Exhibit 4.1


 


STOCK PURCHASE AGREEMENT


 


This
STOCK PURCHASE AGREEMENT (the “Agreement”), dated as of December 22, 2009,
is made among CENTRAL VALLEY COMMUNITY BANCORP, a California business
corporation (the “Corporation”) with its chief executive offices at 7100 N.
Financial Dr, Suite 101, Fresno, CA 93720, and PATRIOT FINANCIAL PARTNERS,
L.P., a Delaware limited partnership (“Partners”), and PATRIOT FINANCIAL
PARTNERS PARALLEL, L.P., a Delaware limited partnership (“Parallel”) (Partners
and Parallel are sometimes referred to herein individually and collectively as “Patriot”
or the “Purchaser”), each with its chief executive offices at Cira Centre, 2929
Arch Street, Philadelphia, PA 19104.


 


Background:


 


A.
The Corporation is registered as a bank holding company under the provisions of
the Bank Holding Company Act of 1954, as amended (the “BHC Act”).  Its sole bank subsidiary is Central Valley
Community Bank (“Bank”), an FDIC-insured, California chartered commercial bank
that is not a member of the Federal Reserve System and is wholly owned by the
Corporation.


 


B.
The Corporation and the Purchaser intend to provide for the issuance and sale
by Corporation of up to $8,000,000 in capital stock of the Corporation,
including, the purchase by the Purchaser from the Corporation, of the “Purchased
Shares” referred to below, in a limited offering eligible for exemption from
registration under the Securities Act of 1933, as amended (the “1933 Act”)
pursuant to Rule 506 of Regulation D of the Securities and Exchange Commission
(“SEC”).


 


NOW,
THEREFORE, intending to be legally bound hereby, and in consideration of the
mutual benefits of this Agreement and other good and valuable consideration the
receipt and sufficiency of which are hereby acknowledged, the parties hereby agree
as follows:


 


1.             AUTHORIZATION; SALE AND
PURCHASE OF SHARES


 


1.1           Authorization of Shares. The
Corporation has duly authorized the issuance and sale to Patriot of up to:


 


(a) an
aggregate of 1,264,952 newly issued shares of the Corporation’s voting Common
Stock as designated in the Corporation’s Articles of Incorporation, as amended
(the “Articles”), without stated par value (the “Common Stock”); and


 


(b) an
aggregate of 1,359 shares of the Corporation’s preferred stock, to have a
liquidation value of $1,000 per share and to be denominated the Corporation’s “Series B
Adjustable Rate Non-Cumulative Perpetual Preferred Stock” with the terms more
fully set forth in the form of Certificate of Determination for such series of
preferred stock attached to this Agreement as Exhibit A
and made part hereof (the “Certificate of Determination”), to be duly filed of
public record as more fully provided in this Agreement (the “Series B
Preferred Stock”).


 

















 


1.2           Sale and Purchase of Shares. Subject to
the terms and conditions herein provided, the Corporation hereby agrees to sell
to the Purchaser, and the Purchaser, agrees to purchase from the Corporation:


 


(a) 884,000
shares of Common Stock (the “Purchased Common Shares”), at a purchase price of
$5.25 per share, for an aggregate purchase price of $4,641,000.00 (the “Common
Stock Purchase Price”); and


 


(b) 1,359
shares, of Series B Preferred Stock (the “Purchased Preferred Shares”), at
a purchase price of $1,000.00 per share, for an aggregate purchase price of
$1,359,000.00 (the “Preferred Stock Purchase Price”).


 


Patriot’s
purchase commitment herein shall be allocated as between Partners and Parallel
as they may direct to the Corporation at or before Closing.  The Purchased Common Shares and Purchased
Preferred Shares are sometimes referred to in this Agreement collectively as
the “Purchased Shares.”  The Common Stock
Purchase Price and the Preferred Stock Purchase Price are sometimes referred to
in this Agreement collectively as the “Purchase Price.”


 


2.             THE CLOSING.


 


2.1           Time and Place of the
Closing. Subject to Section 3 hereof, payment of the Purchase Price for
and delivery of the Purchased Shares, which are mutually conditional (together,
the “Closing”) shall be made at the offices of the Corporation, or at such
other place or in such other manner as may be agreed upon by the Corporation
and the Purchaser, on or about the date of signing this Agreement and on or
before December 31, 2009, subject to (i) the satisfaction of the
conditions to Closing set forth in Section 3 hereof or (ii) the
receipt of the last regulatory approval of any Governmental Authority (as
defined below) for the Purchaser to acquire the Purchased Shares, if required,
and the expiration of any related statutory waiting period, or on such date and
time as the Purchaser and the Corporation shall mutually agree (such date and
time of payment and delivery being herein called the “Closing Date”).


 


2.2           Delivery of and Payment for
the Purchased Shares. At the Closing, the Corporation shall issue in
certificated form to and in the name of each Purchaser the Purchased Shares to
be purchased by it, dated the Closing Date and bearing appropriate legends as
hereinafter provided for, and registered on the books and records of the
Corporation in the Purchaser’s name, against payment in full at the Closing of
the aggregate Purchase Price therefore by wire transfer of immediately
available funds for credit to such account as the Corporation shall direct.


 


3.             CONDITIONS TO CLOSING


 


3.1           Conditions to the Purchaser’s
Obligations. The obligations of the Purchaser hereunder are
subject to the accuracy, as of the date hereof and on the Closing Date, of the
representations and warranties of the Corporation contained herein, and to the
performance by the Corporation of its obligations hereunder and to each of the
following additional terms and conditions (or waiver thereof by the Purchaser):


 

















 


(a) The
Certificate of Determination shall have been accepted on file by the California
Secretary of State and the Corporation shall have provided to Purchaser a
certified, file-stamped copy thereof;


 


(b) The
Corporation shall have furnished to the Purchaser a certificate, dated the
Closing Date, executed on behalf of the Corporation by each of the President
and Chief Executive Officer and the Chief Financial Officer of the Corporation,
stating that:


 


(i) The
representations, warranties and agreements of the Corporation in Section 4.1
hereof are true and correct in all material respects as of the Closing Date and
the Corporation has complied with all its agreements contained herein;


 


(ii) Such
officers have carefully examined the Financial Statements (as defined in Section 4.1(e) hereof)
and, in their opinion, (except to the extent superseded by statements in
later-prepared documents comprising part of the Financial Statements and
delivered to Purchaser), as of the Closing Date, the Financial Statements do
not contain any untrue statement of a material fact nor omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, with respect to the respective periods covered by such Financial
Statements; and


 


(iii) From
the date hereof to the Closing Date, there have not been any event or series of
events, change, occurrence or development or a state of circumstances or facts
(including any events, changes, occurrences, developments, state of
circumstances or facts existing prior to the date hereof but which become known
during such period) that, individually or in the aggregate, has had, or would
reasonably be expected to have, a “Material Adverse Effect” (for purposes of
this Agreement, “Material Adverse Effect means a material adverse effect on (i) the
business, results of operation or financial condition of the Corporation and
its Subsidiaries taken as a whole; provided, however, that Corporation Material
Adverse Effect shall not be deemed to include the effects of (A) changes
after the date of this Agreement (the “Signing Date”) in general business,
economic or market conditions (including changes generally in prevailing
interest rates, credit availability and liquidity, currency exchange rates and
price levels or trading volumes in the United States or foreign securities or credit
markets), or any outbreak or escalation of hostilities, declared or undeclared
acts of war or terrorism, in each case generally affecting the industries in
which the Corporation and its subsidiaries operate, (B) changes or
proposed changes after the Signing Date in generally accepted accounting
principles in the United States (“GAAP”) or regulatory accounting requirements,
or authoritative interpretations thereof, (C) changes or proposed changes
after the Signing Date in securities, banking and other laws of general
applicability or related policies or interpretations of Governmental Authority
(in the case of each of these clauses (A), (B) and (C), other than changes
or occurrences to the extent that such changes or occurrences have or would
reasonably be expected to have a materially disproportionate adverse effect on
the Corporation and its Subsidiaries taken as a whole relative to comparable
U.S. banking or financial services organizations), or (D) changes in the
market price or trading volume of the Common Stock or any other equity,
equity-related or debt securities of the Corporation or its Subsidiaries (it
being understood and agreed that the exception set forth in this clause (D) does
not apply to the underlying reason giving rise to or contributing to any such
change); or (ii) the ability of the Corporation to consummate the
Transactions and perform its obligations hereunder on a timely basis.


 

















 


(c) The
Corporation shall have delivered a certificate of the Secretary of the
Corporation, dated as of the Closing Date, (i) certifying the resolutions
adopted by the Board of Directors of the Corporation or a duly authorized
committee thereof approving the transactions contemplated by this Agreement and
the issuance of the Purchased Shares, (ii) certifying the current version
of the bylaws, as amended, of the Corporation and (iii) certifying as to
the signatures and authority of persons signing this Agreement and related
documents on behalf of the Corporation;


 


(d) The
Corporation shall have delivered (i) a certificate evidencing the good
standing, and (ii) to the extent possible, with Corporation’s exercise of
diligent efforts, a certified copy of all charter documents of record, in both
cases (i) and (ii) above for each of the Corporation, Bank, the “Trust
Subsidiary” (as hereinafter defined), and Central Valley Community Insurance
Services, LLC in its respective jurisdiction of formation, and due
qualification as a foreign organization authorized to do business in any other
jurisdiction in which it maintains any offices, issued by the Secretary of
State (or comparable office) of such jurisdiction, as of a date within five (5) business
days prior to the Closing Date; to the extent it is not possible, with
Corporation’s exercise of diligent efforts, for Corporation to deliver the
certified copies of the document referred to in clause (ii) above, such
documents shall be certified by the Corporation prior to Closing as true and
complete in all respects, and the Corporation shall deliver publicly certified
documents as soon as possible following Closing; and (iii) evidence of
filing of public record, reasonably acceptable to Purchaser’s legal counsel, of
the Certificate of Determination;


 


(e) To
the extent available, when available with the exercise of diligence by the
Corporation, the certificates described in Section 5.2(d).


 


(f) Any
authorizations, consents, commitments, agreements, orders or approvals or
confirmation of nonobjection of, or declarations, notifications or filings
with, or expirations of waiting periods imposed by, any federal, state or local
court or governmental or regulatory agency or authority or applicable stock
exchange or trading market, including without limitation the Federal Reserve,
the FDIC, the Department and NASDAQ (any such court, agency, authority,
exchange or market, a “Governmental Authority”) required to be obtained by the
Corporation for the consummation of the Transactions, as defined herein, shall
have been obtained or filed or shall have occurred and any such orders shall
have become final, non-appealable orders, and there shall be no judgment,
injunction, order or decree prohibiting any of the transactions contemplated
hereby, and no action, suit or proceeding shall be pending or threatened before
or by any court or Governmental Authority seeking to restrain or prohibit, or
seeking damages in connection with, the transactions contemplated hereby;


 

















 


(g) Downey
Brand LLP, counsel to the Corporation, shall have furnished to the Purchaser
its written opinion, addressed to the Purchaser and dated the Closing Date,
substantially as set forth in Exhibit B
hereto;


 


(h) The
Corporation shall have delivered to the Purchaser, at least five (5) business
days prior to Closing, for Purchaser’s review, a schedule in the form of Schedule 3.1(h) attached
hereto (the “Capital Schedule”) that certifies, as of the time immediately
after the Closing and assuming the sale of the number of each type of Purchased
Shares determined by Purchaser as contemplated by this Agreement, the number of
shares, by class, series and type, of all authorized, issued and outstanding
capital stock, options, warrants, subordinated debt instruments, hybrid debt or
capital instruments, any debt or equity instruments convertible into shares of
common stock of the Corporation, and other securities of the Corporation (in
each case stating whether or not convertible into or exercisable or
exchangeable for shares of capital stock of the Corporation); the Corporation
shall attach to the Capital Schedule complete copies of the instruments
defining all rights and all conversion features of each type of security listed
on the Capital Schedule other than (i) Common Stock and (ii) the
preferred stock issued to the United States Treasury in January 2009.   The Corporation shall not have entered into
any agreements with the “Other Investor” (as defined in Section 4.2(m) containing,
rights, obligations and provisions more favorable to the Other Investors than
the rights, obligations and provisions set forth herein.


 


(i) 
The Common Stock (i) shall be designated for quotation or listed on the
Nasdaq Capital Market and (ii) shall not have been suspended, as of the
Closing Date, by the SEC or the Nasdaq Capital Market from trading on the
Nasdaq Capital Market nor shall suspension by the SEC or the Nasdaq Capital
Market have been threatened, as of the Closing Date, either (A) in writing
by the SEC or the Nasdaq Capital Market or (B) by falling below the
minimum listing maintenance requirements of the Nasdaq Capital Market.


 


3.2           Conditions to the
Corporation’s Obligations. The obligations of the Corporation
hereunder are subject to the accuracy, as of the date hereof and as of the
Closing Date, of the representations and warranties of the Purchaser contained
herein and to the performance by the Purchaser of its obligations hereunder and
to each of the following additional terms and conditions (or waiver thereof by
the Corporation):


 


(a) The
Purchaser shall have received any and all necessary approvals from all
Governmental Authorities necessary for the sale and issuance of the Purchased
Shares by the Corporation to the Purchaser, as the case may be, pursuant to
this Agreement, and any and all applicable waiting periods upon which such
approvals are conditioned shall have expired, and there shall be no judgment,
injunction, order or decree prohibiting any of the transactions contemplated
hereby, and no action, suit or proceeding shall be pending or threatened before
or by any court or Governmental Authority seeking to restrain or prohibit, or
seeking damages in connection with, the transactions contemplated hereby.


 


(b) The
Certificate of Determination shall have been accepted on file by the California
Secretary of State.


 

















 


4.             REPRESENTATIONS AND
WARRANTIES


 


4.1           Representations, Warranties
and Agreements of the Corporation. Except as otherwise set
forth on the Corporation Disclosure Schedule attached hereto, the Corporation
represents and warrants to, and agrees with the Purchaser that as of the date
hereof and immediately prior to the Closing:


 


(a) The
authorized capital stock of the Corporation consists of 80,000,000 shares of
Common Stock, without stated par value, of which 7,684,802 shares are
outstanding as of the date of this Agreement; and 10,000,000 shares of
preferred stock, without stated par value, of which 7,000 shares of its Series A
Fixed Rate Cumulative Perpetual Preferred Stock are outstanding as of the date
of this Agreement.


 


(b) The
Corporation does not have any “Subsidiaries” (as defined below) other than the
Bank, including the Bank’s majority-owned subsidiary, Central Valley Community
Insurance Services, LLC, and the Trust Subsidiary.  Within the preceding twenty-four (24) months,
the Corporation and each Subsidiary have filed all reports, registrations and
statements, together with any required amendments thereto, that it was required
to file with the Federal Reserve, the SEC, the FDIC, the Department and any
other applicable federal or state securities or banking authorities, except
where the failure to file any such report, registration or statement would not
reasonably be expected to have a Material Adverse Effect. All such reports and
statements filed within the preceding twenty-four (24) months, with any such
regulatory body or authority are collectively referred to herein as the “Corporation
Reports.”  As of their respective dates,
the Corporation Reports complied as to form in all material respects with all
the rules and regulations promulgated by the Federal Reserve, the FDIC,
the Department, the SEC and any other applicable foreign or state securities or
banking authorities, as the case may be. The Corporation Reports filed with the
SEC (the “SEC Documents”), including the Registration Statement, at the time
filed or, in the case of any SEC Document amended or superseded by a filing
prior to the date of this Agreement, then on the date of such amending or
superseding filing, and, in the case of registration statements and proxy
statements, on the dates of effectiveness and the dates of mailing,
respectively, (i) 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 therein, in light of the circumstances under which
they were made, not misleading, and (ii) complied in all material respects
with the applicable requirements of the Securities Exchange Act of 1934, as
amended (the “1934 Act”) and the 1933 Act, as applicable. For the purposes of
this Agreement, the term “Subsidiary” shall mean any: (a) firm,
corporation, partnership, limited liability company, trust or other entity of
which the Corporation owns (i) at least 10% of the outstanding voting
capital stock (or other outstanding voting shares of beneficial interest), or (ii) at
least a majority of the partnership, membership, joint venture or similar
interests; (b) partnership in which the Corporation is a general partner;
or (c) limited liability company in which the Corporation is the manager
or the managing member or owns a majority interest.


 

















 


(c) Except
as set forth in Schedule 4.1(c),
since December 31, 2008 (the “Financial Statement Date”), no change has
occurred and no circumstances exist (including any changes, occurrences,
circumstances or facts existing prior to the Financial Statement Date, but
which became known on or after the Financial Statement Date) that is not
reflected in the Financial Statements (as defined below) which, individually or
in the aggregate, have had or are reasonably likely to have a Material Adverse
Effect.  Except as set forth in Schedule
4.1(c), there are no transactions, arrangements, or other relationships between
the Corporation or any Subsidiary and an unconsolidated or other off balance
sheet entity.  Neither the Corporation
nor any of its Subsidiaries is a party to any material transaction or material
contract or arrangement with any stockholder of the Corporation holding at
least 5% of the outstanding shares of Common Stock (determined on a fully
diluted basis), director, officer or employee of the Corporation or any of its Subsidiaries
(collectively, “Related Parties”) or any of the respective immediate family
members or affiliates of Related Parties other than in the ordinary course of
business.


 


(d) The
Corporation, Bank and each of their respective Subsidiaries (i) have all
corporate power and authority necessary to own or hold their respective
properties and to conduct the businesses in which they are currently engaged;
and (ii) have all permits, licenses, authorizations, orders and approvals
of, and have made all filings, applications and registrations with, any
governmental entities that are required in order to carry on their business as
presently conducted and that are material to the business of the Corporation or
such Subsidiary, except where the failure to have such permits, licenses,
authorizations, orders and approvals or the failure to make such filings,
applications and registrations would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect; and all such permits,
licenses, certificates of authority, orders and approvals are in full force and
effect and, to the knowledge of the Corporation, no suspension or cancellation
of any of them is threatened, and all such filings, applications and
registrations are current.


 


(e) The
Corporation has furnished to the Purchaser or otherwise made available a copy
of the audited consolidated financial statements of the Corporation for its
fiscal years ended December 31, 2006, 2007 and 2008 and the unaudited
consolidated financial statements of the Corporation for each interim period
subsequent to the end of its most recent fiscal year through September 30,
2009 (collectively, the “Financial Statements”).  The Financial Statements do not contain any
untrue statement of material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.


 


(f) Based
in part upon the representations and warranties of the Purchaser contained
herein, (i) the Corporation is not required by applicable law or
regulation in connection with the offer, sale and delivery of the Purchased
Shares to the Purchaser in the manner contemplated by this Agreement to
register the Purchased Shares under the 1933 Act, or any state securities laws
and (ii) none of the Corporation, its Subsidiaries nor, to the Corporation’s
knowledge, any of its affiliates or any person acting on its behalf has,
directly or indirectly, at any time within the past six months, made any offers
or sales of any Corporation security or solicited any offers to buy any
security under circumstances that would (A) eliminate the availability of
the exemption from registration under Rule 506 of Regulation D under the
1933 Act in connection with the offer and sale by the Corporation of the
Purchased Shares as contemplated hereby or (B) cause the offering of the
Purchased Shares pursuant to this Agreement to be integrated with prior
offerings by the Corporation for purposes of any applicable law, regulation or
stockholder approval provisions.  Neither
the Corporation nor any person acting on behalf of the Corporation has offered
or sold any of the Purchased Shares by any form of general solicitation or general
advertising.


 

















 


(g) The
Corporation and its Subsidiaries (i) have been duly incorporated or
organized and are validly existing in good standing under the laws of their
respective jurisdictions of incorporation or organization, (ii) are duly
qualified to do business and are in good standing as foreign corporations or
organizations in each jurisdiction in which their respective ownership or lease
of property or the conduct of their respective businesses requires such
qualification, except where the failure to be so qualified would not reasonably
be expected to result in a Material Adverse Effect.


 


(h) The
number of shares and type of all authorized, issued and outstanding capital
stock, options and other securities of the Corporation (whether or not
presently convertible into or exercisable or exchangeable for shares of capital
stock of the Corporation) as of the date hereof has been set forth on Schedule 3.1(h).  All of the outstanding shares of capital
stock of the Corporation are duly authorized, validly issued, fully paid and
non-assessable, have been issued in compliance in all material respects with
all applicable federal and state securities laws.  None of such outstanding shares was issued in
violation of any preemptive rights or similar rights to subscribe for or
purchase any capital stock of the Corporation, and no person has any preemptive
or similar right to purchase any shares of capital stock of the
Corporation.  Except as set forth on
Schedule 3.1(h), (i) there are no outstanding options, warrants, scrip,
rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, or exercisable or
exchangeable for, any shares of capital stock of the Corporation, or contracts,
commitments, understandings or arrangements by which the Corporation is or may
become bound to issue additional shares of capital stock of the Corporation or
options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into, or
exercisable or exchangeable for, any shares of capital stock of the
Corporation, (ii) there are no outstanding securities or instruments of
the Corporation which contain any redemption or similar provisions, and there
are no contracts, commitments, understandings or arrangements by which the
Corporation is or may become bound to redeem a security of the Corporation; (iii) there
are no securities or instruments containing anti-dilution or similar provisions
that will be triggered by the issuance of the Purchased Shares; (iv) the
Corporation does not have any stock appreciation rights or “phantom stock”
plans or agreements or any similar plan or agreement; and (v) the
Corporation has not exercised its right to defer payments of interest on the
junior subordinated deferrable interest debentures of the Corporation or the
corresponding trust preferred securities of Service 1st Capital Trust I (the “Trust
Subsidiaries”).


