Exhibit 10.2

  

PLEDGE AND SECURITY AGREEMENT

  

 

dated as of December 10, 2015

   

between

   

BANK OF COMMERCE HOLDINGS, as Grantor

   

and

NEXBANK SSB, as Lender

 

 

 
 

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PLEDGE AND SECURITY AGREEMENT

  

This PLEDGE AND SECURITY AGREEMENT, dated as of December 10, 2015 (as it may be
amended, restated, supplemented or otherwise modified from time to time, this
“Agreement”), by and among Bank of Commerce Holdings, a California corporation
(the “Borrower”), each Additional Grantor (as herein defined) (along with the
Borrower, each, a “Grantor”), and NexBank SSB, as lender (together with its
successors and permitted assigns, the “Lender”).

 

RECITALS:

 

WHEREAS, reference is made to that certain Loan Agreement, dated as of the date
hereof (as it may be amended, restated, supplemented or otherwise modified from
time to time, the “Loan Agreement”), by and between Borrower and Lender;

  

WHEREAS, in consideration of the extensions of credit and other accommodations
of Lender as set forth in the Loan Agreement, Grantor has agreed to secure
Grantor’s obligations under the Loan Documents as set forth herein; and

  

NOW, THEREFORE, in consideration of the premises and the agreements, provisions
and covenants herein contained, and for other good and valuable consideration
the receipt and sufficiency of which is hereby acknowledged, Grantor and Lender
agree as follows:

 

SECTION 1. DEFINITIONS; GRANT OF SECURITY.

  

1.1 General Definitions. In this Agreement, the following terms shall have the
following meanings:

  

“Additional Grantors” shall have the meaning assigned in Section 7.2.

  

“Agreement” shall have the meaning set forth in the preamble.

 

“Borrower” shall have the meaning set forth in the preamble.

 

“Cash Proceeds” shall have the meaning assigned in Section 9.4. “Collateral”
shall have the meaning assigned in Section 2.1.

  

“Collateral Account” shall mean any account established by the Lender.

   

“Collateral Records” shall mean books, records, ledger cards, files,
correspondence, customer lists, supplier lists, blueprints, technical
specifications, manuals, computer software and related documentation, computer
printouts, tapes, disks and other electronic storage media and related data
processing software and similar items that at any time evidence or contain
information relating to any of the Collateral or are otherwise necessary or
helpful in the collection thereof or realization thereupon.

  

“Control” shall mean: (1) with respect to any Deposit Accounts, control within
the meaning of Section 9-104 of the UCC, (2) with respect to any Securities
Accounts, Security Entitlements, Commodity Contract or Commodity Account,
control within the meaning of Section 9-

106 of the UCC, (3) with respect to any Uncertificated Securities, control
within the meaning of Section 8-106(c) of the UCC, (4) with respect to any
Certificated Security, control within the meaning of Section 8-106(a) or (b) of
the UCC, (5) with respect to any Electronic Chattel Paper, control within the
meaning of Section 9-105 of the UCC, (6) with respect to Letter of Credit
Rights, control within the meaning of Section 9-107 of the UCC and (7) with
respect to any “transferable record”(as that term is defined in Section 201 of
the Federal Electronic Signatures in Global and National Commerce Act or in
Section 16 of the Uniform Electronic Transactions Act as in effect in any
relevant jurisdiction), control within the meaning of Section 201 of the Federal
Electronic Signatures in Global and National Commerce Act or in Section 16 of
the Uniform Electronic Transactions Act as in effect in the jurisdiction
relevant to such transferable record.

 

 

 
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“Grantor” shall have the meaning set forth in the preamble.

  

“Investment Related Property” shall mean: (i) all “investment property” (as such
term is defined in Article 9 of the UCC) and (ii) all of the following
(regardless of whether classified as investment property under the UCC): all
Pledged Stock.

 

“Lender” shall have the meaning set forth in the preamble.

  

“Loan Agreement” shall have the meaning set forth in the recitals.

  

“Pledge Supplement” shall mean any supplement to this Agreement in substantially
the form of Exhibit A.

  

“Pledged Stock” shall mean all shares of capital stock owned by Grantor,
including, without limitation, all shares of capital stock described on Schedule
5.2(I) under the heading “Pledged Stock” (as such schedule may be amended or
supplemented from time to time), and the certificates, if any, representing such
shares and any interest of Grantor in the entries on the books of the issuer of
such shares or on the books of any securities intermediary pertaining to such
shares, and all dividends, distributions, cash, warrants, rights, options,
instruments, securities and other property or proceeds from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of such shares.

  

“Secured Obligations” shall have the meaning assigned in Section 3.1.

  

“UCC” shall mean the Uniform Commercial Code as in effect from time to time in
the State of Texas; provided, however, that in the event that, by reason of
mandatory provisions of law, any or all of the perfection or priority of, or
remedies with respect to, any Collateral is governed by the Uniform Commercial
Code as enacted and in effect in a jurisdiction other than the State of Texas,
the term “UCC” shall mean the Uniform Commercial Code as enacted and in effect
in such other jurisdiction solely for purposes of the provisions hereof relating
to such perfection, priority or remedies.

  

“United States” or “U.S.” shall mean the United States of America.

