GUARANTEE
AGREEMENT
This GUARANTEE
AGREEMENT (this “Guarantee”), dated as of
September 25, 2007, is executed and delivered by First
Regional Bancorp, a California corporation (the
“Guarantor”), and Wilmington Trust Company, a Delaware
banking corporation, as trustee (the “Guarantee
Trustee”), for the benefit of the Holders (as defined herein)
from time to time of the Capital Securities (as defined herein) of
First Regional Statutory Trust VIII, a Delaware statutory
trust (the “Issuer”).
WHEREAS, pursuant
to an Amended and Restated Declaration of Trust (the
“Declaration”), dated as of the date hereof among
Wilmington Trust Company, not in its individual capacity but solely
as institutional trustee, the administrators of the Issuer named
therein, the Guarantor, as sponsor, and the holders from time to
time of undivided beneficial interests in the assets of the Issuer,
the Issuer is issuing on the date hereof those undivided beneficial
interests, having an aggregate liquidation amount of $15,000,000.00
(the “Capital Securities”); and
WHEREAS, as
incentive for the Holders to purchase the Capital Securities, the
Guarantor desires irrevocably and unconditionally to agree, to the
extent set forth in this Guarantee, to pay to the Holders of
Capital 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 the Capital
Securities, which purchase the Guarantor hereby agrees shall
benefit the Guarantor, the Guarantor executes and delivers this
Guarantee for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND
INTERPRETATION
Section 1.1.
Definitions and Interpretation . In this Guarantee,
unless the context otherwise requires:
(a)
capitalized terms used in this Guarantee but not defined in the
preamble above have the respective meanings assigned to them in
this Section 1.1;
(b)
a term defined anywhere in this Guarantee has the same meaning
throughout;
(c)
all references to “the Guarantee” or “this
Guarantee” are to this Guarantee as modified, supplemented or
amended from time to time;
(d)
all references in this Guarantee to “Articles” or
“Sections” are to Articles or Sections of this
Guarantee, unless otherwise specified;
(e)
terms defined in the Declaration as at the date of execution of
this Guarantee have the same meanings when used in this Guarantee,
unless otherwise defined in this Guarantee or unless the context
otherwise requires; and
(f)
a reference to the singular includes the plural and vice
versa.
“
Affiliate ” has the same meaning as given to that term
in Rule 405 of the Securities Act of 1933, as amended, or any
successor rule thereunder.
“
Beneficiaries ” means any Person to whom the Issuer is
or hereafter becomes indebted or liable.
“ Capital
Securities ” has the meaning set forth in the recitals to
this Guarantee.
“ Common
Securities ” means the common securities issued by the
Issuer to the Guarantor pursuant to the Declaration.
“
Corporate Trust Office ” means the office of the
Guarantee Trustee at which the corporate trust business of the
Guarantee Trustee shall, at any particular time, be principally
administered, which office at the date of execution of this
Guarantee is located at Rodney Square North, 1100 North Market
Street, Wilmington, Delaware 19890-1600, Attention:
Corporate Trust Administration.
“ Covered
Person ” means any Holder of Capital
Securities.
“
Debentures ” means the debt securities of the
Guarantor designated the Floating Rate Junior Subordinated
Deferrable Interest Debentures due 2037 held by the Institutional
Trustee (as defined in the Declaration) of the Issuer.
“
Declaration Event of Default ” means an “Event
of Default” as defined in the Declaration.
“ Event
of Default ” has the meaning set forth in Section
2.4(a).
“
Guarantee Payments ” means the following payments or
distributions, without duplication, with respect to the Capital
Securities, to the extent not paid or made by the Issuer:
(i) any accrued and unpaid Distributions (as defined in the
Declaration) which are required to be paid on such Capital
Securities to the extent the Issuer shall have funds available
therefor, (ii) the Redemption Price to the extent the Issuer
has funds available therefor, with respect to any Capital
Securities called for redemption by the Issuer, (iii) the
Special Redemption Price to the extent the Issuer has funds
available therefor, with respect to Capital Securities redeemed
upon the occurrence of a Special Event, and (iv) upon a
voluntary or involuntary liquidation, dissolution, winding-up or
termination of the Issuer (other than in connection with the
distribution of Debentures to the Holders of the Capital Securities
in exchange therefor as provided in the Declaration), the lesser of
(a) the aggregate of the liquidation amount and all accrued
and unpaid Distributions on the Capital Securities to the date of
payment, to the extent the Issuer shall have funds available
therefor, and (b) the amount of assets of the Issuer remaining
available for distribution to Holders in liquidation of the Issuer
(in either case, the “Liquidation
Distribution”).
