exv10w1






Exhibit 10.1




[Execution Copy]




SECURITIES PURCHASE AGREEMENT




     THIS SECURITIES PURCHASE AGREEMENT (this “Agreement”) is dated as of June 12, 2009, by and
between HANMI FINANCIAL CORPORATION, a Delaware corporation and registered bank holding company
with its principal offices in Los Angeles, California (the “Company”) and LEADING INVESTMENT &
SECURITIES CO., LTD., a Korean corporation with its principal offices in Seoul, Korea (the
“Purchaser”).



RECITALS




     WHEREAS, the Company is a Delaware corporation and registered bank holding company owning all
of the issued and outstanding shares of capital stock of Hanmi Bank, a California state bank with
its main office located in Los Angeles, California (the “Bank”);



     WHEREAS, the authorized capital stock of the Company consists of 200,000,000 shares of common
stock, par value $0.001 per share (the “Common Stock”), of which 45,924,767 shares are issued and
outstanding, and 10,000,000 shares of preferred stock, par value $0.001 per share, of which no
shares are issued and outstanding;



     WHEREAS, the Company desires to issue and sell to the Purchaser, and the Purchaser desires to
purchase from the Company, in a private transaction that is exempt from registration under Section
4(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Regulation D
(“Regulation D”) promulgated by the United States Securities and Exchange Commission (the
“Commission”) under the Securities Act, 8,040,882 shares of Common Stock (the “Shares”),
representing 14.9% of the issued and outstanding shares of Common Stock of the Company after giving
effect to the sale of such Shares (the “Acquisition”);



     WHEREAS, the Purchaser desires to accomplish the Acquisition through an initial purchase of
5,046,118 Shares, representing up to 9.9% of the issued and outstanding shares of Common Stock of
the Company after giving effect to the sale of such Shares (the “Initial Acquisition”) and a
subsequent purchase of 2,994,764 Shares, which together with the Initial Acquisition will represent
up to 14.9% of the issued and outstanding shares of Common Stock of the Company after giving effect
to the sale of such Shares (the “Additional Acquisition”);



     WHEREAS, the Company has engaged Keefe, Bruyette and Woods as its exclusive placement agent
(the “Placement Agent”) for the offering of the Shares on a “best efforts” basis; and



     WHEREAS, contemporaneously with the execution and delivery of this Agreement, the parties
hereto are executing and delivering a Registration Rights Agreement, substantially in the form
attached hereto as Exhibit A (the “Registration Rights Agreement”), pursuant to which,
among other things, the Company will agree to provide certain registration rights with respect to
the Shares under the Securities Act and the rules and regulations promulgated thereunder and
applicable state securities laws.



     NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for
other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged,
the Company and the Purchaser hereby agree as follows:



 









 





ARTICLE I

DEFINITIONS




     1.1 Definitions. In addition to the terms defined elsewhere in this Agreement, for all
purposes of this Agreement, the following terms shall have the meanings indicated in this
Section 1.1:



     “Acquisition” has the meaning set forth in the Recitals.



     “Action” means any action, suit, inquiry, notice of violation, proceeding (including any
partial proceeding such as a deposition) or investigation pending or, to the Company’s Knowledge,
threatened in writing against the Company, any Subsidiary or any of their respective properties or
any officer, director or employee of the Company or any Subsidiary acting in his or her capacity as
an officer, director or employee before or by any federal, state, county, local or foreign court,
arbitrator, governmental or administrative agency, regulatory authority, stock market, stock
exchange or trading facility.



     “Additional Acquisition” has the meaning set forth in the Recitals.



     “Additional Acquisition Closing” has the meaning set forth in Section 2.1(c).



     “Additional Acquisition Closing Date” has the meaning set forth in Section 2.1(c).



     “Affiliate” means, with respect to any Person, any other Person that, directly or indirectly
through one or more intermediaries, Controls, is controlled by or is under common control with such
Person, as such terms are used in and construed under Rule 405 under the Securities Act.



     “Agreement” shall have the meaning ascribed to such term in the Preamble.



     “Bank” has the meaning set forth in the Recitals.



     “BHC Registration” has the meaning set forth in Section 5.1(e).



     “Business Day” means a day, other than a Saturday or Sunday, on which banks in Los Angeles,
California are open for the general transaction of business.



     “Buy-In” has the meaning set forth in Section 4.1(f).



     “Buy-In Price” has the meaning set forth in Section 4.1(f).



     “CDFI” means the California Department of Financial Institutions.



     “Change-of-Control Notice” has the meaning set forth in Section 5.1(e).



     “Closing Bid Price” means, for any security as of any date, the last closing price for such
security on the Principal Trading Market, as reported by Bloomberg, or, if the Principal Trading
Market begins to operate on an extended hours basis and does not designate the closing bid price
then the last bid price of such security prior to 4:00:00 p.m., New York Time, as reported by
Bloomberg, or, if the Principal Trading Market is not the principal securities exchange or trading



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market for such security, the last closing price of such security on the principal securities
exchange or trading market where such security is listed or traded as reported by Bloomberg, or if
the foregoing do not apply, the last closing price of such security in the over-the-counter market
on the electronic bulletin board for such security as reported by Bloomberg, or, if no closing bid
price is reported for such security by Bloomberg, the average of the bid prices of any market
makers for such security as reported in the “pink sheets” by Pink Sheets LLC (formerly the National
Quotation Bureau, Inc.). If the Closing Bid Price cannot be calculated for a security on a
particular date on any of the foregoing bases, the Closing Bid Price of such security on such date
shall be the fair market value as mutually determined by the Company and the holder. If the Company
and the holder are unable to agree upon the fair market value of such security, then the Company
shall, within two Business Days submit via facsimile (a) the disputed determination to an
independent, reputable investment bank selected by the Company and approved by the holder or (b)
the disputed arithmetic calculation to the Company’s independent, outside accountant. The Company
shall cause at its expense the investment bank or the accountant, as the case may be, to perform
the determinations or calculations and notify the Company and the holder of the results no later
than ten Business Days from the time it receives the disputed determinations or calculations. Such
investment bank’s or accountant’s determination or calculation, as the case may be, shall be
binding upon all parties absent demonstrable error. All such determinations shall be appropriately
adjusted for any stock dividend, stock split, stock combination or other similar transaction during
the applicable calculation period.




     “Commission” has the meaning set forth in the Recitals.



     “Common Stock” has the meaning set forth in the Recitals, and also includes any securities
into which the Common Stock may hereafter be reclassified or changed.



     “Common Stock Equivalents” means any securities of the Company or any Subsidiary which would
entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any
debt, preferred stock, rights, options, warrants or other instrument that is at any time
convertible into or exchangeable for, or otherwise entitles the holder thereof to receive, Common
Stock or other securities that entitle the holder to receive, directly or indirectly, Common Stock.



     “Company” shall have the meaning ascribed to such term in the Preamble.



     “Company Counsel” means Hunton & Williams LLP.



     “Company Deliverables” has the meaning set forth in Section 2.2(a).



     “Company’s Knowledge” means with respect to any statement made to the knowledge of the
Company, that the statement is based upon the actual knowledge of the executive officers of
the Company or its Subsidiaries having responsibility for the matter or matters that are the
subject of the statement.



     “Control” (including the terms “controlling”, “controlled by” or “under common control with”)
means the possession, direct or indirect, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.



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     “CRA” means the Community Reinvestment Act of 1977 or any successor law, and regulations and
rules issued pursuant to that Act or any successor law.



     “Deadline Date” has the meaning set forth in Section 4.1(f).



     “Disclosure Materials” has the meaning set forth in Section 3.1(h).



     “DTC” means the Depository Trust Company.



     “Effective Date” means the date on which the initial Registration Statement required by
Section 2(a) of the Registration Rights Agreement is first declared effective by the Commission.



     “Effectiveness Deadline” means the date on which the initial Registration Statement is
required to be declared effective by the Commission under the terms of the Registration Rights
Agreement.



     “Escrow Agent” has the meaning set forth in Section 2.1(d).



     “Escrow Amount” has the meaning set forth in Section 2.1(d).



     “Evaluation Date” has the meaning set forth in Section 3.1(j).



     “Exchange Act” means the Securities Exchange Act of 1934, as amended, or any successor
statute, and the rules and regulations promulgated thereunder.



     “GAAP” means U.S. generally accepted accounting principles, as applied by the Company.



     “Indemnified Person” has the meaning set forth in Section 4.7(b).



     “Initial Acquisition” has the meaning set forth in the Recitals.



     “Initial Acquisition Closing” has the meaning set forth in Section 2.1(b).



     “Initial Acquisition Closing Date” has the meaning set forth in Section 2.1(b).



     “Intellectual Property” has the meaning set forth in Section 3.1(x).



     “Irrevocable Transfer Agent Instructions” means, with respect to the Company, the Irrevocable
Transfer Agent Instructions, in the form of Exhibit E, executed by the Company and
delivered to and acknowledged in writing by the Transfer Agent.



     “Lien” means any lien, charge, claim, encumbrance, security interest, right of first refusal,
preemptive right or other restrictions of any kind.



     “Legend Removal Date” has the meaning set forth in Section 4.1(c).



     “Lock-Up Period” has the meaning set forth in Section 4.10.



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     “Los Angeles Courts” means the state and federal courts sitting in the City of Los Angeles.



     “Material Adverse Effect” means any of (i) a material and adverse effect on the legality,
validity or enforceability of any Transaction Document, (ii) a material and adverse effect on the
results of operations, assets, business or financial condition of the Company and the Subsidiaries,
taken as a whole, or (iii) any adverse impairment to the Company’s ability to perform in any
material respect on a timely basis its obligations under any Transaction Document, except that any
of the following, either alone or in combination, shall not be deemed a Material Adverse Effect:
(A) effects caused by changes or circumstances affecting general market conditions in the U.S.
economy or which are generally applicable to the industry in which the Company operates, (B)
effects resulting from or relating to the announcement or disclosure of the sale of the Shares or
other transactions contemplated by this Agreement, or (C) effects caused by any event, occurrence
or condition resulting from or relating to the taking of any action in accordance with this
Agreement.



     “Material Contract” means any contract of the Company that was filed as an exhibit to the SEC
Reports pursuant to Item 601(b)(4) or Item 601(b)(10) of Regulation S-K.



     “Material Permits” has the meaning set forth in Section 3.1(v).



     “Outside Date” means the thirtieth day following the date of this Agreement; provided that if
such day is not a Business Day, the first day following such day that is a Business Day.



     “Person” means an individual, corporation, partnership, limited liability company, trust,
business trust, association, joint stock company, joint venture, sole proprietorship,
unincorporated organization, governmental authority or any other form of entity not specifically
listed herein.



     “Placement Agent” has the meaning set forth in the Recitals.



     “Press Release” has the meaning set forth in Section 4.6.



     “Principal Trading Market” means the Trading Market on which the Common Stock is primarily
listed on and quoted for trading, which, as of the date of this Agreement and the Initial
Acquisition Closing Date and the Additional Acquisition Closing Date, shall mean the NASDAQ Global
Select Market.



     “Proceeding” means an action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition), whether commenced or
threatened.



     “Purchase Price” means $1.37 per Share.



     “Purchaser” shall have the meaning ascribed to such term in the Preamble.



     “Purchaser Deliverables” has the meaning set forth in Section 2.2(b).



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     “Purchaser Party” has the meaning set forth in Section 4.7(a).



     “Registration Rights Agreement” has the meaning set forth in the Recitals.



     “Registration Statement” means a registration statement meeting the requirements set forth in
the Registration Rights Agreement and covering the resale by the Purchaser of the Registrable
Securities (as defined in the Registration Rights Agreement).



     “Regulatory Authority” means any administrative agency or commission or other governmental
authority or instrumentality, domestic or foreign, or any industry self-regulatory authority
charged with the supervision and regulation of financial institutions or issuers of securities or
engaged in the insurance of deposits or the supervision or regulation of any party hereto or its
Subsidiaries.



     “Regulation D” has the meaning set forth in the Recitals.



     “Required Approvals” has the meaning set forth in Section 3.1(e).



     “Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by
the Commission having substantially the same effect as such Rule.



     “SEC” means the Securities Exchange Commission.



     “SEC Reports” has the meaning set forth in Section 3.1(h).



     “Secretary’s Certificate” has the meaning set forth in Section 2.2(a).



     “Securities Act” means the Securities Act of 1933, as amended.



     “Shares” has the meaning set forth in the Recitals.



     “Short Sales” include, without limitation, all “short sales” as defined in Rule 200
promulgated under Regulation SHO under the Exchange Act, whether or not against the box, and all
types of direct and indirect stock pledges, forward sale contracts, options, puts, calls, short
sales, swaps, “put equivalent positions” (as defined in Rule 16a-1(h) under the Exchange Act) and
similar arrangements (including on a total return basis), and sales and other transactions through
non-U.S. broker dealers or foreign regulated brokers.



     “Significant Subsidiaries” has the meaning set forth in Section 3.1(b).



     “Stock Certificates” has the meaning set forth in Section 2.2(a).



     “Subscription Amount” means with respect to each Purchaser, the aggregate amount to be paid
for the Shares purchased hereunder as indicated on such Purchaser’s signature page to this
Agreement next to the heading “Aggregate Purchase Price (Subscription Amount)”.



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     “Subsidiary” means any entity in which the Company, directly or indirectly, owns sufficient
capital stock or holds a sufficient equity or similar interest such that it is consolidated with
the Company in the financial statements of the Company.



     “Trading Affiliate” has the meaning set forth in Section 3.2(h).



