Unassociated Document


    

      Exhibit
        10.14

      


      
        

PURCHASE
        AGREEMENT

      


      


      This
        Purchase Agreement (as it may be amended or otherwise modified from time
        to time
        in accordance with the terms hereof, this "Purchase
        Agreement"),
        dated
        as of January 31, 2006, is made by and between Heritage Bank of Commerce,
        having
        an address at 150 Almaden Boulevard, San Jose, California 95113 (the "Seller"),
        and County Bank, having an address at 550 W. Main Street, P.O. Box 351, Merced,
        California 95113 ("Purchaser").

      


      W I T N E S S E T H:

      


      WHEREAS,
        Purchaser desires to purchase and Seller desires to sell those certain loans
        (collectively, the "Loans")
        listed
        on Exhibit A
        annexed
        hereto and other loan documents evidencing and securing the Loans (such loan
        documents being collectively referred to as the "Loan Documents");

      


      NOW
        THEREFORE, in consideration of the premises and the mutual agreements set
        forth
        herein, the parties hereby agree as follows:

      


      1. Purchase
        of the Loans.
        For
        valuable consideration, the sufficiency of which is hereby acknowledged,
        Seller
        hereby agrees to sell, assign and convey to Purchaser and Purchaser hereby
        agrees to purchase and accept from Seller, all of Seller's right, title and
        interest in and to the Loans and the Loan Documents, subject to and in
        accordance with the terms and provisions of this Purchase
        Agreement.

      


      2. Closing
        Requirements.

       

              (a) The
        consummation of the purchase and sale of the Loans shall
        take place at 5:01 p.m. on January 31, 2006
        (the
        "Closing"), at
        the
        offices of Heritage Bank of Commerce, 150 Almaden Blvd, San Jose, California
        95113;
        provided however, if the purchase and sale of the Loans are not consummated
        by
January
        31, 2006,
        then
        Seller shall permit further due diligence of the Loans by
        Purchaser.

            

              (b) Purchaser
        shall pay to Seller an amount equal to the outstanding principal
        amount,
        also
        referred to as the “active balance” within Distinctive Solutions
        and such
        amounts within Seller’s ITI systems,
        of all
        the Loans as of the Closing, plus accrued interest, fees and expenses (Exhibit
        D) thereon (except the Purchase Price attributable to the Loan(s) to
***
        shall
        be
        the net principal balance after all prior charge offs, which as of the date
        hereof, equals ***
        as
        of
        January 31, 2006]) less any unearned loan fees to be paid to Seller by wire
        transfer of immediately available federal funds as Seller shall direct.
Seller
        is
        to be reimbursed for any reasonable costs after
        the
        Closing directly relating to the Loans; provided however, such costs shall
        not
        include any costs resulting from any breach of this Purchase Agreement by
        Seller
        or any costs which are Seller’s responsibility under this Purchase
        Agreement.

      


              (c) At
        Closing, and as a condition of Seller's obligations under this Purchase
        Agreement, any payments in respect of interest or other sums periodically
        due on
        the Loans which are paid or payable for the month in which the Closing
occurs
        will be prorated as of the Closing.

      


              (d) At
        Closing, all escrows, if any, then held by Seller and any account records
        reflecting amounts actually held in escrow by Seller at Closing, if any,
        for
        taxes, governmental assessments and insurance premiums, water, sewer and
        municipal charges, deposits, transferable security deposits, replacement
        reserves or other escrowed funds relating to the Loans shall be paid over
        to
        Purchaser. 

       

              (e) At
        or
        prior to Closing, Seller shall at its sole cost and expense prepare and mail
        to
        the insurer for the Loans, a notice of assignment and a request for an
        endorsement of each policy of insurance deleting Seller and naming Purchaser
        and
        its successors and/or assigns as the loss payee and additional insured named
        therein in a form satisfactory to Purchaser.