“
Guarantee Trustee ” means Wilmington Trust Company,
until a Successor Guarantee Trustee has been appointed and has
accepted such appointment pursuant to the terms of this Guarantee
and thereafter means each such Successor Guarantee
Trustee.
“
Guarantor ” means First Regional Bancorp and each of
its successors and assigns.
“
Holder ” means any holder, as registered on the books
and records of the Issuer, of any Capital Securities;
provided , however , that, in determining whether the
Holders of the requisite percentage of Capital Securities have
given any request, notice, consent or waiver hereunder,
“Holder” shall not include the Guarantor or any
Affiliate of the Guarantor.
“
Indemnified Person ” means the Guarantee Trustee, any
Affiliate of the Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives,
nominees, custodians or agents of the Guarantee Trustee.
“
Indenture ” means the Indenture dated as of the date
hereof between the Guarantor and Wilmington Trust Company, not in
its individual capacity but solely as trustee, and any
indenture
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supplemental
thereto pursuant to which the Debentures are to be issued to the
institutional trustee of the Issuer.
“
Issuer ” has the meaning set forth in the opening
paragraph to this Guarantee.
“
Liquidation Distribution ” has the meaning set forth
in the definition of “Guarantee Payments”
herein.
“
Majority in liquidation amount of the Capital Securities
” means Holder(s) of outstanding Capital Securities, voting
together as a class, but separately from the holders of Common
Securities, of more than 50% of the aggregate liquidation amount
(including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all
Capital Securities then outstanding.
“
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.
“
Officer’s Certificate ” means, with respect to
any Person, a certificate signed by one Authorized Officer of such
Person. Any Officer’s Certificate delivered with respect to
compliance with a condition or covenant provided for in this
Guarantee shall include:
(a)
a statement that the officer signing the Officer’s
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 the officer in rendering the
Officer’s Certificate;
(c)
a statement that the 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 the officer, such
condition or covenant has been complied with.
“
Person ” means a legal person, including any
individual, corporation, estate, partnership, joint venture,
association, joint stock company, limited liability company, trust,
unincorporated association, or government or any agency or
political subdivision thereof, or any other entity of whatever
nature.
“
Redemption Price ” has the meaning set forth in the
Indenture.
“
Responsible Officer ” means, with respect to the
Guarantee Trustee, any officer within the Corporate Trust Office of
the Guarantee Trustee including any Vice President, Assistant Vice
President, Secretary, Assistant Secretary or any other officer of
the Guarantee Trustee customarily performing functions similar to
those performed by any of the above designated officers and also,
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.
“ Special
Event ” has the meaning set forth in the
Indenture.
“ Special
Redemption Price ” has the meaning set forth in the
Indenture.
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“
Successor Guarantee Trustee ” means a successor
Guarantee Trustee possessing the qualifications to act as Guarantee
Trustee under Section 3.1.
“ Trust
Securities ” means the Common Securities and the Capital
Securities.
ARTICLE II
POWERS, DUTIES AND RIGHTS
OF
GUARANTEE
TRUSTEE
Section 2.1.
Powers and Duties of the Guarantee Trustee .
(a)
This Guarantee shall be held by the Guarantee Trustee for the
benefit of the Holders of the Capital Securities, and the Guarantee
Trustee shall not transfer this Guarantee to any Person except a
Holder of Capital Securities exercising his or her rights pursuant
to Section 4.4(b) or to a Successor Guarantee Trustee on 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, and such vesting and cessation 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)
If an Event of Default actually known to a Responsible Officer of
the Guarantee Trustee has occurred and is continuing, the Guarantee
Trustee shall enforce this Guarantee for the benefit of the Holders
of the Capital Securities.
(c)
The Guarantee Trustee, before the occurrence of any Event of
Default and after curing all Events of Default that may have
occurred, shall undertake to perform only such duties as are
specifically set forth in this Guarantee, and no implied covenants
shall be read into this Guarantee against the Guarantee
Trustee. In case an Event of Default has occurred (that has
not been waived pursuant to Section 2.4) and is actually known
to a Responsible Officer of the Guarantee Trustee, the Guarantee
Trustee shall exercise such of the rights and powers vested in it
by this Guarantee, and use the same degree of care and skill in its
exercise thereof, as a prudent person would exercise or use under
the circumstances in the conduct of his or her own affairs.
