Document:

Exhibit 4.20

Executive Version

 

GUARANTEE AGREEMENT

between

PACIFIC CREST CAPITAL, INC.,

as
Guarantor,

and

THE BANK OF NEW YORK,

as
Guarantee Trustee

Dated as of April 23, 2003 

PACIFIC CREST CAPITAL TRUST II

TABLE OF CONTENTS

 

	
  ARTICLE I

  	
  INTERPRETATION AND
  DEFINITIONS

  	
   

  	
  2

  
	
  Section 1.1.

  	
   

  	
  Interpretation

  	
   

  	
  2

  
	
  Section 1.2.

  	
   

  	
  Definitions

  	
   

  	
  2

  
	
  ARTICLE II

  	
  REPORTS

  	
   

  	
  5

  
	
  Section
  2.1.

  	
   

  	
  List
  of Holders

  	
   

  	
  5

  
	
  Section 2.2.

  	
   

  	
  Periodic
  Reports to the Guarantee Trustee

  	
   

  	
  6

  
	
  Section
  2.3.

  	
   

  	
  Event of
  Default; Waiver

  	
   

  	
  6

  
	
  Section 2.4.

  	
   

  	
  Event of
  Default; Notice

  	
   

  	
  6

  
	
  ARTICLE III

  	
  POWERS, DUTIES AND RIGHTS OF THE GUARANTEE
  TRUSTEE

  	
   

  	
  7

  
	
  Section 3.1.

  	
   

  	
  Powers and Duties of the
  Guarantee Trustee

  	
   

  	
  7

  
	
  Section 3.2.

  	
   

  	
  Certain
  Rights of the Guarantee Trustee

  	
   

  	
  8

  
	
  Section 3.3.

  	
   

  	
  Compensation

  	
   

  	
  9

  
	
  Section 3.4.

  	
   

  	
  Indemnity

  	
   

  	
  9

  
	
  Section 3.5.

  	
   

  	
  Securities

  	
   

  	
  10

  
	
  ARTICLE IV

  	
  GUARANTEE TRUSTEE

  	
   

  	
  10

  
	
  Section 4.1.

  	
   

  	
  Guarantee Trustee;
  Eligibility

  	
   

  	
  10

  
	
  Section 4.2.

  	
   

  	
  Appointment, Removal and
  Resignation of the Guarantee Trustee

  	
   

  	
  11

  
	
  ARTICLE V

  	
  GUARANTEE

  	
   

  	
  11

  
	
  Section 5.1.

  	
   

  	
  Guarantee

  	
   

  	
  11

  
	
  Section 5.2.

  	
   

  	
  Waiver of Notice and Demand

  	
   

  	
  12

  
	
  Section 5.3.

  	
   

  	
  Obligations Not Affected

  	
   

  	
  12

  
	
  Section
  5.4.

  	
   

  	
  Rights
  of Holders

  	
   

  	
  13

  
	
  Section
  5.5.

  	
   

  	
  Guarantee
  of Payment

  	
   

  	
  13

  
	
  Section 5.6.

  	
   

  	
  Subrogation

  	
   

  	
  13

  
	
  Section 5.7.

  	
   

  	
  Independent Obligations

  	
   

  	
  13

  
	
  Section 5.8.

  	
   

  	
  Enforcement

  	
   

  	
  13

  
	
  ARTICLE VI

  	
  COVENANTS AND SUBORDINATION

  	
   

  	
  14

  
	
  Section 6.1.

  	
   

  	
  Dividends, Distributions and
  Payments

  	
   

  	
  14

  
	
  Section
  6.2.

  	
   

  	
  Subordination

  	
   

  	
  14

  
	
  Section
  6.3.

  	
   

  	
  Pari
  Passu Guarantees

  	
   

  	
  14

  

 

i

 

	
  ARTICLE VII

  	
  TERMINATION

  	
   

  	
  15

  
	
  Section
  7.1.

  	
   

  	
  Termination

  	
   

  	
  15

  
	
  ARTICLE VIII

  	
  MISCELLANEOUS

  	
   

  	
  15

  
	
  Section 8.1.

  	
   

  	
  Successors and Assigns

  	
   

  	
  15

  
	
  Section 8.2.

  	
   

  	
  Amendments

  	
   

  	
  15

  
	
  Section 8.3.

  	
   

  	
  Notices

  	
   

  	
  16

  
	
  Section 8.4.

  	
   

  	
  Benefit

  	
   

  	
  16

  
	
  Section
  8.5.

  	
   

  	
  Governing
  Law

  	
   

  	
  17

  
	
  Section 8.6.

  	
   

  	
  Submission to Jurisdiction

  	
   

  	
  17

  
	
  Section 8.7.

  	
   

  	
  Counterparts

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

ii

 

Guarantee
Agreement, dated as
of April 23, 2003, executed and delivered by Pacific
Crest Capital, Inc., a Delaware corporation (the “Guarantor”) having its
principal office at 30343 Canwood Street, Agoura Hills, CA 91301, and The Bank of New York, a New York
banking corporation, as trustee (in such capacity, the “Guarantee Trustee”),
for the benefit of the Holders (as defined herein) from time to time of the
Preferred Securities (as defined herein) of Pacific
Crest  Capital Trust II, a
Delaware statutory trust (the “Issuer”).