 


(i) The
Purchased Shares have been duly authorized and, when issued and delivered by
the Corporation against payment therefor in the manner contemplated by this
Agreement, will be validly issued, fully paid and non-assessable, and there are
no preemptive rights relating to the issuance of the Purchased Shares.


 


(j) This
Agreement has been duly authorized, executed and delivered by the Corporation
and constitutes a valid and legally binding agreement of the Corporation
enforceable against the Corporation in accordance with its terms, subject to
the effects of bankruptcy, insolvency, reorganization, moratorium and other
similar laws relating to or affecting creditors’ rights generally, and general
equitable principles (whether considered in a proceeding in equity or at law).


 

















 


(k) The
execution, delivery and performance by the Corporation of this Agreement, the
issuance and sale of the Purchased Shares in the manner contemplated hereby,
and the consummation of the transactions contemplated herein (collectively, the
“Transactions”), will not (i) conflict with or constitute a violation of,
or default (with the passage of time or the delivery of notice) under, (A) any
bond, debenture, note or other evidence of indebtedness, or any agreement,
lease, franchise, license, permit, contract, indenture, mortgage, deed of
trust, loan agreement, joint venture or other agreement or instrument to which
the Corporation or any of its Subsidiaries is a party or by which it or any of
its Subsidiaries or their property is bound, where such conflict, violation or
default would reasonably be expected to have a Material Adverse Effect, or (B) any
law, administrative regulation, ordinance or judgment, order or decree of any
court or governmental agency, arbitration panel or authority binding upon the
Corporation or any of its Subsidiaries or any of their property; provided,
however, that the Corporation makes no representation or warranty as to the
proposed Transaction’s conflict with or violation of Title 12 of the Code of
Federal Regulations, Section 225.41 (“12 C.F.R. § 225.41”), or (ii) violate
any of the provisions of the Articles, or Bylaws, as amended, of the
Corporation; and no consent, approval, authorization or order of, or filing or
registration with any such person (including, without limitation, any such
court or governmental agency or body) is required for the consummation of the
Transactions by the Corporation, except such as may be required for a under
Regulation D under the 1933 Act or for a Rule 506 “federal covered
security” under state securities laws.


 


(l) The
Financial Statements (including the related notes) present fairly, in all
material respects, the financial condition and results of operations of the
Corporation and its subsidiaries, at the dates and for the periods indicated,
and have been prepared in conformity with GAAP applied on a consistent basis
throughout the periods involved.  Since
the Financial Statement Date, the Corporation has not effected any change in
any method of accounting or accounting practice, except for any such change
required because of a concurrent change in GAAP, nor has it been advised by its
independent registered accounting firm or any Governmental Authority that any
such change in method of accounting or accounting practice is appropriate.  No change in accounting treatment reflected
in the Financial Statements, if any, resulting from the review of the
Registration Statement by the SEC will or would be reasonably expected to
result in a restatement of any prior financial statements or amendment of any
prior periodic reports filed with the SEC. 
Neither the Corporation nor any of its Subsidiaries has any liabilities
or obligations of any nature (absolute, accrued, contingent or otherwise) that
are not properly reflected or reserved against in the Financial Statements to
the extent required to be so reflected or reserved against in accordance with
GAAP, except for (i) liabilities that have arisen since September 30,
2009 in the ordinary course of business, (ii) contractual liabilities
under agreements entered into in the ordinary course of business or that are
disclosed in the SEC Documents, and (iii) liabilities that have not had
and would not reasonably be expected to have a Material Adverse Effect.


 

















 


(m) There
is no action, suit or proceeding before or by any court or governmental agency
or body or any labor dispute now pending or, to the knowledge of the
Corporation, threatened against the Corporation or any of its Subsidiaries,
which would reasonably be expected, either individually or in the aggregate, to
have a Material Adverse Effect.


 


(n) No
temporary restraining order, preliminary or permanent injunction or other order
issued by any court of competent jurisdiction or other legal restraint or
prohibition preventing the consummation of the Transactions is in effect or, to
the knowledge of the Corporation, threatened.


 


(o) Neither
the Corporation nor any Subsidiary has engaged in conduct that it knows to be a
violation of any applicable law or contractual obligation relating to the
recruitment, hiring, extension of offers of employment, retention or
solicitation of any current employee of the Corporation or any Subsidiary where
such violation would reasonably be expected to have a Material Adverse
Effect.  To the knowledge of the
Corporation, no executive officer is, or is expected to be, in violation of any
material term of any employment contract, confidentiality, disclosure or
proprietary information agreement or non-competition agreement, or any other
contract or agreement or any restrictive covenant, and to the knowledge of the
Corporation, the continued employment of each such executive officer does not
subject the Corporation or any of its Subsidiaries to any material liability
with respect to any of the foregoing matters.


 


(p) No
broker’s, finder’s, investment banker’s or similar fee or commission has been
paid or will be payable by the Corporation with respect to, or for any services
rendered to the Corporation ancillary to, the offer, issue and sale of the
Purchased Shares contemplated by this Agreement other than fees payable to
Sandler O’Neill & Partners, L.P. (the “Financial Advisor”) as set
forth in Schedule 4.1(p) for
acting as financial advisor to the Corporation in connection with the
Transactions, which will be paid by the Corporation. The Corporation
acknowledges that Financial Advisor has acted only as financial advisor to the
Corporation in connection with the Transactions and not as a placement agent or
underwriter in connection with the Transactions.


 


(q) The
Corporation does not own or control, directly or indirectly, any Subsidiary
other than Bank and the other companies and entities referred to in Section 4.1(b).  The Corporation does not engage, directly or
indirectly or through any other entity or through any partnership, joint
venture or the like, in any business or activity other than investing its
assets and owning or controlling Bank and Central Valley Community Insurance
Services, LLC.  The Corporation does not
own any shares of stock or any other equity or debt securities of any
corporation or other entity or have any equity interest in any firm,
partnership, limited liability company, joint venture, association or other
entity except as set forth in the Financial Statements.


 


(r) Except
for such agreements that have expired or terminated in accordance with their
terms prior to the date hereof, each material agreement to which the
Corporation and its Subsidiaries is a party, is in full force and effect and is
binding on the Corporation and/or its Subsidiaries, as applicable, and, to the
knowledge of the Corporation, is binding upon such other parties, in each case
in accordance with its terms, and neither the Corporation, any of its
Subsidiaries nor, to the knowledge of the Corporation, any other party thereto,
is in breach of or default under any such agreement, which breach or default
would reasonably be expected to have a Material Adverse Effect. Neither the
Corporation, nor any of its Subsidiaries, has received any written notice
regarding the termination of any such agreements. The Corporation has made
available to Purchaser true, correct and complete copies of all such agreements
to which the Corporation or any of its Subsidiaries is a party or subject.


 
















 


(s) Each
of the Corporation and its Subsidiaries has filed on a timely basis all
federal, state, local and foreign income and franchise tax returns required to
be filed by it through the date hereof or had properly requested extension
thereof and has paid all taxes shown as due thereon, and any related
assessments, fines or penalties, except where such failure to timely file would
not reasonably be expected to have a Material Adverse Effect.  Each of the Corporation and its Subsidiaries
has made reasonable charges, accruals and reserves in the applicable Financial
Statements in respect of all federal, state, local and foreign income and
franchise taxes for all periods as to which the tax liability of the
Corporation and its Subsidiaries has not been finally determined.  No tax deficiency has been asserted against
the Corporation or any of its Subsidiaries and the knowledge of the
Corporation, there is no tax deficiency which might be asserted or threatened
against it or any of its Subsidiaries.


 


(t) The
Corporation and its Subsidiaries are in compliance in all material respects
with all applicable laws, rules, regulations, orders, decrees and judgments
applicable to it, including, without limitation, all applicable local, state
and federal environmental laws and the applicable federal and state banking
laws, rules and regulations except where which non-compliance would not be
reasonably expected to have a Material Adverse Effect (the “Applicable Laws”).  Neither the Corporation nor any of its
Subsidiaries has received any notice of purported or actual non-compliance with
Applicable Laws (except to the extent it would not individually or in the
aggregate reasonably be expected to have a Material Adverse Effect).  Neither the Corporation nor any of its
Subsidiaries has received any communication from any Governmental Authority (i) threatening
to revoke any permit, license, franchise, certificate of authority or other
governmental authorization, or (ii) threatening or contemplating
revocation or limitation of, or which would have the effect of revoking or
limiting, FDIC deposit insurance.


 


(u) The
operations of the Corporation and its Subsidiaries are and have been conducted,
in all material respects, in compliance with applicable financial recordkeeping
and reporting requirements of the Currency and Foreign Transactions Reporting
Act of 1970, as amended, the money laundering statutes of all applicable
jurisdictions, the rules and regulations thereunder and any related or
similar rules, regulations or guidelines, issued, administered or enforced by
any governmental agency (collectively, the “Money Laundering Laws”) and no
action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Corporation or any of its
Subsidiaries with respect to the Money Laundering Laws is pending or, to the
knowledge of the Corporation, threatened.


 


(v) Neither
the Corporation nor any of its Subsidiaries nor, to the knowledge of the
Corporation, any director, officer, agent, employee or affiliate of the
Corporation or any of its Subsidiaries, is currently subject to any U.S.
sanctions administered by the Department of Foreign Assets Control of the U.S.
Treasury Department (“OFAC”).


 

















 


(w) Except
as disclosed in the Financial Statements, each of the Corporation and its
Subsidiaries owns or leases all such properties as are necessary to its
operations as now conducted.


 


(x) Each
of the Corporation and its Subsidiaries maintains insurance (issued by insurers
of recognized financial responsibility) of the types, against such losses and
in the amounts, with such insurers and subject to deductibles and exclusions as
the Corporation reasonably believes are customary in the Corporation’s and its
Subsidiaries’ industry and otherwise prudent, including, without limitation,
insurance covering all real and personal property owned or leased by the
Corporation and its Subsidiaries against theft, damage, destruction, acts of
vandalism and all other risks customarily insured against by similarly situated
companies, all of which insurance is in full force and effect and no written
notice of cancellation has been received.


 


(y) The
Corporation is not and, after giving effect to the offering and sale of the
Purchased Shares as contemplated in this Agreement will not be, an “investment
company” as defined in the Investment Company Act of 1940, as amended.


 


(z) The
Corporation is duly registered as a bank holding company under the BHC Act, as
amended. Bank is a commercial bank duly organized, validly existing and in good
standing with the Department.  Bank has
at least a “satisfactory” rating under the U.S. Community Reinvestment
Act.  Bank is a member in good standing
of the Federal Home Loan Bank of San Francisco. 
The deposit accounts of Bank are insured up to applicable limits by the
FDIC, and all premiums and assessments required to be paid in connection
therewith have been paid when due. As of the date of this Agreement, Bank meets
or exceeds the standards necessary to be considered “well capitalized” under
the FDIC’s regulatory framework for prompt corrective action.


 


(aa)
Except as set forth on Schedule 4.1(aa)
neither the Corporation nor any Subsidiary is subject to any cease-and-desist,
memorandum of understanding or other similar order or enforcement action
(including any order to pay civil money penalties) issued by, or is a party to
any written 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 that currently restricts in any material
respect the conduct of its operations or business or that in any material
manner relates to its capital adequacy, maintenance of specific capital levels,
its liquidity and funding policies and practices, its ability to pay dividends,
its credit, risk management or compliance policies, its internal controls, its
management or its operations or business (each item in this sentence, a “Regulatory
Agreement”), nor has the Corporation or any Subsidiary been advised by any
governmental entity that it is considering issuing, initiating, ordering, or
requesting any such Regulatory Agreement.


 


(bb)
The Corporation is not, and has never been, an issuer identified in Rule 144(i)(1) under
the 1933 Act.


 

















 


(cc)
Except as set forth on Schedule 4.1(cc),
as of the Closing Date, except for normal periodic examinations conducted by a
federal or state bank regulatory authority having jurisdiction over the
Corporation or any of its Subsidiaries (a “Bank Regulator”), since December 31,
2006, no Bank Regulator has initiated any proceeding or, to the knowledge of
the Corporation, investigation into the business or operations of the
Corporation or any of its Subsidiaries. The Corporation and its Subsidiaries
have addressed in all material respects any matters requiring Board attention
set forth in writing by any Bank Regulator with respect to any such normal
periodic examination and addressing such matters has not and is reasonably
expected to not result in a Material Adverse Effect.


 


(dd)
As of the Closing Date, taking into account the net proceeds of the capital
raise contemplated as part of this Transaction, the Corporation and Bank each
will have leverage, Tier 1 risk-based and total risk-based capital ratios that
are at least 100 basis points in excess of the minimum regulatory requirements,
in the case of the Corporation, and for “well-capitalized” status under Federal
prompt corrective action regulations, in the case of the Bank.


 


(ee)
As of the date hereof and as of Closing Date, the Corporation’s management has
concluded that the loan loss reserves of Bank are adequate and has not been
advised by the Corporation’s independent or internal auditors of any
preliminary or final disagreement with management’s conclusions.


 


(ff)
The issuance of the Purchased Shares to the Purchaser as contemplated by this
Agreement will not trigger any rights under any “change of control” provision
in any of the employee benefit plans, retirement plans or other agreements to
which the Corporation or any of its Subsidiaries is a party, including without
limitation any employment, “change in control,” severance or other compensatory
agreements or arrangements (all of the foregoing are referred to as “Employee
Arrangements”), which results in payments to the counterparty or the
acceleration of vesting of benefits.  In
the event that the issuance of the Purchased Shares to the Purchaser as
contemplated by this Agreement would otherwise trigger any such rights, the
Corporation will obtain waivers from the parties to the Employee Arrangements
waiving, as applicable, (i) the right to receive any such payments
resulting from the occurrence of such triggering event or (ii) the
acceleration of vesting of such benefits.


 


(gg)
The Corporation has implemented and maintains disclosure controls and
procedures (as defined in Rule 13a-15(e) of the 1934 Act) to ensure
that material information relating to the Corporation, including its
Subsidiaries, is made known to the chief executive officer and the chief
financial officer of the Corporation by others within those entities.  The Corporation maintains internal control
over financial reporting (as defined in Rule 13a-15 of the 1934 Act) to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with GAAP and includes policies and procedures that (A) pertain to the
maintenance of records that in reasonable detail accurately and fairly reflect
the transactions and dispositions of the asset of the Corporation, (B) provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with GAAP, and that receipts
and expenditures of the Corporation are being made only in accordance with
authorizations of management and directors of the Corporation, and (C) provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of the Corporation’s assets that could 


 

















 


have
a material effect on its financial statements. 
The Corporation has disclosed, based on its most recent evaluation prior
to the date hereof, to the Corporation’s outside auditors and the audit
committee of the Board of Directors (x) any significant deficiencies and
material weaknesses in the design or operation of internal control over
financial reporting that are reasonably expected to adversely affect the
Corporation’s ability to record, process, summarize and report financial
information and (y) any fraud, whether or not material, that involves
management or other employees who have a significant role in the Corporation’s
internal controls over financial reporting.


 


(hh) Except as
expressly set forth or reflected in the Financial Statements, since December 31,
2008, (A) neither the Corporation nor any Subsidiary nor, to the knowledge
of the Corporation, any director or officer of the Corporation or any
Subsidiary, has received or otherwise had or obtained knowledge of any material
complaint, allegation, assertion or claim, whether written or oral, regarding
the accounting or auditing practices, procedures, methodologies or methods of
the Corporation or a subsidiary of the Corporation or their respective internal
accounting controls, including any material complaint, allegation, assertion or
claim that the Corporation or any Subsidiary has engaged in questionable
accounting or auditing practices The records, systems, controls, data and
information of the Corporation and the Subsidiaries are recorded, stored,
maintained and operated under means (including any electronic, mechanical or
photographic process, whether computerized or not) that are under the exclusive
ownership and direct control of the Corporation or the Subsidiaries or their
accountants (including all means of access thereto and therefrom), except for
any non-exclusive ownership and non-direct control that would not, individually
or in the aggregate, reasonably be expected to adversely affect in any material
respect the system of internal accounting controls described above in this
subsection.


 


(ii) Except as
expressly set forth or reflected in the Financial Statements, since December 31,
2008, the Corporation and each of the Subsidiaries have conducted their
respective businesses in all material respects in the ordinary course,
consistent with prior practice.


 


(jj) The Board of
Directors has taken all other necessary action to ensure that any “moratorium,”
“control share,” “fair price,” “takeover” or “interested stockholder” law does
not and will not apply to this Agreement or to any of the Transactions
contemplated hereby.


 


(kk) The
Corporation is eligible to register the resale of the Purchased Shares by the Purchasers
using Form S-3 promulgated under the 1933 Act.


 


(ll) The Corporation
has not, and to the Corporation’s knowledge no one acting on its behalf has,
taken, directly or indirectly, any action designed to cause or to result in the
stabilization or manipulation of the price of any security of the Corporation
to facilitate the sale or resale of any of the Purchased Shares.


 


(mm) The Corporation’s Common Stock is registered
pursuant to Section 12(b) of the 1934 Act, and the Corporation has
taken no action designed to terminate the registration of the Common Stock
under the 1934 Act nor has the Corporation received any notification that the
SEC is contemplating terminating such registration. The Corporation has not, in
the 12 months preceding the date hereof, received written notice from the
Nasdaq Capital Market to the effect that the Corporation is not in compliance
with the listing or maintenance requirements of the Nasdaq Capital Market. The
Corporation is in compliance in all material respects with the listing and
maintenance requirements for trading of the Common Stock on the Nasdaq Capital
Market.


 

















 


4.2           Representations and
Warranties and Agreements of the Purchaser. Each Purchaser, severally
and not jointly with any other Purchaser, represents and warrants to, and
agrees with, the Corporation that, as of the date hereof and immediately prior
to the Closing:


 


(a) The
Purchaser has full power and authority to enter into this Agreement and this
Agreement constitutes a valid and legally binding obligation of the Purchaser,
enforceable against the Purchaser in accordance with its terms, subject to the
effects of bankruptcy, insolvency, reorganization, moratorium and other similar
laws relating to or affecting creditor’s rights generally, and general equitable
principles (whether considered in a proceeding in equity or at law).


 


(b) The
Purchaser represents that: (i) it is duly organized, validly existing and
in good standing in its jurisdiction of incorporation or organization and has
all the requisite power and authority to purchase the Purchased Shares, as
provided herein, and (ii) its purchase of the Purchased Shares has been
duly authorized by all necessary action on behalf of the Purchaser.


 


(c) The
Purchaser is purchasing the Purchased Shares for Purchaser’s own account and
not with a view to or for sale in connection with any distribution thereof in a
transaction that would violate or cause a violation of the 1933 Act or the
securities laws of any state or any other applicable jurisdiction.


 


(d) The
Purchaser is an “accredited investor” as defined in Rule 501(a) promulgated
under the 1933 Act and understands and agrees that the offer and sale of the
Purchased Shares to the Purchaser hereunder have not been registered under the
1933 Act or any state securities law in reliance on the availability of an
exemption from such registration requirements of the 1933 Act based in part on
the accuracy of the Purchaser’s representations in this Section.


 


(e) In
the normal course of the Purchaser’s business or affairs, Purchaser invests in
or purchases securities similar to the Purchased Shares and has such knowledge
and experience in financial and business matters as to be capable of evaluating
the merits and risks of purchasing the Purchased Shares. Purchaser has received
and has carefully reviewed the Financial Statements.  Purchaser has had access to such financial
and other information concerning the Corporation and its Subsidiaries as
Purchaser deemed necessary or desirable in making a decision to purchase the
Purchased Shares, including all of the Corporation’s periodic and current
reports filed with the SEC, and an opportunity to ask questions and receive
answers from officers of the Corporation and to obtain additional information
(to the extent the Corporation possessed such information or could acquire it
without unreasonable effort or expense) necessary to verify the accuracy of any
information furnished to Purchaser or to which Purchaser had access.


 

















 


(f) The
Purchaser is not relying on the Corporation or any of its affiliates with
respect to an analysis or consideration of the terms of or economic
considerations relating to an investment in the Purchased Shares. In regard to
such considerations and analysis, the Purchaser has relied on the advice of, or
has consulted with, its own advisors.