      


              (f) At
        Closing, with respect to each Loan, Seller shall:

       

                  (i) deliver
        the original note for such Loan, endorsed without recourse by allonge in
        blank
        in substantially the form of Exhibit B
        annexed
        hereto, which allonge shall be firmly affixed to the note;

       

                  (ii) deliver
        the original mortgage (or a true and complete photocopy thereof) related
        to such
        Loan and an executed assignment of such mortgage and the other recorded Loan
        Documents in blank in substantially the form of Exhibit C
        annexed
        hereto, with such modifications as shall be customary and appropriate under
        local laws for recording in the land records in the jurisdiction in which
        the
        related mortgaged property is located (the "Assignment");

      


          
 
(iii) authorize
        assignments of UCC financing statements, if any, pertaining to the Loans;
        

       

                  (iv) with
        respect to any depository accounts, certificates of deposit and investment
        accounts which are a part of the collateral for any of the Loans, notify
        any
        depository bank or financial institution at which such depository accounts,
        certificates of deposit and investment accounts are located,
        that
Seller’s
        rights
        therein
        have
        been
        assigned to Purchaser and request acknowledgement of same to Purchaser and
        to
        request the delivery of any lockbox control agreements, securities account
        control agreements, operating account control agreements and deposit account
        control agreements (or an assignment or amendment thereto) with respect to
        any
        operating or deposit account control agreement, in form and substance
reasonably
        satisfactory to
        Purchaser necessary to evidence Purchaser’s control of such accounts and arrange
        for the orderly transfer of any accounts that are held at Seller to
        Purchaser;

       

                  (v) deliver
        to Purchaser an original counterpart of each other Loan Document (including
        without limitation, any possessory collateral such as stock certificates,
        notes,
        instruments and/or title certificates for any motor vehicles (and/or cause
        such
        title certificates to be re-issued to evidence Purchaser’s security interest
        therein) or, in the event that Seller is unable to locate an original
        counterpart of any such Loan Document, a true and complete photocopy thereof;
        and

       

               (vi) deliver
        to Purchaser copies of all records concerning the Loans.

       

       
(g) At
        Closing, Purchaser shall:

       

              (i) issue
        a
        back-up letter
        of
credit
        for the
        benefit of Seller
        to each
        existing letter of credit issued by Seller for the benefit of any borrower
        or
        any other person or entity on account of or related to any obligation or
        liability arising under the Loan Documents;
        and

       

              (ii) immediately
        notify all account debtors, or cause account debtors to be notified, of
the
        transfer
        of the
        Loans
        hereunder
        and to
        cause remittance checks to be made payable to Purchaser.

       

      3. Representations
        and Warranties and Covenants.

       

               (a) Seller
        covenants, represents and warrants to Purchaser as follows:

      


          (i) Seller
        is
        a banking corporation duly organized and validly existing in good standing
        and
        has all requisite power and authority to own its assets and carry on its
        business as and where now being conducted. Seller has full power and authority,
        and has taken all action necessary, to execute and deliver this Purchase
        Agreement and any and all other documents required or permitted to be executed
        or delivered by Seller in connection with this Purchase Agreement and to
        fulfill
        Seller's obligations under, and to consummate the transactions contemplated
        by,
        this Purchase Agreement, and no governmental authorizations or other
        authorizations are required in connection therewith;

      


          (ii) this
        Purchase Agreement constitutes the legal, valid and binding obligation of
        Seller
        enforceable against Seller in accordance with its terms (subject to bankruptcy,
        insolvency, reorganization, moratorium or similar laws affecting creditors'
        rights generally);

      


          (iii) neither
        the execution, delivery and performance of this Purchase Agreement nor the
        consummation of the transactions contemplated hereby (1) is prohibited by,
        or
        requires Seller to obtain any consent, authorization, approval or registration
        under any law, statute, rule, regulation, judgment, order, writ, injunction
        or
        decree which is binding upon Seller or (2) violates, conflicts with, results
        in
        a breach of, constitutes a default under, is prohibited by, or requires any
        additional approval under any instrument or agreement to which Seller is
        a party
        or by which it is bound or which affects the Loans and the mortgaged
        property;

