AGREEMENT AND PLAN OF MERGER
by and among
BBCN BANCORP, INC.
and
PACIFIC INTERNATIONAL BANCORP, INC.
_______________
Dated as of October 22, 2012

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TABLE OF CONTENTS
 
Page

 
 
 
 
 
ARTICLE I
 
THE MERGER
 
1

Section 1.01
 
The Merger
 
1

Section 1.02
 
Closing
 
1

Section 1.03
 
Effective Time
 
2

Section 1.04
 
Certificate of Incorporation; Bylaws
 
2

Section 1.05
 
Directors and Officers
 
2

Section 1.06
 
Bank Merger
 
2

ARTICLE II
 
EFFECT OF MERGER ON CAPITAL STOCK; EXCHANGE OF CERTIFICATES
 
2

Section 2.01
 
Effect on Capital Stock
 
2

Section 2.02
 
Exchange of Certificates
 
4

Section 2.03
 
Stock Options
 
6

Section 2.04
 
Series A Preferred Stock; Treasury Warrant
 
6

ARTICLE III
 
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
 
6

Section 3.01
 
Disclosure
 
7

Section 3.02
 
Representations and Warranties of the Company
 
7

ARTICLE IV
 
REPRESENTATIONS AND WARRANTIES OF ACQUIRER
 
28

Section 4.01
 
Representations and Warranties of Acquirer
 
28

ARTICLE V
 
COVENANTS RELATING TO CONDUCT OF BUSINESS
 
31

Section 5.01
 
Conduct of Businesses Prior to the Effective Time
 
31

Section 5.02
 
Company Forbearances
 
31

ARTICLE VI
 
ADDITIONAL AGREEMENTS
 
34

Section 6.01
 
Cooperation; Regulatory Matters
 
34

Section 6.02
 
Access to Information
 
35

Section 6.03
 
Employee Matters
 
36

Section 6.04
 
Indemnification; Directors' and Officers' Insurance
 
37

Section 6.05
 
Acquisition Proposals
 
38

Section 6.06
 
Takeover Laws
 
39

Section 6.07
 
Financial Statements and Other Current Information
 
40

Section 6.08
 
Shareholders Meeting
 
40

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TABLE OF CONTENTS
(continued)
 
 
 
 
 
 
 
 
 
 
 
Page

Section 6.09
 
Notification of Certain Matters
 
40

Section 6.10
 
Related Party Contracts
 
40

Section 6.11
 
Form S-4 Registration Statement
 
41

Section 6.12
 
NASDAQ Listing
 
41

Section 6.13
 
Trust Preferred Securities
 
41

Section 6.14
 
Tax Matters
 
41

ARTICLE VII
 
CONDITIONS PRECEDENT
 
42

Section 7.01
 
Conditions to Each Party's Obligation to Effect the Merger
 
42

Section 7.02
 
Conditions to Obligations of Acquirer
 
42

Section 7.03
 
Conditions to Obligations of the Company
 
43

ARTICLE VIII
 
TERMINATION AND AMENDMENT
 
44

Section 8.01
 
Termination
 
44

Section 8.02
 
Effect of Termination
 
45

Section 8.03
 
Fees and Expenses
 
46

Section 8.04
 
Extension; Waiver
 
46

ARTICLE IX
 
GENERAL PROVISIONS
 
46

Section 9.01
 
Nonsurvival of Representations, Warranties and Agreements
 
47

Section 9.02
 
Amendment
 
47

Section 9.03
 
Waiver of Conditions
 
47

Section 9.04
 
Notices
 
47

Section 9.05
 
Counterparts
 
48

Section 9.06
 
Entire Agreement
 
48

Section 9.07
 
Severability
 
48

Section 9.08
 
Governing Law; Jurisdiction
 
48

Section 9.09
 
Waiver of Jury Trial
 
49

Section 9.10
 
Publicity
 
49

Section 9.11
 
Assignment; Third-Party Beneficiaries
 
50

Section 9.12
 
Specific Performance
 
50

Section 9.13
 
Definitions
 
50

Section 9.14
 
Other Definitional Provisions
 
55

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INDEX OF DEFINED TERMS

Acquirer
Preamble

Acquirer Board
Section 4.01(b)(ii)

Acquirer Common Stock
Section 2.01(a)

Acquirer Disclosure Schedule
Section 3.01

Acquirer Plans
Section 6.03(a)

Acquirer SEC Reports
Section 4.01(c)(i)

Agencies
Section 3.02(u)(iv)

Agency
Section 3.02(u)(iv)

Agreement
Preamble

Anti-Money Laundering Laws
Section 3.02(n)(iii)

Articles of Merger
Section 1.03

Assumed Option
Section 2.03

Audited Financial Statements
Section 3.02(f)(i)

Bank Merger
Section 1.06

Bank Merger Agreement
Section 1.06

Bankruptcy and Equity Exception
Section 3.02(d)(i)

Benefit Plan
Section 3.02(q)(i)

BHCA
Section 3.02(a)(i)

Book Entry Notice
Section 2.02(b)

Burdensome Condition
Section 6.01(c)

CERCLA
Section 3.02(t)(ii)

Certificate
Section 2.01(a)

Certificate of Merger
Section 1.03

Change of Recommendation
Section 6.05(c)

Closing
Section 1.02

Closing Date
Section 1.02

Code
Recitals

Collar Price
Section 2.01(a)

Company
Preamble

Company Bank
Section 3.02(a)(ii)

Company Board
Recitals

Company Board Recommendation
Section 3.02(d)(iii)

Company Common Stock
Section 2.01(a)

Company Disclosure Schedule
Section 3.01

Company Insurance Policies
Section 3.02(v)

Company Intellectual Property
Section 3.02(w)

Company Proprietary Right
Section 3.02(l)(i)(15)

Company Reports
Section 3.02(g)(i)

Confidentiality Agreement
Section 6.02(b)

Covered Employees
Section 6.03(a)

D&O Insurance
Section 6.04(b)

Data Room
Section 3.01

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Delaware Secretary
Section 1.03

DGCL
Section 1.01

DIF
Section 3.02(a)(ii)

Disclosure Schedules
Section 3.01

Dissenting Shareholders
Section 2.01(a)

Dissenting Shares
Section 2.01(a)

Effective Time
Section 1.03

Employees
Section 5.02(h)

Environmental Laws
Section 3.02(t)(i)

ERISA
Section 3.02(q)(i)

ERISA Affiliate
Section 3.02(q)(i)

Exchange Agent
Section 2.02(a)

Exchange Ratio
Section 2.01(a)

Executive Officer
Section 5.02(h)

FDIC
Section 3.02(a)(ii)

Federal Reserve
Section 3.02(e)

Financial Statements
Section 3.02(f)(i)

Hazardous Substances
Section 3.02(t)(i)

Indemnified Parties
Section 6.04(a)

Initial Premium
Section 6.04(b)

Interim Financials
Section 3.02(f)(i)

IRS
Section 3.02(q)(ii)

Leased Real Property
Section 3.02(h)

Loans
Section 3.02(u)(i)

Market Value
Section 2.01(a)

Material Contract
Section 3.02(l)(i)

Merger
Section 1.01

OFAC
Section 3.02(n)(i)

Outside Date
Section 8.01(e)

Parties
Recitals

Party
Recitals

Per Share Merger Consideration
Section 2.01(a)

Pool
Section 3.02(u)(vii)

Post-Signing Return
Section 6.14

Preferred Stock Certificate
Section 2.01(c)

RCW
Section 3.02(a)(ii)

Regulatory Agreement
Section 3.02(s)

Related Party Contract
Section 3.02(y)(i)

Representatives
Section 6.05(a)

Required Filings
Section 6.01(a)

Requisite Regulatory Consents
Section 3.02(e)

Requisite Shareholder Approval
Section 3.02(d)(i)

SBA
Section 3.02(u)(iv)

Series A Preferred Stock
Section 2.01(c)

Share
Section 2.01(a)

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Shareholders Meeting
Section 6.08

Shares
Section 2.01(a)

Surviving Corporation
Section 1.01

TARP
Section 2.01(c)

Treasury
Section 2.01(c)

VA
Section 3.02(u)(iv)

Voting Debt
Section 3.02(b)

Washington DFI
Section 3.02(e)

Washington Secretary
Section 1.03

WBCA
Section 1.01

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AGREEMENT AND PLAN OF MERGER, dated as of October 22, 2012 (this “Agreement”),
by and among BBCN Bancorp, Inc., a Delaware corporation (“Acquirer”) and Pacific
International Bancorp, Inc., a Washington corporation (the “Company”). Certain
terms with initial capital letters used in this Agreement have the meanings
indicated in Section 9.13.
RECITALS
WHEREAS, the board of directors of the Company (the “Company Board”) has (i)
approved and declared advisable this Agreement and the transactions contemplated
by this Agreement, including the Merger, (ii) determined that this Agreement and
such transactions are fair to and in the best interests of the Company and its
shareholders and (iii) resolved to recommend that the Company’s shareholders
approve this Agreement.
WHEREAS, the board of directors of Acquirer has (i) approved and declared this
Agreement and the transactions contemplated hereby to be advisable upon the
terms and subject to the conditions set forth herein and (ii) determined that
this Agreement and such transactions are fair to, and in the best interests of,
Acquirer, and the shareholders of Acquirer.
WHEREAS, the Parties intend that for federal income tax purposes the Merger and
the Bank Merger shall each qualify as a “reorganization” within the meaning of
Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”),
and that this Agreement shall constitute a “plan of reorganization” for purposes
of Sections 354 and 361 of the Code.
WHEREAS, the parties hereto (each, a “Party” and, collectively, the “Parties”)
desire to make certain representations and warranties and document their
agreements in connection with the Merger and to prescribe certain conditions to
the Merger.
NOW, THEREFORE, in consideration of the mutual covenants, representations,
warranties and agreements contained in this Agreement, the Parties agree as
follows:

ARTICLE I
THE MERGER
Section 1.01     The Merger. Upon the terms and subject to the conditions set
forth in this Agreement, at the Effective Time, the Company shall be merged with
and into Acquirer and the separate corporate existence of the Company shall
thereupon cease (the “Merger”). Acquirer shall be the surviving corporation in
the Merger (Acquirer in such capacity being sometimes hereinafter referred to as
the “Surviving Corporation”), and the separate corporate existence of Acquirer,
with all its rights, privileges, immunities, powers and franchises, shall
continue unaffected by the Merger. The Merger shall have the effects specified
in the Delaware General Corporation Law (the “DGCL”) and the Washington Business
Corporation Act (the “WBCA”).
Section 1.02     Closing. Unless otherwise mutually agreed in writing between
the Company and Acquirer, the closing for the Merger (the “Closing”) shall take
place at the offices of Mayer Brown LLP, 350 South Grand Avenue, 25th Floor, Los
Angeles, California, on a date

1

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(the “Closing Date”) designated by Acquirer, which shall be no later than the
fifth Business Day after the last to be satisfied or waived of the conditions
set forth in Article VII (other than those conditions that by their nature are
to be satisfied at the Closing, but subject to the fulfillment or waiver of
those conditions at the Closing) in accordance with this Agreement, or at such
other place and time as the Parties may agree.
Section 1.03     Effective Time. In connection with the Closing, the Company and
Acquirer shall cause a certificate of merger (the “Certificate of Merger”) to be
executed, acknowledged and filed with the Secretary of State of the State of
Delaware (the “Delaware Secretary”) as provided in Section 251 of the DGCL, and
shall concurrently cause the articles of merger (the “Articles of Merger”)
specified in the WBCA to be filed with the Secretary of State of the State of
Washington (the “Washington Secretary”), in such form as required by, and
executed in accordance with, the relevant provisions of the WBCA. The Merger
shall become effective at the time (the “Effective Time”) (i) when the
Certificate of Merger and the Articles of Merger have been duly filed with the
Delaware Secretary and the Washington Secretary, respectively, or (ii) at such
later time as may be agreed by the Parties in writing and specified in the
Certificate of Merger and Articles of Merger.
Section 1.04     Certificate of Incorporation; Bylaws. The certificate of
incorporation and bylaws of Acquirer shall be the certificate of incorporation
and bylaws of the Surviving Corporation, until thereafter duly amended as
provided therein or by applicable Laws.
Section 1.05     Directors and Officers. The directors of Acquirer immediately
prior to the Effective Time shall, from and after the Effective Time, be the
directors of the Surviving Corporation until their successors have been duly
elected or appointed and qualified or until their earlier death, resignation or
removal in accordance with the certificate of incorporation and the bylaws of
the Surviving Corporation. The officers of Acquirer immediately prior to the
Effective Time shall be the officers of the Surviving Corporation and shall hold
office until their respective successors are duly appointed and qualified, or
their earlier death, resignation or removal.
Section 1.06     Bank Merger. As soon as reasonably practicable after the date
hereof, Acquirer and the Company shall cause Acquirer Bank and Company Bank to
enter into a bank merger agreement in substantially the form attached to this
Agreement as Exhibit A (the “Bank Merger Agreement”), providing for the merger
of Company Bank with and into Acquirer Bank, in which Acquirer Bank shall be the
surviving banking corporation (the “Bank Merger”), in accordance with all
applicable Laws and the terms of the Bank Merger Agreement concurrently with or
as soon as reasonably practicable after consummation of the Merger.
ARTICLE II
EFFECT OF MERGER ON CAPITAL STOCK; EXCHANGE OF CERTIFICATES
Section 2.01     Effect on Capital Stock. At the Effective Time, as a result of
the Merger and without any action on the part of the holder of any capital stock
of the Company or Acquirer:
(a)    Company Common Stock. Subject to Section 2.02(e), each share of the
common stock, no par value (the “Company Common Stock”), of the Company (each a
“Share” and,

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collectively, the “Shares”) issued and outstanding immediately prior to the
Effective Time (other than (i) any Excluded Shares and (ii) Shares that are
owned by shareholders (“Dissenting Shareholders”) who have perfected and not
effectively withdrawn a demand for appraisal rights pursuant to Chapter 23B.13
of the WBCA (“Dissenting Shares”)) shall be converted into the right to receive
the fraction of a share of the common stock, par value $0.01 per share, of
Acquirer (the “Acquirer Common Stock”) equal to the Exchange Ratio (the “Per
Share Merger Consideration”). The “Exchange Ratio” is equal to the fraction
derived by dividing $1.75 by the Collar Price, carried out to five decimal
places. The “Collar Price” shall be an amount equal to the average of the daily
weighted average prices of the Acquirer Common Stock on NASDAQ as reported on
the NASDAQ website for each of the fifteen (15) trading days ending one (1)
trading day prior to the Effective Time (“Market Value”), subject to the
limitations that in the event that such weighted average price exceeds $13.00
the Collar Price shall be $13.00 and in the event such weighted average price is
less than $11.50 the Collar Price shall be $11.50. At the Effective Time, each
Share shall cease to be outstanding, shall be cancelled and shall cease to
exist, and each certificate (a “Certificate”) formerly representing any of the
Shares (other than Excluded Shares and Dissenting Shares) shall thereafter
represent only the Merger Consideration specified herein.
(b)    Excluded Shares. Each Excluded Share shall, by virtue of the Merger and
without any action on the part of the holder thereof, cease to be outstanding,
be cancelled without payment of any consideration therefor and shall cease to
exist.
(c)    Series A Preferred Stock. Each share of Fixed Rate Cumulative Perpetual
Preferred Stock, Series A issued by the Company to the United States Department
of the Treasury (the “Treasury”) in connection with the Company’s participation
in the Treasury’s Troubled Asset Relief Program (“TARP”) Capital Purchase
Program (the “Series A Preferred Stock”) shall be converted into the right to
receive payment in cash of the sum of $1,000 plus all accrued and unpaid
dividends on such share of Series A Preferred Stock. At the Effective Time, each
share of the Series A Preferred Stock shall cease to be outstanding, shall be
cancelled and shall cease to exist, and each certificate (a “Preferred Stock
Certificate”) formerly representing any of the Series A Preferred Stock shall
thereafter represent only the right to receive the cash consideration specified
herein.
(d)    Dissenting Shares. Notwithstanding anything to the contrary contained
herein, the holders of any Dissenting Shares shall be entitled only to such
rights and payments as are provided by Chapter 23B.13 of the WBCA; provided,
however, that if any such holder shall effectively waive, withdraw or lose such
holder’s rights under Chapter 23B.13 of the WBCA, each of such holder’s
Dissenting Shares shall thereupon be deemed to have been converted at the
Effective Time into the right to receive the Per Share Merger Consideration,
after giving effect to any required Tax withholdings as provided in Section
2.02(h), and such holder shall cease to have any other rights with respect
thereto.
(e)    No Effect on Acquirer Stock. The Merger shall have no effect on the
shares of capital stock of Acquirer that are outstanding before the Merger, all
of which shares shall remain outstanding without change after the Effective
Time.

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(f)    Adjustments. If, between the date of this Agreement and the Effective
Time, the outstanding shares of Acquirer Common Stock shall have been increased,
decreased, changed into or exchanged for a different number or kind of shares or
securities as a result of a reorganization, recapitalization, reclassification,
stock dividend, stock split, reverse stock split or other similar change in
capitalization, an appropriate and proportionate adjustment shall be made to the
Exchange Ratio.
Section 2.02     Exchange of Certificates.
(a)    Exchange Agent. At the Effective Time, Acquirer shall deposit or make
available to Computershare, or to a bank or trust company designated by Acquirer
and reasonably acceptable to the Company (the “Exchange Agent”), for the benefit
of the holders of Shares for exchange in accordance with this Article II, (i)
evidence of shares in book entry form representing the shares of Acquirer Common
Stock issuable pursuant to Section 2.01 in exchange for the Shares and (ii) to
the extent then known, sufficient cash to pay cash in lieu of fractional shares
in accordance with Section 2.02(e).
(b)    Exchange Procedures. Promptly after the Effective Time, the Surviving
Corporation shall cause the Exchange Agent to mail to each holder of Shares of
record (other than holders of Excluded Shares or Dissenting Shares) (i) a letter
of transmittal specifying that delivery shall be effected, and risk of loss and
title to the Certificates shall pass, only upon delivery of the Certificates (or
affidavits of loss in lieu of the Certificates as provided in Section 2.02(d))
to the Exchange Agent, and (ii) instructions for use in effecting the surrender
of the Certificates (or affidavits of loss in lieu of the Certificates as
provided in Section 2.02(d)) in exchange for evidence in customary form of the
issuance of shares of Acquirer Common Stock in book entry form (a “Book Entry
Notice”) representing the number of whole shares of Acquirer Common Stock into
which such Shares have been converted in the Merger. Upon surrender of a
Certificate (or affidavit of loss in lieu of the Certificate as provided in
Section 2.02(d)) to the Exchange Agent in accordance with the terms of such
letter of transmittal, duly executed, the holder of such Certificate shall be
entitled to receive in exchange therefor a Book Entry Notice evidencing that
number of whole shares of Acquirer Common Stock, which such holder has the right
to receive in respect of the Shares surrendered pursuant to the provisions of
this Article II (after aggregation of all Shares then held by such holder) and
the Certificate so surrendered shall forthwith be cancelled. In the event of a
transfer of ownership of Shares that is not registered in the transfer records
of the Company, the Merger Consideration to be exchanged upon due surrender of
the Certificate as herein provided may be issued to the transferee if the
Certificate previously representing such Shares is presented to the Exchange
Agent, accompanied by all documents required to evidence and effect such
transfer and to evidence that any applicable stock transfer taxes have been paid
or are not applicable.
(c)    No Further Transfers. From and after the Effective Time, there shall be
no transfers on the stock transfer books of the Company of the Shares that were
outstanding immediately prior to the Effective Time. If, after the Effective
Time, any Certificate is presented to the Surviving Corporation, Acquirer or the
Exchange Agent for transfer, it shall be cancelled

