Exhibit 10.1

 

EXECUTION VERSION

 

STOCK PURCHASE AGREEMENT

 

by and between

 

PACWEST BANCORP

 

and

 

CAPGEN CAPITAL GROUP II LP

 

August 29, 2008

 

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PACWEST BANCORP

 

STOCK PURCHASE AGREEMENT

 

This Stock Purchase Agreement (this “Agreement”) is made as of August 29, 2008,
by and between PacWest Bancorp, a Delaware corporation (the “Company”), and
CapGen Capital Group II LP, a Delaware limited partnership (“Purchaser”).

 

RECITALS

 

WHEREAS, the Company desires to issue and sell and Purchaser desires to purchase
certain shares of the Company’s common stock, par value $0.01 per share (the
“Company Common Stock”), on the terms set forth herein;

 

WHEREAS, Purchaser is or will be on or prior to the Closing Date (as defined
below) a registered bank holding company and, following consummation of the
Transaction (as defined below), will be a registered bank holding company with
respect to the Company’s subsidiary bank; and

 

WHEREAS, the Company has authorized, and shall prepare and file under the terms
set forth herein, a registration statement on Form S-3 under the Securities Act
of 1933, as amended (the “Act”), with respect to the Shares (as defined below).

 

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
promises hereinafter set forth, the parties hereto agree as follows:

 

SECTION 1

 

AGREEMENT TO SELL AND PURCHASE

 

Subject to the terms and conditions hereof, Purchaser agrees to purchase from
the Company, on the Closing Date, 3,846,153 (three million eight hundred
forty-six thousand one hundred fifty-four) shares (the “Shares”) of Company
Common Stock, and the Company agrees to issue and sell such Shares to Purchaser,
at a price of $26.00 per share for an aggregate purchase price (the “Purchase
Price”) equal to $99,999,978 (ninety nine million nine hundred ninety nine
thousand nine hundred seventy eight dollars) (such issuance, sale and purchase
of the Shares, along with the other commitments by each party to the other set
forth in this Agreement, the “Transaction”).

 

SECTION 2

 

CLOSING, DELIVERY AND PAYMENT

 

2.1           CLOSING.  THE CLOSING (THE “CLOSING”) OF THE PURCHASE AND SALE OF
THE SHARES SHALL TAKE PLACE AT THE OFFICES OF THE COMPANY, AT 10:00 A.M., LOCAL
TIME ON (I) THE FIRST BUSINESS DAY (AS DEFINED BELOW) FOLLOWING THE LAST TO BE
WAIVED OR FULFILLED OF THE CONDITIONS SET FORTH IN SECTION 8 (OTHER THAN THOSE
CONDITIONS THAT BY THEIR NATURE ARE TO BE SATISFIED AT THE CLOSING, BUT SUBJECT
TO THE FULFILLMENT OR WAIVER OF THOSE CONDITIONS) OR (II) SUCH OTHER DATE AND
TIME AS THE PARTIES HERETO MAY MUTUALLY AGREE.  THE DATE ON WHICH THE CLOSING
OCCURS IS REFERRED TO HEREIN AS THE “CLOSING DATE.”  FOR PURPOSES OF THIS
AGREEMENT, A “BUSINESS DAY” SHALL MEAN ANY DAY THAT IS NOT A SATURDAY, SUNDAY OR
OTHER DAY IN WHICH BANKS IN THE STATE OF CALIFORNIA OR NEW YORK ARE AUTHORIZED
OR REQUIRED BY LAW TO BE CLOSED.

 

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2.2           DELIVERY.  AT THE CLOSING, SUBJECT TO THE TERMS AND CONDITIONS
HEREOF, THE COMPANY WILL DELIVER TO PURCHASER THE SHARES IN CERTIFICATE FORM OR
VIA UNCERTIFICATED BOOK-ENTRY FORM PURSUANT TO INSTRUCTIONS OF PURCHASER
PROVIDED TO THE COMPANY AT LEAST FIVE (5) BUSINESS DAYS IN ADVANCE OF THE
CLOSING DATE, FREE AND CLEAR OF ANY LIENS OR OTHER ENCUMBRANCES (OTHER THAN
THOSE PLACED THEREON BY OR ON BEHALF OF ANY PURCHASER) AND SUBJECT TO ANY
RESTRICTIONS ON RESALE IN ACCORDANCE WITH APPLICABLE LAW PRIOR TO THE
EFFECTIVENESS OF ANY REGISTRATION STATEMENT REGISTERING SUCH RESALE, AND
PURCHASER WILL MAKE PAYMENT TO THE COMPANY OF THE PURCHASE PRICE, BY WIRE
TRANSFER OF IMMEDIATELY AVAILABLE FUNDS TO AN ACCOUNT DESIGNATED BY THE COMPANY
AND SET FORTH IN SCHEDULE 2.2(A) HERETO.  PURCHASER AND THE COMPANY SHALL
EXECUTE A CROSS RECEIPT ACKNOWLEDGING RECEIPT OF THE SHARES AND THE PURCHASE
PRICE, RESPECTIVELY.

 

2.3           ANTI-DILUTION.  IF, BETWEEN THE DATE OF THIS AGREEMENT AND THE
CLOSING DATE, THE OUTSTANDING SHARES OF COMPANY COMMON STOCK SHALL HAVE BEEN
CHANGED INTO OR EXCHANGED FOR A DIFFERENT NUMBER OR KIND OF SHARES OR SECURITIES
AS A RESULT OF ANY REORGANIZATION, RECAPITALIZATION, RECLASSIFICATION, STOCK
DIVIDEND, STOCK SPLIT, REVERSE STOCK SPLIT OR OTHER SUBSTANTIALLY SIMILAR
TRANSACTION, AN APPROPRIATE AND PROPORTIONATE ADJUSTMENT SHALL BE MADE TO THE
NUMBER OF SHARES AND THE PURCHASE PRICE, AS THE CASE MAY BE, FOR THE SHARES.

 

SECTION 3

 

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

Except as disclosed in reasonable detail in the Company Reports (as defined
below) furnished or filed prior to the date of this Agreement (excluding any
risk factor disclosures contained in such documents under the heading “Risk
Factors” and any disclosures of risks included in any “forward-looking
statements” disclaimer or other statements made that are similarly non-specific
and are predictive or forward-looking in nature), the Company hereby represents
and warrants to Purchaser as follows:

 

3.1           ORGANIZATION AND STANDING.  (A) THE COMPANY IS A CORPORATION DULY
ORGANIZED, VALIDLY EXISTING AND IN GOOD STANDING UNDER THE LAWS OF THE STATE OF
DELAWARE.  THE COMPANY IS DULY QUALIFIED TO DO BUSINESS AND IS IN GOOD STANDING
AS A FOREIGN CORPORATION IN EACH JURISDICTION WHERE THE OWNERSHIP OR OPERATION
OF ITS ASSETS OR PROPERTIES OR CONDUCT OF ITS BUSINESS REQUIRES SUCH
QUALIFICATION, EXCEPT WHERE THE FAILURE TO BE SO QUALIFIED OR IN GOOD STANDING
IS NOT REASONABLY LIKELY TO HAVE, INDIVIDUALLY OR IN THE AGGREGATE, A MATERIAL
ADVERSE EFFECT (AS DEFINED BELOW). AS USED IN THIS AGREEMENT, A “MATERIAL
ADVERSE EFFECT” MEANS ANY EFFECT, CIRCUMSTANCE, OCCURRENCE OR CHANGE THAT IS
MATERIAL AND ADVERSE TO THE BUSINESS, ASSETS, RESULTS OF OPERATIONS OR FINANCIAL
CONDITION OF THE COMPANY AND COMPANY SUBSIDIARIES (AS DEFINED BELOW), TAKEN AS A
WHOLE; PROVIDED, HOWEVER, THAT MATERIAL ADVERSE EFFECT SHALL NOT BE DEEMED TO
INCLUDE (A) ANY EFFECTS, CIRCUMSTANCES, OCCURRENCES OR CHANGES GENERALLY
AFFECTING THE COMMERCIAL BANKING INDUSTRY, THE ECONOMY, OR THE FINANCIAL, REAL
ESTATE, SECURITIES OR CREDIT MARKETS IN THE UNITED STATES OR

 

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ELSEWHERE IN THE WORLD, INCLUDING EFFECTS ON SUCH INDUSTRY, ECONOMY OR MARKETS
RESULTING FROM ANY REGULATORY OR POLITICAL CONDITIONS OR DEVELOPMENTS, OR ANY
OUTBREAK OR ESCALATION OF HOSTILITIES, DECLARED OR UNDECLARED ACTS OF WAR OR
TERRORISM, (B) CHANGES OR PROPOSED CHANGES IN GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES IN THE UNITED STATES (“GAAP”), (C) CHANGES OR PROPOSED CHANGES IN
LAWS GOVERNING FINANCIAL INSTITUTIONS AND LAWS OF GENERAL APPLICABILITY OR
RELATED POLICIES OR INTERPRETATIONS OF ANY GOVERNMENTAL AUTHORITY), (IN THE CASE
OF EACH OF CLAUSE (A), (B) AND (C), OTHER THAN EFFECTS, CIRCUMSTANCES,
OCCURRENCES OR CHANGES THAT ARISE AFTER THE DATE OF THIS AGREEMENT BUT BEFORE
THE CLOSING TO THE EXTENT THAT SUCH EFFECTS, CIRCUMSTANCES, OCCURRENCES OR
CHANGES HAVE A MATERIALLY DISPROPORTIONATE ADVERSE AFFECT ON THE COMPANY AND
COMPANY SUBSIDIARIES RELATIVE TO OTHER COMPANIES IN THE COMMERCIAL BANKING
INDUSTRY), OR (D) CHANGES IN THE MARKET PRICE OR TRADING VOLUME OF COMPANY
COMMON STOCK (IT BEING UNDERSTOOD AND AGREED THAT THE EXCEPTION SET FORTH IN
THIS CLAUSE (D) DOES NOT APPLY TO THE UNDERLYING REASON OR CAUSE GIVING RISE TO
OR CONTRIBUTING TO ANY SUCH CHANGE).

 

(b)           Each Company Subsidiary is duly organized, validly existing and in
good standing under the laws of its jurisdiction of organization or
incorporation.  Each Company Subsidiary is duly qualified to do business and is
in good standing as a foreign corporation in each jurisdiction where the
ownership or operation of its assets or properties or conduct of its business
requires such qualification, except where the failure to be so qualified or in
good standing is not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect.

 

3.2           COMPANY CAPITAL STOCK.  AS OF THE DATE HEREOF, THE AUTHORIZED
CAPITAL STOCK OF THE COMPANY CONSISTS SOLELY OF 50,000,000 SHARES OF COMPANY
COMMON STOCK, OF WHICH 27,196,853 SHARES ARE ISSUED AND OUTSTANDING (EXCLUDING
969,410 SHARES OF UNVESTED TIME-BASED RESTRICTED STOCK AND PERFORMANCE-BASED
RESTRICTED STOCK), AND 5,000,000 SHARES OF PREFERRED STOCK, PAR VALUE $0.01 PER
SHARE, NONE OF WHICH ARE ISSUED AND OUTSTANDING.  AS OF THE DATE HEREOF, 1,312
SHARES OF COMPANY COMMON STOCK ARE ISSUABLE UPON THE EXERCISE OF OUTSTANDING
OPTIONS TO ACQUIRE SUCH SHARES AND THERE ARE 969,410 OUTSTANDING SHARES OF
UNVESTED TIME-BASED AND PERFORMANCE-BASED RESTRICTED STOCK.  THE OUTSTANDING
SHARES OF COMPANY COMMON STOCK HAVE BEEN DULY AUTHORIZED AND ARE VALIDLY ISSUED,
FULLY PAID AND NONASSESSABLE, AND ARE NOT SUBJECT TO PREEMPTIVE RIGHTS (AND WERE
NOT ISSUED IN VIOLATION OF ANY PREEMPTIVE RIGHTS).  THE SHARES WILL BE, AS OF
THE CLOSING, DULY AUTHORIZED BY ALL NECESSARY CORPORATE ACTION ON THE PART OF
THE COMPANY AND, WHEN ISSUED AND DELIVERED AS PROVIDED IN THIS AGREEMENT, WILL
BE DULY AND VALIDLY ISSUED, FULLY PAID AND NONASSESSABLE, AND THE ISSUANCE
THEREOF WILL NOT BE SUBJECT TO ANY PREEMPTIVE RIGHTS.  AS OF THE DATE OF THIS
AGREEMENT, NEITHER THE COMPANY NOR ANY COMPANY SUBSIDIARY HAS AND IS NOT BOUND
BY ANY OUTSTANDING SUBSCRIPTIONS, OPTIONS, WARRANTS, CALLS, COMMITMENTS OR
AGREEMENTS OF ANY CHARACTER CALLING FOR THE PURCHASE OR ISSUANCE OF, OR
SECURITIES OR RIGHTS CONVERTIBLE INTO OR EXCHANGEABLE FOR, ANY SHARES OF CAPITAL
STOCK OF THE COMPANY OR ANY SECURITIES REPRESENTING THE RIGHT TO PURCHASE OR
OTHERWISE RECEIVE ANY SHARES OF CAPITAL STOCK OF THE COMPANY (INCLUDING ANY
RIGHTS PLAN OR AGREEMENT).

 

3.3           CORPORATE POWER.  THE COMPANY AND EACH COMPANY SUBSIDIARY HAS ALL
REQUISITE POWER AND AUTHORITY (CORPORATE AND OTHER) TO CARRY ON ITS BUSINESS AS
IT IS NOW BEING CONDUCTED AND TO OWN, LEASE OR OPERATE ALL ITS PROPERTIES AND
ASSETS; AND THE COMPANY HAS ALL REQUISITE CORPORATE POWER AND AUTHORITY AND HAS
TAKEN ALL CORPORATE ACTION NECESSARY IN ORDER TO EXECUTE, DELIVER AND PERFORM
ITS OBLIGATIONS UNDER THIS AGREEMENT AND TO CONSUMMATE THE TRANSACTION.

 

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3.4           CORPORATE AUTHORITY.  THIS AGREEMENT AND THE TRANSACTION HAVE BEEN
DULY AUTHORIZED BY ALL NECESSARY CORPORATE ACTION OF THE COMPANY AND THE BOARD
OF DIRECTORS OF THE COMPANY (THE “COMPANY BOARD”).  THIS AGREEMENT HAS BEEN DULY
EXECUTED AND DELIVERED BY THE COMPANY AND, ASSUMING THE DUE AUTHORIZATION,
EXECUTION AND DELIVERY OF THIS AGREEMENT BY PURCHASER, THIS AGREEMENT IS A VALID
AND LEGALLY BINDING AGREEMENT OF THE COMPANY, ENFORCEABLE AGAINST THE COMPANY IN
ACCORDANCE WITH ITS TERMS, SUBJECT TO BANKRUPTCY, INSOLVENCY, REORGANIZATION,
MORATORIUM, FRAUDULENT TRANSFER AND SIMILAR LAWS OF GENERAL APPLICABILITY
RELATING TO OR AFFECTING CREDITORS’ RIGHTS OR TO GENERAL EQUITY PRINCIPLES.

 

3.5           REGULATORY APPROVALS; NO VIOLATIONS. (A) NO CONSENTS, APPROVALS,
PERMITS, ORDERS, AUTHORIZATIONS OF, EXEMPTIONS, REVIEWS OR WAIVERS BY, OR
NOTICES, REPORTS, FILINGS, DECLARATIONS OR REGISTRATIONS WITH, ANY FEDERAL,
STATE OR LOCAL COURT, GOVERNMENTAL, LEGISLATIVE, JUDICIAL, ADMINISTRATIVE OR
REGULATORY AUTHORITY, AGENCY, COMMISSION, BODY OR OTHER GOVERNMENTAL ENTITY OR
SELF REGULATORY ORGANIZATION (EACH, A “GOVERNMENTAL AUTHORITY”) OR WITH ANY
THIRD PARTY ARE REQUIRED TO BE MADE OR OBTAINED BY THE COMPANY OR ANY COMPANY
SUBSIDIARY IN CONNECTION WITH THE EXECUTION, DELIVERY AND PERFORMANCE BY THE
COMPANY OF THIS AGREEMENT OR THE CONSUMMATION OF THE PURCHASE OF THE SHARES OR
ANY OTHER ASPECT OF THE TRANSACTION EXCEPT FOR (A) THE FILINGS CONTEMPLATED BY
SECTION 5.3, (B) THOSE ALREADY OBTAINED OR MADE, (C) ANY SECURITIES OR “BLUE
SKY” FILINGS OF ANY STATE AND (D) ANY NOTICES, FILINGS, DECLARATIONS OR
REGISTRATIONS IN CONNECTION WITH THE APPLICATIONS OF THE PURCHASER AS SET FORTH
IN SECTION 5.3.  AS USED IN THIS AGREEMENT, “COMPANY SUBSIDIARY” MEANS ANY
PERSON OF WHICH AT LEAST A MAJORITY OF THE SECURITIES OR OWNERSHIP INTERESTS
HAVING BY THEIR TERMS ORDINARY VOTING POWER TO ELECT A MAJORITY OF THE BOARD OF
DIRECTORS OR OTHER PERSONS PERFORMING SIMILAR FUNCTIONS IS DIRECTLY OR
INDIRECTLY OWNED OR CONTROLLED BY THE COMPANY OR BY ONE OR MORE OF ITS COMPANY
SUBSIDIARIES; AND “PERSON” MEANS AN INDIVIDUAL, CORPORATION, LIMITED LIABILITY
COMPANY, PARTNERSHIP, ASSOCIATION, TRUST, UNINCORPORATED ORGANIZATION, OTHER
ENTITY OR GROUP (AS DEFINED IN SECTION 13(D) OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED (THE “EXCHANGE ACT”)).

 

(B)           THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS AGREEMENT BY THE
COMPANY DOES NOT, AND THE CONSUMMATION BY THE COMPANY OF THE TRANSACTION WILL
NOT, (A) CONSTITUTE OR RESULT IN A BREACH OR VIOLATION OF, OR A DEFAULT UNDER,
THE ACCELERATION OF ANY OBLIGATIONS OR PENALTIES OR THE CREATION OF ANY CHARGE,
MORTGAGE, PLEDGE, SECURITY INTEREST, RESTRICTION, CLAIM, LIEN, EQUITY,
ENCUMBRANCE OR ANY OTHER ENCUMBRANCE OR EXCEPTION TO TITLE OF ANY KIND ON THE
ASSETS OF THE COMPANY OR ANY COMPANY SUBSIDIARIES (WITH OR WITHOUT NOTICE, LAPSE
OF TIME, OR BOTH) PURSUANT TO, AGREEMENTS BINDING UPON THE COMPANY OR ANY
COMPANY SUBSIDIARY OR TO WHICH THE COMPANY OR ANY COMPANY SUBSIDIARY OR ANY OF
THEIR RESPECTIVE PROPERTIES IS SUBJECT OR BOUND OR ANY LAW, REGULATION, JUDGMENT
OR GOVERNMENTAL OR NON-GOVERNMENTAL PERMIT OR LICENSE TO WHICH THE COMPANY OR
ANY COMPANY SUBSIDIARY OR ANY OF THEIR RESPECTIVE PROPERTIES IS SUBJECT,
(B) CONSTITUTE OR RESULT IN A BREACH OR VIOLATION OF, OR A DEFAULT UNDER, THE
CERTIFICATE OF INCORPORATION OF THE COMPANY, AS AMENDED, OR THE BYLAWS OF THE
COMPANY OR (C) REQUIRE ANY CONSENT OR APPROVAL OR NOTICE OR OTHER FILING UNDER
ANY SUCH AGREEMENT, LAW, REGULATION, JUDGMENT, GOVERNMENTAL OR NON-GOVERNMENTAL
PERMIT OR LICENSE, EXCEPT, IN THE CASE OF CLAUSES (A) OR (C) ABOVE, FOR ANY
BREACH, VIOLATION, DEFAULT, ACCELERATION, CREATION, CHANGE, CONSENT OR APPROVAL
THAT, INDIVIDUALLY OR IN THE AGGREGATE, IS NOT REASONABLY LIKELY TO HAVE A
MATERIAL ADVERSE EFFECT.