W I T N E S S E T H :

Whereas, pursuant to an Amended and Restated
Trust Agreement, dated as of the date hereof (the “Trust Agreement”), among the
Guarantor, as Depositor, the Property Trustee, the Delaware Trustee and the
Administrative Trustees named therein and the holders from time to time of the
Preferred Securities (as hereinafter defined), the Issuer is issuing Six
Million Dollars ($6,000,000) aggregate Liquidation Amount (as defined in the
Trust Agreement) of its Floating Rate Preferred Securities (Liquidation Amount
$1,000 per preferred security) (the “Preferred Securities”) representing
preferred undivided beneficial interests in the assets of the Issuer and having
the terms set forth in the Trust Agreement;

Whereas, the Preferred Securities will be issued
by the Issuer and the proceeds thereof, together with the proceeds from the
issuance of the Issuer’s Common Securities (as defined below), will be used to
purchase the Notes (as defined in the Trust Agreement) of the Guarantor; and

Whereas, as incentive for the Holders to
purchase Preferred Securities the Guarantor desires irrevocably and
unconditionally to agree, to the extent set forth herein, to pay to the Holders
of the Preferred Securities the Guarantee Payments (as defined herein) and to
make certain other payments on the terms and conditions set forth herein.

Now, Therefore, in
consideration of the purchase by each Holder of Preferred Securities, which
purchase the Guarantor hereby agrees shall benefit the Guarantor, the Guarantor
executes and delivers this Guarantee Agreement to provide as follows for the
benefit of the Holders from time to time of the Preferred Securities:

 

 

 

ARTICLE I

Interpretation and Definitions

SECTION 1.1.  Interpretation.

In this Guarantee
Agreement, unless the context otherwise requires:

(a)           capitalized
terms used in this Guarantee Agreement but not defined in the preamble hereto
have the respective meanings assigned to them in Section 1.2;

(b)           the
words “include”, “includes” and “including” shall be deemed to be followed by
the phrase “without limitation”;

(c)           all
references to “the Guarantee Agreement” or “this Guarantee Agreement” are to
this Guarantee Agreement as modified, supplemented or amended from time to
time;

(d)           all
references in this Guarantee Agreement to Articles and Sections are to Articles
and Sections of this Guarantee Agreement unless otherwise specified;

(e)           the
words “hereby”, “herein”, “hereof” and “hereunder” and other words of similar
import refer to this Guarantee Agreement as a whole and not to any particular
Article, Section or other subdivision;

(f)            a
reference to the singular includes the plural and vice versa; and

(g)           the
masculine, feminine or neuter genders used herein shall include the masculine,
feminine and neuter genders.

SECTION 1.2.  Definitions.

As used in this Guarantee
Agreement, the terms set forth below shall, unless the context otherwise
requires, have the following meanings:

“Affiliate”  of any specified Person
means any other Person directly or indirectly controlling or controlled by or
under direct or indirect common control with such specified Person; provided,  that the Issuer
shall not be deemed to be an Affiliate of the Guarantor.  For the purposes of this definition, “control” when used with
respect to any specified Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings
correlative to the foregoing.

“Beneficiaries”
means any Person to whom the Issuer is or hereafter becomes indebted or liable.

 

 

2

 

“Board of Directors” means either the board of
directors of the Guarantor or any duly authorized committee of that board.

“Common Securities” means the securities
representing common undivided beneficial interests in the assets of the Issuer.

“Debt” means with respect to any
Person, whether recourse is to all or a portion of the assets of such Person,
whether currently existing or hereafter incurred, and whether or not contingent
and without duplication, (i) every obligation of such Person for money borrowed;
(ii) every obligation of such Person evidenced by bonds, debentures, notes or
other similar instruments, including obligations incurred in connection with
the acquisition of property, assets or businesses; (iii) every reimbursement
obligation of such Person with respect to letters of credit, bankers’
acceptances or similar facilities issued for the account of such Person; (iv)
every obligation of such Person issued or assumed as the deferred purchase
price of property or services (but excluding trade accounts payable arising in
the ordinary course of business); (v) every capital lease obligation of such
Person; (vi) all indebtedness of such Person, whether incurred on or prior to
the date of this Guarantee Agreement or thereafter incurred, for claims in
respect of derivative products, including interest rate, foreign exchange rate
and commodity forward contracts, options, swaps and similar arrangements; (vii)
every obligation of the type referred to in clauses (i) through (vi) of another
Person and all dividends of another Person the payment of which, in either
case, such Person has guaranteed or is responsible or liable for, directly or
indirectly, as obligor or otherwise; and (viii) any renewals, extensions,
refundings, amendments or modifications of any obligation of the type referred
to in clauses (i) through (vii).

“Event of Default”  means a default by the Guarantor on any of its
payment or other obligations under this Guarantee Agreement; provided, that except with
respect to a default in payment of any Guarantee Payments, the Guarantor shall
have received notice of default from the Guarantee Trustee and shall not have
cured such default within thirty (30) days after receipt of such notice.

“Guarantee Payments” means the following
payments or distributions, without duplication, with respect to the Preferred
Securities, to the extent not paid or made by or on behalf of the Issuer: (i)
any accumulated and unpaid Distributions (as defined in the Trust Agreement)
required to be paid on the Preferred Securities, to the extent the Issuer shall
have funds on hand available therefor at such time, (ii) the Redemption Price
with respect to any Preferred Securities to the extent the Issuer shall have
funds on hand available therefor at such time of redemption, and (iii) upon a
voluntary or involuntary termination, winding up or liquidation of the Issuer,
unless Notes are distributed to the Holders, the lesser of (a) the aggregate of
the Liquidation Amount of $1,000 per Preferred Security plus accumulated and unpaid
Distributions on the Preferred Securities to the date of payment, to the extent
that the Issuer shall have funds available therefor at such time and (b) the
amount of assets of the Issuer remaining available for distribution to Holders
in liquidation of the Issuer after satisfaction of liabilities to creditors of
the Issuer in accordance with applicable law (in either case, the “Liquidation
Distribution”).

3

 

“Guarantee Trustee”  means The Bank of New York,
until a Successor Guarantee Trustee, as defined below, has been appointed and
has accepted such appointment pursuant to the terms of this Guarantee
Agreement, and thereafter means each such Successor Guarantee Trustee.

“Holder”  means any holder, as registered
on the books and records of the Issuer, of any Preferred Securities; provided,  that, in
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder,
“Holder” shall not include the Guarantor, the Guarantee Trustee or any
Affiliate of the Guarantor or the Guarantee Trustee.