4

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and exchanged for the Merger Consideration to which the holder of the
Certificate is entitled pursuant to this Article II.
(d)    Lost, Stolen or Destroyed Certificates. In the event any Certificate
shall have been lost, stolen or destroyed, upon the making of an affidavit of
that fact by the Person claiming such Certificate to be lost, stolen or
destroyed and, if required by Acquirer, the posting by such Person of a bond in
customary amount and upon such terms as may be required by Acquirer as indemnity
against any claim that may be made against it or the Surviving Corporation with
respect to such Certificate, the Exchange Agent will issue a Book Entry Notice
evidencing the amount of Acquirer Common Stock to which the holder of Company
Common Stock is entitled pursuant to this Article II.
(e)    No Fractional Shares. No certificates or scrip representing fractional
shares of Acquirer Common Stock shall be issued upon the surrender for exchange
of Company Common Stock, and such fractional share interests will not entitle
the owner thereof to vote or to any rights of a shareholder of the Surviving
Corporation. In lieu thereof, upon surrender of the applicable Company Common
Stock by submission of a letter of transmittal to the Exchange Agent accompanied
by the applicable Certificates, the Exchange Agent shall pay each holder of such
Company Common Stock an amount in cash equal to the product obtained by
multiplying (i) the fractional share interest to which such holder would
otherwise be entitled by (ii) the Market Value.
(f)    Termination of Exchange Fund. Any portion of the Exchange Fund which
remains undistributed to the shareholders of the Company for six months after
the Effective Time shall be delivered to the Surviving Corporation, upon demand,
and any holders of Company Common Stock who have not theretofore complied with
this Article II shall thereafter look only to the Surviving Corporation for
payment of their claim for Acquirer Common Stock, any cash in lieu of fractional
shares of Acquirer Common Stock and any dividends or distributions with respect
to Acquirer Common Stock.
(g)    Appraisal Rights. No Person who has perfected a demand for appraisal
rights pursuant to Chapter 23B.13 of the WBCA shall be entitled to receive the
Per Share Merger Consideration with respect to the Shares owned by such Person
unless and until such Person shall have effectively withdrawn or lost such
Person’s right to appraisal under the WBCA. Each Dissenting Shareholder shall be
entitled to receive only the payment provided by Chapter 23B.13 of the WBCA with
respect to Shares owned by such Dissenting Shareholder. The Company shall give
Acquirer (i) reasonably prompt notice of any written demands for appraisal,
attempted withdrawals of such demands, and any other instruments served pursuant
to applicable Law that are received by the Company relating to shareholders’
rights of appraisal and (ii) the opportunity to direct all negotiations and
proceedings with respect to demand for appraisal under Chapter 23B.13 of the
WBCA. The Company shall not, except with the prior written consent of Acquirer,
voluntarily make any payment with respect to any demands for appraisal, offer to
settle or settle any such demands or approve any withdrawal of any such demands.
(h)    Withholding Rights. Each of Acquirer and the Surviving Corporation shall
be entitled to deduct and withhold from the consideration otherwise payable
pursuant to this

5

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Agreement to any holder of Shares such amounts as it is required to deduct and
withhold with respect to the making of such payment under the Code or any other
applicable state, local or foreign Tax Laws. To the extent that amounts are so
withheld by Acquirer or the Surviving Corporation, as the case may be, such
withheld amounts (i) shall be remitted by Acquirer or the Surviving Corporation,
as applicable, to the applicable Governmental Entity, and (ii) to the extent so
remitted, shall be treated for all purposes of this Agreement as having been
paid to the holder of Shares in respect of which such deduction and withholding
was made by the Surviving Corporation or Acquirer, as the case may be.
Section 2.03     Stock Options. The Company and Acquirer shall take all actions
necessary to provide that, effective as of the Effective Time, without any
action on the part of the holders thereof, each outstanding Company Stock Option
shall cease to represent the right to acquire shares of Company Common Stock and
shall instead be converted automatically into an option to acquire shares of
Acquirer Common Stock as provided below (an “Assumed Option”), and such Assumed
Options will be assumed by Acquirer on substantially the same terms and
conditions as were applicable under the corresponding Company Stock Options
immediately prior to the Effective Time; provided, however, that after the
Effective Time:
(a)    each Assumed Option will be exercisable for a number of shares of
Acquirer Common Stock equal to the product of (i) the number of shares of
Company Common Stock that would be issuable upon exercise of the Company Stock
Option outstanding immediately prior to the Effective Time multiplied by (ii)
the Exchange Ratio, rounded down to the nearest whole share; and
(b)    the per share exercise price for the Acquirer Common Stock issuable upon
exercise of such Assumed Option will be equal to the quotient determined by
dividing (i) the per share exercise price for such Company Stock Option
outstanding immediately prior to the Effective Time by (ii) the Exchange Ratio,
rounded up to the nearest whole cent.
Any restriction on the exercisability of such Company Stock Option in effect as
of the date hereof will continue in full force and effect, and the term,
exercisability, and vesting schedule of such Company Stock Option as in effect
on the date hereof will remain unchanged. As soon as reasonably practicable
following the Closing Date, the Surviving Corporation will deliver to each
Person who holds an Assumed Option a document evidencing the foregoing
assumption of such Company Stock Option by the Surviving Corporation. The
Company and Acquirer will cooperate and coordinate with respect to any materials
to be submitted to the holders of Company Stock Options in connection with any
notice required under this Section 2.03.
Section 2.04     Series A Preferred Stock; Treasury Warrant. Acquirer will make
appropriate arrangements with the Treasury prior to the Effective Time to pay to
the Treasury the Merger Consideration to which the Treasury is entitled with
respect to the Series A Preferred Stock owned by the Treasury and, at Acquirer’s
sole election, to purchase the Treasury Warrant, in connection with or following
the Closing.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

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Section 3.01     Disclosure. On or prior to the date of this Agreement, the
Company has delivered to Acquirer a schedule (the “Company Disclosure Schedule”)
and Acquirer has delivered to the Company a schedule (the “Acquirer Disclosure
Schedule,” and, together with the Company Disclosure Schedule, the “Disclosure
Schedules”), setting forth, among other things, items the disclosure of which is
necessary or appropriate either in response to an express disclosure requirement
contained in a provision hereof or as an exception to one or more
representations or warranties contained in Article III and Article IV, or to one
or more of the Company’s or Acquirer’s covenants contained herein. The Company
Disclosure Schedule may refer to and incorporate by reference information and
documents contained in the electronic data room (the “Data Room”) established by
the Company for the purpose of providing information and documents in connection
with the transactions contemplated by this Agreement; provided, that such
information and documents may only be incorporated by reference to the extent
they are contained in the Data Room as of the close of business on the second
day preceding the date of this Agreement and only to the extent that the
specific Sections or subsections of this Agreement to which it relates are
stated under appropriate captions in the Company Disclosure Schedule.
Section 3.02     Representations and Warranties of the Company. The Company
represents and warrants to Acquirer that, except as Previously Disclosed:
(c)    Organization, Good Standing and Qualification.
(i)    The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Washington. The Company is a bank
holding company duly registered under the Bank Holding Company Act of 1956 (the
“BHCA”) and meets the applicable requirements for qualification as such. The
Company has all corporate power and authority to own or lease all the assets
owned or leased by it and to conduct its business as it is now being conducted,
except where any failure could not, individually or in the aggregate, reasonably
be expected to be materially adverse to the Company. The Company is duly
licensed or qualified to do business and in good standing as a foreign
corporation in all jurisdictions (1) in which the nature of the activities
conducted by the Company requires such licensure or qualification and (2) in
which the Company owns or leases real property, other than any failures to be so
licensed or qualified that (3) would not reasonably be expected to have or
result in any material adverse impact on the Company. The articles of
incorporation of the Company comply with applicable Law. A true, complete and
correct copy of each of the articles of incorporation and the bylaws of the
Company, as amended and currently in effect, has been delivered or made
available to Acquirer.
(ii)    Pacific International Bank (“Company Bank”) is a wholly owned subsidiary
of the Company and is a Washington state-chartered commercial bank duly
organized, validly existing and in good standing under Title 30 of the Revised
Code of Washington (the “RCW”). The deposit accounts of Company Bank are insured
up to applicable limits (or fully insured if there is no limit) by the Deposit
Insurance Fund (“DIF”), which is administered by the Federal Deposit Insurance
Corporation (the

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“FDIC”), and no proceedings for the termination or revocation of such insurance
are pending or, to the Knowledge of the Company, threatened. Company Bank has
the corporate power and authority to own or lease all of the assets owned or
leased by it and to conduct its business as it is now being conducted, except
where any failure could not, individually or in the aggregate, reasonably be
expected to be materially adverse to the Company. Company Bank is duly licensed
or qualified to do business and in good standing in all jurisdictions (1) in
which the nature of the activities conducted by Company Bank requires such
qualification and (2) in which Company Bank owns or leases real property, other
than, in each case, such failures that would not have any material adverse
impact on Company Bank. The articles of incorporation of Company Bank comply
with applicable Law. A true, complete and correct copy of each of the articles
of incorporation of Company Bank and the bylaws of Company Bank, as amended and
currently in effect, has been delivered or made available to Acquirer.
(iii)    Each of the Company’s Subsidiaries (other than Company Bank) is a
corporation or other legal entity duly incorporated or duly organized, validly
existing and in good standing under the Laws of its jurisdiction of
organization. Each such Subsidiary has the corporate (or similar) power and
authority to own or lease all of the assets owned or leased by it and to conduct
its business in all material respects as it is now being conducted, except where
any failure could not, individually or in the aggregate, reasonably be expected
to be materially adverse to the Company. Each such Subsidiary is duly licensed
or qualified to do business and in good standing as a foreign corporation or
other legal entity in all jurisdictions (1) in which the nature of the
activities conducted by such Subsidiary requires such licensing or qualification
and (2) in which such Subsidiary owns or leases real property, other than, in
each case, such failures that would not have any material adverse impact on the
Company. The articles or certificate of incorporation, operating or limited
liability company agreement, certificate of trust or other organizational
document of each such Subsidiary comply with applicable Law. A true, complete
and correct copy of the articles or certificate of incorporation, operating or
limited liability company agreement, or certificate of trust and bylaws (or
similar governing documents) of each such Subsidiary, as amended and currently
in effect, has been delivered or made available to Acquirer.
(d)    Capitalization. The authorized capital stock of the Company consists of
10,000,000 shares of Company Common Stock, no par value, and 6,500 shares of
Series A Preferred Stock, $0.01 par value. As of September 30, 2012, (i)
4,701,832 shares of Company Common Stock were issued and outstanding, 127,785
shares of Company Common Stock were reserved for issuance upon exercise of the
Treasury Warrant, 95,000 shares of Company Common Stock were subject to
outstanding stock options issued under the Company Stock Plan, 699,766 shares of
Company Common Stock were reserved for future issuance upon exercise of stock
options or other awards granted in the future under the Company Stock Plan and
383,716 shares of Company Common Stock were reserved for issuance under the
Company Restricted Stock Plan, but no restricted stock is currently outstanding;
and (ii) 6,500 shares of Series A Preferred Stock were issued and outstanding.
All of the issued and outstanding shares of Company Common Stock and Series A
Preferred Stock have been duly authorized and validly

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issued and are fully paid and nonassessable and were not issued in violation of
or subject to any preemptive rights or other rights to subscribe for or purchase
securities. No bonds, debentures, notes or other indebtedness having the right
to vote on any matters on which the shareholders of the Company may vote
(“Voting Debt”) are issued and outstanding. As of the date of this Agreement,
except (i) pursuant to any cashless exercise provisions of any Company Stock
Options or pursuant to the surrender of shares to the Company or the withholding
of shares by the Company to cover Tax withholding obligations under the Benefit
Plans and (ii) as required to satisfy obligations in respect of outstanding
Company Stock Options, the Company does not have and is not bound by any
outstanding subscriptions, options, calls, commitments or Contracts of any
character calling for the purchase or issuance of, or securities or rights
convertible into or exchangeable for, any shares of Company Common Stock or
preferred stock or any other equity securities of the Company or Voting Debt or
any securities representing the right to purchase or otherwise receive any
shares of capital stock of the Company (including any rights plan or agreement).
Section 3.02(b) of the Company Disclosure Schedule sets forth a table listing,
as of the date of this Agreement, the outstanding series of trust preferred and
subordinated debt securities of the Company, Company Bank and all of the
Company’s other Subsidiaries, and all such information is accurate and complete.
(e)    Subsidiaries. With respect to Company Bank and each of the Company’s
other Subsidiaries, (i) all the issued and outstanding shares of such entity’s
capital stock (or corresponding equity interests in the case of Subsidiaries
that are not corporations) have been duly authorized and validly issued, are
fully paid and nonassessable (except as provided by Section 30.12.180 of the
RCW) and were not issued in violation of or subject to any preemptive rights or
other rights to subscribe for or purchase securities, and (ii) such entity does
not have and is not bound by any outstanding subscriptions, options, calls,
commitments or Contracts of any character calling for the purchase or issuance
of, or securities or rights convertible into or exchangeable for, any shares of
such entity’s capital stock or any other equity securities or Voting Debt or any
securities representing the right to purchase or otherwise receive any shares of
capital stock of such entity (including any rights plan or agreement). Neither
the Company nor Company Bank has received any notice relating to the assessment
on the capital stock of Company Bank. Section 3.02(c) of the Company Disclosure
Schedule sets forth as of the date of this Agreement (i) each of the Company’s
Subsidiaries and the ownership interest of the Company in each such Subsidiary,
as well as the ownership interest of any other Person or Persons in each such
Subsidiary and (ii) the Company’s or its Subsidiaries’ capital stock, equity
interest or other direct or indirect ownership interest in any other Person
other than (1) securities in a publicly traded company held for investment by
the Company or any of its Subsidiaries and consisting of less than one percent
(1%) of the outstanding capital stock of such company and (2) securities held in
a fiduciary capacity for the benefit of customers.
(f)    Authorization and Action.
(i)    The Company has all requisite corporate power and authority and has taken
all corporate action necessary in order to execute, deliver and perform its
obligations under this Agreement and to consummate the transactions contemplated
hereby, subject only, with respect to the Merger, approval of this Agreement by
the

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holders of two-thirds of the outstanding Company Common Stock and Series A
Preferred Stock voting together as a single class, and the holders of two-thirds
of the outstanding shares of Series A Preferred Stock voting separately as a
single class (the “Requisite Shareholder Approval”). This Agreement has been
duly and validly executed and delivered by the Company and, assuming due
authorization, execution and delivery by Acquirer, is a valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar Laws of general
applicability relating to or affecting creditors’ rights and to general
equitable principles, regardless of whether such enforceability is considered in
a proceeding in equity or at law (the “Bankruptcy and Equity Exception”).
(ii)    The Company Board has received the opinion of its financial advisor,
Keefe Bruyette & Woods, Inc. to the effect that, subject to the assumptions,
qualifications and limitations set forth therein, as of the date of such
opinion, the Per Share Merger Consideration is fair to the holders of the Shares
from a financial point of view. It is agreed and understood that such opinion is
solely for the benefit of the Company Board and may not be relied upon by
Acquirer or any holders of capital stock of the Company.
(iii)    The Company Board has duly adopted resolutions (1) determining that
this Agreement and the transactions hereby are advisable, and in the best
interests of the Company and its shareholders, (2) approving this Agreement and
the transactions contemplated hereby and (3) recommending that the Company’s
shareholders approve this Agreement (such recommendation, the “Company Board
Recommendation”).
(iv)    Neither the execution and delivery by the Company of this Agreement, nor
the consummation of the transactions contemplated hereby, nor compliance by the
Company with any of the provisions hereof, will (1) violate, conflict with, or
result in a breach of any provision of, or constitute a default (or an event
which, with notice or lapse of time or both, would constitute a default) under,
or result in the termination of, or result in the loss to the Company or any of
its Subsidiaries of any benefit or creation of any right on the part of any
third party under, or accelerate the performance required by, or result in a
right of termination or acceleration of, or result in the creation of any
Encumbrances upon any of the material properties or assets of the Company or any
of its Subsidiaries under any of the terms, conditions or provisions of (x) the
certificate of incorporation or bylaws of the Company or the certificate of
incorporation, charter, bylaws or other governing instruments of any of its
Subsidiaries or (y) to Company’s Knowledge, any material Contract or license to
which the Company or any of its Subsidiaries is a party or by which it may be
bound, or to which the Company or any of its Subsidiaries or any of the
properties or assets of the Company or any of its Subsidiaries may be subject,
or (2) subject to compliance with the statutes and regulations referred to in
Section 3.02(e), violate any Law or Order applicable to the Company or any of
its Subsidiaries or any of their respective properties or assets.

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(g)    Consents and Approvals. Other than (i) applicable requirements of the
Securities Act, the Exchange Act, and state securities and “blue sky” laws, as
may be required in connection with this Agreement and the transactions
contemplated hereby, (ii) the filing of the Certificate of Merger and the
Articles of Merger with the Delaware Secretary and the Washington Secretary,
respectively, (iii) the filing of applications and notices with the Board of
Governors of the Federal Reserve System (the “Federal Reserve”), the FDIC, the
Treasury, the State of Washington Department of Financial Institutions (the
“Washington DFI”), and the State of California Department of Financial
Institutions, and the receipt of approval or notice of non-objection thereto and
the expiration of any related waiting periods, (iv) such approvals, indications
of non-objection or agreements from applicable bank regulatory agencies and the
Treasury as Acquirer shall consider necessary or advisable to enable Acquirer to
make payment to the Treasury for the Series A Preferred Stock in the Merger and
to purchase the Treasury Warrant, and (v) such other consents of, filings with,
authorizations or approvals from and registrations with any Governmental Entity
which if not obtained or made would not, individually or in the aggregate, be
material to the Company and its Subsidiaries taken as a whole (clauses (iii)
through (v), collectively the “Requisite Regulatory Consents”), no notice or
application to or filing with, or consent or notice of non-objection of, any
Governmental Entity or any other Person is necessary in connection with the
Company’s execution, delivery or performance of this Agreement, and the
consummation of the Merger, the Bank Merger and the other transactions
contemplated hereby. A list of all Requisite Regulatory Consents and any other
regulatory consents that are required by the Company, its Subsidiaries or any of
their Affiliates as of the date hereof is disclosed in Section 3.02(e) of the
Company Disclosure Schedule.
(h)    Financial Statements.
(i)    The Company has previously made available to Acquirer copies of (1) the
audited consolidated statements of financial condition of the Company and its
Subsidiaries as of December 31, 2010 and 2011, and the related consolidated
statements of operations, of comprehensive income, of changes in shareholders’
equity, and of cash flows for the years ended December 31, 2010 and 2011, in
each case including the related notes and accompanied by the audit report of
Moss Adams LLP (the “Audited Financial Statements”), and (2) the unaudited
consolidated statements of financial condition of the Company and its
Subsidiaries as of June 30, 2012 and the related unaudited consolidated
statements of operations, of comprehensive income, of changes in shareholders’
equity and of cash flows for the six-month period ended June 30, 2012, in each
case including the related notes (the “Interim Financials” and, collectively
with the Audited Financial Statements, the “Financial Statements”).
(ii)    Each of the Financial Statements has been prepared in accordance with
GAAP consistently applied throughout the periods covered by each such statement
(except for inconsistencies in the application of GAAP described in such
Financial Statements or in the notes thereto), is consistent with the books and
records of the Company, and fairly presents, in all material respects, the
consolidated financial condition of the Company as of the respective dates and
the results of operations and cash