 


(g) The
Purchaser acknowledges and is aware that there are substantial restrictions on
the transferability of the Purchased Shares. Purchaser understands that the
Purchased Shares have not been registered under the 1933 Act and are “restricted
securities” within the meaning of Rule 144 
of the 1933 Act, and may not be sold, transferred, or otherwise disposed
of without registration under the 1933 Act or an exemption therefrom.
Furthermore, Purchaser acknowledges that the Purchased Shares purchased
hereunder will bear a legend to the effect set forth below, and the Purchaser
covenants that, except to the extent such restrictions are waived by the
Corporation, the Purchaser shall not transfer the Purchased Shares without complying
with the restrictions on transfer described in the legend endorsed on such
certificate:


 


THE
SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, OFFERED FOR SALE,
TRANSFERRED, ASSIGNED, PLEDGED, OR HYPOTHECATED ABSENT AN EFFECTIVE
REGISTRATION THEREOF UNDER SUCH ACT AND ANY APPLICABLE STATE SECURITIES LAW OR
COMPLIANCE WITH RULE 144 PROMULGATED UNDER SUCH ACT, OR UNLESS THE CORPORATION
HAS RECEIVED AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE CORPORATION
AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.


 


(h) The
execution, delivery and performance by the Purchaser of this Agreement,
purchase of the Purchased Shares in the manner contemplated hereby, and the
consummation of the transactions contemplated herein (collectively, the “Transactions”),
will not (i) conflict with or constitute a material violation of, or
material default (with the passage of time or the delivery of notice) under any
law, administrative regulation, ordinance or judgment, order or decree of any
court or governmental agency, arbitration panel or authority binding upon the
Purchaser or any of their property, or (ii) violate any of the provisions
of the charter documents of the Purchaser; and no material consent, approval,
authorization or order of, or filing or registration with any such person
(including, without limitation, any such court or governmental agency or body)
is required for the consummation of the Transactions by the Purchaser, except
such as may be required for a under Regulation D under the 1933 Act or for a Rule 506
“federal covered security” under state securities laws.


 


(i) The
Purchaser represents and warrants that it is not required to obtain, prepare or
file any authorization, approval, consent, filing or registration with any
Governmental Authority in order to consummate the Transactions at the Closing
Date except that in the event that the Purchaser determines, in its sole
discretion, to purchase shares equal to or in excess of 10% of the outstanding
voting Common Stock following consummation of the Transactions, the Purchaser
will require the approval or the non-objection of the Federal Reserve and the
Department to acquire the shares.  Except
as expressly set forth in this Agreement, the Purchaser is not “acting in
concert” (as that term is defined in 12 C.F.R. § 225.41) with any other persons
to acquire any of the Corporation’s capital stock.


 

















 


(j) Other
than the Transactions contemplated hereunder, the Purchaser has not directly or
indirectly, nor has any person acting on behalf of or pursuant to any
understanding with the Purchaser, executed any disposition, including short
sales, in the securities of the Corporation during the period commencing from
the time that the Purchaser first entered into a term sheet with the
Corporation until the date that the Transactions are first publicly announced.


 


(k) The
offer to purchase the Purchased Shares was directly communicated to the
Purchaser by the Corporation.  At no time
was the Purchaser presented with or solicited by any leaflet, newspaper or
magazine article, radio, television, internet or email advertisement, or any
other form of general advertising or solicited or invited to attend a
promotional meeting otherwise than in connection and concurrently with such
communicated offer.


 


(l) The
Purchaser neither is nor will be obligated for any finder’s or broker’s fee or
commission in connection with Transactions.


 


(m) The
Purchaser acknowledges that the Corporation intends to issue up to
approximately 380,952 shares of Common Stock to the investors identified in the
Capital Schedule (“Other Investors”) contemporaneously with the Closing.  The Purchaser (i) is not an affiliate of
any of the Other Investors, (ii) reached its decision to invest in the
Corporation independently from the Other Investors, and (iii) has entered
into no agreements with the Other Investors (A) for the purpose of
controlling the Corporation or any of its Subsidiaries or (B) regarding
voting its interest in the Corporation in concert with any of the Other
Investors or otherwise to act in concert with the Other Investors with respect
to the Corporation.


 


5.             ADDITIONAL AGREEMENTS


 


5.1           Form D, Blue Sky and
Certificates.


 


(a) The
Corporation agrees to timely file a Form D with respect to the Purchased
Shares as required under Regulation D and to provide a copy thereof to the
Purchaser promptly after such filing. 
The Corporation, on or before the Closing Date, shall take such action
as is necessary in order to obtain and maintain an exemption for or to qualify
the Purchased Shares for sale to the Purchaser at the Closing pursuant to this
Agreement under applicable securities or “Blue Sky” laws of the states of the
United States (or to obtain an exemption from such qualification), and shall
provide evidence of any such action so taken to the Purchaser on or prior to
the Closing Date.  The Corporation shall
make all filings and reports relating to the offer and sale of the Securities
required under applicable securities or “Blue Sky” laws of the states of the
United States following the Closing Date.


 


(b) The
restrictive legend set forth in Section 4.2(g) shall be removed and
the Corporation shall issue a certificate without such restrictive legend or
any other restrictive legend to the holder of the applicable Purchased Shares
upon which it is stamped or issue to such holder by electronic delivery at the
applicable balance account at the Depository Trust Corporation (“DTC”), if (i) such
Purchased Shares are registered for resale under the 1933 Act, (ii) such
Purchased Shares are sold or transferred pursuant to Rule 144 or (iii) such
Purchased Shares are 


 

















 


eligible
for sale under Rule 144, without the requirement for the Corporation to be
in compliance with the current public information required under Rule 144
as to such securities and without volume or manner-of-sale restrictions.  Following the earlier of (i) the
effective date of the first Registration Statement covering the resale of some
or all of the Purchased Shares (the “Effective Date”) or (ii) Rule 144
becoming available for the resale of Purchased Shares, without the requirement
for the Corporation to be in compliance with the current public information
required under Rule 144 as to the Purchased Shares and without volume or
manner-of-sale restrictions, the Corporation shall cause counsel to the
Corporation to issue to the Corporation’s transfer agent a legal opinion to the
effect that no subsequent transfer of such Shares shall require registration
under the 1933 Act.  Any fees (with
respect to said transfer agent, counsel or otherwise) associated with the
issuance of such opinion or the removal of such legend shall be borne by the
Corporation.  Following such time as a
restrictive legend is no longer required for any Shares, no later than three trading
days following the delivery by the Purchaser to the Corporation or said
transfer agent (with notice to the Corporation) of a legended certificate
representing such Shares and an opinion of counsel to the extent required by
this Section, the Corporation will and will cause the transfer agent to,
deliver or cause to be delivered to the Purchaser a certificate or confirmation
representing such Shares that is free from all restrictive legends.  Unless otherwise required by applicable law,
the Corporation may not make any notation on its records or give instructions
to the transfer agent that enlarge the restrictions on transfer set forth in
this Section.  Certificates for Shares
free from all restrictive legends may be transmitted by the said transfer agent
to a Purchaser by crediting the account of the Purchaser’s custodian or prime
broker with DTC as directed by the Purchaser.


 


5.2           Regulatory Matters.


 


(a) In
the event that the Purchaser in its sole discretion determines, before or after
Closing, to acquire or to establish its authority to acquire, or in the event
the Purchaser may be deemed to acquire, securities that will amount to 10% or
more of the issued and outstanding shares of any class of securities whose
acquisition is or may be subject to regulatory approval, Purchaser may seek
approvals (to the extent required) and written confirmation that it shall not
thereby be deemed to “control” the Corporation or any Subsidiary after the
Closing, from the Federal Reserve for purposes of the Change in Bank Control
Act or Sections 3 or 4 of the BHC Act and from the Department under Sections
700-711 and/or 3700-3707, as applicable, of the California Financial Code or
other applicable provisions of California law (“California CIBC Law”) (each a “Non-Control
Determination”); provided, however,
that (A) nothing in this Agreement shall obligate Purchaser to seek any
Non-Control Determination or to purchase shares of the Corporation following
the consummation of this Transaction in excess of the respective amount that
Purchaser determines, in its sole discretion, is reasonably likely to be the
maximum number of such Purchased Shares that Purchaser may purchase without
risk of being required to obtain a Non-Control Determination; and (B) if
Purchaser in its sole discretion seeks one or more Non-Control Determinations,
no such Non-Control Determination shall (i) impose any condition or
requirement that would reasonably be expected to be materially burdensome to
the Purchaser (including any material constraints or restrictions on the
Purchaser’s current business or investments), or (ii) impose any restraint
or condition on any limited partner of the Purchaser (including a requirement
to file any application or notice under the BHC Act, the Change in Bank Control
Act or any other federal or state banking law) (each a “Burdensome Condition”);
and provided further that the imposition of
a Burdensome Condition in connection with a Non-Control Determination shall
constitute a denial of such Non-Control Determination and the Non-Control
Determination shall be deemed not received for all purposes in this Agreement,
including but not limited to Section 6.15(b).


 

















 


(b) 
Each of the Corporation and the Purchaser agrees to use its commercially
reasonable efforts to take all actions and to do all things necessary, proper
or advisable to obtain any authorizations, consents, orders and approvals of
all Governmental Authorities necessary for the Purchaser to purchase the
Purchased Shares on the Closing Date on terms consistent with the terms set
forth in this Agreement. If the Purchaser determines to seek receipt of a
Non-Control Determination from the Federal Reserve or the Department in order
to consummate the Transactions contemplated by this Agreement, Purchaser will (i) promptly,
and in any event within 20 calendar days of this Agreement submit to the
Federal Reserve or the Department, as applicable, a request for Non-Control
Determination, (ii) provide (and, if and as required by the Federal
Reserve or the Department, as applicable, will cause any of its general
partners, managers, managing members or management companies or other
controlling entities, as applicable) customary passivity commitments in
connection with its request to obtain such determination, and (iii) promptly
provide to the Corporation copies of the public portion of all requests and
applications, if any, filed with the Federal Reserve or Department in
connection with the transactions contemplated by this Agreement, and correspondence
to and from the Federal Reserve and Department, as applicable, relating to such
requests and applications.  The
Corporation will, and will cause its Affiliates to, use its commercially
reasonable efforts to assist and support the Purchaser’s efforts to obtain a
Non-Control Determination in the event the Purchaser determines to seek such
determination.


 


(c) Purchaser
hereby agrees that it shall not seek to “control” or exercise a controlling
influence over the Corporation or the Bank, for purposes of the BHC Act, and,
to the extent that and for so long as Purchaser may be bound by a “passivity,” “non-control”
or similar agreement required by the Federal Reserve in connection with a
Non-Control Determination (a “Non-Control Agreement”), Purchaser shall not take
any action the taking of which is prohibited by any such Non-Control
Agreement.  Without limiting the
generality of the foregoing, the Purchaser agrees that (i) no officer,
director, partner, agent or other representative of Purchaser shall seek or
accept representation on the board of directors of the Corporation or any of
its Subsidiaries unless nominated by Corporation’s board of directors, and (ii) the
Purchaser shall not directly or indirectly propose a director or slate of
directors in opposition to a nominee or slate of nominees proposed by
management or the board of directors of the Corporation.


 


(d) The
Corporation shall use its diligent efforts to obtain and deliver to Purchaser
certificates from (i) the Federal Deposit Insurance Corporation (the “FDIC”)
confirming that the Bank’s deposits are currently insured by the FDIC, (ii) the
Board of Governors of the Federal Reserve System (the “Federal Reserve”),
certifying that Corporation is a registered bank holding company, and (iii) the
California Department of Financial Regulation (the “Department”) certifying
that the Bank is duly authorized as a commercial bank under California law.


 


5.3           Indemnification of Purchaser. The
Corporation shall indemnify and hold Purchaser harmless from and against all
claims in respect of all fees paid to Financial Advisor in connection with this
Agreement and the Transactions.


 

















 


5.4           Confidentiality.


 


(a) For
so long as the Purchaser owns any Shares the Purchaser agrees and agrees to
cause its Representatives (as defined in subsection (c) below) (to the
extent such Representatives are provided any such Confidential Information (as
defined in subsection (b) below) by the Corporation or Purchaser), to keep
confidential any Confidential Information. 
In the event the Purchaser pursuant to this Agreement or anyone to whom
any of them transmit Confidential Information is requested or required by oral
questions, interrogatories, requests for information or documents, subpoenas,
civil investigative demand or similar process to disclose any such information,
the Purchaser shall (i) provide the Corporation with prompt notice so that
the Corporation may seek a protective order or other appropriate remedy and/or
waive the Purchaser’s compliance with the provisions of this Section, (ii) furnish
only that portion of such information that the Purchaser is advised by counsel
is responsive to the request or legally required and (iii) at the
Corporation’s expense and direction, exercise its reasonable efforts to obtain
reliable assurance that confidential treatment will be accorded such
information.  Notwithstanding the
foregoing, the Purchaser may disclose any such information if required by
judicial or administrative process or by other requirements of law, national
stock exchange or self-regulatory organization.


 


(b) For
the purpose of this Agreement, “Confidential Information” means information
obtained from the Corporation, except to the extent that such information can
be shown to have been (i) previously known on a non-confidential basis by
the Purchaser or its Representatives, (ii) in the public domain other than
by breach of this Agreement by the Purchaser or its Representatives or (iii) later
acquired by such Purchaser from sources other than the Corporation or its Subsidiaries
not bound by any confidentiality obligation to the Corporation or its
Subsidiaries with respect to such information.


 


(c) For
purposes of this Agreement, “Representative” shall mean, with respect to any
person, any of such person’s officers, directors, employees, agents, attorneys,
accountants, consultants, equity financing partners, general partners,
managers, investment managers, or financial advisors or other person associated
with, or acting for or on behalf of, such person.


 


5.5           Use of Proceeds.  The
Corporation will not intentionally directly or indirectly use the proceeds of
the Transactions, and will not lend, contribute or otherwise make available
such proceeds to any Subsidiary, joint venture partner or other person or
entity for the purpose of financing the activities of any person currently
subject to any U.S. sanctions administered by OFAC.


 


5.6           No Change of Control.  The Corporation shall use commercially
reasonable efforts to obtain all necessary irrevocable waivers and make all
appropriate determinations so that the issuance of the Purchased Shares to the
Purchaser, will not trigger a “change of control” or other similar provision in
any of the agreements to which the Corporation or any of its Subsidiaries is a
party, including without limitation any employment, “change in control,”
severance or other agreements and any benefit plan, which results in payments
to the counterparty or the acceleration of vesting of benefits.


 
















 


5.7           Approval of Non-Voting
Common Stock. If at any time the Corporation’s Board of
Directors recommends (i) the amendment and/or restatement of the Articles
to create and authorize the Non-Voting Common (as defined in the Exchange
Proceedures set forth in Exhibit D hereto) (the “Non-Voting Common
Proposal”) or (ii) the approval of the Share Exchange (the “Exchange
Proposal” and collectively with the Non-Voting Common Proposal, each a “Proposal”),
and submits a Proposal for the approval of the shareholders of the Corporation
then entitled to vote thereon, then each Purchaser shall vote, or cause to be
voted, all of the capital stock of the Corporation entitled to vote thereon and
then beneficially held by such Purchaser, in favor of such Proposal, at any applicable
meeting or by written consent of the shareholders of the Corporation.


 


5.8           Other Issuances Prior to
Closing.  Until the
earlier to occur of (i) the completion of Closing, or (ii) the
termination of this Agreement, the Corporation shall not issue any additional
shares of Common Stock or other securities which provide the holder thereof the
right to convert such securities into shares of Common Stock, other than such
issuances, if any, as are expressly disclosed to Purchaser in this Agreement or
a Schedule hereto or pursuant to Incentive Plans (as defined in Section 5.11).  Notwithstanding the foregoing, the
Corporation is authorized to issue up to 380,952 shares of Common Stock to
other “accredited investors,” in a manner that shall not impair the registration
exemption of the offer, purchase and sale of the Purchased Shares under federal
or state law, at a price not less than $5.25 per share, and on terms not more
favorable to the investors than the terms of this Agreement (the “Other
Issuances”).  The Corporation represents
and warrants to Purchaser that Schedule 5.8
sets forth the names of each investor, the amount and types of the Corporation
securities being sold to each investor, and the offering price, for the Other
Issuances.  The Corporation agrees to
deliver to Purchaser complete copies of all agreements with any purchasers in
the Other Issuances, a reasonable time prior to Closing to permit Purchaser to
verify compliance with the provisions of this Section.  Corporation and its agents have not taken and
will not take any action that would be the primary cause of Purchaser being
deemed to be affiliated with or “acting in concert” with any such other
investors as such term is defined under the Change in Bank Control Act, the BHC
Act, the California CIBC Law or other applicable law or regulations.


 


5.9           Management Rights.


 


(a) On
the date of this Agreement, the Corporation and Purchaser are entering into a
management rights agreement in the form of Exhibit C
attached to and made part of this Agreement.


 


(b) The
rights provided by this Section are personal to the Purchaser and in no
event shall such rights be assignable.


 


5.10         Registration
Rights.


 


(a) Defined
Terms.  In this Section, the term “Purchaser”
means each Purchaser severally.  The
following terms when used in this Section have the following respective
meanings:


 

















 


“Affiliate”
means, with respect to any Person, any other Person directly or indirectly
controlling, controlled by, or under direct or indirect common control with,
such Person. For the purposes of this definition, “control” with respect to any
Person means the power to direct the management and policies of such Person,
directly or indirectly, by or through stock ownership, agency or otherwise, or
pursuant to or in connection with an agreement, arrangement or understanding
(written or oral) with one or more other Person; and the terms “controlling”
and “controlled” shall have meanings correlative to the foregoing; and the
terms “controlling” and “controlled” have meanings correlative to the
foregoing.


 


“Corporation
Shares” means and includes the Common Stock (as designated in the Articles),
any shares of the Corporation’s Common Stock into which any Series B
Preferred Stock shall have converted at or prior to the Registration Deadline,
and any shares of the Corporation’s voting common stock issued or issuable in
respect of or in exchange for any of the foregoing.


 


“Business
Day” means any day other than a Saturday, Sunday or a day on which banks are
authorized or required to be closed for business in either New York City, New
York, or Philadelphia, Pennsylvania.


 


“1934
Act” means the U.S. Securities 1934 Act of 1934, as from time to time amended,
and the rules and regulations of the SEC promulgated thereunder.


 


“Holder”
means a holder of a Registrable Security, and “Holders” means such holders
collectively.


 


“Person”
means natural persons, corporations, limited liability companies, trusts, joint
ventures, associations, companies, partnerships, governments or agencies or
political subdivisions thereof and other political or business entities.


 


“Prospectus”
means the prospectus included in any Registration Statement, as amended or
supplemented by any prospectus supplement with respect to the terms of the
offering of any portion of the Registrable Securities covered by such
Registration Statement or any other amendments and supplements to such
prospectus, including without limitation any preliminary prospectus, any
pre-effective or post-effective amendment and all material incorporated by reference
in any prospectus.


 


“Registrable
Securities” means the Corporation Shares or shares of common stock issued or
issuable by the Corporation in respect of or in exchange for the Corporation
Shares. As to any particular Registrable Securities, once issued such
securities shall cease to be Registrable Securities when (i) a
Registration Statement with respect to the sale of such securities shall have
become effective under the 1933 Act and such securities shall have been
disposed of in accordance with such Registration Statement, (ii) such
securities shall have been sold to the public pursuant to Rule 144 (or any
successor provision) under the 1933 Act, (iii) such securities shall have
ceased to be outstanding, or (iv) such securities may be sold in the public
market of the United States, in unlimited amounts and without the requirement
for the Corporation to be in compliance with the current public information
required under Rule 144, under Rule 144, without registration under
the 1933 Act.


 

















 


“Registration”
means the registration of the Registrable Securities as described in paragraph
(b)(i) of this Section.


 


“Registration
Deadline” has the meaning assigned to that term in paragraph (b)(i).


 


“Registration
Expenses” has the meaning set forth in paragraph 5 of this Section.


 


“Registration
Statement” means any registration statement of the Corporation which covers
Registrable Securities pursuant to the provisions of this Agreement, all
amendments and supplements to such registration statement, including post-effective
amendments, and all exhibits and all material incorporated by reference in such
registration statement.


 


(b) Registration.