“Indenture”  means the Junior
Subordinated Indenture, dated as of the date hereof, as supplemented and
amended, between the Guarantor and The Bank of New York, as trustee.

“List of Holders”  has the meaning specified in
Section 2.1.

“Majority in Liquidation
Amount of the Preferred Securities”  means a vote by the
Holder(s), voting separately as a class, of more than fifty percent (50%) of
the aggregate Liquidation Amount of all then outstanding Preferred Securities
issued by the Issuer.

“Obligations”
means any costs, expenses or liabilities (but not including liabilities related
to taxes) of the Issuer, other than obligations of the Issuer to pay to holders
of any Trust Securities the amounts due such holders pursuant to the terms of
the Trust Securities.

“Officers’ Certificate”  means, with respect to any
Person, a certificate signed by the Chief Executive Officer, Chief Financial
Officer, President or a Vice President of such Person, and by the Treasurer, an
Assistant Treasurer, the Secretary or an Assistant Secretary of such Person,
and delivered to the Guarantee Trustee. 
Any Officers’ Certificate delivered with respect to compliance with a
condition or covenant provided for in this Guarantee Agreement (other than the
certificate provided pursuant to Section 2.4) shall include:

(a)           a
statement that each officer signing the Officers’ Certificate has read the
covenant or condition and the definitions relating thereto;

(b)           a
brief statement of the nature and scope of the examination or investigation
undertaken by each officer in rendering the Officers’ Certificate;

(c)           a
statement that each officer has made such examination or investigation as, in
such officer’s opinion, is necessary to enable such officer to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and

(d)           a
statement as to whether, in the opinion of each officer, such condition or
covenant has been complied with.

4

 

“Person”  means a legal person,
including any individual, corporation, estate, partnership, joint venture,
association, joint stock company, limited liability company, trust,
unincorporated association, government or any agency or political subdivision
thereof or any other entity of whatever nature.

“Responsible Officer”  means, with respect to the
Guarantee Trustee, any Senior Vice President, any Vice President, any Assistant
Vice President, the Secretary, any Assistant Secretary, the Treasurer, any
Assistant Treasurer, any Trust Officer or Assistant Trust Officer or any other
officer of the Corporate Trust Department of the Guarantee Trustee and also
means, with respect to a particular corporate trust matter, any other officer
to whom such matter is referred because of that officer’s knowledge of and
familiarity with the particular subject.

“Senior Debt”  means the principal of and
any premium and interest on (including interest accruing on or after the filing
of any petition in bankruptcy or for reorganization relating to the Guarantor
whether or not such claim for post-petition interest is allowed in such
proceeding) all Debt of the Guarantor, whether incurred on or prior to the date
of the Indenture or thereafter incurred, unless it is provided in the
instrument creating or evidencing the same or pursuant to which the same is
outstanding, that such obligations are not superior in right of payment to the
Preferred Securities;  provided,
that if the Guarantor is subject to the regulation and supervision of
an “appropriate Federal banking agency” within the meaning of 12 U.S.C.
1813(q),  the Guarantor shall have
received the approval of such appropriate Federal
banking agency  prior to issuing any such obligation; and provided,
further, that Senior Debt shall not include any other debt
securities and guarantees in respect of such debt securities issued to any
trust other than the Trust (or a trustee of any such trust), partnership or
other entity affiliated with the Guarantor that is a financing vehicle of the
Guarantor (a “financing entity”) in connection with the issuance by such
financing entity of equity securities or other securities that are treated as
equity capital for regulatory capital purposes guaranteed by the Guarantor
pursuant to an instrument that ranks pari passu with or junior in right of
payment to the Indenture, including, without limitation, securities issued by
PCC Capital I and Pacific Crest Capital Trust I.

“Trust
Indenture Act” means the Trust Indenture Act of 1939, as amended and
as in effect on the date of this Guarantee Agreement.

“Successor Guarantee Trustee”  means a successor Guarantee
Trustee possessing the qualifications to act as Guarantee Trustee under Section
4.1.

Capitalized or otherwise
defined terms used but not otherwise defined herein shall have the meanings
assigned to such terms in the Trust Agreement as in effect on the date hereof.

 

5

 

ARTICLE II

Reports

SECTION 2.1.  List of Holders.

The Guarantor shall
furnish or cause to be furnished to the Guarantee Trustee at such times as the
Guarantee Trustee may request in writing, within thirty (30) days after the
receipt by the Guarantor of any such request, a list, in such form as the
Guarantee Trustee may reasonably require, of the names and addresses of the
Holders (the “List
of Holders”) as of a date not more than fifteen (15) days prior to
the time such list is furnished, in each case to the extent such information is
in the possession or control of the Guarantor and is not identical to a
previously supplied list of Holders or has not otherwise been received by the
Guarantee Trustee in its capacity as such. 
The Guarantee Trustee may destroy any List of Holders previously given
to it on receipt of a new List of Holders.

SECTION 2.2.  Periodic Reports to the Guarantee Trustee.

The Guarantor shall
deliver to the Guarantee Trustee, within one hundred and twenty (120) days
after the end of each fiscal year of the Guarantor ending after the date of
this Guarantee Agreement, an Officers’ Certificate covering the preceding
fiscal year, stating whether or not to the knowledge of the signers thereof the
Guarantor is in default in the performance or observance of any of the terms or
provisions or any of the conditions of this Guarantee Agreement (without regard
to any period of grace or requirement of notice provided hereunder) and, if the
Guarantor shall be in default thereof, specifying all such defaults and the
nature and status thereof of which they have knowledge.

SECTION 2.3.  Event of Default; Waiver.

The Holders of a Majority
in Liquidation Amount of the Preferred Securities may,  on behalf of the Holders, waive any past
Event of Default and its consequences. 
Upon such waiver, any such Event of Default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Guarantee Agreement, but no such waiver shall extend to
any subsequent or other default or Event of Default or impair any right
consequent therefrom.