      


          (iv) at
        any
        time, and from time to time hereafter, upon the reasonable request of Purchaser,
        and without payment of further consideration to Seller, Seller, its officers,
        employees, affiliates and assignees each will (1) provide the assistance
        of its
        knowledgeable personnel to respond to inquiries from Purchaser, and (2) do,
        execute, acknowledge, endorse, permit Purchaser to endorse on Seller’s behalf,
        permit Purchaser to open any mail addressed to Seller in connection with
        the
        Loans, negotiate items and deliver, and cause to be done, executed,
        acknowledged, endorsed, permitted, negotiated and delivered, all such further
        acts, deeds, assignments (including without limitation, any notarized letters
        from Seller and/or on Seller’s letterhead notifying any customers, borrower,
        guarantors and account debtors thereof under the Loans of the sale of such
        Loans
        from Seller to Purchaser), remittance advise information, transfers,
        conveyances, powers of attorney and assurances as may be required in order
        to
        better assign, service, transfer, grant, convey, assure and confirm to
        Purchaser, or to collect and reduce to possession, the Loans and the collateral
        as provided for herein;

      


          (v) from
        and
        after the Closing , Seller shall promptly forward (but no later than
one
        business day after receipt thereof) to Purchaser any and all payments received
        by Seller from borrower
        or any other person or entity on account of or related to any obligation
        or
        liability arising under the Loan Documents;

      


          (vi) from
        and
        after the Closing, Seller shall promptly forward to Purchaser (at the address
        specified herein for notices) originals of any and all bills, invoices,
        insurance binders, policies or certificates, documents and other correspondence
        it receives relating to the Loans, the mortgaged property or the Loan
        Documents;

       

                  
(vii)
        to the
best
        knowledge
        of Seller,
        there
        is no litigation or action at law or in equity pending, with the exception
        of
***
        which
        is
        in bankruptcy, or
        threatened against it and no proceeding of any kind is pending or threatened
        by
        any federal, state or local governmental or administrative body which will
        or
        might materially affect the Loans and the mortgaged property or Seller’s ability
        to consummate the transactions contemplated hereby

      


          
        (viii) except
        for ***,
        Seller
        has not received any notice of, and Seller does not have actual knowledge
        of any
        default or condition, which upon the giving of notice, the passage of time,
        or
        both would constitute such a default, on the part of Seller or borrower under
        any of the Loan Documents;

      


            (ix) at
        any
        time, and from time to time hereafter, Seller will, in connection with the
        Loans, 

      


      (A) Upon
        receipt of written approval from Distinctive Solutions that they have approved
        such, upload all necessary information (both SQL and CCM software) relating
        to
        the active Loans to Distinctive Solutions and allow for the transfer of Seller’s
        rights to any Distinctive Solutions software to Purchaser;

      


      (B) provide
        Purchaser and its representatives access to the personnel, advisors, customers,
        previous audits, invoices, historical collateral data (ie; agings, collateral,
        UCC search reports, business credit reports, analysis, appraisals,
        borrower/guarantor financial statements), properties, books and records
        (including without limitation, loan files, tax notices, legal notices, account
        debtor correspondence, copies of all ancillary documents and correspondence,
        as
        well as servicing records (in hard and soft/down-loadable formats, electronic
        information in a format suitable for download onto Purchaser’s systems,
        including without limitation, any and all assistance necessary to download
        information relating to the Loans which are contained within the Distinctive
        Solutions system); 

       