 

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3.6           NO BROKERS.  NEITHER THE COMPANY NOR ANY COMPANY SUBSIDIARY NOR
ANY OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR
REPRESENTATIVES HAS EMPLOYED ANY BROKER OR FINDER OR INCURRED ANY LIABILITY FOR
ANY BROKERAGE FEES, COMMISSIONS OR FINDERS OR SIMILAR FEES IN CONNECTION WITH
THE TRANSACTION.

 

3.7           COMPANY REPORTS; FINANCIAL STATEMENTS.  (A) THE COMPANY, AND EACH
COMPANY SUBSIDIARY HAS FILED OR FURNISHED, AS APPLICABLE, ON A TIMELY BASIS ALL
FORMS, FILINGS, REGISTRATIONS, SUBMISSIONS, STATEMENTS, CERTIFICATIONS, REPORTS
AND DOCUMENTS REQUIRED TO BE FILED OR FURNISHED BY IT WITH THE U.S. SECURITIES
AND EXCHANGE COMMISSION (THE “SEC”) UNDER THE EXCHANGE ACT OR THE ACT SINCE
DECEMBER 31, 2006 (THE FORMS, STATEMENTS, REPORTS AND DOCUMENTS FILED OR
FURNISHED SINCE DECEMBER 31, 2006 AND THROUGH THE DATE HEREOF, INCLUDING ANY
AMENDMENTS THERETO, THE “COMPANY REPORTS”).  EACH OF THE COMPANY REPORTS, AT THE
TIME OF ITS FILING OR BEING FURNISHED COMPLIED, OR IF NOT YET FILED OR
FURNISHED, WILL COMPLY, IN ALL MATERIAL RESPECTS WITH THE APPLICABLE
REQUIREMENTS OF THE ACT AND THE EXCHANGE ACT, AND ANY RULES AND REGULATIONS
PROMULGATED THEREUNDER APPLICABLE TO THE COMPANY REPORTS.   AS OF THEIR
RESPECTIVE DATES (OR, IF AMENDED PRIOR TO THE DATE HEREOF, AS OF THE DATE OF
SUCH AMENDMENT), THE COMPANY REPORTS DID NOT, AND ANY COMPANY REPORTS FILED OR
FURNISHED WITH THE SEC SUBSEQUENT TO THE DATE HEREOF WILL NOT, CONTAIN ANY
UNTRUE STATEMENT OF A MATERIAL FACT OR OMIT TO STATE A MATERIAL FACT REQUIRED TO
BE STATED THEREIN OR NECESSARY TO MAKE THE STATEMENTS MADE THEREIN, IN LIGHT OF
THE CIRCUMSTANCES IN WHICH THEY WERE MADE, NOT MISLEADING.

 

(B)           THE COMPANY’S CONSOLIDATED FINANCIAL STATEMENTS (INCLUDING, IN
EACH CASE, ANY NOTES THERETO) CONTAINED IN THE COMPANY REPORTS, WERE OR WILL BE
PREPARED (I) IN ACCORDANCE WITH GAAP APPLIED ON A CONSISTENT BASIS THROUGHOUT
THE PERIODS INDICATED (EXCEPT AS MAY BE INDICATED IN THE NOTES THERETO OR, IN
THE CASE OF INTERIM CONSOLIDATED FINANCIAL STATEMENTS, WHERE INFORMATION AND
FOOTNOTES CONTAINED IN SUCH FINANCIAL STATEMENTS ARE NOT REQUIRED UNDER THE
RULES OF THE SEC TO BE IN COMPLIANCE WITH GAAP) AND (II) TO COMPLY AS TO FORM,
AS OF THEIR RESPECTIVE DATE OF FILING WITH THE SEC, IN ALL MATERIAL RESPECTS
WITH APPLICABLE ACCOUNTING REQUIREMENTS AND WITH THE PUBLISHED RULES AND
REGULATIONS OF THE SEC WITH RESPECT THERETO, AND IN EACH CASE SUCH CONSOLIDATED
FINANCIAL STATEMENTS FAIRLY PRESENTED, IN ALL MATERIAL RESPECTS, THE
CONSOLIDATED FINANCIAL POSITION, RESULTS OF OPERATIONS, CHANGES IN STOCKHOLDER
EQUITY AND CASH FLOWS OF THE COMPANY AND THE CONSOLIDATED COMPANY SUBSIDIARIES
AS OF THE RESPECTIVE DATES THEREOF AND FOR THE RESPECTIVE PERIODS COVERED
THEREBY (SUBJECT, IN THE CASE OF UNAUDITED STATEMENTS, TO NORMAL YEAR-END
ADJUSTMENTS WHICH WERE NOT AND WHICH ARE NOT EXPECTED TO BE, INDIVIDUALLY OR IN
THE AGGREGATE, MATERIAL TO THE COMPANY AND ITS CONSOLIDATED COMPANY SUBSIDIARIES
TAKEN AS A WHOLE).

 

(C)           THE COMPANY IS IN COMPLIANCE IN ALL MATERIAL RESPECTS WITH THE
APPLICABLE LISTING AND CORPORATE GOVERNANCE RULES AND REGULATIONS OF THE NASDAQ
STOCK MARKET, LLC (THE “NASDAQ STOCK MARKET”).

 

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(D)           THE COMPANY MAINTAINS DISCLOSURE CONTROLS AND PROCEDURES REQUIRED
BY RULE 13A-15 OR 15D-15 UNDER THE EXCHANGE ACT.  SUCH DISCLOSURE CONTROLS AND
PROCEDURES ARE DESIGNED TO ENSURE THAT INFORMATION REQUIRED TO BE DISCLOSED BY
THE COMPANY IS RECORDED AND REPORTED ON A TIMELY BASIS TO THE INDIVIDUALS
RESPONSIBLE FOR THE PREPARATION OF THE COMPANY’S FILINGS WITH THE SEC AND OTHER
PUBLIC DISCLOSURE DOCUMENTS.  THE COMPANY MAINTAINS INTERNAL CONTROL OVER
FINANCIAL REPORTING (AS DEFINED IN RULE 13A-15 OR 15D-15, AS APPLICABLE, UNDER
THE EXCHANGE ACT).  SUCH INTERNAL CONTROL OVER FINANCIAL REPORTING IS DESIGNED
TO PROVIDE REASONABLE ASSURANCE REGARDING THE RELIABILITY OF FINANCIAL REPORTING
AND THE PREPARATION OF FINANCIAL STATEMENTS FOR EXTERNAL PURPOSES IN ACCORDANCE
WITH GAAP AND INCLUDES POLICIES AND PROCEDURES THAT (I) PERTAIN TO THE
MAINTENANCE OF RECORDS THAT IN REASONABLE DETAIL ACCURATELY AND FAIRLY REFLECT
THE TRANSACTIONS AND DISPOSITIONS OF THE ASSETS OF THE COMPANY, (II) PROVIDE
REASONABLE ASSURANCE THAT TRANSACTIONS ARE RECORDED AS NECESSARY TO PERMIT
PREPARATION OF FINANCIAL STATEMENTS IN ACCORDANCE WITH GAAP, AND THAT RECEIPTS
AND EXPENDITURES OF THE COMPANY ARE BEING MADE ONLY IN ACCORDANCE WITH
AUTHORIZATIONS OF MANAGEMENT AND DIRECTORS OF THE COMPANY, AND (III) PROVIDE
REASONABLE ASSURANCE REGARDING PREVENTION OR TIMELY DETECTION OF UNAUTHORIZED
ACQUISITION, USE OR DISPOSITION OF THE COMPANY’S ASSETS THAT COULD HAVE A
MATERIAL EFFECT ON ITS FINANCIAL STATEMENTS.

 

(E)           THE COMPANY HAS DISCLOSED, BASED ON THE MOST RECENT EVALUATION OF
ITS CHIEF EXECUTIVE OFFICER AND ITS CHIEF FINANCIAL OFFICER PRIOR TO THE DATE
HEREOF, TO THE COMPANY’S AUDITORS AND THE AUDIT COMMITTEE OF THE COMPANY BOARD
(A) ANY SIGNIFICANT DEFICIENCIES AND MATERIAL WEAKNESSES IN THE DESIGN OR
OPERATION OF ITS INTERNAL CONTROL OVER FINANCIAL REPORTING THAT ARE REASONABLY
LIKELY TO ADVERSELY AFFECT THE COMPANY’S ABILITY TO RECORD, PROCESS, SUMMARIZE
AND REPORT FINANCIAL INFORMATION AND HAS IDENTIFIED FOR THE COMPANY’S AUDITORS
AND AUDIT COMMITTEE OF THE COMPANY BOARD ANY MATERIAL WEAKNESSES IN INTERNAL
CONTROL OVER FINANCIAL REPORTING AND (B) ANY FRAUD, WHETHER OR NOT MATERIAL,
THAT INVOLVES MANAGEMENT OR OTHER EMPLOYEES WHO HAVE A SIGNIFICANT ROLE IN THE
COMPANY’S INTERNAL CONTROL OVER FINANCIAL REPORTING.  SINCE DECEMBER 31, 2006,
NO MATERIAL COMPLAINTS, ALLEGATION, ASSERTION OR CLAIM, WHETHER WRITTEN OR ORAL
FROM ANY SOURCE REGARDING ACCOUNTING, INTERNAL ACCOUNTING CONTROLS OR AUDITING
MATTERS, AND NO CONCERNS FROM THE COMPANY EMPLOYEES REGARDING QUESTIONABLE
ACCOUNTING OR AUDITING MATTERS, HAVE BEEN RECEIVED BY THE COMPANY.  NO ATTORNEY
REPRESENTING THE COMPANY OR ANY COMPANY SUBSIDIARY, WHETHER OR NOT EMPLOYED BY
THE COMPANY OR ANY COMPANY SUBSIDIARY, HAS REPORTED EVIDENCE OF A VIOLATION OF
SECURITIES LAWS, BREACH OF FIDUCIARY DUTY OR SIMILAR VIOLATION BY THE COMPANY OR
ANY OF ITS OFFICERS, DIRECTORS, EMPLOYEES OR AGENTS TO THE COMPANY’S CHIEF LEGAL
OFFICER, AUDIT COMMITTEE (OR OTHER COMMITTEE DESIGNATED FOR THE PURPOSE) OF THE
COMPANY BOARD OR THE COMPANY BOARD PURSUANT TO THE RULES ADOPTED PURSUANT TO
SECTION 307 OF THE SARBANES-OXLEY ACT.

 

(F)            THE COMPANY AND COMPANY SUBSIDIARIES HAVE TIMELY FILED ALL
REPORTS AND STATEMENTS, TOGETHER WITH ANY AMENDMENTS REQUIRED TO BE MADE WITH
RESPECT THERETO, THAT THEY WERE REQUIRED TO FILE SINCE DECEMBER 31, 2007 WITH
THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM (THE “FRB”), THE FEDERAL
DEPOSIT INSURANCE CORPORATION (THE “FDIC”), THE CALIFORNIA DEPARTMENT OF
FINANCIAL INSTITUTIONS (THE “DFI”) OR ANY OTHER GOVERNMENTAL AUTHORITY HAVING
JURISDICTION OVER ITS BUSINESS OR ANY OF ITS ASSETS OR PROPERTIES (EACH A
“REGULATORY AUTHORITY”), AND ALL OTHER MATERIAL REPORTS AND STATEMENTS REQUIRED
TO BE FILED BY IT SINCE DECEMBER 31, 2007, INCLUDING, WITHOUT LIMITATION, THE
RULES AND REGULATIONS OF THE FDIC, THE DFI OR ANY OTHER REGULATORY AUTHORITY,
AND HAS PAID ALL FEES AND ASSESSMENTS DUE AND PAYABLE IN CONNECTION THEREWITH. 
AS OF THEIR RESPECTIVE DATES, SUCH REPORTS AND STATEMENTS COMPLIED IN ALL
MATERIAL RESPECTS WITH ALL THE LAWS, RULES AND REGULATIONS OF THE APPLICABLE
REGULATORY AUTHORITY WITH WHICH THEY WERE FILED.

 

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3.8           ABSENCE OF CERTAIN CHANGES.  SINCE DECEMBER 31, 2007 UNTIL THE
DATE HEREOF, (1) THE COMPANY AND COMPANY SUBSIDIARIES HAVE CONDUCTED THEIR
RESPECTIVE BUSINESSES IN ALL MATERIAL RESPECTS IN THE ORDINARY COURSE,
CONSISTENT WITH PRIOR PRACTICE, AND (2) NO EVENT OR EVENTS HAVE OCCURRED THAT
HAVE HAD OR WOULD BE REASONABLY LIKELY TO HAVE, INDIVIDUALLY OR IN THE
AGGREGATE, A MATERIAL ADVERSE EFFECT.

 

3.9           COMMITMENTS AND CONTRACTS. THE COMPANY HAS PUBLICLY DISCLOSED IN
THE COMPANY REPORTS FILED WITH THE SEC SINCE JANUARY 1, 2008 AND PRIOR TO THE
DATE OF THIS AGREEMENT OR PROVIDED (BY HARD COPY, ELECTRONIC DATA ROOM OR
OTHERWISE) TO PURCHASER OR ITS REPRESENTATIVES TRUE, CORRECT AND COMPLETE COPIES
OF, ANY CONTRACT OR AGREEMENT TO WHICH THE COMPANY OR ANY COMPANY SUBSIDIARY IS
A PARTY OR BY WHICH THE COMPANY OR ANY COMPANY SUBSIDIARY OR ANY OF THEIR
RESPECTIVE PROPERTIES OR ASSETS ARE BOUND WHICH LIMITS OR PURPORTS TO LIMIT THE
FREEDOM OF THE COMPANY OR ANY COMPANY SUBSIDIARY OR ANY OF THEIR RESPECTIVE
AFFILIATES TO COMPETE IN ANY MATERIAL LINE OF BUSINESS OR ANY GEOGRAPHIC AREA TO
WHICH THE COMPANY OR ANY COMPANY SUBSIDIARY IS A PARTY OR SUBJECT.

 

3.10         LITIGATION.  (I) NO CIVIL, CRIMINAL OR ADMINISTRATIVE LITIGATION,
CLAIM, ACTION, SUIT, HEARING, ARBITRATION, INVESTIGATION OR OTHER PROCEEDING
BEFORE ANY GOVERNMENTAL AUTHORITY OR ARBITRATOR IS PENDING OR, TO THE ACTUAL
KNOWLEDGE OF ANY OF THE EXECUTIVE OFFICERS OF THE COMPANY, THREATENED AGAINST
THE COMPANY OR ANY COMPANY SUBSIDIARY, (II) NEITHER THE COMPANY OR ANY COMPANY
SUBSIDIARY IS SUBJECT TO ANY ORDER, JUDGMENT OR DECREE, AND (III) THERE ARE NO
FACTS OR CIRCUMSTANCES THAT COULD RESULT IN ANY CLAIMS AGAINST, OR OBLIGATIONS
OR LIABILITIES OF, THE COMPANY OR ANY COMPANY SUBSIDIARY, EXCEPT WITH RESPECT TO
(I), (II) AND (III) FOR THOSE THAT ARE NOT, INDIVIDUALLY OR IN THE AGGREGATE,
REASONABLY LIKELY TO HAVE A MATERIAL ADVERSE EFFECT.

 

SECTION 4

 

REPRESENTATIONS AND WARRANTIES OF PURCHASER

 

Purchaser hereby represents and warrants to the Company as follows:

 

4.1           INSTITUTIONAL ACCREDITED INVESTOR; EXPERIENCE.  PURCHASER IS AN
“ACCREDITED INVESTOR” (AS DEFINED IN RULE 501 UNDER THE ACT) AND IS CAPABLE OF
EVALUATING THE MERITS AND RISKS OF ITS INVESTMENT IN THE COMPANY AND HAS THE
CAPACITY TO PROTECT ITS OWN INTERESTS.

 

4.2           INVESTMENT.  PURCHASER IS ACQUIRING THE SHARES FOR INVESTMENT FOR
ITS OWN ACCOUNT FOR INVESTMENT PURPOSES, AND NOT WITH THE VIEW TO, OR FOR RESALE
IN CONNECTION WITH, ANY DISTRIBUTION THEREOF THAT WOULD REQUIRE THE ISSUANCE OF
THE SHARES PURSUANT TO THIS AGREEMENT TO BE REGISTERED UNDER THE ACT.  AS USED
IN THIS AGREEMENT, “AFFILIATE” MEANS, WITH RESPECT TO ANY PERSON, ANY OTHER
PERSON THAT DIRECTLY OR INDIRECTLY THROUGH ONE OR MORE INTERMEDIARIES, CONTROLS,
OR IS CONTROLLED BY, OR IS UNDER COMMON CONTROL WITH, SUCH PERSON, AND THE TERM
“CONTROL” (INCLUDING THE TERMS “CONTROLLED BY” AND “UNDER COMMON CONTROL WITH”)
MEANS THE POSSESSION, DIRECTLY OR INDIRECTLY, OF THE POWER TO DIRECT OR CAUSE
THE DIRECTION OF THE MANAGEMENT AND POLICIES OF SUCH PERSON, WHETHER THROUGH
OWNERSHIP OF VOTING SECURITIES, BY CONTRACT OR OTHERWISE.

 

7

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4.3           NO RELIANCE.  PURCHASER HAS RELIED UPON THE REPRESENTATIONS AND
WARRANTIES SET FORTH HEREIN AND ITS OWN INVESTIGATIONS AND DILIGENCE, INCLUDING
A REVIEW OF THE COMPANY REPORTS FILED WITH THE SEC AND INCLUDING WITH RESPECT TO
THE TAX CONSEQUENCES OF THIS INVESTMENT AND THE TRANSACTION, AND NOT UPON ANY
OTHER INFORMATION PROVIDED BY OR ON BEHALF OF THE COMPANY IN MAKING THE DECISION
TO PURCHASE THE SHARES.  PURCHASER UNDERSTANDS AND ACKNOWLEDGES THAT NEITHER THE
COMPANY NOR ANY OF THE COMPANY’S REPRESENTATIVES, AGENTS OR ATTORNEYS IS MAKING
OR HAS MADE AT ANY TIME ANY WARRANTIES OR REPRESENTATIONS OF ANY KIND OR
CHARACTER, EXPRESS OR IMPLIED, WITH RESPECT TO ANY MATTER OR THE COMPANY COMMON
STOCK, EXCEPT AS EXPRESSLY SET FORTH HEREIN.

 

4.4           ORGANIZATION AND STANDING.  PURCHASER IS DULY ORGANIZED, VALIDLY
EXISTING AND IN GOOD STANDING UNDER THE LAWS OF THE STATE OF DELAWARE. 
PURCHASER IS DULY QUALIFIED TO DO BUSINESS AND IS IN GOOD STANDING AS A FOREIGN
ENTITY IN EACH JURISDICTION WHERE THE OWNERSHIP OR OPERATION OF ITS ASSETS OR
PROPERTIES OR CONDUCT OF ITS BUSINESS REQUIRES SUCH QUALIFICATION, EXCEPT WHERE
THE FAILURE TO BE SO QUALIFIED OR IN GOOD STANDING IS NOT REASONABLY LIKELY TO
HAVE, INDIVIDUALLY OR IN THE AGGREGATE, A MATERIAL ADVERSE EFFECT ON THE ABILITY
OF PURCHASER TO TIMELY CONSUMMATE THE TRANSACTION.