     “Trading Day” means (i) a day on which the Common Stock is listed or quoted and traded on its
Principal Trading Market (other than the OTC Bulletin Board), or (ii) if the Common Stock is not
listed on a Trading Market (other than the OTC Bulletin Board), a day on which the Common Stock is
traded in the over-the-counter market, as reported by the OTC Bulletin Board, or (iii) if the
Common Stock is not quoted on any Trading Market, a day on which the Common Stock is quoted in the
over-the-counter market as reported in the “pink sheets” by Pink Sheets LLC (or any similar
organization or agency succeeding to its functions of reporting prices); provided , that in the
event that the Common Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof,
then Trading Day shall mean a Business Day.



     “Trading Market” means whichever of the New York Stock Exchange, the American Stock Exchange,
the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market or the OTC
Bulletin Board on which the Common Stock is listed or quoted for trading on the date in question.



     “Transaction Documents” means this Agreement, the schedules and exhibits attached hereto, the
Registration Rights Agreement, the Irrevocable Transfer Agent Instructions and any other documents
or agreements executed in connection with the transactions contemplated hereunder.



     “Transfer Agent” means Computershare Trust Company, N.A., or any successor transfer agent for
the Company.



ARTICLE II

PURCHASE AND SALE




     2.1 Closing.



          (a) Purchase Price. On the terms and subject to the conditions contained in this
Agreement, and in reliance upon the representations and warranties set forth in this Agreement, at
the Initial Acquisition Closing and the Additional Acquisition Closing (each, as hereinafter
defined), the Purchaser hereby agrees to purchase the Shares from the Company, and the Company
hereby agrees to sell, convey, transfer and assign the Shares to the Purchaser, free and clear of
all liens, security interests, pledges, encumbrances, adverse claims and demands of every kind,
character and description whatsoever. The purchase price (“Purchase Price”) and full consideration
that Purchaser shall pay to the Company for the Shares shall be an amount equal to $11,016,008.34
in the aggregate, or $1.37 per Share. Subject to confirmation from applicable Regulatory Authorities, the Acquisition of the Shares shall be accomplished through
the Initial Acquisition of 5,046,118 Shares and an Additional Acquisition of 2,994,764 Shares.




          (b) Initial Acquisition Closing. On a date mutually acceptable to the Company and the
Purchaser which date shall be within five (5) Business Days following receipt




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of all necessary
regulatory, corporate and other approvals, consents or confirmations referred to herein and the
expiration of any mandatory waiting periods, or oral or written confirmation from all applicable
regulatory agencies that such approvals are not required (herein called the “Initial Acquisition
Closing Date”), a meeting (the “Initial Acquisition Closing”) will take place at which the parties
to this Agreement will exchange certificates, letters and other documents in order to determine
whether all of the conditions set forth in ARTICLE V have been satisfied or waived or whether any
condition exists that would permit a party to this Agreement to terminate this Agreement. If no
such condition then exists or if no party elects to exercise any right it may have to terminate
this Agreement, then and thereupon the appropriate parties shall execute such documents and
instruments as may be necessary or appropriate in order to effect the Initial Acquisition
contemplated by this Agreement. The Initial Acquisition Closing shall take place at 10:00 a.m.,
Los Angeles, California time at the offices of Hunton & Williams LLP, 550 South Hope Street, Suite
2000, Los Angeles, California 90071, on the Initial Acquisition Closing Date, or at such other time
and place to which the Company and the Purchaser may agree.




          (c) Additional Acquisition Closing. On a date mutually acceptable to the Company and
the Purchaser which date shall be within five (5) Business Days following receipt of all necessary
regulatory, corporate and other approvals, consents or confirmations referred to herein and the
expiration of any mandatory waiting periods, or oral or written confirmation from all applicable
regulatory agencies that such approvals are not required (herein called the “Additional Acquisition
Closing Date”), a meeting (the “Additional Acquisition Closing”) will take place at which the
parties to this Agreement will exchange certificates, letters and other documents in order to
determine whether all of the conditions set forth in ARTICLE V have been satisfied or waived or
whether any condition exists that would permit a party to this Agreement to terminate this
Agreement. If no such condition then exists or if no party elects to exercise any right it may
have to terminate this Agreement, then and thereupon the appropriate parties shall execute such
documents and instruments as may be necessary or appropriate in order to effect the Additional
Acquisition contemplated by this Agreement. The Additional Acquisition Closing shall take place at
10:00 a.m., Los Angeles, California time at the offices of Hunton & Williams LLP, 550 South Hope
Street, Suite 2000, Los Angeles, California 90071, or at such other time and place to which the
Company and the Purchaser may agree.




          (d) Form of Payment; Escrow. Unless otherwise agreed to by the Company and the
Purchaser, on or prior to the Business Day immediately prior to the Initial Acquisition Closing
Date or the Additional Acquisition Closing Date, as applicable, the Purchaser shall wire its
Subscription Amount relating to the applicable closing, in United States dollars and in immediately
available funds, to a non-interest bearing escrow account established by the Company and the
Placement Agent with an independent, third party escrow agent mutually acceptable to the Company
and the Purchaser (the “Escrow Agent”) as set forth on Exhibit G hereto (the aggregate
amounts received being held in escrow by the Escrow Agent are referred to herein as the “Escrow
Amount”). Unless otherwise agreed to by the Company and the Purchaser, on the Initial Acquisition
Closing Date or the Additional Acquisition Closing Date, as applicable,
(a) the Company and the Placement Agent shall instruct the Escrow Agent to deliver, in
immediately available funds, the Escrow Amount constituting the aggregate Purchase Price relating
to the applicable closing as follows: (1) to the Placement Agent, the fees and reimbursable
expenses payable to the Placement Agent (which fees and expenses shall be set forth in such
instructions), and (2) the balance of the applicable Purchase Price to the Company





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and (b) the
Company shall irrevocably instruct the Transfer Agent to deliver to the Purchaser one or more stock
certificates, free and clear of all restrictive and other legends (except as expressly provided in
Section 4.1(b) hereof), evidencing the number of Shares the Purchaser is purchasing pursuant to the
Initial Acquisition or the Additional Acquisition, as applicable, as is set forth on the
Purchaser’s signature page to this Agreement next to the heading “Number of Shares to be Acquired,”
within three (3) Business Days after the Initial Acquisition Closing and the Additional Acquisition
Closing, as applicable.




     2.2 Closing Deliveries.



          (a) On or prior to each of the Initial Acquisition Closing Date and the Additional Acquisition
Closing Date, the Company shall issue, deliver or cause to be delivered to the Purchaser the
following (the “Company Deliverables”):





          (i) this Agreement, duly executed by the Company;




          (ii) facsimile copies of one or more stock certificates, free and clear of all
restrictive and other legends (except as provided in Section 4.1(b) hereof), evidencing the
Shares subscribed for by the Purchaser hereunder and relating to the Initial Acquisition or
the Additional Acquisition, as applicable, registered in the name of the Purchaser as set
forth on the Stock Certificate Questionnaire included as Exhibit B hereto (the
“Stock Certificates”), with the original Stock Certificates sent within three (3) Business
Days of the Initial Acquisition Closing or the Additional Acquisition Closing, as
applicable;




          (iii) a legal opinion of Company Counsel, dated as of the Initial Acquisition Closing
Date or the Additional Acquisition Closing Date, as applicable, and in the form attached
hereto as Exhibit C, executed by such counsel and addressed to the Purchaser;




          (iv) the Registration Rights Agreement, duly executed by the Company, relating to the
Shares to be acquired pursuant to the Initial Acquisition or the Additional Acquisition, as
applicable;




          (v) duly executed Irrevocable Transfer Agent Instructions acknowledged in writing by
the Transfer Agent;




          (vi) a certificate of the Secretary of the Company (the “Secretary’s Certificate”),
dated as of the Initial Acquisition Closing Date or the Additional Acquisition Closing
Date, as applicable, (a) certifying the resolutions adopted by the Board of Directors of
the Company or a duly authorized committee thereof approving the transactions contemplated
by this Agreement and the other Transaction Documents and the issuance of the Shares,
(b) certifying the current versions of the certificate or
articles of incorporation, as amended, and by-laws of the Company and (c) certifying
as to the signatures and authority of persons signing the Transaction Documents and related
documents on behalf of the Company, in the form attached hereto as Exhibit E;




          (vii) the Compliance Certificate referred to in Section 5.1(h);



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          (viii) a certificate evidencing the formation and good standing of the Company in its
jurisdiction of formation issued by the Secretary of State (or comparable office) of such
jurisdiction, as of a date within five (5) Business Days of the Initial Acquisition Closing
Date or the Additional Acquisition Closing Date, as applicable;




          (ix) a certified copy of the Certificate of Incorporation, as certified by the
Secretary of State of the State (or comparable office) of such entity’s jurisdiction of
formation, as of a date within ten (10) Business Days of the Initial Acquisition Closing
Date or the Additional Acquisition Closing Date, as applicable.



          (b) On or prior to each of the Initial Acquisition Closing Date and the Additional Acquisition
Closing Date, the Purchaser shall deliver or cause to be delivered to the Company the following
(the “Purchaser Deliverables”):





          (i) this Agreement, duly executed by the Purchaser;




          (ii) unless otherwise agreed to by the Company and the Purchaser, its Subscription
Amount relating to the Initial Acquisition or the Additional Acquisition, as applicable, in
U.S. dollars and in immediately available funds, in the amount set forth as the “Purchase
Price” indicated below such Purchaser’s name on the applicable signature page hereto under
the heading “Aggregate Purchase Price (Subscription Amount)” by wire transfer to the escrow
account set forth on Exhibit G attached hereto;




          (iii) the Registration Rights Agreement, duly executed by the Purchaser, relating to
the Shares to be acquired pursuant to the Initial Acquisition or the Additional
Acquisition, as applicable;




          (iv) a fully completed and duly executed Selling Stockholder Questionnaire in the form
attached as Annex B to the Registration Rights Agreement; and




          (v) a fully completed and duly executed Stock Certificate Questionnaire in the form
attached hereto as Exhibit B.



ARTICLE III

REPRESENTATIONS AND WARRANTIES




     3.1 Representations and Warranties of the Company. The Company hereby represents and
warrants as of the date hereof and the Initial Acquisition Closing Date or the Additional
Acquisition Closing Date, as applicable (except for the representations and warranties that speak
as of a specific date, which shall be made as of such date), to the Purchaser that, except as set
forth in the Schedules delivered herewith or disclosed in the SEC Reports:



     (a) Subsidiaries. The Company has no direct or indirect Subsidiaries other than those
listed in Schedule 3.1(a) hereto. Except as disclosed in Schedule 3.1(a) hereto,
the Company owns, directly or indirectly, all of the capital stock or comparable equity interests
of each Subsidiary free and clear of any and all Liens which could reasonably be expected to have a
Material Adverse Effect, and all the issued and outstanding shares of capital stock or comparable



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equity interest of each Subsidiary are validly issued and are fully paid, non-assessable and free
of preemptive and similar rights to subscribe for or purchase securities.




          (b) Organization and Qualification. The Company and each of its “ Significant
Subsidiaries” (as defined in Rule 1-02 of Regulation S-X) is an entity duly incorporated or
otherwise organized, validly existing and in good standing under the laws of the jurisdiction of
its incorporation or organization (as applicable), with the requisite corporate power and authority
to own or lease and use its properties and assets and to carry on its business as currently
conducted. Neither the Company nor any Significant Subsidiary is in material violation of any of
the provisions of its respective certificate or articles of incorporation, bylaws or other
organizational or charter documents. The Company and each of its Significant Subsidiaries is duly
qualified to conduct business and is in good standing as a foreign corporation or other entity in
each jurisdiction in which the nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in good standing, as the
case may be, would not reasonably be expected to have a Material Adverse Effect.




          (c) Authorization; Enforcement; Validity. The Company has the requisite corporate
power and authority to enter into and to consummate the transactions contemplated by each of the
Transaction Documents to which it is a party and otherwise to carry out its obligations hereunder
and thereunder. The Company’s execution and delivery of each of the Transaction Documents to which
it is a party and the consummation by it of the transactions contemplated hereby and thereby
(including, but not limited to, the sale and delivery of the Shares) have been duly authorized by
all necessary corporate action on the part of the Company, and no further corporate action is
required by the Company, its Board of Directors or its stockholders in connection therewith other
than in connection with the Required Approvals. Each of the Transaction Documents to which it is a
party has been (or upon delivery will have been) duly executed by the Company and is, or when
delivered in accordance with the terms hereof, will constitute the legal, valid and binding
obligation of the Company enforceable against the Company in accordance with its terms, except (i)
as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of,
creditors’ rights and remedies or by other equitable principles of general application, (ii) as
limited by laws relating to the availability of specific performance, injunctive relief or other
equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited
by applicable law. Except for Material Contracts, there are no stockholder agreements, voting
agreements, or other similar arrangements with respect to the Company’s capital stock to which the
Company is a party or, to the Company’s Knowledge, between or among any of the Company’s
stockholders.




          (d) No Conflicts. The execution, delivery and performance by the Company of the
Transaction Documents to which it is a party and the consummation by the Company of the
transactions contemplated hereby or thereby (including, without limitation, the issuance of
the Shares) do not and will not (i) conflict with or violate any provisions of the Company’s
or any Subsidiary’s certificate or articles of incorporation, bylaws or otherwise result in a
violation of the organizational documents of the Company, (ii) conflict with, or constitute a
default (or an event that with notice or lapse of time or both would result in a default) under,
result in the creation of any Lien upon any of the properties or assets of the Company or give to
others any




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rights of termination, amendment, acceleration or cancellation (with or without notice,
lapse of time or both) of, any Material Contract, or (iii) subject to the Required Approvals,
conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction,
decree or other restriction of any court or governmental authority to which the Company or any of
its Subsidiaries is subject (including federal and state securities laws and regulations and the
rules and regulations, assuming the correctness of the representations and warranties made by the
Purchaser herein, of any self-regulatory organization to which the Company or its securities are
subject, including all applicable Trading Markets), or by which any property or asset of the
Company or any of its Subsidiaries is bound or affected, except in the case of clauses (ii) and
(iii) such as would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.