11

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flows of the Company for the respective periods indicated therein, as
applicable, subject to, in the case of the Interim Financials (1) the absence of
notes and schedules and (2) normal year-end adjustments (but only to the extent
not material in the aggregate).
(iii)    The books and records of the Company and its Subsidiaries in all
material respects have been, and are being, maintained in accordance with
applicable legal and accounting requirements and reflect only actual
transactions.
(iv)    Moss Adams LLP, which has expressed its opinion with respect to the
consolidated financial statements of the Company for the years ended December
31, 2010 and 2011 were, to the Company’s Knowledge, as of the date of such
opinion independent public accountants, within the meaning of the Code of
Professional Conduct of the American Institute of Certified Public Accountants.
(i)    Reports; Books and Records.
(i)    Since January 1, 2011, each of the Company and each of its Subsidiaries
has timely filed or furnished all material reports, registrations, documents,
filings, statements and submissions, together with any amendments thereto, that
it was required to file with or furnish to any Governmental Entity (the
foregoing, collectively, the “Company Reports”) and has paid all material fees
and assessments due and payable in connection therewith. As of their respective
dates of filing or furnishing, or, if amended, as of the date of the last such
amendment prior to the date of this Agreement, the Company Reports complied in
all material respects with all statutes and applicable rules and regulations of
the applicable Governmental Entities. As of the date of this Agreement, there
are no outstanding comments from any Governmental Entity with respect to any
such Company Report. With respect to all other Company Reports filed since
January 1, 2009 or to be filed subsequent to the date of this Agreement and
prior to the Closing, the Company Reports will be complete and accurate in all
material respects as of their respective dates, or the dates of their respective
amendments. Except for normal examinations conducted by a Governmental Entity in
the regular course of the business of the Company and its Subsidiaries, no
Governmental Entity has initiated any proceeding or, to the Knowledge of the
Company, investigation into the business or operations of the Company or any of
its Subsidiaries since January 1, 2009. Except as set forth in Section 3.02(g)
of the Company Disclosure Schedule, there are no unresolved violations set forth
in any report relating to any examinations or inspections by any Governmental
Entity of any of the Company and its Subsidiaries. The Company and its
Subsidiaries have fully resolved all “matters requiring attention,” “matters
requiring immediate attention,” “matters requiring enhancements” and similar
items as identified by any such Governmental Entity.
(ii)    Neither the Company nor any of its Subsidiaries is required to file
periodic reports with the SEC pursuant to Sections 13 or 15(d) of the Exchange
Act.
(iii)    The records, systems, controls, data and information of each of the
Company and each of its Subsidiaries are recorded, stored, maintained and
operated

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under means (including any electronic, mechanical or photographic process,
whether computerized or not) that are under the exclusive ownership and direct
control of the Company or its Subsidiaries or their accountants (including all
means of access thereto and therefrom), except as would not reasonably be
expected to have a material adverse effect on the Company’s system of internal
accounting controls.
(iv)    Each of the Company and each of its Subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurances
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with GAAP, and that (1)
transactions are executed in accordance with management’s general or specific
authorization, (2) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets, (3) access to assets is
permitted only in accordance with management’s general or specific authorization
and (4) the recorded amount for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(j)    Real Property. To the Company’s Knowledge, with respect to the real
property leased or subleased to the Company or its Subsidiaries (the “Leased
Real Property”), the lease or sublease for such property is valid, legally
binding, enforceable and in full force and effect, and neither the Company nor
any of its Subsidiaries is in breach of or default under such lease or sublease,
and no event has occurred which, with notice, lapse of time or both, would
constitute a breach or default by any of the Company or its Subsidiaries or
permit termination, modification or acceleration by any third party thereunder,
or prevent, materially delay or materially impair the consummation of the
transactions contemplated by this Agreement except in each case, for such
invalidity, failure to be binding, unenforceability, ineffectiveness, breaches,
defaults, terminations, modifications, accelerations or repudiations that would
not, individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect. The Company and Company Bank do not own any real
property, other than real estate acquired by Company Bank or a Subsidiary of
Company Bank through foreclosure or by deed in lieu of foreclosure.
(k)    Taxes. Except as set forth in Section 3.02(i) of the Company Disclosure
Schedule, to the Company’s Knowledge: (1) each of the Company and each of its
Subsidiaries has duly and timely filed (including, pursuant to applicable
extensions) all Tax Returns required to be filed by it and all such Tax Returns
are correct and complete; (2) each of the Company and each of its Subsidiaries
has paid in full all Taxes due or made adequate provision in the financial
statements of the Company (in accordance with GAAP) for any such Taxes, whether
or not shown as due on such Tax Returns; (3) no deficiencies for any Taxes have
been proposed, asserted or assessed, in each case in writing, against or with
respect to any Taxes due by, or Tax Returns of, the Company or any of its
Subsidiaries which deficiencies have not since been resolved; (4) there are no
Encumbrances for Taxes upon the assets of either the Company or its Subsidiaries
except for statutory Encumbrances for Taxes not yet due; (5) neither the Company
nor any of its Subsidiaries has been a “distributing corporation” or a
“controlled corporation” in any distribution occurring during the last two (2)
years in which the parties to such distribution treated the distribution as one
to which Code Section 355 is applicable; (6) neither the Company

13

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nor any of its Subsidiaries has engaged in any “listed transaction” within the
meaning of Treasury Regulations section 1.6011-4(b)(2); (7) neither the Company
nor any of its Subsidiaries has engaged in a transaction of which it made
disclosure to any taxing authority to avoid penalties under Section 6662(d) or
any comparable provision of state, foreign or local Law; (8) neither the Company
nor any of its Subsidiaries has participated in any “tax amnesty” or similar
program offered by any taxing authority to avoid the assessment of penalties or
other additions to Tax; (9) the Company and each of its Subsidiaries have
complied in all material respects with all requirements to report information
for Tax purposes to any individual or taxing authority, and have collected and
maintained all material certifications and documentation in valid and complete
form with respect to any such reporting obligation, including, without
limitation, valid Internal Revenue Service Forms W-8 and W-9; (10) no written
claim has been made within the past three (3) years by a Tax authority in a
jurisdiction where the Company or any of its Subsidiaries, as the case may be,
does not file Tax Returns that the Company, Bank or any of the Company’s other
Subsidiaries, as the case may be, is or may be subject to Tax by that
jurisdiction; (11) neither the Company nor any of its Subsidiaries has granted
any currently effective waiver, extension or comparable consent regarding the
application of the statute of limitations with respect to any Taxes or Tax
Return that is outstanding, nor has any request for any such waiver or consent
been made; (12) neither the Company nor any of its Subsidiaries has been or is
in violation (or with notice or lapse of time or both, would be in violation) of
any applicable Law relating to the payment or withholding of Taxes (including,
without limitation, withholding of Taxes pursuant to Sections 1441 and 1442 of
the Code or any similar provisions of state, local or foreign law); (13) each of
the Company and each of its Subsidiaries has duly and timely withheld from
employee salaries, wages and other compensation and paid over to the appropriate
taxing authority all amounts required to be so withheld and paid over under all
applicable Laws; (14) no audits or investigations by any taxing authority
relating to any Tax Returns of any of the Company or any of its Subsidiaries is
in progress, nor has the Company or any of its Subsidiaries received written
notice from any taxing authority of the commencement of any audit not yet in
progress; (15) there are no outstanding and currently effective powers of
attorney enabling any person or entity not a party to this Agreement to
represent the Company or any of its Subsidiaries with respect to Tax matters
other than its accountants or attorneys; (16) neither the Company nor any of its
Subsidiaries has applied for, been granted, or agreed to any accounting method
change for which it will be required to take into account any adjustment under
Code Section 481 after the Closing; (17) neither the Company nor any of its
Subsidiaries has undergone an “ownership change” within the meaning of Code
Section 382(g); (18) neither the Company nor any of its Subsidiaries is liable
for Taxes of any other Person (other than the Company or any of its
Subsidiaries) pursuant to a tax indemnity, tax sharing or other similar
agreement (other than pursuant to lease agreements, loan agreements, financing
arrangements, commercial agreements entered into in the ordinary course of
business, or Benefit Plans); (19) neither the Company nor any of its
Subsidiaries has any liability for any tax under Treasury Regulations section
1.1502-6 (or any similar provision of state, local or non-United States law), as
a transferee or successor, by contract or otherwise; (20) neither the Company
nor any of its Subsidiaries has taken or agree to take (or failed to take or
agree to take) any action or knows of any facts or circumstances that would
reasonably be expected to prevent the Merger or the Bank Merger from qualifying
as a reorganization within the meaning of Section 368(a) of the Code; and (21)
Company Bank operates at least one significant historic business line, or owns
at least a

14

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significant portion of its historic business assets, in each case within the
meaning of Treasury Regulations section 1.368-1(d).
(l)    Absence of Certain Changes. Since December 31, 2011, and except as
Previously Disclosed, (i) the Company and its Subsidiaries have conducted their
respective businesses in all material respects in the ordinary course of
business and consistent with past practice, (ii) the Company has not made or
declared any distribution in cash or in kind to its shareholders or issued or
repurchased any shares of its capital stock or other equity interests, (iii)
there has been no material change in any method of accounting or accounting
practice by the Company or any of its Subsidiaries (except, in each case, as
indicated in the Financial Statements or in the notes thereto), (iv) no fact,
event, change, condition, development, circumstance or effect has occurred that
has had, or would reasonably be expected to have, a Company Material Adverse
Effect, and (v) no material default (or event which, with notice or lapse of
time, or both, would constitute a material default) exists on the part of the
Company or any of its Subsidiaries or, to their Knowledge, on the part of any
other party, in the due performance and observance of any term, covenant or
condition of any Contract to which the Company or any of its Subsidiaries is a
party and which is, individually or in the aggregate, material to the financial
condition of the Company and its Subsidiaries, taken as a whole.
(m)    No Undisclosed Liabilities. Neither the Company nor any of its
Subsidiaries has any liabilities or obligations of any nature, or is an obligor
under any guarantee, keepwell or other similar Contract (absolute, accrued or
contingent) or otherwise except for (i) liabilities or obligations reflected in
or reserved against in the Company’s consolidated balance sheet as of December
31, 2011 and (ii) liabilities that have arisen since December 31, 2011 in the
ordinary course of business and consistent with past practice and that have
either been Previously Disclosed or would not have, individually or in the
aggregate, a material adverse impact on the Company and its Subsidiaries, taken
as a whole.
(n)    Commitments and Contracts.
(i)    The Company has provided to Acquirer or its representatives true, correct
and complete copies of each Material Contract to which the Company or any of its
Subsidiaries is, as of the date hereof, a party or subject. “Material Contract”
means each of the following (whether written or oral):
(1)    any Contract with respect to the employment or service of any current or
former directors, officers, employees or consultants of the Company or any of
its Subsidiaries, in each case involving an annual base salary, annual fee or
other form of cash compensation, as applicable, to be paid by the Company or any
of its Subsidiaries in excess of $50,000, or any Contract with a current or
former director, officer or employee with change-in-control or severance or
other provisions resulting in or causing the acceleration of any compensation
benefit upon a change in control or termination of employment following a change
in control;

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(2)    any Contract containing any standstill or similar agreement pursuant to
which one Person has agreed not to acquire assets or securities of another
Person;
(3)    any Related Party Contract;
(4)    any Contract (A) that restricts the ability of the Company or any of its
Subsidiaries to compete in any business or geographic area or any particular
medium or (B) that grants a Person other than the Company or any of its
Subsidiaries “most favored nation” status or “exclusivity” or similar rights;
(5)    any Contract involving the payment or receipt of royalties or similar
payments of more than $25,000 in the aggregate calculated based upon the
revenues or income of the Company or its Subsidiaries or income or revenues
related to any product or service of the Company or any of its Subsidiaries;
(6)    any Contract with a labor union or guild (including any collective
bargaining agreement);
(7)    any Contract which grants any person a right of first refusal, right of
first offer or similar right with respect to any material properties, assets or
businesses of the Company or any of its Subsidiaries, other than with respect to
real estate acquired by Company Bank or a Subsidiary of Company Bank through
foreclosure or by deed in lieu of foreclosure;
(8)    any Contract (A) having as its principal subject matter the agreement of
the Company or any of its Subsidiaries to indemnify any Person, (B) providing
for indemnification by the Company or any of its Subsidiaries of any Person and
that could reasonably be expected to result in an indemnification obligation of
the Company or any of its Subsidiaries in excess of $25,000, or (C) providing
for indemnification by the Company or any of its Subsidiaries of any current or
former director, officer or employee of the Company or any of its Subsidiaries;
(9)    any Contract that contains a put, call or similar right pursuant to which
the Company or any of its Subsidiaries could be required to purchase or sell, as
applicable, assets that have a fair market value or purchase price of more than
$25,000 or any equity interests of any Person;
(10)    any indenture, mortgage, promissory note, loan agreement, guarantee,
sale and leaseback agreement, capitalized lease or other agreement or commitment
for the borrowing by the Company or any of its Subsidiaries of money or the
deferred purchase price of property in excess of $100,000 (in either case,
whether incurred, assumed, guaranteed or secured by any asset), or any Contract
including provisions whereby the Company or any of its Subsidiaries is
guaranteeing the obligations of or agreeing to provide financial support to or
on

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behalf of a Person (other than to or on behalf of the Company or one of its
Subsidiaries);
(11)    any lease of real property that provides for annual payments of $25,000
or more;
(12)    any license, franchise or similar Contract material to the business and
operations of the Company and its Subsidiaries that provides for annual payments
of $25,000 or more;
(13)    any Contract for the purchase, sale or lease of materials, supplies,
goods, services, equipment or other assets (other than those specified elsewhere
in this definition) that provides for either (A) annual payments or obligations
of $25,000 or more, or (B) aggregate payments or obligations of $100,000 or
more;
(14)    any partnership, joint venture or other similar agreement or
arrangement;
(15)    any Contract pursuant to which (A) the Company or any of its
Subsidiaries grants a license or other right to use any registered and/or
applied for Proprietary Right that is owned or purported to be owned by the
Company or any of its Subsidiaries (a “Company Proprietary Right”) to a third
person and (B) a third person grants a license or other right to the Company or
any of its Subsidiaries to any Proprietary Rights (but excluding licenses to
commercially available “click-wrap” or “shrink-wrap” software);
(16)    any Contract relating to the acquisition or disposition of any material
business or material assets (whether by merger, sale of stock or assets or
otherwise), which acquisition or disposition is not yet complete or where such
Contract contains continuing material obligations of the Company or any of its
Subsidiaries;
(17)    any agreement or consent decree entered into with a Governmental Entity;
(18)    any Contract that provides for the imposition of any material
Encumbrance on any assets of the Company.
(ii)    To the Knowledge of the Company, each of the Material Contracts to which
the Company or any of its Subsidiaries is a party or subject is valid and
binding on the Company or its Subsidiaries, as the case may be and, to the
Knowledge of the Company, each other party thereto, and is in full force and
effect, except for such failures to be valid and binding or to be in full force
and effect as would not be, or would not reasonably be expected to be,
individually or in the aggregate, materially adverse to the Company. To the
Knowledge of the Company, there is no default under any such Contracts by the
Company or its Subsidiaries, or to the Knowledge of the Company, by

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the other party thereto, and no event has occurred that with the lapse of time
or the giving of notice or both would constitute a default thereunder by the
Company or its Subsidiaries or to the Knowledge of the Company, by the other
party thereto, in each case except as would not be, or could not reasonably be
expected to be, individually or in the aggregate, materially adverse to the
Company.
(o)    Litigation and Other Proceedings. Except as set forth in Section 3.02(m)
of the Company Disclosure Schedule, there are no pending or, to the Knowledge of
the Company, threatened, legal, administrative, arbitral or other proceedings,
claims, actions, or pending or, to the Knowledge of the Company, threatened
governmental or regulatory investigations of any nature (i) against the Company
or any of its Subsidiaries (excluding those of the type contemplated by the
following clause (ii)) which would reasonably be expected to have, individually
or in the aggregate, a Company Material Adverse Effect or (ii) challenging the
validity or propriety of the transactions contemplated by this Agreement. To the
Knowledge of the Company, there is no injunction, order, judgment, decree or
regulatory restriction imposed upon the Company, any of its Subsidiaries or the
assets of the Company or any of its Subsidiaries. The representations and
warranties set forth in this Section 3.02(m) shall not apply to any collection
litigation or proceedings in the ordinary course related to the Company Bank’s
loan portfolio that involve amounts not exceeding $500,000.
(p)    Compliance with Laws.
(i)    To the Knowledge of the Company, the business of each of the Company and
each of its Subsidiaries has been since January 1, 2009, and is being, conducted
in accordance with all material applicable Laws and written regulatory
guidelines, including the Equal Credit Opportunity Act (15 U.S.C. Section 1691
et seq.), the Fair Housing Act (420 U.S.C. Section 3601 et seq.), the Community
Reinvestment Act of 1977, the Home Mortgage Disclosure Act (12 U.S.C. Section
2801 et seq.), the Dodd-Frank Wall Street Reform and Consumer Protection Act,
the Bank Secrecy Act (31 U.S.C. Section 5311 et seq.), Title III of the USA
Patriot Act, the Interagency Policy Statement on Retail Sales of Nondeposit
Investment Products and all other applicable bank secrecy laws, fair lending
laws and other laws relating to discriminatory business practices and any Order
issued with respect to anti-money laundering by the Office of Foreign Assets
Control of the U.S. Treasury Department (“OFAC”) and any other anti-money
laundering statute, rule or regulation, except for violations that, individually
or in the aggregate, would not reasonably be expected to have a Company Material
Adverse Effect. Each of the Company and each of its Subsidiaries has all
permits, licenses, franchises, authorizations, orders and approvals of, and have
made all filings, applications and registrations with, Governmental Entities
that are required in order to permit them to own or lease their properties and
assets and to carry on their business as presently conducted. Each of the
Company and each of its Subsidiaries has since January 1, 2009 complied in all
material respects with and is not in default or violation in any material
respect of, and none of them is, to the Knowledge of the Company, under
investigation with respect to, or, to the Knowledge of the Company, has been
threatened to be charged with or given notice of, any material violation of, any
applicable Law or Order of any Governmental Entity.