  

1.2     Definitions; Interpretation.

 

(a) In this Agreement, the following capitalized terms shall have the meaning
given to them in the UCC (and, if defined in more than one Article of the UCC,
shall have the meaning given in Article 9 thereof): Certificated Security,
Proceeds and Supporting Obligations.

 

(b) All other capitalized terms used herein (including the preamble and recitals
hereto) and not otherwise defined herein shall have the meanings ascribed
thereto in the UCC or Loan Agreement, as applicable. The incorporation by
reference of terms defined in the Loan Agreement shall survive any termination
of the Loan Agreement until this Agreement is terminated as provided in Section
10 hereof. Any of the terms defined herein may, unless the context otherwise
requires, be used in the singular or the plural, depending on the reference.
References herein to any Section, Appendix, Schedule or Exhibit shall be to a
Section, an Appendix, a Schedule or an Exhibit, as the case may be, hereof
unless otherwise specifically provided. The use herein of the word “include” or
“including”, when following any general statement, term or matter, shall not be
construed to limit such statement, term or matter to the specific items or
matters set forth immediately following such word or to similar items or
matters, whether or not non-limiting language (such as “without limitation” or
“but not limited to” or words of similar import) is used with reference thereto,
but rather shall be deemed to refer to all other items or matters that fall
within the broadest possible scope of such general statement, term or matter.
The terms lease and license shall include sub-lease and sub-license, as
applicable. If any conflict or inconsistency exists between this Agreement and
the Loan Agreement, the Loan Agreement shall govern. All references herein to
provisions of the UCC shall include all successor provisions under any
subsequent version or amendment to any Article of the UCC.

 

 

 
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SECTION 2.     GRANT OF SECURITY.

 

2.1 Grant of Security. The Grantor hereby grants to the Lender a security
interest in and continuing lien on all of Grantor’s right, title and interest
in, to and under the following personal property of the Grantor, in each case
whether now or hereafter existing or in which the Grantor now has or hereafter
acquires an interest and wherever the same may be located (all of which being
hereinafter collectively referred to as the “Collateral”):

  

 

(a)

Pledged Stock;

 

 

(b)

Investment Related Property;

  

 

(c)

to the extent not otherwise included above, all Collateral Records and
Supporting Obligations relating to any of the foregoing; and

  

 

(d)

to the extent not otherwise included above, all Proceeds, products, accessions,
rents and profits of or in respect of any of the foregoing.

   

SECTION 3.     SECURITY FOR OBLIGATIONS; GRANTOR REMAINS LIABLE.

 

3.1 Security for Obligations. This Agreement secures, and the Collateral is
collateral security for, the prompt and complete payment or performance in full
when due, whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise (including the payment of amounts that would
become due but for the operation of the automatic stay under Section 362(a) of
the Bankruptcy Code, 11 U.S.C. §362(a) (and any successor provision thereof)),
of all Obligations of Grantor arising under the Loan Documents (the “Secured
Obligations”).

  

3.2 Continuing Liability Under Collateral. Notwithstanding anything herein to
the contrary, (i) Grantor shall remain liable for all obligations under the
Collateral and nothing contained herein is intended or shall be a delegation of
duties to the Lender, (ii) Grantor shall remain liable under each of the
agreements included in the Collateral, including, without limitation, any
agreements relating to Pledged Stock, to perform all of the obligations
undertaken by it thereunder all in accordance with and pursuant to the terms and
provisions thereof and the Lender shall have no obligation or liability under
any of such agreements by reason of or arising out of this Agreement or any
other document related thereto nor shall the Lender have any obligation to make
any inquiry as to the nature or sufficiency of any payment received by it or
have any obligation to take any action to collect or enforce any rights under
any agreement included in the Collateral, including, without limitation, any
agreements relating to Pledged Stock, and (iii) the exercise by the Lender of
any of its rights hereunder shall not release Grantor from any of its duties or
obligations under the contracts and agreements included in the Collateral.

 

 

 
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SECTION 4. CERTAIN PERFECTION REQUIREMENTS

 

4.1     Delivery Requirements. With respect to any Certificated Securities
included in the Collateral, Grantor shall deliver to the Lender the Certificates
evidencing such Certificated Securities duly indorsed by an effective
indorsement (within the meaning of Section 8-107 of the UCC), or accompanied by
share transfer powers or other instruments of transfer duly endorsed by such an
effective endorsement, in each case, to the Lender or in blank.

  

4.2     Control Requirements. With respect to any Uncertificated Security
included in the Collateral (other than any Uncertificated Securities credited to
a Securities Account), Grantor shall cause the issuer of such Uncertificated
Security to notify the Lender of any Uncertificated Security included in the
Collateral. Upon the request of the Lender, the Grantor shall enter into an
agreement with the Lender, such agreement in form and substance reasonably
satisfactory to the Lender, pursuant to which such issuer agrees to comply with
the Lender’s instructions with respect to such Uncertificated Security without
further consent by Grantor.

  

4.3     Timing and Notice. With respect to any Collateral in existence on the
Effective Date, Grantor shall comply with the requirements of Section 4 on the
date hereof and, with respect to any Collateral hereafter owned or acquired,
Grantor shall comply with such requirements within thirty (30) days of Grantor
acquiring rights therein. Grantor shall promptly inform the Lender of its
acquisition of any Collateral for which any action is required by Section 4
hereof.