SECTION 2.4.  Event of Default; Notice.

(a)           The Guarantee
Trustee shall, within ninety (90) days after the occurrence of a default,
transmit to the Holders notices of all defaults actually known to the Guarantee
Trustee, unless such defaults have been cured or waived before the giving of
such notice; provided, that, except in the
case of a default in the payment of a Guarantee Payment, the Guarantee Trustee
shall be protected in withholding such notice if and so long as the Board of
Directors, the executive committee or a trust committee of directors and/or
Responsible Officers of the Guarantee Trustee in good faith determine that the
withholding of such notice is in the interests of the Holders.  For the purpose of this Section 2.4,
the term “default” means any event
that is, or after notice or lapse of time or both would become, an Event of
Default.

(b)           The Guarantee
Trustee shall not be deemed to have knowledge of any Event of Default unless
the Guarantee Trustee shall have received written notice, or a Responsible
Officer charged with the administration of this Guarantee Agreement shall have
obtained written notice, of such Event of Default from the Guarantor or a
Holder.

 

6

 

ARTICLE
III

Powers,
Duties and Rights of the Guarantee Trustee

SECTION 3.1.  Powers and Duties of the Guarantee Trustee.

(a)           This Guarantee Agreement shall be
held by the Guarantee Trustee for the benefit of the Holders, and the Guarantee
Trustee shall not transfer this Guarantee Agreement to any Person except a
Holder exercising its rights pursuant to Section 5.4(d) or to a
Successor Guarantee Trustee upon acceptance by such Successor Guarantee Trustee
of its appointment to act as Successor Guarantee Trustee.  The right, title and interest of the
Guarantee Trustee shall automatically vest in any Successor Guarantee Trustee,
upon acceptance by such Successor Guarantee Trustee of its appointment hereunder,
and such vesting and succession of title shall be effective whether or not
conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Guarantee Trustee.

(b)           The rights,
immunities, duties and responsibilities of the Guarantee Trustee shall be as
provided by this Guarantee Agreement and there shall be no other duties or
obligations, express or implied, of the Guarantee Trustee.  Notwithstanding the foregoing, no provisions
of this Guarantee Agreement shall require the Guarantee Trustee to expend or
risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.  Whether
or not herein expressly so provided, every provision of this Guarantee
Agreement relating to the conduct or affecting the liability of or affording
protection to the Guarantee Trustee shall be subject to the provisions of this Section
3.1.  To the extent that, at law or
in equity, the Guarantee Trustee has duties and liabilities relating to the
Guarantor or the Holders, the Guarantee Trustee shall not be liable to any
Holder for the Guarantee Trustee’s good faith reliance on the provisions of
this Guarantee Agreement.  The
provisions of this Guarantee Agreement, to the extent that they restrict the
duties and liabilities of the Guarantee Trustee otherwise existing at law or in
equity, are agreed by the Guarantor and the Holders to replace such other
duties and liabilities of the Guarantee Trustee.

(c)           No provision of this
Guarantee Agreement shall be construed to relieve the Guarantee Trustee from
liability for its own negligent action, negligent failure to act or own willful
misconduct, except that:

(i)            the
Guarantee Trustee shall not be liable for any error of judgment made in good
faith by a Responsible Officer of the Guarantee Trustee, unless it shall be
proved that the Guarantee Trustee was negligent in ascertaining the pertinent
facts upon which such judgment was made; and

(ii)           the
Guarantee Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the direction of the
Holders of not less than a Majority in Liquidation Amount of the Preferred
Securities relating to the time, method and place of conducting any proceeding
for any remedy available to the

 

7

 

Guarantee Trustee, or exercising any trust or power conferred upon the
Guarantee Trustee under this Guarantee Agreement.

SECTION 3.2.  Certain
Rights of the Guarantee Trustee.

(a)           Subject to the
provisions of Section 3.1:

(i)            the
Guarantee Trustee may conclusively rely and shall be fully protected in acting
or refraining from acting in good faith and in accordance with the terms hereof
upon any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document reasonably believed by it
to be genuine and to have been signed, sent or presented by the proper party or
parties;

(ii)           any
direction or act of the Guarantor contemplated by this Guarantee Agreement
shall be sufficiently evidenced by an Officers’ Certificate unless otherwise
prescribed herein;

(iii)          the
Guarantee Trustee may consult with counsel, and the advice of such counsel
shall be full and complete authorization and protection in respect of any
action taken, suffered or omitted to be taken by it hereunder in good faith and
in reliance thereon and in accordance with such advice.  Such counsel may be counsel to the Guarantee
Trustee, the Guarantor or any of its Affiliates and may be one of its
employees.  The Guarantee Trustee shall
have the right at any time to seek instructions concerning the administration
of this Guarantee Agreement from any court of competent jurisdiction;

(iv)          the
Guarantee Trustee shall be under no obligation to exercise any of the rights or
powers vested in it by this Guarantee Agreement at the request or direction of
any Holder, unless such Holder shall have provided to the Guarantee Trustee
reasonable security or indemnity against the costs, expenses (including
reasonable attorneys’ fees and expenses) and liabilities that might be incurred
by it in complying with such request or direction, including such reasonable
advances as may be requested by the Guarantee Trustee; provided, that, nothing
contained in this Section 3.2(a)(iv) shall be taken to relieve the
Guarantee Trustee, upon the occurrence of an Event of Default, of its
obligation to exercise the rights and powers vested in it by this Guarantee
Agreement;

(v)           the
Guarantee Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the
Guarantee Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit, and if the
Guarantee Trustee shall determine to make such inquiry or investigation, it
shall be entitled to examine the books, records and premises of the Guarantor,
personally or by agent or attorney;