 


(i) Requirement
for Registration. On or prior to that date (the “Registration Deadline”)
that is six (6) months after the Closing Date, the Corporation agrees to
file the Registrable Securities for registration for sale under the 1933 Act
and to cause such Registration Statement to be declared effective, subject to
the provisions of this Section and to the Purchaser’s compliance with
Purchaser’s obligations under the provisions of this Section.  Subject to the other provisions of this
Section, the Corporation shall be obligated to provide Registration regardless
of whether an underwritten offering is undertaken in connection with the
Registration.  The Corporation shall use
its commercially reasonable efforts to cause the registration to remain
effective until the later of (i) the expiration of any limitations on sale
of the Registrable Securities by the Purchaser under Rule 144 and without
the requirement for the Corporation to be in compliance with the current public
information required under Rule 144 or, if earlier, the sale of all the
Registrable Securities by the Purchaser under Rule 144, or (ii) the
date on which all of the Registrable Securities covered thereby are disposed of
under the Registration Statement in accordance with any method or methods of
disposition stated therein. 
Notwithstanding anything to the contrary in this paragraph, the
Corporation shall not be required to register any Registrable Securities
pursuant to this paragraph during any period (not to exceed 180 days) following
the closing of the completion of a distribution of securities offered by the
Corporation that would cause the Corporation to breach a lock-up provision
contained in the underwriting agreement for such distribution, and in such
event the “Registration Deadline” shall be deemed automatically extended for
such period.


 


(ii) Number
and Timing of Registrations. Notwithstanding anything in this paragraph to
the contrary: (A) provided the Corporation complies with its obligations
under this Section, the Purchaser shall have no other right to demand
Registration, and (B) the Corporation shall not be obligated to make a
Registration in the event that a Piggy-back Registration is available to
Purchaser on or prior to the Registration Deadline.


 

















 


(iii) Suspension
of Registration. Notwithstanding the foregoing, if (a) an “Interruption
Event” (as described in paragraph (b)(iv) occurs, or (b) in the good
faith judgment of the Board of Directors of the Corporation it would be
materially detrimental to the Corporation and its stockholders for any
Registration Statement to be filed or for any Registration Statement or
Prospectus to be amended or supplemented because such filing, amendment or
supplement would (i) require disclosure of material non-public
information, the disclosure of which would be reasonably likely to materially
and adversely affect the Corporation and its subsidiaries (if any) taken as a
whole, or (ii) materially interfere with any existing or prospective
business situation, transaction or negotiation involving the Corporation; then
in either such event the Corporation shall have the right to suspend the use of
the applicable Registration Statement or delay delivery or filing, but not the
preparation, of the applicable Registration Statement or Prospectus or any
document incorporated therein by reference, in each case for a reasonable
period of time; provided, however, that the Corporation shall not
be able to exercise such suspension right more than twice in each 12-month
period aggregating not more than 150 days in such 12-month period. In the event
that the ability of the Purchaser to sell shall be suspended pursuant to the
foregoing, the period of such suspension shall not count towards compliance
with the 60-day period referred to under clause (i) of paragraph (b)(i) of
this Agreement.


 


(iv) Interrupted
Registration. Notwithstanding any other provision of this Section, the
Registration Deadline shall be extended if, for reasons beyond the reasonable
control of the Corporation, any of the following (an “Interruption Event”)
shall occur: (i) the SEC refuses to declare a Registration effective; (ii) if
after it has become effective, such registration is interfered with by any stop
order, injunction or other order or requirement of the SEC such that the
Registration Statement shall not be effective; or (iii) if the conditions
to closing specified in the underwriting agreement, if any, entered into in
connection with such registration are not satisfied and are not otherwise
waived.  If an Interruption Event occurs,
the Registration Deadline shall automatically be extended until sixty (60) days
after all Interruption Events shall have ceased.


 


(c) Piggy-back
Registrations.


 


(i) Right
to Include Registrable Securities. If at any time the Corporation proposes
to register (including for this purpose a registration effected by the
Corporation for security holders of the Corporation other than Purchaser) any
Registrable Securities and to file a Registration Statement with respect
thereto under the 1933 Act, whether or not for sale for its own account (other
than pursuant to (i) paragraph (b)(i), or (ii) a registration
statement on Form S-4, Form S-8 or any successor or similar forms, in
a manner that would permit registration of Registrable Securities for sale to
the public under the 1933 Act (a “Public Offering”), the Corporation will each
such time promptly give written notice to the Purchaser (i) of its
intention to do so, (ii) of the form of registration statement of the SEC
that has been selected by the Corporation and (iii) of rights of Purchaser
under this paragraph (the “paragraph 3 Notice”). The Corporation will include
in the case of a proposed Public Offering all Registrable Securities that the
Corporation is requested in writing, within 15 days after the paragraph 3
Notice is given, to register by the Purchaser thereof (a “Piggy-back
Registration”); provided, however, that (x) if, at any time
after giving written notice of its intention to register any Registrable
Securities and prior to the effective date of the Registration Statement filed
in connection with such registration, the Corporation shall determine that none
of such Registrable Securities shall be registered, the Corporation may, at its
election, give written notice of such determination to Purchaser if 


 

















 


Purchaser
shall have requested registration and, thereupon, shall be relieved of its
obligation to register any Registrable Securities in connection with such
abandoned registration, and (y) in case of a determination by the
Corporation to delay registration of Registrable Securities, the Corporation
shall be permitted to delay the registration of such Registrable Securities pursuant
to this paragraph for the same period as the delay in registering such other
Registrable Securities by the Corporation, as the case may be or may abandon
the registration of Registrable Securities, in the sole discretion of the
Corporation.  No registration effected
under this paragraph shall relieve the Corporation of its obligations to effect
registrations under paragraph 2.


 


(ii) Priority;
Registration Form. If the managing underwriter(s) for a registration
in which Registrable Securities are proposed to be included pursuant to this
paragraph that involves an underwritten offering shall advise the Corporation
in writing in good faith that in its opinion, the number of Registrable
Securities to be sold for the account of persons other than the Corporation
(collectively, “Selling Stockholders”) is greater than the amount that can be
offered without adversely affecting the success of the offering (taking into
consideration the interests of the Corporation and the Purchaser), then the
number of Registrable Securities to be sold for the account of Selling
Stockholders (including Purchaser) may be reduced to a number that, in the
opinion of the managing underwriter(s), may reasonably be sold without having
the adverse effect referred to above. The reduced number of Registrable
Securities that may be registered shall be allocated in the following priority:
first, to Registrable Securities proposed to be registered for offer and sale
by the Corporation; second, to Registrable Securities proposed to be registered
pursuant to any registration rights of third parties; third, to Registrable
Securities proposed to be registered pursuant to any piggy-back registration
rights under any other agreements ; and, fourth, to Registrable Securities
proposed to be registered by Purchaser as a Piggy-back Registration. The
reduced number of Registrable Securities that may be registered pursuant to
this paragraph (c)(ii) shall be allocated pro rata among the Purchaser and
any other Holders participating in the Piggy-back Registration, based on the
number of Registrable Securities beneficially owned by the respective Holders.
If, as a result of the proration provisions of this paragraph (c)(ii),
Purchaser shall not be entitled to include all Registrable Securities in a
registration pursuant to this paragraph that Purchaser has requested be
included, Purchaser may elect to withdraw its Registrable Securities from the
registration.


 


(iii) Merger,
Consolidation, etc. Notwithstanding anything in this paragraph to the
contrary, Purchaser shall not have any right to include Registrable Securities
in any distribution or registration which is pursuant to a merger,
amalgamation, consolidation, acquisition, exchange offer, sale of Registrable
Securities issuable or issued upon exchange, conversion or sale of the
Corporation Shares or other Registrable Securities, recapitalization, other
reorganization, dividend reinvestment plan, stock option plan or other employee
benefit plan, or any similar transaction having similar effect.


 


(d) Registration
Procedures.


 


(i) Use
Reasonable Best Efforts. In connection with the Corporation’s registration
obligations pursuant to subsections (b) and (c) of this Section, the
Corporation shall use its reasonable best efforts to effect such registrations
to permit the sale of such Registrable Securities in accordance with the
intended method or methods of disposition thereof and:


 

















 


(1) to prepare and file with the SEC a
Registration Statement relating to the registration on any appropriate form
under the 1933 Act, and to cause such Registration Statement to become
effective as soon as reasonably practicable and to remain continuously
effective for the time period required by this Agreement to the extent
permitted under the 1933 Act;


 


(2) to prepare and file with the SEC such
amendments and post-effective amendments to each Registration Statement as may
be necessary to keep such Registration Statement effective for the applicable
period set forth in paragraph (b)(i); and to cause the Registration Statement
and the related Prospectus to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed in accordance with the 1933 Act
and any rules and regulations promulgated thereunder; and otherwise to
comply with the provisions of the 1933 Act as may be necessary to facilitate
the disposition of all Registrable Securities covered by such Registration
Statement during the applicable period in accordance with the intended method
or methods of disposition by the Purchaser thereof set forth in such
Registration Statement or such Prospectus or Prospectus supplement;


 


(3) to notify the Purchaser if it is selling
Registrable Securities and the managing underwriter(s), if any, promptly if at
any time (A) any Prospectus, Registration Statement or amendment or
supplement thereto is filed, (B) any Registration Statement, or any
post-effective amendment thereto, becomes effective, (C) the SEC requests
any amendment or supplement to, or any additional information in respect of,
any Registration Statement or Prospectus, (D) the SEC issues any stop
order suspending the effectiveness of a Registration Statement or initiates any
proceedings for that purpose, (E) the Corporation receives any notice that
the qualification of any Registrable Securities for sale in any jurisdiction
has been suspended or that any proceeding has been initiated for the purpose of
suspending such qualification, or (F) upon the discovery, or upon the
occurrence of any event, which requires that any changes be made in such
Registration Statement or any related Prospectus so that such Registration
Statement or Prospectus will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, in light of the
circumstances under which they were made; provided, however, that
in the case of this subclause (vi), such notice need only state that an event
of such nature has occurred, without describing such event;


 


(4) to make every reasonable effort to obtain
the withdrawal of any order suspending the effectiveness of a Registration
Statement, or the qualification of any Registrable Securities for sale in any
jurisdiction, at the earliest reasonably practicable moment;


 


(5) if requested by the managing underwriter(s) or
any Holder of Registrable Securities being sold in connection with an
underwritten offering, to incorporate into a Prospectus supplement or a
post-effective amendment to the Registration Statement any information which
the Corporation and such Purchaser reasonably agree is required to be included
therein relating to such sale of Registrable Securities; and to file such
supplement or post-effective amendment as soon as practicable in accordance
with the 1933 Act;


 

















 


(6) to furnish to each Purchaser and each
managing underwriter, if any, one signed copy of the Registration Statement and
any post-effective amendment thereto, including all financial statements and
schedules thereto, all documents incorporated therein by reference and all
exhibits thereto (including exhibits incorporated by reference) as promptly as
practicable after filing such documents with the SEC;


 


(7) if Registrable Securities being sold in
connection with an underwritten offering, to deliver to Purchaser and each
underwriter, if any, as many copies of the Prospectus or Prospectuses
(including each preliminary Prospectus) and any amendment, supplement or
exhibit thereto as such Persons may reasonably request; and to consent to the
use of such Prospectus or any amendment, supplement or exhibit thereto by
Purchaser and underwriter, if any, in connection with the offering and sale of
the Registrable Securities covered by such Prospectus, amendment, supplement or
exhibit in each case in accordance with the intended method or methods of
disposition thereof;


 


(8) prior to any public offering of Registrable
Securities, to register or qualify, or to cooperate with the Purchaser, the
underwriter(s), if any, and their respective counsel in connection with the
registration or qualification of, such Registrable Securities for offer and
sale under the securities or blue sky laws of such jurisdictions as may be
requested by the Holders of a majority of the Registrable Securities included
in such Registration Statement; to keep each such registration or qualification
effective during the period set forth in paragraph (b)(i) that the
applicable Registration Statement is required to be kept effective; and to do
any and all other acts or things necessary to enable the disposition in such
jurisdictions of the Registrable Securities covered by such Registration
Statement; provided, however, that the Corporation will not be
required to qualify generally to do business in any jurisdiction where it is
not then so qualified or to take any action which would subject it to general
service in any jurisdiction where it is not then so subject;


 


(9) to cooperate with the Purchaser and the
underwriter(s), if any, in the preparation and delivery of certificates
representing the Registrable Securities to be sold, such certificates to be in
such denominations and registered in such names as Purchaser or managing
underwriter(s) may request at least five (5) Business Days prior to
any sale of Registrable Securities represented by such certificates;


 


(10) subject to paragraph (d)(iii) hereof,
upon the occurrence of any event described in clause (F) of subparagraph
(d)(i)(3) above, to prepare and file a supplement or post-effective
amendment to the applicable Registration Statement or Prospectus or any document
incorporated therein by reference, and any other required documents, so that
such Registration Statement and Prospectus will not thereafter contain an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading, in light of the
circumstances under which they were made, and to cause such supplement or
post-effective amendment to become effective as soon as practicable;


 

















 


(11) to take all other actions in connection
therewith as are reasonably necessary or desirable in order to expedite or
facilitate the disposition of the Registrable Securities included in such
Registration Statement and, in the case of an underwritten offering: (i) to
enter into an underwriting agreement in customary form with the managing
underwriter(s) (such agreement to contain standard and customary
indemnities, representations, warranties and other agreements of or from the
Corporation, as the case may be); (ii) to obtain opinions of counsel to
the Corporation (which (if reasonably acceptable to the underwriter(s)) may be
the Corporation’s inside counsel) addressed to the underwriter(s), such
opinions to be in customary form; and (iii) to obtain “comfort” letters
from the Issuer’s or the Corporation’s independent certified public accountants
addressed to the underwriter(s), such letters to be in customary form;


 


(12) to consider in good faith any reasonable
request of Purchaser and underwriters for the participation of management of
the Corporation in “road shows” and similar sales events; and


 


(13) reasonably cooperate with Purchaser and each
underwriter or agent participating in the disposition of such Registrable
Securities and their respective counsel, in connection with any filings
required to be made by the Financial Industry Regulatory Authority.


 


(14)  in
connection with the filing of a Registration Statement hereunder or any
amendment or supplement  to a
Registration Statement or Prospectus hereunder, the Corporation shall, not less
than three (3) business days prior to such filing, furnish to the
Purchaser copies of such Registration Statement, Prospectus or amendment or
supplement thereto, as proposed to be filed, which documents will be subject to
the review of the Purchaser (it being acknowledged and agreed that if the
Purchaser does not object to or comment on the aforementioned documents within
such three (3) business day period, then the Purchaser shall be deemed to
have consented to and approved the use of such documents).  The Corporation shall not file any
Registration Statement or amendment or supplement thereto in a form to which
the Purchaser reasonably objects in good faith, provided that, the Corporation
is notified of such objection in writing within the three (3) business day
period described above.


 


(ii) Purchaser’s
Obligation to Furnish Information and Cooperate. If a registration is being
effected with respect to any Registrable Securities for which the Purchaser is
a Holder, Purchaser shall, promptly on the Corporation’s request, (i) furnish
to the Corporation such information regarding the Purchaser, the Registrable
Securities held by the Purchaser, the manner of holding any interests therein,
and distribution of such Registrable Securities, as the Corporation may from
time to time reasonably request in writing, and (ii) provide such consents
as the Corporation may reasonably require with respect to disclosure of the
content of the disclosures and any identification of the Purchaser or its
Registrable Shares or the circumstances in which they are held.


 

















 


(iii) Suspension
of Sales Pending Amendment of Prospectus. Purchaser shall, upon receipt of
any notice from the Corporation of the happening of any event of the kind
described in clauses (A)-(F) of subparagraph (d)(i)(3) above, suspend
the disposition of any Registrable Securities covered by such Registration
Statement or Prospectus until such Purchaser’s receipt of the copies of a
supplemented or amended Prospectus or until it is advised in writing by the
Corporation that the use of the applicable Prospectus may be resumed, and, if
so directed by the Corporation such Purchaser will deliver to the Corporation
all copies, other than permanent file copies, then in such Purchaser’s
possession of any Prospectus covering such Registrable Securities. If the
Corporation shall have given any such notice during a period when a
Registration is in effect, the 60-day period described in paragraph (b)(i) shall
be extended by the number of days of such suspension period.


 


(e) Registration
Expenses. Except as otherwise expressly provided herein to the contrary,
the Corporation will bear all expenses incident to the Corporation’s
performance of or compliance with its obligations under this Section 5.10,
including without limitation all (i) registration and filing fees, (ii) fees
and expenses of compliance with securities or blue sky laws, (iii) printing
expenses, (iv) fees and disbursements of its counsel and its independent
certified public accountants (including the expenses of any special audit or “comfort”
letters required by or incident to such performance or compliance), (v) securities
acts liability insurance (if the Corporation elects to obtain such insurance)
and (vi) the expenses and fees for listing securities to be registered on
each securities exchange on which Securities are then listed (all such expenses
being herein referred to as “Registration Expenses”); provided, however,
that Registration Expenses borne by the Corporation shall not include any
underwriting discounts, commissions or fees attributable to the sale of the
Purchaser’s Registrable Securities or the fees and expenses of counsel for the
Purchaser, which underwriting discounts, commissions, fees and expenses of
counsel shall in all cases be borne solely by the Purchaser, and, provided,
further that the Purchaser will bear all its other expenses incurred in
fulfilling its obligations under this Agreement.


 


(f) Indemnification.


 


(i) Indemnification
by the Corporation.  In the event of
any registration of any securities of the Corporation under the 1933 Act
pursuant to subsection (b) or (c) of this Section, the Corporation
will, and hereby does, indemnify and hold harmless Purchaser, its directors,
officers and agents and each other Person, if any, who controls Purchaser
within the meaning of paragraph 15 of the 1933 Act (Purchaser and such other
Persons, collectively, “Purchaser Covered Persons”), against any and all
out-of-pocket losses, claims, damages, liabilities and expenses (including
reasonable attorneys’ fees and expenses) actually incurred by such Purchaser
Covered Person under the 1933 Act, common law or otherwise (collectively, “Damages”),
to the extent that such Damages (or actions or proceedings in respect thereof)
arise out of or result from (i) any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement under
which such securities were registered under the 1933 Act or the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, or (ii) any untrue statement
or alleged untrue statement of a 


 

















 


material
fact contained in any preliminary Prospectus, together with the documents
incorporated by reference therein (as amended or supplemented if the
Corporation shall have filed with the SEC any amendment thereof or supplement
thereto), if used prior to the effective date of such Registration Statement,
or contained in the Prospectus, together with the documents incorporated by
reference therein (as amended or supplemented if the Corporation shall have
filed with the SEC any amendment thereof or supplement thereto), or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading; provided,
however, that the Corporation shall not be liable to any Purchaser
Covered Person in any such case to the extent that any such Damage (or action
or proceeding in respect thereof) arises out of or relates to any untrue
statement or alleged untrue statement or omission or alleged omission made in
such Registration Statement or amendment thereof or supplement thereto or in
any such preliminary, final or summary Prospectus in reliance upon and in
conformity with written information furnished to the Corporation by or on
behalf of any such Purchaser Covered Person, specifically for use in the
preparation thereof.


 


(ii) Indemnification
by the Selling Purchaser. In consideration of the Corporation including any
Registrable Securities of Purchaser in any Registration Statement filed in
accordance with subsection (b) or (c) of this Section, Purchaser
shall be deemed to have agreed to indemnify and hold harmless, jointly and
severally (in the same manner and to the same extent as set forth in paragraph (a) of
this Section) the Corporation, its directors, officers, managing directors and
agents and each Person controlling the Corporation within the meaning of
paragraph 15 of the 1933 Act (each, a “Corporation Covered Person”) against any
and all Damages, to the extent that such Damages (or actions or proceedings in
respect thereof) arise out of or are related to any statement or alleged
statement in or omission or alleged omission from such Registration Statement,
any preliminary, final or summary Prospectus contained therein, or any
amendment or supplement, if such statement or alleged statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Corporation or its representatives by or on behalf
of Purchaser specifically for use in the preparation of such Registration
Statement, preliminary, final or summary Prospectus or amendment or supplement;
provided however, that the total amounts payable in indemnity by the Purchaser
under this Section 5.10(f)(ii) shall not exceed the net proceeds
received by the Purchaser in the registered offering out of which such
indemnification arises. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the Corporation or any
of its directors, officers or controlling Persons. The Corporation may require
as a condition to its including Registrable Securities in any Registration
Statement filed hereunder that Purchaser acknowledge its agreement to be bound
by the provisions of this Section (including without limitation this
subsection (f)) applicable to it.