 

SECTION 5.     REPRESENTATIONS AND WARRANTIES. Grantor hereby represents and
warrants, on the Effective Date that:

 

5.1     Grantor Information and Status.

 

(a) Schedule 5.1(A) and (B) sets forth, as of the Effective Date, under the
appropriate headings: (1) the full legal name of Grantor, (2) all trade names or
other names under which Grantor currently conducts business, (3) the type of
organization of Grantor, (4) the jurisdiction of organization of Grantor, (5)
its organizational identification number, if any, and (6) the jurisdiction where
the chief executive office or its principal place of business is located.

  

(b) except as provided on Schedule 5.1(C), it has not changed its name,
jurisdiction of organization or its corporate structure in any way (e.g., by
merger, consolidation, change in corporate form or otherwise) and has not done
business under any other name, in each case, within the past five (5) years;

 

(c) it has been duly organized and is validly existing as an entity of the type
as set forth opposite its name on Schedule 5.1(A) solely under the laws of the
jurisdiction as set forth opposite its name on Schedule 5.1(A) and remains duly
existing as such. It has not filed any certificates of dissolution or
liquidation, any certificates of domestication, transfer or continuance in any
other jurisdiction; and

   

(d)     Grantor is not a “transmitting utility” (as defined in Section
9-102(a)(80) of the UCC).

 

 

 
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5.2     Collateral Identification, Special Collateral.

 

(a)     Schedule 5.2 sets forth as of the Effective Date under the appropriate
headings all of Grantor’s Pledged Stock;

  

(b)     none of the Collateral constitutes, or is the Proceeds of, (1) Farm
Products, (2) As-Extracted Collateral, (3) Manufactured Homes, (4) timber to be
cut, or (5) aircraft, aircraft engines, satellites, ships or railroad rolling
stock; and

 

(c)     all information supplied by Grantor with respect to any of the
Collateral (in each case taken as a whole with respect to any particular
Collateral) is accurate and complete in all material respects.

 

5.3     Ownership of Collateral and Absence of Other Liens.

 

It owns the Collateral purported to be owned by it or otherwise has the rights
it purports to have in each item of Collateral and, as to all Collateral whether
now existing or hereafter acquired, developed or created (including by way of
lease or license), will continue to own or have such rights in each item of the
Collateral (except as otherwise permitted by the Loan Agreement), in each case
free and clear of any and all Liens, rights or claims of all other Persons,
including, without limitation, liens arising as a result of Grantor becoming
bound (as a result of merger or otherwise) as debtor under a security agreement
entered into by another Person other than, in the case of priority only, any
Permitted Liens.

  

5.4     Status of Security Interest.

 

(a) upon the filing of financing statements naming Grantor as “debtor” and the
Lender as “secured party” and describing the Collateral in the filing offices
set forth opposite Grantor’s name on Schedule 5.4 hereof (as such schedule may
be amended or supplemented from time to time), the security interest of the
Lender in all Collateral that can be perfected by the filing of a financing
statement under the Uniform Commercial Code as in effect in any jurisdiction
will constitute a valid, perfected, first priority Lien subject, in the case of
priority only, to any Permitted Liens with respect to Collateral. Each agreement
purporting to give the Lender Control over any Collateral is effective to
establish the Lender’s Control of the Collateral subject thereto; and

  

(b) no authorization, consent, approval or other action by, and no notice to or
filing with, any Governmental Authority or regulatory body or any other Person
is required for either (i) the pledge or grant by Grantor of the Liens purported
to be created in favor of the Lender hereunder or (ii) the exercise by Lender of
any rights or remedies in respect of any Collateral (whether specifically
granted or created hereunder or created or provided for by applicable law),
except (A) for the filings contemplated by clause (a) above, (B) those that have
been obtained prior to the date of determination and (C) as may be required, in
connection with the disposition of any Investment Related Property, by laws
generally affecting the offering and sale of Securities and the regulations of
any applicable Bank Regulatory Authority.

   

5.5     Reserved.

  

5.6     Pledged Stock, Investment Related Property.

 

(a) it is the record and beneficial owner of the Pledged Stock free of all
Liens, rights or claims of other Persons and there are no outstanding warrants,
options or other rights to purchase, or shareholder, voting trust or similar
agreements outstanding with respect to, or property that is convertible into, or
that requires the issuance or sale of, any Pledged Stock;

 

 

 
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(b) no consent of any Person including any other general or limited partner, any
other member of a limited liability company, any other shareholder or any other
trust beneficiary is necessary in connection with the creation, perfection or
first priority status of the security interest of the Lender in any Pledged
Stock or the exercise by the Lender of the voting or other rights provided for
in this Agreement or the exercise of remedies in respect thereof except such as
have been obtained and as may be required, in connection with the disposition of
any Investment Related Property, by laws generally affecting the offering and
sale of Securities and the regulations of any applicable Bank Regulatory
Authority.

 

SECTION 6.     COVENANTS AND AGREEMENTS.

