Document:

exhibit10-1.htm

    Exhibit 10.1

    
      

    

    UNITED
      STATES OF AMERICA

    BEFORE
      THE

    BOARD
OF
GOVERNORS
      OF THE FEDERAL RESERVE
      SYSTEM

    WASHINGTON,
D.C.

     

    

     

    Written
      Agreement by and between

     

    VINEYARD
      NATIONAL BANCORP                                                                                                           
Docket No. O8-032-WA/RB-HC
      Corona,
California

     

    and

     

    
      	
               

            	
              FEDERAL
                RESERVE BANKOF SAN
                FRANCISCO San
                Francisco, California

            

    

     

     

     

     

    WHEREAS,
      in recognition of their common
      goal to maintain the financial soundness of Vineyard National Bancorp,
Corona.
      California ("VNB"), a registered
bank
      holding company that
      owns
      and controls Vineyard Bank, National Association, Corona, California (the
      "Bank"), a national banking association, and various nonbank subsidiaries,
      VNB
      and the Federal Reserve Bank of San Francisco (the “Reserve Bank'') have
      mutually agreed to enter into this Written Agreement
(the
“Agreement");
      and

     

    WHEREAS,
      on September
      23, 2008, the board
      of directors of VNB at a duly constituted meeting adopted a resolution
      authorizing and directing Douglas
      M.
      Kratzto enter into this
      Agreement on behalf of VNB, and consenting to compliance with each and every
      provision of this Agreement by VNB and its institution-affiliated parties;
      as
      defined in sections 3(u)
and
      8(b)(.3) of the
      Federal Deposit Insurance Act, as
      amended (the "FDI Act") (12 U.S.C.§§ 1813(u) and 1818(b)(3)).

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

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

    

     

    Dividends

     

    
      	
            	
              1.  

            	
              (a) VNB
                shall not declare or pay any dividends without the prior written
approval of the
                Reserve

            

    

    Bank
      and the Director of the Division of
      Banking Supervision and Regulation (the "Director") of the Board of Governors
      of
      the Federal Reserve System (the “Board of Governors").

    

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

     

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

     

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

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    Debt
      and Stock Redemption

    

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

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

    Capital
      Plan

    

    3.          
      Within 60 days of this Agreement, VNB shall submit to the Reserve Bank an
      acceptable written plan to maintain a sufficient capital position at the
      consolidated organization and the Bank. The plan shall, at a minimum, address,
      consider, and include:

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

     

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

     

    (c) The
      source and timing of additional funds to fulfill the consolidated organization's
      and the Bank's future capital requirements;

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    (d) Supervisory
      requests for additional capital
      at
      the Bank or the requirements of any supervisory action imposed on the Bank
      by
      any regulator;

     

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

     

    (f) 
procedures
      for VNB to
      notify the Reserve Bank, in writing, no more than 30 days after the end of
      any
      quarter in which VNB's consolidated capital ratios or the Bank's capital ratios
      (total risk-based, Tier 1
risk-based; or leverage)
      fall below the plan's minimum ratios and to
      submit to the Reserve Bank an acceptable written plan that details the steps
      VNB
      will take to increase its and the Bank's capital ratios above the plan's minimum
      within 30 days of such calendar quarter-end date.

     

    Affiliate
Transactions

     

    4.        (a)  VNB
      shall take all necessary
      actions to ensure that the Bank complies with sections 23A and 23B of the
      Federal Reserve Act (12 U.S.C. §§ 371c and 371c-1) and Regulation W of the Board
      of Governors (12 C.F.R.
Part 223) in all transactions
      between the Bank and its affiliates,
      including VNB and its nonbank subsidiaries.

            

              (b)  VNB
      and its
      nonbank subsidiaries shall not cause the Bank to violate any provision of'
      sections 23A and 23B of the Federal Reserve Act or Regulation W of the Board
      of
      Governors.

     

    Appointment
of New
      Officers and Directors, and
      Severance and Indemnification Payments

     

    5.           
      In appointing any new
      director or senior executive officer, or changing the responsibilities of any
      senior executive officer so that the officer would assume a different senior
      executive officer position, VNB shall comply with the notice provisions of
      section 32 of theFD1
Act
      (12 U.S.C. § 1831i) and Subpart
      H of
      Regulation Y of
      the Board of Governors (12 C.F.
R. §§ 225.71
et seq.).

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    6.           
VNB
      shall
      comply with the restrictions on indemnification and severance payments of
      section 18(k) of the FDI Act (12 U.S.C. § 1828(k)) and Part 359 of the Federal
Deposit insurance
Corporation's
      regulations (12 C.F R.
      Part 359).

     

    Approval,
      Implementation, and Progress Reports

     

    7.           
      (a)  VNB shall submit a written capital plan that is acceptable to the
      Reserve Bank within the applicable time period set forth in paragraph 3 of
      this
      Agreement.

    

      (b)  Within
10
      days
      of approval by the Reserve Bank, VNB shall adopt the approved
      capital plan.Upon
      adoption, VNB shall promptly implement the approved plan, and thereafter fully
      comply with it.