(vi)          the
Guarantee Trustee may execute any of the trusts or powers hereunder or perform
any duties hereunder either directly or by or through its agents, attorneys,

 

8

 

custodians or nominees and the Guarantee Trustee shall not be
responsible for any misconduct or negligence on the part of any such agent,
attorney, custodian or nominee appointed with due care by it hereunder;

(vii)         whenever
in the administration of this Guarantee Agreement the Guarantee Trustee shall
deem it desirable to receive instructions with respect to enforcing any remedy
or right hereunder, the Guarantee Trustee (A) may request instructions from the
Holders of a Majority in Liquidation Amount of the Preferred Securities, (B)
may refrain from enforcing such remedy or right or taking such other action
until such instructions are received and (C) shall be protected in acting in
accordance with such instructions;

(viii)        except
as otherwise expressly provided by this Guarantee Agreement, the Guarantee
Trustee shall not be under any obligation to take any action that is
discretionary under the provisions of this Guarantee Agreement; and

(ix)           whenever,
in the administration of this Guarantee Agreement, the Guarantee Trustee shall
deem it desirable that a matter be proved or established before taking,
suffering or omitting to take any action hereunder, the Guarantee Trustee
(unless other evidence is herein specifically prescribed) may, in the absence
of bad faith on its part, request and rely upon an Officers’ Certificate which,
upon receipt of such request from the Guarantee Trustee, shall be promptly
delivered by the Guarantor.

(b)           No provision of this
Guarantee Agreement shall be deemed to impose any duty or obligation on the
Guarantee Trustee to perform any act or acts or exercise any right, power, duty
or obligation conferred or imposed on it in any jurisdiction in which it shall
be illegal, or in which the Guarantee Trustee shall be unqualified or
incompetent in accordance with applicable law, to perform any such act or acts
or to exercise any such right, power, duty or obligation.  No permissive power or authority available to
the Guarantee Trustee shall be construed to be a duty to act in accordance with
such power and authority.

SECTION 3.3.  Compensation.

The Guarantor agrees to
pay to the Guarantee Trustee from time to time reasonable compensation for all
services rendered by it hereunder (which compensation shall not be limited by
any provisions of law in regard to the compensation of a trustee of an express
trust) and to reimburse the Guarantee Trustee upon request for all reasonable
expenses, disbursements and advances (including the reasonable fees and expenses
of its attorneys and agents) incurred or made by the Guarantee Trustee in
accordance with any provisions of this Guarantee Agreement.

SECTION 3.4.  Indemnity.

The Guarantor agrees to
indemnify and hold harmless the Guarantee Trustee and any of its Affiliates and
any of their officers, directors, shareholders, employees, representatives or
agents from and against any loss, damage, liability, tax (other than income,
franchise or other taxes imposed on amounts paid pursuant to Section 3.3),
penalty, expense or claim of any kind or nature whatsoever incurred without
negligence, bad faith or willful misconduct on its part, arising out of or in
connection with the acceptance or administration of this Guarantee

 

9

 

Agreement,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers
or duties hereunder.  The Guarantee
Trustee will not claim or exact any lien or charge on any Guarantee Payments as
a result of any amount due to it under this Guarantee Agreement.  This indemnity shall survive the termination
of this Agreement or the resignation or removal of the Guarantee Trustee.

                In no event shall the Guarantee
Trustee be liable for any indirect, special, punitive or consequential loss or
damage of any kind whatsoever, including, but not limited to, lost profits,
even if the Guarantee Trustee has been advised of the likelihood of such loss
or damage and regardless of the form of action.

                In no event shall the Guarantee
Trustee be liable for any failure or delay in the performance of its
obligations hereunder because of circumstances beyond its control, including,
but not limited to, acts of God, flood, war (declared or undeclared),
terrorism, fire, riot, embargo, government action, including any laws,
ordinances, regulations, governmental action or the like which delay, restrict
or prohibit the providing of the services contemplated by this Guarantee
Agreement.

SECTION 3.5.  Securities.

The Guarantee Trustee or
any other agent of the Guarantee Trustee, in its individual or any other
capacity, may become the owner or pledgee of Common or Preferred Securities.

ARTICLE IV

Guarantee
Trustee

SECTION 4.1.  Guarantee Trustee; Eligibility.

(a)           There shall at all
times be a Guarantee Trustee which shall:

(i)            not
be an Affiliate of the Guarantor; and

(ii)           be
a corporation organized and doing business under the laws of the United States
or of any State thereof, authorized to exercise corporate trust powers, having
a combined capital and surplus of at least fifty million dollars ($50,000,000),
subject to supervision or examination by Federal or State authority and having
an office within the United States. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of such
supervising or examining authority, then, for the purposes of this Section
4.1, the combined capital and surplus of such corporation shall be deemed
to be its combined capital and surplus as set forth in its most recent report
of condition so published.

(b)           If at any time the
Guarantee Trustee shall cease to be eligible to so act under Section 4.1(a),
the Guarantee Trustee shall immediately resign in the manner and with the effect
set out in Section 4.2(c).

 

10

 

(c)           If the Guarantee
Trustee has or shall acquire any “conflicting interest” within the meaning of
Section 310(b) of the Trust Indenture Act, the Guarantee Trustee shall either
eliminate such interest or resign in the manner and with the effect set out in Section
4.2(c).

SECTION 4.2.  Appointment,
Removal and Resignation of the Guarantee
Trustee.

(a)           Subject to Section
4.2(b), the Guarantee Trustee may be appointed or removed without cause at
any time by the Guarantor, except during an Event of Default.

(b)           The Guarantee
Trustee shall not be removed until a Successor Guarantee Trustee has been
appointed and has accepted such appointment by written instrument executed by
such Successor Guarantee Trustee and delivered to the Guarantor.