                      (C) cooperate
        with Purchaser to transition or cause (1) any
        phone or
        800 number and have such
        phone or
        800 number provider to forward any calls relating to the Loans to a number
        designated by Purchaser, (2)
        the
        United States Postal Service to assign the secured dedicated post office
        box
        (1089 San Jose, California) located at the US Post Office, 200 South
        3rd
        Street,
        San Jose, California 95112 (the “Dedicated PO Box”) for Purchaser’s benefit
        (upon the assignment of the Dedicated PO Box to Purchaser, within 1 business
        of
        receipt, Purchaser shall deliver to Seller any mail not related to the
        Loans),
        (3)
        the
        existing courier service, Gold Rush Express, to pick up and deliver contents
        of
        the Dedicated PO Box to Purchaser’s
        ABL
        Group, and (4)
        Trans
        Box Courier Services to delivery client packages relating to the Loans, to
        Purchaser’s new ABL location; and 

       

                      (D) transfer
        the following to Purchaser: electronic HCG back up data files
        (but
        excluding any
        email
        archives),
        contents
        of three 4 Lateral Drawer fireproof filing cabinets, six 4 Lateral Drawer
        filing
        cabinets and 3 Three Lateral Drawer filing cabinets, and copies of payroll
        tax
        files of any borrower or guarantor under the Loans;

       

                
        (x) Seller
        agrees not to solicit any banking
        services
        business (including
        without limitation, loan and deposit services) from
        the
        borrowers,
        guarantors any
        obligation or liability arising under
        the
        Loans from the date hereof until 12 months after the date of this Purchase
        Agreement;

       

                      (xi) as
        to
        each Loan, the following representations and warranties are true and correct
        in
        all material respects as of the date hereof, subject to the limitations set
        forth in subsection (C) below;

       

                            
        (A) Exhibit F
        annexed
        hereto accurately sets forth, as of January 26, 2006, the outstanding principal
        balance of such Loan, accrued interest, the maturity date, the date through
        which interest has been paid, and the maximum amount of any commitment to
        advance funds after the Closing.

      


      (B) Seller
        is
        the sole owner of each Loan and has full right to sell and assign each Loan
        anticipated to be sold by it hereunder without the consent of any third party,
        except such consent as has been obtained or will be obtained and the Loans
        are
        free and clear of any and all liens, pledges, charges or security interests
        of
        any nature encumbering the Loans.

      


      (C) All
        documents delivered by Seller with respect to the Loans are true, complete
        and
        correct originals or copies thereof, and all information supplied by Seller
        concerning the Loans is materially correct, except that Seller makes no
        representation as to accuracy of information supplied by any borrower or
        guarantor under the Loan Documents.

       

                      (D) Except
        by
        written instrument or other written documentation delivered to Purchaser
        prior to
        the execution of this Purchase Agreement,
        neither
        Seller nor any prior holder of the Loan has modified any related note or
        mortgage securing a note or satisfied or canceled such note or mortgage in
        whole
        or in part.

      


      (E) Based
        upon the lender's title insurance policy or other evidence of title received
        by
        Seller with respect to a Loan, any mortgage or deed of trust assigned by
        Seller
        is a valid and enforceable first lien on the fee interest in the real property
        encumbered thereby subject to the exceptions listed in such policy.

      


      (F) The
        note
        relating to each Loan sold by Seller pursuant hereto and the related mortgage
        are the
        legal, valid and binding obligations of the maker or obligor thereof,
        enforceable against such maker or obligor in accordance with their terms
        except
        as such enforcement may be limited by bankruptcy, insolvency, reorganization
        or
        other similar laws affecting the enforcement of creditors' rights generally
        and
        by general equity principles (regardless of whether such enforcement is
        considered in a proceeding in equity or at law).