      

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

    

    8.           
      (a)  Within 30 days after the end of each calendar quarter following
      the date of this Agreement, the board of directors shall furnish to the Reserve
      Bank written progress reports detailing the form and manner of all actions
      taken
      to secure VNB's compliance with this Agreement and the results thereof.

     

    Communications

     

    
      	
               

            	
              9.

            	
              All
                communications regarding this Agreement shall be sent to:
                

            

    

     

    
      	
               

            	
              (a)

            	
              Mr.
                David E. Reiser
                

            

    

    
      	
               

            	
              Examining
                Officer 

            

    

    
      	
               

            	
              Banking
                Supervision &
                Regulation 

            

    

    
      	
               

            	
              Federal
                Reserve Bank or San Francisco 

            

    

    
      	
               

            	
              10
                l Market Street, Mail Stop 920 

            

    

    
      	
               

            	
              San
                Francisco, California
                94105 

            

    

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    
      	 	 

    

    
      	
               

            	
              (b)

            	
              Mr.
                Douglas M. Kratz 

            

    

    
      	
               

            	
              Chairman
                of the Board 

            

    

    
      	
               

            	
              Vineyard
                National Bancorp 

            

    

    
      	
               

            	
              1260
                Corona Pointe Court 

            

    

    
      	
               

            	
              Corona,
                California 92879 

            

    

    

    

    Miscellaneous

     

    10.           
      Notwithstanding any provision of this Agreement, the Reserve Bank may, in its
      sole discretion, grant written extensions of time to VNB to comply with any
      provision of this Agreement.

     

    11.           
The
      provisions of this Agreement shall be binding upon VNB and its institution-
      affiliated parties, in their capacities as such, and their successors and
      assigns.

     

    12.           
      Each provision of this Agreement shall remain effective and enforceable until
      stayed, modified, terminated or suspended in writing by the Reserve Bank.

     

    13.           
      The provisions of this Agreement shall not bar, estop or otherwise prevent
      the
      Board of Governors, the Reserve Bank, or any other federal or state agency
      from
      taking any other action affecting VNB, the Bank, any nonbank subsidiary of
      VNB,
      or any of their current or former institution-affiliated parties
      and their successors and assigns.

      
      

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

     

    IN
      WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
      the
23 day of September,
      2008.

     

    ~

     

    
      	
              VINEYARD
                NATIONAL BANCORP

            	
              FEDERAL
                RESERVE BANK OF SAN FRANCISCO 

            

    

    

    

    
      	
              By:
                _/s/
                Douglas
                M. Kratz_____________________

            	
              By:_/s/
David
                Reiser__________________________

            

    

     

     

    
      
         

      

      
        6exhibit10-2.htm

    
      Exhibit 10.2

      
        

      

     

    AMENDMENT
      TO FIFTH MODIFICATION AGREEMENT

     

    AND
      COVENANT WAIVER

     

    This
      Amendment to Fifth Modification Agreement and Covenant Waiver (this “Agreement”) is made
      and effective September 23, 2008 (the “Effective Date”), by
      and between VINEYARD NATIONAL BANCORP, a California corporation (“Borrower”) and FIRST
      TENNESSEE BANK NATIONAL ASSOCIATION (“Lender”).  Unless
      otherwise set forth herein, all capitalized terms used herein shall have the
      meaning given such terms in the Loan Documents (defined below).

    

    WHEREAS,
      in connection with a loan from
      Lender to Borrower in the original principal amount of $70,000,000.00, with
      a
      current outstanding principal loan balance of $48,300,000.00 (the “Loan”), the Borrower
      executed and delivered to Lender that certain Amended and Restated Promissory
      Note (“Note”)
      dated March 29, 2007, that certain Loan Agreement (“Loan Agreement”),
      that certain  Pledge Agreement together with Addendum to Pledge
      Agreement (collectively the “Pledge”), each dated
      as of March 17, 2006, that certain Modification Agreement effective as of May
      11, 2006 (“First
      Modification”), that certain Second Modification Agreement and Covenant
      Waiver effective as of March 29, 2007 (“Second
      Modification”), that certain Third Modification Agreement and Covenant
      Waiver effective as of March 15, 2008 (“Third Modification”),
      that certain Fourth Modification Agreement and Covenant Waiver effective as
      of
      June 30, 2008 (“Fourth
      Modification”) and that certain Fifth Modification Agreement and Covenant
      Waiver dated and effective as of August 29, 2008 (“Fifth Modification”)
      (this Agreement, the Note, the Loan Agreement, the Pledge, the First
      Modification, the Second Modification, the Third Modification, the Fourth
      Modification and the Fifth Modification and any other documents executed by
      Borrower in connection with the Loan are collectively herein referred to as
      the
“Loan
      Documents”);

    

    WHEREAS,
      Borrower and Lender now desire
      to amend the definition of the “Additional Waiver” set forth in Exhibit A to the
      Fifth Modification by deleting said Exhibit A and replacing it with Exhibit
      A
      attached to this Agreement, as set forth below;

    

    NOW,
      THEREFORE, FOR MUTUAL
      CONSIDERATIONS, the receipt and sufficiency of which is hereby acknowledged,
      the
      undersigned Borrower and Lender do hereby agree as follows:

    

    1) Amendment.  Borrower
      and Lender hereby
      amend the definition of “Additional Waiver” set forth in the Fifth Modification
      by hereby deleting ExhibitA
      of the Fifth Modification in its
      entirety and hereby substituting in its place Exhibit A attached to this
      Agreement and incorporated herein by reference.

