Exhibit 10.1

THIS PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT (THE “AGREEMENT”) RELATES TO AN
OFFERING OF SERIES A STOCK RELYING UPON ONE OR MORE EXEMPTIONS FROM THE
REGISTRATION REQUIREMENTS OF THE FEDERAL SECURITIES LAWS PURSUANT TO SECTION
4(2) AND/OR RULE 506 OF REGULATION D (“REGULATION D”) AS PROMULGATED BY THE U.S.
SECURITIES AND EXCHANGE COMMISSION (THE “SEC”) UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “SECURITIES ACT”). NONE OF THE SHARES TO WHICH THIS SUBSCRIPTION
AGREEMENT RELATES HAVE BEEN REGISTERED UNDER THE SECURITIES ACT, OR ANY U.S.
STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED NONE MAY BE OFFERED OR SOLD,
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS. IN ADDITION, HEDGING TRANSACTIONS
INVOLVING THE SHARES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE
SECURITIES ACT.

IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION
OF THE ISSUER OF THE SECURITIES AND THE TERMS OF THE OFFERING, INCLUDING THE
MERITS AND RISKS INVOLVED. THE SHARES OF STOCK BEING OFFERED HEREBY HAVE NOT
BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY
AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE
ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT; ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.

THE SHARES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT
BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION
OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO
BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT

BankGuam Holding Company

111 W. Chalan Santo Papa

Hagatna, Guam 96910

Attention: Amoretta L.P. Carlson, VP Trust

& Endowment Service Manager

Ladies and Gentlemen:

BankGuam Holding Company (the “Company”) is offering, on an exempt private
placement basis, up to an aggregate 10,000 shares of its Series A Non-Cumulative
Perpetual Preferred stock (each a “Share” or collectively, “Shares”) which are
more particularly described in the Certificate of Designation attached hereto
and made a part hereof as Exhibit B (the “Designation Certificate”). The Shares
are being offered exclusively by the Company to eligible investors (a
“Subscriber” or collectively, “Subscribers”) at a subscription price of U.S.
$1,000 per Share (the “Purchase Price”).

The Subscriber will purchase a minimum number of Shares equivalent to at least
$250,000 (250 shares). The Shares are being offered solely to Subscribers who
are accredited investors via this subscription agreement (the “Agreement”). The
Company will receive gross proceeds of up to $10,000,000.00 (Ten Million
Dollars) from sale of the offered Shares (the “Offering”).

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1. Subscription.

1.1 Based upon the terms of this Agreement, the Subscriber hereby irrevocably
subscribes for and agrees to purchase the number of Shares set forth on the
signature page of this Agreement from the Company at a subscription price of
U.S. $1,000 per Share, for aggregate consideration also set forth on the
signature page of this Agreement (the “Subscription Proceeds”), subject to a
minimum subscription of Shares equivalent to at least $250,000.00.

1.2 Payment.

(a) The Subscription Proceeds must accompany this Agreement and shall be paid by
wire transfer of immediately available funds in U.S. dollars (or in the form of
a personal or cashier’s check) in accordance with the wire and delivery
instructions attached hereto as Exhibit A.

(b) In the event that this Agreement is not accepted by the Company for whatever
reason within ten (10) days of the delivery of an executed Agreement by the
Subscriber, this Agreement and any other documents delivered in connection
herewith will be returned to the Subscriber by the Company at the address of the
Subscriber as set forth in this Agreement, and any Subscription Proceeds shall
be returned to the Subscriber by the Company in accordance with the payment
information provided by the Subscriber.

1.3 Documents Required from Subscriber.

(a) The Subscriber must complete, sign and return to the Company one
(1) executed copy of this Agreement and the Accredited Investor Questionnaire,
attached hereto as Exhibit D; and

(b) The Subscriber shall complete, sign and return to the Company as soon as
possible, on request by the Company, any documents, questionnaires, notices and
undertakings as may be required by regulatory authorities, the OTC Bulletin
Board, stock exchanges and applicable law.

1.4 In the event the Company rejects this subscription in whole or in part, the
Company shall return the Subscription Proceeds directly to the investor without
interest or deduction there from.

1.5 The consummation of the purchase and sale of the Shares shall occur at one
or more closings (a “Closing”) which shall occur on such date or dates as may be
agreed upon by the Company (individually or collectively, the “Closing Date”).
For purposes of this Agreement, a “business day” means a day (A) other than
Saturday or Sunday and (B) on which commercial banks are open for business in
Guam. On each Closing Date (as defined herein), the Company shall irrevocably
instruct its transfer agent to (a) register the Subscriber’s ownership in book
entry form or (b) deliver to the Subscriber one or more stock certificates
bearing the restrictive legends described below, evidencing the number of Shares
the Subscriber is purchasing as is set forth on Subscriber’s signature page to
this Agreement next to the heading “Shares Issued” within two (2) business days
after the Closing Date (the “Subscribed Shares”).

2. Conditions to Offering.

Closing of the Offering shall occur as described in and subject to the
provisions of Section 1.5 hereof.

3. Representations, Warranties and Covenants.

3.1 The Subscriber hereby represents and warrants to, and covenants with, the
Company (which representation, warranties and covenants shall survive the
closing of this Agreement) and acknowledges that the Company is relying thereon
that:

(a) The undersigned is resident, or if not an individual, has a headquarters
office, in the jurisdiction set out under the heading “Address of Subscriber”
above the signature set forth on the execution page of this Agreement, which
address is the undersigned’s principal residence or place of business, and such
address was not obtained or used solely for the purpose of acquiring the Shares.

 

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(b) The Company has not undertaken, and will have no obligation, to register any
of the Shares under the Securities Act or any other securities legislation.

(c) The Subscriber has received and carefully read this Agreement. The
Subscriber has relied only on the information in the Company’s filings with the
U.S. Securities and Exchange Commission (the “SEC’) that are available to any
member of the public on the EDGAR database maintained by the SEC and information
of the Company available in the Federal Financial Institutions Examination
Council’s website (www.ffiec.gov) which are also available to any member of the
public (together as the “SEC Documents”). In making its investment decision, the
Subscriber has received no written or oral representations or information that
is inconsistent with, or outside of, the SEC Documents, and has relied solely on
the SEC Documents in making such investment decision.

(d) (i) If the Subscriber is a “United States Person” (as defined by
Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended), the
Subscriber represents and warrants that the Subscriber is an “Accredited
Investor”, as the term is defined in Rule 501(a) of the Securities Act. The
Subscriber shall submit to the Company such further assurances of accredited or
sophisticated status as may reasonably be requested by the Company, including
but not limited to an executed copy of attached Exhibit D.