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Except for statutory or regulatory restrictions of general application, no
Governmental Entity has placed any material restriction on the business or
properties of the Company or any of its Subsidiaries that remains in effect.
Neither the Company nor any of its Subsidiaries has received any written
notification or communication from any Governmental Entity (1) asserting that
the Company or any of its Subsidiaries is not in material compliance with any
statutes, regulations or ordinances, (2) threatening to revoke any permit,
license, franchise, authorization, order or approval or (3) threatening or
contemplating revocation or limitation of, or which would have the effect of
revoking or limiting, FDIC deposit insurance.
(ii)    To the Knowledge of the Company, neither the Company nor any of its
Subsidiaries, nor any director, officer, employee or Affiliate of either the
Company or any of its Subsidiaries, nor, to the Knowledge of the Company, any
agent or other Person acting on behalf of the Company or any of its Subsidiaries
is currently subject to any sanctions administered by OFAC.
(iii)    The operations of each of the Company and each of its Subsidiaries are
and have been conducted at all times since December 31, 2008 in compliance with
the money laundering statutes of applicable jurisdictions, the rules and
regulations thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any applicable Governmental
Entity (collectively, the “Anti-Money Laundering Laws”) and no action, suit or
proceeding by or before any Governmental Entity involving the Company and/or any
of its Subsidiaries with respect to the Anti-Money Laundering Laws is pending
or, to the Knowledge of the Company, threatened.
(iv)    The Company and each of its Subsidiaries that is an insured depositary
institution is in compliance in all material respects with the applicable
provisions of the Community Reinvestment Act of 1977 and the regulations
promulgated thereunder and has received a Community Reinvestment Act rating of
“satisfactory” in its most recently completed exam, and the Company has no
knowledge of the existence of any fact or circumstance or set of facts or
circumstances which would reasonably be expected to result in the Company or any
such Subsidiary having its current rating lowered.
(q)    Fiduciary Accounts; Trust. Each of the Company and each of its
Subsidiaries has properly administered in all material respects all accounts for
which it acts as a fiduciary, including accounts for which it serves as a
trustee, agent, custodian, personal representative, guardian, conservator or
investment advisor, in accordance with the terms of the governing documents and
applicable Law. To the Knowledge of the Company, none of the Company, any of its
Subsidiaries, or any director, officer or employee of the Company or of any of
its Subsidiaries, has committed any material breach of trust or fiduciary duty
with respect to any such fiduciary account. To the Knowledge of the Company, the
accountings for each such fiduciary account are true and correct, and accurately
reflect, in all material respects the assets of such fiduciary account.
(r)    Employees. No Employees of the Company or any of its Subsidiaries are
represented by any labor union nor are any collective bargaining agreements
otherwise in effect

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with respect to such Employees. No labor organization or group of Employees of
the Company or any of its Subsidiaries has made a demand for recognition or
certification, and there are no representation or certification proceedings or
petitions seeking a representation proceeding presently pending or, to the
Knowledge of the Company, threatened to be brought or filed with the National
Labor Relations Board or any other labor relations tribunal or authority. The
Company and its Subsidiaries are in compliance with all notice and other
requirements under the Worker Adjustment and Retraining Notification Act of 1988
and any other similar applicable foreign, state, or local Laws relating to
facility closings and layoffs. All independent contractors of the Company are
properly classified in such capacity under applicable state and federal Law.
(s)    Company Benefit Plans.
(i)    (1) Section 3.02(q)(i) of the Company Disclosure Schedule sets forth a
complete list of each Benefit Plan. With respect to each Benefit Plan, the
Company and its Subsidiaries have complied, and are now in compliance, in all
material respects, with all provisions of the Employee Retirement Income
Security Act of 1974 (“ERISA”), the Code and all laws and regulations applicable
to such Benefit Plan; and (2) each Benefit Plan has been administered in all
material respects in accordance with its terms. “Benefit Plan” means any
employee welfare benefit plan within the meaning of Section 3(1) of ERISA, any
employee pension benefit plan within the meaning of Section 3(2) of ERISA, and
any bonus, incentive, deferred compensation, vacation, stock purchase, stock
option, severance, employment, change of control or fringe benefit plan,
program, agreement or policy sponsored, maintained or contributed to or required
to be contributed to by the Company or any of its Subsidiaries or by any trade
or business, whether or not incorporated, that together with the Company or any
of its Subsidiaries would be deemed a “single employer” within the meaning of
Section 4001(b) of ERISA (an “ERISA Affiliate”), or to which the Company,
Company Bank, any of the Company’s other Subsidiaries or any of their respective
ERISA Affiliates is party, whether written or oral, in each case for the benefit
of any director, former director, employee or former employee of the Company or
any of its Subsidiaries. No Benefit Plan is maintained outside the jurisdiction
of the United States, or covers any employee residing or working outside of the
United States.
(ii)    With respect to each material Benefit Plan and each Benefit Plan
(whether or not material) that is intended to be tax-qualified under Section
401(a) or Section 501(c)(9) of the Code, the Company has heretofore delivered or
made available to Acquirer true and complete copies of each of the following
documents: (1) a copy of the Benefit Plan and any amendments thereto (or if the
Benefit Plan is not a written plan, a description thereof); (2) a copy of the
two (2) most recent annual reports and actuarial reports, if required under
ERISA; (3) a copy of the most recent Summary Plan Description, if required under
ERISA with respect thereto; (4) if the Benefit Plan is funded through a trust or
any third party funding vehicle, a copy of the trust or other funding agreement
and the latest financial statements thereof; and (5) the most recent
determination letter received from the Internal Revenue Service (the “IRS”) with
respect to each Benefit Plan intended to qualify under Section 401 of the Code.

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(iii)    Except as set forth in Section 3.02(q)(iii) of the Company Disclosure
Schedule, no claim has been made, or to the Knowledge of the Company threatened,
against the Company or any of its Subsidiaries related to any Benefit Plan,
including, without limitation, any claim related to the purchase of employer
securities or to expenses or fees paid under any defined contribution pension
plan other than ordinary course claims for benefits.
(iv)    No Benefit Plan is subject to Title IV of ERISA or described in Section
3(37) of ERISA, and none of the Company, any of its Subsidiaries or any of their
ERISA Affiliates has at any time within the past six (6) years sponsored or
contributed to, or has or had within the past six (6) years any liability or
obligation in respect of, any plan subject to Title IV or described in Section
3(37) of ERISA. The Company has not incurred any current or projected liability
in respect of post-retirement health, medical or life insurance benefits for the
Employees, except as required to avoid an excise tax under Section 4980B of the
Code or comparable state benefit continuation laws. The Company or its
Subsidiaries may amend or terminate any Benefit Plan that provides for retiree
medical or life benefits at any time without incurring any liability thereunder
other than in respect of claims incurred prior to such amendment or termination.
(v)    Each Benefit Plan intended to be “qualified” within the meaning of
Section 401(a) of the Code and the related trust have received a favorable
determination letter from the IRS as to qualification of the Benefit Plan under
Section 401(a) of the Code and exemption of the related trust from taxation
under Section 501(a) of the Code that has not been revoked, and, to the
Company’s Knowledge, no circumstances exist and no events have occurred that
could reasonably be expected to adversely affect the qualified status of any
such Benefit Plan or the tax exempt status of the related trust. To the extent
any Benefit Plan is required to be funded under ERISA or the Code, it is so
funded and all contributions required to be made by applicable law have been
timely made.
(vi)    None of the Company, any of its Subsidiaries, any Benefit Plan, any
trust created under any Benefit Plan, or any trustee or administrator of any
Benefit Plan has engaged in a transaction in connection with which the Company
or any of its Subsidiaries, any plan, any such trust, or any trustee or
administrator thereof, or any party dealing with any plan or any such trust
could reasonably be expected to be subject to either a material civil penalty
assessed pursuant to Sections 409 or 502(i) of ERISA or a material tax imposed
pursuant to Sections 4975 or 4976 of the Code.
(vii)    To the Company’s Knowledge, each Benefit Plan and each Material
Contract described in Section 3.02(l)(i)(1) that is a “nonqualified deferred
compensation plan” within the meaning of Section 409A of the Code and associated
Treasury Department guidance has (1) between January 1, 2005 and December 31,
2008, been operated in all material respects in good faith compliance with
Section 409A of the Code and Notice 2005-01 and (2) since January 1, 2009 (or
such later date permitted under applicable guidance), been operated in
compliance with, and is in documentary

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compliance with, in all material respects, Section 409A of the Code and IRS
regulations and guidance thereunder. All Company Options granted by the Company
or any of its Subsidiaries to any current or former employee or director have
been granted with a per share exercise price at least equal to the fair market
value of the underlying stock on the date the Company Stock Option was granted,
within the meaning of Section 409A of the Code and associated Treasury
Department guidance.
(viii)    Neither the execution and delivery of this Agreement, nor the
consummation of the transactions contemplated hereby will, either alone or in
conjunction with any other event, (1) result in any payment (including
severance, unemployment compensation, “excess parachute payment” (within the
meaning of Section 280G of the Code), forgiveness of indebtedness or otherwise)
becoming due to any current or former employee, officer or director of the
Company or any of its Subsidiaries under any Benefit Plan or otherwise, (2)
increase any benefits otherwise payable under any Benefit Plan or any Material
Contract described in Section 3.02(l)(i)(1), (3) result in any acceleration of
the time of payment or vesting of any such benefits, (4) require the funding or
increase in the funding of any such benefits or (5) result in any limitation on
the right of the Company or any of its Subsidiaries to amend, merge, terminate
or receive a reversion of assets from any Benefit Plan or related trust or any
Material Contract described in Section 3.02(l)(i)(1). Neither the Company nor
any of its Subsidiaries has taken, or permitted to be taken, any action that
required, and no circumstances exist that will require the funding, or increase
in the funding, of any benefits, or will result, in any limitation on the right
of the Company or any of its Subsidiaries to amend, merge or terminate any
Benefit Plan or receive a reversion of assets from any Benefit Plan or related
trust.
(t)    Risk Management Instruments. Since January 1, 2011, all derivative
instruments, including, swaps, caps, floors and option Contracts, whether
entered into for the account of the Company or any of its Subsidiaries or for
the account of a customer of the Company or any of its Subsidiaries, were
entered into (i) only in the ordinary course of business and consistent with
past practice, (ii) in accordance with prudent banking practices and in all
material respects with all applicable Laws and with the rules, regulations and
policies of applicable Governmental Entities, and (iii) with counterparties
believed to be financially responsible at the time; and each of them constitutes
the valid and legally binding obligation of the Company or one of its
Subsidiaries, enforceable in accordance with its terms, subject to the
Bankruptcy and Equity Exception. Neither the Company nor any of its
Subsidiaries, nor, to the Knowledge of the Company, any other party thereto, is
in breach of any of its material obligations under any such Contract or
arrangement. The financial position of the Company and any of its Subsidiaries,
as applicable, on a consolidated basis under or with respect to each such
derivative instrument has been reflected in its books and records and the books
and records of such Subsidiaries in accordance with GAAP consistently applied.
(u)    Agreements with Regulatory Agencies. Except as set forth in Section
3.02(s) of the Company Disclosure Schedule, neither the Company nor any of its
Subsidiaries is subject to any cease-and-desist order or other enforcement
action issued by, or is a party to any written

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agreement, consent agreement or memorandum of understanding with, or is a party
to any commitment letter or similar undertaking to, or is subject to any capital
directive by, or has adopted any board resolutions at the request of, any
Governmental Entity (each type of item referred to in this sentence, a
“Regulatory Agreement”), nor has the Company or any of its Subsidiaries been
advised in writing, or, to the Knowledge of the Company, orally, since January
1, 2009 by any Governmental Entity that it is considering issuing, initiating,
ordering, or requesting any such Regulatory Agreement. The Company and each
Subsidiary are in compliance in all material respects with each Regulatory
Agreement to which it is a party or subject, and since January 1, 2009 neither
the Company nor any of its Subsidiaries has received any notice from any
Governmental Entity indicating that either the Company or any of its
Subsidiaries is not in compliance in all material respects with any such
Regulatory Agreement. Without limiting the foregoing, each of the Company and
each of its Subsidiaries, to the Knowledge of the Company, is and has been in
compliance in all respects with the standards of conduct set forth in the
Consent Order, dated December 2, 2011, issued by the FDIC and the Washington DFI
except as set forth in Section 3.02(s) of the Company Disclosure Schedule.
(v)    Environmental Liability.
(i)    The Company and its Subsidiaries have at all times, and at the Closing
Date will have, complied in all material respects with all Laws, regulations,
ordinances, requirements of any Governmental Entity, and orders relating to
public health, safety or the environment (“Environmental Laws”), including all
laws, regulations, ordinances and orders relating to releases, discharges,
emissions or disposals to air, water, land or groundwater, to the withdrawal or
use of groundwater, to the use, handling or disposal of polychlorinated
biphenyls, asbestos, mold or urea formaldehyde, to the treatment, storage,
disposal or management of, or to exposure to, any substance regulated pursuant
to any Environmental Law, including any hazardous substances, pollutants,
contaminants, toxic, hazardous or other controlled, prohibited or regulated
substances (“Hazardous Substances”).
(ii)    In addition, and irrespective of such compliance, (and to its Knowledge
with respect to any real estate acquired by Company Bank or a Subsidiary of
Company Bank through foreclosure or by deed in lieu of foreclosure) neither the
Company nor any of its Subsidiaries is subject to any liability for any exposure
to any Hazardous Substance or any contamination, environmental remediation or
clean-up obligations pursuant to any Environmental Law including any liability
under the Comprehensive Environmental Response, Compensation and Liability Act
of 1980 (“CERCLA”), or the Resource Conservation and Recovery Act of 1976, in
each case which liability, individually or in the aggregate, would reasonably be
expected to have a material impact on the consummation of the transactions
contemplated by this Agreement.
(iii)    There are no legal, administrative, arbitral or other proceedings,
claims, actions or notices of any nature seeking to impose, or that would
reasonably be expected to result in the imposition of, on the Company or any of
its Subsidiaries, any liability or obligation of the Company or any of its
Subsidiaries with respect to any Environmental

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Law. There is no private or governmental, environmental health or safety
investigation or remediation activity of any nature arising under any
Environmental Law pending or, to the Knowledge of the Company, threatened
against the Company or any of its Subsidiaries or any property in which the
Company or any of its Subsidiaries has taken a security interest, to the
Knowledge of the Company there is no reasonable basis for, or circumstances that
would reasonably be expected to give rise to, any such proceeding, claim,
action, investigation or remediation; and neither the Company nor any of its
Subsidiaries is subject to any agreement, letter or memorandum or Order by or
with any Governmental Entity or any indemnity or other Contract with any third
party that would reasonably be expected to impose any such environmental
obligation or liability.
(iv)    To the Company’s Knowledge, no property currently or formerly owned or
operated by the Company or any of its Subsidiaries was contaminated with any
Hazardous Substance during or prior to such period of ownership or operation in
a manner that would result in any liability that could reasonably be expected to
have, individually or in the aggregate, a material impact on the Company or any
of its Subsidiaries, taken as a whole, or a material impact on the consummation
of the transactions contemplated by this Agreement.
(v)    The Company has made available to Acquirer copies of all material
environmental reports, studies, assessments, sampling data and other material
environmental documents in its possession as of the date hereof relating to the
Company, its Subsidiaries or their current or former properties and properties
in which the Company or any of its Subsidiaries has taken a security interest
having a book value in excess of $500,000.
(vi)    Each of the Company and each of its Subsidiaries complies with all FDIC
guidelines concerning environmental due diligence and risk management in
lending, loan administration, workout and foreclosure activities including FDIC
Bulletin FIL-14-93, and update FIL-98-2006.
(w)    Loan Portfolio.
(i)    Except as set forth in Section 3.02(u)(i) of the Company Disclosure
Schedule, as of the date hereof, neither the Company nor any of its Subsidiaries
is a party to any written or oral (1) loan, loan agreement, note or borrowing
arrangement (including leases, credit enhancements, commitments, guarantees and
interest-bearing assets) (collectively, “Loans”), under the terms of which the
obligor was, as of June 30, 2012, over 90 days delinquent in payment of
principal or interest or, to the Knowledge of the Company, in default of any
other material provision or (2) Loan with any director, executive officer or
five percent or greater shareholder of the Company or any of its Subsidiaries,
or to the Knowledge of the Company, any person, corporation or enterprise
controlling, controlled by or under common control with any of the foregoing.
Section 3.02(u)(i) of the Company Disclosure Schedule sets forth (1) all of the
Loans of the Company or any of its Subsidiaries that as of June 30, 2012 were
classified by the Company as “Other Loans Specially Mentioned,” “Special
Mention,” “Substandard,”

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“Doubtful,” “Loss,” “Classified,” “Criticized,” “Credit Risk Assets,” “Concerned
Loans,” “Watch List” or words of similar import, together with the principal
amount of and accrued and unpaid interest on each such Loan as of June 30, 2012
and the identity of the borrower thereunder (and since January 1, 2011 there
have been no such classifications by any Governmental Entity that are not so
classified by the Company), (2) by category of Loan (i.e., commercial, consumer,
or other commonly used category designation), all the other Loans of the Company
or any of its Subsidiaries that as of June 30, 2012 were classified as such,
together with the aggregate principal amount of and aggregate accrued and unpaid
interest on such Loans by category as of June 30, 2012, and (3) each asset of
the Company that as of June 30, 2012 was classified as “Other Real Estate Owned”
and the book value thereof.
(ii)    Each Loan of the Company or any of its Subsidiaries in original
principal amount in excess of $5,000 (1) is evidenced by notes, Contracts or
other evidences of indebtedness that are true, genuine and what they purport to
be, (2) to the extent secured, has been secured by valid Encumbrances which have
been perfected and (3) to the Knowledge of the Company, is the legal, valid and
binding obligation of the obligor named therein, enforceable in accordance with
its terms, subject to the Bankruptcy and Equity Exception.
(iii)    Except as set forth in Section 3.02(u)(iii) of the Company Disclosure
Schedule, none of the Contracts pursuant to which the Company or any of its
Subsidiaries has sold Loans or pools of Loans or participations in Loans or
pools of Loans contains any obligation to repurchase such Loans or interests
therein, or entitle the buyer of such Loans or pools of Loans or participations
in Loans or pools of Loans or any other Person to pursue any other form of
recourse against the Company or its Subsidiaries. Since January 1, 2009, there
has not been any claim made by any such buyer or other Person for repurchase or
other similar form of recourse against the Company or any of its Subsidiaries.
(iv)    Each of the Company and each of its Subsidiaries, as applicable, is
approved by and is in good standing: (1) as a supervised mortgagee by the
Department of Housing and Urban Development to originate and service Title I FHA
mortgage Loans; (2) as a GNMA I and II Issuer by the Government National
Mortgage Association; (3) by the Department of Veteran’s Affairs (“VA”) to
originate and service VA Loans; (4) as a seller/servicer by the Federal National
Mortgage Association and the Federal Home Loan Mortgage Corporation to originate
and service conventional residential mortgage Loans; and (5) by the Small
Business Administration (“SBA”) to originate and service SBA Loans (each such
entity being referred to herein as an “Agency” and, collectively, the
“Agencies”).
(v)    Except as set forth in Section 3.02(u)(v) of the Company Disclosure
Schedule, neither the Company nor any of its Subsidiaries is now nor has it ever
been since January 1, 2009 subject to any fine, suspension, settlement or other
Contract or other administrative agreement or sanction by, or any reduction in
any loan purchase

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commitment from, any Governmental Entity or Agency relating to the origination,
sale or servicing of mortgage, SBA or consumer Loans. Neither the Company nor
any of its Subsidiaries has received any notice, nor does it have any reason to
believe as of the date of this Agreement, that any Agency proposes to limit or
terminate the underwriting authority of the Company or any of its Subsidiaries
or to increase the guarantee fees payable to any such Governmental Entity or
Agency.
(vi)     Each of the Company and each of its Subsidiaries is and has been in
compliance in all material respects since January 1, 2008 with all applicable
federal, state and local Laws, rules and regulations, including the
Truth-In-Lending Act and Regulation Z, the Equal Credit Opportunity Act and
Regulation B, the Real Estate Settlement Procedures Act and Regulation X, the
Fair Credit Reporting Act, the Fair Debt Collection Practices Act, any
regulations promulgated by the Consumer Financial Protection Bureau, SAFE
Mortgage Licensing Act of 2008, the Small Business Investment Act of 1958, and
all Agency and other investor and mortgage insurance company requirements,
relating to the origination, sale and servicing of mortgage and consumer Loans.
(vii)    To the Knowledge of the Company, each Loan included in a pool of Loans
originated, acquired or serviced by the Company or any of its Subsidiaries (a
“Pool”) meets all eligibility requirements (including all applicable
requirements for obtaining mortgage insurance certificates and loan guaranty
certificates) for inclusion in such Pool. All such Pools have been finally
certified or, if required, recertified in accordance with all applicable laws,
rules and regulations, except where the time for certification or
recertification has not yet expired. To the Knowledge of the Company, no Pools
have been improperly certified, and no Loan has been bought out of a Pool
without all required approvals of the applicable investors.
(x)    Insurance. To the Company’s Knowledge, each of the Company and each of
its Subsidiaries maintains, and has maintained for the two years prior to the
date of this Agreement, insurance underwritten by insurers that, to the
Company’s Knowledge, are of recognized financial responsibility, of the types
and in the amounts that the Company and its Subsidiaries reasonably believe are
adequate for their respective businesses, including insurance covering all real
and personal property owned or leased by the Company or any of its Subsidiaries
against theft, damage, destruction, acts of vandalism and all other risks
customarily insured against, with such deductibles as are customary, to the
Company’s Knowledge, for companies in the same or similar business. True,
correct and complete copies of all policies and binders of insurance currently
maintained in respect of the assets, properties, business, operations,
employees, officers or directors of the Company and its Subsidiaries, excluding
such policies pursuant to which the Company, any of its Subsidiaries or an
Affiliate of any of them acts as the insurer and which are identified with
respective expiration dates on Section 3.02(v) of the Company Disclosure
Schedule (collectively, the “Company Insurance Policies”), and all written
correspondence relating to any material claims made since December 31, 2011
under the Company Insurance Policies, have been previously made available to
Acquirer. To its Knowledge, all of the Company Insurance Policies are in full
force and effect, the premiums due and payable thereon have been or will be
timely paid through the Closing Date, and there is no breach or default (and