     

    2) Full
      Force and
      Effect.  Except as expressly amended hereby, the Loan Documents
      (including without limitation, the Fifth Modification) are in all respects
      confirmed, ratified and approved and are in full force and effect as of the
      date
      hereof.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    3) Capitalized
      Terms.  Any
      capitalized term used but not defined herein shall have the meaning ascribed
      to
      it in the Fifth Modification.  All references to the “Loan Documents”
in the Fifth Modification and any of the other Loan Documents shall include,
      without limitation, this Agreement and all other such Loan Documents, as
      modified by this Agreement.

     

    4) Time
      of the
      Essence.                                                      
TIME
      IS OF THE ESSENCE OF THIS
      AGREEMENT.

     

    5) Counterpart
      Signature Pages.  This Agreement may be
      executed in one or more counterparts and may be delivered by facsimile or
      electronic mail, each of which shall be deemed an original and all of which
      together shall constitute one and the same instrument.

     

    [Signature
      Pages to
      Follow]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    COUNTER
      PART SIGNATURE PAGE
      TO

    AMENDMENT
      TOFIFTH MODIFICATION
      AGREEMENT

    AND
      COVENANT WAIVER

    

    IN
      WITNESS WHEREOF, the parties have
      executed this Agreement as of the date first above written.

    

    BORROWER:

    

    VINEYARD
      NATIONAL
      BANCORP,

    a Californiacorporation

    

    By: /s/
      James G.
      LeSieur                                                     

    

    Name: James
      G.
      LeSieur                                                               

    

    Title: Chief
      Executive
      Officer                                                               

    

    STATE
      OF CALIFORNIA

    COUNTY
      OF RIVERSIDE

    

    Before
      me, Elizabeth A.Reyes, Notary
      Public of the state and county aforesaid, personally appeared James G. LeSieur,
      with whom I am personally acquainted (or proved to me on the basis of
      satisfactory evidence), and who, upon oath, acknowledged himself to be Chief
      Executive Officer (or other officer authorized to execute the instrument)
      of VINEYARD
      NATIONAL
      BANCORP, a California
      corporation, the within named bargainor, and that he as such Chief Executive
      Officer, executed the foregoing instrument for the purpose therein contained,
      by
      signing the name of the corporation by himself as Chief Executive
      Officer.

    

    WITNESS
      MY HAND, at office,
      this 23rd day of September,
      2008.

    

    

    _/s/
      Elizabeth A.
      Reyes_____________

    Notary
      Public

    

    My
      Commission
      Expires:

    

    _January
      24,
      2010______________________

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    COUNTER
      PART SIGNATURE PAGE
      TO

    AMENDMENT
      TO FIFTH MODIFICATION AGREEMENT

    AND
      COVENANT WAIVER

    

    IN
      WITNESS WHEREOF, the parties have
      executed this Agreement as of the date first above written.

    

    

    LENDER:

    

    FIRST
      TENNESSEE BANK
      NATIONALASSOCIATION,
      a national banking
      association

    

    By: /s/
      David S.
      Work                                                     

    Name:  David
      S.
      Work                                                               

    

    Title: Executive
      Vice
      President                                                               

    

    STATE
      OF TENNESSEE

    COUNTY
      OF SHELBY

    

    Before
      me, Carly Wilson, Notary Public
      of the state and county aforesaid, personally appeared David S. Work, with
      whom I am personally acquainted (or proved to me on the basis of satisfactory
      evidence), and who, upon oath, acknowledged himself to be Executive Vice
      President (or other officer authorized to execute the instrument) of First
      Tennessee Bank National Association, a national banking association, the within
      named bargainor, and that he as such Executive Vice President, executed the
      foregoing instrument for the purpose therein contained, by signing the name
      of
      the national banking association by himself as Executive Vice
      President.

    

    WITNESS
      MY HAND, at office,
      this 22nd day of September,
      2008.

    

    

    ___/s/
      Carly
      Wilson___________________

    Notary
      Public

    

    My
      Commission
      Expires:

    

    __February
      23,
      2011___________________

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      A

    

    ADDITIONAL
      WAIVER

    

    

    Borrower
      has disclosed to and has
      requested from Lender the Additional Waiver as a result of Borrower’s
      noncompliance with Section 3.5
      (Litigation) of the Loan Agreement due (i) to
      the issuance of a Consent Order on
      July 22, 2008 by the Comptroller of the Currency of the United States
      of America
and Borrower’s
      agreement to a Stipulation and Consent
      to the Issuance of the Consent Orderand (ii)
      to an Agreement between Borrower
      and the Federal Reserve Bank of San Francisco dated September 23,
      2008.

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