          (e) Filings, Consents and Approvals. Neither the Company nor any of its Subsidiaries
is required to obtain any consent, waiver, authorization or order of, give any notice to, or make
any filing or registration with, any court or other federal, state, local or other governmental
authority or other Person in connection with the execution, delivery and performance by the Company
of the Transaction Documents (including, without limitation, the issuance of the Shares), other
than (i) the filing with the Commission of one or more Registration Statements in accordance with
the requirements of the Registration Rights Agreement, (ii) filings required by applicable state
securities laws, (iii) the filing of a Notice of Sale of Securities on Form D with the Commission
under Regulation D of the Securities Act, (iv) the filing of any requisite notices and/or
application(s) to the Principal Trading Market for the issuance and sale of the Common Stock and
the listing of the Common Stock for trading or quotation, as the case may be, thereon in the time
and manner required thereby, (v) the filings required in accordance with Section 4.6 of this
Agreement and (vi) those that have been made or obtained prior to the date of this Agreement
(collectively, the “Required Approvals”).




          (f) Issuance of the Shares. The Shares have been duly authorized and, when issued and
paid for in accordance with the terms of the Transaction Documents, will be duly and validly
issued, fully paid and nonassessable and free and clear of all Liens, other than restrictions on
transfer provided for in the Transaction Documents or imposed by applicable securities laws, and
shall not be subject to preemptive or similar rights. Assuming the accuracy of the representations
and warranties of the Purchaser in this Agreement, the Shares will be issued in compliance with all
applicable federal and state securities laws.




          (g) Capitalization. The number of shares and type of all authorized, issued and
outstanding capital stock, options and other securities of the Company (whether or not presently
convertible into or exercisable or exchangeable for shares of capital stock of the Company) has
been set forth in the SEC Reports and has changed since the date of such SEC Reports only due to
stock grants or other equity awards or stock option and warrant exercises that do not, individually
or in the aggregate, have a material effect on the issued and outstanding capital stock, options
and other securities. All of the outstanding shares of capital stock of the Company
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, and 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 Company. Except as specified in the SEC Reports:
(i) no shares of the Company’s outstanding capital stock are subject to preemptive




12









 







rights or any
other similar rights; (ii) 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 Company,
or contracts, commitments, understandings or arrangements by which the Company is or may become
bound to issue additional shares of capital stock of the Company 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
Company, other than those issued or granted pursuant to Material Contracts or equity or incentive
plans or arrangements described in the SEC Reports; (iii) there are no material outstanding debt
securities, notes, credit agreements, credit facilities or other agreements, documents or
instruments evidencing indebtedness of the Company or by which the Company is bound; (iv) except as
identified in the Registration Rights Agreement, there are no agreements or arrangements under
which the Company is obligated to register the sale of any of their securities under the Securities
Act; (v) there are no outstanding securities or instruments of the Company or which contain any
redemption or similar provisions, and there are no contracts, commitments, understandings or
arrangements by which the Company is or may become bound to redeem a security of the Company;
(vi) there are no securities or instruments containing anti-dilution or similar provisions that
will be triggered by the issuance of the Shares; (vii) the Company does not have any stock
appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement; and
(viii) the Company has no liabilities or obligations required to be disclosed in the SEC Reports
but not so disclosed in the SEC Reports, other than those incurred in the ordinary course of the
Company’s businesses and which, individually or in the aggregate, do not or would not in the
reasonable judgment of the Company be expected to have a Material Adverse Effect.




          (h) SEC Reports; Disclosure Materials. Except as set forth on Confidential
Schedule 3.1(h), the Company has filed all reports, schedules, forms, statements and other
documents required to be filed by it under the Securities Act or the Exchange Act, including
pursuant to Section 13(a) or 15(d) of the Exchange Act, for the twenty-four months preceding the
date hereof (the foregoing materials, including the exhibits thereto and documents incorporated by
reference therein, being collectively referred to herein as the “SEC Reports” and together with
this Agreement and the Schedules to this Agreement, the “Disclosure Materials”), on a timely basis
or has received a valid extension of such time of filing and has filed any such SEC Reports prior
to the expiration of any such extension. Except as set forth on Confidential Schedule
3.1(h), as of their respective filing dates, or, to the extent corrected by a subsequent
restatement or subsequent filings, the time of filing of such subsequent restatement or subsequent
filings, the SEC Reports complied in all material respects with the requirements of the Securities
Act and the Exchange Act and the rules and regulations of the Commission promulgated thereunder,
and, except as corrected by subsequent filings, none of the SEC Reports, when filed, contained any
untrue statement of a material fact or omitted 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.




          (i) Financial Statements. Except as set forth on Confidential Schedule
3.1(i), the financial statements of the Company included in the SEC Reports comply in all
material respects with applicable accounting requirements and the rules and regulations of the
Commission with respect thereto as in effect at the time of filing (or, to the extent corrected by
a




13









 







subsequent restatement, at the time of the filing of such restatement). Such financial statements
have been prepared in accordance with GAAP applied on a consistent basis during the periods
involved, except as may be otherwise specified in such financial statements or the notes thereto
and except that unaudited financial statements may not contain all footnotes required by GAAP, and
fairly present in all material respects the balance sheet of the Company and its consolidated
subsidiaries taken as a whole as of and for the dates thereof and the results of operations and
cash flows for the periods then ended, subject, in the case of unaudited statements, to normal,
year-end audit adjustments.




          (j) Disclosure Controls and Procedures. Except as set forth on Confidential
Schedule 3.1(j), the Company has established and maintains disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)). The Company’s certifying officers have
evaluated the effectiveness of the Company’s controls and procedures as of the end of the period
covered by the most recently filed quarterly or annual periodic report under the Exchange Act (such
date, the “Evaluation Date”). The Company presented in its most recently filed quarterly or annual
periodic report under the Exchange Act the conclusions of the certifying officers about the
effectiveness of the disclosure controls and procedures based on their evaluations as of the
Evaluation Date. Since the Evaluation Date, except as set forth on Confidential Schedule
3.1(j), there have been no significant changes in the Company’s internal controls (as such term
is defined in Item 307(b) of Regulation S-K under the Exchange Act) or, to the Company’s Knowledge,
in other factors that could reasonably be expected to materially affect the Company’s internal
controls.




          (k) Accounting Controls. The Company maintains a system of accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed in accordance with
management’s general or specific authorization, (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with GAAP and to maintain accountability
for assets, (iii) access to assets is permitted only in accordance with management’s general or
specific authorization, and (iv) the recorded accountability for assets is compared with existing
assets at reasonable intervals and appropriate action is taken with respect to any differences.




          (l) Tax Matters. Each of the Company and its Subsidiaries (i) has prepared and filed
all foreign, federal and state income and all other tax returns, reports and declarations required
by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental
assessments and charges that are material in amount, shown or determined to be due on such returns,
reports and declarations, except those being contested in good faith, with respect to which
adequate reserves have been set aside on its books and (iii) has set aside on its books provisions
reasonably adequate for the payment of all taxes for periods subsequent to the periods to which
such returns, reports or declarations apply, except, in the case of clauses (i) and (ii) above,
where the failure to so pay or file any such tax, assessment, charge or return would not reasonably
be expected to have a Material Adverse Effect.




          (m) Material Changes. Except as set forth on Confidential Schedule 3.1(m),
since the date of the latest financial statements included within the SEC Reports, except as
disclosed in the SEC Reports, (i) there have been no events, occurrences or developments that have
had or would reasonably be expected to have, either individually or in the aggregate, a




14









 







Material
Adverse Effect, (ii) the Company has not incurred any material liabilities (contingent or
otherwise) other than (A) trade payables, accrued expenses and other liabilities incurred in the
ordinary course of business consistent with past practice and (B) liabilities not required to be
reflected in the Company’s financial statements pursuant to GAAP or required to be disclosed in
filings made with the Commission, (iii) the Company has not altered materially its method of
accounting or the manner in which it keeps its accounting books and records, (iv) the Company has
not declared or made any dividend or distribution of cash or other property to its stockholders or
purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock
(other than in connection with repurchases of unvested stock issued to employees of the Company),
(v) the Company has not issued any equity securities to any officer, director or Affiliate, except
Common Stock (A) issued in the ordinary course as dividends on outstanding preferred stock or (B)
issued pursuant to existing Company stock option or stock purchase plans or executive and director
corporate arrangements disclosed in the SEC Reports or (C) issued pursuant to other existing
agreements disclosed in the SEC Reports and (vi) there has not been any material change or
amendment to, or any waiver of any material right by the Company under, any Material Contract under
which the Company or any of its Subsidiaries is bound or subject.




          (n) Material Contracts. Except for the Material Contracts and except for this
Agreement and the other Transaction Documents, the Company and its Subsidiaries do not have any
agreements, contracts and commitments that are material to the business, financial condition,
assets, prospects or operations of the Company and its Subsidiaries that would be required to be
filed under the Exchange Act. Neither the Company nor any of its Subsidiaries is in default under
or in violation of, nor to the Company’s Knowledge, is there any valid basis for any claim of
default under or violation of, any Material Contract that could reasonably be expected to have a
Material Adverse Effect.




          (o) Litigation. To the Company’s Knowledge, there is no Action which (i) adversely
affects or challenges the legality, validity or enforceability of any of the Transaction Documents
or the Shares or (ii) except as disclosed in the SEC Reports, is likely to have a Material Adverse
Effect, individually or in the aggregate, if there were an unfavorable decision. Neither the
Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any
Action involving a claim of violation of or liability under federal or state securities laws or a
claim of breach of fiduciary duty.




          (p) Employment Matters. No material labor dispute exists or, to the Company’s
Knowledge, is imminent with respect to any of the employees of the Company or its Subsidiaries.
None of the Company’s or any of its Subsidiaries’ employees is a member of a union that relates to
such employee’s relationship with the Company or relevant Subsidiary, and neither the Company nor
any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and each
Subsidiary believes that its relationship with its employees is good. No executive officer of the
Company or a Subsidiary of the Company (as defined in Rule 501(f) of the Securities Act) has
notified the Company or such Subsidiary, as the case may be, that such
officer intends to leave the Company or such Subsidiary, as the case may be, or otherwise
terminate such officer’s employment with the Company or such Subsidiary, as the case may be,. To
the Company’s Knowledge, no executive officer of the Company or any of its Subsidiaries is, or is
now expected to be, in violation of any material term of any employment contract,




15









 







confidentiality,
disclosure or proprietary information agreement or non-competition agreement, or any other contract
or agreement or any restrictive covenant in favor of a third party, and to the Company’s Knowledge,
the continued employment of each such executive officer does not subject the Company or any
Subsidiary to any liability with respect to any of the foregoing matters. To the Company’s
Knowledge, each of the Company and its Subsidiaries is in compliance with all U.S. federal, state,
local and foreign laws and regulations relating to employment and employment practices, terms and
conditions of employment and wages and hours, except where the failure to be in compliance would
not in the reasonable judgment of the Company be expected to have, individually or in the
aggregate, a Material Adverse Effect.




          (q) Compliance. Except as set forth on Confidential Schedule 3.1(q), neither
the Company nor any of its Subsidiaries (i) is in default under or in violation of (and no event
has occurred that has not been waived that, with notice or lapse of time or both, would result in a
default by the Company or any of its Subsidiaries under), nor has the Company or any of its
Subsidiaries received written notice of a claim that it is in default under or that it is in
violation of, any Material Contract (whether or not such default or violation has been waived),
(ii) is in violation of any order of which the Company or any of its Subsidiaries has been made
aware in writing of any court, arbitrator or governmental body having jurisdiction over the Company
or any of its Subsidiaries or its properties or assets, or (iii) is in violation of, or in receipt
of written notice that it is in violation of, any statute, rule or regulation of any governmental
authority applicable to the Company or any of its Subsidiaries, except in each case as would not
reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.




          (r) Regulatory Agreement. Except as described in Confidential Schedule
3.1(r), the Company (i) has not received, consented to, or entered into any notice,
communication, memorandum, agreement or order of any applicable Regulatory Authority directing,
restricting or limiting, or purporting to direct, restrict or limit, in any manner the operations
of the Company (a “Regulatory Agreement”), and (ii) is not aware of any basis for any unresolved
violation, criticism, or exception by any applicable Regulatory Authority with respect to any
Regulatory Agreement which if resolved in a manner adverse to the Company could reasonably be
expected to have a Material Adverse Effect.




          (s) CRA Compliance. The Bank is in compliance, in all material respects, with the
applicable provisions of the CRA, and, as of the date hereof, the Bank has received a CRA rating of
“satisfactory” or better from the applicable Regulatory Authority. To the Company’s Knowledge,
there is no fact or circumstance or set of facts or circumstances which would cause the Bank to
fail to comply with such provisions in a manner which could reasonably be expected to have a
Material Adverse Effect.




          (t) Loan Loss Reserves. Except as set forth on Confidential Schedule 3.1(t),
each of the reserve and allowances for possible loan losses and the carrying value for real estate
owned which are shown on the financial statements of the Company included in the SEC Reports has
been established in conformity in all material respects with all applicable requirements, rules
and policies of applicable Regulatory Authorities and complies in all material respects with
the requirements of GAAP applied on a consistent basis to provide for possible losses on loans
outstanding and real estate owned as of the date of such financial statements.




16









 








          (u) Compliance with Capital Adequacy Guidelines. As of the date of this Agreement,
the Company and the Bank have, on a pro forma basis giving effect to the consummation of the
Initial Acquisition and the Additional Acquisition, sufficient regulatory capital to meet all
applicable regulatory capital guidelines of all Applicable Regulatory Authorities.