(ii) If the Subscriber is not a United States Person as defined above (a
“non-U.S. Person”), the Subscriber represents and warrants that it has satisfied
itself as to the full observance of the laws of its jurisdiction in connection
with any invitation to subscribe for the Shares or any use of this Agreement,
including (i) the legal requirements within its jurisdiction for the purchase of
the Shares, (ii) any foreign exchange restrictions applicable to such purchase,
(iii) any governmental or other consents that may need to be obtained, and
(iv) the income tax and other tax consequences, if any, that may be relevant to
the purchase, holding, redemption, sale, or transfer of the Shares. The
Subscriber’s subscription and payment for and continued beneficial ownership of
the Shares will not violate any applicable securities or other laws of
Subscriber’s jurisdiction. The Subscriber further represents and warrants that
it is not a “U.S. person” within the meaning of Regulation S promulgated under
the Securities Act, because: (1) Subscriber is not a natural person resident in
the United States, or (2) a partnership or corporation organized or incorporated
under the laws of any jurisdiction and formed by a U.S. person principally for
purposes of investing in securities not registered under the Securities Act
unless it is organized or incorporated and owned by “accredited investors” who
are not natural persons, estates or trusts, or (3) an estate of which any
executor or administrator is a U.S. person, or (4) a trust of which any trustee
is a U.S. person, or (5) any agency or branch of a foreign entity located in the
United States. The Subscriber agrees not to engage in hedging transactions with
respect to the Shares unless in compliance with the Securities Act.

(e) The Subscriber has the legal capacity and competence to enter into and
execute this Subscription Agreement and to take all actions required pursuant
hereto and, if the Subscriber is a corporation, it is duly incorporated and
validly subsisting under the laws of its jurisdiction of incorporation and all
necessary approvals by its directors, shareholders and others have been obtained
to authorize execution and performance of this Subscription Agreement on behalf
of the Subscriber.

(f) The Company has not made any other representations or warranties to the
undersigned with respect to the Company or rendered any investment or tax advice
except as specifically contained herein.

 

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(g) The undersigned has such knowledge and experience in financial, investment
and business matters to be capable of evaluating the merits and risks of the
prospective investment in the Shares of the Company. The undersigned has
consulted with such independent legal counsel or other advisers as the
undersigned has deemed appropriate to assist the undersigned in evaluating the
proposed investment in the Shares. By accepting these documents, the undersigned
agrees that the information contained herein, and in all related and ancillary
documents, shall be kept confidential (except as may be properly disclosed to
the Subscriber’s counsel, accountants, and investment representatives, if any,
to which disclosure is made in connection with an evaluation of whether to
invest in the Shares) and will not be reproduced, made available or accessible,
or used for any other purpose other than in connection with considering the
purchase of the Shares or as required by law or order of a court of competent
jurisdiction. The Subscriber agrees that it and its representatives shall not
use, and will not permit the use of, any or all of the information in the SEC
Documents in a manner or for a purpose detrimental to the Company. The
Subscriber acknowledges that until public announcement, the terms and existence
of this Subscription Agreement may be deemed material non-public information
under the Securities Exchange Act of 1934, and shall govern its activities
accordingly.

(h) The Subscriber (i) has adequate means of providing for its current financial
needs and possible personal contingencies and does not have a need for liquidity
of this investment in the Shares; (ii) can afford (a) to hold the Shares for an
indefinite period of time, and (b) to sustain a complete loss of the entire
amount of the Subscription Proceeds for the Shares; and (iii) has not made an
overall commitment to investments which are not readily marketable which is
disproportionate so as to cause such overall commitment to become excessive. If
the Subscriber is not an accredited investor, the Subscriber (i) has at least
five years’ investment experience in investments similar to the Shares,
including investments in securities listed on the OTC Bulletin Board, (ii) has
adequate means of providing for its current financial needs and possible
personal contingencies and does not have a need for liquidity of this investment
in the Shares for the foreseeable future; (iii) can afford (a) to hold the
Shares for an indefinite period of time, and (b) to sustain a complete loss of
the entire amount of the Subscription Proceeds for the Shares; (iv) has not made
an overall commitment to investments which are not readily marketable which is
disproportionate so as to cause such overall commitment to become excessive, and
(v) is fully aware that the purchase of the Shares is a high risk investment.

(i) The Subscriber has been afforded the opportunity to ask questions of, and
receive answers from, the officers and/or directors of the Company acting on its
behalf concerning the terms and conditions of a purchase of the Shares and to
obtain any additional information, to the extent that the Company possesses such
information or can acquire it without unreasonable effort or expense, necessary
to verify the accuracy of the information furnished; and the undersigned has
received satisfactory answers to all such questions to the extent deemed
appropriate in order to evaluate the merits and risks of an investment in the
Shares.

(j) The Subscriber acknowledges that none of the Shares are currently registered
under the Securities Act and the Company has not undertaken to register any of
such Shares under U.S. Federal or State law, and, unless so registered, may only
be offered or sold pursuant to an effective registration statement under the
Securities Act, or pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act and in each case
in accordance with applicable state securities laws.

(k) The undersigned further understands that it is purchasing all such Shares
without being furnished a prospectus setting forth all of the information that
may be required to be furnished under applicable securities laws in a registered
public offering and, as a consequence, certain protections, rights and remedies
provided in applicable securities legislation, including statutory rights of
rescission or damages, may not be available to it.

(l) The undersigned further acknowledges that no agency, governmental authority,
securities commission or similar regulatory body, stock exchange or other entity
has reviewed, passed on or made any finding or determination as to the merit for
investment of the Shares nor have any such agencies or governmental authorities
made any recommendation or endorsement with respect to the Shares.

(m) The Subscriber understands that the Shares are being offered and sold to it
in reliance on specific exemptions from the registration requirements of United
States federal and state securities laws and that the Company is relying in part
upon the truth and accuracy of, and the Subscriber’s compliance with, the
representations and warranties set forth herein in order to determine the
availability of such exemptions and the eligibility of the Subscriber to acquire
the Shares.

 

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(n) This Agreement has been duly executed and delivered and, when accepted by
the Company, will constitute a legal, valid and binding obligation of the
undersigned enforceable against it in accordance with the terms hereof, except
as enforceability may be limited by except as enforcement may be limited by
insolvency and similar laws affecting the enforcement of creditors’ rights
generally and the effect of rules of law governing equitable remedies.

(o) The social security number or Tax Identification Number of the Subscriber
set forth herein is true, accurate and complete. The Subscriber understands and
agrees that there may be material tax consequences to it of an acquisition,
holding or disposition of the Shares. The Company gives no opinion and makes no
representation with respect to the tax consequences under U.S., state, local or
foreign tax law of the acquisition, holding or disposition of the Shares and the
Subscriber acknowledges that it is solely responsible for determining the tax
consequences of its investment.

(p) There are risks associated with an investment in the Company, including, by
way of example and not in limitation, the specific risks identified in SEC
Documents and available for viewing at the SEC’s website at www.sec.gov or the
Company’s subsidiary’s (Bank of Guam) website at www.bankofguam.com and those
Risk Factors listed in the attached Exhibit C.

(q) The SEC Documents reflect the Company’s current intentions and business,
financial and other information as of its date or such later date on which the
SEC Documents were amended or supplemented, and, as such, the Subscriber
understands and acknowledges that the precise nature of the Company’s
operations, use of proceeds, capital needs, and other factors inherent in the
Company’s business can be expected to change from time to time.

(r) If required by applicable securities legislation, regulations, rules,
policies or orders or by any securities commission, stock exchange or other
regulatory authority, the undersigned will execute, deliver, file and otherwise
assist the Company in filing such reports, undertakings and other documents with
respect to the issuance of the Shares.