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no condition exists or event has occurred which, with the giving of notice or
lapse of time or both, would constitute such a breach or default) by the Company
or any of its Subsidiaries under any of the Company Insurance Policies or, to
the Knowledge of the Company, by any other party to the Company Insurance
Policies, except for any such breach or default that would not reasonably be
expected to have, individually or in the aggregate, a material impact on the
Company and its Subsidiaries, taken as a whole. Neither the Company nor any of
its Subsidiaries has received any written notice of cancellation or non-renewal
of any such Company Insurance Policy nor, to the Knowledge of the Company, is
the termination of any such policies threatened.
(y)    Intellectual Property. To the Company’s Knowledge, the Company and its
Subsidiaries own or otherwise have a valid license to use all trademarks,
service marks and trade names (including any registrations or applications for
registration of any of the foregoing) (collectively, the “Company Intellectual
Property”) necessary to carry on their business substantially as currently
conducted, except where such failures to own or validly license such Company
Intellectual Property would not, individually or in the aggregate, reasonably be
materially adverse to the Company. Neither the Company nor any such Subsidiary
has received any notice of infringement of or conflict with, and to the
Knowledge of the Company, there are no infringements of or conflicts with, the
rights of others with respect to the use of any Company Intellectual Property
which would, individually or in the aggregate, reasonably be materially adverse
to the Company.
(z)    Brokers and Finders. None of the Company, any of its Subsidiaries or any
of their respective officers, directors, employees or agents has employed any
broker or finder or incurred any liability for any financial advisory fees,
brokerage fees, commissions or finder’s fees, and no broker or finder has acted
directly or indirectly for the Company or any of its Subsidiaries, in connection
with this Agreement or the transactions contemplated hereby, except that the
Company has employed Keefe Bruyette & Woods, Inc. as its financial advisor in
connection therewith.
(aa)    Related Party Transactions.
(i)    Except as set forth in Section 3.02(y)(i) of the Company Disclosure
Schedule or as part of the normal and customary terms of an individual’s
employment or service as a director, neither the Company nor any of its
Subsidiaries is party to any extension of credit (as debtor, creditor, guarantor
or otherwise), Contract for goods or services, lease or other Contract with any
(1) Affiliate, (2) insider or related interest of an insider, (3) shareholder
owning five percent (5%) or more of the outstanding Common Stock or related
interest of such a shareholder or (4) employee who is not an executive officer
(other than credit and consumer banking transactions in the ordinary course of
business) (each, a “Related Party Contract”). For purposes of the preceding
sentence, the terms “insider,” “related interest,” and “executive officer” shall
have the meanings assigned in the Federal Reserve’s Regulation O.
(ii)    Each of the Company, Bank and each of the Company’s other Subsidiaries
is in compliance with, and has since December 31, 2006, complied with, Sections
23A

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and 23B of the Federal Reserve Act, its implementing regulations, and Federal
Reserve Board Regulation O.
(bb)    Information Supplied. None of the information supplied or to be supplied
by or on behalf of the Company for inclusion or incorporation by reference in
the Form S-4 Registration Statement will, at the time the Form S-4 Registration
Statement is filed with the SEC or at the time it becomes effective under the
Securities Act, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under which they are
made, not misleading. None of the information supplied or to be supplied by or
on behalf of the Company for inclusion or incorporation by reference in the
Proxy Statement or otherwise used in the solicitation of shareholders of the
Company to approve this Agreement and the transactions contemplated hereby will,
at the time the Proxy Statement is mailed to the shareholders of the Company or
otherwise used or at the time of the Shareholders Meeting, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they are made, not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ACQUIRER
Section 4.01     Representations and Warranties of Acquirer. Acquirer hereby
represents and warrants to the Company, that, except as Previously Disclosed:
(cc)    Organization, Good Standing and Qualification.
(i)    Acquirer is duly organized, validly existing and in good standing under
the laws of State of Delaware. Acquirer is a bank holding company duly
registered under the BHCA and meets the applicable requirements for
qualification as such. Acquirer has all corporate power and authority to own or
lease all the assets owned or leased by it and to conduct its business as it is
now being conducted. Acquirer is duly licensed or qualified to do business and
in good standing as a foreign corporation in all jurisdictions (i) in which the
nature of the activities conducted by Acquirer requires such licensure or
qualification and (ii) in which Acquirer owns or leases real property, other
than any failures to be so licensed or qualified that (iii) would not reasonably
be expected to have or result in any material adverse impact on Acquirer. The
articles of incorporation of Acquirer comply with applicable Law. A true,
complete and correct copy of each of the certificate of incorporation and the
bylaws of Acquirer, as amended and currently in effect, has been delivered or
made available to the Company.
(ii)    Acquirer Bank is a commercial bank, duly organized, validly existing and
in good standing under the Laws of the State of California and engages only in
activities permitted by Law. Acquirer Bank (1) has all requisite corporate power
and authority to own, operate and lease its properties and to carry on its
business as it is currently being conducted (including all requisite authority
to operate outside California where applicable) and (2) is in good standing and
is duly qualified to do business in each

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jurisdiction in which the character of its properties owned or held under lease
or the nature of its business makes such qualification necessary. Acquirer
Bank’s deposit accounts are insured by the FDIC to the fullest extent permitted
under applicable Law.
(dd)    Authorization.
(i)    No vote of holders of capital stock of Acquirer is necessary to approve
this Agreement and the Merger and the other transactions contemplated hereby,
including under any applicable Law or the requirements of any stock exchange.
Acquirer has all requisite corporate power and authority and has taken all
corporate action necessary to execute, deliver and perform its obligations under
this Agreement, and to consummate the Merger and the other transactions
contemplated hereby. This Agreement has been duly executed and delivered by
Acquirer and, assuming due authorization, execution and delivery by the Company,
is a valid and binding agreement of Acquirer, enforceable against Acquirer in
accordance with its terms, subject to the Bankruptcy and Equity Exception. No
other corporate proceedings are necessary for the execution and delivery by
Acquirer of this Agreement, the performance by it of its obligations hereunder
or the consummation by it of the transactions contemplated hereby.
(ii)    Acquirer’s board of directors (the “Acquirer Board”) has received the
opinion of its financial advisor, Raymond James Financial, Inc. to the effect
that, subject to the assumptions, qualifications and limitations set forth
therein, as of the date of such opinion, the Per Share Merger Consideration is
fair to the holders of Acquirer Common Stock from a financial point of view. It
is agreed and understood that such opinion is for the benefit of the Acquirer
Board only and may not be relied upon by the Company or its shareholders or by
any holders of capital stock of Acquirer.
(iii)    The Acquirer Board has adopted resolutions (1) determining that this
Agreement and the transactions hereby are advisable, and in the best interests
of Acquirer and its shareholders and (2) approving this Agreement and the
transactions contemplated hereby.
(iv)    Neither the execution and delivery by Acquirer of this Agreement, nor
the consummation of the transactions contemplated hereby, nor compliance by
Acquirer with any of the provisions hereof, will (1) violate, conflict with, or
result in a breach of any provision of, or constitute a default (or an event
which, with notice or lapse of time or both, would constitute a default) under,
or result in the termination of, or result in the loss to Acquirer or any of its
Subsidiaries of any benefit or creation of any right on the part of any third
party under, or accelerate the performance required by, or result in a right of
termination or acceleration of, or result in the creation of any Encumbrances
upon any of the material properties or assets of Acquirer or any of its
Subsidiaries under any of the terms, conditions or provisions of (x) the
certificate of incorporation or bylaws of Acquirer or the articles of
incorporation, charter, bylaws or other governing instruments of any of its
Subsidiaries or (y) any material Contract or license to which Acquirer or any of
its Subsidiaries is a party or by which it may be bound, or to which Acquirer or
any of its Subsidiaries or any of the properties or assets of Acquirer or any of
its Subsidiaries

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may be subject, or (2) violate any Law or Order applicable to Acquirer or any of
its Subsidiaries or any of their respective properties or assets.
(ee)    Acquirer SEC Reports.
(i)    Acquirer has filed all forms, reports, and documents required to be filed
by it with the SEC since December 31, 2011. Except to the extent available in
full without redaction on the SEC’s website through EDGAR two days prior to the
date of this Agreement, Acquirer has delivered to the Company copies in the form
filed with the SEC (including the full text of any document filed subject to a
request for confidential treatment) of all forms, reports, registration
statements and other documents (other than preliminary materials if the
corresponding definitive materials have been provided to the Company) filed by
the Acquirer with the SEC since December 31, 2011 (such forms, reports,
registration statements, and other documents, whether or not available through
EDGAR, are collectively referred to herein as the “Acquirer SEC Reports”).
(ii)    Each of the Acquirer SEC Reports (1) as of the date of the filing of
such report, complied as to form with the requirements of the Securities Act and
the Exchange Act, and the rules and regulations thereunder, and (2) as of its
filing date (or, if amended or superseded by a subsequent filing prior to the
date hereof, on the date of such filing) did not contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading.
(ff)    NASDAQ Listing and Compliance. The outstanding shares of Acquirer Common
Stock are listed for trading on the NASDAQ. Acquirer is, and since December 31,
2011 has been, in compliance with the applicable listing rules and corporate
governance rules and regulations of NASDAQ.
(gg)    Acquirer Financial Statements. Each of the financial statements
(including, in each case, the notes thereto) of Acquirer contained or
incorporated by reference in the Acquirer SEC Reports complied with the rules
and regulations of the SEC as of the date of the filing of such reports, was
prepared in accordance with GAAP and fairly presents the financial condition and
the results of operations, changes in shareholders’ equity, and cash flows of
Acquirer and its Subsidiaries as of the dates of and for the periods referred to
in such financial statements, subject in the case of interim financial
statements to (i) the omission of notes to the extent permitted by Regulation
S-X and (ii) normal, recurring year-end adjustments. The financial statements of
Acquirer referred to in this Section 4.01(e) reflect the consistent application
of such accounting principles throughout the periods involved, except as
disclosed in the notes to such financial statements.
(hh)    Brokers and Finders. Except that Acquirer has employed Raymond James
Financial, Inc. to provide its opinion to the Acquirer Board regarding the
fairness of the Merger to Acquirer from a financial point of view, none of
Acquirer, its Affiliates or any of their respective officers, directors,
employees or agents has employed any broker or finder or incurred any liability
for any financial advisory fees, brokerage fees, commissions or finder’s fees,
and no

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broker or finder has acted directly or indirectly for Acquirer, in connection
with this Agreement or the transactions contemplated hereby that will require
any payment by the Company.
(ii)    Certain Information. None of the information provided in writing by, and
relating to Acquirer or Acquirer Bank or any of their respective Subsidiaries
included in any registration statement or proxy statement contemplated under
this Agreement will contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, that
information provided as of a later date shall be deemed to modify information
provided as of an earlier date.
(jj)    Stock Validity. At the Effective Time, the Acquirer Stock issued in
connection with the Merger will be duly authorized and validly issued and fully
paid and nonassessable, subject to an effective registration statement with the
SEC, freely tradeable without any restrictions, and not subject to any
preemptive rights to subscribe for or purchase securities.

ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS
Section 5.01     Conduct of Businesses Prior to the Effective Time. Except as
required by applicable Law, or with the prior written consent of Acquirer,
during the period from the date of this Agreement to the Effective Time, the
Company shall, and shall cause each of its Subsidiaries to, (a) conduct its
business only in the ordinary course, consistent with past practice, (b) use
commercially reasonable best efforts to maintain and preserve its business
organizations intact and maintain existing relations and goodwill with
Governmental Entities, customers, suppliers, distributors, creditors, lessors,
landlords, Employees and business associates, to keep available the services of
its and its Subsidiaries’ Employees and to maintain its branch network, (c) not
take any action that could reasonably be expected to delay the receipt by the
Company or Acquirer of any necessary approvals of any Governmental Entity
required for the transactions contemplated hereby or to perform its covenants
and agreements under this Agreement or to consummate the transactions
contemplated hereby and (d) pay investment banking fees, legal fees, data
processing termination penalty and other normal transaction fees prior to or
concurrent with the Effective Date, and not pay any other fees or costs in
excess of $150,000 that are outside the Company’s normal business prior to the
Effective Date.
Section 5.02     Company Forbearances. During the period from the date of this
Agreement to the Effective Time, except as Previously Disclosed, as expressly
permitted by this Agreement or as required by applicable Law, the Company shall
not, and shall not permit any of its Subsidiaries to, without the prior written
consent of Acquirer:
(a)    (i) Issue, sell or otherwise permit to become outstanding, or dispose of
or encumber or pledge, or authorize or propose the creation of, any additional
shares of its stock other than in connection with the exercise of Company Stock
Options that are outstanding as of the date of this Agreement, or (ii) authorize
or cause any additional shares of its stock to become subject to new grants
under the Company Stock Plan or otherwise.

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(b)    (i) Make, declare, pay or set aside for payment any dividend on or in
respect of, or declare or make any distribution on any shares of its stock
(other than dividends from its wholly owned Subsidiaries to it or another of its
wholly owned Subsidiaries) or (ii) directly or indirectly adjust, split,
combine, redeem, reclassify, purchase or otherwise acquire, any shares of its
stock (other than repurchases in the ordinary course of business to satisfy
obligations under Benefit Plans).
(c)    Amend the terms of, waive any material rights under, fail to use
reasonable best efforts to enforce, terminate, knowingly violate the terms of or
enter into any Material Contracts.
(d)    Sell, transfer, mortgage, encumber, license, let lapse, cancel, abandon
or otherwise dispose of or discontinue any of its assets, deposits, business or
properties, except for sales, transfers, mortgages, encumbrances, licenses,
lapses, cancellations, abandonments or other dispositions or discontinuances in
the ordinary course of business and consistent with past practice.
(e)    Acquire (other than by way of foreclosures, deeds in lieu of foreclosure,
or acquisitions of control in a fiduciary or similar capacity or in satisfaction
of debts previously contracted in good faith, in each case in the ordinary
course of business consistent with past practice) all or any portion of the
assets, business, deposits or properties of any other entity.
(f)    Amend the articles of incorporation or bylaws of the Company, or similar
governing documents of any of its Subsidiaries.
(g)    Implement or adopt any change in its financial or regulatory accounting
principles, practices or methods, other than as required by GAAP or applicable
regulatory accounting requirements.
(h)    Except for any retention plan to which the Parties mutually agree or as
required by the terms of any Benefit Plan existing as of the date hereof (i)
increase in any manner the compensation or benefits of any of the current or
former directors, officers, employees, consultants, independent contractors or
other service providers of the Company or any of its Subsidiaries (collectively,
“Employees”), other than increases to Employees who are not directors or
executive officers of the Company or any of its Subsidiaries that are in the
ordinary course of business consistent with past practice, (ii) become a party
to, establish, amend, commence participation in, terminate or commit itself to
the adoption of any stock option plan or other stock-based compensation plan,
compensation, severance, pension, retirement, profit-sharing, welfare benefit,
or other employee benefit plan or Contract or employment agreement with or for
the benefit of any Employee (or prospective Employees), (iii) accelerate the
vesting of or lapsing of restrictions with respect to any stock-based
compensation or other long-term incentive compensation, other compensation or
benefits under any Benefit Plans, (iv) cause the funding of any rabbi trust or
similar arrangement or take any action to fund or in any other way secure the
payment of compensation or benefits under any Benefit Plan or (v) change any
actuarial assumptions used to calculate funding obligations with respect to any
Benefit Plan that is required by applicable Law to be funded or change the
manner in which contributions to such plans are made or the basis on which such
contributions are determined, except as may be

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required by GAAP. For the purposes of this Section 5.02(h), “executive officer”
shall mean any officer who is in charge of a principal business unit, division
or function and any other Person who performs a policy-making function for the
Company or Company Bank.
(i)    Hire or engage the services of any individual except for the hiring or
engagement of any individual with an annual rate of pay (which for purposes
hereof shall include base salary or wages and target annual bonus, if any) less
than $100,000.
(j)    Incur or guarantee any indebtedness for borrowed money other than in the
ordinary course of business consistent with past practice and not in excess of
$500,000 in the aggregate, except for Federal Home Loan Bank advances obtained
in the ordinary course of business.
(k)    (i) Enter into any new line of business or (ii) materially change its
lending, investment, underwriting, risk, compliance and asset/liability
management and other banking and operating policies, except as required by a
Governmental Entity.
(l)    Make any material change to (i) its investment securities portfolio,
derivatives portfolio or its interest rate exposure, through purchases, sales or
otherwise, or (ii) the manner in which such portfolio is classified or reported,
except as required by a Governmental Entity.
(m)    Settle any action, suit, claim or proceeding against it or any of its
Subsidiaries, except for an action, suit, claim or proceeding that is settled in
an amount and for consideration not in excess of $50,000 and that would not (i)
impose any restriction on it or its Subsidiaries or on Acquirer or any of its
Affiliates or (ii) create precedent for claims that is reasonably likely to be
material to it or its Subsidiaries.
(n)    Make application for the opening, relocation or closing of any, or open,
relocate or close any, branch office, loan production office or other
significant office or operations facility other than such applications that have
been submitted and announced as of the date of this Agreement.
(o)    Make or change any material Tax election, change or consent to any change
in its or its Subsidiaries’ material method of accounting for Tax purposes,
settle or compromise any material Tax liability, claim or assessment, enter into
any closing agreement, waive or extend any statute of limitations with respect
to a material amount of Taxes, surrender any right to claim a refund for a
material amount of Taxes, or file any material amended Tax Return.
(p)    (i) Merge or consolidate the Company or any of its Subsidiaries with any
other Person or restructure, reorganize or completely or partially liquidate or
(ii) otherwise enter into any Contracts or arrangements imposing material
changes or restrictions on its assets, operations or businesses.
(q)    Create or incur any Encumbrance material to the Company and its
Subsidiaries, taken as a whole, not incurred in the ordinary and usual course of
business consistent with past practice.