 

Grantor hereby covenants and agrees that:

 

6.1     Grantor Information and Status.

 

(a) Without limiting any prohibitions or restrictions on mergers or other
transactions set forth in the Loan Agreement, it shall not change Grantor’s
name, identity, corporate structure (e.g. by merger, consolidation, change in
corporate form or otherwise), principal place of business, chief executive
office, organizational identification number, type of organization or
jurisdiction of organization unless it shall have (a) notified the Lender in
writing at least ten (10) days prior to any such change or establishment,
identifying such new proposed name, identity, corporate structure, principal
place of business, chief executive office, jurisdiction of organization or trade
name and providing such other information in connection therewith as the Lender
may reasonably request and (b) taken all actions necessary to maintain the
continuous validity, perfection and the same or better priority of the Lender’s
security interest in the Collateral granted or intended to be granted and agreed
to hereby, which in the case of any merger or other change in corporate
structure shall include, without limitation, executing and delivering to the
Lender a completed Pledge Supplement together with all Supplements to Schedules
thereto, upon completion of such merger or other change in corporate structure
confirming the grant of the security interest hereunder.

  

6.2     Ownership of Collateral and Absence of Other Liens.

 

(a) except for the security interest created by this Agreement, it shall not
create or suffer to exist any Lien upon or with respect to any of the
Collateral, other than Permitted Liens, and Grantor shall defend the Collateral
against all Persons at any time reasonably claiming any interest therein;

 

(b) upon Grantor or any executive officer of Grantor obtaining knowledge
thereof, it shall promptly notify the Lender in writing of any event that could
reasonably be expected to materially diminish the value of the Collateral or any
portion thereof, the ability of Grantor or the Lender to dispose of the
Collateral or any portion thereof, or the rights and remedies of the Lender in
relation thereto, including, without limitation, the levy of any legal process
against the Collateral or any portion thereof; and

  

(c) it shall not sell, transfer or assign (by operation of law or otherwise) or
exclusively license to another Person any Collateral except as otherwise
permitted by the Loan Agreement.

  

6.3     Status of Security Interest.

 

(a) Grantor shall maintain the security interest of the Lender hereunder in all
Collateral as valid, perfected, first priority Liens (subject to Permitted
Liens).

 

 

 
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(b) Notwithstanding the foregoing, Grantor shall not be required to take any
action to perfect any Collateral to the extent that the Grantor, in consultation
with the Lender, reasonably determines that the cost of obtaining a security
interest in such Collateral exceeds the practical benefit thereof to the Lender.

  

6.4     Pledged Stock, Investment Related Property.

  

(a) except as provided in the next sentence, in the event Grantor receives any
dividends, interest or distributions on any Pledged Stock or other Investment
Related Property, upon the merger, consolidation, liquidation or dissolution of
any issuer of any Pledged Stock or Investment Related Property, then (a) such
dividends, interest or distributions and securities or other property shall be
included in the definition of Collateral without further action and (b) Grantor
shall promptly take all steps, if any, necessary to ensure the validity,
perfection, priority and, if applicable, control of the Lender over such
Investment Related Property and pending any such action Grantor shall be deemed
to hold such dividends, interest, distributions, securities or other property in
trust for the benefit of the Lender and shall segregate such dividends,
distributions, Securities or other property from all other property of Grantor.
Notwithstanding the foregoing, so long as no Event of Default shall have
occurred and be continuing, the Lender authorizes Grantor to retain all ordinary
cash dividends and distributions paid consistent with the past practice of the
issuer and all scheduled payments of interest;

  

(b)     Voting.

  

(i) So long as no Event of Default shall have occurred and be continuing, except
as otherwise provided under the covenants and agreements relating to Investment
Related Property in this Agreement or elsewhere herein or in the Loan Agreement,
Grantor shall be entitled to exercise or refrain from exercising any and all
voting and other consensual rights pertaining to the Investment Related Property
or any part thereof for any purpose not inconsistent with the terms of this
Agreement or the Loan Agreement; and

 

(ii)     Upon the occurrence and during the continuation of an Event of Default:

  

(1)   all rights of Grantor to exercise or refrain from exercising the voting
and other consensual rights which it would otherwise be entitled to exercise
pursuant hereto shall upon notice from the Lender cease and all such rights
shall thereupon become vested in the Lender who shall thereupon have the sole
right to exercise such voting and other consensual rights; and

 

(2)   in order to permit the Lender to exercise the voting and other consensual
rights which it may be entitled to exercise pursuant hereto and to receive all
dividends and other distributions which it may be entitled to receive hereunder:
(x) Grantor shall promptly execute and deliver (or cause to be executed and
delivered) to the Lender all proxies, dividend payment orders and other
instruments as the Lender may from time to time reasonably request and (y)
Grantor acknowledges that the Lender may utilize the power of attorney set forth
in Section 8.1.

 

 

 
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SECTION 7.     FURTHER ASSURANCES; ADDITIONAL GRANTORS.

  

7.1     Further Assurances.

 

(a) Grantor agrees that from time to time, at the expense of Grantor, that it
shall promptly execute and deliver all further instruments and documents, and
take all further action, that may be necessary, or that the Lender may
reasonably request, in order to create and/or maintain the validity, perfection
or priority of and protect any security interest granted or purported to be
granted hereby or to enable the Lender to exercise and enforce its rights and
remedies hereunder with respect to any Collateral.

  

(b) Grantor hereby authorizes the Lender to file a Record or Records, including,
without limitation, financing or continuation statements and amendments and
supplements to any of the foregoing, in any jurisdictions and with any filing
offices as the Lender may determine, in its sole discretion, are necessary to
perfect or otherwise protect the security interest granted to the Lender herein.
Such financing statements may describe the Collateral in the same manner as
described herein or may contain an indication or description of collateral that
describes such property in any other manner as the Lender may determine, in its
sole discretion, is necessary to ensure the perfection of the security interest
in the Collateral granted to the Lender herein.

    

7.2 Additional Grantors. From time to time subsequent to the date hereof, to the
extent required by the Loan Agreement, additional Persons may become parties
hereto as additional Grantors (each, an “Additional Grantor”), by executing a
joinder agreement in a form reasonably acceptable to Grantor and Lender. Upon
delivery of any such joinder agreement to the Lender, notice of which is hereby
waived by Grantor, each Additional Grantor shall be a Grantor and shall be as
fully a party hereto as if Additional Grantor were an original signatory hereto.
Grantor expressly agrees that its obligations arising hereunder shall not be
affected or diminished by the addition or release of any other Grantor
hereunder, nor by any election of Lender not to cause any Subsidiary of Borrower
to become an Additional Grantor hereunder. This Agreement shall be fully
effective as to any Grantor that is or becomes a party hereto regardless of
whether any other Person becomes or fails to become or ceases to be a Grantor
hereunder.

 

SECTION 8.     LENDER APPOINTED ATTORNEY-IN-FACT.

 

8.1 Power of Attorney. Grantor hereby irrevocably appoints the Lender (such
appointment being coupled with an interest) as Grantor’s attorney-in-fact, with
full authority in the place and stead of Grantor and in the name of Grantor, the
Lender or otherwise, from time to time in the Lender’s discretion to take any
action and to execute any instrument, in each case, that the Lender may deem
reasonably necessary in connection with any of the following actions:

 

(a) upon the occurrence and during the continuance of any Event of Default, to
obtain and adjust insurance required to be maintained by Grantor or paid to the
Lender pursuant to the Loan Agreement;

   

(b) upon the occurrence and during the continuance of any Event of Default, to
ask for, demand, collect, sue for, recover, compound, receive and give
acquittance and receipts for moneys due and to become due under or in respect of
any of the Collateral;

 

 

 
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(c) upon the occurrence and during the continuance of any Event of Default, to
receive, endorse and collect any drafts or other instruments, documents and
chattel paper in connection with clause (b) above;

 

(d) upon the occurrence and during the continuance of any Event of Default, to
file any claims or take any action or institute any proceedings that the Lender
may deem necessary or desirable for the collection of any of the Collateral or
otherwise to enforce the rights of the Lender with respect to any of the
Collateral;

 

(e) to prepare and file any UCC financing statements against Grantor as debtor;

 

(f) to take or cause to be taken all actions necessary to perform or comply or
cause performance or compliance with the terms of this Agreement (if Grantor has
failed to take such action), including, without limitation, access to pay or
discharge taxes or Liens (other than Permitted Liens) levied or placed upon or
threatened against the Collateral, the legality or validity thereof and the
amounts necessary to discharge the same to be determined by the Lender in its
sole discretion, any such payments made by the Lender to become obligations of
Grantor to the Lender, due and payable immediately without demand; and

  

(g) upon the occurrence and during the continuance of any Event of Default,
generally to sell, transfer, lease, license, pledge, make any agreement with
respect to or otherwise deal with any of the Collateral as fully and completely
as though the Lender were the absolute owner thereof for all purposes, and to
do, at the Lender’s option and Grantor’s expense, at any time or from time to
time, all acts and things that the Lender deems reasonably necessary to protect,
preserve or realize upon the Collateral and the Lender’s security interest
therein in order to effect the intent of this Agreement, all as fully and
effectively as Grantor might do.

  

8.2 No Duty on the Part of Lender. The powers conferred on the Lender hereunder
are solely to protect its interest in the Collateral and shall not impose any
duty upon the Lender to exercise any such powers. The Lender shall be
accountable only for amounts that it actually receives as a result of the
exercise of such powers, and neither the Lender nor any of its officers,
directors, employees or agents shall be responsible to Grantor for any act or
failure to act hereunder, except for their own gross negligence bad faith or
willful misconduct.

 

SECTION 9.     REMEDIES.

 

9.1     Generally.

 

(a) If any Event of Default shall have occurred and be continuing, the Lender
may exercise in respect of the Collateral, in addition to all other rights and
remedies provided for

 

herein or otherwise available to it at law or in equity, all the rights and
remedies of the Lender on default under the UCC (whether or not the UCC applies
to the affected Collateral) to collect, enforce or satisfy any Secured
Obligations then owing, whether by acceleration or otherwise, and also may
pursue any of the following separately, successively or simultaneously:

 

(i) require Grantor to, and Grantor hereby agrees that it shall at its expense
and promptly upon request of the Lender forthwith, assemble all or part of the
Collateral as directed by the Lender and make it available to the Lender at a
place to be designated by the Lender that is reasonably convenient to both
parties;

 

 

 
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(ii) enter onto the property where any Collateral is located and take possession
thereof with or without judicial process;

 

(iii) prior to the disposition of the Collateral, store, process, repair or
recondition the Collateral or otherwise prepare the Collateral for disposition
in any manner to the extent the Lender deems appropriate; and

  

(iv) without notice except as specified below or under the UCC, sell, assign,
lease, license (on an exclusive or nonexclusive basis) or otherwise dispose of
the Collateral or any part thereof in one or more parcels at public or private
sale, at any of the Lender’s offices or elsewhere, for cash, on credit or for
future delivery, at such time or times and at such price or prices and upon such
other terms as the Lender may deem commercially reasonable.

  

(b) The Lender may be the purchaser of any or all of the Collateral at any
public or private (to the extent the portion of the Collateral being privately
sold is of a kind that is customarily sold on a recognized market or the subject
of widely distributed standard price quotations) sale in accordance with the UCC
and the Lender shall be entitled, for the purpose of bidding and making
settlement or payment of the purchase price for all or any portion of the
Collateral sold at any such sale made in accordance with the UCC, to use and
apply any of the Secured Obligations as a credit on account of the purchase
price for any Collateral payable by the Lender at such sale. Each purchaser at
any such sale shall hold the property sold absolutely free from any claim or
right on the part of Grantor, and Grantor hereby waives (to the extent permitted
by applicable law) all rights of redemption, stay and/or appraisal which it now
has or may at any time in the future have under any rule of law or statute now
existing or hereafter enacted. Grantor agrees that, to the extent notice of sale
shall be required by law, at least ten (10) days’ notice to Grantor of the time
and place of any sale shall constitute reasonable notification. The Lender shall
not be obligated to make any sale of Collateral regardless of notice of sale
having been given. The Lender may adjourn any public or private sale from time
to time by announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so
adjourned. Grantor hereby waives any claims against the Lender arising by reason
of the fact that the price at which any Collateral may have been sold at such a
private sale was less than the price which might have been obtained at a public
sale, even if the Lender accepts the first offer received and does not offer
such Collateral to more than one offeree. If the proceeds of any sale or other
disposition of the Collateral are insufficient to pay all the Secured
Obligations, Grantor shall be liable for the deficiency and the fees of any
attorneys employed by the Lender to collect such deficiency. Grantor further
agrees that a breach of any of the covenants contained in this Section will
cause irreparable injury to the Lender, that the Lender has no adequate remedy
at law in respect of such breach and, as a consequence, that each and every
covenant contained in this Section shall be specifically enforceable against
Grantor, and Grantor hereby waives and agrees not to assert any defenses against
an action for specific performance of such covenants except for a defense that
no default has occurred giving rise to the Secured Obligations becoming due and
payable prior to their stated maturities. Nothing in this Section shall in any
way limit the rights of the Lender hereunder.

 

(c) The Lender may sell the Collateral without giving any warranties as to the
Collateral. The Lender may specifically disclaim or modify any warranties of
title or the like. This procedure will not be considered to adversely affect the
commercial reasonableness of any sale of the Collateral.

  

(d)     The Lender shall have no obligation to marshal any of the Collateral.

  

9.2 Application of Proceeds. Except as expressly provided elsewhere in this
Agreement, all proceeds received by the Lender in the event that an Event of
Default shall have occurred and not otherwise been waived, and the maturity of
the Obligations shall have been accelerated pursuant to Section 16.1 of the Loan
Agreement and in respect of any sale of, any collection from, or other
realization upon all or any part of the Collateral shall be applied in full or
in part by the Lender against, the Secured Obligations in the following order of
priority: first, to the payment of all costs and expenses of such sale,
collection or other realization, including reasonable compensation to the Lender
and its agents and counsel, and all other expenses, liabilities and advances
made or incurred by the Lender in connection therewith, and all amounts for
which the Lender is entitled to indemnification hereunder and all advances made
by the Lender hereunder for the account of the Grantor, and to the payment of
all costs and expenses paid or incurred by the Lender in connection with the
exercise of any right or remedy hereunder or under the Loan Agreement, all in
accordance with the terms hereof or thereof; second, to the extent of any excess
of such proceeds, to the payment of all other Secured Obligations; and third, to
the extent of any excess of such proceeds, to the payment to or upon the order
of the Grantor or to whosoever may be lawfully entitled to receive the same or
as a court of competent jurisdiction may direct.

 

 

 
10

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9.3 Investment Related Property. Grantor recognizes that, by reason of certain
prohibitions contained in the Securities Act and applicable state securities
laws, the Lender may be compelled, with respect to any sale of all or any part
of the Investment Related Property conducted without prior registration or
qualification of such Investment Related Property under the Securities Act
and/or such state securities laws, to limit purchasers to those who will agree,
among other things, to acquire the Investment Related Property for their own
account, for investment and not with a view to the distribution or resale
thereof. Grantor acknowledges that any such private sale may be at prices and on
terms less favorable than those obtainable through a public sale without such
restrictions (including a public offering made pursuant to a registration
statement under the Securities Act) and, notwithstanding such circumstances,
each Grantor agrees that any such private sale shall be deemed to have been made
in a commercially reasonable manner and that the Lender shall have no obligation
to engage in public sales and no obligation to delay the sale of any Investment
Related Property for the period of time necessary to permit the issuer thereof
to register it for a form of public sale requiring registration under the
Securities Act or under applicable state securities laws, even if such issuer
would, or should, agree to so register it. If the Lender determines to exercise
its right to sell any or all of the Investment Related Property, upon written
request, Grantor shall and shall cause each issuer of any Pledged Stock to be
sold hereunder, each partnership and each limited liability company from time to
time to furnish to the Lender all such information as the Lender may request in
order to determine the number and nature of interest, shares or other
instruments included in the Investment Related Property which may be sold by the
Lender in exempt transactions under the Securities Act and the rules and
regulations of the Securities and Exchange Commission thereunder, as the same
are from time to time in effect.

  

9.4     Cash Proceeds. If any Event of Default shall have occurred and be
continuing, all proceeds of any Collateral received by Grantor consisting of
cash, checks and other near-cash items (collectively, “Cash Proceeds”) shall be
held by Grantor in trust for the Lender, segregated from other funds of Grantor,
and shall, upon the exercise of remedies by the Lender, be turned over to the
Lender in the exact form received by Grantor (duly indorsed by such Grantor to
the Lender, if required) and held by the Lender in the Collateral Account. Any
Cash Proceeds received by the Lender (whether from a Grantor or otherwise) may,
in the sole discretion of the Lender, (A) be held by the Lender as collateral
security for the Secured Obligations (whether matured or unmatured) and/or (B)
then or at any time thereafter may be applied by the Lender against the Secured
Obligations then due and owing.

 

SECTION 10. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS.

 

This Agreement shall create a continuing security interest in the Collateral and
shall remain in full force and effect until the payment in full of all Secured
Obligations (other than contingent obligations that survive the termination of
the Loan Agreement), be binding upon Grantor, its successors and assigns, and
inure, together with the rights and remedies of the Lender hereunder, to the
benefit of the Lender and its successors, transferees and assigns. Without
limiting the generality of the foregoing, but subject to the terms of the Loan
Agreement, Lender may assign or otherwise transfer any Loans held by it to any
other Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to Lender herein or otherwise. Upon the
payment in full of all Secured Obligations (other than contingent obligations
that survive the termination of the Loan Agreement), the security interest
granted hereby shall automatically terminate hereunder and of record and all
rights to the Collateral shall revert to the Grantor. Upon any such termination
the Lender shall, at the Grantor’s expense, promptly return all Collateral in
the Lender’s possession and execute and deliver to the Grantor or otherwise
authorize the filing of such documents as the Grantor shall reasonably request,
including financing statement amendments to evidence such termination. Upon any
disposition of property permitted by the Loan Agreement, the Liens granted
herein shall be deemed to be automatically released and such property shall
automatically revert to the Grantor with no further action on the part of any
Person, and to the extent in the Lender’s possession, shall promptly be returned
to the Grantor. The Lender shall, at the Grantor’s expense, execute and deliver
or otherwise authorize the filing of such documents as Grantor shall reasonably
request, in form and substance reasonably satisfactory to the Lender, including
financing statement amendments to evidence such release.

 

 

 
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SECTION 11. STANDARD OF CARE; LENDER MAY PERFORM.

 

The powers conferred on the Lender hereunder are solely to protect its interest
in the Collateral and shall not impose any duty upon it to exercise any such
powers. Except for the exercise of reasonable care in the custody of any
Collateral in its possession and the accounting for moneys actually received by
it hereunder, the Lender shall have no duty as to any Collateral or as to the
taking of any necessary steps to preserve rights against prior parties or any
other rights pertaining to any Collateral. The Lender shall be deemed to have
exercised reasonable care in the custody and preservation of Collateral in its
possession if such Collateral is accorded treatment substantially equal to that
which the Lender accords its own property. Neither the Lender nor any of its
directors, officers, employees or agents shall be liable for failure to demand,
collect or realize upon all or any part of the Collateral or for any delay in
doing so or shall be under any obligation to sell or otherwise dispose of any
Collateral upon the request of Grantor or otherwise. If Grantor fails to perform
any agreement contained herein, the Lender may itself perform, or cause
performance of, such agreement, and the expenses of the Lender incurred in
connection therewith shall be payable by Grantor under Section 7.5 of the Loan
Agreement.

 

SECTION 12. MISCELLANEOUS.

  

Any notice required or permitted to be given under this Agreement shall be given
in accordance with Section 17.16 of the Loan Agreement. No failure or delay on
the part of the Lender in the exercise of any power, right or privilege
hereunder or under any other Loan Document shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence therein,
nor shall any single or partial exercise of any such power, right or privilege
preclude other or further exercise thereof or of any other power, right or
privilege. All rights and remedies existing under this Agreement and the other
Loan Documents are cumulative to, and not exclusive of, any rights or remedies
otherwise available. In case any provision in or obligation under this Agreement
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby. All covenants hereunder shall be given independent
effect so that if a particular action or condition is not permitted by any of
such covenants, the fact that it would be permitted by an exception to, or would
otherwise be within the limitations of, another covenant shall not avoid the
occurrence of a Default or an Event of Default if such action is taken or
condition exists. This Agreement shall be binding upon and inure to the benefit
of the Lender and the Grantor and its respective successors and assigns. Grantor
shall not, without the prior written consent of the Lender given in accordance
with the Loan Agreement, assign any right, duty or obligation hereunder. This
Agreement and the other Loan Documents embody the entire agreement and
understanding between the Grantor and the Lender and supersede all prior
agreements and understandings between such parties relating to the subject
matter hereof and thereof. Accordingly, the Loan Documents may not be
contradicted by evidence of prior, contemporaneous or subsequent oral agreements
of the parties. There are no unwritten oral agreements between the parties. This
Agreement may be executed in one or more counterparts and by different parties
hereto in separate counterparts, each of which when so executed and delivered
shall be deemed an original, but all such counterparts together shall constitute
but one and the same instrument; signature pages may be detached from multiple
separate counterparts and attached to a single counterpart so that all signature
pages are physically attached to the same document.

 

 

 
12

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Irrespective of the place of execution and/or delivery, this Agreement shall be
governed by, and shall be construed in accordance with, the laws of the State of
Texas.

 

THE PROVISIONS OF THE LOAN AGREEMENT UNDER THE HEADINGS “JURISDICTION” AND
“WAIVER OF JURY TRIAL” ARE INCORPORATED HEREIN BY THIS REFERENCE AND SUCH
INCORPORATION SHALL SURVIVE ANY TERMINATION OF THE LOAN AGREEMENT.

 

[Signature page follows.]

 

 

 
13

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IN WITNESS WHEREOF, Grantor and the Lender have caused this Agreement to be duly
executed and delivered by their respective officers thereunto duly authorized as
of the date first written above.

 

 

BANK OF COMMERCE HOLDINGS

 

 

 

 

 

 

 

 

 

 

By:

/s/ Samuel D. Jimenez

 

 

Name: 

Samuel D. Jimenez

 

 

Title:

Executive Vice President and Chief Operating Officer 

 

 

 

 

NEXBANK SSB,

 

  as Lender  

 

 

 

 

 

 

 

 

 

By:

/s/ Rhett A. Miller III

 

 

Name:

Rhett A. Miller III

 

 

Title: 

SVP and Chief Credit Officer

 

 

 

 [Signature Page to Pledge and Security Agreement]

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SCHEDULE 5.1

TO PLEDGE AND SECURITY AGREEMENT

   

GENERAL INFORMATION

   

(A) Full Legal Name, Type of Organization, Jurisdiction of Organization, Chief
Executive Office/Principal Place of Business and Organizational Identification
Number of Grantor:

 

Full Legal Name

 

Type of Organization

 

Jurisdiction of Organization

 

Chief Executive Office/Principal Place of Business

 

Organization I.D. #

                  Bank of Commerce Holdings   Corporation   California   1901
Churn Creek Rd   C1101478             Redding, CA 96002    

 

 

(B)

Other Names (including any Trade Name or Fictitious Business Name) under which
Grantor currently conducts business:

 

Full Legal Name Trade Name or Fictitious Business Name

 

 

(C)

Changes in Name, Jurisdiction of Organization, Chief Executive Office or
Principal Place of Business and Corporate Structure within past five (5) years:
N/A

 

 

 

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SCHEDULE 5.2

TO PLEDGE AND SECURITY AGREEMENT

  

COLLATERAL IDENTIFICATION

 

I. INVESTMENT RELATED PROPERTY

 

(A)     Pledged Stock:

  

 Grantor

Stock Issuer

Class of Stock

Certificated (Y/N)

Stock Cert. No.

Par Value

No. of Shares Pledged Stock

%

of Outstanding Stock of the Stock Issuer

Bank of Commerce Holdings

Redding Bank of Commerce

Common

Y

1

*

1,000

100%

  

*Par value of stock is not specified

 

 

 

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SCHEDULE 5.4 TO

PLEDGE SECURITY AGREEMENT

  

FINANCING STATEMENTS:

  

Grantor

Filing Jurisdiction(s)

 

 

BANK OF COMMERCE HOLDINGS

California 

 

 

 

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EXHIBIT A

   

SUPPLEMENT TO PLEDGE AND SECURITY AGREEMENT

 

SUPPLEMENT dated as of __________ (the “Supplement”), to the Pledge and Security
Agreement dated as of December 10, 2015 (as amended, supplemented, restated, or
otherwise modified from time to time, the “Security Agreement”), between Bank of
Commerce Holdings (“Grantor”), and NexBank SSB (“Lender”).

 

Grantor hereby confirms the grant to Lender set forth in the Security Agreement
of, and does hereby grant to Lender, a security interest in the Collateral (as
defined therein). Grantor represents and warrants that the attached Supplement
to Schedule accurately and completely sets forth all additional information
required pursuant to the Security Agreement and hereby agrees that such
Supplement to Schedule shall constitute part of the Schedule to the Security
Agreement.

 

This Supplement shall be governed by and construed in accordance with the laws
of the State of Texas, except to the extent that federal laws of the United
States of America may apply.

 

[Remainder of Page Intentionally Blank]

[Signature Page to Follow]

 

 

 

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IN WITNESS WHEREOF, Grantor has caused this Supplement to be duly executed and
delivered by its duly authorized officer as of the date first written above.

  

 

BANK OF COMMERCE HOLDINGS,

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title: