to any
loan or any Commitment in which such Participant has an interest which forgives principal,
interest or fees or reduces the interest rate or fees payable with respect to any such loan
or such Commitment, extends the Stated Termination Date, postpones any date fixed for any
regularly scheduled payment of principal of, or interest or fees on, any such loan or any
such Commitment, releases any guarantor of any such loan or releases all or substantially
all of the collateral, if any, securing any such loan.

(c) Benefit of Setoff. Each Borrower agrees that each Participant shall be
deemed to have the right of setoff provided in Section 11.1 in respect of its
participating interest in amounts owing under the Credit Documents to the same extent as if
the amount of its participating interest were owing directly to it as a Lender under the
Credit Documents, provided that each Lender shall retain the right of setoff provided in
Section 11.1 with respect to the amount of participating interests sold to each
Participant. The Lenders agree to share with each Participant, and each Participant, by
exercising the right of setoff provided in Section 11.1, agrees to share with each
Lender, any amount received pursuant to the exercise of its right of setoff, such amounts to
be shared in accordance with Section 11.1 as if each Participant were a Lender.

13.3 Assignments.

(a) Permitted Assignments. Any Lender may, in the ordinary course of its
business and in accordance with applicable law, at any time assign to one or more banks or
other entities (“Purchasers”) all or any part of its rights and obligations under
the Credit Documents. Such assignment shall be substantially in the form of Exhibit
E or in such other form as may be agreed to by the parties thereto. The consent of
Borrowers and Administrative Agent shall be required prior to an assignment becoming
effective with respect to a Purchaser which is not a Lender or an Affiliate thereof;
provided, however, that if an Event of Default has occurred and is continuing, the consent
of Borrowers shall not be required. Such consent shall not be unreasonably withheld or
delayed. Each such assignment with respect to a Purchaser which is not a Lender or an
Affiliate thereof shall (unless each of Borrowers and Administrative Agent otherwise
consents) be in an amount not less than the lesser of (i) $5,000,000 or (ii) the remaining
amount of the assigning Lender’s Commitment (calculated as at the date of such assignment)
or outstanding loans (if the applicable Commitment has been terminated).

(b) Effect; Effective Date. Upon (i) delivery to Administrative Agent of an
assignment, together with any consents required by Section 13.3(a), and (ii) payment
of a $4,000 fee from the Purchaser or the assigning Lender to Administrative Agent for
processing such assignment (unless such fee is waived by Administrative Agent), such
assignment shall become effective on the effective date specified in such assignment. The
assignment shall contain a representation by the Purchaser to the effect that none of the
consideration used to make the purchase of the Commitments and loans under the applicable
assignment agreement constitutes “plan assets” as defined under ERISA and that the rights
and interests of the Purchaser in and under the Credit

 

62

 

Documents will not be “plan assets” under ERISA. On and after the effective date of such assignment, such
Purchaser shall for all purposes be a Lender party to this agreement and any other Credit
Document executed by or on behalf of the Lenders and shall have all the rights and
obligations of a Lender under the Credit Documents, to the same extent as if it were an
original party hereto, and no further consent or action by Borrower, the Lenders or
Administrative Agent shall be required to release the transferor Lender with respect to the
percentage of the Commitments and loans assigned to such Purchaser. Upon the consummation
of any assignment to a Purchaser pursuant to this Section 13.3(b), the transferor
Lender, Administrative Agent and Borrowers shall, if the transferor Lender or the Purchaser
desires that its loans be evidenced by Notes, make appropriate arrangements so that new
Notes or, as appropriate, replacement Notes are issued to such transferor Lender and new
Notes or, as appropriate, replacement Notes, are issued to such Purchaser, in each case in
principal amounts reflecting their respective Commitments, as adjusted pursuant to such
assignment.

13.4 Dissemination of Information. Each Borrower authorizes each Lender to disclose
to any Participant or Purchaser or any other Person acquiring an interest in the Credit Documents
by operation of law (each a “Transferee”) and any prospective Transferee any and all
information in such Lender’s possession concerning the creditworthiness of Borrowers and their
respective Subsidiaries, so long as such Transferee or prospective Transferee agrees in writing to
keep such information confidential.

13.5 Tax Treatment. If any interest in any Credit Document is transferred to any
Transferee which is organized under the laws of any jurisdiction other than the United States or
any State thereof, the transferor Lender shall cause such Transferee, concurrently with the
effectiveness of such transfer, to comply with the provisions of Section 3.19.

SECTION 14. MISCELLANEOUS.

14.1 Nonbusiness Days. Any payment or action that is due under any Credit Document on
a non-Business Day may be delayed until the next succeeding Business Day (but interest shall
continue to accrue on any applicable payment until payment is in fact made) unless the payment
concerns a LIBOR Rate Borrowing, in which case if the next-succeeding Business Day is in the next
calendar month, then such payment shall be made on the next-preceding Business Day.

14.2 Communications. Unless otherwise specifically provided, whenever any Credit
Document requires or permits any consent, approval, notice, request or demand from one party to
another, communication must be in writing (which may be by telex or fax) to be effective and shall
be deemed to have been given (i) if by telex, when transmitted to the appropriate telex number and
the appropriate answer back is received, (ii) if by fax, when transmitted to the appropriate fax
number and machine confirmation of receipt is received (and all communications sent by fax must be
confirmed promptly thereafter by telephone; but any requirement in this parenthetical shall not
affect the date when the fax shall be deemed to have been delivered), (iii) if by mail, on the
third Business Day after it is enclosed in an envelope and properly addressed, stamped, sealed and
deposited in the appropriate official postal service, (iv) if by e-mail, when transmitted to the
appropriate e-mail address of the receiving party (and all communications sent
by e-mail must be followed by a facsimile of that e-mail sent to the receiving party), or (v)
if by any other means, when actually delivered. Until changed by notice pursuant to this
agreement, the addresses (and fax numbers) for Borrowers and Administrative Agent are stated beside
their respective signatures to this agreement. The address (and fax number) for each Lender who
becomes party to this agreement shall be stated beside its name on the then most recently amended
Schedule 2.

 

63

 

14.3 Form and Number of Documents. The form, substance and number of counterparts of
each writing to be furnished under this agreement must be satisfactory to Administrative Agent and
its counsel.

14.4 Exceptions to Covenants. No Company may take or fail to take any action that is
permitted as an exception to any of the covenants contained in any Credit Document if that action
or omission would result in the breach of any other covenant contained in any Credit Document.

14.5 Survival. All covenants, agreements, undertakings, representations, and
warranties made in any of the Credit Documents survive all closings under the Credit Documents and,
except as otherwise indicated, are not affected by any investigation made by any party.

14.6 Governing Governmental Requirements. Unless otherwise stated in any Credit
Document, the Governmental Requirements of the State of Texas and of the United States of America
govern the Rights and duties of the parties to the Credit Documents and the validity, construction,
enforcement, and interpretation of the Credit Documents.

14.7 Invalid Provisions. Any provision in any Credit Document held to be illegal,
invalid or unenforceable is fully severable; the appropriate Credit Document shall be construed and
enforced as if that provision had never been included; and the remaining provisions shall remain in
full force and effect and shall not be affected by the severed provision. Administrative Agent,
Lenders and each Company party to the affected Credit Document agree to negotiate, in good faith,
the terms of a replacement provision as similar to the severed provision as may be possible and be
legal, valid and enforceable.

14.8 Conflicts Between Credit Documents. The provisions of this agreement control if
in conflict (i.e., the provisions contradict each other as opposed to a Credit Document containing
additional provisions not in conflict) with the provisions of any other Credit Document.

14.9 Discharge Only Upon Payment in Full; Reinstatement in Certain Circumstances.
Each Company’s obligations under the Credit Documents shall remain in full force and effect until
termination of the Commitments and payment in full of the Principal Debt and of all interest, fees,
and other amounts of the Obligation then due and owing, except that Sections 3.16,
3.18, Section 11, and Section 13, and any other provisions under the Credit
Documents expressly intended to survive by the terms hereof or by the terms of the applicable
Credit Documents, shall survive such termination. If at any time any payment of the principal of
or interest on any Note or any other amount payable by any Borrower under any Credit Document is
rescinded or must be otherwise restored or returned upon the insolvency, bankruptcy, or
reorganization of any Borrower or otherwise, the obligations of each Company under the Credit
Documents with
respect to such payment shall be reinstated as though such payment had been due but not made
at such time.

 

64

 

14.10 Amendments, Consents, Conflicts, and Waivers.

(a) Required Lenders. Unless otherwise specifically provided (i) the
provisions of this agreement may be amended, modified, or waived, only by an instrument in
writing executed by Borrowers, Administrative Agent, and Required Lenders and supplemented
only by documents delivered or to be delivered in accordance with the express terms of this
agreement, and (ii) the other Credit Documents may only be the subject of an amendment,
modification, or waiver that has been approved by Required Lenders and Borrowers.

(b) All Lenders. Any amendment to or consent or waiver under this agreement or
any Credit Document that purports to accomplish any of the following must be by an
instrument in writing executed by Borrowers and Administrative Agent and executed (or
approved, as the case may be) by each Lender: (i) Extends the due date or decreases the
amount of any scheduled payment or amortization of the Obligation beyond the date specified
in the Credit Documents; (ii) decreases any rate or amount of interest, fees, or other sums
payable to Administrative Agent or Lenders under this agreement (except such reductions as
are contemplated by this agreement); (iii) changes the definition of “Commitment,”
“Commitment Percentage,” “Required Lenders,” or “Pro Rata Part;”
(iv) increases any one or more Lenders’ Commitments; or (v) changes this clause (b)
or any other matter specifically requiring the consent of all Lenders under this agreement.

(c) Conflicts. Any conflict or ambiguity between the terms and provisions of
this agreement and terms and provisions in any other Credit Document is controlled by the
terms and provisions of this agreement.

(d) Waivers. No course of dealing or any failure or delay by Administrative
Agent, any Lender, or any of their respective Representatives with respect to exercising any
Right of Administrative Agent or any Lender under this agreement operates as a waiver
thereof. A waiver must be in writing and signed by Administrative Agent and Lenders (or
Required Lenders, if permitted under this agreement) to be effective, and a waiver will be
effective only in the specific instance and for the specific purpose for which it is given.

14.11 Multiple Counterparts. Any Credit Document may be executed in a number of
identical counterparts, and by each party thereto on separate counterparts (including, at
Administrative Agent’s discretion, counterparts or signature pages executed and transmitted by fax)
with the same effect as if all signatories had signed the same document. All counterparts must be
construed together to constitute one and the same instrument.

 

65

 

14.12 VENUE, SERVICE OF PROCESS, AND JURY TRIAL.

(a) VENUE AND SERVICE OF PROCESS. EACH BORROWER, FOR ITSELF AND ITS SUCCESSORS
AND ASSIGNS, IRREVOCABLY (I) SUBMITS
TO THE NONEXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS IN TEXAS, (II) WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE GOVERNMENTAL REQUIREMENTS, ANY OBJECTION THAT
IT MAY NOW OR IN THE FUTURE HAVE TO THE LAYING OF VENUE OF ANY LITIGATION ARISING OUT OF OR
IN CONNECTION WITH ANY CREDIT DOCUMENT AND THE OBLIGATION BROUGHT IN THE DISTRICT COURTS OF
DALLAS COUNTY, TEXAS, OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF
TEXAS, DALLAS DIVISION, (III) WAIVES ANY CLAIMS THAT ANY LITIGATION BROUGHT IN ANY OF THE
FOREGOING COURTS HAS BEEN BROUGHT IN AN INCONVENIENT FORUM, (IV) CONSENTS TO THE SERVICE OF
PROCESS OF ANY OF THOSE COURTS IN ANY LITIGATION BY THE MAILING OF COPIES OF THAT PROCESS BY
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, POSTAGE PREPAID, BY HAND DELIVERY, OR BY DELIVERY
BY A NATIONALLY RECOGNIZED COURIER SERVICE, AND SERVICE SHALL BE DEEMED COMPLETE UPON
DELIVERY OF THE LEGAL PROCESS AT ITS ADDRESS FOR PURPOSES OF THIS AGREEMENT, AND (V) AGREES
THAT ANY LEGAL PROCEEDING AGAINST ANY PARTY TO ANY CREDIT DOCUMENT ARISING OUT OF OR IN
CONNECTION WITH THE CREDIT DOCUMENTS OR THE OBLIGATION MAY BE BROUGHT IN ONE OF THE
FOREGOING COURTS.

(b) JURY WAIVER. EACH OF BORROWERS, ADMINISTRATIVE AGENT AND LENDERS HEREBY
VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE)
BETWEEN OR AMONG SUCH PARTIES ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT OR ANY
OTHER CREDIT DOCUMENT. THIS PROVISION IS A MATERIAL INDUCEMENT TO LENDERS TO PROVIDE THE
FINANCING DESCRIBED HEREIN OR IN THE OTHER CREDIT DOCUMENTS.

(c) General. The scope of each of the foregoing waivers is intended to be all
encompassing of any and all disputes that may be filed in any court and that relate to the
subject matter of this transaction, including, without limitation, contract claims, tort
claims, breach of duty claims, and all other common law and statutory claims. EACH
BORROWER ACKNOWLEDGES THAT THESE WAIVERS ARE A MATERIAL INDUCEMENT TO ADMINISTRATIVE AGENT’S
AND EACH LENDER’S AGREEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH OF
ADMINISTRATIVE AGENT AND EACH LENDER HAVE ALREADY RELIED ON THESE WAIVERS IN ENTERING INTO
THIS AGREEMENT, AND THAT ADMINISTRATIVE AGENT AND EACH LENDER WILL CONTINUE TO RELY ON EACH
OF THESE WAIVERS IN RELATED FUTURE DEALINGS. EACH BORROWER FURTHER WARRANTS AND REPRESENTS
THAT IT HAS REVIEWED THESE WAIVERS WITH ITS LEGAL COUNSEL, AND THAT IT KNOWINGLY AND
VOLUNTARILY AGREES TO EACH WAIVER FOLLOWING CONSULTATION WITH LEGAL COUNSEL. The
waivers in this
section are irrevocable, meaning that they may not be modified either orally or in
writing, and these waivers apply to any future renewals, extensions, amendments,
modifications, or replacements in respect of the applicable Credit Document. In connection
with any Litigation, this agreement may be filed as a written consent to a trial by the
court.

 

66

 

14.13 ENTIRETY. THE CREDIT DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN BORROWER,
THE OTHER COMPANIES, LENDERS, AND ADMINISTRATIVE AGENT AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.

14.14 Amendment and Restatement. This agreement amends and restates in its entirety
the Existing Credit Agreement. The execution of this agreement and the other Credit Documents
executed in connection herewith does not extinguish the indebtedness outstanding in connection with
the Existing Credit Agreement nor does it constitute a novation with respect to such indebtedness.
EACH BORROWER REPRESENTS AND WARRANTS THAT AS OF THE DATE HEREOF THERE ARE NO CLAIMS OR OFFSETS
AGAINST OR DEFENSES OR COUNTERCLAIMS TO ITS OR ANY OTHER PERSON’S OBLIGATIONS UNDER THE EXISTING
CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS.

[Remainder of Page Intentionally Blank. Signature Page Follows]

 

67

 

DULY EXECUTED AND DELIVERED by each of the signatories hereto as of the date first stated in
this agreement.

	 	 	 	 	 
	 	PMC COMMERCIAL TRUST,

as a Borrower

 	 
	 	By:  	/s/ Barry N. Berlin
 	 
	 	 	Barry N. Berlin 	 
	 	 	Executive Vice President

and Chief Financial Officer 	 

Address for Notice:

PMC Commercial Trust

17950 Preston Road, Suite 600

Dallas, Texas 75252

Attn: Chief Financial Officer

Fax No.: 972/349-3265

	 	 	 	 	 
	 	FIRST WESTERN SBLC, INC.,

as a Borrower

 	 
	 	By:  	                      /s/ Barry N. Berlin
 	 
	 	 	Barry N. Berlin 	 
	 	 	Executive Vice President

and Chief Financial Officer 	 

Address for Notice:

First Western SBLC, Inc.

17950 Preston Road, Suite 600

Dallas, Texas 75252

Attn: Lance B. Rosemore

Fax No.:                                         

 

68

 

	 	 	 	 	 
	 	JPMORGAN CHASE BANK, NATIONAL ASSOCIATION

as Administrative Agent, JPMorgan Chase,

and a Lender

 	 
	 	By:  	/s/ Denise Parks
 	 
	 	 	Denise Parks 	 
	 	 	Senior Vice President 	 

Address for Notice:

JPMorgan Chase Bank, National Association

2200 Ross Avenue, 8th Floor

Dallas, Texas 75201

Attn: Denise Parks

Fax No.: 214/965-2946

 

69Exhibit 10.2

Exhibit 10.2

AMENDED AND RESTATED REVOLVING NOTE

			
	 	 	 
	$30,000,000
	 	December 28, 2010

FOR VALUE RECEIVED, the undersigned, PMC COMMERCIAL TRUST, a real estate investment trust
organized under the laws of the State of Texas (“PMC”), irrevocably and unconditionally
promises to pay to the order of JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, a national banking
association with its office in Dallas, Texas (“Lender”, and together with each subsequent
holder hereof, “Payee”), at the principal banking office of Administrative Agent
(hereinafter referenced) at 2200 Ross Avenue, Dallas, Texas 75201, (i) the principal amount of
THIRTY MILLION AND NO/100 DOLLARS ($30,000,000) (or such lesser amount as shall equal the aggregate
unpaid principal amount of all Borrowings made by Lender to PMC pursuant to the Credit Agreement
hereinafter referenced), on the dates and in the principal amounts provided for in the Credit
Agreement, and (ii) interest on the unpaid principal amount of each such Borrowing from time to
time remaining outstanding and unpaid from the date of each such Borrowing until it shall be paid
in full, at the rates per annum and on the dates provided for in the Credit Agreement.

All capitalized terms used herein and not otherwise defined herein shall have the same meaning
and effect as used and defined in that certain Amended and Restated Credit Agreement dated as of
the date hereof (as amended and otherwise modified, and in effect, the “Credit Agreement”),
by and among PMC, First Western SBLC, Inc., certain Lenders, and JPMorgan Chase Bank, National
Association, as Administrative Agent for those Lenders. Reference is hereby made to the Credit
Agreement for all intents and purposes.

This Note is a “Revolving Note” executed by PMC and is referred to in, governed by, and
subject to, and is entitled to the benefits of, the terms and provisions of the Credit Agreement as
therein stated and referenced. Reference is hereby made to the Credit Agreement for a statement of
the agreements, rights, remedies, benefits and obligations of Payee and the covenants, agreements,
rights, duties and obligations of PMC in relation hereto, including provisions for acceleration of
the maturity hereof, interest rate and amount limitations and voluntary and mandatory prepayments
hereon; but this reference to the Credit Agreement, or any provision thereof, shall not affect or
impair the irrevocable, absolute and unconditional obligation of PMC to pay principal of, and
interest on, this Note when due. Unless the maturity of this Note shall have sooner occurred, the
outstanding principal balance of this Note and all accrued and unpaid interest thereon shall be
finally and fully payable on the Termination Date.