      


      (G) Except
        as
        otherwise set forth on Exhibit
        E,
        there
        has been issued in connection with each mortgage relating to a Loan sold
        by a
        Seller pursuant hereto, (i) a valid and enforceable ALTA policy of title
        insurance (or any amendment or supplement thereto or other form of title
        insurance policy affording equivalent coverage and customarily accepted by
        institutional lenders in the jurisdiction in which the mortgaged property
        relating to a Loan sold by Seller pursuant hereto is located) (each a
        "Title
        Insurance Policy")
        by a
        title insurer in an amount equal to the lesser of (A) the principal amount
        of
        such Loan to the extent advanced and (B) the approximate fair market value
        of
        such mortgaged property as of the date of recording of the subject mortgage,
        subject to the conditions and limitations set forth in such Title Insurance
        Policy, or (ii) a title opinion from an attorney licensed to practice in
        such
        jurisdiction, or (iii) a title report or specimen policy from a title insurer
        or
        such other form of title assurance as was customarily employed in the relevant
        jurisdiction (including blanket insurance coverage). If a title insurance
        policy
        was issued, such Title Insurance Policy is presently in full force and effect
        and all premiums with respect thereto that are due and payable have been
        paid in
        full. In addition, as of the Closing each such Title Insurance Policy insures
        such Seller that each of the mortgages relating to a Loan sold by the Seller
        pursuant hereto is a valid lien on the property therein described with the
        lien
        priority disclosed on such policy.

      


      (b) Purchaser
        hereby represents and warrants to Seller as follows:

      


      (i) Purchaser
        has full power and authority, and has taken all action necessary, to execute
        and
        deliver this Purchase Agreement and any and all other documents required
        or
        permitted to be executed or delivered by Purchaser in connection with this
        Purchase Agreement and to fulfill Purchaser's obligations under, and to
        consummate the transactions contemplated by, this Purchase Agreement, and
        no
        governmental authorizations or other authorizations are required in connection
        therewith;

      


      (ii) this
        Purchase Agreement constitutes the legal, valid and binding obligation of
        Purchaser enforceable against Purchaser in accordance with its terms (subject
        to
        bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
        creditors' rights generally); and

      


      (iii) neither
        the execution, delivery and performance of this Purchase Agreement nor the
        consummation of the transactions contemplated hereby is prohibited by, or
        requires Purchaser to obtain any consent, authorization, approval or
        registration under any law, statute, rule, regulation, judgment, order, writ,
        injunction or decree which is binding upon Purchaser.

      


      4. Brokers.
        Each
        party represents to the other that this Purchase Agreement was not brought
        about
        by a broker. Purchaser shall indemnify, defend and hold harmless Seller against
        all claims, liabilities, costs, damages and expenses of any nature arising
        out
        of any claim, demand or liability to or asserted by any broker, agent or
        finder,
        licensed or otherwise, claiming to have acted on behalf of or to have dealt
        with
        Purchaser in connection with the transactions contemplated by this Purchase
        Agreement. Seller shall indemnify, defend and hold harmless Purchaser against
        all claims, liabilities, costs, damages and expenses of any nature arising
        out
        of any claim, demand or liability to or asserted by any broker, agent or
        finder,
        licensed or otherwise, claiming to have acted on behalf of or to have dealt
        with
        Seller in connection with the transactions contemplated by this Purchase
        Agreement. The provisions of this Section 4 shall survive the
        Closing.

      


      5. Remedies
        for Breach.

      


      (a) Breach.

      


      (i) If
        for
        any reason Seller or Purchaser materially breaches any representation, warranty
        or agreement under this Purchase Agreement, then either party shall be entitled
        to terminate this Purchase Agreement upon notice to the other party, and
        upon
        such termination, neither party shall thereafter have any further obligations
        under this Purchase Agreement. In addition, Seller and Purchaser shall be
        entitled to indemnification as provided in section 14 hereof

       

                (ii) If
        for
        any reason Seller or Purchaser materially breaches any representation, warranty,
        covenant or agreement under this Purchase Agreement, then, either party to
        this
Purchase
        Agreement
        may
        avail itself of any legal or equitable rights (including, without limitation,
        the right of specific performance and/or money damages) which either party
        may
        have at law or in equity or under this Purchase Agreement.

      


      (b) Survival
        of Representations and Warranties.
        Seller's and Purchaser’s representations, warranties, covenants and agreements
        contained herein of this Purchase Agreement shall survive the Closing for
        a
        period (the "Survival
        Period")
        ending
        on the date that is
        12 months
        following the Closing.
        

      


      6. Governing
        Law.
        This
        Purchase Agreement shall be governed by and construed in accordance with
        the
        laws of the State of California without regard to conflict of law
        principles.

      


      7. Notices.
        All
        communications among the parties or notices in connection with this Purchase
        Agreement shall be in writing, hand-delivered or sent postage or shipping
        prepaid by certified mail, return receipt requested, or by reputable overnight
        courier, addressed to each party as follows:

      


      To
        Seller:   Heritage
        Bank of Commerce

      Attention:
        Mr. Ray Parker, Executive Vice President

      150
        Almaden Boulevard

      San
        Jose,
        CA 95113

      


      and

      


      To
        Purchaser:  County
        Bank

      Attn:
        Ed
        Rocha, President and COO

      550
        W.
        Main Street

      P.O.
        Box
        351

      Merced,
        California 95341

      


      All
        such
        communications and notices shall be effective upon receipt.

      


      8. Time.
        Time is
        of the essence for all provisions of this Purchase Agreement.

      


      9. Interpretation.
        The
        headings of the various sections of this Purchase Agreement are for convenience
        of reference only and shall not affect the meaning or construction of any
        provisions hereof.

      


      10. Counterparts.
        This
        Purchase Agreement may be executed in one or more counterparts, each of which
        shall be an original but all of which, taken together, shall constitute one
        and
        the same instrument.

      


      11. Successors
        and Assigns.
        This
        Purchase Agreement, including, without limitation, the representations,
        warranties and covenants contained herein, shall be binding upon and inure
        to
        the benefit of and be enforceable by the parties hereto and their respective
        successors and assigns.

      


      12. Costs
        and Expenses.
        Except
        as otherwise set forth herein, each party shall be solely responsible for
        their
        own costs and expenses (including legal expenses) incurred with respect to
        this
        Purchase Agreement and the transactions contemplated hereby.

      


      13. Entire
        Agreement.
        This
        Purchase Agreement (together with the Exhibits annexed hereto) sets forth
        the
        entire agreement and understanding of the parties hereto with respect to
        the
        subject matter hereof, and supersedes all prior agreements and understandings
        between the parties hereto with respect to the transactions contemplated
        hereby.

      


      14. Indemnification;
        Hold Harmless.
        

              

                  (a) Seller
        and Purchaser hereby agree to indemnify, defend and hold each other harmless
        from and against any and all claims, causes of action, loss, cost or damage,
        or
        any nature including, without limitation, reasonable attorneys’ fees and
        expenses (i) arising out of any act, error or omission, or alleged act, error
        or
        omission, of Seller or Purchaser or any employee, agent or representative
        authorized to act and acting, or failing to act, on Seller’s or Purchaser’s
        behalf with respect to the Loans or the collateral or any Loan Document
        occurring prior to the Closing;
        (ii)
        arising out of Seller’s or Purchaser’s willful failure to perform any of its
        obligations hereunder;
        or
        (iii)
        arising out of any falsity, incorrectness or incompleteness in any material
        respect of any representation or warranty made by Seller or Purchaser herein
        or
        otherwise in connection with this transaction.

       

      15. Conflicts.
        If and
        to the extent there exists any conflict between the terms of the Exhibits
        and
        the terms of this Purchase Agreement, the terms of this Purchase Agreement
        shall
        govern.

      


      IN
        WITNESS WHEREOF, the undersigned have duly executed this Purchase Agreement
        as
        of the date first above written.

      


      SELLER:

      


      HERITAGE
        BANK OF COMMERCE

      


      By:____________________________

      Name:

      Title:

                                      

                                      PURCHASER:

      


      COUNTY
        BANK

      


      ________________________________

      


      By:______________________________

      Name:

      Title: