Exhibit 4.2


 


WARRANT TO PURCHASE COMMON STOCK


 


THE SECURITIES REPRESENTED
BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION
STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR
SUCH LAWS. THIS INSTRUMENT IS ISSUED SUBJECT TO THE RESTRICTIONS ON TRANSFER
AND OTHER PROVISIONS OF A SECURITIES PURCHASE AGREEMENT BETWEEN THE ISSUER OF
THESE SECURITIES AND THE INVESTOR REFERRED TO THEREIN, A COPY OF WHICH IS ON
FILE WITH THE ISSUER. THE SECURITIES REPRESENTED BY THIS INSTRUMENT MAY NOT
BE SOLD OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH SAID AGREEMENT. ANY
SALE OR OTHER TRANSFER NOT IN COMPLIANCE WITH SAID AGREEMENT WILL BE VOID.


 


WARRANT


to purchase


895,968


Shares of Common Stock


 


of CoBiz Financial Inc.


 


Issue Date: December 19, 2008


 


1.           Definitions.
Unless the context otherwise requires, when used herein the following terms
shall have the meanings indicated.


 


“Affiliate” has the meaning ascribed to
it in the Purchase Agreement.


 


“Appraisal Procedure” means a procedure whereby
two independent appraisers, one chosen by the Company and one by the Original
Warrantholder, shall mutually agree upon the determinations then the subject of
appraisal. Each party shall deliver a notice to the other appointing its
appraiser within 15 days after the Appraisal Procedure is invoked. If within 30
days after appointment of the two appraisers they are unable to agree upon the
amount in question, a third independent appraiser shall be chosen within 10
days thereafter by the mutual consent of such first two appraisers. The
decision of the third appraiser so appointed and chosen shall be given within
30 days after the selection of such third appraiser. If three appraisers shall
be appointed and the determination of one appraiser is disparate from the
middle determination by more than twice the amount by which the other
determination is disparate from the middle determination, then the
determination of such appraiser shall be excluded, the remaining two
determinations shall be averaged and such average shall be binding and
conclusive upon the


 

















 


Company and the Original
Warrantholder; otherwise, the average of all three determinations shall be
binding upon the Company and the Original Warrantholder. The costs of
conducting any Appraisal Procedure shall be borne by the Company.


 


“Board of Directors” means the board of directors
of the Company, including any duly authorized committee thereof.


 


“Business Combination” means a merger,
consolidation, statutory share exchange or similar transaction that requires
the approval of the Company’s stockholders.


 


“business day” means any day except
Saturday, Sunday and any day on which banking institutions in the State of New
York generally are authorized or required by law or other governmental actions
to close.


 


“Capital Stock” means (A) with respect
to any Person that is a corporation or company, any and all shares, interests,
participations or other equivalents (however designated) of capital or capital
stock of such Person and (B) with respect to any Person that is not a
corporation or company, any and all partnership or other equity interests of
such Person.


 


“Charter” means, with respect to any
Person, its certificate or articles of incorporation, articles of association,
or similar organizational document.


 


“Common Stock” has the meaning ascribed to
it in the Purchase Agreement.


 


“Company” means the Person whose name,
corporate or other organizational form and jurisdiction of organization is set
forth in Item 1 of Schedule A hereto.


 


“conversion” has the meaning set forth in
Section 13(B).


 


“convertible securities” has the meaning set forth in
Section 13(B).


 


“CPP” has the meaning ascribed to it in the
Purchase Agreement.


 


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


 


“Exercise Price” means the amount set forth
in Item 2 of Schedule A hereto.


 


“Expiration Time” has the meaning set forth in
Section 3.


 


“Fair Market Value” means, with respect to any
security or other property, the fair market value of such security or other
property as determined by the Board of Directors, acting in good faith or, with
respect to Section 14, as determined by the Original Warrantholder acting
in good faith. For so long as the Original Warrantholder holds this Warrant or
any portion thereof, it may object in writing to the Board of Director’s
calculation of fair market value within 10 days of receipt of written notice
thereof. If the Original Warrantholder and the Company are unable to agree on
fair market value during the 10-day period following the delivery of the
Original Warrantholder’s objection, the Appraisal Procedure may be invoked by
either party to determine Fair Market Value by delivering written notification
thereof not later than the 30th day after delivery of the Original
Warrantholder’s objection.


 


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“Governmental Entities” has the meaning ascribed to
it in the Purchase Agreement.


 


“Initial Number” has the meaning set forth in
Section 13(B).


 


“Issue Date” means the date set forth in
Item 3 of Schedule A hereto.


 


“Market Price” means, with respect to a
particular security, on any given day, the last reported sale price regular way
or, in case no such reported sale takes place on such day, the average of the
last closing bid and ask prices regular way, in either case on the principal
national securities exchange on which the applicable securities are listed or
admitted to trading, or if not listed or admitted to trading on any national
securities exchange, the average of the closing bid and ask prices as furnished
by two members of the Financial Industry Regulatory Authority, Inc.
selected from time to time by the Company for that purpose. “Market Price”
shall be determined without reference to after hours or extended hours trading.
If such security is not listed and traded in a manner that the quotations
referred to above are available for the period required hereunder, the Market
Price per share of Common Stock shall be deemed to be (i) in the event
that any portion of the Warrant is held by the Original Warrantholder, the fair
market value per share of such security as determined in good faith by the
Original Warrantholder or (ii) in all other circumstances, the fair market
value per share of such security as determined in good faith by the Board of
Directors in reliance on an opinion of a nationally recognized independent
investment banking corporation retained by the Company for this purpose and
certified in a resolution to the Warrantholder. For the purposes of determining
the Market Price of the Common Stock on the “trading day” preceding, on or
following the occurrence of an event, (i) that trading day shall be deemed
to commence immediately after the regular scheduled closing time of trading on
the New York Stock Exchange or, if trading is closed at an earlier time, such
earlier time and (ii) that trading day shall end at the next regular
scheduled closing time, or if trading is closed at an earlier time, such
earlier time (for the avoidance of doubt, and as an example, if the Market
Price is to be determined as of the last trading day preceding a specified
event and the closing time of trading on a particular day is 4:00 p.m. and
the specified event occurs at 5:00 p.m. on that day, the Market Price
would be determined by reference to such 4:00 p.m. closing price).


 


“Ordinary Cash Dividends” means a regular quarterly
cash dividend on shares of Common Stock out of surplus or net profits legally
available therefor (determined in accordance with generally accepted accounting
principles in effect from time to time), provided
that Ordinary Cash Dividends shall not include any cash dividends
paid subsequent to the Issue Date to the extent the aggregate per share
dividends paid on the outstanding Common Stock in any quarter exceed the amount
set forth in Item 4 of Schedule A hereto, as adjusted for any stock split,
stock dividend, reverse stock split, reclassification or similar transaction.


 


“Original Warrantholder” means the United States
Department of the Treasury. Any actions specified to be taken by the Original
Warrantholder hereunder may only be taken by such Person and not by any other
Warrantholder.


 


“Permitted Transactions” has the meaning set forth in
Section 13(B).


 


“Person” has the meaning given to it
in Section 3(a)(9) of the Exchange Act and as used in Sections 13(d)(3) and
14(d)(2) of the Exchange Act.


 


“Per Share Fair Market Value” has the meaning
set forth in Section 13(C).


 


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“Preferred Shares” means the perpetual
preferred stock issued to the Original Warrantholder on the Issue Date pursuant
to the Purchase Agreement.


 


“Pro Rata Repurchases” means any purchase of shares
of Common Stock by the Company or any Affiliate thereof pursuant to (A) any
tender offer or exchange offer subject to Section 13(e) or 14(e) of
the Exchange Act or Regulation 14E promulgated thereunder or (B) any other
offer available to substantially all holders of Common Stock, in the case of
both (A) or (B), whether for cash, shares of Capital Stock of the Company,
other securities of the Company, evidences of indebtedness of the Company or
any other Person or any other property (including, without limitation, shares
of Capital Stock, other securities or evidences of indebtedness of a
subsidiary), or any combination thereof, effected while this Warrant is
outstanding. The “Effective Date” of
a Pro Rata Repurchase shall mean the date of acceptance of shares for purchase
or exchange by the Company under any tender or exchange offer which is a Pro
Rata Repurchase or the date of purchase with respect to any Pro Rata Repurchase
that is not a tender or exchange offer.


 


“Purchase Agreement” means the Securities
Purchase Agreement - Standard Terms incorporated into the Letter Agreement,
dated as of the date set forth in Item 5 of Schedule A hereto, as amended from
time to time, between the Company and the United States Department of the
Treasury (the “Letter Agreement”), including
all annexes and schedules thereto.


 


“Qualified Equity Offering” has the meaning ascribed to
it in the Purchase Agreement.


 


“Regulatory Approvals” with respect to the
Warrantholder, means, to the extent applicable and required to permit the
Warrantholder to exercise this Warrant for shares of Common Stock and to own
such Common Stock without the Warrantholder being in violation of applicable
law, rule or regulation, the receipt of any necessary approvals and
authorizations of, filings and registrations with, notifications to, or
expiration or termination of any applicable waiting period under, the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and
regulations thereunder.


 


“SEC” means the U.S. Securities
and Exchange Commission.


 


“Securities Act” means the Securities Act of
1933, as amended, or any successor statute, and the rules and regulations
promulgated thereunder.


 


“Shares” has the meaning set forth in
Section 2.


 


“trading day” means (A) if the shares
of Common Stock are not traded on any national or regional securities exchange
or association or over-the-counter market, a business day or (B) if the
shares of Common Stock are traded on any national or regional securities
exchange or association or over-the-counter market, a business day on which
such relevant exchange or quotation system is scheduled to be open for business
and on which the shares of Common Stock (i) are not suspended from trading
on any national or regional securities exchange or association or
over-the-counter market for any period or periods aggregating one half hour or
longer; and (ii) have traded at least once on the national or regional
securities exchange or association or over-the-counter market that is the
primary market for the trading of the shares of Common Stock.


 


“U.S. GAAP” means United
States generally accepted accounting principles.


 


“Warrantholder” has the meaning set forth in
Section 2.


 


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“Warrant” means this Warrant, issued
pursuant to the Purchase Agreement.


 


2.           Number of Shares;
Exercise Price. This certifies that, for value received, the United States
Department of the Treasury or its permitted assigns (the “Warrantholder”) is entitled, upon the
terms and subject to the conditions hereinafter set forth, to acquire from the
Company, in whole or in part, after the receipt of all applicable Regulatory
Approvals, if any, up to an aggregate of the number of fully paid and
nonassessable shares of Common Stock set forth in Item 6 of Schedule A hereto,
at a purchase price per share of Common Stock equal to the Exercise Price. The
number of shares of Common Stock (the “Shares”)
and the Exercise Price are subject to adjustment as provided herein,
and all references to “Common Stock,” “Shares” and “Exercise Price” herein
shall be deemed to include any such adjustment or series of adjustments.


 


3.           Exercise of
Warrant; Term. Subject to Section 2, to the extent permitted by applicable
laws and regulations, the right to purchase the Shares represented by this
Warrant is exercisable, in whole or in part by the Warrantholder, at any time
or from time to time after the execution and delivery of this Warrant by the
Company on the date hereof, but in no event later than 5:00 p.m., New York
City time on the tenth anniversary of the Issue Date (the “Expiration Time”), by (A) the
surrender of this Warrant and Notice of Exercise annexed hereto, duly completed
and executed on behalf of the Warrantholder, at the principal executive office
of the Company located at the address set forth in Item 7 of Schedule A hereto
(or such other office or agency of the Company in the United States as it may
designate by notice in writing to the Warrantholder at the address of the
Warrantholder appearing on the books of the Company), and (B) payment of
the Exercise Price for the Shares thereby purchased:


 


(i) by having the Company withhold, from the shares of Common
Stock that would otherwise be delivered to the Warrantholder upon such
exercise, shares of Common stock issuable upon exercise of the Warrant equal in
value to the aggregate Exercise Price as to which this Warrant is so exercised
based on the Market Price of the Common Stock on the trading day on which this
Warrant is exercised and the Notice of Exercise is delivered to the Company
pursuant to this Section 3, or


 


(ii) with the consent of both the Company and the Warrantholder,
by tendering in cash, by certified or cashier’s check payable to the order of
the Company, or by wire transfer of immediately available funds to an account
designated by the Company.


 


If
the Warrantholder does not exercise this Warrant in its entirety, the
Warrantholder will be entitled to receive from the Company within a reasonable
time, and in any event not exceeding three business days, a new warrant in
substantially identical form for the purchase of that number of Shares equal to
the difference between the number of Shares subject to this Warrant and the
number of Shares as to which this Warrant is so exercised. Notwithstanding
anything in this Warrant to the contrary, the Warrantholder hereby acknowledges
and agrees that its exercise of this Warrant for Shares is subject to the
condition that the Warrantholder will have first received any applicable
Regulatory Approvals.


 


4.           Issuance of
Shares; Authorization; Listing. Certificates for Shares issued upon exercise
of this Warrant will be issued in such name or names as the Warrantholder may
designate and will be delivered to such named Person or Persons within a
reasonable time, not to exceed three business days after the date on which this
Warrant has been duly exercised in accordance with the terms of this Warrant.
The Company hereby represents and warrants that any Shares issued upon the
exercise of this Warrant in accordance with the provisions of Section 3
will be duly and validly authorized and issued,


 


5

















 


fully
paid and nonassessable and free from all taxes, liens and charges (other than
liens or charges created by the Warrantholder, income and franchise taxes
incurred in connection with the exercise of the Warrant or taxes in respect of
any transfer occurring contemporaneously therewith). The Company agrees that
the Shares so issued will be deemed to have been issued to the Warrantholder as
of the close of business on the date on which this Warrant and payment of the
Exercise Price are delivered to the Company in accordance with the terms of
this Warrant, notwithstanding that the stock transfer books of the Company may
then be closed or certificates representing such Shares may not be actually
delivered on such date. The Company will at all times reserve and keep
available, out of its authorized but unissued Common Stock, solely for the
purpose of providing for the exercise of this Warrant, the aggregate number of
shares of Common Stock then issuable upon exercise of this Warrant at any time.
The Company will (A) procure, at its sole expense, the listing of the
Shares issuable upon exercise of this Warrant at any time, subject to issuance
or notice of issuance, on all principal stock exchanges on which the Common
Stock is then listed or traded and (B) maintain such listings of such
Shares at all times after issuance. The Company will use reasonable best
efforts to ensure that the Shares may be issued without violation of any
applicable law or regulation or of any requirement of any securities exchange
on which the Shares are listed or traded.


 


5.           No Fractional
Shares or Scrip. No fractional Shares or scrip representing fractional
Shares shall be issued upon any exercise of this Warrant. In lieu of any fractional
Share to which the Warrantholder would otherwise be entitled, the Warrantholder
shall be entitled to receive a cash payment equal to the Market Price of the
Common Stock on the last trading day preceding the date of exercise less the
pro-rated Exercise Price for such fractional share.


 


6.           No Rights as
Stockholders; Transfer Books. This Warrant does not entitle the Warrantholder
to any voting rights or other rights as a stockholder of the Company prior to
the date of exercise hereof. The Company will at no time close its transfer
books against transfer of this Warrant in any manner which interferes with the
timely exercise of this Warrant.


 


7.           Charges, Taxes and
Expenses. Issuance of certificates for Shares to the Warrantholder upon the
exercise of this Warrant shall be made without charge to the Warrantholder for
any issue or transfer tax or other incidental expense in respect of the
issuance of such certificates, all of which taxes and expenses shall be paid by
the Company.


 


8.           Transfer/Assignment.


 


(A)        Subject to compliance
with clause (B) of this Section 8, this Warrant and all rights hereunder
are transferable, in whole or in part, upon the books of the Company by the
registered holder hereof in person or by duly authorized attorney, and a new
warrant shall be made and delivered by the Company, of the same tenor and date
as this Warrant but registered in the name of one or more transferees, upon
surrender of this Warrant, duly endorsed, to the office or agency of the
Company described in Section 3. All expenses (other than stock transfer
taxes) and other charges payable in connection with the preparation, execution
and delivery of the new warrants pursuant to this Section 8 shall be paid
by the Company.


 


(B)         The transfer of the
Warrant and the Shares issued upon exercise of the Warrant are subject to the
restrictions set forth in Section 4.4 of the Purchase Agreement. If and
for so long as required by the Purchase Agreement, this Warrant shall contain
the legends as set forth in Sections 4.2(a) and 4.2(b) of the
Purchase Agreement.


 


6
















 


9.           Exchange and
Registry of Warrant. This Warrant is exchangeable, upon the surrender
hereof by the Warrantholder to the Company, for a new warrant or warrants of
like tenor and representing the right to purchase the same aggregate number of
Shares. The Company shall maintain a registry showing the name and address of
the Warrantholder as the registered holder of this Warrant. This Warrant may be
surrendered for exchange or exercise in accordance with its terms, at the
office of the Company, and the Company shall be entitled to rely in all
respects, prior to written notice to the contrary, upon such registry.


 


10.         Loss, Theft,
Destruction or Mutilation of Warrant. Upon receipt by the Company of
evidence reasonably satisfactory to it of the loss, theft, destruction or
mutilation of this Warrant, and in the case of any such loss, theft or
destruction, upon receipt of a bond, indemnity or security reasonably
satisfactory to the Company, or, in the case of any such mutilation, upon
surrender and cancellation of this Warrant, the Company shall make and deliver,
in lieu of such lost, stolen, destroyed or mutilated Warrant, a new Warrant of
like tenor and representing the right to purchase the same aggregate number of
Shares as provided for in such lost, stolen, destroyed or mutilated Warrant.


 


11.         Saturdays, Sundays,
Holidays, etc. If the last or appointed day for the taking of any action or
the expiration of any right required or granted herein shall not be a business
day, then such action may be taken or such right may be exercised on the next
succeeding day that is a business day.


 


12.         Rule 144
Information. The Company covenants that it will use its reasonable best efforts
to timely file all reports and other documents required to be filed by it under
the Securities Act and the Exchange Act and the rules and regulations
promulgated by the SEC thereunder (or, if the Company is not required to file
such reports, it will, upon the request of any Warrantholder, make publicly
available such information as necessary to permit sales pursuant to Rule 144
under the Securities Act), and it will use reasonable best efforts to take such
further action as any Warrantholder may reasonably request, in each case to the
extent required from time to time to enable such holder to, if permitted by the
terms of this Warrant and the Purchase Agreement, sell this Warrant without
registration under the Securities Act within the limitation of the exemptions
provided by (A) Rule 144 under the Securities Act, as such rule may
be amended from time to time, or (B) any successor rule or regulation
hereafter adopted by the SEC. Upon the written request of any Warrantholder,
the Company will deliver to such Warrantholder a written statement that it has
complied with such requirements.


 


13.         Adjustments and
Other Rights. The Exercise Price and the number of Shares issuable upon
exercise of this Warrant shall be subject to adjustment from time to time as
follows; provided, that if more
than one subsection of this Section 13 is applicable to a single event,
the subsection shall be applied that produces the largest adjustment and no
single event shall cause an adjustment under more than one subsection of this Section 13
so as to result in duplication:


 


(A)        Stock Splits,
Subdivisions, Reclassifications or Combinations. If the Company shall (i) declare
and pay a dividend or make a distribution on its Common Stock in shares of
Common Stock, (ii) subdivide or reclassify the outstanding shares of
Common Stock into a greater number of shares, or (iii) combine or reclassify
the outstanding shares of Common Stock into a smaller number of shares, the
number of Shares issuable upon exercise of this Warrant at the time of the
record date for such dividend or distribution or the effective date of such
subdivision, combination or reclassification shall be proportionately adjusted
so that the Warrantholder after such date shall be entitled to purchase the
number of shares of Common Stock which such holder would have owned or been
entitled to receive in respect of the shares of Common Stock subject to this
Warrant after such date had this Warrant been


 


7

















 


exercised immediately prior
to such date. In such event, the Exercise Price in effect at the time of the
record date for such dividend or distribution or the effective date of such
subdivision, combination or reclassification shall be adjusted to the number
obtained by dividing (x) the product of (1) the number of Shares
issuable upon the exercise of this Warrant before such adjustment and (2) the
Exercise Price in effect immediately prior to the record or effective date, as
the case may be, for the dividend, distribution, subdivision, combination or
reclassification giving rise to this adjustment by (y) the new number of
Shares issuable upon exercise of the Warrant determined pursuant to the
immediately preceding sentence.


 


(B)         Certain Issuances
of Common Shares or Convertible Securities. Until the earlier of (i) the
date on which the Original Warrantholder no longer holds this Warrant or any
portion thereof and (ii) the third anniversary of the Issue Date, if the
Company shall issue shares of Common Stock (or rights or warrants or other
securities exercisable or convertible into or exchangeable (collectively, a “conversion”) for shares of Common Stock)
(collectively, “convertible securities”) (other
than in Permitted Transactions (as defined below) or a transaction to which
subsection (A) of this Section 13 is applicable) without
consideration or at a consideration per share (or having a conversion price per
share) that is less than 90% of the Market Price on the last trading day
preceding the date of the agreement on pricing such shares (or such convertible
securities) then, in such event:


 


(A) the
number of Shares issuable upon the exercise of this Warrant immediately prior
to the date of the agreement on pricing of such shares (or of such convertible
securities) (the “Initial Number”) shall
be increased to the number obtained by multiplying the Initial Number by a
fraction (A) the numerator of which shall be the sum of (x) the
number of shares of Common Stock of the Company outstanding on such date and (y) the
number of additional shares of Common Stock issued (or into which convertible
securities may be exercised or convert) and (B) the denominator of which
shall be the sum of (I) the number of shares of Common Stock outstanding
on such date and (II) the number of shares of Common Stock which the
aggregate consideration receivable by the Company for the total number of
shares of Common Stock so issued (or into which convertible securities may be
exercised or convert) would purchase at the Market Price on the last trading
day preceding the date of the agreement on pricing such shares (or such
convertible securities); and


 


(B) the
Exercise Price payable upon exercise of the Warrant shall be adjusted by
multiplying such Exercise Price in effect immediately prior to the date of the
agreement on pricing of such shares (or of such convertible securities) by a
fraction, the numerator of which shall be the number of shares of Common Stock
issuable upon exercise of this Warrant prior to such date and the denominator
of which shall be the number of shares of Common Stock issuable upon exercise
of this Warrant immediately after the adjustment described in clause (A) above.


 


For
purposes of the foregoing, the aggregate consideration receivable by the
Company in connection with the issuance of such shares of Common Stock or
convertible securities shall be deemed to be equal to the sum of the net
offering price (including the Fair Market Value of any non-cash consideration
and after deduction of any related expenses payable to third parties) of all
such securities plus the minimum aggregate amount, if any, payable upon
exercise or conversion of any such convertible securities into shares of Common
Stock; and “Permitted Transactions” shall
mean issuances (i) as consideration for or to fund the acquisition of
businesses and/or related assets, (ii) in connection with employee benefit
plans and compensation related arrangements in the ordinary course and
consistent


 


8

















 


with past practice approved
by the Board of Directors, (iii) in connection with a public or broadly
marketed offering and sale of Common Stock or convertible securities for cash
conducted by the Company or its affiliates pursuant to registration under the
Securities Act or Rule 144A thereunder on a basis consistent with capital
raising transactions by comparable financial institutions and (iv) in
connection with the exercise of preemptive rights on terms existing as of the
Issue Date. Any adjustment made pursuant to this Section 13(B) shall
become effective immediately upon the date of such issuance.


 


(C)         Other Distributions.
In case the
Company shall fix a record date for the making of a distribution to all holders
of shares of its Common Stock of securities, evidences of indebtedness, assets,
cash, rights or warrants (excluding Ordinary Cash Dividends, dividends of its
Common Stock and other dividends or distributions referred to in Section 13(A)),
in each such case, the Exercise Price in effect prior to such record date shall
be reduced immediately thereafter to the price determined by multiplying the
Exercise Price in effect immediately prior to the reduction by the quotient of (x) the
Market Price of the Common Stock on the last trading day preceding the first
date on which the Common Stock trades regular way on the principal national
securities exchange on which the Common Stock is listed or admitted to trading
without the right to receive such distribution, minus the amount of cash and/or
the Fair Market Value of the securities, evidences of indebtedness, assets,
rights or warrants to be so distributed in respect of one share of Common Stock
(such amount and/or Fair Market Value, the “Per
Share Fair Market Value”) divided by (y) such Market Price on
such date specified in clause (x); such adjustment shall be made successively
whenever such a record date is fixed. In such event, the number of Shares issuable
upon the exercise of this Warrant shall be increased to the number obtained by
dividing (x) the product of (1) the number of Shares issuable upon
the exercise of this Warrant before such adjustment, and (2) the Exercise
Price in effect immediately prior to the distribution giving rise to this
adjustment by (y) the new Exercise Price determined in accordance with the
immediately preceding sentence. In the case of adjustment for a cash dividend that is, or is
coincident with, a regular quarterly cash dividend, the Per Share Fair Market
Value would be reduced by the per share amount of the portion of the cash
dividend that would constitute an Ordinary Cash Dividend. In the event that
such distribution is not so made, the Exercise Price and the number of Shares
issuable upon exercise of this Warrant then in effect shall be readjusted,
effective as of the date when the Board of Directors determines not to
distribute such shares, evidences of indebtedness, assets, rights, cash or
warrants, as the case may be, to the Exercise Price that would then be in
effect and the number of Shares that would then be issuable upon exercise of
this Warrant if such record date had not been fixed.


 


(D)         Certain Repurchases
of Common Stock. In  case the Company effects a Pro Rata
Repurchase of Common Stock, then the Exercise Price shall be reduced to the
price determined by multiplying the Exercise Price in effect immediately prior
to the Effective Date of such Pro Rata Repurchase by a fraction of which the
numerator shall be (i) the product of (x) the number of shares of
Common Stock outstanding immediately before such Pro Rata Repurchase and (y) the
Market Price of a share of Common Stock on the trading day immediately
preceding the first public announcement by the Company or any of its Affiliates
of the intent to effect such Pro Rata Repurchase, minus (ii) the aggregate
purchase price of the Pro Rata Repurchase, and of which the denominator shall
be the product of (i) the number of shares of Common Stock outstanding immediately
prior to such Pro Rata Repurchase minus the number of shares of Common Stock so
repurchased and (ii) the Market Price per share of Common Stock on the
trading day immediately preceding the first public announcement by the Company
or any of its Affiliates of the intent to effect such Pro Rata Repurchase. In such event, the
number of shares of Common Stock issuable upon the exercise of this Warrant
shall be increased to the number obtained by dividing (x) the product of (1) the
number of Shares issuable upon the exercise of this Warrant before such
adjustment, and (2) the Exercise Price in effect immediately prior to the
Pro Rata Repurchase giving


 


9

















 


rise to this adjustment by (y) the
new Exercise Price determined in accordance with the immediately preceding
sentence. For the avoidance of doubt, no increase to the Exercise Price or
decrease in the number of Shares issuable upon exercise of this Warrant shall
be made pursuant to this Section 13(D).


 


(E)         Business
Combinations. In
case of any Business Combination or reclassification of Common Stock
(other than a reclassification of Common Stock referred to in Section 13(A)),
the Warrantholder’s right to receive Shares upon exercise of this Warrant shall
be converted into the right to exercise this Warrant to acquire the number of
shares of stock or other securities or property (including cash) which the
Common Stock issuable (at the time of such Business Combination or
reclassification) upon exercise of this Warrant immediately prior to such
Business Combination or reclassification would have been entitled to receive
upon consummation of such Business Combination or reclassification; and in any
such case, if necessary, the provisions set forth herein with respect to the
rights and interests thereafter of the Warrantholder shall be appropriately
adjusted so as to be applicable, as nearly as may reasonably be, to the
Warrantholder’s right to exercise this Warrant in exchange for any shares of
stock or other securities or property pursuant to this paragraph. In determining the
kind and amount of stock, securities or the property receivable upon exercise
of this Warrant following the consummation of such Business Combination, if the
holders of Common Stock have the right to elect the kind or amount of
consideration receivable upon consummation of such Business Combination, then
the consideration that the Warrantholder shall be entitled to receive upon
exercise shall be deemed to be the types and amounts of consideration received
by the majority of all holders of the shares of common stock that affirmatively
make an election (or of all such holders if none make an election).


 


(F)         Rounding of
Calculations; Minimum Adjustments. All calculations under this Section 13
shall be made to the nearest one-tenth (1/10th) of a cent or to the nearest
one-hundredth (1/100th) of a share, as the case may be. Any provision of this Section 13
to the contrary notwithstanding, no adjustment in the Exercise Price or the
number of Shares into which this Warrant is exercisable shall be made if the
amount of such adjustment would be less than $0.01 or one-tenth (1/10th) of a
share of Common Stock, but any such amount shall be carried forward and an
adjustment with respect thereto shall be made at the time of and together with
any subsequent adjustment which, together with such amount and any other amount
or amounts so carried forward, shall aggregate $0.01 or 1/10th of a share of
Common Stock, or more.


 


(G)         Timing of Issuance
of Additional Common Stock Upon Certain Adjustments. In any case in
which the provisions of this Section 13 shall require that an adjustment
shall become effective immediately after a record date for an event, the
Company may defer until the occurrence of such event (i) issuing to the
Warrantholder of this Warrant exercised after such record date and before the
occurrence of such event the additional shares of Common Stock issuable upon
such exercise by reason of the adjustment required by such event over and above
the shares of Common Stock issuable upon such exercise before giving effect to
such adjustment and (ii) paying to such Warrantholder any amount of cash
in lieu of a fractional share of Common Stock; provided,
however, that the Company upon request shall deliver to such
Warrantholder a due bill or other appropriate instrument evidencing such
Warrantholder’s right to receive such additional shares, and such cash, upon
the occurrence of the event requiring such adjustment.