(c)           The Guarantee
Trustee appointed hereunder shall hold office until a Successor Guarantee
Trustee shall have been appointed or until its removal or resignation.  The Guarantee Trustee may resign from office
(without need for prior or subsequent accounting) by an instrument in writing
executed by the Guarantee Trustee and delivered to the Guarantor, which
resignation shall not take effect until a Successor Guarantee Trustee has been
appointed and has accepted such appointment by instrument in writing executed
by such Successor Guarantee Trustee and delivered to the Guarantor and the
resigning Guarantee Trustee.

(d)           If no Successor
Guarantee Trustee shall have been appointed and accepted appointment as
provided in this Section 4.2 within thirty (30) days after delivery to
the Guarantor of an instrument of resignation, the resigning Guarantee Trustee
may petition, at the expense of the Guarantor, any court of competent
jurisdiction for appointment of a Successor Guarantee Trustee.  Such court may thereupon, after prescribing
such notice, if any, as it may deem proper, appoint a Successor Guarantee
Trustee.

ARTICLE V

Guarantee

SECTION 5.1.  Guarantee.

(a)           The Guarantor irrevocably and
unconditionally agrees to pay in full to the Holders the Guarantee Payments
(without duplication of amounts theretofore paid by or on behalf of the
Issuer), as and when due, regardless of any defense (except for the defense of
payment by the Issuer), right of set-off or counterclaim which the Issuer may
have or assert.  The Guarantor’s
obligation to make a Guarantee Payment may be satisfied by direct payment of
the required amounts by the Guarantor to the Holders or by causing the Issuer
to pay such amounts to the Holders.  The
Guarantor shall give prompt written notice to the Guarantee Trustee in the
event it makes any direct payment to the Holders hereunder.

(b)           The Guarantor hereby also agrees to
assume any and all Obligations of the Issuer, and, in the event any such Obligation
is not so assumed, subject to the terms and conditions hereof, the Guarantor
hereby irrevocably and unconditionally guarantees to each Beneficiary the

 

11

 

full payment, when
and as due, of any and all Obligations to such Beneficiaries.  This Guarantee is intended to be for the
Beneficiaries who have received notice hereof.

SECTION 5.2.  Waiver of Notice and Demand.

The Guarantor hereby
waives notice of acceptance of the Guarantee Agreement and of any liability to
which it applies or may apply, presentment, demand for payment, any right to
require a proceeding first against the Guarantee Trustee, Issuer or any other
Person before proceeding against the Guarantor, protest, notice of nonpayment,
notice of dishonor, notice of redemption and all other notices and demands.

SECTION 5.3.  Obligations Not Affected.

The obligations,
covenants, agreements and duties of the Guarantor under this Guarantee
Agreement shall in no way be affected or impaired by reason of the happening
from time to time of any of the following:

(a)           the
release or waiver, by operation of law or otherwise, of the performance or
observance by the Issuer of any express or implied agreement, covenant, term or
condition relating to the Preferred Securities to be performed or observed by
the Issuer;

(b)           the
extension of time for the payment by the Issuer of all or any portion of the
Distributions (other than an extension of time for payment of Distributions
that results from the extension of any interest payment period on the Notes as
provided in the Indenture), Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Preferred Securities or the extension
of time for the performance of any other obligation under, arising out of, or
in connection with, the Preferred Securities;

(c)           any
failure, omission, delay or lack of diligence on the part of the Holders to
enforce, assert or exercise any right, privilege, power or remedy conferred on
the Holders pursuant to the terms of the Preferred Securities, or any action on
the part of the Issuer granting indulgence or extension of any kind;

(d)           the
voluntary or involuntary liquidation, dissolution, sale of any collateral,
receivership, insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition or readjustment of debt of, or other
similar proceedings affecting, the Issuer or any of the assets of the Issuer;

(e)           any
invalidity of, or defect or deficiency in, the Preferred Securities;

(f)            the
settlement or compromise of any obligation guaranteed hereby or hereby
incurred; or

(g)           any
other circumstance whatsoever that might otherwise constitute a legal or
equitable discharge or defense of a guarantor, it being the intent of this Section
5.3 that the obligations of the Guarantor hereunder shall be absolute and
unconditional under any and all circumstances.

 

12

 

There shall be no
obligation of the Holders to give notice to, or obtain the consent of, the
Guarantor with respect to the happening of any of the foregoing.

SECTION 5.4.  Rights of Holders.

The Guarantor expressly
acknowledges that:  (a) this Guarantee
Agreement will be deposited with the Guarantee Trustee to be held for the benefit
of the Holders; (b) the Guarantee Trustee has the right to enforce this
Guarantee Agreement on behalf of the Holders; (c) the Holders of a Majority in
Liquidation Amount of the Preferred Securities have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Guarantee Trustee in respect of this Guarantee Agreement or exercising any
trust or power conferred upon the Guarantee Trustee under this Guarantee
Agreement; and (d) any Holder may institute a legal proceeding directly against
the Guarantor to enforce its rights under this Guarantee Agreement, without
first instituting a legal proceeding against the Guarantee Trustee, the Issuer
or any other Person.

SECTION 5.5.  Guarantee of Payment.

This Guarantee Agreement
creates a guarantee of payment and not of collection.  This Guarantee Agreement will not be discharged except by payment
of the Guarantee Payments in full (without duplication of amounts theretofore paid
by the Issuer) or upon distribution of Notes to Holders as provided in the
Trust Agreement.

SECTION 5.6.  Subrogation.

The Guarantor shall be
subrogated to all (if any) rights of the Holders against the Issuer in respect
of any amounts paid to the Holders by the Guarantor under this Guarantee
Agreement and shall have the right to waive payment by the Issuer pursuant to Section
5.1; provided,  that, the Guarantor
shall not (except to the extent required by mandatory provisions of law) be
entitled to enforce or exercise any rights it may acquire by way of subrogation
or any indemnity, reimbursement or other agreement, in all cases as a result of
payment under this Guarantee Agreement, if, at the time of any such payment,
any amounts are due and unpaid under this Guarantee Agreement.  If any amount shall be paid to the Guarantor
in violation of the preceding sentence, the Guarantor agrees to hold such
amount in trust for the Holders and to pay over such amount to the Holders.