 


(iii) Notices
of Claims. Promptly after receipt by a Purchaser Covered Person or a
Corporation Covered Person (each, an “Indemnified Party”) of written notice of
the commencement of any action or proceeding with respect to which a claim for
indemnification may be made pursuant to this paragraph, such Indemnified Party
will, if a claim in respect thereof is to be made against, respectively, the
Corporation, on the one hand, or Purchaser, on the other hand (such Person or
Persons, the “Indemnifying Party”), give written notice to the latter of the
commencement of such action; provided, however, that the failure
of any Indemnified Party


 
















 


to
give notice as provided herein shall not relieve the Indemnifying Party of its
or their obligations under this paragraph, except to the extent that the
Indemnifying Party is actually materially prejudiced by such failure to give
notice, and in no event shall such failure relieve the Indemnifying Party from
any other liability which it may have to such Indemnified Party. If any such
claim or action shall be brought against an Indemnified Party, and it shall
notify the Indemnifying Party thereof, the Indemnifying Party shall be entitled
to participate therein, and, to the extent that it wishes, to assume the
defense thereof with counsel reasonably satisfactory to the Indemnified Party,
and after notice from the Indemnifying Party to such Indemnified Party of its
election to assume the defense thereof, the Indemnifying Party shall not be
liable to such Indemnified Party under this paragraph for any legal or other
expenses subsequently incurred by such Indemnified Party in connection with the
defense thereof, other than reasonable cost of investigation; provided, further,
that if, in the Indemnified Party’s reasonable judgment, a conflict of interest
between the Indemnified Party and the Indemnifying Party exists in respect of
such claim, then such Indemnified Party shall have the right to participate in
the defense of such claim and to employ one firm of attorneys at the
Indemnifying Party’s expense to represent such Indemnified Party. No
Indemnified Party will consent to entry of any judgment or enter into any
settlement without the Indemnifying Party’s written consent to such judgment or
settlement, which shall not be unreasonably withheld. No Indemnifying Party
shall, without the prior written consent of the Indemnified Party, consent to
entry of any judgment or enter into any settlement in respect of which the
Indemnified Party is or could have been a party and indemnity could have been
sought hereunder by such Indemnified Party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability arising out
of such claim or proceeding.


 


(iv) Contribution.
If the indemnification provided for in this paragraph is unavailable or
insufficient to hold harmless an Indemnified Party under this paragraph, then
each Indemnifying Party shall have a joint and several obligation to contribute
to the amount paid or payable by such Indemnified Party as a result of the
Damages referred to in this paragraph in such proportion as is appropriate to
reflect the relative fault of the Indemnifying Party on the one hand and the
Indemnified Party on the other hand in connection with the offering which
resulted in such Damages, as well as any other relevant equitable
considerations. The relative fault shall be determined by reference to, among
other things, whether an untrue or alleged untrue statement of a material fact
or an omission or alleged omission to state a material fact relates to
information supplied by the Indemnifying Party or the Indemnified Party and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statements or omission. The Corporation and the
Purchaser (in consideration of the Corporation’s including any Registrable
Securities in any Registration Statement filed in accordance with subsection (b) or
(c) of this Section) shall be deemed to have agreed, that it would not be
just and equitable if contributions pursuant to this paragraph were to be
determined by pro rata allocation or by any other method or allocation which
does not take account of the equitable considerations referred to in the first
sentence of this paragraph. The amount paid by an Indemnified Party as a result
of the Damages referred to in the first sentence of this paragraph shall be
deemed to include any legal or other expenses reasonably incurred by such
Indemnified Party in connection with investigating or defending any action or
claim (which shall be limited as provided in paragraph (f)(iii) if the
Indemnifying Party has assumed the defense of any such action accordance with
the provisions thereof) which is the subject of this paragraph (f)(iv).  Notwithstanding the provisions 


 

















 


of
this Section 5.10(f)(iv), the Purchaser shall not be required to
contribute, in the aggregate, an amount in excess of the amount by which the
net proceeds actually received by the Purchaser for the sale of Registrable
Securities in the registered offering exceeds the amount of damages that the
Purchaser has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission.  No Person guilty of fraudulent
misrepresentation (within the meaning of paragraph 11(f) of the 1933 Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. Promptly after receipt by an Indemnified Party
under this paragraph of notice of the commencement of any action against such
party in respect of which a claim for contribution has been made against an
Indemnifying Party under this paragraph, such Indemnified Party shall notify
the Indemnifying Party in writing of the commencement thereof if the notice
specified in paragraph (f)(iii) has not been given with respect to such
action; provided, however, that the omission so to notify the
Indemnifying Party shall not relieve the Indemnifying Party from any liability
which it may have to any Indemnified Party otherwise under this paragraph,
except to the extent that the Indemnifying Party is actually materially
prejudiced by such failure to give notice, and in no event shall such failure
relieve the Indemnifying Party from any other liability which it may have to
such Indemnified Party.


 


(g) Rule 144.
The Corporation shall file the reports required to be filed by it under the
1933 Act and the 1934 Act and the rules and regulations promulgated
thereunder, so long as it is subject to such reporting requirements, all to the
extent required from time to time to enable Purchaser to sell Registrable
Securities without registration under the 1933 Act within the limits of the
exemptions provided by Rule 144 of the 1933 Act (“Rule 144”).


 


(h) Underwritten
Registrations.


 


(i) Selection
of Underwriter(s). In each registration under subsection (b) or (c) of
this Section, the underwriter or underwriters and managing underwriter or
managing underwriters that will administer the offering shall be selected by
the Corporation.


 


(ii) Agreements
of Selling Purchaser. Purchaser shall not sell any of its Registrable
Securities in any underwritten offering pursuant to a registration hereunder
unless Purchaser (i) agrees to sell such Registrable Securities on a basis
provided in any underwriting agreement in customary form, including the making
of customary representations, warranties and indemnities and (ii) completes
and executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents required under the terms of such underwriting
agreements or as reasonably requested by the Corporation (whether or not such
offering is underwritten).


 


(j) Transferability.
The rights of Purchaser under this Section and the right to cause the
Corporation to register Registrable Shares under this Section may be
assigned by Purchaser to a transferee or assignee of any Registrable
Securities; provided, however, that prior to the receipt by the
Corporation of adequate written notice of the transfer of any Registrable
Securities specifying the full name and address of the transferee, the
Corporation may deem and treat the person listed as the holder of such
Registrable Securities in its records as the absolute owner and holder of such
Registrable Securities for all purposes.


 

















 


5.11         Additional Purchases. In the event that the
Corporation issues additional shares of Common Stock (or securities convertible
into Common Stock) (“Additional Shares”) following the Closing Date (Additional
Shares shall not include issuances of Common Stock, (i) to employees,
officers, director, and consultants of the Corporation, pursuant to its
currently existing warrant, stock option, stock appreciation rights and
restricted stock plan (“Incentive Plans”), if any (“Plan Issuances”), (ii) in
an Acquisition Transaction, or (iii) issued as a dividend on the Common
Stock or as a result of a stock split of the Common Stock (“Dividend Issuances”))
the Purchaser shall have the right to purchase directly from the Corporation,
subject to compliance with any applicable provision of California law and the
approval or non-objection of the Federal Reserve, the Department and/or the
FDIC, if required, additional shares of Common Stock (or securities convertible
into Common Stock) in an amount necessary to maintain its ownership percentage
of the Common Stock at the same level as it was immediately subsequent to the
Closing Date, at the same price and on the same terms as the Additional Shares
are issued (“Purchaser Additional Shares Purchase Right”); provided, however, the Purchaser
Additional Shares Purchase Right shall expire the earlier to occur of (i) as
a direct result of a transfer of Common Stock by a Purchaser, Patriot’s
aggregate economic interests in the Corporation is reduced to less than 7.0% of
the issued and outstanding shares of Common Stock of the Corporation (for such
purpose any Preferred Shares shall be deemed economic interests equal to the
number of shares of Non-Voting Common Stock into which the Preferred Shares are
convertible), or (ii) the passage of five (5) years subsequent to the
Closing Date; provided, further
that the Purchaser Additional Shares Purchase Right shall be reduced to the extent
necessary to prevent the exercise thereof requiring the Corporation to obtain
stockholder approval of such exercise in order to comply with the listing
requirements of the NASDAQ Stock Market. 
For purposes of this Section, “Acquisition Transaction” means any
transaction entered into by the Corporation relating to any acquisition or
purchase thereby of all or substantially all of the business, properties or
assets of, or any equity interest in, or any merger, consolidation, business
combination or similar transaction involving, any third party pursuant to which
the Corporation is the surviving entity thereof and its stockholders hold more
than 50% of the issued and outstanding Common Stock upon completion of such
Acquisition Transaction.


 


5.12 Authorization of Uncertificated Shares.  Within six months after the Closing Date, but
in any event prior to the registration of the Purchased Common Shares, the
Corporation shall take and complete all such steps as may be necessary to
authorize and support issuance and transfer of its Common Stock in
uncertificated form.


 


5.13  Securities
Laws Disclosure; Publicity.  By 9:00 a.m.,
New York City time, on the business day immediately following the execution of
this Agreement, the Corporation shall issue one or more press releases (each, a
“Press Release”) reasonably acceptable to the Purchaser disclosing all material
terms of the transactions contemplated hereby. 
On or before 9:00 a.m., New York City time, on the fourth business
day immediately following the execution of this Agreement, the Corporation will
file a Current Report on Form 8-K with the SEC describing the terms of
this Agreement.  Notwithstanding the
foregoing, the Corporation shall not publicly disclose the name of the
Purchaser or any affiliate or investment adviser of the Purchaser, or include
the name of the Purchaser or any affiliate or investment adviser of the
Purchaser in any press release or filing with the SEC or any regulatory agency
or the Nasdaq Capital Market, without the prior written consent of the
Purchaser, except (i) as required by federal securities law in connection
with (A) any registration statement contemplated by the Registration
Rights Agreement and (B) the filing of final transaction documents with
the SEC and (ii) to the extent such disclosure is required by law, at the
request of the staff of the SEC or the Nasdaq Capital Market regulations, in
which case the Corporation shall provide the Purchaser with prior written
notice of such disclosure permitted under this subclause (ii).


 

















 


5.14  Exchange
of Preferred Shares.  Subject to an
in accordance with the Exchange Proceedures set forth in Exhibit D
hereto, the Corporation and each of the Purchasers hereby agree that the
Corporation may elect, in its sole discretion, to cause Purchasers to exchange
all of the then-outstanding Preferred Shares for Non-Voting Common Stock and
that the Purchasers shall cause the Preferred Shares to be so exchanged (the “Share
Exchange”).


 


6.             MISCELLANEOUS


 


6.1           Survival of Provisions.


 


(a) All
statements contained in any officers’ certificates delivered by or on behalf of
the Corporation or its subsidiaries pursuant to this Agreement or in connection
with the Transactions will be deemed representations or warranties of the
Corporation under this Agreement. All representations and warranties contained
in this Agreement made by or on behalf of the Corporation or the Purchaser will
survive the execution and delivery of this Agreement, and the sale and purchase
of the Purchased Shares under this Agreement, and shall expire eighteen (18)
months following the Closing Date (the “Survivial Period”).


 


(b) The
other provisions of this Agreement are intended to survive closing indefinitely
for such respective periods of time as are consistent with the intent of each provision.


 


6.2           Successors and Assigns. This
Agreement shall be binding upon and inure to the benefit of and be enforceable
by or against the respective successors and assigns of the parties hereto.


 


6.3           Notices. Written
notices under this Agreement shall be valid if sent by U.S. Certified Mail
(Return Receipt Requested) or recognized overnight delivery service (with
charges prepaid), or by telecopier facsimile with evidence of successful
transmission to the following respective addresses:


 


	
   

  	
  if to a Purchaser:

  	
  Patriot Financial Partners, L.P.

  	
   

  
	
   

  	
   

  	
  Cira Centre

  	
   

  
	
   

  	
   

  	
  2929 Arch Street

  	
   

  
	
   

  	
   

  	
  Philadelphia, Pennsylvania 19104

  	
   

  
	
   

  	
   

  	
  Attention: James J. Lynch, Managing Partner

  	
   

  
	
   

  	
   

  	
  Facsimile No. (215) 399-4653

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  	
  Stradley Ronon Stevens & Young, LLP

  	
   

  
	
   

  	
   

  	
  30 Valley Stream Parkway

  	
   

  
	
   

  	
   

  	
  Malvern, Pennsylvania 19355

  	
   

  
	
   

  	
   

  	
  Attention: David F. Scranton, Partner

  	
   

  
	
   

  	
   

  	
  Facsimile No. (610) 640-1965

  	
   

  



 


or
at such other address as such Purchaser or its legal counsel may have specified
to the Corporation in writing,


 

















 


	
   

  	
  and if to the Corporation:

  	
   

  	
   

  
	
   

  	
   

  	
  Central Valley Community Bancorp

  	
   

  
	
   

  	
   

  	
  7100 N. Financial Drive, Suite 101

  	
   

  
	
   

  	
   

  	
  Fresno, CA 93720

  	
   

  
	
   

  	
   

  	
  Attention: Daniel J. Doyle

  	
   

  
	
   

  	
   

  	
  President and Chief Executive Officer

  	
   

  
	
   

  	
   

  	
  Facsimile No. (559) 323-3310

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  	
  Downey Brand LLP

  	
   

  
	
   

  	
   

  	
  3425 Brookside Road, Suite A

  	
   

  
	
   

  	
   

  	
  Stockton, CA 95219

  	
   

  
	
   

  	
   

  	
  Attention: James K. Dyer

  	
   

  
	
   

  	
   

  	
  Facsimile No. (209) 473-6455

  	
   

  



 


or
at such other address as the Corporation or its legal counsel may have
specified to the Purchaser in writing. Notices under this Section shall be
deemed given only when actually received.


 


6.4           Governing Law; Service of
Process; Jury Trial.  All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by the internal laws of the State of
California, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of California or any other
jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of California.  Each party hereby irrevocably waives personal
service of process and consents to process being served in any such suit,
action or proceeding by mailing a copy thereof to such party at the address for
such notices to it under this Agreement, by certified or registered first class
mail, postage prepaid, and agrees that such service shall constitute good and
sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to
limit in any way any right to serve process in any manner permitted by law.


 


6.5           Counterparts. This
Agreement may be executed in one or more counterparts and, if executed in more
than one counterpart, the executed counterparts shall each be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.


 


6.6           Headings. The headings
herein are inserted for convenience of reference only and are not intended to
be part of, or to affect the meaning or interpretation of, this Agreement.


 


6.7           Severability. Any provision
of this Agreement that is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any jurisdiction shall
(to the full extent permitted by law) not invalidate or render unenforceable
such provision in any other jurisdiction.


 


6.8.          Expenses.  In the event (i) the Closing occurs, or (ii) the
Transactions contemplated hereof are not consummated other than due to a breach
by Patriot of any of its obligations under this Agreement or the failure of
Patriot to receive, if required, any applicable Non-Control Determinations, the
Corporation will reimburse Patriot for its reasonable documented out-of-pocket
expenses incurred in connection with its due diligence and the preparation and
negotiation of this Agreement and the Transactions contemplated thereby
including, but not limited to, the fees and expenses of counsel incurred by
Patriot and its Affiliates in connection with the transactions contemplated
hereby; provided, that the Corporation shall not
be obligated to reimburse Patriot for total expenses in excess of $50,000.


 

















 


6.9           Construction. Each agreement
contained herein shall be construed (absent express provision to the contrary)
as being independent of each other agreement contained herein, so that
compliance with any one agreement shall not (absent such an express contrary
provision) be deemed to excuse compliance with any other agreement. Where any
provision herein refers to action to be taken by any person or entity, or which
such person or entity is prohibited from taking, such provision shall be
applicable whether such action is taken directly or indirectly by such person
or entity.


 


6.10         Entire Agreement; Amendments.  This Agreement supersedes all other prior
oral or written agreements between the Purchaser, the Corporation, their
affiliates and persons acting on their behalf with respect to the matters
discussed herein, and this Agreement and the instruments referenced herein,
contain the entire understanding of the parties with respect to the matters
covered herein and therein and, except as specifically set forth herein or
therein, neither the Corporation nor the Purchaser makes any representation,
warranty, covenant or undertaking with respect to such matters.  No provision of this Agreement may be amended
other than by an instrument in writing signed by the Corporation and the
Purchaser.  No provision hereof may be
waived other than by an instrument in writing signed by the party against whom
enforcement is sought.


 


6.11         No Third Party Beneficiaries.  This Agreement is intended for the benefit of
the parties hereto and their respective permitted successors and assigns, and
is not for the benefit of, nor may any provision hereof be enforced by, any
other person other than Indemnities.


 


6.12         Indemnification.


 


(a) Subject
to Section 6.1 and in consideration of the Purchaser’s execution and delivery
of this Agreement and acquiring the Purchased Shares thereunder and in addition
to all of the Corporation’s other obligations under this Agreement, the
Corporation shall defend, protect, indemnify and hold harmless the Purchaser
and each of their general and limited partners, members, officers, directors,
and employees and any of the foregoing persons’ agents or other representatives
(including, without limitation, those retained in connection with the
Transactions) (collectively, the “Purchaser Indemnitees”) from and against any
and all actions, causes of action, suits, claims, losses, costs, penalties,
fees, liabilities and damages, and expenses in connection therewith
(irrespective of whether any such Indemnitee (as hereinafter defined) is a
party to the action for which indemnification hereunder is sought), and
including reasonable documented attorneys’ fees and disbursements (the “Indemnified
Liabilities”), incurred by Purchaser Indemnitee as a result of, or arising out
of, or relating to (a) any misrepresentation or breach of any
representation or warranty made by the Corporation in this Agreement or any
other certificate, instrument or document contemplated hereby or thereby, (b) any
breach of any covenant, agreement or obligation of the Corporation contained in
this Agreement or any other 


 

















 


certificate,
instrument or document contemplated hereby or thereby, or (c) any cause of
action, suit or claim brought or made before the expiration of the Survival
Period against such Indemnitee by a third party (including for these purposes a
derivative action brought on behalf of the Corporation) and arising out of or
resulting from the execution, delivery, performance or enforcement of this
Agreement, any other certificate, instrument or document contemplated hereby or
thereby and the Transactions contemplated hereby, except to the extent that any
such cause of action, suit or claim (including any administrative process by
any governmental agency) is based upon actions or omissions of the Indemnitee
or its agents or representatives, including without limitation,  Indemnitee’s violation of any provision of
the BHC Act, the Change in Bank Control Act or any other federal or state
banking law.  To the extent that the
foregoing undertaking by the Corporation may be unenforceable for any reason,
the Corporation shall make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is permissible under
applicable law.


 


(b) Subject
to Section 6.1 and in consideration of the Corporation’s execution and
delivery of this Agreement and issuing the Purchased Shares thereunder and in
addition to all of the Purchaser’s other obligations under this Agreement, the
Purchaser shall defend, protect, indemnify and hold harmless the Corporation
and each of its officers, directors and employees and any of the foregoing
persons’ agents or other representatives (collectively, the “Corporation
Indemnitees” and collectively with the Purchaser Indemnitees, the “Indemnitees”)
from and against any and all Indemnified Liabilities incurred by a Corporation
Indemnitee as a result of, or arising out of, or relating to (a) any
misrepresentation or breach of any representation or warranty made by the
Purchaser in this Agreement or any other certificate, instrument or document
contemplated hereby or thereby, or (b) any breach of any covenant,
agreement or obligation of the Purchaser contained in this Agreement or any
other certificate, instrument or document contemplated hereby or thereby.  To the extent that the foregoing undertaking
by the Purchaser may be unenforceable for any reason, the Purchaser shall make
the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities which is permissible under applicable law.


 


(c) Promptly
after receipt by an Indemnitee under this Section of notice of the
commencement of any action or proceeding (including any governmental action or
proceeding) involving an Indemnified Liability, such Indemnitee shall, if a
claim for indemnification in respect thereof is to be made against any
indemnifying party under this Section, deliver to the indemnifying party a
written notice of the commencement thereof, and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
control of the defense thereof with counsel mutually satisfactory to the
indemnifying party and the Indemnitee; provided,
however, that an Indemnitee shall have the right to retain its own
counsel with fees and expenses of not more than one counsel for such Indemnitee
to be paid by the indemnifying party, only if, in the reasonable opinion of the
Indemnitee, the representation by such counsel of the Indemnitee and the
indemnifying party would be inappropriate due to actual or potential differing
interests between such Indemnitee and any other party represented by such
counsel in such proceeding; and provided, further,
in no event shall the indemnifying party be liable for fees and expenses of
more than one counsel separate from its own counsel for all Indemnitees in
connection with any one action or separate but similar or related actions in
the same jurisdiction arising out of the 


 

















 


same
general allegations or circumstances. The Indemnitee shall cooperate fully with
the indemnifying party in connection with any negotiation or defense of any
such action or Indemnified Liabilities by the indemnifying party and shall
furnish to the indemnifying party all information reasonably available to the
Indemnitee that relates to such action or Indemnified Liabilities.  The indemnifying party shall keep the
Indemnitee fully apprised at all times as to the status of the defense or any
settlement negotiations with respect thereto. 
No indemnifying party shall be liable for any settlement of any action,
claim or proceeding effected without its prior written consent, provided, however, that the indemnifying
party shall not unreasonably withhold, delay or condition its consent.  No indemnifying party shall, without the
prior written consent of the Indemnitee, which consent shall not be
unreasonably withheld conditioned or delayed, consent to entry of any judgment
or enter into any settlement or other compromise which (i) does not include
as an unconditional term thereof the giving by the claimant or plaintiff to
such Indemnitee of a release from all liability in respect to such Indemnified
Liabilities or litigation, (ii) requires any admission of wrongdoing by
such Indemnitee, or (iii) obligates or requires an Indemnitee to take, or
refrain from taking, any action. 
Following indemnification as provided for hereunder, the indemnifying
party shall be subrogated to all rights of the Indemnitee with respect to all
third parties, firms or corporations relating to the matter for which
indemnification has been made.  The
failure to deliver written notice to the indemnifying party within a reasonable
time of the commencement of any such action shall not relieve such indemnifying
party of any liability to the Indemnitee under this Section, except to the
extent that the indemnifying party is prejudiced in its ability to defend such
action.