 


(H)         Completion of
Qualified Equity Offering. In the event the Company (or any successor by
Business Combination) completes one or more Qualified Equity Offerings on or
prior to December 31, 2009 that result in the Company (or any such
successor) receiving aggregate gross proceeds of not less than 100% of the
aggregate liquidation preference of the Preferred Shares (and any


 


10

















 


preferred stock issued by
any such successor to the Original Warrantholder under the CPP), the number of
shares of Common Stock underlying the portion of this Warrant then held by the
Original Warrantholder shall be thereafter reduced by a number of shares of
Common Stock equal to the product of (i) 0.5 and (ii) the number of
shares underlying the Warrant on the Issue Date (adjusted to take into account
all other theretofore made adjustments pursuant to this Section 13).


 


(I)          Other Events.
For so long as the Original Warrantholder holds this Warrant or any portion
thereof, if any event occurs as to which the provisions of this Section 13
are not strictly applicable or, if strictly applicable, would not, in the good
faith judgment of the Board of Directors of the Company, fairly and adequately
protect the purchase rights of the Warrants in accordance with the essential
intent and principles of such provisions, then the Board of Directors shall
make such adjustments in the application of such provisions, in accordance with
such essential intent and principles, as shall be reasonably necessary, in the
good faith opinion of the Board of Directors, to protect such purchase rights
as aforesaid. The Exercise Price or the number of Shares into which this
Warrant is exercisable shall not be adjusted in the event of a change in the
par value of the Common Stock or a change in the jurisdiction of incorporation
of the Company.


 


(J)           Statement
Regarding Adjustments. Whenever the Exercise Price or the number
of Shares into which this Warrant is exercisable shall be adjusted as provided
in Section 13, the Company shall forthwith file at the principal office of
the Company a statement showing in reasonable detail the facts requiring such
adjustment and the Exercise Price that shall be in effect and the number of
Shares into which this Warrant shall be exercisable after such adjustment, and
the Company shall also cause a copy of such statement to be sent by mail, first
class postage prepaid, to each Warrantholder at the address appearing in the
Company’s records.


 


(K)         Notice of
Adjustment Event. In the event that the Company shall propose to take any
action of the type described in this Section 13 (but only if the action of
the type described in this Section 13 would result in an adjustment in the
Exercise Price or the number of Shares into which this Warrant is exercisable
or a change in the type of securities or property to be delivered upon exercise
of this Warrant), the Company shall give notice to the Warrantholder, in the
manner set forth in Section 13(J), which notice shall specify the record
date, if any, with respect to any such action and the approximate date on which
such action is to take place. Such notice shall also set forth the facts with
respect thereto as shall be reasonably necessary to indicate the effect on the
Exercise Price and the number, kind or class of shares or other securities or
property which shall be deliverable upon exercise of this Warrant. In the case
of any action which would require the fixing of a record date, such notice
shall be given at least 10 days prior to the date so fixed, and in case of all
other action, such notice shall be given at least 15 days prior to the taking
of such proposed action. Failure to give such notice, or any defect therein,
shall not affect the legality or validity of any such action.


 


(L)         Proceedings Prior
to Any Action Requiring Adjustment. As a condition precedent to the taking
of any action which would require an adjustment pursuant to this Section 13,
the Company shall take any action which may be necessary, including obtaining
regulatory, New York Stock Exchange, NASDAQ Stock Market or other applicable
national securities exchange or stockholder approvals or exemptions, in order
that the Company may thereafter validly and legally issue as fully paid and
nonassessable all shares of Common Stock that the Warrantholder is entitled to
receive upon exercise of this Warrant pursuant to this Section 13.


 


(M)        Adjustment Rules.
Any adjustments pursuant to this Section 13 shall be made successively
whenever an event referred to herein shall occur. If an adjustment in Exercise
Price made


 


11

















 


hereunder would reduce the
Exercise Price to an amount below par value of the Common Stock, then such
adjustment in Exercise Price made hereunder shall reduce the Exercise Price to
the par value of the Common Stock.


 


14.         Exchange. At
any time following the date on which the shares of Common Stock of the Company
are no longer listed or admitted to trading on a national securities exchange
(other than in connection with any Business Combination), the Original
Warrantholder may cause the Company to exchange all or a portion of this
Warrant for an economic interest (to be determined by the Original
Warrantholder after consultation with the Company) of the Company classified as
permanent equity under U.S. GAAP having a value equal to the Fair Market Value
of the portion of the Warrant so exchanged. The Original Warrantholder shall
calculate any Fair Market Value required to be calculated pursuant to this Section 14,
which shall not be subject to the Appraisal Procedure.


 


15.         No Impairment.
The Company will not, by amendment of its Charter or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue
or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Company, but will at all times in good faith assist in the
carrying out of all the provisions of this Warrant and in taking of all such
action as may be necessary or appropriate in order to protect the rights of the
Warrantholder.