The date, amount, Type, and interest rate of each Borrowing made by Lender to PMC, and each
payment made on account of the principal thereof, and accrued interest thereon, shall be recorded
by Payee on its books and records, and prior to any transfer of this Note, endorsed by Payee on a
schedule attached hereto or any continuation thereof; and all recordations and endorsements made by
Payee shall, absent manifest error, be conclusive of all such matters and binding on all Persons.
Payee’s failure to make or error in making any such recordations or endorsements shall not
diminish, reduce or relieve PMC’s obligation to pay (i) all Borrowings made by Lender and then
outstanding and (ii) all accrued and earned interest on the amounts thereof from time to time
outstanding and unpaid, pursuant to this Note.

 

 

 

Upon the occurrence of an Event of Default, this Note may be declared to be, or shall become,
forthwith due, and immediately payable in the manner, upon the conditions (if any) and with the
effect, provided for and referred to in the Credit Agreement.

If this Note is placed in the hands of an attorney for collection (whether or not any
proceeding is filed in connection therewith), or collected through suit, the Bankruptcy Court or
any other judicial proceeding, PMC irrevocably and unconditionally agrees to pay all costs,
expenses and fees incurred by Payee, including reasonable attorneys’ fees and expenses, and any
assessed court and related costs, in addition to all other amounts owing hereunder.

PMC and all sureties, endorsers, guarantors and other Persons ever liable for the payment of
any sums payable on this Note, jointly and severally, waive notice, demand, notice of presentment,
presentment, presentment for payment, demand for payment, non-payment, notice of dishonor,
dishonor, notice of intent to accelerate maturity, notice of acceleration of maturity, notice of
intent to demand, protest, notice of protest, grace and all formalities and other notices of any
and every kind, and filing of suit or diligence in collecting this Note or enforcing (in whole or
part) any security or guaranty now or hereafter for the payment of this Note, and consent and agree
to any partial or full substitution, exchange or release of any such security or guaranty or the
partial or full release of any Person primarily or secondarily liable hereon, and consent and agree
that it will not be necessary for any holder hereof, in order to enforce payment by it of this Note
to first institute suit or exhaust its remedies against PMC or any other Persons liable herefor, or
to enforce it rights against any such security herefor or guarantor or any other Person with
respect hereto, and consent to any or all extensions, increases or renewals or postponements,
modifications or rearrangements of time or payment of this Note or any other indulgence with
respect hereto, without notice thereof to, or consent thereto from, any of them.

Each of PMC and Payee hereby agrees that Chapter 346 of the Texas Finance Code, as amended,
shall not apply to this Note or the loan transaction evidenced by, and referred to in, the Credit
Agreement in any manner, including without limitation, to any account or arrangement evidenced or
created by, or provided for in, this Note or the Credit Agreement.

This Note (including its validity, enforceability and interpretation) shall be governed by,
and construed in accordance with, the laws of the State of Texas (without regard to conflict of law
principles) and, to the extent controlling, federal laws of the United States of America. This
Note has been executed, delivered and accepted and is payable at, Dallas, Dallas County, Texas.

THIS NOTE AND THE OTHER CREDIT DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AS
TO THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.

The indebtedness evidenced by this Note is given in amendment, restatement, extension and
modification (but not in extinguishment or novation) of the indebtedness evidenced by that certain
Revolving Note dated February 29, 2004 in the original principal amount of $40,000,000 executed by
PMC and payable to the order of Payee.

[Remainder of Page Intentionally Left Blank]

 

 

 

	 	 	 	 	 
	 	PMC COMMERCIAL TRUST

 	 
	 	By:  	/s/ Barry N. Berlin
 	 
	 	 	Name:  	Barry N. Berlin 	 
	 	 	Title:  	Executive Vice President and CFO

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