 


(d) The
indemnification required by this Section shall be made by periodic
payments of the amount thereof during the course of the investigation or
defense, as and when bills are received or Indemnified Liabilities are
incurred.


 


6.13         No Strict Construction.  The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any party.


 


6.14         Payment Set Aside.  To the extent that the Corporation makes a
payment or payments to the Purchaser hereunder or the Purchaser enforces or
exercises its rights hereunder, and such payment or payments or the proceeds of
such enforcement or exercise or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside, recovered from, disgorged
by or are required to be refunded, repaid or otherwise restored to the
Corporation, a trustee, receiver or any other person under any law (including,
without limitation, any bankruptcy law, foreign, state or federal law, common
law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.


 

















 


6.15         Termination.


 


This
Agreement may be terminated, and the Transactions contemplated hereby
abandoned, at any time prior to the Closing Date:


 


(a) by the mutual written consent of the Purchaser and the
Corporation;


 


(b) by either the Purchaser or the Corporation if either (i) any
approval, consent or waiver of a Governmental Authority required to permit
consummation of the Transactions contemplated by this Agreement shall have been
denied or the Purchaser receives written notice from or is otherwise notified
by the Federal Reserve that it will not grant a Non-Control Determination or (ii) any
Governmental Authority of competent jurisdiction shall have issued an order
enjoining or otherwise prohibiting consummation of the Transactions
contemplated by this Agreement; or


 


(c) by
either the Purchaser or the Corporation if the Closing has not occurred on or
before December 31, 2009.


 


[SIGNATURE
PAGE FOLLOWS]


 
















 


IN WITNESS WHEREOF, the
parties have caused this Stock Purchase Agreement to be duly executed and
delivered as of the date first above written.


 


 


	
   

  	
  CENTRAL
  VALLEY COMMUNITY BANCORP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:
  

  	
  Daniel
  J. Doyle

  
	
   

  	
  Title:

  	
  President
  and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PATRIOT
  FINANCIAL PARTNERS, L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
  James
  J. Lynch

  
	
   

  	
  Title:

  	
  Managing
  Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PATRIOT
  FINANCIAL PARTNERS PARALLEL, L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
  James
  J. Lynch

  
	
   

  	
  Title:

  	
  Managing
  Partner

  



 

















 


SCHEDULE 3.1(h)


AUTHORIZED, ISSUED AND OUTSTANDING


CAPITAL STOCK, OPTIONS AND OTHER SECURITIES OF THE
CORPORATION


(Immediately after the Closing)


 

















 


SCHEDULE 4.1(c)


FINANCIAL STATEMENTS AND OTHER MATTERS


 

















 


SCHEDULE 4.1(p)


FINANCIAL ADVISER FEES


 

















 


SCHEDULE 4.1(aa)


REGULATORY AGREEMENTS


 

















 


SCHEDULE 4.1(cc)


REGULATORY MATTERS


 

















 


SCHEDULE 5.8


OTHER ISSUANCES


 

















 


EXHIBIT A


FORM OF CERTIFICATE OF DETERMINATION


 


CERTIFICATE
OF DETERMINATION


 


OF


SERIES
B ADJUSTABLE RATE NON-CUMULATIVE PERPETUAL PREFERRED STOCK


 


OF


 


CENTRAL
VALLEY COMMUNITY BANCORP,


a
California Corporation


 


Pursuant to Section 401
of the Corporations Code of the State of California:


 


We, Daniel J. Doyle, as
President and Chief Executive Officer and Cathy Ponte, as Assistant Secretary,
of Central Valley Community Bancorp, a corporation organized under the laws of
the State of California (hereinafter called the “Corporation”), do hereby
certify as follows:


 


1. On December 16, 2009,
the Board of Directors of the Corporation adopted a resolution designating
1,359 shares of its Preferred Stock as Series B Adjustable Rate Non-Cumulative
Perpetual Preferred Stock.


 


2. No shares of Series B
Adjustable Rate Non-Cumulative Perpetual Preferred Stock have been issued.


 


3. Pursuant to the
authority conferred upon the Board of Directors by the Articles of
Incorporation of the Corporation, as amended, the following resolution was duly
adopted by the Board of Directors on December 16, 2009 creating the series of
Preferred Stock designated as Series B Adjustable Rate Non-Cumulative Perpetual
Preferred Stock:


 


RESOLVED,
that pursuant to
the provisions of the Articles of Incorporation of the Corporation and
applicable law, a series of Preferred Stock of the Corporation be and hereby is
created, and that the designation and number of shares of such series, and the
voting and other powers, preferences and relative, participating, optional or
other rights, and the qualifications, limitations and restrictions thereof, of
the shares of such series are as follows:


 


1. Designation and
Number of Shares. There is hereby created out of the authorized and
unissued shares of Preferred Stock of the Corporation a series of preferred
stock designated as the “Series B Adjustable Rate Non-Cumulative Perpetual
Preferred Stock” (the “Series B Preferred Stock”). The authorized number of
shares of Series B Preferred Stock shall be 1,359.


 


2. Standard Provisions.
The Standard Provisions contained in Exhibit A attached hereto are
incorporated herein by reference in their entirety and shall be deemed to be a
part of this Certificate of Determination to the same extent as if such
provisions had been set forth in full herein.


 


[Remainder of Page Intentionally Left Blank]


 

















 


The undersigned declare
under penalty of perjury under the laws of the State of California that the
matters set forth in the foregoing Certificate of Determination are true and
correct of their own knowledge.


 


Date: December 22, 2009


 


 


	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Daniel J. Doyle

  
	
   

  	
  Title:

  	
  President & Chief
  Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Cathy Ponte

  
	
   

  	
  Title:

  	
  Assistant Secretary

  
	
   

  	
   

  	
   

  



 
















 


EXHIBIT
A


To


CERTIFICATE
OF DETERMINATION


 


STANDARD
PROVISIONS


 


Section 1. Designation
of Series and Number of Shares.


 


(a) The shares of such
series of Preferred Stock shall be designated “Series B Adjustable Rate
Non-Cumulative Perpetual Preferred Stock” (the “Series B Preferred Stock”), and the authorized number of
shares that shall constitute such series shall be 1,359 shares, which may be
decreased (but not below the number of shares of Series B Preferred Stock then
issued and outstanding) from time to time by the Board of Directors. Shares of
outstanding Series B Preferred Stock that are purchased or otherwise acquired
by the Corporation shall be cancelled and, if the Board of Directors so
expressly provides by resolution, shall revert to authorized but unissued
shares of Preferred Stock of the Corporation undesignated as to series;
provided, nevertheless, that, except to the extent a statement of designations
adopted by resolution of the Board of Directors in accordance with applicable
law and the Articles of Incorporation expressly reduces the authorized number
of shares of Series B Preferred Stock, cancelled shares may be reissued as Series
B Preferred Stock up to a maximum aggregate of 1,000 at any time issued and
outstanding as Series B Preferred Stock shall remain 1,000.


 


(b) The number of shares
of Series B Preferred Stock may be increased or decreased (but not below the
number of shares thereof then outstanding) by a further statement of
designations hereafter adopted by resolution of the Board of Directors in
accordance with applicable law and the Articles of Incorporation. In case the
authorized number of shares of Series B Preferred Stock shall be so decreased,
any excess shares shall revert to authorized but unissued shares of preferred
stock of the Corporation undesignated as to series.


 


Section 2. Ranking.
The Series B Preferred Stock will rank, with respect to the payment of
dividends and distributions and upon liquidation, dissolution or winding-up, (1)
on a parity with the Corporation’s Series A Fixed Rate Cumulative Perpetual
Preferred Stock issued on January 30, 2009 (the “EESA
Preferred Shares”), and each class or series of capital stock the
Corporation may issue in the future the terms of which expressly provide that
such class or series will rank on a parity with the Series B Preferred Stock as
to dividend rights and rights on liquidation, winding up or dissolution of the
Corporation (collectively, the “Parity
Securities”), and (2) senior to Common Stock and each other class or
series of capital stock, not referred to in clauses (1) or (2) above, that the
Corporation may issue in the future the terms of which do not expressly provide
that it ranks on a parity with or senior to the Series B Preferred Stock as to
dividend rights and rights on liquidation, winding-up or dissolution of the
Corporation (the “Junior Securities”).


 


Section 3. Definitions.
As used herein with respect to the Series B Preferred Stock:


 


(a) “Articles of Incorporation” shall mean the
articles of incorporation of the Corporation, as they may be amended from time
to time, and shall include this Certificate of Determination.


 


(b) “Board of Directors” means the board of
directors of the Corporation or any committee thereof duly authorized to act on
behalf of such board of directors.


 


(c) “Business Day” means any day that is not
Saturday or Sunday and that, in California, is not a day on which banking
institutions generally are authorized or obligated by law or executive order to
be closed.


 


(d) “Bylaws” means the Amended and Restated
Bylaws of the Corporation, as may be amended from time to time.


 


(e) “Common Stock” means the common stock of
the Corporation.


 


(f) “Corporation” means Central Valley
Community Bancorp, a California business corporation.


 

















 


(g) “Depositary” means DTC or its nominee or
any successor depositary appointed by the Corporation.


 


(h) “Dividend Payment Date” has the meaning set
forth in Section 4(b).


 


(i) “Dividend Period” has the meaning set forth
in Section 4(b).


 


(j) “DTC” means The Depository Trust Company
and its successors or assigns.


 


(k) “Holder” means the Person in whose name the
shares of the Series B Preferred Stock are registered, which may be treated by
the Corporation, Transfer Agent, Registrar, and paying agent as the absolute
owner of the shares of Series B Preferred Stock for the purpose of making
payment and settling the related conversions and for all other purposes.


 


(l) “Issue Date” means the date on which shares
of the Series B Preferred Stock are first issued.


 


(m) “Junior Securities” has the meaning set
forth in Section 2.


 


(n) “Liquidation Preference” means, as to the Series
B Preferred Stock, $1,000.00 per share.


 


(o) “Officer” means the President, the Chief
Executive Officer, the Chief Operating Officer, any Senior Executive Vice
President, any Executive Vice President, any Senior Vice President, the Chief
Financial Officer, the Treasurer or the Secretary of the Corporation.


 


(p) “Officer’s Certificate” means a certificate
of the Corporation, signed by any duly authorized Officer of the Corporation.


 


(q) “Parity Securities” has the meaning set
forth in Section 2.


 


(r) “Person” means a legal person, including
any individual, corporation, estate, partnership, joint venture, association,
joint-stock company, limited liability company or trust.


 


(s) “Record Date” has the meaning set forth in Section
4(b).


 


(t) “Registrar” shall mean the Transfer Agent
acting in its capacity as registrar for the Series B Preferred Stock, and its
successors and assigns or any other registrar duly appointed by the
Corporation.


 


(u) “Certificate of Determination” means this
Certificate of Determination relating to the Series B Preferred Stock, as it
may be amended from time to time.


 


(v) “Transfer Agent” means the Corporation,
acting as Transfer Agent, Registrar, and paying agent for the Series B
Preferred Stock, and its successors and assigns, including any successor
transfer agent appointed by the Corporation. 
The Corporation may act as its own transfer agent.


 


(w) “Voting Preferred Stock” means any and all
series of preferred stock of the Corporation that rank equally with Series B
Preferred Stock either or both as to the payment of dividends and/or the
distribution of assets upon liquidation, dissolution or winding up of the
Corporation and upon which like voting rights have been conferred and are
exercisable.


 


Section 4. Dividends.


 


(a) From and after the
Issue Date, Holders shall be entitled to receive, when, as and if authorized
and declared by the Board of Directors, out of legally available funds, on a
non-cumulative basis, cash dividends in the amount determined as set forth in Section
4(c), and no more.


 

















 


(b) Subject to Section 4(a),
dividends shall be payable in semi-annual installments commencing on the six (6)
month anniversary of the Series B Issuance Date and continuing on each six (6) month
anniversary thereafter (each, a “Dividend
Payment Date”). Each dividend will be payable to Holders of record
as they appear in the stock register of the Corporation at the close of
business on the first day of the month, whether or not a Business Day, in which
the relevant Dividend Payment Date occurs (each, a “Record Date”). Each period from and including a Dividend
Payment Date (or the date of the issuance of the Series B Preferred Stock (the “Series B Issuance Date”)) to but excluding the following
Dividend Payment Date is herein referred to as a “Dividend Period.”


 


(c) Dividends, if, when
and as authorized and declared by the Board of Directors, will be payable, for
each outstanding share of Series B Preferred Stock, at the following respective
rates during each of the following respective periods (each rate expressed as
an annual rate on the $1,000.00 per share liquidation preference):


 


(i) 10%
per annum for the Dividend Period beginning on the Series B Issuance Date and
ending on the six (6) month anniversary of the Series B Issuance Date (the “First Period End Date”);


 


(ii) 15%
per annum for the Dividend Period beginning on the First Period End Date and
ending on the six (6) month anniversary of the First Period End Date (the “Second Period End Date”); and


 


(iii) 20%
per annum for the dividends accruing during all Dividend Periods subsequent to
the Second Period End Date.


 


Dividends payable for a
Dividend Period will be computed on the basis of a 360-day year of twelve
30-day months. If a scheduled Dividend Payment Date falls on a day that is not
a Business Day, the dividend will be paid on the next Business Day as if it
were paid on the scheduled Dividend Payment Date, and no interest or other
amount will accrue on the dividend so payable for the period from and after
that Dividend Payment Date to the date the dividend is paid. No interest or sum
of money in lieu of interest will be paid on any dividend payment on shares of Series
B Preferred Stock paid later than the scheduled Dividend Payment Date.


 


(d) Dividends on the Series
B Preferred Stock are non-cumulative. If the Board of Directors does not
authorize and declare a dividend on the Series B Preferred Stock or if the
Board of Directors authorizes and declares less than a full dividend in respect
of any Dividend Period, the Holders will have no right to receive any dividend
or a full dividend, as the case may be, for the Dividend Period, and the
Corporation will have no obligation to pay a dividend or to pay full dividends
for that Dividend Period, whether or not dividends are authorized, declared and
paid for any future Dividend Period with respect to the Series B Preferred
Stock or the Common Stock or any other class or series of the Corporation’s preferred
stock.


 


(e) So long as any share
of Series B Preferred Stock remains outstanding, (1) no dividend shall be
declared and paid or set aside for payment and no distribution shall be
declared and made or set aside for payment on any Junior Securities (other than
a dividend payable solely in shares of Junior Securities) and (2) no shares of
Junior Securities shall be purchased, redeemed or otherwise acquired for
consideration by the Corporation, directly or indirectly (other than (a) as a
result of a reclassification of Junior Securities for or into other Junior
Securities or the exchange or conversion of one share of Junior Securities for
or into another share of Junior Securities, (b) repurchases in support of the
Corporation’s employee benefit and compensation programs and (c) through the
use of the proceeds of a substantially contemporaneous sale of other shares of
Junior Securities), unless, in each case, the full dividends for the most
recent Dividend Payment Date on all outstanding shares of Series B Preferred
Stock and Parity Securities have been paid or declared and a sum sufficient for
the payment thereof has been set aside.


 


Subject to the succeeding
sentence, for so long as any shares of Series B Preferred Stock remain
outstanding, no dividends shall be declared or paid or set aside for payment on
any Parity Securities for any period unless full dividends on all outstanding
shares of Series B Preferred Stock for the then-current Dividend Period have
been paid in full or declared and a sum sufficient for the payment thereof set
aside for all outstanding shares of Series B Preferred Stock. To the extent the
Corporation declares dividends on the Series B Preferred Stock and on any
Parity Securities but does not make full payment of such declared dividends,
the Corporation shall allocate the dividend payments on a pro rata basis among
the holders of the shares of Series B Preferred Stock and the holders of any
Parity Securities then outstanding. For purposes of calculating the pro rata
allocation of partial dividend payments, the Corporation shall allocate those
payments so that the respective amounts of those payments bear the same ratio
to each other as all accrued and unpaid dividends per share on the Series B
Preferred Stock and all Parity Securities bear to each other.


 

















 


The Corporation is not
obligated to pay Holders of the Series B Preferred Stock any dividend in excess
of the dividends on the Series B Preferred Stock that are payable as described
herein. Subject to the foregoing, and not otherwise, such dividends (payable in
cash, stock or otherwise) as may be determined by the Board of Directors or any
duly authorized committee of the Board of Directors may be declared and paid on
any Junior Securities from time to time out of any assets legally available
therefor, and the shares of Series B Preferred Stock shall not be entitled to
participate in any such dividend.


 


(f) Payments of cash for
dividends will be delivered to the Holder by check or, at any time that shares
of Series B Preferred Stock are held by book-entry with DTC or any successor
Depositary, through a book-entry transfer through DTC or such successor
Depositary.


 


(g) If the shares of Series
B Preferred Stock are cancelled or reaquired by the Corporation by any means
(including share exchanges) (a “Termination Event”) on or prior to the Record
Date for any declared dividend for the Dividend Period, the Holder will not
have the right to receive any declared dividends for that Dividend Period.  If a Termination Event occurs after the Record
Date for any declared dividend and prior to the Dividend Payment Date, such
Holder shall receive that dividend on the relevant Dividend Payment Date if
such Holder was the Holder of record on the Record Date for that dividend.


 


Section 5. Liquidation.


 


(a) In the event the
Corporation voluntarily or involuntarily liquidates, dissolves or winds up, the
Holders at the time shall be entitled to receive liquidating distributions in
the amount of $1,000.00 per share of Series B Preferred Stock, plus an amount
equal to any authorized and declared but unpaid dividends thereon to and
including the date of such liquidation, out of assets legally available for
distribution to the Corporation’s stockholders, before any distribution of
assets is made to the holders of the Common Stock or any other Junior
Securities. After payment of the full amount of such liquidating distributions,
the Holders will not be entitled to any further participation in any
distribution of assets by, and shall have no right or claim to any remaining
assets of, the Corporation.


 


(b) In the event the
assets of the Corporation available for distribution to stockholders upon any
liquidation, dissolution or winding-up of the affairs of the Corporation,
whether voluntary or involuntary, shall be insufficient to pay in full the
amounts payable with respect to all outstanding shares of the Series B
Preferred Stock and the corresponding amounts payable on any Parity Securities,
Holders and the holders of such Parity Securities shall share ratably in any
distribution of assets of the Corporation in proportion to the full respective
liquidating distributions to which they would otherwise be respectively
entitled.


 


(c) The Corporation’s
consolidation or merger with or into any other entity, the consolidation or
merger of any other entity with or into the Corporation, or the sale of all or
substantially all of the Corporation’s property or business will not constitute
its liquidation, dissolution or winding up.


 


Section 6. Perpetual;
No Maturity. The Series B Preferred Stock shall be perpetual and shall be
without maturity.


 


Section 7. Non-Redeemable.
The Series B Preferred Stock shall not be redeemable either at the Corporation’s
option or at the option of Holders at any time. The Series B Preferred Stock shall
not be subject to any sinking fund or other obligation to redeem, repurchase or
retire the Series B Preferred Stock.


 


Section 8. Voting
Rights. The holders of Series B Preferred Stock shall not have any voting
rights except as set forth in this Section 8 or as otherwise from time to time
required by law.