 

4.5           BANK HOLDING COMPANY STATUS.  PRIOR TO CLOSING, PURCHASER WILL BE
A REGISTERED BANK HOLDING COMPANY UNDER THE BANK HOLDING COMPANY ACT OF 1956, AS
AMENDED (THE “BHCA”), AND HAS RECEIVED, OR WILL HAVE RECEIVED PRIOR TO THE
CLOSING DATE, ALL NECESSARY APPROVALS AND AUTHORITY FROM FEDERAL AND STATE
BANKING REGULATORS TO ACQUIRE THE SHARES AS CONTEMPLATED HEREIN.

 

4.6           NO CROSS SUPPORT.  PURCHASER IS NOT A BANK HOLDING COMPANY FOR ANY
OTHER ENTITY, AND NEITHER IT NOR THE COMPANY NOR ANY COMPANY SUBSIDIARY OR
AFFILIATE OF THE COMPANY WILL BE LOOKED TO AS A SOURCE OF STRENGTH FOR ANY OTHER
ENTITY PARTIALLY OR WHOLLY OWNED, CONTROLLED BY OR AFFILIATED WITH PURCHASER.

 

4.7           LIMITED PARTNERSHIP POWER.  PURCHASER HAS ALL REQUISITE LIMITED
PARTNERSHIP POWER AND AUTHORITY AND HAS TAKEN ALL LIMITED PARTNERSHIP ACTION
NECESSARY IN ORDER TO EXECUTE, DELIVER AND PERFORM ITS OBLIGATIONS UNDER THIS
AGREEMENT AND TO CONSUMMATE THE TRANSACTION.

 

4.8           LIMITED PARTNER AUTHORITY.  THIS AGREEMENT AND THE TRANSACTION
HAVE BEEN DULY AUTHORIZED BY ALL NECESSARY LIMITED PARTNERSHIP ACTION OF
PURCHASER.  THIS AGREEMENT HAS BEEN DULY EXECUTED AND DELIVERED BY PURCHASER,
AND, ASSUMING THE DUE AUTHORIZATION, EXECUTION AND DELIVERY OF THIS AGREEMENT BY
THE COMPANY, THIS AGREEMENT IS A VALID AND LEGALLY BINDING AGREEMENT OF
PURCHASER, ENFORCEABLE AGAINST PURCHASER IN ACCORDANCE WITH ITS TERMS, SUBJECT
TO BANKRUPTCY, INSOLVENCY, REORGANIZATION, MORATORIUM, FRAUDULENT TRANSFER AND
SIMILAR LAWS OF GENERAL APPLICABILITY RELATING TO OR AFFECTING CREDITORS’ RIGHTS
OR TO GENERAL EQUITY PRINCIPLES.

 

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4.9           REGULATORY APPROVALS; NO VIOLATIONS.  (A) NO CONSENTS, APPROVALS,
PERMITS, ORDER OR AUTHORIZATIONS OF, EXEMPTIONS, REVIEWS OR WAIVERS BY, OR
NOTICES, REPORTS, FILINGS OR REGISTRATIONS WITH ANY GOVERNMENTAL AUTHORITY OR
WITH ANY OTHER THIRD PARTY ARE REQUIRED TO BE MADE OR OBTAINED BY PURCHASER OR
ANY OF ITS AFFILIATES OR ANY OF THEIR RESPECTIVE OFFICERS, DIRECTORS OR
EMPLOYEES IN CONNECTION WITH THE EXECUTION, DELIVERY AND PERFORMANCE BY
PURCHASER OF THIS AGREEMENT OR THE CONSUMMATION OF THE TRANSACTION EXCEPT FOR
(A) THE APPROVAL OF THE CALIFORNIA COMMISSIONER OF FINANCIAL INSTITUTIONS UNDER
SECTION 701 OF THE CALIFORNIA FINANCIAL CODE AND FILING OF THE RELATED
APPLICATION, (B) THE APPROVAL OF THE FRB UNDER SECTION 3 OF THE BHCA AND THE
FILING OF THE RELATED APPLICATION, (C) THOSE ALREADY OBTAINED OR MADE AND
(D) ANY SECURITIES OR “BLUE SKY” FILINGS OF ANY STATE.

 

(B)           THE EXECUTION, DELIVERY, AND PERFORMANCE OF THIS AGREEMENT BY
PURCHASER DOES NOT, AND THE CONSUMMATION BY PURCHASER OF THE TRANSACTION WILL
NOT, (A) CONSTITUTE OR RESULT IN A BREACH OR VIOLATION OF, OR A DEFAULT UNDER,
OR THE ACCELERATION OR CREATION OF ANY OBLIGATIONS, PENALTIES OR THE CREATION OF
ANY CHARGE, MORTGAGE, PLEDGE, SECURITY INTEREST, RESTRICTION, CLAIM, LIEN OR
EQUITY, ENCUMBRANCE OR ANY OTHER ENCUMBRANCE OR EXCEPTION TO TITLE OF ANY KIND
ON THE ASSETS OR PROPERTIES OF PURCHASER (WITH OR WITHOUT NOTICE, LAPSE OF TIME,
OR BOTH) PURSUANT TO AGREEMENTS BINDING UPON PURCHASER OR TO WHICH PURCHASER OR
ANY OF ITS PROPERTIES IS SUBJECT OR BOUND OR ANY LAW, REGULATION, JUDGMENT OR
GOVERNMENTAL OR NON-GOVERNMENTAL PERMIT OR LICENSE TO WHICH PURCHASER OR ANY OF
ITS PROPERTIES IS SUBJECT, (B) CONSTITUTE OR RESULT IN A BREACH OR VIOLATION OF,
OR A DEFAULT UNDER, THE LIMITED PARTNERSHIP AGREEMENT OR OTHER ORGANIZATIONAL
DOCUMENTS OF PURCHASER OR (C) REQUIRE ANY CONSENT OR APPROVAL UNDER ANY SUCH
AGREEMENT, LAW, REGULATION, JUDGMENT, GOVERNMENTAL OR NON-GOVERNMENTAL PERMIT OR
LICENSE (OTHER THAN THOSE CONTEMPLATED BY (4.9(A)), EXCEPT, IN THE CASE OF
CLAUSES (A) OR (C) ABOVE, FOR ANY BREACH, VIOLATION, DEFAULT, ACCELERATION,
CREATION, CHANGE, CONSENT OR APPROVAL THAT, INDIVIDUALLY OR IN THE AGGREGATE, IS
NOT REASONABLY LIKELY TO HAVE A MATERIAL ADVERSE EFFECT ON THE ABILITY OF
PURCHASER TO TIMELY CONSUMMATE THE TRANSACTION.

 

4.10         AVAILABLE FUNDS.   PURCHASER HAS OR AT CLOSING WILL HAVE AVAILABLE
TO IT ALL FUNDS NECESSARY FOR THE PAYMENT TO THE COMPANY OF THE AGGREGATE
PURCHASE PRICE.

 

SECTION 5

 

Pre-Closing Covenants

 

5.1           REASONABLE BEST EFFORTS.  SUBJECT TO THE TERMS AND CONDITIONS OF
THIS AGREEMENT, EACH OF THE COMPANY AND PURCHASER AGREES TO COOPERATE WITH THE
OTHER AND USE ITS REASONABLE BEST EFFORTS IN GOOD FAITH TO TAKE, OR CAUSE TO BE
TAKEN, ALL ACTIONS, AND TO DO, OR CAUSE TO BE DONE, ALL THINGS NECESSARY,
PROPER, DESIRABLE, OR ADVISABLE ON ITS PART UNDER THIS AGREEMENT OR UNDER
APPLICABLE LAWS TO CONSUMMATE AND MAKE EFFECTIVE THE TRANSACTION AS PROMPTLY AS
PRACTICABLE, INCLUDING THE SATISFACTION OF THE CONDITIONS SET FORTH IN SECTION 8
HEREOF.

 

5.2           PRESS RELEASES.  THE INITIAL PRESS RELEASE ISSUED BY THE COMPANY
AND PURCHASER CONCERNING THE TRANSACTION AND THIS AGREEMENT SHALL BE A JOINT
PRESS RELEASE, AND THEREAFTER THE COMPANY AND PURCHASER SHALL CONSULT WITH EACH
OTHER BEFORE ISSUING ANY PRESS RELEASE WITH RESPECT TO THE TRANSACTION OR THIS
AGREEMENT AND SHALL NOT ISSUE ANY SUCH PRESS RELEASE OR MAKE ANY SUCH PUBLIC
STATEMENTS WITHOUT THE PRIOR CONSENT OF THE OTHER PARTY, WHICH CONSENT SHALL NOT
BE UNREASONABLY WITHHELD OR DELAYED; PROVIDED, HOWEVER, THAT A

 

9

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PARTY MAY, WITHOUT THE PRIOR CONSENT OF THE OTHER PARTY (BUT AFTER SUCH
CONSULTATION, TO THE EXTENT PRACTICABLE IN THE CIRCUMSTANCES), ISSUE SUCH PRESS
RELEASE OR MAKE SUCH PUBLIC STATEMENTS AS MAY UPON THE ADVICE OF OUTSIDE COUNSEL
BE REQUIRED BY LAW OR THE RULES OR REGULATIONS OF THE NASDAQ STOCK MARKET OR THE
SEC OR ANY OTHER APPLICABLE REGULATION.

 

5.3           BANK REGULATORY APPLICATIONS.  (A)  WITHOUT LIMITING THE
GENERALITY OF SECTION 5.1, PURCHASER SHALL USE ITS REASONABLE BEST EFFORTS TO
PREPARE AND FILE ON BEHALF OF IT AND ANY OF ITS SUBSIDIARIES OR AFFILIATES, AND,
TO THE EXTENT NECESSARY, THE COMPANY SHALL USE ITS REASONABLE BEST EFFORTS TO
PREPARE AND FILE ON BEHALF OF IT OR ANY COMPANY SUBSIDIARY OR AFFILIATE, ALL
DOCUMENTATION TO EFFECT ALL NECESSARY NOTICES, REPORTS AND OTHER FILINGS AND TO
OBTAIN ALL PERMITS, CONSENTS, APPROVALS AND AUTHORIZATIONS NECESSARY OR
ADVISABLE TO BE OBTAINED FROM ANY THIRD PARTIES AND/OR GOVERNMENTAL AUTHORITIES
IN ORDER TO CONSUMMATE THE TRANSACTION, INCLUDING, WITHOUT LIMITATION, ANY
APPLICATION OR OTHER FILING REQUIRED UNDER SECTION 701 OF THE CALIFORNIA
FINANCIAL CODE OR SECTION 3 OF THE BHCA OR, IN EACH CASE, ANY APPLICABLE
REGULATIONS THEREUNDER AND THE COMPANY SHALL REASONABLY COOPERATE WITH PURCHASER
IN CONNECTION WITH THE FOREGOING; AND ANY INITIAL FILINGS WITH GOVERNMENTAL
AUTHORITIES SHALL BE MADE BY PURCHASER AS SOON AS REASONABLY PRACTICABLE AFTER
THE DATE HEREOF AND IN ANY EVENT BY SEPTEMBER 30, 2008.  SUBJECT TO APPLICABLE
LAWS RELATING TO THE EXCHANGE OF INFORMATION, PURCHASER AND THE COMPANY SHALL
HAVE THE RIGHT TO REVIEW IN ADVANCE, AND TO THE EXTENT PRACTICABLE EACH SHALL
CONSULT WITH THE OTHER ON, ALL MATERIAL WRITTEN INFORMATION SUBMITTED TO ANY
THIRD PARTY AND/OR ANY GOVERNMENTAL AUTHORITY IN CONNECTION WITH THE
TRANSACTION.  IN EXERCISING THE FOREGOING RIGHT, EACH OF THE PARTIES AGREES TO
ACT REASONABLY AND AS PROMPTLY AS PRACTICABLE.  EACH PARTY HERETO AGREES THAT IT
SHALL TO THE EXTENT LEGALLY PERMISSIBLE AND PRACTICABLE CONSULT WITH THE OTHER
WITH RESPECT TO THE OBTAINING OF ALL MATERIAL PERMITS, CONSENTS, APPROVALS AND
AUTHORIZATIONS OF ALL THIRD PARTIES AND/OR GOVERNMENTAL AUTHORITIES NECESSARY OR
ADVISABLE TO CONSUMMATE THE TRANSACTION AND EACH PARTY SHALL TO THE EXTENT
LEGALLY PERMISSIBLE AND PRACTICABLE KEEP THE OTHER PARTY APPRISED OF THE STATUS
OF MATERIAL MATTERS RELATING TO COMPLETION OF THE TRANSACTION (INCLUDING TO THE
EXTENT LEGALLY PERMISSIBLE AND PRACTICABLE (I) PROMPTLY FURNISHING THE OTHER
WITH COPIES OF NOTICES OR OTHER COMMUNICATIONS RECEIVED BY PURCHASER OR THE
COMPANY, AS THE CASE MAY BE, FROM ANY THIRD PARTY AND/OR GOVERNMENTAL AUTHORITY
WITH RESPECT TO THE TRANSACTION AND THE ESTABLISHMENT OF ANY BANK HOLDING
COMPANY FOR PURPOSES OF THE TRANSACTION, AND AS OTHERWISE CONTEMPLATED BY THIS
AGREEMENT AND, TO THE EXTENT PERMITTED BY LAW, AND (II) PROVIDING DESCRIPTIONS
OF ANY ORAL COMMUNICATIONS FROM SUCH PERSONS).

 

(B)           EACH PARTY AGREES, UPON REQUEST, TO FURNISH THE OTHER PARTY WITH
ALL INFORMATION CONCERNING ITSELF, ITS SUBSIDIARIES, DIRECTORS, OFFICERS AND
STOCKHOLDERS OR SHAREHOLDERS, AS APPLICABLE, OTHER THAN ANY INFORMATION
CONCERNING EACH PARTY’S OFFICERS, PRINCIPALS, DIRECTORS AND STOCKHOLDERS OR
SHAREHOLDERS THE DISCLOSING PARTY REASONABLY DETERMINES TO BE CONFIDENTIAL, AND
SUCH OTHER MATTERS AS MAY BE REASONABLY NECESSARY OR ADVISABLE IN CONNECTION
WITH ANY FILING, NOTICE OR APPLICATION MADE BY OR ON BEHALF OF SUCH OTHER PARTY
TO ANY THIRD PARTY AND/OR GOVERNMENTAL AUTHORITY.

 

5.4           BOARD SEAT.

 

(A)           PRIOR TO THE CLOSING DATE, UPON SATISFACTORY COMPLETION OF A
DIRECTORS & OFFICERS QUESTIONNAIRE AND PROVISION OF OTHER BACKGROUND INFORMATION
AS MAY BE REASONABLY REQUESTED BY THE COMPANY, THE COMPANY SHALL CAUSE MR. JOHN
ROSE OR

 

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MR. ROBERT GOLDSTEIN, AT PURCHASER’S OPTION, AS A REPRESENTATIVE OF PURCHASER
(THE “BOARD REPRESENTATIVE”), TO BE APPOINTED TO THE COMPANY BOARD AND COMMENCE
SERVING ON THE COMPANY BOARD IMMEDIATELY FOLLOWING THE CLOSING DATE.  PRIOR TO
THE CLOSING DATE, THE COMPANY SHALL ALSO CAUSE THE BOARD REPRESENTATIVE TO BE
APPOINTED TO THE EXECUTIVE COMMITTEE OF THE COMPANY BOARD (OR ANY SUCCESSOR
COMMITTEE THERETO).

 

(B)           THE COMPANY SHALL INCLUDE THE BOARD REPRESENTATIVE IN THE
COMPANY’S SLATE OF DIRECTOR NOMINEES RECOMMENDED BY THE COMPANY BOARD TO BE
VOTED ON BY STOCKHOLDERS OF THE COMPANY AT THE 2009 ANNUAL MEETING OF
STOCKHOLDERS (THE “2009 MEETING”), SUBJECT TO SATISFACTION OF ALL LEGAL AND
GOVERNANCE REQUIREMENTS APPLICABLE TO ALL BOARD MEMBERS REGARDING SERVICE AS A
DIRECTOR OF THE COMPANY (INCLUDING THE APPROVAL OF THE COMPENSATION, NOMINATING
AND GOVERNANCE COMMITTEE OF THE COMPANY BOARD) AND THE COMPANY SHALL ALSO CAUSE
THE BOARD REPRESENTATIVE TO BE RE-APPOINTED TO THE EXECUTIVE COMMITTEE OF THE
COMPANY BOARD (OR ANY SUCCESSOR COMMITTEE THERETO), PROVIDED THAT (I) THROUGH
THE DATE OF THE 2009 MEETING, PURCHASER SHALL HOLD SHARES OF COMPANY COMMON
STOCK REPRESENTING AT LEAST TEN PERCENT (10%) OF THE OUTSTANDING SHARES OF
COMPANY COMMON STOCK; AND (II) THE BOARD REPRESENTATIVE SHALL REMAIN
“INDEPENDENT” (AS SUCH TERM IS DEFINED IN THE LISTING STANDARDS OF THE NASDAQ
STOCK MARKET).

 

(C)           THROUGH THE 2009 MEETING AND, ASSUMING THE CONDITIONS IN THE
PROVISO IN SECTION 5.4(B) ARE SATISFIED AND THE BOARD REPRESENTATIVE IS
RE-ELECTED AT THE 2009 MEETING BY THE STOCKHOLDERS OF THE COMPANY, THROUGH THE
2010 ANNUAL MEETING OF STOCKHOLDERS, PURCHASER SHALL HAVE THE POWER TO DESIGNATE
THE BOARD REPRESENTATIVE’S REPLACEMENT UPON THE DEATH, RESIGNATION, RETIREMENT,
DISQUALIFICATION OR REMOVAL FROM OFFICE OF SUCH DIRECTOR, SUBJECT TO
SATISFACTION OF ALL LEGAL AND GOVERNANCE REQUIREMENTS APPLICABLE TO ALL BOARD
MEMBERS REGARDING SERVICE AS A DIRECTOR OF THE COMPANY (INCLUDING THE APPROVAL
OF THE COMPENSATION, NOMINATING AND GOVERNANCE COMMITTEE OF THE COMPANY BOARD)
AND PROVIDED THAT ANY SUCH REPLACEMENT SHALL BE “INDEPENDENT” (AS SUCH TERM IS
DEFINED IN THE LISTING STANDARDS OF THE NASDAQ STOCK MARKET).

 

5.5           CONDUCT OF BUSINESS PRIOR TO THE CLOSING.  EXCEPT AS OTHERWISE
EXPRESSLY CONTEMPLATED OR PERMITTED BY THIS AGREEMENT OR WITH THE PRIOR WRITTEN
CONSENT OF PURCHASER (WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD OR
DELAYED), DURING THE PERIOD FROM THE DATE OF THIS AGREEMENT TO THE CLOSING DATE,
THE COMPANY SHALL, AND SHALL CAUSE EACH COMPANY SUBSIDIARY TO, (I) CONDUCT ITS
BUSINESS ONLY IN THE USUAL, REGULAR AND ORDINARY COURSE CONSISTENT WITH PAST
PRACTICE AND (II) TAKE NO ACTION WHICH WOULD REASONABLY BE EXPECTED TO ADVERSELY
AFFECT OR DELAY (X) THE RECEIPT OF ANY APPROVALS OF ANY GOVERNMENTAL AUTHORITY
REQUIRED TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREBY OR (Y) THE
CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY.

 

5.6           COMPANY FORBEARANCES.  EXCEPT AS EXPRESSLY CONTEMPLATED OR
PERMITTED BY THIS AGREEMENT OR AS SET FORTH IN SCHEDULE 5.6, DURING THE PERIOD
FROM THE DATE OF THIS AGREEMENT TO THE CLOSING, THE COMPANY SHALL NOT, AND SHALL
NOT PERMIT ANY COMPANY SUBSIDIARY TO, WITHOUT THE PRIOR WRITTEN CONSENT OF
PURCHASER (WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD OR DELAYED):

 

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(A)           SET ANY RECORD OR PAYMENT DATES FOR THE PAYMENT OF ANY DIVIDENDS
OR DISTRIBUTIONS ON ITS CAPITAL STOCK OR OTHER EQUITY INTEREST OR MAKE, DECLARE
OR PAY ANY DIVIDEND OR MAKE ANY OTHER DISTRIBUTION ON, OR DIRECTLY OR INDIRECTLY
REDEEM, PURCHASE OR OTHERWISE ACQUIRE, ANY SHARES OF ITS CAPITAL STOCK OR OTHER
EQUITY INTEREST OR ANY SECURITIES OR OBLIGATIONS CONVERTIBLE INTO OR
EXCHANGEABLE FOR ANY SHARES OF ITS CAPITAL STOCK OR OTHER EQUITY INTEREST OR
STOCK APPRECIATION RIGHTS OR GRANT ANY PERSON ANY RIGHT TO ACQUIRE ANY SHARES OF
ITS CAPITAL STOCK OR OTHER EQUITY INTEREST, OTHER THAN (A) REGULAR QUARTERLY
CASH DIVIDENDS ON COMPANY COMMON STOCK EQUAL TO THE RATE PAID DURING THE FISCAL
QUARTER IMMEDIATELY PRECEDING THE DATE HEREOF WITH RECORD AND PAYMENT DATES
CONSISTENT WITH PAST PRACTICE; AND (B) DIVIDENDS PAID BY ANY OF COMPANY
SUBSIDIARIES SO LONG AS SUCH DIVIDENDS ARE ONLY PAID TO THE COMPANY OR ANY OF
ITS OTHER WHOLLY OWNED SUBSIDIARIES; PROVIDED THAT NO SUCH DIVIDEND SHALL CAUSE
ANY BANK COMPANY SUBSIDIARY TO CEASE TO QUALIFY AS A “WELL CAPITALIZED”
INSTITUTION UNDER THE PROMPT CORRECTIVE ACTION PROVISIONS OF THE FEDERAL DEPOSIT
INSURANCE CORPORATION IMPROVEMENT ACT OF 1991, AS AMENDED, AND THE APPLICABLE
REGULATIONS THEREUNDER;

 

(B)           OR ISSUE OR COMMIT TO ISSUE ANY ADDITIONAL SHARES OF CAPITAL STOCK
OR OTHER EQUITY INTEREST (EXCEPT (I) OPTIONS, RESTRICTED STOCK OR OTHER EQUITY
GRANTS APPROVED BY THE COMPANY BOARD OR THE COMPENSATION, NOMINATING AND
GOVERNANCE COMMITTEE OF THE COMPANY BOARD UNDER THE COMPANY’S EQUITY INCENTIVE
PLAN) OR (II) PURSUANT TO THE EXERCISE OF COMPANY OPTIONS OR VESTING OF
RESTRICTED STOCK OR OTHER EQUITY GRANTS THAT WERE OR ARE APPROVED BY THE COMPANY
BOARD OR THE COMPENSATION, NOMINATING AND GOVERNANCE COMMITTEE OF THE COMPANY
BOARD UNDER THE COMPANY’S EQUITY INCENTIVE PLAN), OR ANY SECURITIES CONVERTIBLE
INTO OR EXERCISABLE FOR, OR ANY RIGHTS, WARRANTS OR OPTIONS TO ACQUIRE, ANY
ADDITIONAL SHARES OF CAPITAL STOCK OR OTHER EQUITY INTEREST (EXCEPT (I) OPTIONS,
RESTRICTED STOCK OR OTHER EQUITY GRANTS APPROVED BY THE COMPANY BOARD OR THE
COMPENSATION, NOMINATING AND GOVERNANCE COMMITTEE OF THE COMPANY BOARD UNDER THE
COMPANY’S EQUITY INCENTIVE PLAN OR (II) PURSUANT TO THE EXERCISE OF COMPANY
OPTIONS OR VESTING OF RESTRICTED STOCK OR OTHER EQUITY GRANTS THAT WERE OR ARE
APPROVED BY THE COMPANY BOARD OR THE COMPENSATION, NOMINATING AND GOVERNANCE
COMMITTEE OF THE COMPANY BOARD UNDER THE COMPANY’S EQUITY INCENTIVE PLAN); OR

 

(C)           AGREE TO, OR MAKE ANY COMMITMENT TO, TAKE ANY OF THE ACTIONS
PROHIBITED BY THIS SECTION 5.6.

 

5.7           ACCESS; INFORMATION.

 

(A)           FROM THE DATE HEREOF, UNTIL PURCHASER NO LONGER OWNS ANY SHARES,
THE COMPANY WILL (I) PERMIT PURCHASER TO VISIT AND INSPECT, AT PURCHASER’S
EXPENSE, THE PROPERTIES OF THE COMPANY AND THE COMPANY SUBSIDIARIES, TO EXAMINE
THE CORPORATE BOOKS AND TO DISCUSS THE AFFAIRS, FINANCES AND ACCOUNTS OF THE
COMPANY AND THE COMPANY SUBSIDIARIES WITH THE APPROPRIATE OFFICERS OF THE
COMPANY, ALL UPON REASONABLE NOTICE AND AT SUCH REASONABLE TIMES AND AS OFTEN AS
PURCHASER MAY REASONABLY REQUEST; (II) DELIVER TO PURCHASER, SIMULTANEOUSLY WITH
ITS DELIVERY TO THE COMPANY’S SENIOR MANAGEMENT, (A) THE MONTHLY FINANCIAL
REPORTING PACKAGE DELIVERED TO THE COMPANY’S SENIOR MANAGEMENT AND (B) ANY OTHER
PERIODIC FINANCIAL REPORTS PREPARED BY OR ON BEHALF OF THE COMPANY AND THE
COMPANY SUBSIDIARIES FOR THE SENIOR MANAGEMENT OF THE COMPANY; (III) MAKE
APPROPRIATE OFFICERS OF THE COMPANY, AND COMPANY SUBSIDIARIES AVAILABLE UPON
REASONABLE NOTICE AND AT SUCH REASONABLE TIMES AND AS OFTEN AS PURCHASER MAY
REASONABLY REQUEST FOR CONSULTATION WITH PURCHASER WITH RESPECT TO MATTERS
RELATING TO THE BUSINESS AND AFFAIRS OF THE COMPANY

 

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AND COMPANY SUBSIDIARIES; AND (IV) TO THE EXTENT CONSISTENT WITH APPLICABLE LAW,
INFORM PURCHASER IN ADVANCE (EXCEPT WITH RESPECT TO EVENTS WHICH REQUIRE PUBLIC
DISCLOSURE, IN WHICH CASE ONLY FOLLOWING THE COMPANY’S PUBLIC DISCLOSURE THEREOF
THROUGH APPLICABLE SECURITIES LAW FILINGS OR OTHERWISE) WITH RESPECT TO ANY
MATERIAL CORPORATE ACTIONS AND CONSULT WITH THE COMPANY AND COMPANY SUBSIDIARIES
WITH RESPECT TO SUCH ACTIONS, AND CONSIDER, IN GOOD FAITH, THE RECOMMENDATIONS
OF PURCHASER IN CONNECTION WITH THE MATTERS ON WHICH IT IS CONSULTED AS
DESCRIBED ABOVE, RECOGNIZING THAT THE ULTIMATE DISCRETION WITH RESPECT TO ALL
SUCH MATTERS SHALL BE RETAINED BY THE COMPANY.  NOTWITHSTANDING THE FOREGOING,
AT ANY TIME DURING WHICH THE COMPANY IS SUBJECT TO THE PERIODIC REPORTING
REQUIREMENTS OF THE EXCHANGE ACT OR VOLUNTARILY REPORTS THEREUNDER, THE COMPANY
MAY SATISFY ITS OBLIGATIONS PURSUANT TO CLAUSE (II) BY FILING WITH THE SEC (VIA
THE EDGAR SYSTEM OR OTHERWISE) ANNUAL AND QUARTERLY REPORTS SATISFYING THE
REQUIREMENTS OF THE EXCHANGE ACT.  ANY INVESTIGATION PURSUANT TO THIS
SECTION 5.7 SHALL BE CONDUCTED DURING NORMAL BUSINESS HOURS AND IN SUCH MANNER
AS NOT TO INTERFERE UNREASONABLY WITH THE CONDUCT OF THE BUSINESS OF THE
COMPANY, AND NOTHING HEREIN SHALL REQUIRE THE COMPANY OR ANY COMPANY SUBSIDIARY
TO DISCLOSE ANY INFORMATION TO THE EXTENT (X) PROHIBITED BY APPLICABLE LAW OR
REGULATION, (Y) THAT THE COMPANY REASONABLY BELIEVES SUCH INFORMATION TO BE
COMPETITIVELY SENSITIVE PROPRIETARY INFORMATION (EXCEPT TO THE EXTENT PURCHASER
PROVIDES ASSURANCES REASONABLY ACCEPTABLE TO THE COMPANY THAT SUCH INFORMATION
SHALL NOT BE USED BY PURCHASER OR ITS AFFILIATES TO COMPETE WITH THE COMPANY AND
COMPANY SUBSIDIARIES), OR (Z) THAT SUCH DISCLOSURE WOULD REASONABLY BE EXPECTED
TO CAUSE A VIOLATION OF ANY AGREEMENT TO WHICH THE COMPANY OR ANY COMPANY
SUBSIDIARY IS A PARTY OR WOULD CAUSE A RISK OF A LOSS OF PRIVILEGE TO THE
COMPANY OR ANY COMPANY SUBSIDIARY (PROVIDED THAT THE COMPANY SHALL USE
COMMERCIALLY REASONABLE EFFORTS TO MAKE APPROPRIATE SUBSTITUTE DISCLOSURE
ARRANGEMENTS UNDER CIRCUMSTANCES WHERE THE RESTRICTIONS IN THIS CLAUSE
(Z) APPLY).  IN THE EVENT, AND TO THE EXTENT, THAT IT IS REASONABLY DETERMINED
THAT THE RIGHTS AFFORDED PURSUANT TO THIS SECTION 5.7 ARE NOT SUFFICIENT FOR
PURPOSES OF THE DEPARTMENT OF LABOR’S “PLAN ASSETS” REGULATIONS, TO THE EXTENT
SUCH PLAN ASSETS REGULATION APPLIES TO THE INVESTMENT IN THE SHARES, PURCHASER
AND THE COMPANY SHALL COOPERATE IN GOOD FAITH TO AGREE UPON MUTUALLY
SATISFACTORY AMENDMENTS TO THESE MANAGEMENT ACCESS AND INFORMATION RIGHTS AS
APPROPRIATE SO THAT THEY THEREAFTER SATISFY WHAT IS REASONABLY REQUIRED BY THE
THEN APPLICABLE REGULATIONS.  THE COMPANY AGREES TO CONSIDER, IN GOOD FAITH, THE
RECOMMENDATIONS OF PURCHASER IN CONNECTION WITH THE MATTERS ON WHICH IT IS
CONSULTED AS DESCRIBED ABOVE, RECOGNIZING THAT THE ULTIMATE DISCRETION WITH
RESPECT TO ALL SUCH MATTERS SHALL BE RETAINED BY THE COMPANY.

 

(B)           PURCHASER AGREES THAT THE INFORMATION PROVIDED PURSUANT TO THIS
SECTION 5.7 SHALL BE GOVERNED BY THE TERMS OF THE CONFIDENTIALITY AGREEMENT,
DATED AS OF JULY 28, 2008 (THE “CONFIDENTIALITY AGREEMENT”), AND THAT IT SHALL
ABIDE BY SUCH TERMS AS IF IT WERE CAP (AS DEFINED THEREIN) WITH RESPECT THERETO.

 

SECTION 6

 

PRIVATE PLACEMENT OF THE SHARES; REGISTRATION RIGHTS

 

6.1           SECURITIES ACT EXEMPTION.  IT IS INTENDED THAT THE COMPANY COMMON
STOCK TO BE ISSUED PURSUANT TO THIS AGREEMENT WILL NOT BE REGISTERED UNDER THE
ACT IN RELIANCE ON THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SECTION 5
OF THE ACT SET FORTH IN SECTION 4(2) AND REGULATION D UNDER THE ACT.

 

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6.2           REGISTRATION STATEMENT.  THE COMPANY SHALL AS PROMPTLY AS
PRACTICABLE, BUT IN ANY EVENT WITHIN TWENTY (20) BUSINESS DAYS AFTER THE CLOSING
DATE, FILE A “SHELF REGISTRATION STATEMENT” AS DEFINED UNDER RULE 405 OF THE ACT
ON FORM S-3 WITH THE SEC (THE “REGISTRATION STATEMENT”) FOR PURPOSES OF
REGISTERING UNDER THE ACT THE RESALE OF THE SHARES.

 

6.3           CERTAIN REGISTRATION PROCEDURES.  IN CONNECTION WITH THE
REGISTRATION STATEMENT TO BE FILED BY THE COMPANY PURSUANT TO THIS AGREEMENT:

 

(A)           PURCHASER AGREES TO PROVIDE IN A TIMELY MANNER INFORMATION
REQUESTED BY THE COMPANY REGARDING THE PROPOSED DISTRIBUTION BY PURCHASER OF THE
SHARES AND ALL OTHER INFORMATION REASONABLY REQUESTED BY THE COMPANY IN
CONNECTION WITH THE PREPARATION OF SUCH REGISTRATION STATEMENT.

 

(B)           THE COMPANY WILL USE ITS COMMERCIALLY REASONABLE EFFORTS TO CAUSE
THE REGISTRATION STATEMENT TO BECOME EFFECTIVE AND, SUBJECT TO SECTION 6.4
HEREOF, THE COMPANY WILL PREPARE AND FILE WITH THE SEC SUCH AMENDMENTS AND
SUPPLEMENTS TO THE REGISTRATION STATEMENT AND THE PROSPECTUS OR PROSPECTUS
SUPPLEMENT USED IN CONNECTION THEREWITH AS MAY BE NECESSARY (I) TO KEEP SUCH
REGISTRATION STATEMENT EFFECTIVE AND USABLE FOR RESALE OF THE SHARES FOR A
PERIOD FROM THE DATE OF ITS INITIAL EFFECTIVENESS UNTIL SUCH TIME AS THERE ARE
NO SUCH SHARES REMAINING (INCLUDING BY REFILING THE REGISTRATION STATEMENT (OR A
NEW REGISTRATION STATEMENT) IF THE INITIAL REGISTRATION STATEMENT EXPIRES AND
(II) TO COMPLY WITH THE PROVISIONS OF THE ACT WITH RESPECT TO THE DISPOSITION OF
THE SECURITIES COVERED BY SUCH REGISTRATION STATEMENT, IN EACH CASE FOR SUCH
TIME AS IS CONTEMPLATED BY THIS SECTION 6.  IN THE EVENT THAT THE COMPANY IS A
WELL-KNOWN SEASONED ISSUER (AS DEFINED UNDER RULE 405 OF THE ACT) AT THE TIME OF
THE FILING OF THE REGISTRATION STATEMENT WITH THE SEC, SUCH REGISTRATION
STATEMENT SHALL BE DESIGNATED BY THE COMPANY AS AN AUTOMATIC REGISTRATION
STATEMENT.

 

(C)           THE COMPANY WILL FURNISH TO PURCHASER SUCH NUMBER OF COPIES OF THE
APPLICABLE REGISTRATION STATEMENT AND EACH SUCH AMENDMENT AND SUPPLEMENT THERETO
(INCLUDING IN EACH CASE ALL EXHIBITS) AND OF A PROSPECTUS, INCLUDING A
PRELIMINARY PROSPECTUS, IN CONFORMITY WITH THE REQUIREMENTS OF THE ACT, AND SUCH
OTHER DOCUMENTS AS THEY MAY REASONABLY REQUEST IN ORDER TO FACILITATE THE
DISPOSITION OF SHARES OWNED OR TO BE DISTRIBUTED BY THEM.

 

(D)           THE COMPANY SHALL USE ITS REASONABLE BEST EFFORTS TO REGISTER AND
QUALIFY THE SECURITIES COVERED BY SUCH REGISTRATION STATEMENT UNDER SUCH OTHER
SECURITIES OR “BLUE SKY” LAWS OF SUCH JURISDICTIONS AS SHALL BE REASONABLY
REQUESTED BY PURCHASER, TO KEEP SUCH REGISTRATION OR QUALIFICATION IN EFFECT FOR
SO LONG AS SUCH REGISTRATION STATEMENT REMAINS IN EFFECT, AND TO TAKE ANY OTHER
ACTION WHICH MAY BE REASONABLY NECESSARY TO ENABLE PURCHASER TO CONSUMMATE THE
DISPOSITION IN SUCH JURISDICTIONS OF THE SECURITIES OWNED BY PURCHASER; PROVIDED
THAT THE COMPANY SHALL NOT BE REQUIRED IN CONNECTION THEREWITH OR AS A CONDITION
THERETO TO QUALIFY TO DO BUSINESS OR TO FILE A GENERAL CONSENT TO SERVICE OF
PROCESS IN ANY SUCH STATES OR JURISDICTIONS;

 

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(E)           AFTER THE FILING OF THE REGISTRATION STATEMENT, THE COMPANY WILL
PROMPTLY NOTIFY PURCHASER OF ANY STOP ORDER ISSUED OR THREATENED BY THE SEC AND
SHALL TAKE ALL COMMERCIALLY REASONABLE ACTIONS REQUIRED TO PREVENT THE ENTRY OF
SUCH STOP ORDER OR TO REMOVE IT IF ENTERED.

 

(F)            THE COMPANY SHALL CAUSE THE SHARES TO BE LISTED ON EACH
SECURITIES EXCHANGE ON WHICH COMPANY COMMON STOCK IS THEN LISTED.

 

(G)           THE COMPANY SHALL PROMPTLY NOTIFY PURCHASER:

 

(1)           AT ANY TIME WHEN A PROSPECTUS RELATING THERETO IS REQUIRED TO BE
DELIVERED UNDER THE ACT, OF THE EXISTENCE OF ANY FACT OF WHICH THE COMPANY IS
AWARE OR THE OCCURRENCE OF AN EVENT REQUIRING THE PREPARATION OF A SUPPLEMENT OR
AMENDMENT TO EITHER THE REGISTRATION STATEMENT OR RELATED PROSPECTUS SO THAT, AS
THEREAFTER DELIVERED TO THE PURCHASERS OF THE SHARES, SUCH REGISTRATION
STATEMENT OR RELATED PROSPECTUS, BOTH AS THEN IN EFFECT, WILL NOT CONTAIN AN
UNTRUE STATEMENT OF A MATERIAL FACT OR OMIT TO STATE ANY MATERIAL FACT REQUIRED
TO BE STATED THEREIN OR NECESSARY TO MAKE THE STATEMENT THEREIN, IN LIGHT OF THE
CIRCUMSTANCES THEN EXISTING, NOT MISLEADING AND PROMPTLY MAKE AVAILABLE TO
PURCHASER A REASONABLE NUMBER OF COPIES OF ANY SUCH SUPPLEMENT OR AMENDMENT;

 

(2)           WHEN ANY REGISTRATION STATEMENT FILED PURSUANT TO THIS SECTION 6
OR ANY AMENDMENT THERETO (OTHER THAN THROUGH THE INCORPORATION BY REFERENCE
THEREIN OF ANY REPORT, STATEMENT OR OTHER DOCUMENT REQUIRED TO BE FILED PURSUANT
TO THE EXCHANGE ACT AND THE RULES AND REGULATIONS THEREUNDER) HAS BEEN FILED
WITH THE SEC AND WHEN SUCH REGISTRATION STATEMENT OR ANY POST-EFFECTIVE
AMENDMENT THERETO HAS BECOME EFFECTIVE; AND

 

(3)           of any request by the SEC for amendments or supplements to any
registration statement or the prospectus included therein; and

 

(4)           OF THE RECEIPT BY THE COMPANY OR ITS LEGAL COUNSEL OF ANY
NOTIFICATION WITH RESPECT TO THE SUSPENSION OF THE QUALIFICATION OF THE COMPANY
COMMON STOCK FOR SALE IN ANY JURISDICTION OR THE INITIATION OR THREATENING OF
ANY PROCEEDING FOR SUCH PURPOSE.