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(r)    Acquire any Loans through bulk purchases that are not in the process as
of the date of this Agreement.
(s)    Make any capital contributions to or investments (other than to be held
in a fiduciary or agency capacity to be beneficially owned by third Parties) in
any Person (other than to or in any direct or indirect wholly owned Subsidiary
of the Company).
(t)    Except as set forth in the capital budgets set forth in Section 5.02(t)
of the Company Disclosure Schedule and consistent therewith, make or authorize
any capital expenditure in excess of $50,000.
(u)    Take any action that would reasonably be expected to result in any of the
conditions to the Merger set forth in Article VII not being satisfied.
(v)    Agree to take, make any commitment to take, or adopt any resolutions of
the Company Board in support of, any of the actions prohibited by this Section
5.02.
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.01     Cooperation; Regulatory Matters.
(w)    Each of the Parties shall cooperate with the other Party and use its
commercially reasonable best efforts to take or cause to be taken all actions,
and do or cause to be done all things, reasonably necessary, proper or advisable
on its part under this Agreement and applicable Law to consummate the Merger,
the Bank Merger and other transactions contemplated by this Agreement as soon as
practicable, including promptly preparing and filing (or causing any required
Affiliate to promptly prepare and file) all necessary documentation (the
“Required Filings”) to make all applications, notices, petitions and filings, to
obtain as promptly as practicable all permits, consents, approvals, agreements,
authorizations and indications of non-objection (including all Requisite
Regulatory Consents) of all Governmental Entities and other third parties that
are necessary or advisable to consummate the transactions contemplated by this
Agreement (including the Merger and the Bank Merger), and to comply with the
terms and conditions of all such Requisite Regulatory Consents, permits,
consents, approvals, agreements, authorizations and indications of non-objection
of all Governmental Entities and other third parties. Without limiting the
generality of the foregoing, the Parties agree to use their commercially
reasonable best efforts to cause all Required Filings with respect to any
Requisite Regulatory Consent to be completed and filed no later than twenty (20)
Business Days after the date of this Agreement. The Company and Acquirer shall
have the right to review in advance, and, to the extent practicable, each will
consult the other on, in each case subject to applicable Laws, all the
information relating to the Company or Acquirer, as the case may be, or any of
their respective Affiliates, that appear in any Required Filings. In exercising
the foregoing rights set forth in this Section 6.01(a), Acquirer will take the
lead in preparing required applications and notices, but each of the Parties
shall act reasonably and as promptly as practicable. The Parties shall consult
with each other with respect to the obtaining of all permits, consents,
approvals and authorizations of all third parties and Governmental Entities
necessary or advisable to

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consummate the transactions contemplated by this Agreement and each Party will
keep the other apprised on a current basis of the status of matters, and any
material communication to, with or from a Governmental Entity, relating to, or
reasonably likely to affect the timely completion of, the transactions
contemplated by this Agreement.
(x)    Each of Acquirer and the Company shall, upon request, furnish to the
other all information concerning itself, its Affiliates, Subsidiaries,
directors, officers and shareholders and such other matters as may be reasonably
necessary or advisable in connection with the Proxy Statement, as applicable, or
any other statement, filing, notice or application made by or on behalf of
Acquirer or any of its Affiliates, or the Company or any of its Subsidiaries, to
any Governmental Entity in connection with the Merger, the Bank Merger or any of
the other transactions contemplated by this Agreement.
(y)    In furtherance and not in limitation of the foregoing, each of Acquirer
(and Acquirer shall cause its Subsidiaries to) and the Company (and the Company
shall cause its Subsidiaries to) shall use its reasonable best efforts to (i)
avoid the entry of, or to have vacated, lifted, reversed or overturned any
decree, judgment, injunction or other order, whether temporary, preliminary or
permanent, that would restrain, prevent or delay the Closing, and (ii) avoid or
eliminate each and every impediment under any applicable Law so as to enable the
Closing to occur as soon as possible; provided, however, that nothing in this
Agreement, including this Section 6.01, shall require, or be construed to
require, Acquirer or any of its Affiliates to (x) proffer to, or agree to, sell,
divest, or otherwise dispose of before or after the Effective Time, any assets,
licenses, operations, rights, product lines, businesses or interest therein of
Acquirer, the Company or any of their respective Affiliates, (y) agree to any
conditions or make any commitments that are not comparable to those imposed in
connection with comparable transactions and that would not be reasonably
foreseeable based upon publicly available information, or (z) agree to any
material changes or restriction on, or other impairment of Acquirer’s ability to
own or operate, any of any such assets, licenses, operations, rights, product
lines, businesses or interests therein or Acquirer’s or any of its Affiliates’
ability to vote, transfer, receive dividends or otherwise exercise full
ownership rights with respect to the stock of the Surviving Corporation, in each
case measured on a scale relative to the Company and its Subsidiaries, taken as
a whole (each, a “Burdensome Condition”).
(z)    Each of Acquirer and the Company shall promptly advise the other upon
receiving (including through their respective Affiliates) any communication from
a Governmental Entity the consent or approval of which is required for
consummation of the transactions contemplated by this Agreement that causes such
Party to believe that there is a reasonable likelihood that any Requisite
Regulatory Consent will not be obtained without the imposition of a Burdensome
Condition or that the receipt of any such approval may be delayed.
Section 6.02     Access to Information.
(a)    Upon reasonable notice and subject to applicable Laws and with an effort
to minimize business disruption, the Company shall, and shall cause each of its
Subsidiaries to, afford to the officers, directors, employees, agents and the
Representatives of Acquirer, reasonable access, during normal business hours
during the period prior to the Effective Time, to

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all its properties, books, Contracts, commitments and records, and, during such
period, the Company shall, and shall cause its Subsidiaries to, make available
to Acquirer (i) a copy of each report, schedule, registration statement and
other document filed or received by it during such period pursuant to the
requirements of federal or state banking Laws (other than reports or documents
that the Company is not permitted to disclose under applicable Law) and (ii) all
such other information concerning its business, properties and personnel as
Acquirer may reasonably request. Neither the Company nor any of its Affiliates
shall be required to provide access to or to disclose information where such
access or disclosure would jeopardize the attorney-client privilege of such
party or contravene any Law, fiduciary duty or Order or binding Contract entered
into prior to the date of this Agreement. The Parties shall make appropriate
substitute disclosure arrangements under circumstances in which the restrictions
of the preceding sentence apply.
(b)    All nonpublic information and materials provided prior to or after the
date of this Agreement shall be subject to the provisions of the confidentiality
agreement entered into between the Parties as of March 1, 2012 (the
“Confidentiality Agreement”).
(c)    No investigation by a party hereto or its representatives shall affect or
be deemed to modify or waive any representations, warranties or covenants of the
other Party set forth in this Agreement.
Section 6.03     Employee Matters.
(a)    Acquirer shall have the sole right and discretion to determine which
Persons shall remain as Employees after the Closing Date. Following the Closing
Date, Acquirer shall maintain or cause to be maintained employee benefit plans
and compensation opportunities for the benefit of Employees who remain actively
employed by the Company or its Subsidiaries after the Closing Date (“Covered
Employees”) that provide employee benefits and compensation opportunities that,
in the aggregate, are no less favorable than the employee benefits and
compensation opportunities that are generally made available to similarly
situated employees of Acquirer or its Subsidiaries (other than the Surviving
Corporation and its Subsidiaries) (collectively, the “Acquirer Plans”), as
applicable; provided, that (i) with respect to retirement benefits, satisfaction
of the foregoing standard shall not require that any Covered Employee be
eligible to participate in any specific retirement plan of Acquirer or a closed
or frozen Acquirer Plan; and (ii) until such time as Acquirer shall cause
Covered Employees to participate in the Acquirer Plans, a Covered Employee’s
continued participation in the employee benefit plans and compensation
opportunities of the Company and its Subsidiaries as in effect immediately prior
to the Closing Date shall be deemed to satisfy the foregoing provisions of this
sentence (it being understood that participation in the Acquirer Plans may
commence at different times with respect to each Acquirer Plan).
(b)    Nothing in this Section 6.03 shall be construed to limit the right of
Acquirer or any of its Affiliates (including, following the Closing Date, the
Surviving Corporation and its Subsidiaries) to amend or terminate any Benefit
Plan or other employee benefit plan, to the extent such amendment or termination
is permitted by the terms of the applicable plan, nor shall anything in this
Section 6.03 be construed to require Acquirer or any of its Affiliates
(including,

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following the Closing Date, the Surviving Corporation and its Subsidiaries) to
maintain any Acquirer Plan or retain the employment of any particular Covered
Employee for any fixed period of time following the Closing Date. This Agreement
shall inure exclusively to the benefit of, and be binding upon the Parties
hereto and their respective successors, assigns, executors and legal
representatives. Nothing in this Agreement, express or implied, including
without limitation this Section 6.03, is intended to confer on any person other
than the Parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement.
Section 6.04     Indemnification; Directors’ and Officers’ Insurance.
(a)    From and after the Effective Time, the Surviving Corporation shall
indemnify, defend and hold harmless, to the extent permitted under applicable
Law (and shall also advance expenses as incurred to the extent permitted under
applicable Law and the certificate of incorporation and bylaws of the Surviving
Corporation), each present and former director and officer of the Company or its
Subsidiaries (in each case, to the extent acting in such capacity), determined
as of the Effective Time (collectively, the “Indemnified Parties”) against any
costs or expenses (including reasonable attorneys’ fees), judgments, fines,
losses, claims, damages or liabilities incurred in connection with any claim,
action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative, actual or threatened, arising out of facts or
matters existing or occurring at or prior to the Effective Time, including the
transactions contemplated by this Agreement; provided, that the Indemnified
Party to whom expenses are advanced provides an undertaking to repay such
advances if it is ultimately determined that such Indemnified Party is not
entitled to indemnification by the Surviving Corporation.
(b)    The Surviving Corporation shall provide the directors and officers
liability insurance (the “D&O Insurance”) to the Indemnified Parties for a
period of six years from and after the Effective Time with $3,000,000 of
coverage; provided, however, that in no event shall the Surviving Corporation be
required to expend for such D&O Insurance a premium amount in excess of 200% of
the annual premium paid by the Company for such insurance during its last
renewal (“Initial Premium”); provided, further, that if the premium amount of
such insurance coverage would exceed 200% of Initial Premium amount, the
Surviving Corporation shall obtain a policy or policies of D&O Insurance for
such Persons with the greatest coverage available for a cost not exceeding 200%
of Initial Premium amount.
(c)    Any Indemnified Party wishing to claim indemnification under Section
6.04(a), upon learning of any claim, action, suit, proceeding or investigation
described above, will promptly notify the Surviving Corporation; provided, that
failure to so notify will not affect the obligations of Acquirer under Section
6.04(a) unless and to the extent that the Surviving Corporation is actually and
materially prejudiced as a consequence.
(d)    The provisions of this Section 6.04 are intended to be for the benefit
of, and shall be enforceable by, each Indemnified Party.

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Section 6.05     Acquisition Proposals.
(a)    The Company agrees that it shall not, and shall cause the officers,
directors, employees, agents and representatives, including any investment
banker, financial advisor, attorney, accountant or other advisor, agent,
representative or Affiliate (collectively as to each Party, the
“Representatives”) of the Company or any of its Subsidiaries not to, directly or
indirectly:
(i)    initiate, solicit or encourage any inquiries or the making of any
proposal or offer that constitutes, or could reasonably be expected to lead to,
any Acquisition Proposal;
(ii)    engage in, continue or otherwise participate in any discussions or
negotiations regarding, or provide any information or data to any Person
relating to, any Acquisition Proposal; or
(iii)    otherwise knowingly facilitate any effort or attempt to make an
Acquisition Proposal.
(b)    Notwithstanding anything in Section 6.05(a) to the contrary, prior to the
time, but not after, the Requisite Shareholder Approval is obtained, the Company
may (i) provide information in response to a request therefor by a Person who
has made an unsolicited bona fide written Acquisition Proposal providing for the
acquisition of more than 50% of the assets (on a consolidated basis) or total
voting power of the equity securities of the Company if the Company receives
from the Person so requesting such information an executed confidentiality
agreement on terms not less restrictive to the other party than those contained
in the Confidentiality Agreement and substantially concurrently (and in any
event within two (2) Business Days) discloses (and, if applicable, provides
copies of) any such information to Acquirer to the extent not previously
provided to Acquirer; (ii) engage or participate in any discussions or
negotiations with any Person who has made such an unsolicited bona fide written
Acquisition Proposal; or (iii) after having complied with all requirements of
Section 6.05(c) and Section 6.05(d), approve, recommend, or otherwise declare
advisable or propose to approve, recommend or declare advisable (publicly or
otherwise) such an Acquisition Proposal, if, but only to the extent that, (x)
prior to taking any action described in clause (i), (ii) or (iii) above, the
Company Board determines in good faith after consultation with outside legal
counsel that failure to take such action, in light of the Acquisition Proposal
and the terms of this Agreement, would be inconsistent with the directors’
fiduciary duties under applicable Law, (y) in each such case referred to in
clause (i) or (ii) above, the Company Board has determined in good faith after
consultation with its financial advisor and outside legal counsel that such
Acquisition Proposal constitutes a Superior Proposal, and (z) in the case
referred to in clause (iii) above, the Company Board determines in good faith
after consultation with its financial advisor and outside legal counsel that
such Acquisition Proposal is a Superior Proposal.
(c)    The Company Board shall not withhold, withdraw, qualify or modify (or
publicly propose or resolve to withhold, withdraw, qualify or modify), in a
manner adverse to Acquirer, the Company Board Recommendation with respect to the
Merger. Notwithstanding the

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preceding sentence, prior to the time, but not after, the Requisite Shareholder
Approval is obtained, the Company Board may withhold, withdraw, qualify or
modify the Company Board Recommendation or approve, recommend or otherwise
declare advisable any Superior Proposal made after the date of this Agreement
that was not solicited, initiated, encouraged or facilitated in breach of this
Agreement, if the Company Board determines in good faith, after consultation
with outside counsel, that failure to do so would be in violation of the
directors’ fiduciary duties under applicable Law (a “Change of Recommendation”);
provided, however, that no Change of Recommendation may be made, and, for the
avoidance of doubt, no action referred to in Section 6.05(b)(iii) shall be
taken, until after at least 72 hours following Acquirer’s receipt of notice from
the Company advising that the Company currently intends to take such action and
the basis therefor, including all necessary information under Section 6.05(e).
In determining whether to make a Change of Recommendation or, for the avoidance
of doubt, whether to take any action referred to in Section 6.05(b)(iii), in
response to a Superior Proposal or otherwise, the Company Board shall take into
account any changes to the terms of this Agreement proposed by Acquirer and any
other information provided by Acquirer in response to such notice. Any material
amendment to any Acquisition Proposal will be deemed to be a new Acquisition
Proposal for purposes of this Section 6.05, including with respect to the notice
periods referred to in this Section 6.05(c) and Section 6.05(e).
(d)    The Company agrees that it will immediately cease and cause to be
terminated any existing activities, discussions or negotiations with any parties
conducted prior to the date hereof with respect to any Acquisition Proposal. The
Company agrees that it will take the necessary steps to promptly inform the
individuals or entities referred to in the first sentence hereof of the
obligations undertaken in this Section 6.05 and in the Confidentiality
Agreement. The Company also agrees that it will promptly request each Person
that has heretofore executed a confidentiality agreement in connection with such
Person’s consideration of acquiring the Company or any of its Subsidiaries to
return or destroy all confidential information heretofore furnished to such
Person by or on behalf of it or any of its Subsidiaries.
(e)    The Company agrees that it will promptly (and, in any event, within two
(2) Business Days) notify Acquirer if any inquiries, proposals or offers with
respect to an Acquisition Proposal are received by, any such information is
requested from, or any such discussions or negotiation are sought to be
initiated or continued with, it or any of its Representatives indicating, in
connection with such notice, the name of such Person and the material terms and
conditions of any proposals or offers (including, if applicable, copies of any
written requests, proposals or offers, including proposed Contracts) and
thereafter shall keep Acquirer informed, on a current basis, of any material
changes in the status and terms of any such proposals or offers (including any
amendments thereto) and any material changes in the status of any such
discussions or negotiations, including any change in the Company’s intentions as
previously notified.
Section 6.06     Takeover Laws. No Party will take any action that would cause
the transactions contemplated by this Agreement to be subject to requirements
imposed by any Takeover Law and each Party will take all necessary steps within
its control to exempt (or ensure

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the continued exemption of) those transactions from, or if necessary challenge
the validity or applicability of, any applicable Takeover Law, as now or
hereafter in effect.
Section 6.07     Financial Statements and Other Current Information. As soon as
reasonably practicable after they become available, but in no event more than
thirty (30) days after the end of each calendar month ending after the date
hereof, the Company will put in the Data Room or, at the Company’s election,
furnish to such Person as may be specified by Acquirer, pursuant to notice
requirements set forth in Section 9.04, (a) consolidated financial statements
(including balance sheets, statements of operations and shareholders’ equity) of
the Company or any of its Subsidiaries (to the extent available) as of and for
such month then ended, (b) to the extent available, internal management reports
showing actual financial performance against plan and previous period and (c) to
the extent permitted by applicable Law, any reports provided to the Company
Board or any committee thereof relating to the financial performance and risk
management of the Company or any of its Subsidiaries.
Section 6.08     Shareholders Meeting. The Company will take, in accordance with
applicable Law and its certificate of incorporation and bylaws, all action
necessary to convene a meeting of holders of Shares (the “Shareholders Meeting”)
as promptly as practicable after the date hereof, to consider and vote upon the
adoption of this Agreement, and shall not postpone or adjourn such meeting
except to the extent required by Law. Subject to Section 6.05(c) hereof, the
Company Board shall recommend the adoption of this Agreement by the Requisite
Shareholder Approval and shall take all lawful action to solicit such adoption
of this Agreement. The obligation of the Company to hold the Shareholders
Meeting shall not be affected by any Acquisition Proposal or other event or
circumstance and the Company agrees that it will not submit any Acquisition
Proposal to its shareholders for a vote at the Shareholder Meeting convened to
consider and vote upon the adoption of this Agreement.
Section 6.09     Notification of Certain Matters. The Company and Acquirer will
give prompt notice to the other of any fact, event or circumstance known to it
that (a) is reasonably likely, individually or taken together with all other
facts, events and circumstances known to it, to result in any Company Material
Adverse Effect or Acquirer Material Adverse Effect, respectively, or (b) would
cause or constitute a material breach of any of its representations, warranties,
covenants or agreements contained herein that reasonably could be expected to
give rise, individually or in the aggregate, to the failure of a condition in
Article VII; provided, however, that failure to give such notice shall not
separately constitute a failure of any condition in Article VII or a basis to
terminate this Agreement unless the underlying fact, event or circumstance would
independently result in such failure or provide such basis. The Company shall
give prompt notice to Acquirer of any legal, administrative, arbitral or other
proceeding, claim or action, or governmental or regulatory investigation of any
nature arising after the date hereof, but prior to the Effective Time.
Section 6.10     Related Party Contracts. To the extent requested in writing by
the Acquirer with respect to any specific identified contract prior to the
Effective Time, the Company shall take all actions necessary to terminate, and
shall cause to be terminated, each Related Party Contract, in each case without
any further liability or obligation of the Company,

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the Surviving Corporation, Acquirer or any of their respective Subsidiaries or
Affiliates and, in connection therewith, the Company (or its applicable
Subsidiary) shall have received from the other party to such Related Party
Contract a release in favor of the Company, the Surviving Corporation, Acquirer
and their respective Subsidiaries and Affiliates from any and all liabilities or
obligations arising out of such Related Party Contract.
Section 6.11     Form S-4 Registration Statement. Acquirer shall use its
commercially reasonable best efforts to cause the Form S-4 Registration
Statement, in which the Company’s Proxy Statement for the Shareholders Meeting
will be included, to be filed with the SEC no later than forty-five (45)
Business Days after the date of this Agreement. Each of Acquirer and the Company
shall use its commercially reasonable best efforts to have the Form S-4
Registration Statement declared effective under the Securities Act as promptly
as practicable after such filing, and the Company shall thereafter mail or
deliver the proxy statement contained therein to its shareholders. Acquirer
shall also use its reasonable best efforts to obtain all necessary state
securities law or “blue sky” permits and approvals required to carry out the
transactions contemplated by this Agreement, and the Company shall furnish all
information concerning the Company and the holders of the Company Common Stock
that may be reasonably requested in connection with such action. Within 60 days
after the Effective Time, the Acquirer shall cause the shares underlying the
Assumed Options to be registered with the SEC under a registration statement on
Form S-8, including, at Acquirer’s election, an amendment on Form S-8 of the
Form S-4 Registration Statement.
Section 6.12     NASDAQ Listing. Acquirer shall use its commercially reasonable
best efforts to cause the shares of Acquirer Common Stock to be issued in the
Merger to have been authorized for listing on the NASDAQ, subject to official
notice of issuance, prior to the effective time.
Section 6.13     Trust Preferred Securities. At the Effective Time, Acquirer
shall assume the Company’s obligations under Company’s outstanding Unsecured
Junior Subordinated Deferrable Interest Notes.
Section 6.14     Tax Matters. During the period from the date of this Agreement
to the Effective Time, (a) the Company and each of its Subsidiaries shall timely
file all Tax Returns required to be filed by each such entity during such period
(after taking into account any extensions) (each, a “Post-Signing Return”),
which Post-Signing Returns shall be complete and correct in all respects and,
except as otherwise required by Law, shall be prepared on a basis consistent
with the past practice of the Company; provided, however, that no material
Post-Signing Returns shall be filed with any Governmental Entity without
Acquirer’s prior written consent, which consent shall not be unreasonably
withheld or delayed; (b) the Company and each of its Subsidiaries shall timely
pay all Taxes due and payable with respect to the Tax periods covered by such
Post-Signing Returns; (c) the Company shall accrue a liability in its books and
records and financial statements in accordance with GAAP and past practice for
all Taxes payable by the Company or any of its Subsidiaries for which no
Post-Signing Return is due prior to the Effective Time; (d) the Company and each
of its Subsidiaries shall promptly notify Acquirer of any suit, claim, action,
investigation, proceeding or audit pending against or with

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respect to the Company or any of its Subsidiaries in respect of any material
amount of Tax and will not settle or compromise any such suit, claim, action,
investigation, proceeding or audit without Acquirer’s prior written consent,
which consent shall not be unreasonably withheld or delayed; and (e) the Company
and each of its Subsidiaries shall retain all books, documents and records
necessary for the preparation of Tax Returns and reports and Tax audits
consistent with its standard policy.

ARTICLE VII
CONDITIONS PRECEDENT
Section 7.01     Conditions to Each Party’s Obligation to Effect the Merger. The
respective obligations of the Parties to effect the Merger shall be subject to
the satisfaction or waiver at or prior to the Effective Time of each of the
following conditions:
(d)    Shareholder Approval. The Requisite Shareholder Approval shall have been
obtained.
(e)    No Injunctions or Restraints; Illegality. No order, injunction or decree
issued by any Governmental Entity or other Law preventing or making illegal the
consummation of the Merger or any of the other transactions contemplated by this
Agreement shall be in effect.
(f)    Regulatory Approvals. The Requisite Regulatory Consents shall have been
obtained and shall remain in full force and effect and all statutory waiting
periods in respect thereof shall have expired, without the imposition of any
Burdensome Condition in connection therewith.
(g)    Effectiveness of Form S-4 Registration Statement. The Form S-4
Registration Statement shall have been declared effective by the SEC in
accordance with the provisions of the Securities Act, no stop order suspending
the effectiveness of Form S-4 Registration Statement shall have been issued by
the SEC, and no proceeding for that purpose shall have been initiated or
threatened by the SEC.
(h)    NASDAQ Listing. The shares of Acquirer Common Stock to be issued in the
Merger pursuant to this Agreement shall have been approved for listing on the
NASDAQ.
Section 7.02     Conditions to Obligations of Acquirer. The obligations of
Acquirer to effect the Merger are also subject to the satisfaction, or waiver by
Acquirer, at or prior to the Effective Time, of the following conditions:
(c)    Representations and Warranties. The representations and warranties of the
Company set forth in this Agreement shall be true and correct in all material
respects as of the date of this Agreement and as of the Effective Time as though
made on and as of the Effective Time (except that representations and warranties
that by their terms speak specifically as of the date of this Agreement or
another date shall be true and correct as of such date); provided, however, that
no representation or warranty of the Company (other than the representations and

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warranties set forth in the first two sentences of Section 3.02(a)(i) and the
first sentence of Section 3.02(a)(ii), Section 3.02(b), Section 3.02(d)(i),
Section 3.02(d)(iii) and Section 3.02(d)(iv)(1)(x), which shall be true and
correct in all respects) shall be deemed untrue or incorrect for the purposes
hereof as a consequence of the existence of any fact, event or circumstance
inconsistent with such representation or warranty, unless such fact, event or
circumstance, individually or taken together with all other facts, events or
circumstances inconsistent with any representation or warranty of the Company,
has had or would reasonably be expected to result in a Company Material Adverse
Effect; provided, that for purposes of determining whether a representation or
warranty is true and correct for purposes of this Section 7.02(a), any
qualification or exception for, or reference to, materiality (including the
terms “material,” “materially,” “in all material respects,” “Company Material
Adverse Effect” or similar terms or phrases) in any such representation or
warranty (other than in Section 3.02(j)(iv)) shall be disregarded; and Acquirer
shall have received a certificate signed on behalf of the Company by the Chief
Executive Officer and the Chief Financial Officer of the Company to their best
Knowledge to the foregoing effect.
(d)    Performance of Obligations of the Company. The Company shall have
performed in all material respects all obligations required to be performed by
it under this Agreement at or prior to the Effective Time; and Acquirer shall
have received a certificate signed on behalf of the Company by the Chief
Executive Officer and the Chief Financial Officer of the Company to such effect.
(e)    Termination of Regulatory Agreements. Acquirer shall have obtained
assurance satisfactory to Acquirer, that neither the Company’s Regulatory
Agreements nor any other regulatory restrictions will apply to the Surviving
Corporation or the Surviving Bank as a result of the Merger.
(f)    Treasury Regulations Certificate. The Company shall have delivered to
Acquirer a certificate described in Treasury Regulations section 1.897-2(h) in a
form reasonably satisfactory to Acquirer.
(g)    Absence of Material Adverse Effect. Since the date of this Agreement no
Company Material Adverse Effect shall have occurred. Without limitation of
changes that may constitute or be deemed to have had a Company Material Adverse
Effect, deficiencies in the documentation of SBA Loans shall not constitute a
Company Material Adverse Effect unless actual losses are incurred as a result
thereof that constitute a Company Material Adverse Effect.
(h)    Dissenters Rights. The holders of not more than 15% of the outstanding
Company Common Stock shall have given timely notice of an intention to exercise
dissenters’ rights under the applicable provisions of the WBCA.
Section 7.03     Conditions to Obligations of the Company. The obligation of the
Company to effect the Merger is also subject to the satisfaction or waiver by
the Company at or prior to the Effective Time of the following conditions:

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(e)    Representations and Warranties. The representations and warranties of
Acquirer set forth in this Agreement shall be true and correct as of the date of
this Agreement and as of the Effective Time as though made on and as of the
Effective Time (except that representations and warranties that by their terms
speak specifically as of the date of this Agreement or another date shall be
true and correct as of such date); provided, however, that no representation or
warranty of Acquirer shall be deemed untrue or incorrect for the purposes
hereunder as a consequence of the existence of any fact, event or circumstance
inconsistent with such representation or warranty, unless such fact, event or
circumstance, individually or taken together with all other facts, events or
circumstances inconsistent with any representation or warranty of Acquirer, has
had or would reasonably be expected to result in an Acquirer Material Adverse
Effect; provided, further, that for purposes of determining whether a
representation or warranty is true and correct for purposes of this Section
7.03(a), any qualification or exception for, or reference to, materiality
(including the terms “material,” “materially,” “in all material respects,”
“Acquirer Material Adverse Effect” or similar terms or phrases) in any such
representation or warranty shall be disregarded; and the Company shall have
received a certificate signed on behalf of Acquirer by the Chief Executive
Officer or the Chief Financial Officer of Acquirer to the foregoing effect.
(f)    Performance of Obligations of Acquirer. Acquirer shall have performed in
all material respects all obligations required to be performed by it under this
Agreement at or prior to the Effective Time; and the Company shall have received
a certificate signed on behalf of Acquirer by the Chief Executive Officer or the
Chief Financial Officer of Acquirer to such effect.
(g)    Absence of Acquirer Material Adverse Effect. Since the date of this
Agreement no Acquirer Material Adverse Effect shall have occurred.

ARTICLE VIII
TERMINATION AND AMENDMENT
Section 8.01     Termination. This Agreement may be terminated and the Merger
may be abandoned (whether before or after receipt of the Requisite Shareholder
Approval), at any time prior to the Effective Time:
(i)    by mutual consent of the Company and Acquirer in a written instrument
authorized by the Company Board and the Acquirer Board;
(j)    by Acquirer, if, since the date of this Agreement, the Company shall have
suffered a Company Material Adverse Effect;
(k)    by the Company, if, since the date of this Agreement, Acquirer shall have
suffered an Acquirer Material Adverse Effect;
(l)    by either the Company or Acquirer, if any Governmental Entity that must
grant a Requisite Regulatory Consent has denied such Requisite Regulatory
Consent or any Governmental Entity of competent jurisdiction shall have
initiated legal or administrative action

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seeking an order, injunction or decree permanently enjoining or otherwise
prohibiting or making illegal the consummation of the transactions contemplated
by this Agreement and such action shall not have been finally terminated;
(m)    by either the Company or Acquirer, if the Merger shall not have been
consummated on or before June 1, 2013 (the “Outside Date”) unless the failure of
the Closing to occur by such date shall be due to the failure of the Party
seeking to terminate this Agreement to perform or observe the covenants and
agreements of such Party set forth in this Agreement; provided, however that the
Outside Date shall be extended by a period of 90 days if the only outstanding
contingency is receipt of a Requisite Regulatory Approval;
(n)    by either the Company or Acquirer (provided, that the terminating Party
is not then in material breach of any representation, warranty, covenant or
other agreement contained herein), if there shall have been a breach of any of
the covenants or agreements or any of the representations or warranties set
forth in this Agreement on the part of the Company, in the case of a termination
by Acquirer, or on the part of Acquirer, in the case of a termination by the
Company, which breach, either individually or in the aggregate with other
breaches by such Party, would result in, if occurring or continuing on the
Closing Date, the failure of the conditions set forth in Section 7.02 or 7.03,
as the case may be, and which is not cured within the earlier of (i) thirty (30)
days following written notice to the Party committing such breach and (ii) the
Outside Date or by its nature or timing cannot be cured within such time period;
(o)    by either the Company or Acquirer, if the approval of this Agreement by
holders of Shares constituting the Requisite Shareholder Approval shall not have
been obtained at the Shareholders Meeting or at any adjournment or postponement
of the Shareholders Meeting taken in accordance with this Agreement;
(p)    by Acquirer, at any time prior to the time the Requisite Shareholder
Approval is obtained, if (i) the Company Board shall have made a Change of
Recommendation; (ii) the Company shall have materially violated Section 6.06,
Section 6.07, Section 6.09 or Section 6.10; or (iii) at any time following
receipt of an Acquisition Proposal, the Company Board shall have failed to
reaffirm its approval or recommendation of this Agreement and the Merger as
promptly as practicable (but in any event prior to the earlier of (x) within
three Business Days after receipt of any written request to do so from Acquirer
and (y) the date of the Shareholders Meeting).
The Party desiring to terminate this Agreement pursuant to this Section 8.01
shall give written notice of such termination to the other Party in accordance
with Section 9.04, specifying the provision or provisions hereof pursuant to
which such termination is effected.
Section 8.02     Effect of Termination.
(h)    In the event of termination of this Agreement by either the Company or
Acquirer as provided in Section 8.01, this Agreement shall forthwith become void
and of no effect, and none of the Company, Acquirer, any of their respective
Subsidiaries or any of the officers, directors, employees, agents, attorneys or
investment bankers of any of them shall have any liability of any nature
whatsoever under this Agreement, or in connection with the transactions

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contemplated by this Agreement, except that (i) Sections 6.02(b), 8.02, 8.03,
9.03, 9.04, 9.05, 9.06, 9.08, 9.09, 9.13 and 9.14 shall survive any termination
of this Agreement, and (ii) neither the Company nor Acquirer shall be relieved
of or released from any liabilities or damages arising out of its knowing and
intentional breach of any provision of this Agreement.
(i)    If this Agreement is terminated by Acquirer pursuant to Section 8.01(g),
then the Company shall promptly, but in no event later than two (2) days after
the date of such termination, pay Acquirer all the documented out-of-pocket
expenses incurred by Acquirer or any of its Affiliates in connection with this
Agreement, including attorneys’ fees, and the transactions contemplated by this
Agreement up to a maximum amount of $100,000, payable by wire transfer of same
day funds; provided, however, that the Company shall not be required to make
such payment if prohibited from doing so by its regulatory authorities.
(j)    The Parties have determined that it would be too difficult to determine
the damages that would be suffered by a Party in the event of a breach of this
Agreement by the other. Accordingly, the Parties hereby agree that a Party who
properly terminates this Agreement on the basis of a material breach of this
Agreement shall be entitled to obtain payment in the sum of $250,000 in
immediately available funds within 48 hours of delivery of notice of such
termination in the manner provided in Section 9.04. The Parties further agree
that receipt of such sum, plus any costs of collection (including reasonably
attorneys’ fees) necessary to obtain payment of such sum, shall be the sole
remedy of the non-breaching Party; provided, that nothing herein shall be deemed
to prevent a non-breaching Party from seeking the remedy of specific performance
as provided in Section 9.12.
Section 8.03     Fees and Expenses. Costs and expenses of printing and mailing
the Proxy Statement shall be the obligation of the Company. All filing and other
fees paid to the SEC in connection with the Merger and all professional fees
related to such registration shall be the obligation of the Acquirer. All other
fees and expenses incurred in connection with the Merger, this Agreement and the
transactions contemplated by this Agreement shall be paid by the Party incurring
such fees or expenses, whether or not the Merger is consummated.
Section 8.04     Extension; Waiver. At any time prior to the Effective Time, the
Parties, by action taken or authorized by their respective boards of directors,
may, to the extent legally allowed, (a) extend the time for the performance of
any of the obligations or other acts of the other Party, (b) waive any
inaccuracies in the representations and warranties of the other Party contained
in this Agreement or (c) waive compliance by the other Party with any of the
agreements or conditions contained in this Agreement. Any agreement on the part
of a party to any such extension or waiver shall be valid only if set forth in a
written instrument signed on behalf of such Party, but such extension or waiver
or failure to insist on strict compliance with an obligation, covenant,
agreement or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure.
ARTICLE IX
GENERAL PROVISIONS

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Section 9.01     Nonsurvival of Representations, Warranties and Agreements. None
of the representations, warranties, covenants and agreements set forth in this
Agreement or in any instrument delivered pursuant to this Agreement shall
survive the Effective Time, except for Section 6.04 and for those other
covenants and agreements contained in this Agreement that by their terms apply
or are to be performed in whole or in part after the Effective Time.
Section 9.02     Amendment. This Agreement may be amended at any time prior to
the Effective Time by the Parties (by action taken or authorized by their
respective boards of directors), whether before or after receipt of the
Requisite Shareholder Approval; provided, however, that after such shareholder
approval of this Agreement, no amendment shall be made to this Agreement that by
Law requires further approval or authorization by the shareholders of the
Company without such further approval or authorization. This Agreement may only
be amended by an instrument in writing signed by or on behalf of each of the
Parties
Section 9.03     Waiver of Conditions. The conditions to each of the Parties’
obligations to consummate the Merger are for the sole benefit of such Party and
may be waived by such Party in whole or in part to the extent permitted by
applicable Laws.
Section 9.04     Notices. All notices and other communications in connection
with this Agreement shall be in writing and shall be deemed given if delivered
personally, sent via facsimile or email (with confirmation), mailed by
registered or certified mail (return receipt requested) or delivered by an
express courier (with confirmation) to the Parties at the following addresses
(or at such other address for a party as shall be specified by like notice):
If to Acquirer, to:
BBCN Bancorp, Inc.
3731 Wilshire Boulevard, Suite 1000
Los Angeles, CA 90010
Attention:    Legal Department
        Juliet Stone or Lisa Pai
Facsimile:    (213) 235-3257 or (213) 406-8942
Email:        juliet.stone@bbcnbank.com
        lisa.pai@bbcnbank.com
with copies to:
Mayer Brown LLP
350 S. Grand Avenue, 25th Floor
Los Angeles, CA 90071
Attention:    James R. Walther
Facsimile:    (213) 576-8153
Email:        jwalther@mayerbrown.com

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If to the Company, to:
Pacific International Bank
1155 North 130th Street
Seattle, WA
Attention:    Paul G. Sabado    
        President & CEO
Facsimile:    (206) 306-7532
Email:        paul.sabado@pibank.com
with a copy to:
Graham & Dunn PC
Pier 70
2801 Alaskan Way, Suite 300
Seattle, WA 98121
Attention:    Daniel S. Friedberg or Ryan Straus
Facsimile:    (206) 340-9599
Email:        dfriedberg@grahamdunn.com
        rstraus@grahamdunn.com

Section 9.05     Counterparts. This Agreement may be executed in two (2) or more
counterparts (including by facsimile, pdf format or other electronic means), all
of which shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each of the Parties and
delivered to the other Party, it being understood that each Party need not sign
the same counterpart.
Section 9.06     Entire Agreement. This Agreement (including any exhibits
hereto, the documents and the instruments referred to in this Agreement)
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the Parties with respect to the
subject matter of this Agreement, other than the Confidentiality Agreement.
Section 9.07     Severability. If any provision of this Agreement or the
application thereof to any person or circumstance is determined by a court of
competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions, or the application of such provision to persons or circumstances
other than those as to which it has been held invalid or unenforceable, will
remain in full force and effect and will in no way be affected, impaired or
invalidated thereby, so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner materially
adverse to any Party. Upon such determination, the parties will negotiate in
good faith in an effort to agree upon a suitable and equitable substitute
provision to effect the original intent of the parties.
Section 9.08     Governing Law; Jurisdiction. This Agreement shall be governed
and construed in accordance with the laws of the State of Delaware applicable to
contracts made and entirely to be performed within such state, without regard to
any applicable conflicts of law principles that would require the application of
the laws of any other jurisdiction. The Parties

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hereto agree that any suit, action or proceeding brought by either Party to
enforce any provision of, or based on any matter arising out of or in connection
with, this Agreement or the transactions contemplated hereby, whether in tort or
contract or at law or in equity, exclusively, in the United States District
Court for the District of Delaware. Each of the Parties hereto irrevocably
submits to the exclusive jurisdiction of such court in any suit, action or
proceeding seeking to enforce any provision of, or based on any matter arising
out of, or in connection with, this Agreement or the transactions contemplated
hereby and hereby irrevocably waives the benefit of jurisdiction derived from
present or future domicile or otherwise in such action or proceeding. Each Party
hereto irrevocably waives, to the fullest extent permitted by Law, any objection
that it may now or hereafter have to the laying of the venue of any such suit,
action or proceeding in such court or that any such suit, action or proceeding
brought in such court has been brought in an inconvenient forum or that such
Party is not subject to personal jurisdiction in such court.
SECTION 9.09     WAIVER OF JURY TRIAL. EACH PARTY HERETO ACKNOWLEDGES AND AGREES
THAT ANY CONTROVERSY THAT MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH PARTY HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION, DIRECTLY OR INDIRECTLY, ARISING OUT OF, OR RELATING
TO, THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH
PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY
OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER
PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER, (B) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS
WAIVER, (C) EACH PARTY MAKES THIS WAIVER VOLUNTARILY AND (D) EACH PARTY HAS BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION 9.09.
Section 9.10     Publicity. Neither the Company nor Acquirer shall, and neither
the Company nor Acquirer shall permit any of its Subsidiaries or their
respective Representatives to, issue or cause the publication of any press
release or other public announcement with respect to, or otherwise make any
public statement, or, except as otherwise specifically provided in this
Agreement, any disclosure of nonpublic information to a third party, concerning,
the transactions contemplated by this Agreement without the prior consent (which
shall not be unreasonably withheld or delayed) of Acquirer, in the case of a
proposed announcement, statement or disclosure by the Company or its
Subsidiaries or their respective Representatives, or the Company, in the case of
a proposed announcement, statement or disclosure by Acquirer or its Subsidiaries
or their respective Representatives; provided, however, that either Party may,
without the prior consent of the other Party (but after prior consultation with
the other Party to the extent practicable under the circumstances) issue or
cause the publication of any press release or other public announcement to the
extent required by Law or by the rules and regulations of NASDAQ.

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Section 9.11     Assignment; Third-Party Beneficiaries. Neither this Agreement
nor any of the rights, interests or obligations under this Agreement shall be
assigned by either of the Parties (whether by operation of law or otherwise)
without the prior written consent of the other Party (which shall not be
unreasonably withheld or delayed). Any attempted or purported assignment in
contravention hereof shall be null and void. Subject to the preceding sentence,
this Agreement shall be binding upon, inure to the benefit of and be enforceable
by each of the Parties and their respective successors and assigns. Except for
Section 6.04, which is intended to benefit each Indemnified Party and his or her
heirs and representatives, this Agreement (including the documents and
instruments referred to in this Agreement) is not intended to and does not
confer upon any person other than the Parties hereto any rights or remedies
under this Agreement including, without limitation, the right to rely upon the
representations and warranties set forth herein.
Section 9.12     Specific Performance. The Parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms. It is accordingly agreed that
the Parties shall be entitled to seek specific performance of the terms hereof
without being required to post any bond or other security, this being in
addition to any other remedies to which they are entitled at law or equity, in
tort or any other claims.
Section 9.13     Definitions. The following terms, as used herein, have the
following meanings:
“Acquirer Bank” shall mean BBCN Bank, a California state-chartered bank and a
wholly owned subsidiary of Acquirer.
“Acquirer Material Adverse Effect” shall mean any fact, event, change,
condition, occurrence, development, circumstance, effect or state of facts that:
(i)    individually or in the aggregate, has been, or would reasonably be
expected to be, materially adverse to the business, assets, results of
operations or financial condition of Acquirer and its Subsidiaries, in each case
taken as a whole; provided, however, that no fact, event, change, condition,
occurrence, development, circumstance, effect or state of facts to the extent
resulting from any of the following shall be considered in determining whether
an Acquirer Material Adverse Effect has occurred or is in existence:
(1)    changes, after the date hereof, in Laws, rules and regulations of general
applicability, or of general applicability to banks or their holding companies,
or interpretations thereof by Governmental Entities, including any change in
GAAP or regulatory accounting requirements,
(2)    changes in the economy or financial markets, generally, in the United
States, or

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(3)    changes in economic, business or financial conditions generally affecting
the banking industry,
provided, that the foregoing shall not apply to the extent such fact, event,
change, condition, occurrence, development, circumstance, effect, action,
omission or state of facts of the type referred to therein, has a
disproportionate impact on the business, assets, results of operations or
financial condition of Acquirer and its Subsidiaries compared to other
comparable companies within the banking industry, or
(ii)    prevents, materially delays or materially impairs the ability of
Acquirer to perform its obligations under this Agreement or to consummate the
Merger.
“Acquisition Proposal” means (i) any proposal or offer with respect to a merger,
joint venture, partnership, consolidation, dissolution, liquidation, tender
offer, recapitalization, reorganization, share exchange, business combination or
similar transaction involving the Company or any of its Subsidiaries and (ii)
any acquisition by any Person resulting in, or proposal or offer, which if
consummated would result in, any Person becoming the beneficial owner of
directly or indirectly, in one or a series of related transactions, 15% or more
of the total voting power or of any class of equity securities of the Company or
those of any of its Subsidiaries, or 15% or more of the consolidated total
assets (including, without limitation, equity securities of its Subsidiaries) of
the Company, in each case other than the transactions contemplated by this
Agreement.
“Affiliate” shall mean, with respect to a Person, those other Persons that,
directly or indirectly, control, are controlled by or are under common control
with such Person; for purposes of this definition, “control” (including, with
correlative meanings, the terms “controlled by” or “under common control with”),
as applied to any person, means the possession, directly or indirectly, of (i)
ownership, control or power to vote twenty-five percent (25%) or more of the
outstanding shares of any class of voting securities of such person, (ii)
control, in any manner, over the election of a majority of the directors,
trustees or general partners (or individuals exercising similar functions) of
such person or (iii) the power to exercise a controlling influence over the
management or policies of such person as determined by the Federal Reserve;
provided, however, neither the Company nor any of its Affiliates shall be deemed
an Affiliate of Acquirer, or Acquirer’s ultimate parent company, or any of their
respective Subsidiaries for purposes of this Agreement prior to the Effective
Time and neither Acquirer nor any of its Affiliates shall be deemed an Affiliate
of the Company or its Subsidiaries for purposes of this Agreement prior to the
Effective Time.
“Business Day” shall mean any day other than a Saturday or Sunday or a day on
which banks are required or authorized to close in the cities of Seattle,
Washington or Los Angeles, California.
“Company Material Adverse Effect” shall mean any fact, event, change, condition,
occurrence, development, circumstance, effect or state of facts that:

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(i)    individually or in the aggregate, has been, or would reasonably be
expected to be, materially adverse to the business, assets, results of
operations or financial condition of the Company and its Subsidiaries, in each
case taken as a whole; provided, however, that no fact, event, change,
condition, occurrence, development, circumstance, effect or state of facts to
the extent resulting from any of the following shall be considered in
determining whether a Company Material Adverse Effect has occurred or is in
existence:
(4)    changes, after the date hereof, in Laws, rules and regulations of general
applicability, or of general applicability to banks or their holding companies,
or interpretations thereof by Governmental Entities, including any change in
GAAP or regulatory accounting requirements,
(5)    changes in the economy or financial markets, generally, in the United
States, or
(6)    changes in economic, business or financial conditions generally affecting
the banking industry,
provided, that the foregoing shall not apply to the extent such fact, event,
change, condition, occurrence, development, circumstance, effect, action,
omission or state of facts of the type referred to therein, has a
disproportionate impact on the business, assets, results of operations or
financial condition of the Company and its Subsidiaries compared to other
comparable companies within the banking industry, or
(ii)    prevents, materially delays or materially impairs the ability of the
Company to perform its obligations under this Agreement or to consummate the
Merger.
“Company Restricted Stock Plan” shall mean the Pacific International Bancorp,
Inc. 2006 Restricted Stock Plan.

“Company Stock Option” shall mean options to purchase Company Common Stock
granted pursuant to the Company Stock Plan.

“Company Stock Plan” shall mean the Amended Pacific International Bancorp, Inc.
2001 Stock Option Plan.
“Contract” shall mean any agreement, contract, instrument, guarantee,
undertaking, lease, note, mortgage, indenture, license or other legally binding
commitment or obligation, whether written or oral.
“Encumbrance” shall mean any mortgage, lien, pledge, charge, security interest,
easement, covenant or other restriction or title matter or encumbrance of any
kind in respect of such asset but specifically excludes (i) specified
encumbrances described in Section 9.13 of the Company Disclosure Schedule; (ii)
encumbrances for current Taxes or other governmental charges not yet due and
payable, or the validity or amount of which is being contested in good

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faith by appropriate proceedings and are reflected on or specifically reserved
against or otherwise disclosed in the Financial Statements; (iii) mechanics’,
carriers’, workmen’s, repairmen’s or other like encumbrances arising or incurred
in the ordinary course of business consistent with past practice relating to
obligations as to which there is no default on the part of the Company, or the
validity or amount of which is being contested in good faith by appropriate
proceedings and are reflected on or specifically reserved against or otherwise
disclosed in the Financial Statements; and (iv) other encumbrances that do not,
individually or in the aggregate, materially impair the continued use,
operation, value or marketability of the specific parcel of Leased Real Property
to which they relate or the conduct of the business of the Company and its
Subsidiaries as presently conducted.
“Exchange Act” shall mean the Securities Exchange Act of 1934.
“Exchange Fund” shall mean the fund containing the portion of the Merger
Consideration to be distributed to the Company’s shareholders pursuant to this
Agreement.
“Excluded Shares” shall mean Shares owned by Acquirer, the Company or any direct
or indirect wholly owned subsidiary of Acquirer or the Company, in each case not
held (i) in trust accounts (including grantor or rabbi trust accounts), managed
accounts and the like, or otherwise held in a fiduciary or agency capacity, that
are beneficially owned by third parties or (ii) in respect of a debt previously
contracted.
“Form S-4 Registration Statement” shall mean the Form S-4 Registration Statement
under the Securities Act of 1933 to be prepared and filed with the SEC by
Acquirer pursuant to Section 6.11.
“GAAP” shall mean U.S. generally accepted accounting principles.
“Governmental Entity” shall mean any federal, state, local, foreign or
supranational court, tribunal, arbitral or administrative agency or commission
or other governmental authority or instrumentality, and any stock exchange or
industry self-regulatory organization.
“Knowledge” shall mean the actual knowledge of any of the senior management and
directors of the Company or one of its Subsidiaries listed on Section 9.13 of
the Company Disclosure Schedule, after appropriate inquiry.
“Laws” shall mean any federal, state, local or foreign law, common law, statute,
code, ordinance, rule or regulation issued, promulgated, entered or authorized
by any Governmental Entity.
“Merger Consideration” shall mean the amount of Acquirer Common Stock and cash
consideration for fractional shares of Acquirer Common Stock (based upon the Per
Share Merger Consideration formula), to which the holder of Company Common Stock
is entitled to receive as a result of the Merger and the amount of cash the
Treasury is to receive in respect of the Series A Preferred Stock as a result of
the Merger.

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“NASDAQ” shall mean the NASDAQ Global Select Market or The Nasdaq Stock Market,
Inc., as applicable.
“Order” shall mean any order, writ, injunction, decree, judgment, ruling,
arbitration award or stipulation issued, promulgated or entered into by or with
any Governmental Entity.
“Person” shall mean any individual, corporation (including not-for-profit),
general or limited partnership, limited liability company, joint venture,
estate, trust, association, organization, Governmental Entity or other entity of
any kind or nature.
“Previously Disclosed” with regard to a Party means only that information set
forth on such Party’s Disclosure Schedule; provided, however, that (i)
disclosure in any section of such Disclosure Schedule shall apply to the
indicated sections of this Agreement and shall also apply to such other sections
of this Agreement and such Disclosure Schedule as to which it is reasonably
apparent that such disclosure is relevant and (ii) with regard to the Acquirer,
“Previously Disclosed” shall also include information publicly disclosed by
Acquirer in any forms, statements, certifications, reports and documents filed
with SEC pursuant to the Securities Act or the Exchange Act since December 31,
2010 and publicly available prior to the day preceding the date of this
Agreement, but excluding any disclosures contained solely in such documents
under the heading “Risk Factors” and any disclosure of risks included in any
“forward-looking statements” disclaimer or other statements that are similarly
non-specific and cautionary and are predictive or forward-looking in nature.
“Proxy Statement” shall mean proxy materials relating to the matters to be
submitted to the Company’s shareholders at the Shareholders Meeting.
“SEC” shall mean the United States Securities and Exchange Commission.
“Securities Act” shall mean the Securities Act of 1933.
“Subsidiary” shall, when used with respect to either party, have the meaning
ascribed to it in Section 2(d) of the BHCA.
“Superior Proposal” shall mean an unsolicited bona fide Acquisition Proposal
that would result in any Person becoming the beneficial owner, directly or
indirectly, more than 50% of the assets (on a consolidated basis) or 100% of the
total voting power of the equity securities of the Company that the Company
Board has determined in its good faith judgment is reasonably likely to be
consummated in accordance with its terms, taking into account all legal,
financial and regulatory aspects of the proposal and the Person making the
proposal, and if consummated, would result in a transaction more favorable to
the Company’s shareholders from a financial point of view than the transaction
contemplated by this Agreement (after taking into account any revisions to the
terms of the transaction contemplated by Section 6.05(d) of this Agreement
pursuant to Section 6.05(d) and the time likely to be required to consummate
such Acquisition Proposal).

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“Surviving Bank” shall mean the surviving banking corporation resulting from the
Bank Merger, which shall be Acquirer Bank.
“Takeover Laws” shall mean any “fair price,” “moratorium,” “control share
acquisition” or other anti-takeover statute or regulation.
“Tax Return” shall mean any return, report, information return or other document
(including any related or supporting information) required to be filed with any
taxing authority with respect to Taxes, including, without limitation, any
claims for refunds of Taxes and any amendments or supplements to any of the
foregoing.
“Taxes” shall mean all taxes, charges, levies, penalties or other assessments
imposed by any United States federal, state, local or foreign taxing authority,
including any income, excise, property, sales, transfer, franchise, payroll,
withholding, social security, abandoned or unclaimed property or other taxes,
together with any interest, penalties or additions to tax attributable thereto.
“Treasury Warrant” shall mean the warrant issued by the Company to the Treasury
in connection with the Company’s sale of Series A Preferred Stock to the
Treasury.
Section 9.14     Other Definitional Provisions. Unless the express context
otherwise requires:
(a)    the words “hereof,” “herein” and “hereunder” and words of similar import,
when used in this Agreement, shall refer to this Agreement as a whole and not to
any particular provision of this Agreement;
(b)    the terms defined in the singular have a comparable meaning when used in
the plural, and vice versa;
(c)    the terms “Dollars” and “$” mean United States Dollars;
(d)    references herein to a specific Section, Subsection or Exhibit shall
refer, respectively, to Sections, Subsections or Exhibits of this Agreement; and
(e)    wherever the word “include,” “includes” or “including” is used in this
Agreement, it shall be deemed to be followed by the words “without limitation.”
(f)    references herein to any statute, law, code, regulation or treaty shall
be deemed to include any amendments thereto from time to time or any successor
statute, law, code, regulation, treaty or protocol thereof and any the rules and
regulations promulgated thereunder.
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
their respective officers thereunto duly authorized as of the date first above
written.
BBCN Bancorp, Inc.
By:

Name:
Title:

Pacific International Bancorp, Inc.
By:

Name:
Title:

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EXHIBIT A
Form of Bank Merger Agreement
THIS AGREEMENT OF BANK MERGER, dated as of October [___], 2012 (this “Bank
Merger Agreement”), is entered into between BBCN Bank (“Acquirer Bank”), a
California state-chartered bank and a wholly owned subsidiary of BBCN Bancorp,
Inc., a Delaware corporation (“BBCN Bancorp”), and Pacific International Bank
(“Target Bank”), a Washington state-chartered commercial bank and a wholly owned
subsidiary of Pacific International Bancorp, Inc., a Washington corporation
(“Pacific International”). Acquirer Bank and Target Bank are sometimes referred
to herein collectively as the “Parties” and individually as a “Party.”
WHEREAS, BBCN Bancorp and Pacific International entered into an Agreement and
Plan of Merger, dated as of October [___], 2012 (the “Holding Company Merger
Agreement”), providing, among other things, for the merger of Pacific
International with and into BBCN Bancorp(the “Merger”); and
WHEREAS, in connection with the Merger, BBCN Bancorp and Pacific International
desire to merge Target Bank with and into Acquirer Bank (the “Bank Merger”)
concurrently with or as soon as reasonably practicable after the consummation of
the Merger upon the terms and subject to the conditions set forth in this Bank
Merger Agreement and the Holding Company Merger Agreement.
WHEREAS, the Parties intend that for federal income tax purposes the Bank Merger
shall qualify as a “reorganization” within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the “Code”), and that this Agreement
shall constitute a “plan of reorganization” for purposes of Sections 354 and 361
of the Code.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth in this Bank
Merger Agreement and the Holding Company Merger Agreement, subject to the
conditions set forth in this Bank Merger Agreement and the Holding Company
Merger Agreement, and intending to be legally bound hereby, the Parties agree as
follows:
1.    Effective Time. Upon the terms and subject to the conditions set forth in
this Bank Merger Agreement and the Holding Company Merger Agreement,
concurrently with or as soon as reasonably practicable after the consummation of
the Merger, Acquirer Bank and Target Bank shall cause the Bank Merger to be
consummated by (i) filing a copy of this Bank Merger Agreement, certified by the
Secretary of State of the State of California pursuant to Section 1103 of the
California General Corporation Law (the “CGCL”) and (ii) filing a copy of this
Bank Merger Agreement, together with all other required documents and
information, pursuant to Section 30.49.125 of the Revised Code of Washington
(the “RCW”) with the Director of the State of Washington Department of Financial
Institutions. The Bank Merger shall become effective upon the time and date of
such filings (the “Effective Time”).
2.    The Merger. Acquirer Bank shall be the surviving bank in the Bank Merger
(the “Surviving Bank”). At the Effective Time, Target Bank shall be merged with
and into Acquirer Bank

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and the separate existence of Target Bank shall cease. The Bank Merger shall be
governed by, and shall have the effects set forth in, the CGCL and the RCW.
3.    Effects of the Merger.
(a)    At the Effective Time, the Surviving Bank shall succeed, without other
transfer, to all the rights and properties, and shall be subject to all the
debts and liabilities, of Target Bank, and the separate existence of Acquirer
Bank, with all its purposes, objects, rights, powers, privileges, liabilities,
obligations and franchises, shall continue unaffected and unimpaired by the Bank
Merger.
(b)    The articles of incorporation (as amended effective as of the Effective
Time to reflect the new name of the Surviving Bank) and the bylaws of Acquirer
Bank, as in effect as of the Effective Time, shall be the articles of
incorporation and bylaws of the Surviving Bank, until thereafter altered,
amended or repealed in accordance with their terms and applicable law.
(c)    The shares of Target Bank common stock, no par value per share (“Target
Bank Common Stock”) and the shares of Acquirer Bank common stock, no par value
per share (“Acquirer Bank Common Stock”) shall be treated as follows at the
Effective Time: (i) each share of Target Bank Common Stock issued and
outstanding immediately prior to the Effective Time shall be automatically
canceled without consideration and cease to be an issued and outstanding share
of Target Bank Common Stock; and (ii) each share of Acquirer Bank Common Stock
issued and outstanding immediately prior to the Effective Time shall remain
issued and outstanding.
4.    Directors and Officers of the Surviving Bank. The directors and officers
of Acquirer Bank shall be the directors and officers of the Surviving Bank
without change in title or authority, but subject to the authority and power of
the board of directors and shareholder of the Surviving Bank to add directors or
officers to or otherwise modify the board of directors or number, titles and
authority of the officers of the Surviving Bank.
5.    Procurement of Approvals. This Bank Merger Agreement shall be subject to
the approval of BBCN Bancorp, as the sole shareholder of Acquirer Bank, and
Pacific International, as the sole shareholder of Target Bank, at meetings to be
called and held or by consent in lieu thereof in accordance with the applicable
provisions of law and their respective organizational documents. Acquirer Bank
and Target Bank shall use their commercially reasonable best efforts to proceed
expeditiously and cooperate fully in the procurement of any other consents and
approvals and in the taking of any other action, and the satisfaction of all
other requirements prescribed by applicable law or otherwise necessary for the
consummation of the Bank Merger on the terms provided herein, including, without
limitation, the preparation and submission of such applications or other filings
for approval of the Bank Merger as may be required by applicable laws and
regulations.
6.    Conditions Precedent. The obligations of the Parties under this Bank
Merger Agreement shall be subject to: (a) the approvals of this Bank Merger
Agreement by BBCN Bancorp, as the sole shareholder of Acquirer Bank, and Pacific
International, as the sole shareholder of Target Bank, at meetings duly called
and held or by consent or consents in lieu thereof, in each case without any
exercise of such dissenters’ rights as may be applicable; (b) receipt of
approval of the Bank

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Merger from all governmental and banking authorities whose approval is required
by applicable laws and regulations; and (c) the consummation of the Merger
pursuant to the Holding Company Merger Agreement at or before the Effective
Time.
7.    General Provisions.
(a)    Termination and Agreement. The obligations of the Parties to effect the
Bank Merger shall be subject to all the terms and conditions contained in the
Holding Company Merger Agreement. This Bank Merger Agreement shall terminate,
without any further action of any Party, notwithstanding shareholder approval,
in the event that the Holding Company Merger Agreement shall be terminated as
provided therein prior to the Effective Time.
(b)    Amendment. This Bank Merger Agreement may not be amended, modified or
supplemented except by an instrument in writing signed on behalf of each of the
Parties at any time prior to the Effective Time.
(c)    Successors and Assigns. This Bank Merger Agreement shall be binding upon
and enforceable by the Parties and their respective successors and permitted
assigns, but this Bank Merger Agreement may not be assigned by any Party, by
operation of law or otherwise, without the prior written consent of the other
Party.
(d)    Governing Law. This Bank Merger Agreement shall be governed by and
construed in accordance with the laws of the State of California (without giving
effect to choice of law principles thereof).
(e)    Counterparts. This Bank Merger Agreement may be executed in counterparts
(which counterparts may be delivered by facsimile or other commonly used
electronic means), each of which shall be considered one and the same agreement
and shall become effective when both counterparts have been signed by each of
the Parties and delivered to the other Party, it being understood that both
Parties need not sign the same counterpart.
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IN WITNESS WHEREOF, the Parties have caused this Bank Merger Agreement to be
executed by their respective officers thereunto duly authorized as of the date
first above written.
BBCN Bank
By:

Name:
Title:

Pacific International Bank
By:

Name:
Title:

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