 


(a) Voting Rights.
So long as any shares of Series B Preferred Stock are outstanding, in addition
to any other vote or consent of stockholders required by law or by the Articles
of Incorporation, the vote or consent of the holders of at least two-thirds of
the outstanding shares of Series B Preferred Stock and any Voting Preferred
Stock then outstanding (subject to the last paragraph of this Section 8(a)) at
the time outstanding and entitled to vote thereon, voting together as a single
class, given in person or by proxy, either in writing without a meeting or by
vote at any meeting called for the purpose, shall be necessary for effecting or
validating:


 

















 


(i) Authorization of Senior Stock. Any amendment
or alteration of the Articles of Incorporation or this Certificate of
Determination to authorize or create, or increase the authorized amount of, any
shares of any specific class or series of capital stock of the Corporation
ranking senior to the Series B Preferred Stock with respect to either or both
the payment of dividends or the distribution of assets on any liquidation,
dissolution or winding up of the Corporation, provided, however, that no vote,
approval or consent of the holders of the Series B Preferred Stock shall be
required in any event to authorize, or in any way as a condition to the
issuance of, the EESA Preferred Shares even if the EESA Preferred Shares rank
senior to the Series B Preferred Stock, and regardless of whether the terms of
the EESA Preferred Shares are consistent with, or less favorable to the holders
of Series B Preferred Stock than, proposed terms of the EESA Preferred Shares
as may have been disclosed to the holders of Series B Preferred Stock in
connection with their subscriptions for Series B Preferred Stock or as may have
been otherwise published or disclosed in any manner;


 


(ii) Amendment of Series B Preferred Stock. Any
amendment, alteration or repeal of any provision of the Articles of
Incorporation or this Certificate of Determination so as to materially and
adversely affect the special rights, preferences, privileges or voting powers
of the Series B Preferred Stock, taken as a whole; or


 


(iii) Share Exchanges, Reclassifications, Mergers and
Consolidations. Any consummation of a binding share exchange or
reclassification involving the Series B Preferred Stock, or of a merger or
consolidation of the Corporation with another corporation or other entity,
unless in each case (x) the shares of Series B Preferred Stock remain outstanding
or, in the case of any such merger or consolidation with respect to which the
Corporation is not the surviving or resulting entity, are converted into or
exchanged for preference securities of the surviving or resulting entity or its
ultimate parent, in each case, that is an entity organized and existing under
the laws of the United States of America, any state thereof of the District of
Columbia and (y) such shares of Series B Preferred Stock remaining outstanding
or such preference securities, as the case may be, have such rights,
preferences, privileges and voting powers, and limitations and restrictions
thereof, taken as a whole, as are not materially less favorable to the holders
thereof than the rights, preferences, privileges and voting powers, and
limitations and restrictions thereof, of the Series B Preferred Stock
immediately prior to such consummation, taken as a whole;


 


provided,
however, that for
all purposes of this Section 8(a), (1) any increase in the amount of the
Corporation’s authorized but unissued shares of Preferred Stock, (2) any
increase in the amount of the Corporation’s authorized or issued Series B
Preferred Stock, and (3) the creation and issuance, or an increase in the
authorized or issued amount, of other series of preferred stock of the
Corporation ranking equally with or junior to the Series B Preferred Stock
either or both with respect to the payment of dividends (whether such dividends
are cumulative or non-cumulative) and/or the distribution of assets upon the
liquidation, dissolution or winding up of the Corporation, will not be deemed
to materially and adversely affect the special rights, preferences, privileges
or voting powers of the Series B Preferred Shares.


 


The Series B Preferred
Stock shall rank at least equally with any other series of Preferred Stock that
may be issued (except for the EESA Preferred Stock and any other senior series
that may be issued with the requisite consent of the holders of the Series B
Preferred Stock), and will rank senior to the shares of Common Stock and any
other stock that ranks junior to the Series B Preferred Stock either or both
with respect to the payment of dividends and/or the distributions of assets
upon liquidation, dissolution or winding up of the Corporation.


 


If any amendment,
alteration, repeal, share exchange, reclassification, merger or consolidation
specified in this Section 8(a) would materially and adversely affect one or
more but not all series of Voting Preferred Stock (including the Series B
Preferred Stock for the purpose of this paragraph), then only the series of
Voting Preferred Stock materially and adversely affected and entitled to vote
shall vote as a class in lieu of all other series of Voting Preferred Stock.


 

















 


(b) Procedures for
Voting and Consents. The rules and procedures for calling and conducting
any meeting of the holders of Series B Preferred Stock (including, without
limitation, the fixing of a record date in connection therewith), the
solicitation and use of proxies at such a meeting, the obtaining of written
consents and any other aspect or matter with regard to such a meeting or such
consents shall be governed by any rules the Board of Directors or a duly
authorized committee of the Board of Directors, in its discretion, may adopt
from time to time, which rules and procedures shall conform to the requirements
of the Articles of Incorporation, the Bylaws, applicable law and any national
securities exchange or other trading facility, if any, on which the Series B
Preferred Stock is listed or traded at the time. Whether the vote or consent of
the holders of a plurality, majority or other portion of the shares of Series B
Preferred Stock and any Voting Preferred Stock has been cast or given on any
matter on which the holders of shares of Series B Preferred Stock are entitled
to vote shall be determined by the Corporation by reference to the specified
liquidation preference amounts of the Series B Preferred Stock and such other
Voting Preferred Stock voted or covered by the consent.


 


Section 9. Transfer
Agent, Registrar and Paying Agent. The duly appointed Transfer Agent,
Registrar, and paying agent for the Series B Preferred Stock shall initially be
the Corporation. The Corporation may, in its sole discretion, remove the
Transfer Agent; provided that the Corporation shall appoint a successor
transfer agent who shall accept such appointment prior to the effectiveness of
such removal.


 


Section 10. Miscellaneous.
All notices referred to herein shall be in writing, and, unless otherwise
specified herein, all notices hereunder shall be deemed to have been given upon
the earlier of receipt thereof or three Business Days after the mailing thereof
if sent by registered or certified mail (unless first-class mail shall be
specifically permitted for such notice under the terms of this Certificate of
Determination) with postage prepaid, addressed: (i) if to the Corporation, to
the principal executive office of the Corporation or to the Transfer Agent at
its principal office in the United States of America, or other agent of the
Corporation designated as permitted by this Certificate of Determination, or (ii)
if to any Holder or holder of shares of Common Stock, as the case may be, to
such Holder at the address of such Holder as listed in the stock record books
of the Corporation (which may include the records of any transfer agent for the
Series B Preferred Stock or the Common Stock, as the case may be), or (iii) to
such other address as the Corporation or any such Holder, as the case may be,
shall have designated by notice similarly given.


 

















 


EXHIBIT B


FORM OF OPINION OF


DOWNEY BRAND LLP


 


[SEE ATTACHED]


 

















 


EXHIBIT C


 


FORM OF MANAGEMENT RIGHTS AGREEMENT


 


Central
Valley Community Bancorp


7100
North Financial Drive


Suite
101


Fresno,
CA 93720


 


Re:
Board Observation Rights / Management Rights


 


Gentlemen:


 


This
letter will confirm the agreement between Central Valley Community Bancorp (the
“Company”), and Patriot Financial Partners, L.P. and Patriot Financial Partners
Parallel, L.P. (each a “Fund”) pursuant to which the Fund will be entitled to
the following contractual rights in connection with the Fund’s investment in
the Company.


 


The
Fund will be entitled to designate a representative (the “Representative”) to
attend meetings of the Boards of Directors of Central Valley Community Bank and
Central Valley Community Bancorp (the “Boards”) in the capacity of a nonvoting
observer and shall be entitled to such representation as long as the two Funds
beneficially own in the aggregate 7% of the issued and outstanding shares of common
stock or securities convertible into at least 7% of the issued and outstanding
shares of common stock or upon conversion. Each Fund intends to designate as
its Representative the same managing partner or principal of Patriot Financial
Partners GP, L.P.


 


Each
Fund will be provided all information distributed to the members of the Boards
or their respective committees, quarterly and annual audited and unaudited
consolidated financial statements, and copies of all reports required to be
filed under applicable law or under the terms of any outstanding debt
instrument. Each Fund after appropriate notification of management may visit
and inspect Company (and its subsidiaries’) properties, books and records. In
addition, each Fund may consult with management of the Company and its
subsidiaries on the Fund’s views on matters relating to the operation of the
business.


 


The
foregoing rights granted to the Funds are subject to, the Company’s right to
withhold information and to exclude such Representative from any meeting, or
portion thereof, but only to the extent (i) reasonably necessary to preserve
the Company’s attorney-client privilege, or (ii) directly related to a Fund’s
investment.


 


Each
Fund agrees that it will not disclose to any third party any information
provided to it by the Company hereunder which is not generally available to the
public or which is specifically designated by the Company as confidential,
except with the prior express approval of the Company or as may otherwise be
required by applicable law. Each Fund shall comply with all federal securities
laws in connection with its exercise of its rights under this agreement and its
purchases and sales of the Company’s securities, and agrees to be bound by an “insider
trading” policy of the Company, reasonably acceptable to such Fund, during any
period during which it is exercising its rights under this agreement.


 

















 


The
aforementioned rights are intended to satisfy the requirement of management
rights for purposes of qualifying the Funds’ investments in the Company as “venture
capital investments” for purposes of the Department of Labor “plan assets”
regulation, 29 C.F.R. §2510.3-101. In the event the aforementioned rights are
not satisfactory for such purpose, the Company and the Fund shall reasonably
cooperate in good faith to agree upon mutually satisfactory management rights
that satisfy such regulations.


 


The
provisions of this Management Rights Agreement shall survive closing under that
certain Securities Purchase Agreement dated even date with this Management
Rights Agreement, and shall terminate and be of no further force and effect on
the date the Purchasers own, in the aggregate, economic interests equivalent to
at least 7.0% of the issued and outstanding shares of Common Stock of the Corporation
(for such purpose any Preferred Shares shall be deemed economic interests equal
to the number of shares of “Non-Voting Common Stock” (as that term is defined
in Exhibit D) for which such Preferred Shares may be exchanged).


 


The
rights described herein shall not be assignable without the written consent of
the Company; provided, however, that a Fund may assign its rights hereunder to
any affiliate of such Fund which assumes the obligations of such Fund
hereunder.


 


The
rights granted to the Funds hereunder are not in substitution for, and shall
not be deemed to be in limitation of, any rights otherwise available to the
Funds as holders of securities of the Company or pursuant to any other
agreement with the Company.


 


[SIGNATURE PAGE FOLLOWS]


 

















 


IN WITNESS WHEREOF, this letter agreement has
been duly executed by the parties set forth below as of the date written above.


 


	
  CENTRAL VALLEY COMMUNITY BANCORP

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  PATRIOT FINANCIAL PARTNERS, L.P.

  	
   

  
	
  By:
  Patriot Financial Partners GP, L.P., its general partner

  	
   

  
	
  By:
  Patriot Financial Partners GP, LLC, its general partner

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  PATRIOT FINANCIAL PARTNERS PARALLEL, L.P.

  	
   

  
	
  By:
  Patriot Financial Partners GP, L.P., its general partner

  	
   

  
	
  By:
  Patriot Financial Partners GP, LLC, its general partner

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  



 
















 


EXHIBIT D


 


EXCHANGE PROCEDURES


 


Definitions. As used herein with respect to the Series B
Adjustable Rate Non-Cumulative Perpetual Preferred Stock of the Corporation
(the “Series B Preferred Stock”):


 


(a) “Articles of Incorporation” shall mean the
articles of incorporation of the Corporation, as they may be amended from time
to time, and shall include this Certificate of Determination.


 


(b) “Board of Directors” means the board of
directors of the Corporation or any committee thereof duly authorized to act on
behalf of such board of directors.


 


(c) “Change in Control” means the occurrence of
any one or more of the following:  (i) an
event that would be required to be reported as a change in control in response
to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934 (the “Exchange Act”) as if the Corporation were
a reporting company under the Exchange Act; (ii) any “persons” (as such term is
used in Sections 13(d) and 14(d) of the Exchange Act then in effect),
other than the Corporation or any “person” who on the date of this Agreement is
a director or officer of the Corporation, is or becomes the “beneficial owner”
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
of securities of the Corporation representing 50% or more of the combined
voting power of the Corporation’s then outstanding securities; or (iii) during
any period of two (2) consecutive years, individuals who at the beginning
of such period constitute the Board of Directors cease for any reason to
constitute at least a majority thereof, unless the election of each director
who was not a director at the beginning of such period has been approved in
advance by directors representing at least two-thirds of the directors then in
office who were directors at the beginning of the period.


 


(d) “Closing Price” of the Common Stock on any
determination date means the closing sale price or, if no closing sale price is
reported, the last reported sale price of the shares of the Common Stock on the
New York Stock Exchange on such date. If the Common Stock is not traded on the
New York Stock Exchange on any determination date, the Closing Price of the
Common Stock on such determination date means the closing sale price as
reported in the composite transactions for the principal U.S. national or
regional securities exchange on which the Common Stock is so listed or quoted,
or, if no closing sale price is reported, the last reported sale price on the
principal U.S. national or regional securities exchange on which the Common
Stock is so listed or quoted, or if the Common Stock is not so listed or quoted
on a U.S. national or regional securities exchange, the last quoted bid price
for the Common Stock in the over-the-counter market as reported by Pink Sheets
LLC or a similar organization, or, if that bid price is not available, the
market price of the Common Stock on that date as determined by a independent
investment banking firm retained by the Corporation for this purpose. For
purposes of this Certificate of Determination, all references herein to the “Closing Price” and “last reported sale
price” of the Common Stock on the New York Stock Exchange shall be such closing
sale price and last reported sale price as reflected on the website of the New
York Stock Exchange (http://www.nyse.com) or any successor thereto and as
reported by Bloomberg Professional Service or any successor thereto; provided
that in the event that there is a discrepancy between the closing sale price or
last reported sale price as reflected on the website of the New York Stock
Exchange and as reported by Bloomberg Professional Service, the closing sale
price and last reported sale price on the website of the New York Stock
Exchange shall govern. If a Reorganization Event has occurred and (1) the
Exchange Property consists only of shares of common stock, the “Closing Price”
shall be based on the closing price per share of such common stock; (2) the
Exchange Property consists only of cash, the “Closing Price” shall be the cash
amount paid per share; and (3) the Exchange Property consists of
securities, cash and/or other property, the “Closing Price” shall be based on
the sum, as applicable, of (x) the closing price of such common stock, (y) the
cash amount paid per share and (z) the value (as determined by the Board
of Directors from time-to-time) of any other securities or property paid to the
holders of the Common Stock connection with the Reorganization Event.


 


(e) “Common Stock” means the common stock of
the Corporation and, unless the context requires otherwise, shall include
Non-Voting Common Stock.


 


(f) “Corporation” means Central Valley
Community Bancorp, a California business corporation.


 

















 


(g) “Current Market Price” means, on any date,
the average of the daily Closing Prices per share of the Common Stock or other
securities on each of the five consecutive Trading Days preceding the earlier
of the day before the date in question and the day before the Ex-Date with
respect to the issuance or distribution requiring such computation.


 


(h) “Depositary” means DTC or its nominee or
any successor depositary appointed by the Corporation.


 


(i) “Distributed Property” has the meaning set
forth in Section 3(a)(iv).


 


(j) “DTC” means The Depository Trust Company
and its successors or assigns.


 


(k) “Exchange Act” means the Securities
Exchange Act of 1934, as amended.


 


(l) “Exchange Agent” shall mean the Transfer
Agent (which may be the Corporation) acting in its capacity as Exchange Agent
for the Series B Preferred Stock, and its successors and assigns.


 


(m) “Exchange Election” means the proper election by the
Corporation of any contractual right it may have to cause the holders of the
outstanding shares of Series B Preferred exchange all of their respective
shares of Series A Preferred into other shares of capital stock of the
Corporation.


 


(n) “Exchange Rate” means for each share of Series B
Preferred Stock, 190.48 shares of Non-Voting Common Stock (and cash in lieu of
fractional common shares), subject to adjustment as set forth herein.


 


(o) “Ex-Date,” when used with respect to any
issuance or distribution, means the first date on which the Common Stock or
other securities trade without the right to receive the issuance or
distribution.


 


(p) “Holder” means the Person in whose name the
shares of the Series B Preferred Stock are registered, which may be
treated by the Corporation, Transfer Agent, Registrar, paying agent and
Exchange Agent as the absolute owner of the shares of Series B Preferred
Stock for the purpose of making payment and settling the related exchanges and
for all other purposes.


 


(q) “Mandatory Exchange Date” has the meaning
set forth in Section 1.


 


(r) “Non-Voting Common Stock” has the meaning set forth in Section 1.


 


(s) “Person” means a legal person, including
any individual, corporation, estate, partnership, joint venture, association,
joint-stock company, limited liability company or trust.


 


(t) “Registrar” shall mean the Transfer Agent
acting in its capacity as registrar for the Series B Preferred Stock, and
its successors and assigns or any other registrar duly appointed by the
Corporation.


 


(u) “Certificate of Determination” means the
Certificate of Determination of the Corporation relating to the Series B
Preferred Stock, as it may be amended from time to time.


 


(v) “Trading Day” means a day on which the
shares of Common Stock:


 


(i) are
not suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business; and


 


(ii) have
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Stock.


 


(w) “Transfer Agent” means the Corporation,
acting as Transfer Agent, Registrar, paying agent and Exchange Agent for the Series B
Preferred Stock, and its successors and assigns, including any successor transfer
agent appointed by the Corporation.  The
Corporation may act as its own transfer agent.


 

















 


Section 1.  Mandatory Exchange at the Corporation’s
Option on Certain Conditions.


 


(a) The Corporation
and each of the Purchasers agree that at any time at the option of the
Corporation (but subject to the Corporation’s having the authority to issue the
Non-Voting Common Stock), each share of outstanding Series B Preferred
Stock shall be exchanged at the Corporation’s election into shares of
Non-Voting Common Stock at the Exchange Rate, on such date as the Corporation
may designate for such exchange (the “Mandatory Exchange Date”).


 


(b) The Corporation’s
right to cause an exchange of the Series B Preferred Stock shall be
subject to the Corporation taking all such action as may be required to
authorize and issue a sufficient number of shares of a new class or series of
Common Stock, without voting rights but otherwise identical in all rights
(including without limitation dividend rights, privileges, terms and
preferences as the Corporation’s Common Stock) and the amendment to the
Corporation’s articles of incorporation providing therefor shall expressly
provide that such stock shall be entitled to dividends and distributions in
cash or other property on the same terms as the Corporation’s Common Stock (the
“Non-Voting Common Stock”).


 


Section 2. Exchange
Procedures.


 


(a) Effective
immediately prior to the close of business on the Mandatory Exchange Date,
dividends shall no longer be authorized and declared on any exchanged shares of
Series B Preferred Stock and such shares of Series B Preferred Stock
shall automatically be deemed to be exchanged for then-authorized Non-Voting Common
Stock, subject to the right of Holders to receive any then authorized, declared
and unpaid dividends on such shares and any other payments to which they are
otherwise entitled pursuant to applicable provisions of the Certificate of
Determination.


 


(b) No allowance or
adjustment, except pursuant to Section 3, shall be made with respect to
holders of Series B Preferred Stock or the Non-Voting Common Stock for
which the Series B Preferred Stock are exchanged, relating to dividends
payable to holders of the Non-Voting Common Stock of record as of any date or
time prior to the close of business on the Mandatory Exchange Date.  Prior to the close of business on the
Mandatory Exchange Date, shares of Non-Voting Common Stock issuable upon
exchange of, or other securities issuable upon exchange for, any shares of Series B
Preferred Stock shall not be deemed outstanding for any purpose, and Holders
shall have no rights with respect to the Non-Voting Common Stock or other
securities issuable upon exchange (including voting rights, rights to respond
to tender offers for the Non-Voting Common Stock or other securities issuable
upon exchange and rights to receive any dividends or other distributions on the
Non-Voting Common Stock or other securities issuable upon exchange) by virtue
of holding shares of Series B Preferred Stock.


 


(c) The Corporation
may from time-to-time take such appropriate action as may be necessary to
reduce the authorized number of shares of Series B Preferred Stock, but
not below the number of shares of Series B Preferred Stock then
outstanding.


 


(d) The Person or
Persons entitled to receive the Non-Voting Common Stock and/or cash, securities
or other property issuable upon exchange of outstanding Series B Preferred
Stock shall be treated for all purposes as the record holder(s) of such
shares of Non-Voting Common Stock and/or securities as of the close of business
on the Mandatory Exchange Date. In the event that a Holder shall not by written
notice designate the name in which shares of Non-Voting Common Stock and/or
cash, securities or other property (including payments of cash in lieu of
fractional shares) to be issued or paid upon exchange of shares of Series B
Preferred Stock should be registered or paid or the manner in which such shares
should be delivered, the Corporation shall be entitled to register and deliver
such shares, and make such payment, in the name of the Holder and in the manner
shown on the records of the Corporation or, if the shares of Series B
Preferred Stock are then held by book-entry with DTC or any successor
Depositary, through book-entry transfer through the Depositary.


 


(e) Exchange for
shares of Non-Voting Common Stock will occur on the Mandatory Exchange Date as
follows:


 

















 


(i) On
the Mandatory Exchange Date, shares of Non-Voting Common Stock shall be issued
to Holders or their designee upon presentation and surrender of the certificate
evidencing the Series B Preferred Stock to the Exchange Agent, if shares
of the Series B Preferred Stock are held in certificated form, and, if
required, the furnishing of appropriate endorsements and transfer documents and
the payment of all transfer and similar taxes. If a Holder’s interest is a
beneficial interest in shares representing Series B Preferred Stock held
by book-entry with DTC or any successor Depositary, a book-entry transfer
through the Depositary will be made by the Exchange Agent upon compliance with
the Depositary’s procedures for exchanging a beneficial interest in a global
security.