(s) The undersigned hereby agrees that the Company will insert the following
legends on the face of the Shares in compliance with applicable securities laws:

“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SHARES HAVE BEEN ACQUIRED SOLELY FOR INVESTMENT PURPOSES AND NOT WITH A VIEW
TOWARD RESALE AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR AN
OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT
REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS.”

(t) The undersigned has not purchased the Shares as a result of any form of
general solicitation or general advertising, including advertisements, articles,
notices or other communications published in any newspaper, magazine or similar
media or broadcast over radio, television or other form of telecommunications,
or any seminar or meeting whose attendees have been invited by general
solicitation or general advertising.

(u) The undersigned certifies that each of the foregoing representations and
warranties set forth in this Section 3.1 are true as of the date hereof and
shall survive such date.

(v) The undersigned is aware that its investment involves risk and has reviewed
and evaluated the Risk Factors set forth in Exhibit “C” attached hereto and
incorporated by reference into this Agreement. The undersigned has been advised
to seek independent advice from its professional advisors relating to the
suitability of an investment in the Shares in view of the undersigned’s overall
financial needs and with respect to the legal and tax implications of such
investment and have done so. The undersigned believes that the investment in the
Shares is suitable for the undersigned based upon its investment objectives and
financial needs, and the undersigned has adequate means for providing for its
current financial needs and contingencies and has no need for liquidity with
respect to its investment in the Shares.

 

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3.2 The Company hereby represents and warrants and covenants to the Subscriber
that:

(a) The Company is a corporation duly organized, validly existing and in good
standing under the laws of Guam. The Company has all necessary corporate power
and authority to own, lease, use and operate its properties and to carry on its
business as now being conducted and presently proposed to be conducted. The
Company and each of its subsidiaries is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction in which its
ownership or leasing of assets, or the conduct of its business, makes such
qualification necessary.

(b) The Company has all necessary corporate power and authority to execute and
deliver this Agreement, to issue the Shares and to carry out the provisions of
this Agreement. All corporate action on the part of the Company required for the
lawful execution and delivery of this Agreement, issuance and delivery of the
Shares and the performance by the Company of its obligations hereunder has been
taken. Upon execution and delivery, this Agreement constitutes valid and binding
obligations of the Company enforceable in accordance with their respective
terms, except as enforcement may be limited by insolvency and similar laws
affecting the enforcement of creditors’ rights generally and the effect of rules
of law governing equitable remedies. The Shares, when issued in compliance with
the provisions of this Agreement will be duly authorized and validly issued,
fully paid, non-assessable, subject to no lien, claim or encumbrance and issued
in compliance with federal securities laws and applicable state securities laws.
No shareholder of the Company or other person has any preemptive, anti-dilution,
“poison-pill” or similar right with respect to the Shares. The Company has
reserved such number of shares of its preferred stock necessary for issuance of
the Shares.

(c) The SEC Documents, as of its date or such later date on which the SEC
Documents were amended or supplemented, did 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
under which they were made, not misleading. The SEC Documents comply as to form
in all material respects with applicable accounting requirements and with the
published rules and regulations of the SEC with respect thereto. Except as may
be indicated therein, the financial statements included in the SEC Documents
have been prepared in accordance with generally accepted accounting principles
consistently applied and fairly present the consolidated financial position of
the Company and its subsidiaries at the dates thereof and the consolidated
results of their operations and consolidated cash flows for the periods then
ended.

(d) Since the respective dates as of which information is given in the SEC
Documents, except as otherwise stated therein: (i) there has been no material
adverse change in the financial condition, or in the results of operations,
affairs or prospects of the Company, whether or not arising in the ordinary
course of business, and (ii) there have been no transactions entered into by the
Company, other than those in the ordinary course of business, which are material
to the Company.

(e) The Company hereby covenants to use the monies raised from the Offering to
supplement the capital of the Company and its subsidiaries.

(f) No “bad actor” disqualifying event described in Rule 506(d)(l)(i)-(viii) of
the Securities Act (a “Disqualification Event”) is applicable to the Company or,
to the Company’s knowledge, any Company Covered Person, except for a
Disqualification Event as to which Rule 506(d)(2)(ii-iv) or (d)(3), is
applicable. “Company Covered Person” means, with respect to the Company as an
“issuer” for purposes of Rule 506 promulgated under the Securities Act, any
person listed in the first paragraph of Rule 506(d) (l).

(g) The Company certifies that each of the foregoing representations and
warranties set forth in this Section 3.2 are true as of the date hereof and
shall survive such date.

 

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4. Indemnification. The parties hereto understand that the Shares are being
offered in reliance upon representation, warranties and covenants of each of the
parties hereto; the exemptions under applicable securities laws and that the
availability of such exemptions are, in part, dependent upon the truthfulness
and accuracy of the representations made by the undersigned herein; that the
Company will rely on such representations in accepting any subscriptions for the
Shares; and that the Company may take such steps as it considers reasonable to
verify the accuracy and truthfulness of such representations in advance of
accepting or rejecting the undersigned’s subscription. The undersigned agrees to
indemnify and hold harmless the Company, as a third party beneficiary hereof,
against any damage, loss, expense or cost, including reasonable attorneys’ fees,
sustained as a result of any misstatement or omission on the undersigned’s part
in this Agreement.

5. No Waiver. Notwithstanding any of the representations, warranties,
acknowledgments or agreements made herein by the undersigned, the undersigned
does not thereby, or in any manner, waive any rights granted to it under
applicable securities laws.

6. Revocation. The undersigned agrees that he, she or it shall not cancel,
terminate or revoke this Agreement or any agreement of the undersigned made
hereunder, and this Agreement shall survive the death or disability of the
undersigned.

7. Termination of Agreement. If the Company elects to cancel this Agreement,
provided that it returns to the undersigned, without interest and without
deduction, all sums paid by the undersigned, this Offering shall be null and
void and of no further force and effect, and no party shall have any rights
against any other party hereunder.

8. Miscellaneous.

8.1 All notices or other communications given or made hereunder shall be in
writing and shall be mailed by registered or certified mail, return receipt
requested, postage prepaid, to the undersigned at their address set forth below
and to the Company at 111 W. Chalan Santo Papa, Hagatna Guam 96910.

8.2 This Agreement constitutes the entire agreement among the parties hereto
with respect to the subject matter hereof and may be amended only by a writing
executed by all parties.

8.3 The provisions of this Agreement shall survive the execution thereof.

8.4 This Agreement shall be governed by and construed in accordance with the
domestic laws of Guam without giving effect to any choice or conflict of law
provision or rule (whether of Guam or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than Guam. The parties
further: (a) agree that any legal suit, action or proceeding arising out of or
relating to this Agreement shall be instituted exclusively in any Federal or
State court of competent jurisdiction within the territory of Guam, (b) waive
any objection that they may have now or hereafter to the venue of any such suit,
action or proceeding, and (c) irrevocably consent to the in personam
jurisdiction of any Federal or State court of competent jurisdiction within the
territory of Guam in any such suit, action or proceeding. The parties each
further agree to accept and acknowledge service of any and all process which may
be served in any such suit, action or proceeding in a Federal or State court of
competent jurisdiction within the territory of Guam, and that service of process
upon the parties mailed by certified mail to their respective addresses shall be
deemed in every respect effective service of process upon the parties, in any
action or proceeding.