 


16.         Governing Law. This Warrant will be governed by and construed in accordance
with the federal
law of the United States if and to the extent such law is
applicable, and otherwise in accordance with the laws of the State of New York
applicable to contracts made and to be performed entirely within such State.
Each of the Company and the Warrantholder agrees (a) to submit to the exclusive jurisdiction and
venue of the United States District Court for the District of Columbia for any
civil action, suit or proceeding arising out of or relating to this Warrant or
the transactions contemplated hereby, and (b) that notice may be served
upon the Company at the address in Section 20 below and upon the
Warrantholder at the address for the Warrantholder set forth in the registry
maintained by the Company pursuant to Section 9 hereof. To the extent
permitted by applicable law, each of the  Company and the Warrantholder hereby unconditionally waives trial by jury
in any civil legal  action or proceeding relating to the Warrant or the
transactions contemplated hereby or thereby.


 


17.         Binding Effect.
This Warrant shall be binding upon any successors or assigns of the Company.


 


18.         Amendments.
This Warrant may be amended and the observance of any term of this Warrant may
be waived only with the written consent of the Company and the Warrantholder.


 


19 .        Prohibited Actions.
The Company agrees that it will not take any action which would entitle the
Warrantholder to an adjustment of the Exercise Price if the total number of
shares of Common Stock issuable after such action upon exercise of this
Warrant, together with all shares of Common Stock then outstanding and all
shares of Common Stock then issuable upon the exercise of all outstanding
options, warrants, conversion and other rights, would exceed the total number
of shares of Common Stock then authorized by its Charter.


 


20.         Notices. Any
notice, request, instruction or other document to be given hereunder by any
party to the other will be in writing and will be deemed to have been duly
given (a) on the date of


 


12

















 


delivery if delivered
personally, or by facsimile, upon confirmation of receipt, or (b) on the
second business day following the date of dispatch if delivered by a recognized
next day courier service. All notices hereunder shall be delivered as set forth
in Item 8 of Schedule A hereto, or pursuant to such other instructions as may
be designated in writing by the party to receive such notice.


 


21.         Entire Agreement.
This Warrant, the forms attached hereto and Schedule A hereto (the terms of
which are incorporated by reference herein), and the Letter Agreement
(including all documents incorporated therein), contain the entire agreement
between the parties with respect to the subject matter hereof and supersede all
prior and contemporaneous arrangements or undertakings with respect thereto.


 


[Remainder of page intentionally left blank]


 


13

















 


Form of Notice of Exercise


Date: _______________


 


TO:        CoBiz Financial Inc.


 


RE:        Election
to Purchase Common Stock


 


The
undersigned, pursuant to the provisions set forth in the attached Warrant,
hereby agrees to subscribe for and purchase the number of shares of the Common
Stock set forth below covered by such Warrant. The undersigned, in accordance
with Section 3 of the Warrant, hereby agrees to pay the aggregate Exercise
Price for such shares of Common Stock in the manner set forth below. A new
warrant evidencing the remaining shares of Common Stock covered by such
Warrant, but not yet subscribed for and purchased, if any, should be issued in
the name set forth below.


 


Number of Shares of Common Stock ________________________


 


Method of Payment of
Exercise Price (note if cashless exercise pursuant to Section 3(i) of
the Warrant or cash exercise pursuant to


Section 3(ii) of the Warrant, with consent of the Company and
the Warrantholder) ________________________


 


Aggregate Exercise Price: ________________________


 


 


	
   

  	
   

  	
  Holder:

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  



 


14

















 


IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by a
duly authorized officer.


 


	
  Dated:   December 19,
  2008

  	
   

  
	
   

  	
   

  
	
   

  	
  COMPANY: COBIZ FINANCIAL INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven Bangert

  
	
   

  	
   

  	
  Name: Steven Bangert

  
	
   

  	
   

  	
  Title: Chief Executive
  Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attest:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Lyne B. Andrich

  
	
   

  	
   

  	
  Name: Lyne B. Andrich

  
	
   

  	
   

  	
  Title: Chief Financial
  Officer

  



 


 


[Signature Page to Warrant]


 


15

















 


SCHEDULE A


 


Item 1


Name:  CoBiz Financial Inc.


Corporate or other
organizational form:  Corporation


Jurisdiction of
organization: Colorado


 


Item 2


Exercise Price: $10.79 per
share


 


Item 3


Issue Date: December 19,
2008


 


Item 4


Amount of last dividend
declared prior to the Issue Date: $0.07 per share


 


Item 5


Date of Letter Agreement
between the Company and the United States Department of the Treasury:  December 19, 2008


 


Item 6


Number of shares of Common
Stock: 895,968


 


	
  Item
  7

  	
   

  	
   

  
	
  Company’s address:

  	
   

  	
  CoBiz Financial Inc.

  
	
   

  	
   

  	
  Attention: Steven Bangert

  
	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  	
  821 17th Street

  
	
   

  	
   

  	
  Denver, Colorado 80202

  
	
   

  	
   

  	
   

  
	
  Item
  8

  	
   

  	
   

  
	
  Notice information:

  	
   

  	
  CoBiz Financial Inc.

  
	
   

  	
   

  	
  Attention: Steven Bangert

  
	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  	
  821 17th Street

  
	
   

  	
   

  	
  Denver, Colorado 80202