          (v) Regulatory Permits. Except as set forth on Confidential Schedule 3.1(v),
each of the Company and its Subsidiaries possesses or has applied for all certificates,
authorizations and permits issued by the appropriate federal, state, local or foreign regulatory
authorities necessary to conduct its business as currently conducted and as described in the SEC
Reports, except where the failure to possess such permits, individually or in the aggregate, has
not and would not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect (“Material Permits”), and (i) neither the Company nor any of its Subsidiaries has
received any notice in writing of proceedings relating to the revocation or material adverse
modification of any such Material Permits and (ii) none of the Company or its Subsidiaries is aware
of any facts or circumstances that would give rise to the revocation or material adverse
modification of any Material Permits.




          (w) Title to Assets. The Company and its Subsidiaries have good and marketable title
to all real property and tangible personal property owned by them which is material to the business
of the Company and its Subsidiaries, taken as whole, in each case free and clear of all Liens
except such as do not materially affect the value of such property or do not interfere with the use
made and proposed to be made of such property by the Company and any of its Subsidiaries. Any real
property and facilities held under lease by the Company and any of its Subsidiaries are held by
them under valid, subsisting and enforceable leases with such exceptions as are not material and do
not interfere with the use made and proposed to be made of such property and buildings by the
Company and its Subsidiaries.




          (x) Patents and Trademarks. To the Company’s Knowledge, the Company and its
Subsidiaries own, possess, license or have other rights to use all foreign and domestic patents,
patent applications, trade and service marks, trade and service mark registrations, trade names,
copyrights, inventions, trade secrets, technology, Internet domain names, know-how and other
intellectual property (collectively, the “Intellectual Property”) necessary for the conduct of
their respective businesses as now conducted or as proposed to be conducted in the SEC Reports.




          (y) Insurance. The Company and each of the Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such amounts as the
Company believes to be commercially reasonable in the businesses and locations in which the Company
and the Subsidiaries are engaged. Neither the Company nor any of its Subsidiaries has received any
notice of cancellation of any such insurance, nor, to the Company’s Knowledge, will it or any
Subsidiary be unable to renew their respective existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as may be necessary to
continue its business.




          (z) Transactions With Affiliates and Employees. Except as set forth in the SEC
Reports and other than the grant of stock options or other equity awards that are not individually
or in the aggregate material in amount, none of the officers or directors of the




17









 







Company or it
Subsidiaries and, to the Company’s Knowledge, none of the employees of the Company or its
Subsidiaries, is presently a party to any transaction with the Company or its Subsidiary or to a
presently contemplated transaction (other than for services as employees, officers and directors)
that would be required to be disclosed pursuant to Item 404 of Regulation S-K promulgated under the
Securities Act.




          (aa) Certain Fees. No person or entity will have, as a result of the transactions
contemplated by this Agreement, any valid right, interest or claim against or upon the Company or
the Purchaser for any commission, fee or other compensation pursuant to any agreement, arrangement
or understanding entered into by or on behalf of the Company, other than the Placement Agent with
respect to the offer and sale of the Shares (which placement agent fees are being paid by the
Company). The Company shall indemnify, pay, and hold the Purchaser harmless against, any liability,
loss or expense (including, without limitation, attorneys’ fees and out-of-pocket expenses) arising
in connection with any such right, interest or claim.




          (bb) Private Placement. Assuming the accuracy of the Purchaser’s representations and
warranties set forth in Section 3.2 of this Agreement, no registration under the Securities Act is
required for the offer and sale of the Shares by the Company to the Purchaser under the Transaction
Documents.




          (cc) Registration Rights. Other than as set forth in the SEC Reports and other than
the Purchaser, no Person has any right to cause the Company to effect the registration under the
Securities Act of any securities of the Company other than those securities which are currently
registered on an effective registration statement on file with the Commission.




          (dd) No Integrated Offering. Assuming the accuracy of the Purchaser’s representations
and warranties set forth in Section 3.2, none of the Company, its Subsidiaries nor, to the
Company’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 Company
security or solicited any offers to buy any security under circumstances that would (i) eliminate
the availability of the exemption from registration under Regulation D under the Securities Act in
connection with the offer and sale by the Company of the Shares as contemplated hereby or (ii)
cause the offering of the Shares pursuant to the Transaction Documents to be integrated with prior
offerings by the Company for purposes of any applicable law, regulation or stockholder approval
provisions, including, without limitation, under the rules and regulations of any Trading Market on
which any of the securities of the Company are listed or designated.




          (ee) Listing and Maintenance Requirements. The Company’s Common Stock is registered
pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no action
designed to terminate the registration of the Common Stock under the Exchange Act nor has the
Company received any notification that the Commission is contemplating terminating such
registration. The Company has not, in the 12 months preceding the date hereof, received written
notice from any Trading Market on which the Common Stock is listed or quoted to the
effect that the Company is not in compliance with the listing or maintenance requirements of
such Trading Market. The Company’s Common Stock is listed on the Principal Trading Market,




18









 







and to
the Company’s Knowledge, the Company and its Common Stock meet the criteria for continued listing
and trading on the Principal Trading Market.




          (ff) Investment Company. Neither the Company nor any of its Subsidiaries is required
to be registered as, and is not an Affiliate of, and immediately following the Initial Acquisition
Closing or the Additional Acquisition Closing will not be required to register as, an “investment
company” within the meaning of the Investment Company Act of 1940, as amended.




          (gg) Application of Takeover Protections; Rights Agreements. Except as disclosed in
the SEC Reports, the Company has not adopted any stockholder rights plan or similar arrangement
relating to accumulations of beneficial ownership of Common Stock or a change in control of the
Company.




          (hh) Off Balance Sheet Arrangements. There is no transaction, arrangement, or other
relationship between the Company (or any Subsidiary) and an unconsolidated or other off balance
sheet entity that is required to be disclosed by the Company in its Exchange Act filings and is not
so disclosed and would have in the reasonable judgment of the Company a Material Adverse Effect.




          (ii) Acknowledgment Regarding Purchaser’s Purchase of Shares.  The Company
acknowledges and agrees that the Purchaser is acting solely in the capacity of an arm’s length
purchaser with respect to the Transaction Documents and the transactions contemplated hereby and
thereby.  The Company further acknowledges that the Purchaser is not acting as a financial advisor
or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents
and the transactions contemplated thereby and any advice given by the Purchaser or any of its
respective representatives or agents in connection with the Transaction Documents and the
transactions contemplated thereby is merely incidental to the Purchaser’s purchase of the Shares.




          (jj) Regulation M Compliance.  In the last thirty days, the Company has not, and to
the Company’s Knowledge no one acting on its behalf has, (i) 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 Company to facilitate the sale or resale of any of the Shares, (ii) sold, bid for,
purchased, or paid any compensation for soliciting purchases of, any of the securities of the
Company or (iii) paid or agreed to pay to any Person any compensation for soliciting another to
purchase any other securities of the Company, other than, in the case of clauses (ii) and (iii)
compensation paid to the Placement Agent in connection with the placement of the Shares.




          (kk) Sarbanes-Oxley Act. The Company is in compliance with any and all applicable
requirements of the Sarbanes-Oxley Act of 2002, and any and all applicable rules and regulations
promulgated by the SEC thereunder, except where such noncompliance would not, individually or in
the aggregate, be reasonably likely to have a Material Adverse Effect.




          (ll) Books and Records. The books of account, minute books, stock record books and
other records of the Company and its Subsidiaries are complete and correct in all material respects
and have been maintained in accordance with sound business practices and the




19









 







requirements of
Section 13(b)(2) of the Exchange Act, including an adequate system of internal controls.




          (mm) Form S-3 Eligibility. As of the date of this Agreement, the Company is eligible
to register the resale of its Common Stock by the Purchaser under Form S-3 promulgated under the
Securities Act.




          (nn) Vote Required. No vote of the holders of any class or series of the Company’s
capital stock, including the Common Stock, is necessary to approve the issuance of the Shares and
any other transactions contemplated by the Transaction Documents.




     3.2 Representations and Warranties of the Purchaser. The Purchaser hereby represents
and warrants as of the date hereof and as of the Initial Acquisition Closing Date and the
Additional Acquisition Closing Date to the Company as follows:



          (a) Organization; Authority. The Purchaser is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization with the requisite corporate
power and authority to enter into and to consummate the transactions contemplated by the applicable
Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The
execution, delivery and performance by the Purchaser of the transactions contemplated by this
Agreement have been duly authorized by all necessary corporate on the part of the Purchaser. Each
of this Agreement and the Registration Rights Agreement has been duly executed by the Purchaser,
and when delivered by the Purchaser in accordance with the terms hereof, will constitute the valid
and legally binding obligation of the Purchaser, enforceable against it in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the
enforcement of, creditors’ rights and remedies or by other equitable principles of general
application.




          (b) No Conflicts. The execution, delivery and performance by the Purchaser of this
Agreement and the Registration Rights Agreement and the consummation by each of the Purchaser of
the transactions contemplated hereby and thereby will not (i) result in a violation of the
organizational documents of the Purchaser, (ii) conflict with, or constitute a default (or an event
which with notice or lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or
instrument to which the Purchaser is a party, or (iii) result in a violation of any law, rule,
regulation, order, judgment or decree (including federal and state securities laws) applicable to
the Purchaser, except in the case of clauses (ii) and (iii) above, for such conflicts, defaults,
rights or violations which would not, individually or in the aggregate, reasonably be expected to
have a material adverse effect on the ability of the Purchaser to perform its obligations
hereunder.




          (c) Investment Intent. The Purchaser understands that the Shares are “restricted
securities” and have not been registered under the Securities Act or any applicable state
securities law and is acquiring the Shares as principal for its own account and not with a
view to, or for distributing or reselling such Shares or any part thereof in violation of the
Securities Act or any applicable state securities laws, provided, however, that by making the
representations herein, the Purchaser does not agree to hold any of the Shares for any minimum





20












 




period of time and reserves the right, subject to the provisions of this Agreement and the
Registration Rights Agreement, at all times to sell or otherwise dispose of all or any part of such
Shares pursuant to an effective registration statement under the Securities Act or under an
exemption from such registration and in compliance with applicable federal and state securities
laws. The Purchaser is acquiring the Shares hereunder in the ordinary course of its business. The
Purchaser does not presently have any agreement, plan or understanding, directly or indirectly,
with any Person to distribute or effect any distribution of any of the Shares (or any securities
which are derivatives thereof) to or through any person or entity.




          (d) General Solicitation. The Purchaser is not purchasing the Shares as a result of
any advertisement, article, notice or other communication regarding the Shares published in any
newspaper, magazine or similar media or broadcast over television or radio or presented at any
seminar or any other general advertisement.




          (e) Investment Risk. The Purchaser understands that its investment in the Shares
involves a significant degree of risk and that the market price of the Common Stock has been and
continues to be volatile and that no representation is being made as to the future value or trading
volume of the Common Stock.




          (f) Experience of the Purchaser. The Purchaser, either alone or together with its
representatives, has such knowledge, sophistication and experience in business and financial
matters so as to be capable of evaluating the merits and risks of the prospective investment in the
Shares, and has so evaluated the merits and risks of such investment. The Purchaser is able to
bear the economic risk of an investment in the Shares and, at the present time, is able to afford a
complete loss of such investment.




          (g) Access to Information. The Purchaser acknowledges that it has had the opportunity
to review the Disclosure Materials and has been afforded (i) the opportunity to ask such questions
as it has deemed necessary of, and to receive answers from, representatives of the Company
concerning the terms and conditions of the offering of the Shares and the merits and risks of
investing in the Shares; (ii) access to information about the Company and the Subsidiaries and
their respective financial condition, results of operations, business, properties, management and
prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain
such additional information that the Company possesses or can acquire without unreasonable effort
or expense that is necessary to make an informed investment decision with respect to the
investment. Neither such inquiries nor any other investigation conducted by or on behalf of the
Purchaser or its representatives or counsel shall modify, amend or affect the Purchaser’s right to
rely on the truth, accuracy and completeness of the Disclosure Materials and the Company’s
representations and warranties contained in the Transaction Documents. The Purchaser has sought
such accounting, legal and tax advice as it has considered necessary to make an informed decision
with respect to its acquisition of the Shares.




          (h) Certain Trading Activities. Other than with respect to the transactions
contemplated herein, since the time that the Purchaser was first contacted by the Company, the
Placement Agent or any other Person regarding the transactions contemplated hereby, neither
the Purchaser nor any Affiliate of the Purchaser which (x) had knowledge of the transactions
contemplated hereby, (y) has or shares discretion relating to the Purchaser’s investments or




21









 




trading or information concerning the Purchaser’s investments, including in respect of the Shares,
and (z) is subject to the Purchaser’s review or input concerning such Affiliate’s investments or
trading (collectively, “Trading Affiliates”) has directly or indirectly, nor has any Person acting
on behalf of or pursuant to any understanding with the Purchaser or Trading Affiliate, effected or
agreed to effect any purchases or sales of the securities of the Company (including, without
limitation, any Short Sales involving the Company’s securities). Other than to other Persons party
to this Agreement, the Purchaser has maintained the confidentiality of all disclosures made to it
in connection with this transaction (including the existence and terms of this transaction).




          (i) Brokers and Finders. No Person will have, as a result of the transactions
contemplated by this Agreement, any valid right, interest or claim against or upon the Company or
the Purchaser for any commission, fee or other compensation pursuant to any agreement, arrangement
or understanding entered into by or on behalf of the Purchaser.