(d)
No provision of this Guarantee shall be construed to relieve the
Guarantee Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except
that:
(i)
prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have
occurred:
(A)
the duties and obligations of the Guarantee Trustee shall be
determined solely by the express provisions of this Guarantee, and
the Guarantee Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set
forth in this Guarantee, and no implied covenants or obligations
shall be read into this Guarantee against the Guarantee Trustee;
and
(B)
in the absence of bad faith on the part of the Guarantee Trustee,
the Guarantee Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the Guarantee
Trustee and conforming to the requirements of this Guarantee; but
in the
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case of any such certificates or opinions that
by any provision hereof are specifically required to be furnished
to the Guarantee Trustee, the Guarantee Trustee shall be under a
duty to examine the same to determine whether or not they conform
to the requirements of this Guarantee;
(ii)
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 such Responsible Officer of
the Guarantee Trustee or the Guarantee Trustee was negligent in
ascertaining the pertinent facts upon which such judgment was
made;
(iii)
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 written direction of the Holders of not less
than a Majority in liquidation amount of the Capital Securities
relating to the time, method and place of conducting any proceeding
for any remedy available to the Guarantee Trustee, or relating to
the exercise of any trust or power conferred upon the Guarantee
Trustee under this Guarantee; and
(iv)
no provision of this Guarantee shall require the Guarantee Trustee
to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers, if the Guarantee
Trustee shall have reasonable grounds for believing that the
repayment of such funds is not reasonably assured to it under the
terms of this Guarantee or security and indemnity, reasonably
satisfactory to the Guarantee Trustee, against such risk or
liability is not reasonably assured to it.
Section 2.2.
Certain Rights of Guarantee Trustee .
(a)
Subject to the provisions of Section 2.1:
(i)
The Guarantee Trustee may conclusively rely, and shall be fully
protected in acting or refraining from acting 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 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 shall be sufficiently evidenced by an Officer’s
Certificate.
(iii)
Whenever, in the administration of this Guarantee, the Guarantee
Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting 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 conclusively rely upon an Officer’s
Certificate of the Guarantor which, upon receipt of such request,
shall be promptly delivered by the Guarantor.
(iv)
The Guarantee Trustee shall have no duty to see to any recording,
filing or registration of any instrument (or any re-recording,
refiling or re-registration thereof).
(v)
The Guarantee Trustee may consult with counsel of its selection,
and the advice or opinion of such counsel with respect to legal
matters shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in
good faith and in accordance with such advice or opinion. Such
counsel may be counsel to the Guarantor or any
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of
its Affiliates and may include any of its employees. The
Guarantee Trustee shall have the right at any time to seek
instructions concerning the administration of this Guarantee from
any court of competent jurisdiction.
(vi)
The Guarantee Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Guarantee at the
request or direction of any Holder, unless such Holder shall have
provided to the Guarantee Trustee such security and indemnity,
reasonably satisfactory to the Guarantee Trustee, against the
costs, expenses (including attorneys’ fees and expenses and
the expenses of the Guarantee Trustee’s agents, nominees or
custodians) 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 , however , that nothing contained in this
Section 2.2(a)(vi) shall 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.
(vii)
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.
(viii)
The Guarantee Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents, nominees, custodians or attorneys, and the
Guarantee Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due
care by it hereunder.
(ix)
Any action taken by the Guarantee Trustee or its agents hereunder
shall bind the Holders of the Capital Securities, and the signature
of the Guarantee Trustee or its agents alone shall be sufficient
and effective to perform any such action. No third party
shall be required to inquire as to the authority of the Guarantee
Trustee to so act or as to its compliance with any of the terms and
provisions of this Guarantee, both of which shall be conclusively
evidenced by the Guarantee Trustee’s or its agent’s
taking such action.
(x)
Whenever in the administration of this Guarantee the Guarantee
Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Guarantee Trustee (i) may request instructions
from the Holders of a Majority in liquidation amount of the Capital
Securities, (ii) may refrain from enforcing such remedy or
right or taking such other action until such instructions are
received, and (iii) shall be protected in conclusively relying
on or acting in accordance with such instructions.
(xi)
The Guarantee Trustee shall not be liable for any action taken,
suffered, or omitted to be taken by it in good faith, without
negligence, and reasonably believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this
Guarantee.
(b)
No provision of this Guarantee shall be deemed to impose any duty
or obligation on the Guarantee Trustee to perform any act or acts
or exercise any ri