 


(ii) On
the date of any exchange of outstanding Series B Preferred Stock to
Non-Voting Common Stock, if a Holder’s interest is in certificated form, a
Holder shall do each of the following:


 


(A) complete
and manually sign the exchange notice provided by the Exchange Agent, or a
facsimile of the exchange notice, and deliver this irrevocable notice to the
Exchange Agent;


 


(B) surrender
the shares of Series B Preferred Stock to the Exchange Agent;


 


(C) if
required, furnish appropriate endorsements and transfer documents; and


 


(D) if
required, pay all transfer or similar taxes.


 


If the shares of Series B
Preferred Stock are held by book-entry with DTC or any successor Depositary, in
order to exchange, such Holder must comply with paragraphs (C) through (E) of
this clause (ii) and comply with the Depositary’s procedures for
exchanging a beneficial interest in a global security.


 


(iii) The
Exchange Agent shall, on a Holder’s behalf, exchange the Series B
Preferred Stock into shares of Non-Voting Common Stock, in accordance with the
terms of the notice delivered by such Holder described in paragraph (ii) of
this subsection.


 


(iv) The
exchange shall be conditioned upon Holder’s receipt of a legal opinion of
Corporation’s legal counsel in form and substance reasonably acceptable to
Holder, confirming the due authorization and issuance of the Non-Voting Common
Stock to Holder and that such Non-Voting Common Stock upon issuance in the
exchange shall be fully paid and non-assessable.


 


Section 3. Anti-Dilution
Adjustments.


 


(a) The Exchange
Rate shall be subject to the following adjustments:


 


(i) Stock
Dividends and Distributions. If the Corporation pays dividends or other
distributions on its Common Stock in shares of Common Stock, then the Exchange
Rate in effect immediately prior to the Ex-Date for such dividend or
distribution will be multiplied by the following fraction


 


	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  OS1

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  OS0

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


Where,


 


	
  OS0 =

  	
  the number of shares of
  Common Stock outstanding immediately prior to Ex-Date for such dividend or
  distribution.

  
	
   

  	
   

  
	
  OS1 =

  	
  the sum of the number
  of shares of Common Stock outstanding immediately prior to the Ex-Date for
  such dividend or distribution plus the total number of shares of Common Stock
  constituting such dividend or distribution.

  



 

















 


If any dividend or
distribution described in this clause (i) is authorized and declared but
not so paid or made, the Exchange Rate shall be readjusted, effective as of the
date the Board of Directors publicly announces its decision not to make such
dividend or distribution, to such Exchange Rate that would be in effect if such
dividend or distribution had not been declared.


 


(ii) Subdivisions,
Splits and Combination of the Common Stock. If the Corporation subdivides,
splits or combines the shares of Common Stock, then the Exchange Rate in effect
immediately prior to the effective date of such share subdivision, split or
combination will be multiplied by the following fraction:


 


	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  OS1

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  OS0

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


Where,


 


	
  OS0 =

  	
  the number of shares of
  Common Stock outstanding immediately prior to the effective date of such
  share subdivision, split or combination.

  
	
   

  	
   

  
	
  OS1 =

  	
  the number of shares of
  Common Stock outstanding immediately after the opening of business on the
  effective date of such share subdivision, split or combination.

  



 


If any subdivision, split
or combination described in this clause (ii) is announced but the
outstanding shares of Common Stock are not subdivided, split or combined, the
Exchange Rate shall be readjusted, effective as of the date the Board of
Directors publicly announces its decision not to subdivide, split or combine
the outstanding shares of Common Stock, to such Exchange Rate that would be in
effect if such subdivision, split or combination had not been announced.


 


(iii) Issuance
of Stock Purchase Rights. If the Corporation issues to all or substantially
all holders of the shares of Common Stock rights or warrants (other than rights
or warrants issued pursuant to a dividend reinvestment plan or share purchase
plan or other similar plans) entitling them to subscribe for or purchase the
shares of Common Stock at less than the Current Market Price on the date fixed
for the determination of stockholders entitled to receive such rights or
warrants, then the Exchange Rate in effect immediately prior to the Ex-Date for
such distribution will be multiplied by the following fraction:


 


	
   

  	
   

  	
  OS0 + X

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  OS0 + Y

  	
   

  	
   

  	
   

  	
   

  



 


Where,


 


	
  OS0 =

  	
  the number of shares of
  Common Stock outstanding immediately prior to the Ex-Date for such
  distribution.

  
	
   

  	
   

  
	
  X =

  	
  the total number of
  shares of Common Stock issuable pursuant to such rights or warrants.

  
	
   

  	
   

  
	
  Y =

  	
  the number of shares of
  Common Stock equal to (i) the total number of shares of Common Stock
  issuable pursuant to such rights or warrants, times (ii) the aggregate
  price payable to exercise such rights or warrants divided by the Current
  Market Price.

  



 


In the event that such
rights or warrants described in this clause (iii) are not so issued, the
Exchange Rate shall be readjusted, effective as of the date the Board of
Directors publicly announces its decision not to issue such rights or warrants,
to the Exchange Rate that would then be in effect if such issuance had not been
declared. To the extent that such rights or warrants are not exercised prior to
their expiration or shares 


 

















 


of Common Stock are
otherwise not delivered pursuant to such rights or warrants upon the exercise
of such rights or warrants, the Exchange Rate shall be readjusted to such
Exchange Rate that would then be in effect had the adjustment made upon the
issuance of such rights or warrants been made on the basis of the delivery of
only the number of shares of Common Stock actually delivered. In determining
the aggregate offering price payable for such shares of Common Stock, there
shall be taken into account any consideration received for such rights or
warrants and the value of such consideration (if other than cash, to be
determined by the Board of Directors). If an adjustment to the Exchange Rate is
required under this clause (iii), delivery of any additional shares of Common
Stock that may be deliverable upon exchange as a result of an adjustment
required under this clause (iii) shall be delayed to the extent necessary
in order to complete the calculations provided in this clause (iii).


 


(iv) Debt
or Asset Distributions. If the Corporation distributes to all or
substantially all holders of shares of Common Stock evidences of indebtedness,
shares of capital stock, securities, cash or other assets (excluding any
dividend or distribution referred to in clause (i) of this Section 3(a),
any rights or warrants referred to in clause (iii) of this Section 3(a),
any dividend or distribution paid exclusively in cash, any consideration
payable in connection with a tender or exchange offer made by the Corporation
or any of its subsidiaries, and any dividend of shares of capital stock of any
class or series, or similar equity interests, of or relating to a subsidiary or
other business unit in the case of certain spin-off transactions as described
below) (such evidences of indebtedness, shares of capital stock, securities,
cash or other assets, the “Distributed
Property”), then the Exchange Rate in effect immediately prior to
the Ex-Date for such distribution will be multiplied by the following fraction:


 


	
   

  	
   

  	
   

  	
   

  	
   

  	
  SP0

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  SP0 – FMV

  	
   

  	
   

  	
   

  	
   

  



 


Where,


 


	
  SP0 =

  	
  the Current Market
  Price per share of Common Stock on such date.

  
	
   

  	
   

  
	
  FMV =

  	
  the fair market value
  of the portion of the distribution applicable to one share of Common Stock on
  such date as determined by the Board of Directors;

  



 


provided
that, if “FMV” as
set forth above is equal to or greater than “SP0”
as set forth above, in lieu of the foregoing adjustment, adequate provision
shall be made so that each Holder shall receive on the date on which the
Distributed Property is distributed to holders of Common Stock, for each share
of Preferred Stock, the amount of Distributed Property such holder would have
received had such holder owned a number of shares of Common Stock equal to the
Exchange Rate on the Ex-Date for such distribution.


 


In a “spin-off,” where
the Corporation makes a distribution to all or substantially all holders of
shares of Common Stock consisting of capital stock of any class or series, or
similar equity interests of, or relating to, a subsidiary or other business
unit, the Exchange Rate will be adjusted on the 15th Trading Day after the
effective date of the distribution by multiplying such Exchange Rate in effect
immediately prior to such 15th Trading Day by the following fraction:


 


	
   

  	
   

  	
   

  	
   

  	
  MP0 + MP  S

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  MP0

  	
   

  	
   

  	
   

  	
   

  



 


Where,


 


	
  MP0 =

  	
  the average of the
  Closing Prices of the Common Stock over the first 10 Trading Days commencing
  on and including the fifth Trading Day following the effective date of such
  distribution.

  
	
   

  	
   

  
	
  MPS =

  	
  the average of the
  Closing Prices of the capital stock or equity interests representing the
  portion of the distribution applicable to one share of Common Stock over the
  first 10 Trading Days commencing on and including the fifth Trading Day
  following the effective date of such distribution, or, if not traded on a national
  or regional securities exchange or over-the-counter market, the fair market
  value of the capital stock or equity interests representing the portion of
  the distribution applicable to one share of Common Stock on such date as
  determined by the Board of Directors.

  



 

















 


In the event that such
distribution described in this clause (iv) is not so paid or made, the
Exchange Rate shall be readjusted, effective as of the date the Board of
Directors publicly announces its decision not to pay or make such dividend or
distribution, to the Exchange Rate that would then be in effect if such
dividend or distribution had not been declared. If an adjustment to the
Exchange Rate is required under this clause (iv), delivery of any additional
shares of Common Stock that may be deliverable upon exchange as a result of an
adjustment required under this clause (iv) shall be delayed to the extent
necessary in order to complete the calculations provided for in this clause
(iv).


 


(v) Cash
Distributions. If the Corporation makes a distribution consisting
exclusively of cash to all or substantially all holders of the Common Stock,
excluding any cash that is distributed in a Reorganization Event or as part of
a “spin-off” referred to in clause (iv) of this Section 3(a), (c) any
dividend or distribution in connection with the Corporation’s liquidation,
dissolution or winding up, and (d) any consideration payable in connection
with a tender or exchange offer made by the Corporation or any of its
subsidiaries, then in each event, the Exchange Rate in effect immediately prior
to the Ex-Date for such distribution will be multiplied by the following
fraction:


 


	
   

  	
   

  	
   

  	
   

  	
   

  	
  SP0

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  SP0 – DIV

  	
   

  	
   

  	
   

  	
   

  



 


Where,


 


	
  SP0 =

  	
  the Closing Price per
  share of Common Stock on the Ex-Date.

  
	
   

  	
   

  
	
  DIV =

  	
  the amount per share of
  Common Stock of the dividend or distribution, as determined pursuant to the
  following paragraph.

  



 


In the event that any
distribution described in this clause (v) is not so made, the Exchange
Rate shall be readjusted, effective as of the date the Board of Directors
publicly announces its decision not to pay such distribution, to the Exchange
Rate which would then be in effect if such distribution had not been declared.


 


Notwithstanding the
foregoing, if “DIV” as set forth above is equal to or greater than “SP0” as set forth above, in lieu of the foregoing
adjustment, adequate provision shall be made so that each Holder shall have the
right to receive on the date on which the relevant cash dividend or
distribution is distributed to holders of Common Stock, for each share of
Preferred Stock, the amount of cash such holder would have received had such
holder owned a number of shares equal to the Exchange Rate on the Ex-Date for
such distribution.


 


(vi) Self
Tender Offers and Exchange Offers. If the Corporation or any of its
subsidiaries successfully completes a tender or exchange offer for the Common
Stock where the cash and the value of any other consideration included in the
payment per share of the Common Stock exceeds the Closing Price per share of
the Common Stock on the Trading Day immediately succeeding the expiration of
the tender or exchange offer, then the Exchange Rate in effect at the close of
business on such immediately succeeding Trading Day will be multiplied by the
following fraction:


 


	
   

  	
   

  	
   

  	
   

  	
  AC + (SP  0xOS1)

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  OS0xSP0

  	
   

  	
   

  	
   

  	
   

  



 


Where,


 


	
  SP0 =

  	
  the Closing Price per
  share of Common Stock on the Trading Day immediately succeeding the
  expiration of the tender or exchange offer.

  
	
   

  	
   

  
	
  OS0 =

  	
  the number of shares of
  Common Stock outstanding immediately prior to the expiration of the tender or
  exchange offer, including any shares validly tendered and not withdrawn.

  
	
   

  	
   

  
	
  OS1 =

  	
  the number of shares of
  Common Stock outstanding immediately after the expiration of the tender or
  exchange offer.

  
	
   

  	
   

  
	
  AC =

  	
  the aggregate cash and
  fair market value of the other consideration payable in the tender or
  exchange offer, as determined by the Board of Directors.

  



 

















 


In the event that the
Corporation, or one of its subsidiaries, is obligated to purchase shares of Common
Stock pursuant to any such tender offer or exchange offer, but the Corporation,
or such subsidiary, is permanently prevented by applicable law from effecting
any such purchases, or all such purchases are rescinded, then the Exchange Rate
shall be readjusted to be such Exchange Rate that would then be in effect if
such tender offer or exchange offer had not been made. Except as set forth in
the preceding sentence, if the application of this clause (vi) to any
tender offer or exchange offer would result in a decrease in the Exchange Rate,
no adjustment shall be made for such tender offer or exchange offer under this
clause (vi). If an adjustment to the Exchange Rate is required under this
clause (vi), delivery of any additional shares of Common Stock that may be
deliverable upon exchange as a result of an adjustment required under this
clause (vi) shall be delayed to the extent necessary in order to complete
the calculations provided for in this clause (vi).


 


(vii) Rights
Plans. To the extent that the Corporation has a rights plan in effect with
respect to the Common Stock on the Mandatory Exchange Date, upon exchange of
any shares of the Series B Preferred Stock, Holders will receive, in
addition to the shares of Non-Voting Common Stock, the rights under the rights
plan, unless, prior to such Mandatory Exchange Date, the rights have separated
from the shares of Common Stock, in which case the Exchange Rate will be
adjusted at the time of separation as if the Corporation had made a
distribution to all holders of the Common Stock as described in clause (iv) of
this Section 10(a), subject to readjustment in the event of the
expiration, termination or redemption of such rights.


 


(b) The Corporation
may make such increases in the Exchange Rate, in addition to any other
increases required by this Section 10, if the Board of Directors deems it
to be in the best interests of the Corporation or otherwise advisable to avoid
or diminish any income tax to holders of the Common Stock resulting from any
dividend or distribution of shares of Common Stock (or issuance of rights or
warrants to acquire shares of Common Stock) or from any event treated as such
for income tax purposes or for any other reason.


 


(c) All adjustments
to the Exchange Rate shall be calculated to the nearest 1/10,000th of a share
of Non-Voting Common Stock. No adjustment in the Exchange Rate shall be
required unless such adjustment would require an increase or decrease of at
least one percent thereof; provided,
however, that any adjustments which by reason of this subparagraph
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment; provided further
that on the Mandatory Exchange Date relating to an exchange (including, without
limitation, any exchange in connection with a Change in Control), adjustments
to the Exchange Rate will be made with respect to any such adjustment carried
forward and which has not been taken into account before such date.


 


(d) No adjustment to
the Exchange Rate shall be made if Holders may participate in the transaction
that would otherwise give rise to an adjustment, as a result of holding the Series B
Preferred Stock, without having to exchange the Series B Preferred Stock,
as if they held the full number of shares of Common Stock into which a share of
the Series B Preferred Stock may then be exchanged.


 

















 


(e) The Exchange
Rate shall not be adjusted:


 


(i) upon
the issuance of any shares of the Common Stock pursuant to any present or
future plan providing for the reinvestment of dividends or interest payable on
the Corporation’s securities and the investment of additional optional amounts
in shares of Common Stock under any plan;


 


(ii) upon
the issuance to employees, officers, director, and consultants of the
Corporation of any shares of the Common Stock or rights, options or warrants to
purchase those shares pursuant to any warrant, stock option, stock appreciation
rights and restricted stock plan existing as of the effective date of this
Certificate of Determination;


 


(iii) upon
the issuance of any shares of the Common Stock pursuant to any option, warrant,
right or exercisable, exchangeable or convertible security outstanding as of
the date shares of the Series B Preferred Stock were first issued;


 


(iv) for
a change in the par value or no par value of the Common Stock; or


 


(v) for
accrued and unpaid dividends on the Series B Preferred Stock.


 


(f) Whenever the
Exchange Rate is to be adjusted in accordance with Section 3(a) or Section 3(b),
the Corporation shall:


 


(i) as
soon as practicable following the occurrence of an event that requires an
adjustment to the Exchange Rate pursuant to Section 3(a) or Section 3(b),
taking into account the one percent threshold set forth in Section 3(c) (or
if the Corporation is not aware of such occurrence, as soon as practicable
after becoming so aware), provide, or cause to be provided, a written notice to
the Holders of the occurrence of such event; and


 


(ii) as
soon as practicable following the determination of the revised Exchange Rate in
accordance with Section 3(a) or Section 3(b), provide, or cause
to be provided, a written notice to the Holders setting forth in reasonable
detail the method by which the adjustment to the Exchange Rate was determined
and setting forth the revised Exchange Rate.


 


(g) Notwithstanding
anything to the contrary in this Purchase Agreement, any adjustment to the
Exchange Rate that would require the prior approval of any federal or state
banking regulatory agency shall be adjusted so that (i) initially only
that maximum adjustment shall be made that shall result in exchange to the
maximum number of shares of Common Stock that would be permitted without such
regulatory approvals, and (ii) in the event Holder obtains the necessary
bank regulatory approvals, the balance of the adjustment shall be made.  In the event that more than one event occurs
requiring adjustment of the Exchange Rate and requires prior bank regulatory
approval, upon receipt of necessary approvals, the adjustments shall then be
made in such manner that the total number of shares of Common Stock for which
the Series B Preferred Stock is to be exchanged is the same as it would
have been if no regulatory approvals had been required.


 


Section 5. Fractional
Shares.


 


(a) No fractional
shares of Non-Voting Common Stock will be issued as a result of any exchange of
shares of Series B Preferred Stock.


 


(b) In lieu of any
fractional share of Non-Voting Common Stock otherwise issuable in respect of
any mandatory exchange pursuant to Section 1, the Holder shall be entitled
to receive an amount in cash (computed to the nearest cent) equal to the same
fraction of the Closing Price of the Common Stock determined as of the second
Trading Day immediately preceding the effective date of conversion.


 


(c) If more than one
share of the Series B Preferred Stock is surrendered for exchange at one
time by or for the same Holder, the number of full shares of Non-Voting Common
Stock issuable upon exchange thereof shall be computed on the basis of the
aggregate number of shares of the Series B Preferred Stock so surrendered.


 

















 


Section 4. Reservation
of Common Stock.


 


(a) Following the
due authorization of the Non-Voting Common Stock, the Corporation shall at all
times reserve and keep available out of its authorized and unissued Non-Voting
Common Stock, solely for issuance upon the exchange of shares of Series B
Preferred Stock as provided in this Purchase Agreement, free from any
preemptive or other similar rights, such number of shares of Non-Voting Common
Stock as shall from time to time be issuable upon the exchange of all the
shares of Series B Preferred Stock then outstanding. For purposes of this Section 4(a),
the number of shares of Non-Voting Common Stock that shall be deliverable upon
the exchange of all outstanding shares of Series B Preferred Stock shall
be computed as if at the time of computation all such outstanding shares were
held by a single Holder.


 


(b) All shares of
Non-Voting Common Stock delivered upon exchange of the Series B Preferred
Stock shall be duly authorized, validly issued, fully paid and non-assessable.


 


Section 5. Limitations
on Beneficial Ownership. Notwithstanding anything to the contrary contained
herein, if the number of shares to be issued to a holder of Series B
Preferred Stock upon an exchange for Non-Voting Common Stock would cause the
Holder, together with any holdings of Common Stock already held directly or
indirectly by the holder, to require prior approval of any banking regulator to
acquire those shares, the Corporation will not issue any shares for which an
approval may be required of the Corporation until any such approvals shall have
been issued, and then only in accordance with the terms and conditions of any
approvals.  By accepting ownership of the
Series B Preferred Stock, and as a condition to the Corporation’s
obligation to issue Non-Voting Common Stock upon conversion or to pay any
further dividends to such holder, each holder agrees (i) to provide the
Corporation all such information and documents as the Corporation may require
in order for the Corporation to determine the status of compliance with any
potential bank regulatory approval requirements, (ii) that the holder
shall be solely responsible at the holder’s sole expense for obtaining any such
approvals, but shall keep the Corporation fully informed as to the status of
the holder’s efforts to obtain approvals and the resolution of any applications
for approval.  Notwithstanding any other
provision of this Purchase Agreement or in the Certificate of Determination (as
it may hereafter be amended) or of the Series B Preferred Stock, during
any period of delay beyond the Mandatory Exchange Date, the Corporation shall
not be obligated to pay the holder any further dividends on the Series B
Preferred Stock or any damages for delay in issuance and delivery of the Common
Stock.  For the avoidance of doubt, these
limitations on beneficial ownership shall not reduce the number of shares of Series B
Preferred Stock to be exchanged upon a mandatory exchange.