 

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9. Collection of Personal Information. The undersigned (on its own behalf and,
if applicable, on behalf of any person for whose benefit the undersigned is
subscribing) acknowledges and consents to the fact that the Company is
collecting the undersigned’s (and any beneficial purchaser’s) personal
information for the purpose of completing the undersigned’s subscription. The
undersigned (on its own behalf and, if applicable, on behalf of any person for
whose benefit the undersigned is subscribing) acknowledges and consents to the
Company retaining the personal information for as long as permitted or required
by applicable law or business practices. The undersigned (on its own behalf and,
if applicable, on behalf of any person for whose benefit the undersigned is
subscribing) further acknowledges and consents to the fact that the Company may
be required by applicable securities laws and stock exchange rules to provide
regulatory authorities any personal information provided by the undersigned
respecting itself (and any beneficial purchaser). By executing this Agreement,
the undersigned is deemed to be consenting to the foregoing collection, use and
disclosure of the undersigned’s (and any beneficial purchaser’s) personal
information. The undersigned also consents to the filing of copies or originals
of any of the undersigned’s documents described herein as may be required to be
filed with any stock exchange or securities regulatory authority in connection
with the transactions contemplated hereby. The undersigned represents and
warrants that it has the authority to provide the consents and acknowledgments
set out in this paragraph on behalf of all beneficial purchasers.

10. Certification. The undersigned has read this entire Agreement and certifies
that every statement on the part of the undersigned is true and complete.

[Remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF, subject to acceptance by the Company, the undersigned has
executed this Agreement on the date their signature has been subscribed and
sworn to below.

DATED as of this _____ day of ______, 2016.

 

Number of Shares to be

purchased $_______each:

           

Total Subscription

Proceeds:

      Name (full legal name of Subscriber):           (print name of subscriber)
Address of Subscriber:                       (address, including postal code)  
        (telephone number)           (facsimile number, if any)          
(e-mail address)     By:                     (Signature)                 (if
corporation, print name of authorized signatory)               (Official
capacity)               (social security or federal corporate/business account
number)

ACCEPTED as of the _____ day of _______, 2016

 

BANKGUAM HOLDING COMPANY     By:          Shares Issued:  

Name:          

Title:           

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EXHIBIT A

INSTRUCTIONS FOR WIRING OR DELIVERING FUNDS

Bank Name:

ABA Number:

Swift code:

Account Number:

Account Name:

Checks Payable:

Contact Information in case of questions:

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EXHIBIT B

CERTIFICATE OF DESIGNATION

5.50% FIXED RATE / FLOATING RATE NONCUMULATIVE PREFERRED STOCK,

SERIES A

OF

BANKGUAM HOLDING COMPANY

 

 

pursuant to Section 28602 of the Guam Business Corporation Act

 

 

BANKGUAM HOLDING COMPANY, a Guam Corporation (the “Company”), hereby certifies
that:

1.    The First Amended and Restated Articles of Incorporation of the Company
(as amended through the date hereof, the “Certificate of Incorporation”) fixes
the total number of shares of all classes of capital stock that the Company
shall have the authority to issue at forty-eight million (48,000,000) shares of
common stock of the par value of $0.208 1/3 per share, and three hundred
thousand (300,000) shares of preferred stock of the par value of $100 per share.

2.    The Certificate of Incorporation expressly grants to the Board of
Directors of the Company (the “Board of Directors”) authority to provide for the
issuance of the shares of preferred stock from time to time in one or more
series, and to establish from time to time the number of shares to be included
in each such series and to fix the designation, powers, preferences and rights
of the shares of each such series and the qualifications, limitations or
restrictions thereof.

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3.    The Board of Directors by action duly taken on August 22, 2016, adopted
resolutions (i) authorizing the issuance and sale of up to 10,000 shares of the
Company’s preferred stock and (ii) approving this final form of Certificate of
Designation of 5.50% Fixed Rate / Floating Rate Noncumulative Preferred Stock,
Series A (the “Series A Preferred Stock”) establishing the number of shares to
be included in this Series A Preferred Stock and fixing the designation, powers,
preferences and rights of the shares of the Series A Preferred Stock and the
qualifications, limitations or restrictions thereof as follows:

Section 1. Designation.

The designation of the series of preferred stock shall be “5.50% Fixed Rate /
Floating Rate Noncumulative Preferred Stock, Series A” (the “Series A Preferred
Stock”). Each share of Series A Preferred Stock shall be identical in all
respects to every other share of Series A Preferred Stock.

Section 2. Number of Shares.

The number of authorized shares of Series A Preferred Stock shall be Ten
Thousand (10,000). That number from time to time may be increased (but not in
excess of the total number of authorized shares of preferred stock) or decreased
(but not below the number of shares of Series A Preferred Stock then
outstanding) by further resolution duly adopted by the Board of Directors, and
by the filing of a certificate pursuant to the provisions of the Guam Business
Corporation Act stating that such increase or reduction, as the case may be, has
been so authorized. The Company shall have the authority to issue fractional
shares of Series A Preferred Stock.

Section 3. Definitions.

As used herein with respect to Series A Preferred Stock:

(a)     “Appropriate Federal Banking Agency” means the “appropriate Federal
banking agency” with respect to the Company as defined in Section 3(q) of the
Federal Deposit Insurance Act (12 U.S.C. Section 1813(q)), or any successor
provision.

(b)    “Articles of Incorporation” means the First Amended and Restated Articles
of Incorporation of the Company, as may be amended from time to time, and shall
include this Certificate of Designation.

 

(c)     “Board of Directors” means the board of directors of the Company.

 

(d)    “Bylaws” means the Bylaws of the Company, as may be amended from time to
time.

(e)     “Business Day” means, for dividends payable during the Fixed Rate
Period, any day, other than a Saturday or Sunday, that is neither a legal
holiday nor any other day on which banking institutions and trust companies in
New York, New York or Guam are permitted or required by any applicable law to
close, and for dividends payable during the Floating Rate Period, any day that
would be considered a Business Day during the Fixed Rate Period that is also a
London Banking Day.

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(f)    “Calculation Agent” means Computershare Trust Company, N.A., a federally
chartered national association, acting as Calculation Agent for the Series A
Preferred Stock, and its successors and assigns.

(g)    “Certificate of Designation” means this Certificate of Designation
relating to the Series A Preferred Stock, as it may be amended from time to
time.

(h)    “Common Stock” means the common stock, par value $0.208 1/3 per share, of
the Company.

(i)     “Depositary Company” shall have the meaning set forth in Section 6(d)
hereof.

(j)     “Designated LIBOR Page” means the display on Reuters, or any successor
service, on page LIBOR01, or any other page as may replace that page on that
service, for the purpose of displaying the London interbank rates for U.S.
dollars.

(k)    “Dividend Payment Date” shall have the meaning set forth in Section 4(a)
hereof.

(l)     “Dividend Period” shall have the meaning set forth in Section 4(a)
hereof.

(m)    “DTC” means The Depository Trust Company, together with its successors
and assigns.

(n)    “Fixed Rate Period” shall have the meaning set forth in Section 4(a)
hereof.

(o)    “Floating Rate Period” shall have the meaning set forth in Section 4(a)
hereof.

(p)    “Junior Stock” means the Common Stock and any other class or series of
stock of the Company hereafter authorized over which Series A Preferred Stock
has preference or priority in the distribution of assets on any voluntary or
involuntary liquidation, dissolution or winding up of the affairs of the
Company.

(q)    “LIBOR Determination Date” means the second London Banking Day
immediately preceding the first day of the relevant Dividend Period.

(r)    “London Banking Day” means any day on which commercial banks and foreign
exchange markets settle payments in London.

(s)    “Parity Stock” means any other class or series of stock of the Company
that ranks equally with the Series A Preferred Stock in the payment of dividends
and in the distribution of assets on any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Company.

(t)    “Redemption Price” shall have the meaning set forth in Section 6(a)
hereof.

(u)    “Redemption Date” shall have the meaning set forth in Section 6(a)
hereof.

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(v)    “Regulatory Capital Treatment Event” means the Company’s determination,
in good faith, that, as a result of any:

(i)      amendment to, clarification of or change in (including any announced
prospective amendment to, clarification of or change in), the laws or
regulations or policies of the United States or any political subdivision of or
in the United States that is enacted or announced or that becomes effective
after the initial issuance of any share of Series A Preferred Stock;

(ii)     proposed amendment to or change in those laws or regulations or
policies that is announced or becomes effective after the initial issuance of
any share of Series A Preferred Stock; or

(iii)    official administrative decision or judicial decision or administrative
action or other official pronouncement interpreting or applying those laws or
regulations or policies that is announced or that becomes effective after the
initial issuance of any share of Series A Preferred Stock, there is more than an
insubstantial risk that the Company will not be entitled to treat the full
liquidation value of all shares of Series A Preferred Stock then outstanding as
“additional tier 1 capital” (or its equivalent) for purposes of the capital
adequacy guidelines or regulations of the Appropriate Federal Banking Agency, as
then in effect and applicable, for as long as any share of Series A Preferred
Stock is outstanding.

 

(w)    “Representative Amount” shall have the meaning set forth in the
definition of “Three-month LIBOR”.

 

(x)     “Series A Preferred Stock” shall have the meaning set forth in Section 1
hereof.

(y)     “Three-month LIBOR” means, for any LIBOR Determination Date, the offered
rate for deposits in U.S. dollars having a maturity of three months that appears
on the Designated LIBOR Page as of 11:00 a.m., London time, on such LIBOR
Determination Date. If such rate does not appear on such page at such time, then
the Calculation Agent will request the principal London office of each of four
major reference banks in the London interbank market, selected by the
Calculation Agent, to provide such bank’s offered quotation to prime banks in
the London interbank market for deposits in U.S. dollars for a term of three
months as of 11:00 a.m., London time, on such LIBOR Determination Date and in a
principal amount equal to an amount that, in the judgment of the Calculation
Agent, is representative for a single transaction in U.S. dollars in the
relevant market at the relevant time (a “Representative Amount”). If at least
two such quotations are so provided, Three-month LIBOR will be the arithmetic
mean of such quotations. If fewer than two such quotations are provided, the
Calculation Agent will request each of three major banks in New York City to
provide such bank’s rate for loans in U.S. dollars to leading European banks for
a term of three months as of approximately 11:00 a.m., New York City time, on
such LIBOR Determination Date and in a Representative Amount. If three such
quotations are so provided, Three-month LIBOR will be the arithmetic mean of
such quotations. All percentages used in or resulting from any calculation of
Three-month LIBOR will be rounded, if necessary, to the nearest one
hundred-thousandth of a percentage point, with .000005% rounded up to .00001%.

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Section 4. Dividends.

(a)    Rate. Dividends on the Series A Preferred Stock will not be mandatory.
Holders of Series A Preferred Stock shall be entitled to receive, if, as and
when declared by the Board of Directors of the Company or any duly authorized
committee of the Board of Directors of the Company, but only out of assets
legally available therefor, non-cumulative cash dividends on the liquidation
preference of $1000 per share of Series A Preferred Stock, quarterly in arrears
on each March 31, June 30, September 30 and December 31, commencing
September 30, 2016 (each, a “Dividend Payment Date”). From the date of issuance
to, but excluding, the Redemption Date (the “Fixed Rate Period”), dividends will
be calculated at an annual rate of 5.50%, and from, and including, June 30, 2021
(the “Floating Rate Period”), dividends will be calculated annually at an annual
rate equal to Three-month LIBOR plus 4.825%. If, following the procedure set
forth in the definition of Three-month LIBOR, the Calculation Agent is unable to
determine three-month LIBOR for any Floating Rate Period, then the dividend for
such Floating Rate Period shall be calculated at the dividend rate in effect for
the immediately preceding Dividend Period. In the event that any Dividend
Payment Date during the Fixed Rate Period falls on a date that is not a Business
Day, then payment of any dividend payable on such date will be made on the next
succeeding Business Day (without interest or other payment in respect of such
delay). In the event that any Dividend Payment Date during the Floating Rate
Period falls on a date that is not a Business Day, then payment of any dividend
otherwise payable on such date will be made on the next succeeding Business Day,
and dividends will be calculated to, but excluding, the actual payment date.
However if, during the Floating Rate Period, such postponed payment date would
fall in the next calendar month following the relevant Dividend Payment Date,
then payment of any dividend otherwise payable on such date will be made on the
Business Day immediately preceding the relevant Dividend Payment Date. The
period from, and including, any Dividend Payment Date to, but excluding, the
next succeeding Dividend Payment Date is a “Dividend Period”; provided, however,
that the first Dividend Period shall be the period from, and including, the date
of original issuance of the Series A Preferred Stock to, but excluding,
September 30, 2016; and provided, further, that, during the Floating Rate Period
for purposes of determining a Dividend Period only, the Dividend Payment Date
shall be the actual payment date of the applicable dividends. The record date
for payment of dividends on the Series A Preferred Stock shall be the 15th
calendar day before such Dividend Payment Date (provided, however, that if any
such day is not a Business Day, then the record date will be the next succeeding
day that is a Business Day) or such other date as determined by the Board of
Directors of the Company or any duly authorized committee of the Board of
Directors of the Company. The amount of dividends payable during the Fixed Rate
Period, including dividends payable for any partial Dividend Period, shall be
calculated on the basis of a 360-day year consisting of twelve 30-day months.
The amount of any dividend payable during the Floating Rate Period, including
dividends payable for any partial Dividend Period, shall be calculated (without
duplication) on the basis of a 360-day year and the actual number of days
elapsed. Dollar amounts resulting from that calculation will be rounded to the
nearest cent, with one-half cent being rounded upward. The determination of
Three-month LIBOR for each relevant Dividend Period by the Calculation Agent
will (in the absence of manifest error) be final and binding. The Calculation
Agent’s determination of any dividend rate, and its calculation of the amount of
any dividend payable during the Floating Rate Period, will be maintained on file
at the Calculation Agent’s principal offices. Notwithstanding any other
provision hereof, dividends on the Series A Preferred Stock shall not be
declared, paid or set aside for payment to the extent such act would cause the
Company to fail to comply with laws and regulations applicable thereto,
including applicable capital adequacy guidelines.

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(b)    Non-Cumulative Dividends. Dividends on shares of Series A Preferred Stock
shall be non-cumulative. To the extent that any dividends payable on the shares
of Series A Preferred Stock on any Dividend Payment Date are not declared and
paid, in full or otherwise, on such Dividend Payment Date, then such unpaid
dividends shall not be cumulative and shall not be payable for such Dividend
Period, and the Company shall have no obligation to pay, and the holders of
Series A Preferred Stock shall have no right to receive, dividends for such
Dividend Period after the Dividend Payment Date for such Dividend Period or
interest with respect to such dividends, whether or not dividends are declared
for any subsequent Dividend Period with respect to Series A Preferred Stock, or
any other class or series of authorized preferred stock of the Company or
declared at any time upon Junior Stock.

(c)    Parity of Dividends Upon Preferred Stock. When dividends are not paid in
full upon the shares of Series A Preferred Stock and any Parity Stock, all
dividends declared upon shares of Series A Preferred Stock and any such Parity
Stock shall be declared on a proportional basis. For purposes of calculating the
proportional allocation of partial dividend payments, the Company shall allocate
dividend payments based on the ratio between the then-current dividends due on
the shares of the Series A Preferred Stock and (i) in the case of any series of
Parity Stock that is non-cumulative preferred stock, the aggregate of the
current and unpaid dividends due on such series of preferred stock, and (ii) in
the case of any series of Parity Stock that is cumulative preferred stock, the
aggregate of the current and accumulated and unpaid dividends due on such series
of preferred stock. No interest will be payable in respect of any declared but
unpaid dividend payment on shares of Series A Preferred Stock that is paid after
the relevant Dividend Payment Date for such Dividend Period.

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Section 5. Liquidation Rights.

(a)    Voluntary or Involuntary Liquidation. In the event of any voluntary or
involuntary liquidation, dissolution or winding up of the affairs of the
Company, holders of Series A Preferred Stock shall be entitled, out of assets
legally available therefor, before any distribution of the assets of the Company
may be made to the holders of any Common Stock or of any of the Company’s shares
of capital stock ranking junior as to such a distribution to the shares of
Series A Preferred Stock, and subject to the rights of the holders of any class
or series of securities ranking senior to the Series A Preferred Stock upon
liquidation and the rights of the Company’s depositors and other creditors, to
receive in full a liquidating distribution in the amount of the liquidation
preference of $1,000 per share, plus any declared and unpaid dividends, without
accumulation of any undeclared dividends. The holders of Series A Preferred
Stock shall not be entitled to any other amounts in the event of any such
voluntary or involuntary liquidation, dissolution or winding up of the affairs
of the Company other than what is expressly provided for in this Section 5.

(b)    Partial Payment. If in any distribution described in Section 5(a) above
the assets of the Company are not sufficient to pay in full the liquidation
preference plus any declared and unpaid dividends in full to all holders of
Series A Preferred Stock and all holders of any Parity Stock ranking equally as
to such distribution with the Series A Preferred Stock, the amounts paid to the
holders of Series A Preferred Stock and to the holders of all such other Parity
Stock shall be paid pro rata in accordance with the respective aggregate
liquidation preferences plus any declared and unpaid dividends on the Series A
Preferred Stock and all such Parity Stock.

(c)    Residual Distributions. If the liquidation preference plus any declared
and unpaid dividends has been paid in full to all holders of Series A Preferred
Stock and all holders of any Parity Stock ranking equally as to such
distribution with the Series A Preferred Stock, the holders of Junior Stock
shall be entitled to receive all remaining assets of the Company according to
their respective rights and preferences.

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(d)    Merger, Consolidation and Sale of Assets Not Liquidation. For purposes of
this Section 5, the sale, lease or exchange (for cash, securities or other
property) of all or substantially all of the property and assets of the Company
shall not constitute a voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the Company, nor shall the merger, consolidation or
any other business combination transaction of the Company into or with any other
entity or the merger, consolidation or any other business combination
transaction of any other entity into or with the Company in which the holders of
Series A Preferred Stock receive cash, securities or other property for their
shares of Series A Preferred Stock, constitute a voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Company.

Section 6. Redemption.

(a)    Optional Redemption. The Company, at the option of its Board of Directors
or any duly authorized committee of the Board of Directors of the Company, may
redeem in whole or in part the shares of Series A Preferred Stock at the time
outstanding, on the first Dividend Payment Date that is at least five (5) years
from the date of issuance of such shares of Series A Preferred Stock (the
“Redemption Date”) or on any Dividend Payment Date thereafter, upon notice given
as provided in Section 6(b) below. The redemption price for shares of Series A
Preferred Stock shall be $1,000 per share plus dividends that have been declared
but not paid, without accumulation of any undeclared dividends (the “Redemption
Price”). Notwithstanding the foregoing, within 90 days following the occurrence
of a Regulatory Capital Treatment Event, the Company, at its option, subject to
the approval of the Appropriate Federal Banking Agency, may provide notice of
its intent to redeem, as provided in Section 6(b) below, and subsequently
redeem, all (but not less than all) of the shares of Series A Preferred Stock at
the time outstanding at the Redemption Price applicable on such date of
redemption.

(b)    Notice of Redemption. Notice of every redemption of shares of Series A
Preferred Stock shall be either (1) mailed by first class mail, postage prepaid,
addressed to the holders of record of such shares to be redeemed at their
respective last addresses appearing on the stock register of the Company or
(2) transmitted by such other method approved by the Depositary Company, in its
reasonable discretion, to the holders of record of such shares to be redeemed.
Such mailing or transmittal shall be at least 30 days and not more than 60 days
before the date fixed for redemption. Notwithstanding the foregoing, if the
Series A Preferred Stock is held in book-entry form through DTC (or a successor
securities depositary), the Company may give such notice in any manner permitted
by DTC (or such successor). Any notice provided pursuant to this Section 6(b)
shall be

conclusively presumed to have been duly given, whether or not the holder
receives such notice, but failure duly to provide such notice, or any defect in
such notice or in the provision thereof, to any holder of shares of Series A
Preferred Stock designated for redemption shall not affect the validity of the
proceedings for the redemption of any other shares of Series A Preferred Stock.
Each notice shall state (i) the redemption date; (ii) the number of shares of
Series A Preferred Stock to be redeemed and, if less than all the shares held by
such holder are to be redeemed, the number of such shares to be redeemed from
such holder (or the method of determining such number); (iii) the Redemption
Price; (iv) the place or places where the certificates evidencing such shares of
Series A Preferred Stock are to be surrendered for payment of the Redemption
Price; and (v) that dividend rights on the shares to be redeemed will cease on
the redemption date.

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(c)    Partial Redemption. In case of any redemption of only part of the shares
of Series A Preferred Stock at the time outstanding, the shares of Series A
Preferred Stock to be redeemed shall be selected either pro rata from the
holders of record of Series A Preferred Stock in proportion to the number of
Series A Preferred Stock held by such holders or by lot or in such other manner
as the Board of Directors of the Company or any duly authorized committee of the
Board of Directors of the Company may determine to be fair and equitable.
Subject to the provisions of this Section 6, the Board of Directors of the
Company or any duly authorized committee of the Board of Directors shall have
full power and authority to prescribe the terms and conditions upon which shares
of Series A Preferred Stock shall be redeemed from time to time.

(d)    Effectiveness of Redemption. If notice of redemption has been duly given
and if on or before the redemption date specified in the notice all funds
necessary for the redemption have been irrevocably set aside by the Company,
separate and apart from its other assets, in trust for the pro rata benefit of
the holders of the shares called for redemption, so as to be and continue to be
available therefor, or deposited by the Corporation with a bank or trust company
selected by the Board of Directors of the Company or any duly authorized
committee of the Board of Directors (the “Depositary Company”) in trust for the
pro rata benefit of the holders of the shares called for redemption, then,
notwithstanding that any certificate for any share so called for redemption has
not been surrendered for cancellation, on and after the redemption date all
shares so called for redemption shall cease to be outstanding, all dividends
with respect to such shares shall cease to accrue after such redemption date,
and all rights with respect to such shares shall forthwith on such redemption
date cease and terminate, except only the right of the holders thereof to
receive the amount payable on such redemption from the Depository Company at any
time after the redemption date from the funds so deposited, without interest.
The Company shall be entitled to receive, from time to time, from the Depositary
Company any interest accrued on such funds, and the holders of any shares called
for redemption shall have no claim to any such interest. Any funds so deposited
and unclaimed at the end of two years from the redemption date shall, to the
extent permitted by law, be released or repaid to the Company, after which time
the holders of the shares so called for redemption shall look only to the
Company for payment of the redemption price of such shares.

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Section 7. Voting Rights.

The holders of Series A Preferred Stock will have no voting rights and will not
be entitled to elect any directors, except as expressly provided by law.

Section 8. Changes for Clarification.

Without the consent of the holders of Series A Preferred Stock, so long as such
action does not adversely affect the powers, preferences, privileges or rights
of the Series A Preferred Stock, the Company may amend, alter, supplement or
repeal any terms of the Series A Preferred Stock:

(a)    to cure any ambiguity, or to cure, correct or supplement any provision
contained in this Certificate of Designation that may be defective or
inconsistent; or

(b)    to make any provision with respect to matters or questions arising with
respect to the Series A Preferred Stock that is not inconsistent with the
provisions of this Certificate of Designation.

Section 9. Changes after Provision for Redemption.

No vote or consent of the holders of Series A Preferred Stock shall be required
pursuant to Section 7 above if, at or prior to the time when any such vote or
consent would otherwise be required pursuant to such Section, all outstanding
shares of Series A Preferred Stock shall have been redeemed, or shall have been
called for redemption upon proper notice and sufficient funds shall have been
set aside for such redemption, in each case pursuant to Section 6 above.

Section 10. Conversion.

The holders of Series A Preferred Stock shall not have any rights to convert
such Series A Preferred Stock into shares of any other class of capital stock of
the Company.

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Section 11. Rank.

For the avoidance of doubt, the Board of Directors or any duly authorized
committee thereof may, without the vote of the Holders of the Series A Preferred
Stock, authorize and issue additional shares of Junior Stock or shares of any
class or series of stock of the Company now existing or hereafter authorized
that ranks equally with the Series A Preferred Stock in the payment of dividends
or in the distribution of assets on any voluntary or involuntary liquidation,
dissolution or winding up of the Company.

Section 12. Repurchase.

Subject to the limitations imposed herein, the Company may purchase Series A
Preferred Stock from time to time to such extent, in such manner, and upon such
terms as the Board of Directors of the Company or any duly authorized committee
of the Board of Directors of the Company may determine; provided, however, that
the Company shall not use any of its funds for any such purchase when there are
reasonable grounds to believe that the Company is, or by such purchase would be,
rendered insolvent.

Section 13. Unissued or Reacquired Shares.

Shares of Series A Preferred Stock not issued or which have been issued,
redeemed or otherwise purchased or acquired by the Company shall be restored to
the status of authorized but unissued shares of preferred stock without
designation as to series.

Section 14. No Sinking Fund.

The Series A Preferred Stock will not be subject to any mandatory redemption,
sinking fund or other similar provisions. Holders of Series A Preferred Stock
will have no right to require redemption or repurchase of any shares of Series A
Preferred Stock.

Section 15. Record Holders.

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To the fullest extent permitted by applicable law, the Company and any transfer
agent for the Series A Preferred Stock may deem and treat the record holder of
any share of Series A Preferred Stock as the true and lawful owner thereof for
all purposes, and neither the Company nor such transfer agent shall be affected
by any notice to the contrary.

Section 16. Notices.

All notices or communications in respect of the Series A Preferred Stock shall
be sufficiently given if given in writing and delivered in person or by first
class mail, postage prepaid, or if given in such other manner as may be
permitted in this Certificate of Designation, the Company’s Articles of
Incorporation or Bylaws or by applicable law.

Section 17. No Preemptive Rights.

No share of Series A Preferred Stock shall have any rights of preemption
whatsoever as to any securities of the Company, or any warrants, rights or
options issued or granted with respect thereto, regardless of how such
securities, or such warrants, rights or options, may be designated, issued or
granted.

Section 18. Other Rights.

The shares of Series A Preferred Stock shall not have any voting powers,
preferences or relative, participating, optional or other special rights, or
qualifications, limitations or restrictions thereof, other than as set forth
herein or in the Articles of Incorporation or as provided by applicable law.

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EXHIBIT C

RISK FACTORS

Investing in the Shares involves risk. Before deciding to invest in the Shares,
you should carefully consider the following factors and the other information in
the documents incorporated by reference herein, including the Designation
Certificate and the risks described under “Risk Factors” in our Annual Report on
Form 10-K for the year ended December 31, 2015 filed with the U.S. Securities
and Exchange Commission on March 14, 2016. If any of these risks occurs, our
business, financial condition, and results of operations could suffer, and the
value of the Shares could decline substantially, in which case you could lose
part or all of your investment.

Dividends on the Shares are discretionary and may not be declared in full or at
all if the Company’s Board of Directors elects not to declare dividends in
respect of any financial year.

If declared by the Company’s Board of Directors in its discretion, dividends
would be paid on the liquidation preference of $1,000 per Share, quarterly in
arrears on each March 31, June 30, September 30 and December 31, commencing
September 30, 2016. You should carefully review Section 4 of the Designation
Certificate attached hereto as Exhibit C for a complete description of the
dividend policy with respect to the Shares.

Dividends on the Shares are non-cumulative and holders of the Shares will have
no claim in respect of undeclared dividends.

Dividends on the Shares are non-cumulative. If the Company’s Board of Directors
does not declare dividends or any part thereof in respect of any Shares, then
holders of the Shares will have no claim in respect of the non-payment and the
Company will have no obligation to pay those dividends or to pay any interest on
the dividends, whether or not dividends on the Shares are declared for any
future dividend period.

The Shares are subject to redemption at the option of the Company’s Board of
Directors.

The Company, at the option of its Board of Directors, may redeem in whole or in
part the Shares on the first Dividend Payment Date that is at least five
(5) years from the date of issuance of such Shares or on any Dividend Payment
Date thereafter, at a redemption price of $1,000 per Share plus dividends that
have been declared but not paid, but without accumulation of any undeclared
dividends. You should carefully review Section 6 of the Designation Certificate
for a complete description of the Company’s right to redeem the Shares.

 

 

If the Company’s financial condition were to deteriorate, you could lose all or
a part of your investment.

The Company’s ability to pay dividends is conditional upon the extent to which
it has distributable funds in respect of any financial year, which will be
affected by its financial condition. If the Company’s financial condition were
to deteriorate, you might not receive any dividends on the Shares. If the
Company liquidates, dissolves or winds up, you could lose all or part of your
investment.

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If the Company is wound-up or liquidated, any distribution on the Shares will be
subordinated to the claims of the Company’s creditors.

If the Company is wound-up or liquidated, voluntarily or involuntarily, you will
not be entitled to receive any liquidation preference on the Shares until after
the claims of all of the Company’s creditors have been satisfied. If the Company
does not have sufficient assets at the time of liquidation to satisfy those
claims, you will not receive any liquidation preference on the Shares. There is
no limitation on the Company’s ability to issue debt or equity securities in the
future that would rank equal or senior in liquidation to the Shares.

Investors may be required to bear the financial risks of an investment in the
Shares for an indefinite period of time.

The Shares do not have a maturity or mandatory final redemption date and
investors will have no right to compel redemption of the Shares. Although the
Company may redeem Shares in accordance with their terms, the Company has no
obligation to do so. In addition, the Shares are subject to restrictions on
transferability and resale and may not be transferred or resold except as
permitted under the Securities Act of 1933, as amended, and the applicable state
securities laws, pursuant to registration or exemption therefrom. Therefore, you
should be aware that you may be required to bear the financial risks of an
investment in the Shares for an indefinite period of time.

Holders of the Shares do not have the voting rights of the Company’s common
shareholders.

As a holder of the Shares, you will not be entitled to receive notice of, attend
or vote at any general meeting of our common shareholders.

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EXHIBIT D

REGULATION D ACCREDITED

INVESTOR QUESTIONNAIRE

REGULATION D QUALIFICATION

STATEMENT

The undersigned investor represents to the Company that the undersigned
qualifies as an “accredited investor” pursuant to Regulation D under the
Securities Act of 1933 (the “Act”), as a result of having the following status:

 

——    (1)    a natural person with an individual net worth, or joint net worth
with his or her own spouse, excluding the value of his, her, or their primary
residence, exceeding $1,000,000; ——    (2)    a natural person who had an
individual income in excess of $200,000 in each of the two most recent calendar
years or joint income with his or her spouse in excess of $300,000 in each of
the two most recent calendar years and who reasonably expects reaching the same
income level in the current calendar year; ——    (3)    a trust, with total
assets of $5,000,000 not formed for the specific purpose of acquiring the Note,
whose purchase is directed by a person who has such knowledge and experience in
financial and business matters that he or she is capable of evaluating the
merits and risks of the prospective investment; ——    (4)    a bank as defined
in Section 3(a)(2) of the Act, or a savings and loan association or other
institution as defined in Section 3(a)(5)(A) of the Act, whether acting in its
individual or fiduciary capacity; ——    (5)    a broker dealer registered
pursuant to Section 15 of the Securities Exchange Act of 1934, as amended; ——   
(6)    an insurance company as defined in Section 2(13) of the Act; ——    (7)   
an investment company registered under the Investment Company Act of 1940, as
amended (the “1940 Act”) or a business development company as defined in
Section 2(a) (48) of the 1940 Act; ——    (8)    a Small Business Investment
Company licensed by the U.S. Small Business Administration under Section 301(c)
or (d) of the Small Business Investment Act of 1958; ——    (9)    a plan
established and maintained by a state, its political

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      subdivisions, or any agency or instrumentality of a state or its political
subdivisions for the benefit of its employees, if such plan has total assets in
excess of $5,000,000; ——    (10)    an employee benefit plan within the meaning
of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), if
     

(a)    The investment decision is made by a plan fiduciary, as defined in
Section 3(21) of ERISA, which is either a bank, savings and loan association,
insurance company, or registered investment advisor, or

 

(b)    the employee benefit plan has total assets in excess of $5,000,000, or

 

(c)    the employee benefit plan is a self-directed plan with investment
decisions made solely by persons that are “accredited investors”;

——    (11)    a private business development company as defined in
Section 202(a)(22) of the Investment Advisors Act of 1940, as amended; ——   
(12)    an organization described in Section 501(c)(3) of the Internal Revenue
Code, a corporation, or similar business trust, limited liability company, or
partnership (which may include endowments or foundations), not formed for the
specific purpose of acquiring the securities offered, with total assets in
excess of $5,000,000; ——    (13)    an entity in which all of the equity owners
are “accredited investors” under any one or more of the categories specified in
paragraphs (1) through (12) above; or ——    (14)    A non-U.S. Person as that
term is defined in section 3.1 (d) (ii) of the Agreement.

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ADDITIONAL INFORMATION WHICH AN ISSUER MAY REQUIRE BEFORE ACCEPTING INVESTMENT
FROM AN INVESTOR:

 

  (a) Education Completed:

 

  (b) Investment Experience:

 

  (c) Tax Bracket:

Certification that:

 

  (a) The Investor has not filed or been involved in bankruptcy proceedings, and
there are no suits pending or judgments outstanding against the Investor, that
would impair the Investor’s ability to make payments on this investment;

 

  (b) The investment is solely for the Investor’s own account and not for the
account of any other person; and

 

  (c) The Investor’s assets do not constitute plan assets within the meaning of
ERISA.

The Investor further certifies:

In signing this Investor Questionnaire, they acknowledge they have received and
carefully reviewed all of the following documentation:

 

  (a) The Issuer’s Private Placement Subscription Agreement.

  (b) The Issuer’s Certificate of Designation.

  (c) The Risk Factors

Additionally in making this investment, the Investor is able to bear the
economic risk of this investment and the Investor acknowledges that this
investment involves a high degree of risk and that the Investor should not be
making this investment unless the Investor can afford to lose the amount
invested in its entirety.

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The foregoing statements and documents attached hereto are true and accurate to
my knowledge and belief, and the Investor is authorized to rely on the
information in entering into the Investment as of the date completed below.

SIGNATURE OF INVESTOR:

 

If an Individual:    _______________, 2016

Date:

         If an Entity: Date:    _______________, 2016             

(Signature of Investor)

 

         (Name of Entity)

(Printed or Typed Name)

 

If Co-owners:    _______________, 2016

Date:

        

(Type of Entity & State of formation)

 

By: ____________________________________

(Signature of official of Investor)

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(Signature of Co-Investor)

 

   Name: ________________________________

(Printed or Typed Name)

 

Type of ownership:    

 

_____________ co-tenants

_____________ joint tenancy (married couples only)

   Title: _________________________________