 

(H)           THE COMPANY SHALL USE COMMERCIALLY REASONABLE EFFORTS TO PROCURE
THE COOPERATION OF THE COMPANY’S TRANSFER AGENT IN SETTLING ANY OFFERING OR SALE
OF SHARES, INCLUDING WITH RESPECT TO THE TRANSFER OF PHYSICAL STOCK CERTIFICATES
INTO BOOK-ENTRY FORM IN ACCORDANCE WITH ANY PROCEDURES REASONABLY REQUESTED BY
PURCHASER.

 

(I)            ALL REGISTRATION EXPENSES INCURRED IN CONNECTION WITH THE
REGISTRATION HEREUNDER SHALL BE BORNE BY THE COMPANY.  “REGISTRATION EXPENSES”
MEANS THE FOLLOWING EXPENSES INCURRED BY THE COMPANY IN EFFECTING ANY
REGISTRATION PURSUANT TO THIS AGREEMENT (WHETHER OR NOT ANY REGISTRATION OR
PROSPECTUS BECOMES EFFECTIVE OR FINAL):  ALL REGISTRATION FEES, FEES AND
DISBURSEMENTS OF COUNSEL FOR THE COMPANY, BLUE SKY FILING FEES, AND EXPENSES OF
THE COMPANY’S INDEPENDENT ACCOUNTANTS IN CONNECTION WITH ANY REGULAR OR SPECIAL
REVIEWS INCIDENT TO OR REQUIRED BY SUCH REGISTRATION.  FOR THE AVOIDANCE OF
DOUBT, THE COMPANY SHALL NOT BE RESPONSIBLE FOR AND SHALL NOT PAY ANY SELLING
COMMISSIONS AND STOCK TRANSFER TAXES APPLICABLE TO THE SALE OF SHARES AND FEES
AND DISBURSEMENTS OF COUNSEL FOR PURCHASER.

 

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(J)            ALL OBLIGATIONS OF THE COMPANY AND PURCHASER IN THIS SECTION 6
(OTHER THAN AS SET FORTH IN SECTIONS 6.5, 6.6, 6.7 AND 6.8) SHALL TERMINATE AND
BE OF NO FURTHER FORCE AND EFFECT WITH RESPECT TO ANY SHARES ONCE (I) THEY ARE
SOLD PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, (II) THEY
MAY BE SOLD PURSUANT TO RULE 144 WITHOUT LIMITATION THEREUNDER ON VOLUME OR
MANNER OF SALE, (III) THEY SHALL HAVE CEASED TO BE OUTSTANDING OR (IV) THEY HAVE
BEEN SOLD IN A PRIVATE TRANSACTION.

 

6.4           MATERIAL DEVELOPMENTS; SUSPENSION OF OFFERING.

 

(A)           NOTWITHSTANDING THE PROVISIONS OF SECTIONS 6.2 OR 6.3 HEREOF OR
ANY OTHER PROVISIONS OF THIS AGREEMENT TO THE CONTRARY, THE COMPANY SHALL NOT BE
REQUIRED TO FILE THE REGISTRATION STATEMENT OR TO KEEP THE REGISTRATION
STATEMENT EFFECTIVE IF THE NEGOTIATION OR CONSUMMATION OF A TRANSACTION BY THE
COMPANY OR ANY COMPANY SUBSIDIARY OR AFFILIATES IS PENDING OR AN EVENT HAS
OCCURRED, WHICH NEGOTIATION, CONSUMMATION OR EVENT WOULD REQUIRE ADDITIONAL
DISCLOSURE BY THE COMPANY IN THE REGISTRATION STATEMENT OF MATERIAL INFORMATION
WHICH THE COMPANY IN ITS REASONABLE JUDGMENT HAS A BONA FIDE BUSINESS PURPOSE
FOR KEEPING CONFIDENTIAL AND THE NONDISCLOSURE OF WHICH IN THE REGISTRATION
STATEMENT WOULD BE EXPECTED, IN THE COMPANY’S REASONABLE DETERMINATION, TO CAUSE
THE REGISTRATION STATEMENT OR ANY PROSPECTUS FILED WITH RESPECT THERETO OR
INCLUDED THEREIN TO FAIL TO COMPLY WITH APPLICABLE DISCLOSURE REQUIREMENTS;
PROVIDED, HOWEVER, THAT THE COMPANY (I) WILL PROMPTLY NOTIFY PURCHASER OF A
DELAY, SUSPENSION OR WITHDRAWAL PURSUANT TO THIS SECTION 6.4 (WITHOUT HAVING TO
PROVIDE DETAILS THEREOF) AND (II) MAY NOT DELAY, SUSPEND OR WITHDRAW THE
REGISTRATION STATEMENT FOR SUCH REASON UNDER THIS SECTION 6.4 (A) UNLESS, FOR SO
LONG AS THE BOARD REPRESENTATIVE IS A MEMBER OF THE COMPANY BOARD, THE MEMBERS
OF THE COMPANY BOARD GENERALLY ARE THEN INELIGIBLE TO SELL COMPANY SECURITIES
PURSUANT TO THE COMPANY’S INSIDER TRADING POLICIES OR (B) IN THE EVENT THE BOARD
REPRESENTATIVE IS NOT THEN A MEMBER OF THE COMPANY BOARD, MORE THAN FOUR
(4) TIMES IN ANY TWELVE (12) MONTH PERIOD AND IN NO EVENT FOR MORE THAN ONE
HUNDRED AND TWENTY (120) DAYS DURING THE SAME SUCH TWELVE (12) MONTH PERIOD. 
UPON RECEIPT OF ANY NOTICE FROM THE COMPANY OF THE HAPPENING OF ANY EVENT DURING
THE PERIOD THE REGISTRATION STATEMENT IS EFFECTIVE WHICH IS OF A TYPE SPECIFIED
IN THE PRECEDING SENTENCE OR AS A RESULT OF WHICH THE REGISTRATION STATEMENT OR
RELATED PROSPECTUS CONTAINS ANY UNTRUE STATEMENT OF A MATERIAL FACT OR OMITS TO
STATE ANY MATERIAL FACT REQUIRED TO BE STATED THEREIN OR NECESSARY TO MAKE THE
STATEMENT THEREIN, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT
MISLEADING, PURCHASER WILL IMMEDIATELY DISCONTINUE OFFERS AND SALES OF THE
SHARES UNDER THE REGISTRATION STATEMENT (UNTIL PURCHASER HAS RECEIVED COPIES OF
A SUPPLEMENTAL OR AMENDED PROSPECTUS OR PROSPECTUS SUPPLEMENT THAT CORRECTS THE
MISSTATEMENTS OR OMISSIONS AND RECEIVED NOTICE THAT ANY POST-EFFECTIVE AMENDMENT
HAS BECOME EFFECTIVE OR UNLESS NOTIFIED BY THE COMPANY THAT PURCHASER MAY RESUME
SUCH OFFERS AND SALES).  IF SO DIRECTED BY THE COMPANY, PURCHASER WILL USE ITS
REASONABLE BEST EFFORTS TO DELIVER TO THE COMPANY ANY COPIES OF THE PROSPECTUS,
OTHER THAN PERMANENT FILE COPIES THEN IN PURCHASER’S POSSESSION, COVERING THE
SHARES IN ITS POSSESSION AT THE TIME OF RECEIPT OF SUCH NOTICE.  EXCEPT AS
REQUIRED BY LAW, PURCHASER AGREES TO KEEP CONFIDENTIAL THE FACT THAT THE COMPANY
HAS EXERCISED ITS RIGHTS UNDER THIS SECTION 6.4 AND ALL FACTS AND CIRCUMSTANCES
RELATING TO SUCH EXERCISE UNTIL SUCH INFORMATION IS MADE PUBLIC BY THE COMPANY.

 

(B)           IF ALL REPORTS REQUIRED TO BE FILED BY THE COMPANY PURSUANT TO THE
EXCHANGE ACT HAVE NOT BEEN FILED BY THE REQUIRED DATE WITHOUT REGARD TO ANY
EXTENSION, OR IF THE CONSUMMATION OF ANY BUSINESS COMBINATION BY THE COMPANY HAS
OCCURRED OR IS PROBABLE FOR

 

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PURPOSES OF RULE 3-05 OR ARTICLE 11 OF REGULATION S-X UNDER THE ACT, UPON
WRITTEN NOTICE THEREOF BY THE COMPANY TO PURCHASER, THE RIGHTS OF PURCHASER TO
OFFER, SELL OR DISTRIBUTE ANY SHARES PURSUANT TO THE REGISTRATION STATEMENT OR
TO REQUIRE THE COMPANY TO TAKE ACTION WITH RESPECT TO THE REGISTRATION STATEMENT
PURSUANT TO THIS AGREEMENT SHALL BE SUSPENDED UNTIL THE DATE ON WHICH THE
COMPANY HAS FILED SUCH REPORTS OR OBTAINED AND FILED THE FINANCIAL INFORMATION
REQUIRED BY RULE 3-05 OR ARTICLE 11 OF REGULATION S-X TO BE INCLUDED OR
INCORPORATED BY REFERENCE, AS APPLICABLE, IN SUCH REGISTRATION STATEMENT AND THE
COMPANY SHALL NOTIFY PURCHASER AS PROMPTLY AS PRACTICABLE WHEN SUCH SUSPENSION
IS NO LONGER REQUIRED; PROVIDED, THAT THE RIGHTS OF PURCHASER SHALL NOT BE
SUSPENDED PURSUANT TO THE PRECEDING CLAUSE MORE THAN FOUR (4) TIMES IN ANY
TWELVE (12) MONTH PERIOD AND IN NO EVENT FOR MORE THAN ONE HUNDRED AND TWENTY
(120) DAYS DURING THE SAME SUCH TWELVE (12) MONTH PERIOD.  THE COMPANY’S RIGHTS
TO SUSPEND ITS OBLIGATIONS UNDER THIS SECTION 6.4(B) SHALL BE IN ADDITION TO ITS
RIGHTS UNDER SECTION 6.4(A).

 

6.5           INDEMNIFICATION BY THE COMPANY.  THE COMPANY AGREES TO INDEMNIFY
AND HOLD HARMLESS PURCHASER AND, AS APPLICABLE, ITS AFFILIATES, PARTNERS,
MEMBERS, OFFICERS, DIRECTORS, EMPLOYEES, REPRESENTATIVES, AND AGENTS, AND EACH
PERSON, IF ANY, WHO CONTROLS PURCHASER WITHIN THE MEANING OF SECTION 15 OF THE
ACT OR SECTION 20 OF THE EXCHANGE ACT FROM AND AGAINST ANY AND ALL LOSSES,
CLAIMS, ACTIONS, DAMAGES, LIABILITIES, COSTS AND EXPENSES (INCLUDING REASONABLE
FEES, EXPENSES AND DISBURSEMENTS OF ATTORNEYS AND OTHER PROFESSIONALS INCURRED
IN CONNECTION WITH INVESTIGATING, DEFENDING, SETTLING, COMPROMISING OR PAYING
ANY SUCH LOSSES, CLAIMS, ACTIONS, DAMAGES, LIABILITIES, COSTS AND EXPENSES)
CAUSED BY ANY UNTRUE STATEMENT OR ALLEGED UNTRUE STATEMENT OF A MATERIAL FACT
CONTAINED IN THE REGISTRATION STATEMENT (OR ANY AMENDMENT THERETO), INCLUDING
ANY PRELIMINARY PROSPECTUS OR FINAL PROSPECTUS CONTAINED THEREIN OR ANY
AMENDMENT OR SUPPLEMENT THERETO, OR ANY DOCUMENTS INCORPORATED THEREIN BY
REFERENCE, OR THE OMISSION OR ALLEGED OMISSION TO STATE THEREIN A MATERIAL FACT
REQUIRED TO BE STATED THEREIN OR NECESSARY TO MAKE THE STATEMENTS THEREIN, IN
LIGHT OF THE CIRCUMSTANCES IN WHICH THEY WERE MADE, NOT MISLEADING, OR ARISING
OUT OF ANY UNTRUE STATEMENT OR ALLEGED UNTRUE STATEMENT OF A MATERIAL FACT
CONTAINED IN ANY PRELIMINARY OR FINAL PROSPECTUS (OR ANY AMENDMENT OR SUPPLEMENT
THERETO) OR ANY DOCUMENTS INCORPORATED THEREIN BY REFERENCE OR CONTAINED IN THE
REGISTRATION STATEMENT AT THE TIME IT BECAME EFFECTIVE (A “RESALE PROSPECTUS”),
INCLUDING ANY PRELIMINARY OR FINAL PROSPECTUS CONTAINED THEREIN OR ANY AMENDMENT
OR SUPPLEMENT THERETO, OR ANY DOCUMENTS INCORPORATED THEREIN BY REFERENCE, OR
THE OMISSION OR ALLEGED OMISSION THEREFROM OF A MATERIAL FACT NECESSARY IN ORDER
TO MAKE THE STATEMENTS THEREIN, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY
WERE MADE, NOT MISLEADING, EXCEPT INSOFAR AS SUCH LOSSES, CLAIMS, DAMAGES OR
LIABILITIES ARE CAUSED BY ANY SUCH UNTRUE STATEMENT OR OMISSION OR ALLEGED
UNTRUE STATEMENT OR OMISSION BASED UPON INFORMATION FURNISHED IN WRITING TO THE
COMPANY BY PURCHASER OR ON PURCHASER’S BEHALF EXPRESSLY FOR INCLUSION THEREIN;
PROVIDED, HOWEVER, THAT THE COMPANY WILL NOT BE LIABLE IN ANY CASE TO THE EXTENT
THAT ANY SUCH CLAIM, LOSS, DAMAGE, LIABILITY OR EXPENSE ARISES OUT OF OR IS
BASED UPON ANY UNTRUE STATEMENT OR OMISSION CONTAINED IN A RESALE PROSPECTUS
WHICH WAS CORRECTED IN A SUPPLEMENT OR AMENDMENT THERETO IF SUCH CLAIM IS
BROUGHT BY A PURCHASER OF THE SHARES FROM PURCHASER AND PURCHASER FAILED TO
DELIVER TO SUCH PURCHASER THE SUPPLEMENT OR AMENDMENT TO THE RESALE PROSPECTUS
IN A TIMELY MANNER.

 

6.6           INDEMNIFICATION BY PURCHASER.  PURCHASER AGREES TO INDEMNIFY AND
HOLD HARMLESS THE COMPANY, ITS OFFICERS, DIRECTORS AND AGENTS AND EACH PERSON,
IF ANY, WHO CONTROLS THE COMPANY WITHIN THE MEANING OF EITHER SECTION 15 OF THE
ACT OR SECTION 20 OF

 

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THE EXCHANGE ACT TO THE SAME EXTENT AS THE INDEMNITY SET FORTH IN SECTION 6.5
FROM THE COMPANY TO PURCHASER, BUT ONLY WITH RESPECT TO INFORMATION RELATING TO
PURCHASER FURNISHED IN WRITING BY PURCHASER OR ON PURCHASER’S BEHALF EXPRESSLY
FOR USE IN THE REGISTRATION STATEMENT OR RESALE PROSPECTUS OR ANY AMENDMENT OR
SUPPLEMENT THERETO.

 

6.7           CONDUCT OF INDEMNIFICATION PROCEEDINGS.  EACH INDEMNIFIED PARTY
SHALL GIVE PROMPT WRITTEN NOTICE TO EACH INDEMNIFYING PARTY OF ANY CLAIM,
ACTION, SUIT OR PROCEEDING COMMENCED AGAINST IT IN RESPECT OF WHICH INDEMNITY
MAY BE SOUGHT HEREUNDER, BUT FAILURE TO SO NOTIFY THE INDEMNIFYING PARTY
(I) SHALL NOT RELIEVE IT FROM ANY LIABILITY WHICH IT MAY HAVE UNDER THE
INDEMNITY AGREEMENT PROVIDED IN SECTION 6.5 OR 6.6 ABOVE, UNLESS AND TO THE
EXTENT THE INDEMNIFYING PARTY SHALL HAVE BEEN ACTUALLY PREJUDICED BY THE FAILURE
OF SUCH INDEMNIFIED PARTY TO SO NOTIFY SUCH PARTY AND (II) SHALL NOT, IN ANY
EVENT, RELIEVE THE INDEMNIFYING PARTY FROM ANY OBLIGATIONS TO THE INDEMNIFIED
PARTY OTHER THAN THE INDEMNIFICATION OBLIGATION PROVIDED UNDER SECTION 6.5 OR
6.6 ABOVE.  SUCH NOTICE SHALL DESCRIBE IN REASONABLE DETAIL SUCH CLAIM. IN CASE
ANY CLAIM, ACTION, SUIT OR PROCEEDING IS BROUGHT AGAINST AN INDEMNIFIED PARTY,
THE INDEMNIFIED PARTY SHALL BE ENTITLED TO HIRE, AT ITS OWN EXPENSE, SEPARATE
COUNSEL AND PARTICIPATE IN THE DEFENSE THEREOF.  IF THE INDEMNIFYING PARTY SO
ELECTS WITHIN A REASONABLE TIME AFTER RECEIPT OF NOTICE, THE INDEMNIFYING PARTY
MAY ASSUME THE DEFENSE OF THE ACTION OR PROCEEDING AT THE INDEMNIFYING PARTY’S
OWN EXPENSE WITH COUNSEL CHOSEN BY THE INDEMNIFYING PARTY AND APPROVED BY THE
INDEMNIFIED PARTY, WHICH APPROVAL SHALL NOT BE UNREASONABLY WITHHELD; PROVIDED,
HOWEVER, THAT THE INDEMNIFYING PARTY WILL NOT SETTLE OR COMPROMISE ANY CLAIM,
ACTION, SUIT OR PROCEEDING, OR CONSENT TO THE ENTRY OF ANY JUDGMENT WITH RESPECT
TO ANY SUCH PENDING OR THREATENED CLAIM, ACTION, SUIT OR PROCEEDING WITHOUT THE
WRITTEN CONSENT OF THE INDEMNIFIED PARTY UNLESS SUCH SETTLEMENT, COMPROMISE OR
CONSENT SECURES THE UNCONDITIONAL RELEASE OF THE INDEMNIFIED PARTY FROM ALL
LIABILITIES ARISING OUT OF SUCH CLAIM, ACTION, SUIT OR PROCEEDING; PROVIDED,
FURTHER, THAT IF THE DEFENDANTS IN ANY SUCH CLAIM, ACTION, SUIT OR PROCEEDING
INCLUDE BOTH THE INDEMNIFIED PARTY AND THE INDEMNIFYING PARTY AND THE
INDEMNIFIED PARTY REASONABLY DETERMINES, BASED UPON ADVICE OF LEGAL COUNSEL
EXPERIENCED IN SUCH MATTERS, THAT SUCH CLAIM, ACTION, SUIT OR PROCEEDING
INVOLVES A CONFLICT OF INTEREST (OTHER THAN ONE OF A MONETARY NATURE) THAT WOULD
REASONABLY BE EXPECTED TO MAKE IT INAPPROPRIATE FOR THE SAME COUNSEL TO
REPRESENT BOTH THE INDEMNIFYING PARTY AND THE INDEMNIFIED, THEN THE INDEMNIFYING
PARTY SHALL NOT BE ENTITLED TO ASSUME THE DEFENSE OF THE INDEMNIFIED PARTY AND
THE INDEMNIFIED PARTY SHALL BE ENTITLED TO SEPARATE COUNSEL AT THE INDEMNIFYING
PARTY’S EXPENSE, WHICH COUNSEL SHALL BE CHOSEN BY THE INDEMNIFIED PARTY AND
APPROVED BY THE INDEMNIFYING PARTY, WHICH APPROVAL SHALL NOT BE UNREASONABLY
WITHHELD; AND PROVIDED, FURTHER, THAT IT IS UNDERSTOOD THAT THE INDEMNIFYING
PARTY SHALL NOT BE LIABLE FOR THE FEES, CHARGES AND DISBURSEMENTS OF MORE THAN
ONE SEPARATE FIRM FOR THE INDEMNIFIED PARTY.  IF THE INDEMNIFYING PARTY ASSUMES
THE DEFENSE OF ANY CLAIM, ACTION, SUIT OR PROCEEDING, ALL INDEMNIFIED PARTIES
SHALL THEREAFTER DELIVER TO THE INDEMNIFYING PARTY COPIES OF ALL NOTICES AND
DOCUMENTS (INCLUDING COURT PAPERS) RECEIVED BY THE INDEMNIFIED PARTY RELATING TO
THE CLAIM, ACTION, SUIT OR PROCEEDING, AND EACH INDEMNIFIED PARTY SHALL
COOPERATE IN THE DEFENSE OR PROSECUTION OF SUCH CLAIM.  SUCH COOPERATION SHALL
INCLUDE THE RETENTION AND (UPON THE INDEMNIFYING PARTY’S REQUEST) THE PROVISION
TO THE INDEMNIFYING PARTY OF RECORDS AND INFORMATION THAT ARE REASONABLY
RELEVANT TO SUCH CLAIM, ACTION, SUIT OR PROCEEDING, AND MAKING EMPLOYEES
AVAILABLE ON A MUTUALLY CONVENIENT BASIS TO PROVIDE ADDITIONAL INFORMATION AND
EXPLANATION OF ANY MATERIAL PROVIDED HEREUNDER.  IF THE INDEMNIFYING PARTY IS
NOT ENTITLED TO ASSUME THE DEFENSE OF SUCH CLAIM, ACTION, SUIT OR PROCEEDING AS
A RESULT OF THE SECOND PROVISO TO THE FOURTH SENTENCE OF THIS SECTION 6.7, THE

 

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INDEMNIFYING PARTY’S COUNSEL SHALL BE ENTITLED TO CONDUCT THE INDEMNIFYING
PARTY’S DEFENSE AND COUNSEL FOR THE INDEMNIFIED PARTY SHALL BE ENTITLED TO
CONDUCT THE DEFENSE OF THE INDEMNIFIED PARTY, IT BEING UNDERSTOOD THAT BOTH SUCH
COUNSEL WILL COOPERATE WITH EACH OTHER, TO THE EXTENT FEASIBLE IN LIGHT OF THE
CONFLICT OF INTEREST OR DIFFERENT AVAILABLE LEGAL DEFENSES, TO CONDUCT THE
DEFENSE OF SUCH ACTION OR PROCEEDING AS EFFICIENTLY AS POSSIBLE.  IF THE
INDEMNIFYING PARTY IS NOT SO ENTITLED TO ASSUME THE DEFENSE OF SUCH ACTION OR
DOES NOT ASSUME THE DEFENSE, AFTER HAVING RECEIVED THE NOTICE REFERRED TO IN THE
FIRST SENTENCE OF THIS SECTION 6.7, THE INDEMNIFYING PARTY WILL PAY THE
REASONABLE FEES AND EXPENSES OF COUNSEL FOR THE INDEMNIFIED PARTY; IN THAT
EVENT, HOWEVER, THE INDEMNIFYING PARTY WILL NOT BE LIABLE FOR ANY SETTLEMENT OF
ANY CLAIM, ACTION, SUIT OR PROCEEDING EFFECTED WITHOUT THE WRITTEN CONSENT OF
THE INDEMNIFYING PARTY.  IF AN INDEMNIFYING PARTY IS ENTITLED TO ASSUME, AND
ASSUMES, THE DEFENSE OF AN ACTION OR PROCEEDING IN ACCORDANCE WITH THIS
SECTION 6.7, THE INDEMNIFYING PARTY SHALL NOT BE LIABLE FOR ANY FEES AND
EXPENSES OF COUNSEL FOR THE INDEMNIFIED PARTY INCURRED THEREAFTER IN CONNECTION
WITH THAT ACTION OR PROCEEDING EXCEPT AS SET FORTH IN THE PROVISO IN THE FOURTH
SENTENCE OF THIS SECTION 6.7.  UNLESS AND UNTIL A FINAL JUDGMENT IS RENDERED
THAT AN INDEMNIFIED PARTY IS NOT ENTITLED TO THE COSTS OF DEFENSE UNDER THE
PROVISIONS OF THIS SECTION 6.7, THE INDEMNIFYING PARTY SHALL REIMBURSE, PROMPTLY
AS THEY ARE INCURRED, THE INDEMNIFIED PARTY’S COSTS OF DEFENSE.

 

6.8           CONTRIBUTION.

 

(A)           IF THE INDEMNIFICATION PROVIDED FOR IN SECTION 6.5 OR 6.6 HEREOF
IS APPLICABLE IN ACCORDANCE WITH ITS TERMS, BUT IF DETERMINED BY A COURT OF
COMPETENT JURISDICTION TO BE LEGALLY UNENFORCEABLE IN RESPECT OF ANY LOSSES,
CLAIMS, DAMAGES, ACTIONS, LIABILITIES, COSTS OR EXPENSES REFERRED TO THEREIN,
THEN EACH INDEMNIFYING PARTY, IN LIEU OF INDEMNIFYING SUCH INDEMNIFIED PARTY,
SHALL CONTRIBUTE TO THE AMOUNT PAID OR PAYABLE BY INDEMNIFIED PARTY AS A RESULT
OF SUCH LOSSES, CLAIMS, DAMAGES, ACTIONS, LIABILITIES, COSTS OR EXPENSES AS
BETWEEN THE COMPANY ON THE ONE HAND AND PURCHASER ON THE OTHER, IN SUCH
PROPORTION AS IS APPROPRIATE TO REFLECT THE RELATIVE FAULT OF THE COMPANY ON THE
ONE HAND AND OF PURCHASER ON THE OTHER IN CONNECTION WITH SUCH STATEMENTS OR
OMISSIONS WHICH RESULTED IN SUCH LOSSES, CLAIMS, DAMAGES OR LIABILITIES, AS WELL
AS ANY OTHER RELEVANT EQUITABLE CONSIDERATIONS.  THE RELATIVE FAULT OF THE
COMPANY ON THE ONE HAND AND OF PURCHASER ON THE OTHER SHALL BE DETERMINED BY
REFERENCE TO, AMONG OTHER THINGS, WHETHER THE ACTION IN QUESTION, INCLUDING ANY
UNTRUE OR ALLEGED UNTRUE STATEMENT OF A MATERIAL FACT OR THE OMISSION OR ALLEGED
OMISSION TO STATE A MATERIAL FACT, HAS BEEN MADE BY, OR RELATES TO INFORMATION
SUPPLIED BY, THE COMPANY OR PURCHASER, AND THE COMPANY’S AND PURCHASER’S
RELATIVE INTENT, KNOWLEDGE, ACCESS TO INFORMATION AND OPPORTUNITY TO CORRECT OR
PREVENT SUCH ACTION.

 

(B)           THE COMPANY AND PURCHASER AGREE THAT IT WOULD NOT BE JUST AND
EQUITABLE IF CONTRIBUTION PURSUANT TO THIS SECTION 6.8 WERE DETERMINED BY PRO
RATA ALLOCATION OR BY ANY OTHER METHOD OF ALLOCATION WHICH DOES NOT TAKE ACCOUNT
OF THE EQUITABLE CONSIDERATIONS REFERRED TO IN SECTION 6.8(A).  THE AMOUNT PAID
OR PAYABLE BY AN INDEMNIFYING PARTY AS A RESULT OF THE LOSSES, CLAIMS, DAMAGES
OR LIABILITIES REFERRED TO IN SECTIONS 6.5 AND 6.6 HEREOF SHALL BE DEEMED TO
INCLUDE, SUBJECT TO THE LIMITATIONS SET FORTH ABOVE, ANY LEGAL OR OTHER EXPENSES
REASONABLY INCURRED BY THE INDEMNIFIED PARTY IN CONNECTION WITH INVESTIGATING OR
DEFENDING ANY SUCH ACTION OR CLAIM.  NO PERSON GUILTY OF FRAUDULENT
MISREPRESENTATION (WITHIN THE MEANING OF SECTION 11(F) OF THE ACT) SHALL BE
ENTITLED TO CONTRIBUTION FROM ANY PERSON WHO WAS NOT GUILTY OF SUCH FRAUDULENT
MISREPRESENTATION.  FOR PURPOSES OF THIS

 

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SECTION 6.8, EACH PERSON, IF ANY, WHO CONTROLS PURCHASER WITHIN THE MEANING OF
SECTION 15 OF THE ACT SHALL HAVE THE SAME RIGHTS TO CONTRIBUTION AS PURCHASER,
AND EACH DIRECTOR OF THE COMPANY, EACH OFFICER OF THE COMPANY WHO SIGNED A
REGISTRATION STATEMENT AND EACH PERSON, IF ANY, WHO CONTROLS THE COMPANY WITHIN
THE MEANING OF SECTION 15 OF THE ACT SHALL HAVE THE SAME RIGHTS TO CONTRIBUTION
AS THE COMPANY.

 

6.9           RULE 144 REPORTING.  WITH A VIEW TO MAKING AVAILABLE TO PURCHASER
THE BENEFITS OF CERTAIN RULES AND REGULATIONS OF THE SEC WHICH MAY PERMIT THE
SALE OF THE SHARES TO THE PUBLIC WITHOUT REGISTRATION, THE COMPANY AGREES TO USE
ITS COMMERCIALLY REASONABLE EFFORTS TO:

 

(A)           MAKE AND KEEP PUBLIC INFORMATION AVAILABLE, AS THOSE TERMS ARE
UNDERSTOOD AND DEFINED IN RULE 144(C)(1) UNDER THE ACT OR ANY SIMILAR OR
ANALOGOUS RULE PROMULGATED UNDER THE ACT, AT ALL TIMES AFTER THE EFFECTIVE DATE
OF THIS AGREEMENT;

 

(B)           FILE WITH THE SEC, IN A TIMELY MANNER, ALL REPORTS AND OTHER
DOCUMENTS REQUIRED OF THE COMPANY UNDER THE EXCHANGE ACT; AND

 

(C)           SO LONG AS PURCHASER OWNS ANY SHARES, FURNISH TO PURCHASER
FORTHWITH UPON REQUEST: A WRITTEN STATEMENT BY THE COMPANY AS TO ITS COMPLIANCE
WITH THE REPORTING REQUIREMENTS OF RULE 144 UNDER THE ACT, AND OF THE EXCHANGE
ACT; A COPY OF THE MOST RECENT ANNUAL OR QUARTERLY REPORT OF THE COMPANY; AND
SUCH OTHER REPORTS AND DOCUMENTS AS PURCHASER MAY REASONABLY REQUEST IN AVAILING
ITSELF OF ANY RULE OR REGULATION OF THE SEC ALLOWING IT TO SELL ANY SUCH
SECURITIES WITHOUT REGISTRATION.

 

SECTION 7
ADDITIONAL COVENANTS

 

7.1           PREEMPTIVE RIGHTS.

 

(A)           COMPANY SALE OF COVERED SECURITIES.  IF THE COMPANY OFFERS TO SELL
COVERED SECURITIES (AS DEFINED BELOW) IN A PUBLIC OR PRIVATE OFFERING OF COVERED
SECURITIES SOLELY FOR CASH (A “QUALIFIED OFFERING”), PURCHASER SHALL BE AFFORDED
THE OPPORTUNITY TO ACQUIRE FROM THE COMPANY, FOR THE SAME PRICE AND ON THE SAME
TERMS AS SUCH COVERED SECURITIES ARE OFFERED, IN THE AGGREGATE UP TO THE AMOUNT
OF COVERED SECURITIES REQUIRED TO ENABLE IT TO MAINTAIN ITS THEN-CURRENT
PURCHASER PERCENTAGE INTEREST (AS DEFINED BELOW), BUT SOLELY TO THE EXTENT THAT
ANY SUCH ISSUANCE OF SHARES OF COVERED SECURITIES WOULD NOT RESULT IN THE
ISSUANCE OF COVERED SECURITIES THAT WOULD REQUIRE A VOTE OF THE STOCKHOLDERS OF
THE COMPANY PURSUANT TO THE LISTING STANDARDS OF THE NASDAQ STOCK MARKET AND
PROVIDED, HOWEVER, THAT THIS SECTION 7.1 SHALL NOT APPLY TO ANY QUALIFIED
OFFERING THE GROSS PROCEEDS OF WHICH, TOGETHER WITH THE AGGREGATE GROSS PROCEEDS
OF ANY OTHER QUALIFIED OFFERING OF COVERED SECURITIES AFTER THE DATE HEREOF, DO
NOT EXCEED $1,000,000.  AS USED IN THIS SECTION 7.1, (I) “PURCHASER PERCENTAGE
INTEREST” MEANS, AS OF ANY DATE, THE PERCENTAGE EQUAL TO (A) THE AGGREGATE
NUMBER OF SHARES OF COMPANY COMMON STOCK BENEFICIALLY OWNED (WITH THE TERM
“BENEFICIAL OWNERSHIP” HAVING THE MEANING ASCRIBED IN SECTION 13(D)(3) AND
RULE 13D-3 UNDER THE EXCHANGE ACT) OR OTHERWISE HELD BY PURCHASER AS OF SUCH
DATE DIVIDED BY (B) THE TOTAL NUMBER OF OUTSTANDING SHARES OF COMPANY COMMON
STOCK AS OF SUCH DATE AND

 

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(II) “COVERED SECURITIES” MEANS COMMON STOCK AND ANY SECURITIES CONVERTIBLE INTO
OR EXERCISABLE OR EXCHANGEABLE FOR COMMON STOCK, OTHER THAN SECURITIES THAT ARE
(A) ISSUED BY THE COMPANY PURSUANT TO ANY EMPLOYMENT CONTRACT, EMPLOYEE OR
BENEFIT PLAN, STOCK PURCHASE PLAN, STOCK OWNERSHIP PLAN, STOCK OPTION OR EQUITY
COMPENSATION PLAN OR OTHER SIMILAR PLAN WHERE STOCK IS BEING ISSUED OR OFFERED
TO A TRUST, OTHER ENTITY TO OR FOR THE BENEFIT OF ANY EMPLOYEES, POTENTIAL
EMPLOYEES, CONSULTANTS, OFFICERS OR DIRECTOR OF THE COMPANY, (B) ISSUED BY THE
COMPANY IN CONNECTION WITH A BUSINESS COMBINATION OR OTHER MERGER, ACQUISITION
OR DISPOSITION TRANSACTION, (C) ISSUED WITH REFERENCE TO THE COMMON STOCK OF A
SUBSIDIARY (I.E., A CARVE-OUT TRANSACTION), (D) ISSUED AS A DIVIDEND OR IN
CONNECTION WITH A DIVIDEND INVESTMENT OR STOCKHOLDER PURCHASE PLAN OR (E) ISSUED
IN EXCHANGE FOR CURRENTLY OUTSTANDING SECURITIES.

 

(B)           NOTICE.  PRIOR TO MAKING ANY QUALIFIED OFFERING OF COVERED
SECURITIES, THE COMPANY SHALL GIVE PURCHASER WRITTEN NOTICE OF ITS INTENTION
(INCLUDING, IN THE CASE OF A REGISTERED PUBLIC OFFERING AND TO THE EXTENT
POSSIBLE, A COPY OF THE PROSPECTUS INCLUDED IN THE REGISTRATION STATEMENT FILED
IN RESPECT OF SUCH), DESCRIBING, TO THE EXTENT THEN KNOWN, THE ANTICIPATED
AMOUNT OF SECURITIES, PRICE (OR, IN THE CASE OF A REGISTERED PUBLIC OFFERING, AN
ESTIMATED RANGE OF PRICES) AND OTHER MATERIAL TERMS UPON WHICH THE COMPANY
PROPOSES TO OFFER THE SAME.  PURCHASER SHALL HAVE TEN (10) DAYS FROM THE
PROVISION OF SUCH NOTICE TO NOTIFY THE COMPANY IN WRITING THAT IT INTENDS TO
EXERCISE SUCH PREEMPTIVE PURCHASE RIGHTS AND AS TO THE AMOUNT OF COVERED
SECURITIES PURCHASER DESIRES TO PURCHASE, UP TO THE MAXIMUM AMOUNT CALCULATED
PURSUANT TO SECTION 7.1(A) (THE “DESIGNATED SECURITIES”).  SUCH NOTICE SHALL
CONSTITUTE A NON-BINDING INDICATION OF INTEREST OF PURCHASER TO PURCHASE THE
AMOUNT OF DESIGNATED SECURITIES SO SPECIFIED (OR A PROPORTIONATELY LESSER AMOUNT
IF THE AMOUNT OF COVERED SECURITIES TO BE OFFERED IN SUCH QUALIFIED OFFERING IS
SUBSEQUENTLY REDUCED) AT THE PRICE (OR RANGE OF PRICES) AND OTHER TERMS SET
FORTH IN THE COMPANY’S NOTICE TO IT.  THE FAILURE TO RESPOND DURING SUCH TEN
(10) DAY PERIOD SHALL CONSTITUTE A WAIVER OF PREEMPTIVE RIGHTS IN RESPECT OF
SUCH OFFERING.  THE OBLIGATION OF THE COMPANY TO PROVIDE SUCH NOTICE SHALL BE
SUBJECT TO PURCHASER’S WRITTEN AGREEMENT TO CONFIDENTIALITY AND RESTRICTIONS ON
TRADING TERMS REASONABLY ACCEPTABLE TO THE COMPANY, WHICH IN ANY CASE SHALL BE
NO MORE RESTRICTIVE THAN THOSE CONTAINED IN THE CONFIDENTIALITY AGREEMENT.  THE
FAILURE OF THE PURCHASER TO AGREE TO SUCH TERMS WITHIN TEN (10) DAYS AFTER THE
DATE OF RECEIPT OF THE COMPANY’S NOTICE AS DESCRIBED IN THIS CLAUSE SHALL
CONSTITUTE A WAIVER OF THE PURCHASER’S PREEMPTIVE RIGHTS IN RESPECT OF SUCH
OFFERING.

 

(C)           PURCHASE MECHANISM.

 

(1)           If Purchaser exercises its preemptive purchase rights provided in
this Section 7.1 with respect to a Qualified Offering that is an underwritten
public offering or a private offering made to qualified institutional buyers (as
such term is defined in Rule 144A under the Act) for resale pursuant to
Rule 144A under the Act, the Company shall offer Purchaser, if such underwritten
public offering or Rule l44A offering is consummated, the Designated Securities
(as adjusted downward or, at Purchaser’s option, upward to reflect the actual
size of such offering when priced) at the same price as the Covered Securities
are offered to the initial purchasers in such offering and shall provide written
notice of such price to Purchaser as soon as practicable prior to such
consummation.  Contemporaneously with the execution of any underwriting
agreement or purchase agreement entered into between the Company and the
underwriters or initial purchasers of such underwritten public

 

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offering or Rule 144A offering, Purchaser shall, if it continues to wish to
exercise its preemptive rights with respect to such offering, enter into an
instrument in form and substance reasonably satisfactory to the Company
acknowledging Purchaser’s binding obligation to purchase the Designated
Securities to be acquired by it and containing representations, warranties and
agreements of Purchaser that are customary in private placement transactions
and, in any event, no less favorable to Purchaser than any underwriting or
purchase agreement entered into by the Company in connection with such offering,
and the failure to enter into such an instrument at or prior to such time shall
constitute a waiver of preemptive rights in respect of such offering.  Any
offers and sales pursuant to this Section 7.1(c) in the context of a registered
public offering shall also be conditioned on reasonably acceptable
representations and warranties of Purchaser regarding its status as the type of
offeree to whom a private sale can be made concurrently with a registered
offering in compliance with applicable securities laws.

 

(2)           If Purchaser exercises its preemptive rights provided in this
Section 7.1 with respect to a Qualified Offering that is not an underwritten
public offering or Rule 144A offering (a “Private Placement”), the closing of
the purchase of the Covered Securities with respect to which such right has been
exercised shall be conditioned on the consummation of the Private Placement
giving rise to such preemptive purchase rights and shall take place
simultaneously with the closing of the Private Placement or on such other date
as the Company and Purchaser shall agree in writing; provided that the actual
amount of Covered Securities to be sold to Purchaser pursuant to its exercise of
preemptive rights hereunder shall be reduced if the aggregate amount of Covered
Securities sold in the Private Placement is reduced and, at the option of
Purchaser (to be exercised by delivery of written notice to the Company within
five (5) Business Days of receipt of notice of such increase), shall be
increased if such aggregate amount of Covered Securities sold in the Private
Placement is increased.  In connection with its purchase of Designated
Securities, Purchaser shall, if it continues to wish to exercise its preemptive
rights with respect to such offering, execute an agreement containing
representations, warranties and agreements of Purchaser that are substantially
similar in all material respects to the agreements executed by other purchasers
in such Private Placement.

 

(3)           If, prior to consummation of Qualified Offering, the terms of the
proposed issuance change with the result that the price is less than the minimum
price or more than the maximum price set forth in the notice contemplated by
Section 7.1(b) or the other principal terms are more favorable in any material
respect to the prospective purchaser than those set forth in such notice, it
shall be necessary for a separate notice to be furnished, and the terms and
provisions of this Section 7.1 separately complied with.

 

(D)           TERMINATION OF PREEMPTIVE RIGHTS.  ANYTHING TO THE CONTRARY IN
THIS SECTION 7.1 NOTWITHSTANDING, THE PREEMPTIVE RIGHT TO PURCHASE COVERED
SECURITIES GRANTED BY THIS SECTION 7.1 SHALL TERMINATE AS OF AND NOT BE
AVAILABLE FOR ANY OFFERING THAT COMMENCES AT ANY TIME AFTER THE DATE ON WHICH
PURCHASER OFFERS, SELLS, PLEDGES, OR OTHERWISE TRANSFERS ANY SHARES PURCHASED
HEREUNDER, INCLUDING BY WAY OF ENTRY INTO ANY SWAP OR OTHER AGREEMENT OR
TRANSACTION THAT HEDGES OR TRANSFERS, IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, THE ECONOMIC CONSEQUENCE OF OWNERSHIP OF SUCH COMPANY COMMON STOCK
(A “HEDGING TRANSACTION”).

 

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7.2           RESTRICTIONS ON TRANSFER.  PURCHASER SHALL NOT, DIRECTLY OR
INDIRECTLY, TRANSFER, SELL, ASSIGN, PLEDGE, CONVEY, HYPOTHECATE OR OTHERWISE
ENCUMBER OR DISPOSE OF, OR ENGAGE IN A HEDGING TRANSACTION WITH RESPECT TO
(COLLECTIVELY, “TRANSFER”) ANY OF THE SHARES, OTHER THAN ANY SUCH TRANSFER THAT,
TO THE KNOWLEDGE OF PURCHASER AFTER REASONABLE INQUIRY, TAKEN TOGETHER WITH ANY
OTHER TRANSFERS OF SHARES OF COMPANY COMMON STOCK BY PURCHASER TO THE SAME
PERSON OR ANY OF ITS AFFILIATES AT ANY TIME, WOULD CAUSE ALL SUCH TRANSFERS TO
REPRESENT MORE THAN 4.9% OF THE OUTSTANDING SHARES OF COMPANY COMMON STOCK AS OF
IMMEDIATELY PRIOR TO SUCH TRANSFER.  NOTWITHSTANDING SECTION 7.2, NOTHING SHALL
PREVENT PURCHASER FROM MAKING A TRANSFER IN VIOLATION OF SECTION 7.2 UNDER THE
FOLLOWING CIRCUMSTANCES:

 

(A)           TRANSFERS WITH THE CONSENT OF THE COMPANY BOARD (SUCH CONSENT NOT
TO BE UNREASONABLY WITHHELD) TO ANY AFFILIATE OF PURCHASER IF THE TRANSFEREE
AGREES IN WRITING FOR THE BENEFIT OF THE COMPANY (WITH A COPY THEREOF TO BE
FURNISHED TO THE COMPANY AND TO BE IN FORM AND SUBSTANCE REASONABLE SATISFACTORY
TO THE COMPANY) TO BE BOUND BY THE TERMS OF THIS AGREEMENT AND PROVIDED THAT, IN
CONJUNCTION THEREWITH, THE ASSIGNEE MAKES TO THE COMPANY THE REPRESENTATIONS AND
WARRANTIES CONTAINED IN SECTIONS 4.5 AND 4.6 AS IF SUCH ASSIGNEE WERE
“PURCHASER” THEREIN AND THE CLOSING AND CLOSING DATE REFERRED TO IN SECTIONS 4.5
AND 4.6 WERE THE CLOSING AND CLOSING DATE OF SUCH ASSIGNMENT; AND

 

(B)           TRANSFERS PURSUANT TO A MERGER, TENDER OFFER OR EXCHANGE OFFER OR
OTHER BUSINESS COMBINATION, ACQUISITION OF ASSETS OR SIMILAR TRANSACTION OR
CHANGE OF CONTROL INVOLVING THE COMPANY OR ANY COMPANY SUBSIDIARY SO LONG AS
SUCH TRANSACTION HAS BEEN APPROVED BY THE COMPANY BOARD.

 

7.3           INDEMNITY FOR PURCHASER.  THE COMPANY AGREES TO INDEMNIFY AND HOLD
HARMLESS PURCHASER AND ITS AFFILIATES AND EACH OF THEIR RESPECTIVE OFFICERS,
DIRECTORS, PARTNERS, MEMBERS AND EMPLOYEES, AND EACH PERSON WHO CONTROLS
PURCHASER WITHIN THE MEANING OF THE EXCHANGE ACT AND THE RULES AND REGULATIONS
PROMULGATED THEREUNDER (EACH AN “INDEMNIFIED PERSON”), TO THE FULLEST EXTENT
LAWFUL, FROM AND AGAINST ANY AND ALL JUDGMENTS, FINES, AMOUNTS PAID IN
SETTLEMENT AND EXPENSES (INCLUDING REASONABLE ATTORNEYS’ FEES AND DISBURSEMENTS)
(COLLECTIVELY, “LOSSES”) ARISING OUT OF OR RESULTING FROM ANY ACTION, SUIT,
CLAIM, PROCEEDING OR INVESTIGATION BY ANY GOVERNMENTAL AUTHORITY, STOCKHOLDER OF
THE COMPANY OR ANY OTHER PERSON (OTHER THAN THE COMPANY) RELATING TO THIS
AGREEMENT OR THE TRANSACTION (OTHER THAN ANY LOSSES DETERMINED BY A COURT OF
COMPETENT JURISDICTION TO BE ATTRIBUTABLE TO THE ACTS, ERRORS OR OMISSIONS ON
THE PART OF PURCHASER, BUT NOT INCLUDING THE TRANSACTION).  WITH RESPECT TO ANY
LOSSES IN RESPECT OF WHICH INDEMNITY MAY BE SOUGHT UNDER THIS SECTION 7.3, THE
RESPECTIVE RIGHTS AND OBLIGATIONS AND PROCEDURES CONTAINED IN SECTION 6.7 SHALL
APPLY AS IF RESTATED IN THIS SECTION 7.3.  IN NO EVENT SHALL THE COMPANY BE
LIABLE OR OTHERWISE RESPONSIBLE TO ANY INDEMNIFIED PERSON FOR ANY CONSEQUENTIAL
OR PUNITIVE DAMAGES EXCEPT TO THE SAME EXTENT THAT A DIRECTOR OF THE COMPANY
WOULD BE ENTITLED TO INDEMNIFICATION FOR SUCH DAMAGES UNDER THE COMPANY’S
CERTIFICATE OF INCORPORATION, BYLAWS OR THE DELAWARE GENERAL CORPORATION LAW.

 

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7.4           BANK HOLDING COMPANY MATTERS.

 

(A)           EACH OF PURCHASER AND THE COMPANY AGREES TO COMPLY IN ALL MATERIAL
RESPECTS WITH ALL LAWS AND REGULATIONS APPLICABLE TO IT AS A REGISTERED BANK
HOLDING COMPANY.

 

(B)           PURCHASER AGREES THAT IT SHALL NOT, AND SHALL NOT PERMIT ANY OF
ITS AFFILIATES TO, MAKE ANY INVESTMENTS OR ACQUISITIONS OR TAKE ANY OTHER
ACTIONS THAT WOULD REASONABLY BE EXPECTED TO CAUSE PURCHASER TO BECOME A BANK
HOLDING COMPANY WITH RESPECT TO ANY OTHER ENTITY OR OTHERWISE BE LOOKED TO AS A
SOURCE OF STRENGTH FOR ANY OTHER ENTITY PARTIALLY OR WHOLLY OWNED, CONTROLLED BY
OR AFFILIATED WITH PURCHASER, TO CAUSE ANY BANK SUBSIDIARY OF THE COMPANY TO
BECOME LIABLE (CONTINGENTLY OR OTHERWISE) FOR ANY LIABILITIES OF ANY OTHER
INSURED DEPOSITORY INSTITUTION OR TO RESULT IN ANY RESTRICTIONS OR LIMITATIONS
ON THE ACTIVITY OF THE COMPANY OR ANY COMPANY SUBSIDIARY.

 

(C)           IN CONNECTION WITH ANY PROPOSED ACTIVITY, ACQUISITION OR OTHER
EVENT OR TRANSACTION ON THE PART OF PURCHASER, THE COMPANY OR ANY COMPANY
SUBSIDIARY THAT REQUIRES ANY CONSENT OR APPROVAL FROM, OR FILING OR NOTICE TO,
ANY REGULATORY AUTHORITY (A “REGULATORY ACTION”), EACH PARTY HERETO AGREES TO,
AND TO CAUSE ITS AFFILIATES TO, UPON THE OTHER PARTY’S WRITTEN REQUEST, TAKE
SUCH ACTIONS OR REFRAIN FROM TAKING SUCH ACTIONS, PROVIDE SUCH INFORMATION AND
OTHERWISE REASONABLY COOPERATE WITH THE OTHER PARTY IN EACH CASE AS THE
REQUESTING PARTY OR THE APPLICABLE REGULATORY AUTHORITY SHALL REASONABLY REQUEST
IN CONNECTION WITH SUCH REGULATORY ACTION, IN EACH CASE, TO THE EXTENT NECESSARY
TO OBTAIN ANY REQUIRED CONSENT OR APPROVAL OR MAKE ANY REQUIRED FILING OR
NOTICE.  NOTWITHSTANDING THE FOREGOING, NEITHER PARTY SHALL BE REQUIRED TO TAKE
SUCH ACTIONS OR REFRAIN FROM TAKING SUCH ACTIONS, PROVIDE SUCH INFORMATION AND
OTHERWISE REASONABLY COOPERATE TO THE EXTENT DOING SO WOULD REASONABLY BE LIKELY
TO RESULT IN THE IMPOSITION OF ANY CONDITIONS, RESTRICTIONS OR REQUIREMENTS THAT
WOULD BE MATERIALLY AND UNREASONABLY BURDENSOME ON SUCH PARTY.

 

7.5           LEGEND.  PURCHASER AGREES THAT ALL CERTIFICATES OR OTHER
INSTRUMENTS REPRESENTING SHARES WILL BEAR A LEGEND SUBSTANTIALLY TO THE
FOLLOWING EFFECT:

 

“THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR SECURITIES LAWS OF ANY STATE AND
MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A
REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER SUCH ACT OR SUCH LAWS.  THIS INSTRUMENT IS ISSUED PURSUANT TO AND SUBJECT
TO THE RESTRICTIONS ON TRANSFER AND OTHER PROVISIONS OF A STOCK PURCHASE
AGREEMENT, DATED AUGUST 29, 2008, BETWEEN THE ISSUER OF THESE SECURITIES AND
PURCHASER REFERRED TO THEREIN, A COPY OF WHICH IS ON FILE WITH THE ISSUER.  THE
SECURITIES REPRESENTED BY THIS INSTRUMENT MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED EXCEPT IN COMPLIANCE WITH SAID AGREEMENT.  ANY SALE OR OTHER
TRANSFER NOT IN COMPLIANCE WITH SAID AGREEMENT WILL BE VOID.”

 

In the event that any Shares (i) are no longer subject to the transfer
restrictions set forth in this Agreement, (ii) are Transferred in a transaction
registered under the Act, (iii) are Transferred in a transaction exempt from the
registration requirements of the Act, and upon delivery to the Company of such
documents as it may reasonably request with respect to

 

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such exemption, or (iv) upon Purchaser’s request and receipt by the Company and
its transfer agent of an opinion of Purchaser’s counsel, reasonably satisfactory
to the Company and its transfer agent, to the effect that a “private placement”
legend is no longer required under the Act and applicable state laws, the
Company shall issue new certificates representing such Shares, which shall not
contain such portion of the above legend that is no longer applicable.

 

SECTION 8

 

CONDITIONS

 

8.1           CONDITIONS TO EACH PARTY’S OBLIGATIONS TO CLOSE THE TRANSACTION. 
THE OBLIGATION OF PURCHASER TO PURCHASE THE SHARES, AND OF THE COMPANY TO ISSUE
AND SELL THE SHARES, AT CLOSING IS SUBJECT TO THE FULFILLMENT OF THE FOLLOWING
CONDITIONS AS OF THE CLOSING DATE:

 

(A)           NO INJUNCTION.  NO GOVERNMENTAL AUTHORITY OF COMPETENT
JURISDICTION SHALL HAVE ENACTED, ISSUED, PROMULGATED, ENFORCED OR ENTERED ANY
STATUTE, LAW, ORDINANCE, RULE, REGULATION, JUDGMENT, DECREE, INJUNCTION OR OTHER
ORDER (WHETHER TEMPORARY, PRELIMINARY OR PERMANENT) THAT IS IN EFFECT AND
RESTRAIN, ENJOINS OR OTHERWISE PROHIBITS CONSUMMATION OF ANY TRANSACTION
CONTEMPLATED BY THIS AGREEMENT (COLLECTIVELY, AN “ORDER”).

 

8.2           CONDITIONS TO THE OBLIGATIONS OF PURCHASER.  THE OBLIGATION OF
PURCHASER TO PURCHASE THE SHARES IS, AT THE OPTION OF PURCHASER, SUBJECT TO THE
FULFILLMENT OF THE FOLLOWING CONDITIONS AS OF THE CLOSING DATE:

 

(A)           REPRESENTATIONS AND WARRANTIES; COVENANTS.  (I) THE
REPRESENTATIONS AND WARRANTIES IN SECTION 3.8(2) SHALL BE TRUE AND CORRECT IN
ALL RESPECTS AS OF THE CLOSING DATE, AND (II) THE OTHER REPRESENTATIONS AND
WARRANTIES OF THE COMPANY SET FORTH IN THIS AGREEMENT (WITHOUT REGARD TO ANY
“MATERIAL,” “MATERIAL ADVERSE EFFECT” OR OTHER MATERIALITY QUALIFIER) SHALL BE
TRUE AND CORRECT AT AND AS OF THE CLOSING DATE (EXCEPT TO THE EXTENT SUCH
REPRESENTATIONS AND WARRANTIES RELATE TO AN EARLIER DATE, IN WHICH CASE SUCH
REPRESENTATIONS AND WARRANTIES SHALL BE TRUE AND CORRECT ON AND AS OF SUCH
EARLIER DATE); PROVIDED HOWEVER, THAT IN THE EVENT OF A BREACH OF A
REPRESENTATION OR WARRANTY OF THE TYPE DESCRIBED IN SECTION 8.2(A)(II), THE
CONDITION SET FORTH IN THIS SECTION 8.2(A) SHALL BE DEEMED SATISFIED UNLESS THE
EFFECT OF ALL SUCH BREACHES OF REPRESENTATIONS AND WARRANTIES TAKEN TOGETHER
WOULD REASONABLY BE LIKELY TO HAVE A MATERIAL ADVERSE EFFECT.  THE COMPANY SHALL
HAVE PERFORMED OR COMPLIED IN ALL MATERIAL RESPECTS WITH ALL COVENANTS OF THE
COMPANY IN THIS AGREEMENT.

 

(B)           BRINGDOWN CERTIFICATE.  THE COMPANY SHALL HAVE DELIVERED TO
PURCHASER A CERTIFICATE OF THE COMPANY, EXECUTED BY AN EXECUTIVE OFFICER OF THE
COMPANY, DATED THE CLOSING DATE, AND CERTIFYING TO THE FULFILLMENT OF THE
CONDITIONS SPECIFIED IN CLAUSE (A) OF THIS SECTION 8.2.

 

(C)           REGULATORY APPROVALS.  ALL APPROVALS OF THE FRB AND THE DFI IN
CONNECTION WITH THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS AGREEMENT AND
THE CONSUMMATION OF THE TRANSACTION BY PURCHASER SHALL HAVE BEEN MADE OR
OBTAINED (AS THE CASE MAY BE) AND SHALL REMAIN IN FULL FORCE AND EFFECT AND ALL
STATUTORY WAITING PERIODS IN RESPECT THEREOF SHALL

 

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HAVE EXPIRED, AND NONE OF THE APPROVALS SHALL CONTAIN ANY CONDITIONS,
RESTRICTIONS OR REQUIREMENTS WHICH WOULD REASONABLY BE LIKELY (I) FOLLOWING THE
CLOSING DATE, TO, INDIVIDUALLY OR IN THE AGGREGATE, HAVE A MATERIAL ADVERSE
EFFECT ON PURCHASER OR ANY OF ITS SUBSIDIARIES OR AFFILIATES OR (II)  TO BE
MATERIALLY AND UNREASONABLY BURDENSOME ON PURCHASER OR ANY OF ITS SUBSIDIARIES
OR AFFILIATES.

 

8.3           CONDITIONS TO CLOSING OF COMPANY.  THE COMPANY’S OBLIGATION TO
SELL AND ISSUE THE SHARES IS, AT THE OPTION OF THE COMPANY, SUBJECT TO THE
FULFILLMENT OF THE FOLLOWING CONDITIONS AS OF THE CLOSING DATE:

 

(A)           REPRESENTATIONS AND WARRANTIES; COVENANTS.  THE REPRESENTATIONS
AND WARRANTIES OF PURCHASER IN THIS AGREEMENT (WITHOUT REGARD TO ANY “MATERIAL”
OR “MATERIAL ADVERSE EFFECT” QUALIFIERS) SHALL BE TRUE AND CORRECT AT AND AS OF
THE CLOSING (EXCEPT TO THE EXTENT SUCH REPRESENTATIONS AND WARRANTIES RELATE TO
AN EARLIER DATE, IN WHICH CASE SUCH REPRESENTATIONS AND WARRANTIES SHALL BE TRUE
AND CORRECT ON AND AS OF SUCH EARLIER DATE); PROVIDED, HOWEVER, THAT IN THE
EVENT OF A BREACH OF A REPRESENTATION OR WARRANTY OF PURCHASER, THE CONDITION
SET FORTH IN THIS SECTION 8.3(A) SHALL BE DEEMED SATISFIED UNLESS THE EFFECT OF
ALL SUCH BREACHES OF REPRESENTATIONS AND WARRANTIES TAKEN TOGETHER WOULD
REASONABLY BE LIKELY TO PREVENT OR MATERIALLY IMPEDE OR DELAY THE CONSUMMATION
OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.  PURCHASER SHALL HAVE
PERFORMED OR COMPLIED IN ALL MATERIAL RESPECTS WITH ALL COVENANTS OF PURCHASER
IN THIS AGREEMENT.

 

(B)           BRINGDOWN CERTIFICATE.  PURCHASER SHALL HAVE DELIVERED TO THE
COMPANY A CERTIFICATE OF PURCHASER, EXECUTED BY AN EXECUTIVE OFFICER OF
PURCHASER, DATED THE CLOSING DATE, AND CERTIFYING TO THE FULFILLMENT OF THE
CONDITIONS SPECIFIED IN CLAUSE (A) OF THIS SECTION 8.3.

 

(C)           REGULATORY APPROVALS.  ALL APPROVALS OF THE FRB AND THE DFI IN
CONNECTION WITH THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS AGREEMENT AND
THE CONSUMMATION OF THE TRANSACTION BY PURCHASER SHALL HAVE BEEN MADE OR
OBTAINED (AS THE CASE MAY BE) AND SHALL REMAIN IN FULL FORCE AND EFFECT AND ALL
STATUTORY WAITING PERIODS IN RESPECT THEREOF SHALL HAVE EXPIRED, AND NONE OF THE
APPROVALS SHALL CONTAIN ANY CONDITIONS, RESTRICTIONS OR REQUIREMENTS WHICH WOULD
REASONABLY BE LIKELY (I) FOLLOWING THE CLOSING DATE, TO, INDIVIDUALLY OR IN THE
AGGREGATE, HAVE A MATERIAL ADVERSE EFFECT ON THE COMPANY, (II) BE MATERIALLY AND
UNREASONABLY BURDENSOME ON THE COMPANY OR ANY OF ITS SUBSIDIARIES OR AFFILIATES
OR (III) TO REQUIRE THE SALE BY THE COMPANY OR ANY COMPANY SUBSIDIARY OR
AFFILIATES OF ANY ASSETS.

 

SECTION 9
MISCELLANEOUS

 

9.1           GOVERNING LAW; VENUE.  THIS AGREEMENT SHALL BE DEEMED TO BE MADE
IN AND IN ALL RESPECTS SHALL BE INTERPRETED, CONSTRUED AND GOVERNED BY AND IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE.  THE PARTIES HEREBY
IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF DELAWARE
AND THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA LOCATED IN THE STATE OF
DELAWARE SOLELY FOR THE PURPOSES OF ANY SUIT, ACTION OR OTHER PROCEEDING BETWEEN
ANY OF THE PARTIES HERETO ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY, AND HEREBY WAIVE, AND AGREE TO ASSERT, AS A DEFENSE IN ANY

 

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ACTION, SUIT OR PROCEEDING FOR THE INTERPRETATION OR ENFORCEMENT HEREOF, THAT IT
IS NOT SUBJECT THERETO OR THAT SUCH ACTION, SUIT OR PROCEEDING MAY NOT BE
BROUGHT OR IS NOT MAINTAINABLE IN SAID COURTS OR THAT THE VENUE THEREOF MAY NOT
BE APPROPRIATE OR THAT THIS AGREEMENT MAY NOT BE ENFORCED IN OR BY SUCH COURTS,
AND THE PARTIES HERETO IRREVOCABLY AGREE THAT ALL CLAIMS WITH RESPECT TO SUCH
ACTION OR PROCEEDING SHALL BE HEARD AND DETERMINED IN SUCH DELAWARE STATE OR
FEDERAL COURT.  THE PARTIES HEREBY CONSENT TO AND GRANT ANY SUCH COURT
JURISDICTION OVER THE PERSON OF SUCH PARTIES AND OVER THE SUBJECT MATTER OF SUCH
DISPUTE AND AGREE THAT MAILING OF PROCESS OR OTHER PAPERS IN CONNECTION WITH ANY
SUCH ACTION OR PROCEEDING IN THE MANNER PROVIDED IN SECTION 9.7OR IN SUCH OTHER
MANNER AS MAY BE PERMITTED BY LAW, SHALL BE VALID AND SUFFICIENT SERVICE
THEREOF.    EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

9.2           ATTORNEY’S FEES.  IN THE EVENT OF ANY ACTION OF ANY KIND BETWEEN
THE PARTIES HERETO WITH RESPECT TO THIS AGREEMENT, THE PREVAILING PARTY SHALL BE
ENTITLED TO RECOVER FROM THE OTHER PARTY ITS ATTORNEY’S FEES AND RELATED COSTS
AND EXPENSES INCURRED IN CONNECTION WITH SUCH ACTION.

 

9.3           TERMINATION.  THIS AGREEMENT MAY BE TERMINATED AT ANY TIME PRIOR
TO THE CLOSING:

 

(A)           BY EITHER PURCHASER OR THE COMPANY IF THE CLOSING SHALL NOT HAVE
OCCURRED BY FEBRUARY 28, 2009 (THE “TERMINATION DATE”), PROVIDED, HOWEVER THAT
THE RIGHT TO TERMINATE THIS AGREEMENT UNDER THIS SECTION 9.3(A) SHALL NOT BE
AVAILABLE TO ANY PARTY WHOSE BREACH OF ANY REPRESENTATION OR WARRANTY OR FAILURE
TO PERFORM ANY OBLIGATION UNDER THIS AGREEMENT SHALL HAVE CAUSED OR RESULTED IN
THE FAILURE OF THE CLOSING TO OCCUR ON OR PRIOR TO SUCH DATE; OR

 

(B)           BY EITHER PURCHASER OR THE COMPANY IN THE EVENT THAT ANY
GOVERNMENTAL AUTHORITY SHALL HAVE ISSUED AN ORDER AND SUCH ORDER SHALL HAVE
BECOME FINAL AND NONAPPEALABLE; OR

 

(C)           BY THE COMPANY IF THERE HAS BEEN A BREACH OF ANY REPRESENTATION,
WARRANTY, COVENANT OR AGREEMENT MADE BY PURCHASER IN THIS AGREEMENT, OR ANY SUCH
REPRESENTATION AND WARRANTY SHALL HAVE BECOME UNTRUE AFTER THE DATE OF THIS
AGREEMENT, SUCH THAT SECTION 8.3(A) WOULD NOT BE SATISFIED AND SUCH BREACH OR
CONDITION IS NOT CURABLE OR, IF CURABLE, IS NOT CURED WITHIN THE EARLIER OF
(X) THIRTY (30) DAYS AFTER WRITTEN NOTICE THEREOF IS GIVEN BY THE COMPANY TO
PURCHASER AND (Y) THE TERMINATION DATE; OR

 

(D)           BY PURCHASER IF THERE HAS BEEN A BREACH OF ANY REPRESENTATION,
WARRANTY, COVENANT OR AGREEMENT MADE BY THE COMPANY IN THIS AGREEMENT, OR ANY
SUCH REPRESENTATION AND WARRANTY SHALL HAVE BECOME UNTRUE AFTER THE DATE OF THIS
AGREEMENT, SUCH THAT SECTION 8.2(A) WOULD NOT BE SATISFIED AND SUCH BREACH OR
CONDITION IS NOT CURABLE OR, IF CURABLE, IS NOT CURED WITHIN THE EARLIER OF
(X) THIRTY (30) DAYS AFTER WRITTEN NOTICE THEREOF IS GIVEN BY PURCHASER TO THE
COMPANY AND (Y) THE TERMINATION DATE; OR

 

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(E)           BY THE MUTUAL WRITTEN CONSENT OF PURCHASER AND THE COMPANY. IN THE
EVENT OF TERMINATION OF THIS AGREEMENT AS PROVIDED IN THIS SECTION 9.3, THIS
AGREEMENT SHALL FORTHWITH BECOME VOID, EXCEPT THAT NOTHING HEREIN SHALL RELIEVE
ANY PARTY FROM LIABILITY FOR ANY BREACH OF THIS AGREEMENT, MATERIAL
MISREPRESENTATION OR FRAUD.

 

9.4           SURVIVAL.  THE REPRESENTATIONS AND WARRANTIES MADE HEREIN SHALL
SURVIVE THE CLOSING DATE AND SHALL EXPIRE ON THE DATE THAT IS SIX (6) MONTHS
FOLLOWING THE CLOSING DATE; PROVIDED, HOWEVER THAT THE REPRESENTATION AND
WARRANTY IN SECTION 3.8(2) SHALL EXPIRE AS OF THE CLOSING DATE.  THE COVENANTS
CONTAINED HEREIN SHALL SURVIVE IN ACCORDANCE WITH THEIR RESPECTIVE TERMS.

 

9.5           SUCCESSORS AND ASSIGNS.  EXCEPT AS OTHERWISE PROVIDED HEREIN, THE
PROVISIONS HEREOF SHALL INURE TO THE BENEFIT OF, AND BE BINDING UPON, THE
SUCCESSORS, ASSIGNS, HEIRS, EXECUTORS AND ADMINISTRATORS OF THE PARTIES HERETO.

 

9.6           ENTIRE AGREEMENT; AMENDMENT.  THIS AGREEMENT AND THE
CONFIDENTIALITY AGREEMENT CONSTITUTE THE FULL AND ENTIRE UNDERSTANDING AND
AGREEMENT BETWEEN THE PARTIES WITH REGARD TO THE SUBJECTS HEREOF AND THEREOF,
AND NO PARTY SHALL BE LIABLE OR BOUND TO ANY OTHER PARTY IN ANY MANNER BY ANY
WARRANTIES, REPRESENTATIONS OR COVENANTS EXCEPT AS SPECIFICALLY SET FORTH HEREIN
OR THEREIN.  EXCEPT AS EXPRESSLY PROVIDED HEREIN, NEITHER THIS AGREEMENT NOR ANY
TERM HEREOF MAY BE AMENDED, WAIVED, DISCHARGED OR TERMINATED OTHER THAN BY A
WRITTEN INSTRUMENT SIGNED BY THE PARTY AGAINST WHOM ENFORCEMENT OF ANY SUCH
AMENDMENT, WAIVER, DISCHARGE OR TERMINATION IS SOUGHT.

 

9.7           NOTICES, ETC.  ANY NOTICE, REQUEST, INSTRUCTION OR OTHER DOCUMENT
TO BE GIVEN HEREUNDER BY ANY PARTY TO THE OTHER WILL BE IN WRITING AND WILL BE
DEEMED TO HAVE BEEN DULY GIVEN (A) ON THE DATE OF DELIVERY IF DELIVERED
PERSONALLY OR BY TELECOPY OR FACSIMILE, UPON CONFIRMATION OF RECEIPT, (B) ON THE
FIRST BUSINESS DAY FOLLOWING THE DATE OF DISPATCH IF DELIVERED BY A RECOGNIZED
NEXT-DAY COURIER SERVICE, OR (C) ON THE THIRD BUSINESS DAY FOLLOWING THE DATE OF
MAILING IF DELIVERED BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED,
POSTAGE PREPAID.  ALL NOTICES HEREUNDER SHALL BE DELIVERED AS SET FORTH BELOW,
OR PURSUANT TO SUCH OTHER INSTRUCTIONS AS MAY BE DESIGNATED IN WRITING BY THE
PARTY TO RECEIVE SUCH NOTICE.

 

IF TO PURCHASER TO IT AT:

 

 

 

CapGen Capital Group II LP

 

c/o CapGen Capital Advisers LLC

 

280 Park Avenue

 

40th Floor West, Suite 401

 

New York, New York 10017

 

Attn: John Sullivan, Managing Director

 

Telephone: (212) 542-6868

 

Fax: (212) 542-6879

 

 

 

with a copy to (which copy alone shall not constitute notice):

 

 

 

Simpson Thacher & Bartlett LLP

 

425 Lexington Avenue

 

New York, New York 10017

 

Attn:   Gary I. Horowitz, Esq.

 

Telephone: (212) 455-2000

 

Fax: (212) 455-2502

 

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IF TO THE COMPANY:

 

 

 

PacWest Bancorp

 

10250 Constellation Blvd., Suite 1640

 

Los Angeles, CA 90067

 

Attn: Jared M. Wolff, Esq., General Counsel

 

Telephone: (310) 728-1023

 

Fax: (310) 201-0498

 

 

 

with a copy to (which copy alone shall not constitute notice):

 

 

 

Sullivan & Cromwell LLP

 

1888 Century Park East, Suite 2100

 

Los Angeles, CA 90067

 

Attn: Patrick S. Brown, Esq.

 

Telephone: (310) 712-6600

 

Fax: (310) 712-8800

 

9.8           SPECIFIC PERFORMANCE.  THE COMPANY AND PURCHASER ACKNOWLEDGE AND
AGREE THAT IRREPARABLE DAMAGE TO THE OTHER PARTY WOULD OCCUR IN THE EVENT THAT
ANY OF THE PROVISIONS OF THIS AGREEMENT WERE NOT PERFORMED IN ACCORDANCE WITH
THEIR SPECIFIC TERMS OR WERE OTHERWISE BREACHED.  IT IS ACCORDINGLY AGREED THAT
EACH PARTY SHALL BE ENTITLED TO AN INJUNCTION, INJUNCTIONS OR OTHER EQUITABLE
RELIEF, WITHOUT THE NECESSITY OF POSTING A BOND, TO PREVENT OR CURE BREACHES OF
THE PROVISIONS OF THIS AGREEMENT AND TO ENFORCE SPECIFICALLY THE TERMS AND
PROVISIONS HEREOF, THIS BEING IN ADDITION TO ANY OTHER REMEDY TO WHICH THE
PARTIES MAY BE ENTITLED BY LAW OR EQUITY.

 

9.9           NO THIRD PARTY BENEFICIARIES.  OTHER THAN AS SET FORTH IN SECTIONS
6.5 AND 6.6 AND 7.3, NOTHING IN THIS AGREEMENT, EXPRESSED OR IMPLIED, IS
INTENDED TO CONFER UPON ANY PERSON, OTHER THAN THE PARTIES HERETO OR THEIR
RESPECTIVE SUCCESSORS, ANY RIGHTS, REMEDIES, OBLIGATIONS OR LIABILITIES UNDER OR
BY REASON OF THIS AGREEMENT.

 

9.10                         NO ASSIGNMENT.  THIS AGREEMENT SHALL NOT BE
ASSIGNABLE BY OPERATION OF LAW OR OTHERWISE; PROVIDED, HOWEVER, THAT PURCHASER
MAY ASSIGN ITS RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT WITHOUT THE COMPANY’S
CONSENT TO ANY AFFILIATE, BUT ONLY IF THE ASSIGNEE AGREES IN WRITING WITH THE
COMPANY IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY TO BE BOUND
BY THE TERMS OF THIS AGREEMENT AND IN CONJUNCTION THEREWITH, MAKES TO THE
COMPANY REPRESENTATIONS AND WARRANTIES SUBSTANTIALLY EQUIVALENT (WITH NECESSARY
CONFORMING CHANGES) TO THOSE CONTAINED IN SECTION 4 AS IF SUCH ASSIGNEE WERE
“PURCHASER” THEREIN (ANY SUCH TRANSFEREE SHALL BE INCLUDED IN THE TERM
“PURCHASER”); PROVIDED, FURTHER, THAT NO SUCH ASSIGNMENT SHALL BE PERMITTED
WITHOUT THE COMPANY’S CONSENT IF IT (X) WOULD REASONABLY BE EXPECTED TO
ADVERSELY AFFECT OR DELAY THE RECEIPT OF THE APPROVALS OF ANY GOVERNMENTAL
AUTHORITY DESCRIBED IN SECTION 5.3, (Y) WOULD REQUIRE ANY CONSENTS OR APPROVALS
FROM OR FILINGS OR NOTICES WITH ANY GOVERNMENTAL AUTHORITY OR OTHER PERSON NOT
IDENTIFIED IN SECTION 5.3 OR (Z) WOULD REASONABLY BE EXPECTED TO ADVERSELY
AFFECT OR DELAY THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY.

 

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9.11         EXPENSES.  THE COMPANY AND PURCHASERS SHALL BEAR THEIR OWN
RESPECTIVE EXPENSES INCURRED ON ITS BEHALF WITH RESPECT TO THIS AGREEMENT AND
THE TRANSACTION.

 

9.12         COUNTERPARTS.  THIS AGREEMENT MAY BE EXECUTED IN ANY NUMBER OF
COUNTERPARTS, EACH OF WHICH SHALL BE ENFORCEABLE AGAINST THE PARTIES ACTUALLY
EXECUTING SUCH COUNTERPARTS, AND ALL OF WHICH TOGETHER SHALL CONSTITUTE ONE
INSTRUMENT.

 

9.13         SEVERABILITY.  IN THE EVENT THAT ANY PROVISION OF THIS AGREEMENT
BECOMES OR IS DECLARED BY A COURT OF COMPETENT JURISDICTION TO BE ILLEGAL,
UNENFORCEABLE OR VOID, THIS AGREEMENT SHALL CONTINUE IN FULL FORCE AND EFFECT
WITHOUT SAID PROVISION; PROVIDED THAT NO SUCH SEVERABILITY SHALL BE EFFECTIVE IF
IT MATERIALLY CHANGES THE ECONOMIC BENEFIT OF THIS AGREEMENT TO ANY PARTY.

 

9.14         TITLES AND SUBTITLES.  THE TITLES AND SUBTITLES USED IN THIS
AGREEMENT ARE USED FOR CONVENIENCE ONLY AND ARE NOT CONSIDERED IN CONSTRUING OR
INTERPRETING THIS AGREEMENT.

 

[SIGNATURE PAGE FOLLOWS]

 

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This STOCK PURCHASE AGREEMENT is hereby executed as of the date first above
written.

 

“COMPANY”

PACWEST BANCORP,

 

a Delaware corporation

 

 

 

 

 

By:

/s/ Matthew P. Wagner

 

 

 

 

Name:

Matthew P. Wagner

 

 

 

 

Title:

Chief Executive Officer

 

 

 

 

“PURCHASER”

CAPGEN CAPITAL GROUP II LP,

 

a Delaware limited partnership.

 

 

 

By: CapGen Capital Group II LLC, its general
partner

 

 

 

By:

/s/ Eugene A. Ludwig

 

 

 

 

Name:

Eugene A. Ludwig

 

 

 

 

Title:

Managing Member

 

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