          (j) Independent Investment Decision. The Purchaser has independently evaluated the
merits of its decision to purchase Shares pursuant to the Transaction Documents, and the Purchaser
confirms that it has not relied on the advice of any other Person’s business and/or legal counsel
in making such decision. The Purchaser understands that nothing in this Agreement or any other
materials presented by or on behalf of the Company to the Purchaser in connection with the purchase
of the Shares constitutes legal, tax or investment advice. The Purchaser has consulted such legal,
tax and investment advisors as it, in its sole discretion, has deemed necessary or appropriate in
connection with its purchase of the Shares. The Purchaser understands that the Placement Agent has
acted solely as the agent of the Company in this placement of the Shares and the Purchaser has not
relied on the business or legal advice of the Placement Agent or any of its agents, counsel or
Affiliates in making its investment decision hereunder, and confirms that none of such Persons has
made any representations or warranties to the Purchaser in connection with the transactions
contemplated by the Transaction Documents.




          (k) No reliance. The Purchaser is not relying upon, and has not relied upon, any
statement, representation or warranty made by any Person, including, without limitation, the
Placement Agent, except for the statements, representations and warranties contained in this
Agreement. Furthermore, the Purchaser acknowledges that (i) the Placement Agent has not performed
any due diligence review on behalf of the Purchaser, (ii) the Purchaser has made, and has relied
upon, its own examination in purchasing the Common Shares and (iii) the Purchaser has been provided
by the Company with the information the Purchaser deemed necessary in order to make its investment
decision.




          (l) Reliance on Exemptions. The Purchaser understands that the Shares being offered
and sold to it in reliance on specific exemptions from the registration requirements of U.S.
federal and state securities laws and that the Company is relying in part upon the truth and
accuracy of, and the Purchaser’s compliance with, the representations, warranties, agreements,
acknowledgements and understandings of the Purchaser set forth herein in order to determine the
availability of such exemptions and the eligibility of the Purchaser to acquire the Shares.




          (m) No Governmental Review. The Purchaser understands that no U.S. federal or state
agency or any other government or governmental agency has passed on or made




22









 




any recommendation or
endorsement of the Shares or the fairness or suitability of the investment in the Shares nor have
such authorities passed upon or endorsed the merits of the offering of the Shares.




          (n) Regulation M. The Purchaser is aware that the anti-manipulation rules of
Regulation M under the Exchange Act may apply to sales of Common Stock and other activities with
respect to the Common Stock by the Purchaser.




          (o) Residency. The Purchaser’s office in which its investment decision with respect
to the Shares was made is located at the address immediately below the Purchaser’s name on its
signature page hereto.




          (p) Sufficient Funds. The Purchaser has and shall have prior to the Initial
Acquisition Closing Date and the Additional Acquisition Closing Date, as applicable, sufficient
cash, available lines of credit or other sources of immediately available funds to enable it to
timely deliver to the Company the amount of the aggregate Purchase Price for the Shares to be
purchased pursuant to the Initial Acquisition and the Additional Acquisition, as applicable.




ARTICLE IV

OTHER AGREEMENTS OF THE PARTIES




     4.1 Transfer Restrictions.



          (a) Compliance with Laws. Notwithstanding any other provision of this ARTICLE IV, the
Purchaser covenants that the Shares may be disposed of only pursuant to an effective registration
statement under, and in compliance with the requirements of, the Securities Act, or pursuant to an
available exemption from, or in a transaction not subject to, the registration requirements of the
Securities Act, and in compliance with any applicable state, federal or foreign securities laws.
In connection with any transfer of the Shares other than (i) pursuant to an effective registration
statement, (ii) to the Company or (iii) pursuant to Rule 144 (provided that the transferor provides
the Company with reasonable assurances (in the form of seller and broker representation letters)
that the securities may be sold pursuant to such rule), the Company may require the transferor
thereof to provide to the Company and the Transfer Agent, at the transferor’s expense, an opinion
of counsel selected by the transferor and reasonably acceptable to the Company and the Transfer
Agent, the form and substance of which opinion shall be reasonably satisfactory to the Company and
the Transfer Agent, to the effect that such transfer does not require registration of such
transferred Shares under the Securities Act. As a condition of transfer (other than pursuant to
clauses (i), (ii) or (iii) of the preceding sentence), any such transferee shall agree in writing
to be bound by the terms of this Agreement and shall have the rights of the Purchaser under this
Agreement and the Registration Rights Agreement with respect to such transferred Shares.




          (b) Legends. Certificates evidencing the Shares shall bear any legend as required by
the “blue sky” laws of any state and a restrictive legend in substantially the following form,
until such time as they are not required under Section 4.1(c) or applicable law:





THESE SECURITIES HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED



23









 







(THE “SECURITIES ACT”), OR APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT
OR (B) AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS AS
EVIDENCED BY A LEGAL OPINION OF COUNSEL REASONABLY SATISFACTORY TO
THE COMPANY AND ITS TRANSFER AGENT OR (II) UNLESS SOLD PURSUANT TO
RULE 144 UNDER SAID ACT (PROVIDED THAT THE TRANSFEROR PROVIDES THE
COMPANY WITH REASONABLE ASSURANCES (IN THE FORM OF SELLER AND BROKER
REPRESENTATION LETTERS) THAT THE SECURITIES MAY BE SOLD PURSUANT TO
SUCH RULE). NO REPRESENTATION IS MADE BY THE ISSUER AS TO THE
AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT FOR RESALES OF THESE SECURITIES.



          (c) Removal of Legends. The restrictive legend set forth in Section 4.1(b) above
shall be removed and the Company shall issue a certificate without such restrictive legend or any
other restrictive legend to the holder of the applicable Shares upon which it is stamped or issue
to such holder by electronic delivery at the applicable balance account at DTC, if (i) such Shares
are registered for resale under the Securities Act (provided that, if the Purchaser is selling
pursuant to the effective registration statement registering the Shares for resale, the Purchaser
agrees to only sell such Shares during such time that such registration statement is effective and
not withdrawn or suspended, and only as permitted by such registration statement), (ii) such Shares
are sold or transferred pursuant to Rule 144 (if the transferor is not an Affiliate of the
Company), or (iii) such Shares are eligible for sale under Rule 144, without the requirement for
the Company 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 or (ii) Rule 144 becoming available for the resale of Shares, without the
requirement for the Company to be in compliance with the current public information required under
Rule 144 as to the Shares and without volume or manner-of-sale restrictions, the Company shall
cause Company Counsel to issue to the Transfer Agent the legal opinion referred to in the
Irrevocable Transfer Agent Instructions. Any fees (with respect to the Transfer Agent, Company
Counsel or otherwise) associated with the issuance of such opinion or the removal of such legend
shall be borne by the Company. Following the Effective Date, or at such earlier time as a
restrictive legend is no longer required for certain Shares, the Company will no later than three
(3) Trading Days following the delivery by the Purchaser to the Company or the Transfer Agent (with
notice to the Company) of a legended certificate representing such Shares (endorsed or
with stock powers attached, signatures guaranteed, and otherwise in form necessary to affect
the reissuance and/or transfer) and an opinion of counsel to the extent required by Section 4.1(a),




24









 







(such third Trading Day, the “Legend Removal Date”) deliver or cause to be delivered to the
Purchaser a certificate representing such Shares that is free from all restrictive legends. The
Company 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 4.1(c). Certificates for Shares
free from all restrictive legends may be transmitted by the Transfer Agent to the Purchaser by
crediting the account of the Purchaser’s prime broker with DTC as directed by the Purchaser.




          (d) Irrevocable Transfer Agent Instructions. The Company shall issue irrevocable
instructions to its Transfer Agent, and any subsequent transfer agent in the form of Exhibit
D attached hereto (the “Irrevocable Transfer Agent Instructions”). The Company represents and
warrants that no instruction other than the Irrevocable Transfer Agent Instructions referred to in
this Section 4.1(d) or instructions that are not contradictory therewith will be given by the
Company to its transfer agent in connection with this Agreement, and that the Shares shall
otherwise be freely transferable on the books and records of the Company as and to the extent
provided in this Agreement and the other Transaction Documents and applicable law. The Company
acknowledges that a breach by it of its obligations under this Section 4.1(d) will cause
irreparable harm to the Purchaser. Accordingly, the Company acknowledges that the remedy at law
for a breach of its obligations under this Section 4.1(d) will be inadequate and agrees, in the
event of a breach or threatened breach by the Company of the provisions of this Section 4.1(d),
that the Purchaser shall be entitled, in addition to all other available remedies, to an order
and/or injunction restraining any breach and requiring immediate issuance and transfer, without the
necessity of showing economic loss and without any bond or other security being required.




          (e) Acknowledgement. The Purchaser hereunder acknowledges its primary
responsibilities under the Securities Act and accordingly will not sell or otherwise transfer the
Shares or any interest therein without complying with the requirements of the Securities Act.
Except as otherwise provided below, while the above-referenced registration statement remains
effective, the Purchaser hereunder may sell the Shares in accordance with the plan of distribution
contained in the registration statement and if it does so it will comply therewith and with the
related prospectus delivery requirements unless an exemption therefrom is available. The Purchaser
agrees that if it is notified by the Company in writing at any time that the registration statement
registering the resale of the Shares is not effective or that the prospectus included in such
registration statement no longer complies with the requirements of Section 10 of the Securities
Act, the Purchaser will refrain from selling such Shares until such time as the Purchaser is
notified by the Company that such registration statement is effective or such prospectus is
compliant with Section 10 of the Exchange Act, unless the Purchaser is able to, and does, sell such
Shares pursuant to an available exemption from the registration requirements of Section 5 of the
Securities Act. Both the Company and its Transfer Agent, and their respective directors, officers,
employees and agents, may rely on this subsection (e) and the Purchaser hereunder will indemnify and
hold harmless each of such persons from any breaches or violations of this paragraph.




          (f) Buy-In. If the Company shall fail for any reason or for no reason to issue to the
Purchaser unlegended certificates within five (5) Trading Days of receipt of all documents
necessary for the removal of the legend set forth above (the “Deadline Date”), then, in addition
to all other remedies available to the Purchaser, if on or after the Trading Day immediately
following such five (5) Trading Day period, the Purchaser purchases (in an open market




25









 








transaction
or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the holder of shares
of Common Stock that the Purchaser anticipated receiving from the Company without any restrictive
legend (a “Buy-In”), then the Company shall, within five (5) Trading Days after the Purchaser’s
request and in the Purchaser’s sole discretion, either (i) pay cash to the Purchaser in an amount
equal to the Purchaser’s total purchase price (including brokerage commissions, if any) for the
shares of Common Stock so purchased (the “Buy-In Price”), at which point the Company’s obligation
to deliver such certificate (and to issue such shares of Common Stock) shall terminate, or
(ii) promptly honor its obligation to deliver to the Purchaser a certificate or certificates
representing such shares of Common Stock and pay cash to the Purchaser in an amount equal to the
excess (if any) of the Buy-In Price over the product of (a) such number of shares of Common Stock,
times (b) the Closing Bid Price on the Deadline Date.




     4.2 Regulatory Confirmation and Approvals. With the cooperation of the Company, the
Purchaser shall consult with all appropriate Regulatory Authorities as soon as practicable
following the date of this Agreement to obtain the consents, confirmations and/or approvals
referred to in Section 5.1(e). The Purchaser shall use commercially reasonable efforts to obtain
all such regulatory consents, confirmations and/or approvals at the earliest practicable time, it
being understood by, and agreed between, the parties that the Purchaser will use commercial
reasonable efforts to secure the consent, confirmation and approval referred to in Section
5.1(e)(A) on or prior to June 30, 2009. The Purchaser shall keep the Company reasonably informed
as to the status of such applications and filings, and the Purchaser shall promptly furnish the
Company and its counsel with copies of all such regulatory filings and correspondence provided to
all Regulatory Authorities, except for those documents which the Purchaser has requested
confidential treatment.



     4.3 Furnishing of Information. In order to enable the Purchaser to sell the Shares
under Rule 144 of the Securities Act, for a period of one year from the Additional Acquisition
Closing, the Company shall maintain the registration of its Common Stock under Section 12(b) or
12(g) of the Exchange Act and to timely file (or obtain extensions in respect thereof and file
within the applicable grace period) all reports required to be filed by the Company after the date
hereof pursuant to the Exchange Act. During such one-year period, if the Company is not required
to file reports pursuant to such laws, it will prepare and furnish to the Purchaser and make
publicly available the information described in Rule 144(c)(2), if the provision of such
information will allow resales of the Shares pursuant to Rule 144.



     4.4 Form D and Blue Sky. The Company agrees to timely file a Form D with respect to
the Shares as required under Regulation D. The Company, on or before the Initial Acquisition
Closing Date and the Additional Acquisition Closing Date, shall take such action as the Company
shall reasonably determine is necessary in order to obtain an exemption for or to qualify the
Shares for sale to the Purchaser at the applicable 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). The Company shall make all filings and reports relating to the
offer and sale of the Shares required under applicable securities or “Blue Sky” laws of the
states of the United States following the Initial Acquisition Closing Date and the Additional
Acquisition Closing Date.



26









 





     4.5 No Integration. The Company shall not, and shall use its commercially reasonable
efforts to ensure that no Affiliate of the Company shall, sell, offer for sale or solicit offers to
buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities
Act) that will be integrated with the offer or sale of the Shares in a manner that would require
the registration under the Securities Act of the sale of the Shares to the Purchaser, or that will
be integrated with the offer or sale of the Shares for purposes of the rules and regulations of any
Trading Market such that it would require stockholder approval prior to the closing of such other
transaction unless stockholder approval is obtained before the closing of such subsequent
transaction.



     4.6 Securities Laws Disclosure; Publicity. As soon as practicable following the
execution of this Agreement, the Company shall issue one or more press releases (each, a “Press
Release”) disclosing all material terms of the transactions contemplated hereby. On or before 6:00
a.m., Los Angeles, California time, on the fourth Trading Day immediately following the execution
of this Agreement, the Company will file a Current Report on Form 8-K with the Commission
describing the terms of the Transaction Documents (and including as exhibits to such Current Report
on Form 8-K the material Transaction Documents (including, without limitation, this Agreement and
the Registration Rights Agreement)).