SECTION 5.7.  Independent Obligations.

The Guarantor
acknowledges that its obligations hereunder are independent of the obligations
of the Issuer with respect to the Preferred Securities and that the Guarantor
shall be liable as principal and as debtor hereunder to make Guarantee Payments
pursuant to the terms of this Guarantee Agreement notwithstanding the
occurrence of any event referred to in subsections (a) through (g), inclusive,
of Section 5.3.

SECTION 5.8.  Enforcement.

A Beneficiary may enforce the Obligations of the
Guarantor contained in Section 5.1(b) directly against the Guarantor,
and the Guarantor waives any right or remedy to require that any

 

13

 

action be brought against
the Issuer or any other person or entity before proceeding against the
Guarantor.

ARTICLE VI

Covenants
and Subordination

SECTION 6.1.  Dividends, Distributions and Payments.

So long as any Preferred
Securities remain outstanding, if there shall have occurred and be continuing
an Event of Default or the Guarantor shall have entered into an Extension Period
as provided for in the Indenture and such period, or any extension thereof,
shall have commenced and be continuing, then the Guarantor may not (a) declare
or pay any dividends or distributions on, or redeem, purchase, acquire or make
liquidation payment with respect to, any of the Guarantor’s capital stock or
(b) make any payment of principal of or any interest or premium on or repay,
repurchase or redeem any debt securities of the Guarantor that rank pari passu
in all respects with or junior in interest to the Notes, other than (i)
repurchases, redemptions or other acquisitions of shares of capital stock of
the Guarantor in connection with any employment contract, benefit plan or other
similar arrangement with or for the benefit of any one of more employees,
officers, directors or consultants, in connection with a dividend reinvestment
or stockholder stock purchase plan or in connection with the issuance of
capital stock of the Guarantor (or securities convertible into or exercisable
for such capital stock) as consideration in an acquisition transaction entered
into prior to the occurrence of such Event of Default or the applicable
Extension Period, (ii) as a result of an exchange or conversion of any class or
series of the Guarantor’s capital stock (or any capital stock of a subsidiary
of the Guarantor) for any class or series of the Guarantor’s capital stock or
any class of series of the Guarantor’s indebtedness for any class or series of
the Guarantor’s capital stock, (iii) the purchase of fractional interests in
shares of the Guarantor’s capital stock pursuant to the conversions or exchange
provisions of such capital stock or the security being converted or exchanged,
(iv) any declaration of a dividend in connection with any rights plan, the
issuance of rights, stock or other property under any rights plan or the
redemption or repurchase of rights pursuant thereto, or (v) any dividend in the
form of stock, warrants, options or other rights where the dividend stock or
the stock issuable upon exercise of such warrants, options or other rights is
the same stock as that on which the dividend is being paid or ranks pari passu
with or junior to such stock).

SECTION 6.2.  Subordination.

The obligations of the
Guarantor under this Guarantee Agreement will constitute unsecured obligations
of the Guarantor and will rank subordinate and junior in right of payment to
all Senior Debt of the Guarantor.

SECTION 6.3.  Pari Passu Guarantees.

(a)           The obligations of the Guarantor
under this Guarantee Agreement shall rank pari passu with the obligations
of the Guarantor under any similar guarantee agreements issued by the

 

14

 

Guarantor with
respect to preferred securities (if any) similar to the Preferred Securities,
issued by trusts other than the Issuer established or to be established by the
Guarantor (if any), in each case similar to the Issuer, including, without
limitation, the guarantee agreement issued by the Guarantor with respect to the
preferred securities issued by PCC Capital I and Pacific Crest Capital Trust I.

(b)           The right of the Guarantor to
participate in any distribution of assets of any of its subsidiaries upon any
such subsidiary’s liquidation or reorganization or otherwise is subject to the
prior claims of creditors of that subsidiary, except to the extent the
Guarantor may itself be recognized as a creditor of that subsidiary.  Accordingly, the Guarantor’s obligations
under this Guarantee will be effectively subordinated to all existing and
future liabilities of the Guarantor’s subsidiaries, and claimants should look
only to the assets of the Guarantor for payments thereunder. This Guarantee
does not limit the incurrence or issuance of other secured or unsecured debt of
the Guarantor, including Senior Debt of the Guarantor, under any indenture or
agreement that the Guarantor may enter into in the future or otherwise.

ARTICLE
VII

Termination

SECTION 7.1.  Termination.

This Guarantee Agreement
shall terminate and be of no further force and effect upon (a) full payment of
the Redemption Price of all Preferred Securities, (b) the distribution of Notes
to the Holders in exchange for all of the Preferred Securities or (c) full
payment of the amounts payable in accordance with the Trust Agreement upon
liquidation of the Issuer. 
Notwithstanding the foregoing, this Guarantee Agreement will continue to
be effective or will be reinstated, as the case may be, if at any time any
Holder must restore payment of any sums paid with respect to Preferred
Securities or this Guarantee Agreement. 
The obligations of the Guarantor under Sections 3.3 and 3.4
shall survive any such termination or the resignation and removal of the
Guarantee Trustee.

ARTICLE VIII

Miscellaneous

SECTION 8.1.  Successors and Assigns.

All guarantees and
agreements contained in this Guarantee Agreement shall bind the successors,
assigns, receivers, trustees and representatives of the Guarantor and shall
inure to the benefit of the Holders of the Preferred Securities then
outstanding.  Except in connection with
a consolidation, merger or sale involving the Guarantor that is permitted under
Article VIII of the Indenture and pursuant to which the successor or
assignee agrees in writing to perform the Guarantor’s obligations hereunder,
the Guarantor shall not assign its rights or delegate its

 

15

 

obligations
hereunder without the prior approval of the Holders of a Majority in
Liquidation Amount of the Preferred Securities.

SECTION 8.2.  Amendments.

Except with respect to
any changes that do not adversely affect the rights of the Holders in any
material respect (in which case no consent of the Holders will be required),
this Guarantee Agreement may only be amended with the prior approval of the
Guarantor, the Guarantee Trustee and the Holders of not less than a Majority in
Liquidation Amount of the Preferred Securities.  The provisions of Article VI of the Trust Agreement concerning
meetings or consents of the Holders shall apply to the giving of such approval.

SECTION 8.3.  Notices.

Any notice, request or
other communication required or permitted to be given hereunder shall be in
writing, duly signed by the party giving such notice, and delivered, telecopied
or mailed by first class mail as follows:

(a)           if
given to the Guarantor, to the address or facsimile number set forth below or
such other address, facsimile number or to the attention of such other Person
as the Guarantor may give notice to the Guarantee Trustee and the Holders:

Pacific Crest Capital, Inc.

30343 Canwood Street

Agoura Hills, CA 91301

Facsimile No.: (818) 865-3266

Attention: Robert J. Dennen

(b)           if
given to the Issuer, at the Issuer’s address or facsimile number set forth
below or such other address, facsimile number or to the attention of such other
Person as the Issuer may give notice to the Guarantee Trustee and the Holders:

Pacific Crest Capital Trust
II

30343 Canwood Street

Agoura Hills, CA 91301

Facsimile No.: (818) 865-3266

Attention: Robert J. Dennen

(c)           if
given to the Guarantee Trustee, at the address or facsimile number set forth
below or such other address, facsimile number or to the attention of such other
Person as the Guarantee Trustee may give notice to the Guarantor and the
Holders:

The Bank of New York

101 Barclay Street

New York, New York 10286

Facsimile No.: (212) 896-7299

Attention: Corporate Trust Administration

 

16

 

(d)           if
given to any Holder, at the address set forth on the books and records of the
Issuer.

All notices
hereunder shall be deemed to have been given when received in person,
telecopied with receipt confirmed, or mailed by first class mail, postage
prepaid, except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the
date of such refusal or inability to deliver.

SECTION 8.4.  Benefit.

This Guarantee Agreement
is solely for the benefit of the Holders and is not separately transferable
from the Preferred Securities.

SECTION 8.5.  Governing Law.

This Guarantee Agreement and the rights and
obligations of each party hereto, shall be construed and enforced in accordance
with and governed by the laws of the State of New York without reference to its
conflict of laws provisions (other than Section 5-1401 of the General
Obligations Law).

SECTION 8.6.  Submission to Jurisdiction.

ANY LEGAL ACTION OR PROCEEDING BY OR AGAINST ANY PARTY
HERETO OR WITH RESPECT TO OR ARISING OUT OF THIS GUARANTEE AGREEMENT MAY BE
BROUGHT IN OR REMOVED TO THE COURTS OF THE STATE OF NEW YORK, IN AND FOR THE
COUNTY OF NEW YORK, OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN
DISTRICT OF NEW YORK (IN EACH CASE SITTING IN THE BOROUGH OF MANHATTAN). BY
EXECUTION AND DELIVERY OF THIS GUARANTEE AGREEMENT, EACH PARTY ACCEPTS, FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
JURISDICTION OF THE AFORESAID COURTS (AND COURTS OF APPEALS THEREFROM) FOR
LEGAL PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS GUARANTEE
AGREEMENT.

SECTION 8.7.  Counterparts.

This instrument may be
executed in any number of counterparts, each of which so executed shall be
deemed to be an original, but all such counterparts shall together constitute but
one and the same instrument.

[THE NEXT PAGE IS THE
SIGNATURE PAGE]

 

17

 

In
Witness Whereof, the
undersigned have executed this Guarantee Agreement as of the date first above
written.

Pacific
Crest Capital, Inc.

	
  By:

  	
   

  
	
   

  	
  Name:  Robert J. Dennen

  
	
   

  	
  Title:  Senior Vice President and Chief Financial
  Officer

  
	
   

  	
   

  
	
  The
  Bank of New York, not in its individual capacity, but solely
  as Guarantee Trustee

  
	
   

  
	
  By:

  	
   

  
	
   

  	
  Name

  
	
   

  	
  Title:

  

 

18Exhibit 10.1

 

[PARK PLACE ENTERTAINMENT(R) LETTERHEAD]

 

Dated as of March 24, 2003

 

Mr. Harry C. Hagerty, III

Park Place Entertainment
Corporation

Park Place and the Boardwalk

Atlantic City, New Jersey 08401

 

Re:          Amendment
of Employment Agreement Dated March 14, 2002

 

Dear Harry:

 

In consideration of the terms
and conditions contained in the referenced Employment Agreement (the
“Employment Agreement”), Park Place Entertainment Corporation (the “Company”
and/or “Employer”) and you hereby amend said Employment Agreement as follows:

 

Paragraph 3A - Compensation:
Effective as of March 24, 2003, your annual salary shall be adjusted to
$750,000 for each twelve month period through the remainder of the Term of your
Employment Agreement with the Company. 
During the Term, the Base Salary shall be reviewed for possible increase
annually in accordance with the Company’s then applicable merit policies,
although any determination to increase the Base Salary shall be within the
Company in its sole discretion.

 

All other terms and conditions
of the referenced agreement shall remain unchanged.

 

	
  Very truly yours,

  
	
   

  
	
   

  	
  /s/ Wallace R. Barr

  	
   

  
	
  Wallace R. Barr, President and

  
	
  Chief Executive Officer

  

 

Agreed to:

 

	
  /s/ Harry C.
  Hagerty, III

  	
   

  
	
  Harry C.
  Hagerty, III

  
	
   

  
	
  Dated:

  	
    6/16/03

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00055-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00055-of-00352.parquet"}]]