     4.7 Indemnification.



          (a) Indemnification of Purchaser. In addition to the indemnity provided in the
Registration Rights Agreement, the Company will indemnify and hold the Purchaser and its directors,
officers, stockholders, members, partners, employees and agents (and any other Persons with a
functionally equivalent role of a Person holding such titles notwithstanding a lack of such title
or any other title), each Person who controls the Purchaser (within the meaning of Section 15 of
the Securities Act and Section 20 of the Exchange Act), and the directors, officers, stockholders,
agents, members, partners or employees (and any other Persons with a functionally equivalent role
of a Person holding such titles notwithstanding a lack of such title or any other title) of such
controlling person (each, a “Purchaser Party”) harmless from any and all losses, liabilities,
obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts
paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any
such Purchaser Party may suffer or incur as a result of any breach of any of the representations,
warranties, covenants or agreements made by the Company in this Agreement or in the other
Transaction Documents.  The Company will not be liable to any Purchaser Party under this Agreement
to the extent, but only to the extent that a loss, claim, damage or liability is attributable to
any Purchaser Party’s breach of any of the representations, warranties, covenants or agreements
made by such Purchaser Party in this Agreement or in the other Transaction Documents; provided that
such a claim for indemnification relating to any breach of any of the representations or warranties
made by the Company in this Agreement is made within a period of one (1) year from the Additional
Acquisition Closing Date.




          (b) Conduct of Indemnification Proceedings. Promptly after receipt by any Person (the
“Indemnified Person”) of notice of any demand, claim or circumstances which would
or might give rise to a claim or the commencement of any action, proceeding or investigation
in respect of which indemnity may be sought pursuant to Section 4.7(a), such Indemnified Person
shall promptly notify the Company in writing and the Company shall assume the defense thereof,




27









 







including the employment of counsel reasonably satisfactory to such Indemnified Person, and shall
assume the payment of all fees and expenses; provided, however, that the failure of any Indemnified
Person so to notify the Company shall not relieve the Company of its obligations hereunder except
to the extent that the Company is actually and materially and adversely prejudiced by such failure
to notify. In any such proceeding, any Indemnified Person shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified
Person unless: (i) the Company and the Indemnified Person shall have mutually agreed to the
retention of such counsel; (ii) the Company shall have failed promptly to assume the defense of
such proceeding and to employ counsel reasonably satisfactory to such Indemnified Person in such
proceeding; or (iii) in the reasonable judgment of counsel to such Indemnified Person,
representation of both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. The Company shall not be liable for any settlement of
any proceeding effected without its written consent, which consent shall not be unreasonably
withheld, delayed or conditioned. Without the prior written consent of the Indemnified Person,
which consent shall not be unreasonably withheld, delayed or conditioned, the Company shall not
effect any settlement of any pending or threatened proceeding in respect of which any Indemnified
Person 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
Person from all liability arising out of such proceeding.




     4.8 Listing of Common Stock. The Company will use commercially reasonable efforts to
list the Shares for quotation on the NASDAQ Global Select Market and maintain the listing of the
Shares on the NASDAQ Global Select Market.



     4.9 Use of Proceeds. The Company intends to use the net proceeds from the sale of the
Shares hereunder to augment its regulatory capital, support the growth of the Bank and for other
general corporate purposes.



     4.10 Lock-Up Agreement. The Purchaser agrees that during the period beginning on the
Initial Acquisition Closing Date and ending on December 31, 2009 (the “Lock-Up Period”), the
undersigned will not sell, offer, agree to sell, contract to sell, hypothecate, pledge, grant any
option to purchase, make any short sale or otherwise dispose of or hedge, directly or indirectly,
any shares of Common Stock or securities convertible into, exchangeable or exercisable for any
shares of Common Stock or warrants or other rights to purchase shares of Common Stock or any other
securities of the Company that are substantially similar to the Common Stock, whether now owned or
hereafter acquired, owned directly by the undersigned (including holding as a custodian) or with
respect to which the undersigned has or may be deemed to have beneficial ownership in accordance
with the rules and regulations of the Commission or publicly announce an intention to do any of the
foregoing.



     4.11 Conduct of Business. For a period of six months after the date hereof, so long
as the Purchaser holds any of the Shares, the Company shall use commercially reasonable efforts to
maintain its existence and conduct and cause all of its Subsidiaries to conduct their respective
businesses in usual, regular and ordinary course in substantially the same manner as
heretofore conducted.



28









 





     4.12 Short Sales After The Date Hereof. The Purchaser shall not, and shall cause its
Trading Affiliates not to, engage, directly or indirectly, in any transactions in the Company’s
securities (including, without limitation, any Short Sales involving the Company’s securities)
during the period from the date hereof until the earlier of such time as (i) the transactions
contemplated by this Agreement are first required to be publicly announced as described in Section
4.6 or (ii) this Agreement is terminated in full pursuant to Section 6.1. The Purchaser covenants
that until such time as the transactions contemplated by this Agreement are publicly disclosed by
the Company as described in Section 4.6, the Purchaser will maintain the confidentiality of the
existence and terms of this Agreement and the transactions contemplated hereby. The Purchaser
understands and acknowledges that the Commission currently takes the position that covering a short
position established prior to effectiveness of a resale registration statement with shares included
in such registration statement would be a violation of Section 5 of the Securities Act, as set
forth in Item 65, Section 5 under Section A, of the Manual of Publicly Available Telephone
Interpretations, dated July 1997, compiled by the Office of Chief Counsel, Division of Corporation
Finance.



     4.13 Non-Reliance. Except for the specific representations and warranties expressly
made by the Company in this Section 3.1 of this Agreement, (i) the Purchaser acknowledges and
agrees that the Company is not making any representation or warranty, express or implied, at law or
in equity, (ii) the Purchaser specifically disclaims that it is relying upon or has relied upon any
such other representations or warranties and acknowledges and agrees that the Company has
specifically disclaimed and do hereby specifically disclaim any such other representation or
warranty made by any person or entity.



ARTICLE V

CONDITIONS PRECEDENT TO CLOSING




     5.1 Conditions Precedent to the Obligations of the Purchaser to Purchase Shares. The
obligation of the Purchaser to acquire Shares at the Initial Acquisition Closing and the Additional
Acquisition Closing is subject to the fulfillment to the Purchaser’s satisfaction, on or prior to
the Initial Acquisition Closing Date and the Additional Acquisition Closing Date, as applicable, of
each of the following conditions, any of which may be waived by the Purchaser:



          (a) Representations and Warranties. The representations and warranties of the Company
contained herein shall be true and correct in all material respects as of the date when made and as
of the Initial Acquisition Closing Date and the Additional Acquisition Closing Date, as though made
on and as of such date, except for such representations and warranties that speak as of a specific
date.




          (b) Performance. The Company shall have performed, satisfied and complied in all
material respects with all covenants, agreements and conditions required by the Transaction
Documents to be performed, satisfied or complied with by it at or prior to the Initial Acquisition
Closing and the Additional Acquisition Closing.




          (c) No Injunction. No statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by any court or




29









 







governmental
authority of competent jurisdiction that prohibits the consummation of any of the transactions
contemplated by the Transaction Documents.




          (d) Consents. The Company shall have obtained in a timely fashion any and all
consents, permits, approvals, registrations and waivers necessary for consummation of the purchase
and sale of the Shares at the Initial Acquisition Closing and the Additional Acquisition Closing
(including all Required Approvals), all of which shall be and remain so long as necessary in full
force and effect.




          (e) Regulatory Approvals. The Purchaser shall have received approvals, confirmations,
acquiescence and/or consents relating to the Initial Acquisition or Additional Acquisition, as
applicable, from all necessary Regulatory Authorities, including the following:





     A. With respect to the Initial Acquisition, a confirmation from the Federal Reserve
Board or the Federal Reserve Bank of San Francisco that the Initial Acquisition (x) will not
require a change-of-control notice under the Change in Bank Control Act (“Change-of-Control
Notice”), and (y) will not require a registration under the Bank Holding Company Act of
1956, as amended (“BHC Registration”); and a confirmation from CDFI that the Initial
Acquisition will not require a change-of-control application or other application or notice
to CDFI; and




     B. With respect to the Additional Acquisition, (x) either a confirmation from CDFI
that the Acquisition will not require a change-of-control application or other application
or notice, or approval by CDFI of such application or notice; (x) a confirmation from the
Federal Reserve Board or the Federal Reserve Bank of San Francisco that the Acquisition will
not require a Change-of-Control Notice or BHC Registration; and (z) approval by the Korea
Financial Services Commission of the Acquisition.



               (f) No Suspensions of Trading in Common Stock; Listing. The Common Stock (i) shall be
designated for quotation or listed on the Principal Trading Market and (ii) shall not have been
suspended, as of the Initial Acquisition Closing Date and the Additional Acquisition Closing Date,
by the Commission or the Principal Trading Market from trading on the Principal Trading Market.




               (g) Company Deliverables. The Company shall have delivered the Company Deliverables in
accordance with Section 2.2(a).




               (h) Compliance Certificate. The Company shall have delivered to the Purchaser a
certificate, dated as of the Initial Acquisition Closing Date or the Additional Acquisition Closing
Date, as applicable, and signed by its Chief Executive Officer or its Chief Financial Officer,
certifying to the fulfillment of the conditions specified in Sections 5.1(a) and (b) in the form
attached hereto as Exhibit F.




               (i) Termination. This Agreement shall not have been terminated in accordance with
Section 6.1 herein.




30









 








     5.2 Conditions Precedent to the Obligations of the Company to sell Shares. The
Company’s obligation to sell and issue the Shares at the Initial Acquisition Closing and the
Additional Acquisition Closing is subject to the fulfillment to the satisfaction of the Company on
or prior to the Initial Acquisition Closing Date and the Additional Acquisition Closing Date, as
applicable, of the following conditions, any of which may be waived by the Company:



          (a) Representations and Warranties. The representations and warranties made by the
Purchaser in Section 3.2 hereof shall be true and correct in all material respects as of the date when
made, and as of the Initial Acquisition Closing Date and the Additional Acquisition Closing Date as
though made on and as of such date, except for representations and warranties that speak as of a
specific date.




          (b) Performance. The Purchaser shall have performed, satisfied and complied in all
material respects with all covenants, agreements and conditions required by the Transaction
Documents to be performed, satisfied or complied with by the Purchaser at or prior to the Initial
Acquisition Closing and the Additional Acquisition Closing.




          (c) No Injunction. No statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental
authority of competent jurisdiction that prohibits the consummation of any of the transactions
contemplated by the Transaction Documents.




          (d) Consents. The Company shall have obtained in a timely fashion any and all
consents, permits, approvals, registrations and waivers necessary for consummation of the purchase
and sale of the Shares, all of which shall be and remain so long as necessary in full force and
effect.




          (e) Regulatory Approvals. The Purchaser shall have received approvals, confirmations,
acquiescence or consents relating to the Initial Acquisition or Additional Acquisition, as
applicable, from all necessary Regulatory Authorities as contemplated by Section 4.2.




          (f) Purchaser Deliverables. The Purchaser shall have delivered its Purchaser
Deliverables in accordance with Section 2.2(b).




          (g) Termination. This Agreement shall not have been terminated in accordance with
Section 6.1 herein.




ARTICLE VI

TERMINATION




     6.1 Right of Termination. This Agreement and the transactions contemplated hereby may
be terminated and abandoned at any time prior to or at the Initial Acquisition Closing or the
Additional Acquisition Closing, as follows, and in no other manner; provided, however, that neither
the Company nor the Purchaser will terminate and abandon this Agreement and the
transactions contemplated hereby under clause (b), (c) or (f) below, as a result solely of the
failure to obtain necessary regulatory approvals from the applicable Regulatory Authorities, or
oral or written confirmation from all such Regulatory Authorities that such approvals are not



31









 







required, if in the reasonable opinion of the Company and the Purchaser and their legal counsels,
such approvals or confirmations are pending and likely to be obtained within a reasonable time
after the dates set forth in clause (b), (c) or (f), in which case, the dates set forth in clause
(b), (c) or (f) shall be extended by such reasonable period:



          (a) By the mutual agreement of the Company and the Purchaser.




          (b) By either the Company, on the one hand, or the Purchaser, on the other hand, if the
conditions precedent to such party’s obligations to close specified in ARTICLE V hereof have not
been met or waived by July 31, 2009.




          (c) By the Purchaser, if it is unable to obtain, on or prior to July 31, 2009, all necessary
regulatory approvals from the applicable Regulatory Authorities, or oral or written confirmation
from all such Regulatory Authorities that such approvals are not required, as may be necessary to
consummate the Initial Acquisition and the Additional Acquisition.




          (d) By the Purchaser, if the Company fails to comply in any material respect with any of its
covenants or agreements contained in this Agreement or in any other agreement contemplated hereby,
and such failure shall not have been cured within a period of ten (10) calendar days after notice
from the Purchaser, or if any of the representations or warranties of the Company contained herein
or therein shall be inaccurate in any material respect.




          (e) By the Company, if the Purchaser fails to comply in any material respect with any of its
covenants or agreements contained in this Agreement or in any other agreement contemplated hereby,
and such failure shall not have been cured within a period of ten (10) calendar days after notice
from the Company, or if any of the representations or warranties of the Purchaser contained herein
or therein shall be inaccurate in any material respect.




          (f) By the Company, if (i) the Purchaser breaches its obligations pursuant to Section 4.2, or
(ii) the Purchaser is unable to obtain, on or prior to July 31, 2009, all necessary regulatory
approvals from the applicable Regulatory Authorities, or oral or written confirmation from all such
Regulatory Authorities that such approvals are not required, as may be necessary to consummate the
Initial Acquisition and the Additional Acquisition.




     6.2 Notice of Termination. The power of termination provided for by Section 6.1
hereof may be exercised only by a notice given in writing, as provided in Section 7.3 of this
Agreement.



     6.3 Effect of Termination. If this Agreement is terminated and the transactions
contemplated by this Agreement are abandoned, neither party will have any liability or further
obligation under this Agreement; provided, however, that termination will not relieve a party from
liability for any breach by it of this Agreement. Notwithstanding the foregoing, the termination
of this Agreement subsequent to the closing of the Initial Acquisition shall not operate to relieve
either party of their continuing obligations under this Agreement with respect
to such Initial Acquisition, but shall only act as a termination with respect to obligations
under this Agreement relating to the Additional Acquisition.



32









 





ARTICLE VII

MISCELLANEOUS




     7.1 Fees and Expenses. The Company and the Purchaser shall each pay the fees and
expenses of their respective advisers, counsel, accountants and other experts, if any, and all
other expenses incurred by such party in connection with the negotiation, preparation, execution,
delivery and performance of this Agreement. The Company shall pay all Transfer Agent fees, stamp
taxes and other taxes and duties levied in connection with the sale and issuance of the Shares to
the Purchaser.



     7.2 Entire Agreement. The Transaction Documents, together with the Exhibits and
Schedules thereto, contain the entire understanding of the parties with respect to the subject
matter hereof and supersede all prior agreements, understandings, discussions and representations,
oral or written, with respect to such matters, which the parties acknowledge have been merged into
such documents, exhibits and schedules. At or after the Initial Acquisition Closing and the
Additional Acquisition Closing, and without further consideration, the Company, the Purchaser will
execute and deliver to the other such further documents as may be reasonably requested in order to
give practical effect to the intention of the parties under the Transaction Documents.



     7.3 Notices. Any and all notices or other communications or deliveries required or
permitted to be provided hereunder shall be in writing and shall be deemed given and effective on
the earliest of (a) the date of transmission, if such notice or communication is delivered via
facsimile (provided the sender receives a machine-generated confirmation of successful
transmission) at the facsimile number specified in this Section prior to 5:00 p.m., Los Angeles,
California time, on a Trading Day, (b) the next Trading Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number specified in this
Section on a day that is not a Trading Day or later than 5:00 p.m., Los Angeles, California time,
on any Trading Day, (c) the Trading Day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service with next day delivery specified, or (d) upon actual receipt
by the party to whom such notice is required to be given. The address for such notices and
communications shall be as follows:



	 	 	 	 	 
	 

	 	If to the Company:
	 	Hanmi Financial Corporation
	 

	 	 	 	3660 Wilshire Boulevard
	 

	 	 	 	Penthouse A
	 

	 	 	 	Los Angeles, California 90010
	 

	 	 	 	Telephone No.: (213) 427-5631
	 

	 	 	 	Facsimile No.: (213) 384-0990
	 

	 	 	 	Attention: Jay S. Yoo, President and Chief Executive Officer
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Hunton & Williams LLP
	 

	 	 	 	111 Congress Avenue, Suite 1800
	 

	 	 	 	Austin, Texas 78701
	 

	 	 	 	Telephone No.: (512) 542-5000
	 

	 	 	 	Facsimile No.: (512) 542-5049
	 

	 	 	 	Attention: Chet A. Fenimore






33









 






	 	 	 	 	 
	If to

	 	a Purchaser:
	 	Leading Investment & Securities Co., Ltd.
	 

	 	 	 	5th Fl., W Bank Bldg., 90-7 Nonhyeon-Dong
	 

	 	 	 	Gangnam-Gu, Seoul 135-818, Korea
	 

	 	 	 	Telephone No.: 02-2009-7086
	 

	 	 	 	Facsimile No.: 02-2009-7375
	 

	 	 	 	Attention: Stephen Joonwon Suh
	 
	 	 	 	 
	With

	 	a copy to:
	 	Bae, Kim & Lee LLC
	 

	 	 	 	647-15 Yoksam, Kangnam
	 

	 	 	 	Seoul 135-723, Korea
	 

	 	 	 	Telephone No.: 02-3404-7550
	 

	 	 	 	Facsimile No.: 02-3404-0804
	 

	 	 	 	Attention: Nelson Kyunam Ahn





or such other address as may be designated in writing hereafter, in the same manner, by such
Person.




     7.4 Amendments; Waivers; No Additional Consideration. No provision of this Agreement
may be waived or amended except in a written instrument signed, in the case of an amendment, by the
Company and the Purchaser or, in the case of a waiver, by the party against whom enforcement of any
such waiver is sought. No waiver of any default with respect to any provision, condition or
requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver
of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor
shall any delay or omission of either party to exercise any right hereunder in any manner impair
the exercise of any such right.



     7.5 Construction. The headings herein are for convenience only, do not constitute a
part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof. 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. This
Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions
of this Agreement or any of the Transaction Documents.



     7.6 Successors and Assigns. The provisions of this Agreement shall inure to the
benefit of and be binding upon the parties and their successors and permitted assigns. This
Agreement, or any rights or obligations hereunder, may not be assigned by the Company or the
Purchaser without the prior written consent of the other party.



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



     7.8 Governing Law. All questions concerning the construction, validity, enforcement
and interpretation of this Agreement shall be governed by and construed and enforced in accordance
with the internal laws of the State of California, without regard to the principles of conflicts of
law thereof. Each party agrees that all Proceedings concerning the interpretations,



34









 







enforcement and
defense of the transactions contemplated by this Agreement and any other Transaction Documents
(whether brought against a party hereto or its respective Affiliates, employees or agents) shall be
commenced exclusively in the Los Angeles Courts. Each party hereto hereby irrevocably submits to
the exclusive jurisdiction of the Los Angeles Courts for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or discussed herein
(including with respect to the enforcement of any of the Transaction Documents), and hereby
irrevocably waives, and agrees not to assert in any Proceeding, any claim that it is not personally
subject to the jurisdiction of any such Los Angeles Court, or that such Proceeding has been
commenced in an improper or inconvenient forum. Each party hereto hereby irrevocably waives
personal service of process and consents to process being served in any such Proceeding by mailing
a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Agreement 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. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.



     7.9 Survival. Subject to applicable statute of limitations, the representations,
warranties, agreements and covenants contained herein shall survive the Additional Acquisition
Closing and the delivery of the Shares for a period of one (1) year from the Additional Acquisition
Closing Date, at which time all such representations, warranties, agreements and covenants shall
terminate.



     7.10 Execution. This Agreement may be executed in two or more counterparts, all of
which when taken together shall be considered one and the same agreement and shall become effective
when counterparts have been signed by each party and delivered to the other party, it being
understood that both parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, or by e-mail delivery of a “.pdf” format data file, such
signature shall create a valid and binding obligation of the party executing (or on whose behalf
such signature is executed) with the same force and effect as if such facsimile signature page were
an original thereof.



     7.11 Severability. If any provision of this Agreement is held to be invalid or
unenforceable in any respect, the validity and enforceability of the remaining terms and provisions
of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt
to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon
so agreeing, shall incorporate such substitute provision in this Agreement.



     7.12 Replacement of Shares. If any certificate or instrument evidencing any Shares is
mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange
and substitution for and upon cancellation thereof, or in lieu of and substitution therefor, a
new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the
Company and the Transfer Agent of such loss, theft or destruction and the execution by the holder
thereof of a customary lost certificate affidavit of that fact and an agreement to indemnify



35









 







and
hold harmless the Company and the Transfer Agent for any losses in connection therewith or, if
required by the Transfer Agent, a bond in such form and amount as is required by the Transfer
Agent. The applicants for a new certificate or instrument under such circumstances shall also pay
any reasonable third-party costs associated with the issuance of such replacement Shares. If a
replacement certificate or instrument evidencing any Shares is requested due to a mutilation
thereof, the Company may require delivery of such mutilated certificate or instrument as a
condition precedent to any issuance of a replacement.



     7.13 Remedies. In addition to being entitled to exercise all rights provided herein
or granted by law, including recovery of damages, the Purchaser and the Company will be entitled to
specific performance under the Transaction Documents. The parties agree that monetary damages may
not be adequate compensation for any loss incurred by reason of any breach of obligations described
in the foregoing sentence and hereby agree to waive in any action for specific performance of any
such obligation (other than in connection with any action for a temporary restraining order) the
defense that a remedy at law would be adequate.



     7.14 Payment Set Aside. To the extent that the Company makes a payment or payments to
the Purchaser pursuant to any Transaction Document or the Purchaser enforces or exercises its
rights thereunder, 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 Company, a trustee, receiver or any other person under any law (including, without limitation,
any bankruptcy law, 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.



     7.15 Schedules. The disclosure schedules identify, among other things, items the
disclosure of which is necessary or appropriate, either in response to an express disclosure
requirement contained in a provision hereof or as an exception to one or more representations,
warranties or covenants of the Company contained in this Agreement. Any information set forth in
any one section of the disclosure schedule shall be deemed to apply to each other applicable
Section or subsection thereof if its relevance to the information called for in such Section or
subsection is reasonably apparent from the disclosures made in any of the disclosure schedules or a
specific cross reference to a disclosure on another schedule is made. Notwithstanding any
provision in this Agreement to the contrary, the mere inclusion of an item in such section or
subsection of the disclosure schedule as an exception to a representation, warranty or covenant
shall not be deemed as an admission of liability or to mean that any such information is required
to be disclosed by this Agreement, or to mean that such information is material. Such information
shall not be used as a basis for interpreting the term “material,” “materiality”, “materially” or
Material Adverse Effect, or similar qualification in this Agreement.



     7.16 Adjustments in Common Stock Numbers and Prices. In the event of any stock split,
subdivision, dividend or distribution payable in shares of Common Stock (or other securities or
rights convertible into, or entitling the holder thereof to receive directly or indirectly shares
of Common Stock), combination or other similar recapitalization or event occurring after the date
hereof and prior to the Initial Acquisition Closing or Additional Acquisition Closing, as



36









 







applicable, each reference in any Transaction Document to a number of shares or a price per share
shall be deemed to be amended to appropriately account for such event.



     7.17 Rescission and Withdrawal Right. Notwithstanding anything to the contrary
contained in (and without limiting any similar provisions of) the Transaction Documents, whenever
any Purchaser exercises a right, election, demand or option under a Transaction Document and the
Company does not timely perform its related obligations within the periods therein provided, then
such Purchaser may rescind or withdraw, in its sole discretion from time to time upon written
notice to the Company, any relevant notice, demand or election in whole or in part without
prejudice to its future actions and rights.



     7.18 Dates and Time. For purposes of this Agreement, all references to dates and
times shall refer to the date and time in Los Angeles, California.



[Signature Page Follows]




37









 





[Signature Page to Securities Purchase Agreement]




     IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be
duly executed by their respective authorized signatories as of the date first indicated above.



	 	 	 	 	 
	 	HANMI FINANCIAL CORPORATION

 	 
	 	By:  	/s/ Jay S. Yoo
 	 
	 	 	Jay S. Yoo 	 
	 	 	President and Chief Executive Officer 	 
	 
	 	LEADING INVESTMENT & SECURITIES CO., LTD.

 	 
	 	By:  	/s/ Cheul Park
 	 
	 	 	Cheul Park 	 
	 	 	Chairman and Chief Executive Officer 	 
	 




38









 





EXHIBITS




	 	 	 
	A:

	 	Form of Registration Rights Agreement
	B:

	 	Stock Certificate Questionnaire
	C:

	 	Form of Opinion of Company Counsel
	D:

	 	Irrevocable Transfer Agent Instructions
	E:

	 	Form of Secretary’s Certificate
	F:

	 	Form of Officer’s Certificate
	G:

	 	Wire Instructions






SCHEDULES




	 	 	 	 	 
	Schedule 3.1(a)

	 	—
	 	Subsidiaries






CONFIDENTIAL SCHEDULES




	 	 	 	 	 
	Schedule 3.1(h)

	 	—
	 	SEC Reports; Disclosure Materials
	 
	Schedule 3.1(i)

	 	—
	 	Financial Statements
	 
	Schedule 3.1(j)

	 	—
	 	Disclosure Controls and Procedures
	 
	Schedule 3.1(m)

	 	—
	 	Material Changes
	 
	Schedule 3.1(q)

	 	—
	 	Compliance
	 
	Schedule 3.1(r)

	 	—
	 	Regulatory Agreement
	 
	Schedule 3.1(t)

	 	—
	 	Loan Loss Reserves
	 
	Schedule 3.1(v)

	 	—
	 	Regulatory Permits






 









 





EXHIBIT A




Form of Registration Rights Agreement




 











 





EXHIBIT B




Stock Certificate Questionnaire




     Pursuant to Section 2.2(b) of the Agreement, please provide us with the following information:



	 	 	 	 	 	 	 
	1.	 	 	The exact name that the Shares are to be
registered in (this is the name that will
appear on the stock certificate(s) and
warrant(s)). You may use a nominee name if
appropriate:

	 	                                        
	 	 	 	 	 
	 	 
	2.	 	 	The relationship between the Purchaser
of the Shares and the Registered Holder
listed in response to Item 1 above:

	 	                                        
	 	 	 	 	 
	 	 
	3.	 	 	The mailing address, telephone and
telecopy number of the Registered Holder
listed in response to Item 1 above:

	 	                                        
	 	 	 	 	 
	 	 
	 	 	 	 	 

	 	                                        
	 	 	 	 	 
	 	 
	 	 	 	 	 

	 	                                        
	 	 	 	 	 
	 	 
	 	 	 	 	 

	 	                                        
	 	 	 	 	 
	 	 
	 	 	 	 	 

	 	                                        
	 	 	 	 	 
	 	 
	4.	 	 	The Tax Identification Number (or, if an
individual, the Social Security Number) of
the Registered Holder listed in response to
Item 1 above:

	 	                                        







 









 








EXHIBIT C




Form of Opinion of Company Counsel*




[SUBJECT TO OPINION COMMITTEE REVIEW]





	1.	 	The Company is validly existing as a corporation in good standing under the laws of the State
of Delaware.
	 
	2.	 	The Company has the corporate power and authority to execute and deliver and to perform its
obligations under the Transaction Documents.
	 
	3.	 	Except for filings, registrations or qualifications that may be required by applicable
Delaware securities or banking laws, no consent, approval, authorization or order of or
filing, registration or qualification with any Governmental Entity is required under the law
of the State of Delaware in connection with the authorization, execution, delivery and
performance by the Company of the Transaction Documents and the consummation of the
transactions contemplated thereby except as have already been obtained or made.
	 
	4.	 	The Securities Purchase Agreement has been duly authorized, executed and delivered by the
Company.
	 
	5.	 	The Registration Rights Agreement has been duly authorized, executed and delivered by the
Company.
	 
	6.	 	The Shares have been duly authorized and, when issued delivered and paid for in accordance
with the Securities Purchase Agreement, will be validly issued, fully paid and nonassessable,
and free of any preemptive right or similar rights contained in the Company’s Certificate of
Incorporation or Bylaws.
	 
	7.	 	The execution, delivery and performance of the Securities Purchase Agreement and the
Registration Rights Agreement and the performance by the Company of its obligations under such
agreements, including its issuance and sale of the Shares, will not result in any violation of
the Certificate of Incorporation or Bylaws of the Company or the Articles of Incorporation or
Bylaws of the Bank.
	 
	8.	 	Assuming due authorization, execution and delivery by the Company and the Purchaser, the
Registration Rights Agreement constitutes a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms.
	 
	9.	 	The Company is a registered bank holding company under the Bank Holding Company Act of 1956,
as amended, and has made an effective election to be treated as a financial holding company
under the Gramm-Leach-Bliley Act.
	 
	10.	 	The deposit accounts of the Bank are insured by the Federal Deposit Insurance Corporation
under the provisions of the Federal Deposit Insurance Act.




 









 






	11.	 	The execution and delivery by the Company of the Securities Purchase Agreement and the
Registration Rights Agreement and the performance by the Company of its obligations under such
agreements, including its issuance and sale of the Shares, do not and will not: (a) require
any consent, approval, license or exemption by, order or authorization of, or filing,
recording or registration by the Company with any Delaware, California or federal governmental
authority, except (i) such as have been made or obtained under the Securities Act , (ii) as
may be required by federal securities laws with respect to the Company’s obligations under the
Registration Rights Agreement, (iii) the filing of Form D pursuant to Securities and Exchange
Commission Regulation D and (iv) the filings required in accordance with Section 4.6 of the
Securities Purchase Agreement, (b) violate any Delaware, California or federal statute, rule
or regulation, or any court order, judgment or decree, if any, listed in Exhibit B hereto,
which Exhibit lists all court orders, judgments and decrees that the Company has certified to
us are applicable to it or (c) result in a breach of, or constitute a default under, any
Material Contract.
	 
	12.	 	Assuming the accuracy of the representations, warranties and compliance with the covenants
and agreements of the Purchaser and the Company contained in the Securities Purchase
Agreement, it is not necessary, in connection with the offer, sale and delivery of the Shares
to the Purchaser to register the Shares under the Securities Act.







 




			
	*	 	The opinion letter of Company Counsel will be subject to customary limitations and carveouts.




 









 










EXHIBIT D




Form of Irrevocable Transfer Agent Instructions




As of                     , 200[_]




Computershare Trust Company, N.A.

P.O. Box 43070

Providence, Rhode Island 02940-3070




Ladies and Gentlemen:




     Reference is made to that certain Securities Purchase Agreement, dated as of June 12, 2009
(the “Agreement”), by and between Hanmi Financial Corporation, a Delaware corporation (the
“Company”) and Leading Investment & Securities Co., Ltd., a Korean corporation (and including
permitted transferees, the “Holders”), pursuant to which the Company is issuing to the Holders
shares of common stock (the “Shares”) of the Company, par value $0.001 per share (the “Common
Stock”).



     This letter shall serve as our irrevocable authorization and direction to you (provided that
you are the transfer agent of the Company at such time and the conditions set forth in this letter
are satisfied), subject to any stop transfer instructions that we may issue to you from time to
time, if any, to issue certificates representing shares of Common Stock to a Holder from time to
time upon delivery to you of instructions by the Company as indicated in writing executed by a duly
authorized officer of the Company together with indication of receipt of the exercise price
therefor.



     You acknowledge and agree that so long as you have received (a) written confirmation from the
Company’s legal counsel that either (1) a registration statement covering resales of the Shares has
been declared effective by the Securities and Exchange Commission (the “Commission”) under the
Securities Act of 1933, as amended (the “Securities Act”), or (2) the Shares have been sold in
conformity with Rule 144 under the Securities Act (“Rule 144”) or are eligible for sale under Rule
144, without the requirement for the Company 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 and (b) if applicable, a copy of such registration statement, then, unless otherwise
required by law, within three (3) business days of your receipt of written authorization from a
duly authorized officer of the Company that the Common Stock may be issued pursuant to the Exercise
Notice, you shall issue the certificates representing the Common Stock registered in the names of
such Holders or transferees, as the case may be, and such certificates shall not bear any legend
restricting transfer of the Shares thereby and should not be subject to any stop-transfer
restriction; provided, however, that if such Shares are not registered for resale under the
Securities Act or able to be sold under Rule 144 without the requirement for the Company 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, then the certificates for such Shares shall bear the
following restrictive legend:



 









 






THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES
MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A)
AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OR
(B) AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE
STATE SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY AND ITS TRANSFER AGENT OR (II) UNLESS SOLD
PURSUANT TO RULE 144 UNDER SAID ACT (PROVIDED THAT THE TRANSFEROR PROVIDES THE
COMPANY WITH REASONABLE ASSURANCES (IN THE FORM OF SELLER AND BROKER REPRESENTATION
LETTERS) THAT THE SECURITIES MAY BE SOLD PURSUANT TO SUCH RULE). NO REPRESENTATION
IS MADE BY THE ISSUER AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT FOR RESALES OF THESE SECURITIES.



     A form of written confirmation from the Company’s outside legal counsel that a registration
statement covering resales of the Shares has been declared effective by the Commission under the
Securities Act is attached hereto as Annex I.



     Please execute this letter in the space indicated to acknowledge your agreement to act in
accordance with these instructions.



	 	 	 	 	 
	 	Very truly yours,





HANMI FINANCIAL CORPORATION

 	 
	 	By:  	 	 
	 	 	Jay S. Yoo 	 
	 	 	President and Chief Executive Officer 	 
	 



Acknowledged and Agreed:




[                                        ]




	 	 	 	 	 
	By:

	 	 
 

	 	 
	Name:

	 	 
 

	 	 
	Title:

	 	 
 

	 	 






Date:                     , 2009




 









 





Annex I




FORM OF NOTICE OF EFFECTIVENESS OF REGISTRATION STATEMENT




Computershare Trust Company, N.A.

P.O. Box 43070

Providence, Rhode Island 02940-3070




     Re: Hanmi Financial Corporation



Ladies and Gentlemen:




     We are counsel to Hanmi Financial Corporation, a Delaware corporation (the “Company”), and
have represented the Company in connection with that certain Securities Purchase Agreement (the
“Purchase Agreement”), dated as of June 12, 2009, entered into by and between the Company and
Leading Investment & Securities Co., Ltd. (the “Purchaser”), , pursuant to which the Company issued
to the Purchaser shares of the Company’s common stock, $0.001 par value per share (the “Common
Stock”). Pursuant to that certain Registration Rights Agreement of even date, the Company agreed
to register the resale of such shares (collectively, the “Registrable Securities”), under the
Securities Act of 1933, as amended (the “Securities Act”). In connection with the Company’s
obligations under the Registration Rights Agreement, on                     , 2009, the
Company filed a Registration Statement on Form S-3 (File No. 333-                    ) (the
“Registration Statement”) with the Securities and Exchange Commission (the “Commission”) relating
to the Registrable Securities which name of the Purchaser as a selling stockholder thereunder.



     In connection with the foregoing, we inform you that the Registration Statement has been
declared effective under the Securities Act, and, based solely upon oral telephonic advice from one
or more members of the Commission’s staff, that no stop order suspending the effectiveness of the
Registration Statement has been issued under the Securities Act and no proceedings for that purpose
have been instituted or are pending or threatened by the Commission



     Pursuant to the Purchase Agreement, the Purchaser has agreed to satisfy the applicable
prospectus delivery requirements and to sell pursuant to the “Plan of Distribution” section in the
Registration Statement. On the basis of the foregoing, this letter shall serve as our standing
notice to you that the Common Stock may be freely transferred by the Purchaser pursuant to the
Registration Statement. You need not require further letters from us to effect any future
legend-free issuance or reissuance of Common Stock to the Purchaser or the transferees of the
Purchaser, as the case may be, as contemplated by the Company’s Irrevocable Transfer Agent
Instructions dated                     , 2009, provided at the time of such reissuance, the Company has not
otherwise notified you that the Registration Statement is unavailable for the resale of the
Registrable Securities. This letter shall serve as our standing instructions with regard to this
matter.



Very truly yours,





 









 








EXHIBIT E




Form of Secretary’s Certificate



The undersigned hereby certifies that he is the duly elected, qualified and acting Secretary of
Hanmi Financial Corporation, a Delaware corporation (the “Company”), and that as such he is
authorized to execute and deliver this certificate in the name and on behalf of the Company and in
connection with the Securities Purchase Agreement, dated as of June 12, 2009, by and between the
Company and Leading Investment & Securities Co., Ltd. (the “Securities Purchase Agreement”), and
further certifies in his official capacity, in the name and on behalf of the Company, the items set
forth below. Capitalized terms used but not otherwise defined herein shall have the meaning set
forth in the Securities Purchase Agreement.





	1.	 	Attached hereto as Exhibit A is a true, correct and complete copy of the resolutions
duly adopted by the Board of Directors of the Company, effective as of                     , 2009.
Such resolutions have not in any way been amended, modified, revoked or rescinded, have been
in full force and effect since their adoption to and including the date hereof and are now in
full force and effect.
	 
	2.	 	Attached hereto as Exhibit B is a true, correct and complete copy of the Certificate
of Incorporation of the Company, together with any and all amendments thereto currently in
effect, and no action has been taken to further amend, modify or repeal such Certificate of
Incorporation, the same being in full force and effect in the attached form as of the date
hereof.
	 
	3.	 	Attached hereto as Exhibit C is a true, correct and complete copy of the Bylaws of
the Company and any and all amendments thereto currently in effect, and no action has been
taken to further amend, modify or repeal such Bylaws, the same being in full force and effect
in the attached form as of the date hereof.
	 
	4.	 	Each person listed below has been duly elected or appointed to the position(s) indicated
opposite his name and is duly authorized to sign the Securities Purchase Agreement and each of
the Transaction Documents on behalf of the Company, and the signature appearing opposite such
person’s name below is such person’s genuine signature.





	 	 	 	 	 
	Name	 	Position	 	Signature
	 	 	 	 	 
	 
	 	 	 	                                                            
	 	 	 	 	 
	 
	 	 	 	                                                            







 









 








     IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of this ___day of June, 2009.



                                                            

[                    ]

Secretary




I, Jay S. Yoo, President and Chief Executive Officer, hereby certify that                      is the duly
elected, qualified and acting Secretary of the Company and that the signature set forth above is
his true signature.



                                                            

Jay S. Yoo

President and Chief Executive Officer




 









 





EXHIBIT A




Resolutions





 









 








EXHIBIT B




Certificate of Incorporation




 









 








EXHIBIT C




Bylaws




 









 








EXHIBIT F




Form of Officer’s Certificate



The undersigned, the Chief Executive Officer of Hanmi Financial Corporation, a Delaware corporation
(the “Company”), pursuant to Section 5.1(g) of the Securities Purchase Agreement, dated as of June
12, 2009, by and between the Company and Leading Investment & Securities Co., Ltd. (the “Securities
Purchase Agreement”), hereby represents, warrants and certifies as follows (capitalized terms used
but not otherwise defined herein shall have the meaning set forth in the Securities Purchase
Agreement):





	 	1.	 	The representations and warranties of the Company contained in
the Securities Purchase Agreement are true and correct in all material respects
(except for those representations and warranties which are qualified as to
materiality, in which case such representations and warranties shall be true
and correct in all respects) as of the date when made and as of the [Initial
Acquisition Closing Date/Additional Acquisition Closing Date], as though made
on and as of such date, except for such representations and warranties that
speak as of a specific date.
	 
	 	2.	 	The Company has performed, satisfied and complied in all
material respects with all covenants, agreements and conditions required by the
Transaction Documents to be performed, satisfied or complied with by it at or
prior to the [Initial Acquisition Closing/Additional Acquisition Closing].





          IN WITNESS WHEREOF, the undersigned has executed this certificate this ___day of June, 2009.




                                                            

Jay S. Yoo

President and Chief Executive Officer




 









 





EXHIBIT G




Wire Instructions




[                                        ]




 









 








Schedule 3.1(a)




Subsidiaries




Hanmi Bank




All World Insurance Services, Inc.




Chun Ha Insurance Services, Inc.




Hanmi Capital Trust I




Hanmi Capital Trust II




Hanmi Capital Trust III