**Exhibit 10.11**

 

 

GUARANTEE AGREEMENT

CHINO COMMERCIAL BANCORP

Dated as of October 27,2006

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**TABLE OFCONTENTS**
|                                                     | ** ** | ** **                                                     | ** ** | **Page** |
|-----------------------------------------------------|------------|----------------------------------------------------------------|------------|----------|
| ARTICLE I                                           |
| DEFINITIONS AND  INTERPRETATION                     |
|                                                |       |                                                           |       |     |
| SECTION 1.1.                                        |       | Definitions and Interpretation                                 |       | 1        |
|                                                |       |                                                           |       |     |
| ARTICLE II                                          |
| POWERS, DUTIES  AND RIGHTS OF THE GUARANTEE TRUSTEE |
|                                                |       |                                                           |       |     |
| SECTION 2.1.                                        |       | Powers and Duties of the Guarantee Trustee                     |       | 4        |
|                                                |       |                                                           |       |     |
| SECTION 2.2.                                        |       | Certain Rights of the Guarantee Trustee                        |       | 5        |
|                                                |       |                                                           |       |     |
| SECTION 2.3.                                        |       | Not Responsible for Recitals or Issuance of  Guarantee         |       | 7        |
|                                                |       |                                                           |       |     |
| SECTION 2.4.                                        |       | Events of Default; Waiver                                      |       | 7        |
|                                                |       |                                                           |       |     |
| SECTION 2.5.                                        |       | Events of Default; Notice                                      |       | 8        |
|                                                |       |                                                           |       |     |
| ARTICLE III                                         |
| THE GUARANTEE  TRUSTEE                              |
|                                                |       |                                                           |       |     |
| SECTION 3.1.                                        |       | The Guarantee Trustee; Eligibility                             |       | 8        |
|                                                |       |                                                           |       |     |
| SECTION 3.2.                                        |       | Appointment, Removal and Resignation of the  Guarantee Trustee |       | 9        |
|                                                |       |                                                           |       |     |
| ARTICLE IV                                          |
| GUARANTEE                                           |
|                                                |       |                                                           |       |     |
| SECTION 4.1.                                        |       | Guarantee                                                      |       | 9        |
|                                                |       |                                                           |       |     |
| SECTION 4.2.                                        |       | Waiver of Notice and Demand                                    |       | 10       |
|                                                |       |                                                           |       |     |
| SECTION 4.3.                                        |       | Obligations Not Affected                                       |       | 10       |
|                                                |       |                                                           |       |     |
| SECTION 4.4.                                        |       | Rights of Holders                                              |       | 11       |
|                                                |       |                                                           |       |     |
| SECTION 4.5.                                        |       | Guarantee of Payment                                           |       | 11       |
|                                                |       |                                                           |       |     |
| SECTION 4.6.                                        |       | Subrogation                                                    |       | 11       |
|                                                |       |                                                           |       |     |
| SECTION 4.7.                                        |       | Independent Obligations                                        |       | 12       |
|                                                |       |                                                           |       |     |
| SECTION 4.8.                                        |       | Enforcement                                                    |       | 12       |
|                                                |       |                                                           |       |     |

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|                                            | ** ** | ** **                              | ** ** | **Page** |
|--------------------------------------------|------------|-----------------------------------------|------------|----------|
| ARTICLE V                                  |
| LIMITATION OF  TRANSACTIONS; SUBORDINATION |
|                                       |       |                                    |       |     |
| SECTION 5.1.                               |       | Limitation of Transactions              |       | 12       |
|                                       |       |                                    |       |     |
| SECTION 5.2.                               |       | Ranking                                 |       | 13       |
|                                       |       |                                    |       |     |
| ARTICLE VI                                 |
| TERMINATION                                |
|                                       |       |                                    |       |     |
| SECTION 6.1.                               |       | Termination                             |       | 13       |
|                                       |       |                                    |       |     |
| ARTICLE VII                                |
| INDEMNIFICATION                            |
|                                       |       |                                    |       |     |
| SECTION 7.1.                               |       | Exculpation                             |       | 14       |
|                                       |       |                                    |       |     |
| SECTION 7.2.                               |       | Indemnification                         |       | 14       |
|                                       |       |                                    |       |     |
| SECTION 7.3.                               |       | Compensation; Reimbursement of Expenses |       | 15       |
|                                       |       |                                    |       |     |
| ARTICLE VIII                               |
| MISCELLANEOUS                              |
|                                       |       |                                    |       |     |
| SECTION 8.1.                               |       | Successors and Assigns                  |       | 16       |
|                                       |       |                                    |       |     |
| SECTION 8.2.                               |       | Amendments                              |       | 16       |
|                                       |       |                                    |       |     |
| SECTION 8.3.                               |       | Notices                                 |       | 16       |
|                                       |       |                                    |       |     |
| SECTION 8.4.                               |       | Benefit                                 |       | 17       |
|                                       |       |                                    |       |     |
| SECTION 8.5.                               |       | Governing Law                           |       | 17       |
|                                       |       |                                    |       |     |
| SECTION 8.6.                               |       | Counterparts                            |       | 17       |

 

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GUARANTEEAGREEMENT

ThisGUARANTEE AGREEMENT (the “Guarantee”), dated as of October 27, 2006, isexecuted and delivered by Chino Commercial Bancorp, incorporated in California(the “Guarantor”), and U.S. Bank National Association, as trustee (the “GuaranteeTrustee”), for the benefit of the Holders (as defined herein) from time to timeof the Capital Securities (as defined herein) of Chino Statutory Trust I, aConnecticut statutory trust (the “Issuer”).

WHEREAS,pursuant to an Amended and Restated Declaration of Trust (the “Declaration”),dated as of October 27, 2006, among the trustees named therein of the Issuer,the administrators of the Issuer named therein, Chino Commercial Bancorp, assponsor, and the Holders from time to time of undivided beneficial interests inthe assets of the Issuer, the Issuer is issuing on the date hereof securities,having an aggregate liquidation amount of up to $3,000,000, designated the TPSecurities (the “Capital Securities”); and

WHEREAS,as incentive for the Holders to purchase the Capital Securities, the Guarantordesires irrevocably and unconditionally to agree, to the extent set forth inthis Guarantee, to pay to the Holders of Capital Securities the GuaranteePayments (as defined herein) and to make certain other payments on the termsand conditions set forth herein.

NOW,THEREFORE, in consideration of the purchase by each Holder of the CapitalSecurities, which purchase the Guarantor hereby agrees shall benefit theGuarantor, the Guarantor executes and delivers this Guarantee for the benefitof the Holders.

ARTICLE IDEFINITIONS AND INTERPRETATION

SECTION 1.1.  Definitionsand Interpretation.

Inthis Guarantee, unless the context otherwise requires:

(a)           capitalized terms used in thisGuarantee but not defined in the preamble above have the respective meaningsassigned to them in this Section 1.1;

(b)           a term defined anywhere in thisGuarantee has the same meaning throughout;

(c)           all references to “the Guarantee” or “thisGuarantee” are to this Guarantee as modified, supplemented or amended from timeto time;

(d)           all references in this Guarantee toArticles and Sections are to Articles and Sections of this Guarantee, unlessotherwise specified;

(e)           terms defined in the Declaration asof the date of execution of this Guarantee have the same meanings when used inthis Guarantee, unless otherwise defined in this Guarantee or unless thecontext otherwise requires; and

(f)            a reference to the singular includesthe plural and vice versa.

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“Beneficiaries”means any Person to whom the Issuer is or hereafter becomes indebted or liable.

“CorporateTrust Office” means the office of the Guarantee Trustee at which the corporatetrust business of the Guarantee Trustee shall, at any particular time, beprincipally administered.

“CoveredPerson” means any Holder of Capital Securities.

“Debentures”means the junior subordinated debentures of Chino Commercial Bancorp,designated the Junior Subordinated Debt Securities due 2036, held by theInstitutional Trustee (as defined in the Declaration) of the Issuer.

“Eventof Default” has the meaning set forth in Section 2.4.

“GuaranteePayments” means the following payments or distributions, without duplication,with respect to the Capital Securities, to the extent not paid or made by theIssuer: (i) any accrued and unpaid Distributions (as defined in theDeclaration) which are required to be paid on such Capital Securities to theextent the Issuer has funds available in the Property Account (as defined inthe Declaration) therefor at such time, (ii) the Redemption Price (as definedin the Indenture) to the extent the Issuer has funds available in the PropertyAccount therefor at such time, with respect to any Capital Securities calledfor redemption by the Issuer, (iii) the Special Redemption Price (as defined inthe Indenture) to the extent the Issuer has funds available in the PropertyAccount therefor at such time, with respect to Capital Securities called forredemption upon the occurrence of a Special Event (as defined in theIndenture), and (iv) upon a voluntary or involuntary liquidation,dissolution, winding-up or termination of the Issuer (other than in connectionwith the distribution of Debentures to the Holders of the Capital Securities inexchange therefor as provided in the Declaration), the lesser of (a) theaggregate of the liquidation amount and all accrued and unpaid Distributions onthe Capital Securities to the date of payment, to the extent the Issuer hasfunds available in the Property Account therefor at such time, and (b) theamount of assets of the Issuer remaining available for distribution to Holdersin liquidation of the Issuer after satisfaction of liabilities to creditors ofthe Issuer as required by applicable law (in either case, the “LiquidationDistribution”).

“GuaranteeTrustee” means U.S. Bank National Association, until a Successor GuaranteeTrustee has been appointed and has accepted such appointment pursuant to theterms of this Guarantee and thereafter means each such Successor GuaranteeTrustee.

“Holder”means any holder, as registered on the books and records of the Issuer, of anyCapital Securities; provided, however, that, in determining whether the holdersof the requisite percentage of Capital Securities have given any request,notice, consent or waiver hereunder, “Holder” shall not include the Guarantoror any Affiliate of the Guarantor.

“Indemnified Person” means the Guarantee Trustee(including in its individual capacity), any Affiliate of the Guarantee Trustee,or any officers, directors, shareholders, members, partners, employees,representatives, nominees, custodians or agents of the Guarantee Trustee.

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“Indenture”means the Indenture, dated as of October 27, 2006, between the Guarantor andU.S. Bank National Association, not in its individual capacity but solely astrustee, and any indenture supplemental thereto pursuant to which theDebentures are to be issued to the Institutional Trustee of the Issuer.

“LiquidationDistribution” has the meaning set forth in the definition of “GuaranteePayments” herein.

“Majorityin liquidation amount of the Capital Securities” means Holder(s) of outstandingCapital Securities, voting together as a class, but separately from the holdersof Common Securities, of more than 50% of the aggregate liquidation amount(including the stated amount that would be paid on redemption, liquidation orotherwise, plus accrued and unpaid Distributions to, but excluding, the dateupon which the voting percentages are determined) of all Capital Securitiesthen outstanding.

“Obligations”means any costs, expenses or liabilities (but not including liabilities relatedto taxes) of the Issuer, other than obligations of the Issuer to pay to holdersof any Trust Securities the amounts due such holders pursuant to the terms ofthe Trust Securities.

“Officer’sCertificate” means, with respect to any Person, a certificate signed by oneAuthorized Officer of such Person. Any Officer’s Certificate delivered withrespect to compliance with a condition or covenant provided for in thisGuarantee shall include:

(a)           a statement that each officer signingthe Officer’s Certificate has read the covenant or condition and thedefinitions relating thereto;

(b)           a brief statement of the nature andscope of the examination or investigation undertaken by each officer in renderingthe Officer’s Certificate;

(c)           a statement that each such officerhas made such examination or investigation as, in such officer’s opinion, isnecessary to enable such officer to express an informed opinion as to whetheror not such covenant or condition has been complied with; and

(d)           a statement as to whether, in theopinion of each such officer, such condition or covenant has been compliedwith.

“Person”means a legal person, including any individual, corporation, estate,partnership, joint venture, association, joint stock company, limited liabilitycompany, trust, unincorporated association, or government or any agency orpolitical subdivision thereof, or any other entity of whatever nature.

“Responsible Officer” means, with respect to theGuarantee Trustee, any officer within the Corporate Trust Office of theGuarantee Trustee with direct responsibility for the administration of anymatters relating to this Guarantee, including any vice president, any assistantvice president, any secretary, any assistant secretary, the treasurer, anyassistant treasurer, any trust officer or other officer of the Corporate TrustOffice of the Guarantee Trustee customarily performing functions similar tothose performed by any of the above designated

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officers and also means, with respect to a particularcorporate trust matter, any other officer to whom such matter is referredbecause of that officer’s knowledge of and familiarity with the particularsubject.

“SuccessorGuarantee Trustee” means a successor Guarantee Trustee possessing thequalifications to act as Guarantee Trustee under Section 3.1.

“TrustSecurities” means the Common Securities and the Capital Securities.

ARTICLE IIPOWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE

SECTION 2.1.  Powersand Duties of the Guarantee Trustee.

(a)           This Guarantee shall be held by theGuarantee Trustee for the benefit of the Holders of the Capital Securities, andthe Guarantee Trustee shall not transfer this Guarantee to any Person except aHolder of Capital Securities exercising his or her rights pursuant to Section4.4(b) or to a Successor Guarantee Trustee on acceptance by such SuccessorGuarantee Trustee of its appointment to act as Successor Guarantee Trustee. Theright, title and interest of the Guarantee Trustee shall automatically vest inany Successor Guarantee Trustee, and such vesting and cessation of title shallbe effective whether or not conveyancing documents have been executed anddelivered pursuant to the appointment of such Successor Guarantee Trustee.

(b)           If an Event of Default actually knownto a Responsible Officer of the Guarantee Trustee has occurred and iscontinuing, the Guarantee Trustee shall enforce this Guarantee for the benefitof the Holders of the Capital Securities.

(c)           The Guarantee Trustee, before theoccurrence of any Event of Default and after the curing or waiving of allEvents of Default that may have occurred, shall undertake to perform only suchduties as are specifically set forth in this Guarantee, and no impliedcovenants shall be read into this Guarantee against the Guarantee Trustee. Incase an Event of Default has occurred (that has not been cured or waivedpursuant to Section 2.4(b)) and is actually known to a Responsible Officer ofthe Guarantee Trustee, the Guarantee Trustee shall exercise such of the rightsand powers vested in it by this Guarantee, and use the same degree of care andskill in its exercise thereof, as a prudent person would exercise or use underthe circumstances in the conduct of his or her own affairs.

(d)           No provision of this Guarantee shallbe construed to relieve the Guarantee Trustee from liability for its ownnegligent action, its own negligent failure to act, or its own willfulmisconduct, except that:

(i)            prior to the occurrence of any Eventof Default and after the curing or waiving of all Events of Default that mayhave occurred:

(A)          the duties and obligations of theGuarantee Trustee shall be determined solely by the express provisions of thisGuarantee, and the

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Guarantee Trustee shall not be liable except for theperformance of such duties and obligations as are specifically set forth inthis Guarantee, and no implied covenants or obligations shall be read into thisGuarantee against the Guarantee Trustee; and

(B)           in the absence of bad faith on the partof the Guarantee Trustee, the Guarantee Trustee may conclusively rely, as tothe truth of the statements and the correctness of the opinions expressedtherein, upon any certificates or opinions furnished to the Guarantee Trusteeand conforming to the requirements of this Guarantee; but in the case of anysuch certificates or opinions furnished to the Guarantee Trustee, the GuaranteeTrustee shall be under a duty to examine the same to determine whether or noton their face they conform to the requirements of this Guarantee;

(ii)           the Guarantee Trustee shall not beliable for any error of judgment made in good faith by a Responsible Officer ofthe Guarantee Trustee, unless it shall be proved that such Responsible Officerof the Guarantee Trustee or the Guarantee Trustee was negligent in ascertainingthe pertinent facts upon which such judgment was made;

(iii)          the Guarantee Trustee shall not beliable with respect to any action taken or omitted to be taken by it in goodfaith in accordance with the written direction of the Holders of not less thana Majority in liquidation amount of the Capital Securities relating to thetime, method and place of conducting any proceeding for any remedy available tothe Guarantee Trustee, or exercising any trust or power conferred upon theGuarantee Trustee under this Guarantee; and

(iv)          no provision of this Guarantee shallrequire the Guarantee Trustee to expend or risk its own funds or otherwiseincur personal financial liability in the performance of any of its duties orin the exercise of any of its rights or powers, if the Guarantee Trustee shallhave reasonable grounds for believing that the repayment of such funds is notreasonably assured to it under the terms of this Guarantee, or security andindemnity, reasonably satisfactory to the Guarantee Trustee, against such riskor liability is not reasonably assured to it.

SECTION 2.2.  CertainRights of the Guarantee Trustee.

(a)           Subject to the provisions of Section2.1:

(i)            The Guarantee Trustee mayconclusively rely, and shall be fully protected in acting or refraining fromacting upon, any resolution, certificate, statement, instrument, opinion,report, notice, request, direction, consent, order, bond, debenture, note,other evidence of indebtedness or other paper or document believed by it to begenuine and to have been signed, sent or presented by the proper party orparties.

(ii)           Any direction or act of the Guarantorcontemplated by this Guarantee shall be sufficiently evidenced by an Officer’sCertificate.

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(iii)          Whenever, in the administration ofthis Guarantee, the Guarantee Trustee shall deem it desirable that a matter beproved or established before taking, suffering or omitting any actionhereunder, the Guarantee Trustee (unless other evidence is herein specifically prescribed)may, in the absence of bad faith on its part, request and conclusively relyupon an Officer’s Certificate of the Guarantor which, upon receipt of suchrequest, shall be promptly delivered by the Guarantor.

(iv)          The Guarantee Trustee shall have noduty to see to any recording, filing or registration of any instrument or otherwriting (or any rerecording, refiling or reregistration thereof).

(v)           The Guarantee Trustee may consultwith counsel of its selection, and the advice or opinion of such counsel withrespect to legal matters shall be full and complete authorization andprotection in respect of any action taken, suffered or omitted by it hereunderin good faith and in accordance with such advice or opinion. Such counsel maybe counsel to the Guarantor or any of its Affiliates and may include any of itsemployees. The Guarantee Trustee shall have the right at any time to seekinstructions concerning the administration of this Guarantee from any court ofcompetent jurisdiction.

(vi)          The Guarantee Trustee shall be underno obligation to exercise any of the rights or powers vested in it by thisGuarantee at the request or direction of any Holder, unless such Holder shallhave provided to the Guarantee Trustee such security and indemnity, reasonablysatisfactory to the Guarantee Trustee, against the costs, expenses (includingattorneys’ fees and expenses and the expenses of the Guarantee Trustee’sagents, nominees or custodians) and liabilities that might be incurred by it incomplying with such request or direction, including such reasonable advances asmay be requested by the Guarantee Trustee; provided, however,that nothing contained in this Section 2.2(a)(vi) shall be taken to relieve theGuarantee Trustee, upon the occurrence of an Event of Default, of itsobligation to exercise the rights and powers vested in it by this Guarantee.

(vii)         The Guarantee Trustee shall not bebound to make any investigation into the facts or matters stated in anyresolution, certificate, statement, instrument, opinion, report, notice,request, direction, consent, order, bond, debenture, note, other evidence ofindebtedness or other paper or document, but the Guarantee Trustee, in itsdiscretion, may make such further inquiry or investigation into such facts ormatters as it may see fit.

(viii)        The Guarantee Trustee may execute any ofthe trusts or powers hereunder or perform any duties hereunder either directlyor by or through agents, nominees, custodians or attorneys, and the GuaranteeTrustee shall not be responsible for any misconduct or negligence on the partof any agent or attorney appointed with due care by it hereunder.

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(ix)           Any action taken by the GuaranteeTrustee or its agents hereunder shall bind the Holders of the CapitalSecurities, and the signature of the Guarantee Trustee or its agents aloneshall be sufficient and effective to perform any such action. No third partyshall be required to inquire as to the authority of the Guarantee Trustee to soact or as to its compliance with any of the terms and provisions of thisGuarantee, both of which shall be conclusively evidenced by the GuaranteeTrustee’s or its agent’s taking such action.

(x)            Whenever in the administration ofthis Guarantee the Guarantee Trustee shall deem it desirable to receiveinstructions with respect to enforcing any remedy or right or taking any otheraction hereunder, the Guarantee Trustee (A) may request instructions from theHolders of a Majority in liquidation amount of the Capital Securities, (B) mayrefrain from enforcing such remedy or right or taking such other action untilsuch instructions are received and (C) shall be protected in conclusivelyrelying on or acting in accordance with such instructions.

(xi)           The Guarantee Trustee shall not beliable for any action taken, suffered, or omitted to be taken by it in goodfaith and reasonably believed by it to be authorized or within the discretionor rights or powers conferred upon it by this Guarantee.

(b)           No provision of this Guarantee shallbe deemed to impose any duty or obligation on the Guarantee Trustee to performany act or acts or exercise any right, power, duty or obligation conferred orimposed on it, in any jurisdiction in which it shall be illegal or in which theGuarantee Trustee shall be unqualified or incompetent in accordance withapplicable law to perform any such act or acts or to exercise any such right,power, duty or obligation. No permissive power or authority available to theGuarantee Trustee shall be construed to be a duty.

SECTION 2.3.  NotResponsible for Recitals or Issuance of Guarantee.

Therecitals contained in this Guarantee shall be taken as the statements of theGuarantor, and the Guarantee Trustee does not assume any responsibility fortheir correctness. The Guarantee Trustee makes no representation as to thevalidity or sufficiency of this Guarantee.

SECTION 2.4.  Eventsof Default; Waiver.

(a)           An Event of Default under thisGuarantee will occur upon the failure of the Guarantor to perform any of itspayment or other obligations hereunder.

(b)           The Holders of a Majority inliquidation amount of the Capital Securities may, voting or consenting as aclass, on behalf of the Holders of all of the Capital Securities, waive anypast Event of Default and its consequences. Upon such waiver, any such Event ofDefault shall cease to exist, and shall be deemed to have been cured, for everypurpose of this Guarantee, but no such waiver shall extend to any subsequent orother default or Event of Default or impair any right consequent thereon.

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SECTION 2.5.  Eventsof Default; Notice.

(a)           The Guarantee Trustee shall, within90 days after the occurrence of an Event of Default, transmit by mail, firstclass postage prepaid, to the Holders of the Capital Securities, notices of allEvents of Default actually known to a Responsible Officer of the GuaranteeTrustee, unless such defaults have been cured before the giving of such notice;provided, however, that the Guarantee Trustee shall be protectedin withholding such notice if and so long as a Responsible Officer of the GuaranteeTrustee in good faith determines that the withholding of such notice is in theinterests of the Holders of the Capital Securities.

(b)           The Guarantee Trustee shall not becharged with knowledge of any Event of Default unless the Guarantee Trustee shallhave received written notice thereof from the Guarantor or a Holder of theCapital Securities, or a Responsible Officer of the Guarantee Trustee chargedwith the administration of this Guarantee shall have actual knowledge thereof.

ARTICLE IIITHE GUARANTEE TRUSTEE

SECTION 3.1.  TheGuarantee Trustee; Eligibility.

(a)           There shall at all times be aGuarantee Trustee which shall:

(i)            not be an Affiliate of theGuarantor; and

(ii)           be a corporation or nationalassociation organized and doing business under the laws of the United States ofAmerica or any state or territory thereof or of the District of Columbia, orPerson authorized under such laws to exercise corporate trust powers, having acombined capital and surplus of at least Fifty Million U.S. Dollars ($50,000,000),and subject to supervision or examination by federal, state, territorial orDistrict of Columbia authority. If such corporation or national associationpublishes reports of condition at least annually, pursuant to law or to therequirements of the supervising or examining authority referred to above, then,for the purposes of this Section 3.1(a)(ii), the combined capital and surplusof such corporation or national association shall be deemed to be its combinedcapital and surplus as set forth in its most recent report of condition sopublished.

(b)           If at any time the Guarantee Trusteeshall cease to be eligible to so act under Section 3.1(a), the GuaranteeTrustee shall immediately resign in the manner and with the effect set forth inSection 3.2(c).

(c)           If the Guarantee Trustee has or shallacquire any “conflicting interest’ within the meaning of Section 310(b) of theTrust Indenture Act, the Guarantee Trustee shall either eliminate such interestor resign to the extent and in the manner provided by, and subject to, thisGuarantee.

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SECTION 3.2.  Appointment,Removal and Resignation of the Guarantee Trustee.

(a)           Subject to Section 3.2(b), theGuarantee Trustee may be appointed or removed without cause at any time by theGuarantor except during an Event of Default.

(b)           The Guarantee Trustee shall not beremoved in accordance with Section 3.2(a) until a Successor Guarantee Trusteehas been appointed and has accepted such appointment by written instrumentexecuted by such Successor Guarantee Trustee and delivered to the Guarantor.

(c)           The Guarantee Trustee appointed tooffice shall hold office until a Successor Guarantee Trustee shall have beenappointed or until its removal or resignation. The Guarantee Trustee may resignfrom office (without need for prior or subsequent accounting) by an instrumentin writing executed by the Guarantee Trustee and delivered to the Guarantor,which resignation shall not take effect until a Successor Guarantee Trustee hasbeen appointed and has accepted such appointment by an instrument in writingexecuted by such Successor Guarantee Trustee and delivered to the Guarantor andthe resigning Guarantee Trustee.

(d)           If no Successor Guarantee Trusteeshall have been appointed and accepted appointment as provided in this Section3.2 within 60 days after delivery of an instrument of removal or resignation,the Guarantee Trustee resigning or being removed may petition any court ofcompetent jurisdiction for appointment of a Successor Guarantee Trustee. Suchcourt may thereupon, after prescribing such notice, if any, as it may deemproper, appoint a Successor Guarantee Trustee.

(e)           No Guarantee Trustee shall be liablefor the acts or omissions to act of any Successor Guarantee Trustee.

(f)            Upon termination of this Guaranteeor removal or resignation of the Guarantee Trustee pursuant to this Section3.2, the Guarantor shall pay to the Guarantee Trustee all amounts owing to theGuarantee Trustee under Sections 7.2 and 7.3 accrued to the date of suchtermination, removal or resignation.

ARTICLE IVGUARANTEE

SECTION 4.1.  Guarantee.

(a)           The Guarantor irrevocably andunconditionally agrees to pay in full to the Holders the Guarantee Payments(without duplication of amounts theretofore paid by the Issuer), as and whendue, regardless of any defense (except as defense of payment by the Issuer),right of set-off or counterclaim that the Issuer may have or assert. TheGuarantor’s obligation to make a Guarantee Payment may be satisfied by directpayment of the required amounts by the Guarantor to the Holders or by causingthe Issuer to pay such amounts to the Holders.

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(b)           The Guarantor hereby also agrees toassume any and all Obligations of the Issuer and in the event any suchObligation is not so assumed, subject to the terms and conditions hereof, theGuarantor hereby irrevocably and unconditionally guarantees to each Beneficiarythe full payment, when and as due, of any and all Obligations to suchBeneficiaries. This Guarantee is intended to be for the Beneficiaries who havereceived notice hereof.

SECTION 4.2.  Waiverof Notice and Demand.

TheGuarantor hereby waives notice of acceptance of this Guarantee and of anyliability to which it applies or may apply, presentment, demand for payment,any right to require a proceeding first against the Issuer or any other Personbefore proceeding against the Guarantor, protest, notice of nonpayment, noticeof dishonor, notice of redemption and all other notices and demands.

SECTION 4.3.  ObligationsNot Affected.

Theobligations, covenants, agreements and duties of the Guarantor under thisGuarantee shall in no way be affected or impaired by reason of the happeningfrom time to time of any of the following:

(a)           the release or waiver, by operationof law or otherwise, of the performance or observance by the Issuer of anyexpress or implied agreement, covenant, term or condition relating to theCapital Securities to be performed or observed by the Issuer;

(b)           the extension of time for the paymentby the Issuer of all or any portion of the Distributions, Redemption Price,Special Redemption Price, Liquidation Distribution or any other sums payableunder the terms of the Capital Securities or the extension of time for theperformance of any other obligation under, arising out of, or in connectionwith, the Capital Securities (other than an extension of time for the paymentof the Distributions, Redemption Price, Special Redemption Price, LiquidationDistribution or other sums payable that results from the extension of anyinterest payment period on the Debentures or any extension of the maturity dateof the Debentures permitted by the Indenture);

(c)           any failure, omission, delay or lackof diligence on the part of the Holders to enforce, assert or exercise anyright, privilege, power or remedy conferred on the Holders pursuant to theterms of the Capital Securities, or any action on the part of the Issuergranting indulgence or extension of any kind;

(d)           the voluntary or involuntaryliquidation, dissolution, sale of any collateral, receivership, insolvency, bankruptcy,assignment for the benefit of creditors, reorganization, arrangement,composition or readjustment of debt of, or other similar proceedings affecting,the Issuer or any of the assets of the Issuer;

(e)           any invalidity of, or defect ordeficiency in, the Capital Securities;

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(f)            the settlement or compromise of anyobligation guaranteed hereby or hereby incurred; or

(g)           any other circumstance whatsoeverthat might otherwise constitute a legal or equitable discharge or defense of aguarantor, it being the intent of this Section 4.3 that the obligations of theGuarantor hereunder shall be absolute and unconditional under any and allcircumstances.

Thereshall be no obligation of the Holders to give notice to, or obtain consent of,the Guarantor with respect to the happening of any of the foregoing.

SECTION 4.4.  Rightsof Holders.

(a)           The Holders of a Majority inliquidation amount of the Capital Securities have the right to direct the time,method and place of conducting any proceeding for any remedy available to theGuarantee Trustee in respect of this Guarantee or to direct the exercise of anytrust or power conferred upon the Guarantee Trustee under this Guarantee; provided,however, that (subject to Sections 2.1 and 2.2) the Guarantee Trusteeshall have the right to decline to follow any such direction if the GuaranteeTrustee shall determine that the actions so directed would be unjustlyprejudicial to the Holders not taking part in such direction or if theGuarantee Trustee being advised by legal counsel determines that the action orproceeding so directed may not lawfully be taken or if the Guarantee Trustee ingood faith by its board of directors or trustees, executive committee or atrust committee of directors or trustees and/or Responsible Officers shalldetermine that the action or proceeding so directed would involve the GuaranteeTrustee in personal liability.

(b)           Any Holder of Capital Securities mayinstitute a legal proceeding directly against the Guarantor to enforce theGuarantee Trustee’s rights under this Guarantee, without first instituting alegal proceeding against the Issuer, the Guarantee Trustee or any other Person.The Guarantor waives any right or remedy to require that any such action bebrought first against the Issuer, the Guarantee Trustee or any other Personbefore so proceeding directly against the Guarantor.

SECTION 4.5.  Guaranteeof Payment.

ThisGuarantee creates a guarantee of payment and not of collection.

SECTION 4.6.  Subrogation.

The Guarantor shall be subrogated to all (if any)rights of the Holders of Capital Securities against the Issuer in respect ofany amounts paid to such Holders by the Guarantor under this Guarantee; provided,however, that the Guarantor shall not (except to the extent required byapplicable provisions of law) be entitled to enforce or exercise any right thatit may acquire by way of subrogation or any indemnity, reimbursement or otheragreement, in all cases as a result of payment under this Guarantee, if, aftergiving effect to any such payment, any amounts are due and unpaid under thisGuarantee. If any amount shall be paid to the Guarantor

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in violation of the preceding sentence, the Guarantoragrees to hold such amount in trust for the Holders and to pay over such amountto the Holders.

SECTION 4.7.  IndependentObligations.

TheGuarantor acknowledges that its obligations hereunder are independent of theobligations of the Issuer with respect to the Capital Securities and that theGuarantor shall be liable as principal and as debtor hereunder to makeGuarantee Payments pursuant to the terms of this Guarantee notwithstanding theoccurrence of any event referred to in subsections (a) through (g), inclusive,of Section 4.3 hereof.

SECTION 4.8.  Enforcement.

ABeneficiary may enforce the Obligations of the Guarantor contained inSection 4.1(b) directly against the Guarantor, and the Guarantor waivesany right or remedy to require that any action be brought against the Issuer orany other person or entity before proceeding against the Guarantor.

TheGuarantor shall be subrogated to all rights (if any) of any Beneficiary againstthe Issuer in respect of any amounts paid to the Beneficiaries by the Guarantorunder this Guarantee; provided, however, that the Guarantor shallnot (except to the extent required by applicable provisions of law) be entitledto enforce or exercise any rights that it may acquire by way of subrogation orany indemnity, reimbursement or other agreement, in all cases as a result ofpayment under this Guarantee, if, after giving effect to such payment, anyamounts are due and unpaid under this Guarantee.

ARTICLE VLIMITATION OF TRANSACTIONS; SUBORDINATION

SECTION 5.1.  Limitationof Transactions.

So long as any Capital Securities remain outstanding,if (a) there shall have occurred and be continuing an Event of Default or (b)the Guarantor shall have selected an Extension Period as provided in theDeclaration and such period, or any extension thereof, shall have commenced andbe continuing, then the Guarantor may not (x) declare or pay any dividends ordistributions on, or redeem, purchase, acquire, or make a liquidation paymentwith respect to, any of the Guarantor’s capital stock or (y) make any paymentof principal of or interest or premium, if any, on or repay, repurchase or redeemany debt securities of the Guarantor that rank *paripassu* in all respects with or junior in interest to the Debentures(other than (i) payments under this Guarantee, (ii) repurchases, redemptions orother acquisitions of shares of capital stock of the Guarantor (A) inconnection with any employment contract, benefit plan or other similararrangement with or for the benefit of one or more employees, officers,directors, or consultants, (B) in connection with a dividend reinvestment orstockholder stock purchase plan or (C) in connection with the issuance ofcapital stock of the Guarantor (or securities convertible into or exercisablefor such capital stock), as consideration in an acquisition transaction enteredinto prior to the occurrence of the Event of Default or the applicableExtension Period, (iii) as a result of any exchange, reclassification,combination or conversion of any class or series of the Guarantor’s capitalstock (or any capital stock of a

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subsidiary of the Guarantor) for any class or seriesof the Guarantor’s capital stock or of any class or series of the Guarantor’sindebtedness for any class or series of the Guarantor’s capital stock, (iv) thepurchase of fractional interests in shares of the Guarantor’s capital stockpursuant to the conversion or exchange provisions of such capital stock or thesecurity being converted or exchanged, (v) any declaration of a dividend inconnection with any stockholder’s rights plan, or the issuance of rights, stockor other property under any stockholder’s rights plan, or the redemption orrepurchase of rights pursuant thereto, or (vi) any dividend in the form ofstock, warrants, options or other rights where the dividend stock or the stockissuable upon exercise of such warrants, options or other rights is the samestock as that on which the dividend is being paid or ranks *pari passu* with or junior to such stock).

SECTION 5.2.  Ranking.

ThisGuarantee will constitute an unsecured obligation of the Guarantor and willrank subordinate and junior in right of payment to all present and futureSenior Indebtedness (as defined in the Indenture) of the Guarantor. By theiracceptance thereof, each Holder of Capital Securities agrees to the foregoingprovisions of this Guarantee and the other terms set forth herein.

Theright of the Guarantor to participate in any distribution of assets of any ofits subsidiaries upon any such subsidiary’s liquidation or reorganization orotherwise is subject to the prior claims of creditors of that subsidiary,except to the extent the Guarantor may itself be recognized as a creditor ofthat subsidiary. Accordingly, the Guarantor’s obligations under this Guaranteewill be effectively subordinated to all existing and future liabilities of theGuarantor’s subsidiaries, and claimants should look only to the assets of theGuarantor for payments thereunder. This Guarantee does not limit the incurrenceor issuance of other secured or unsecured debt of the Guarantor, includingSenior Indebtedness of the Guarantor, under any indenture or agreement that theGuarantor may enter into in the future or otherwise.

ARTICLE VITERMINATION

SECTION 6.1.  Termination.

This Guarantee shall terminate as to the CapitalSecurities (i) upon full payment of the Redemption Price or the SpecialRedemption Price, as the case may be, of all Capital Securities thenoutstanding, (ii) upon the distribution of all of the Debentures to the Holdersof all of the Capital Securities or (iii) upon full payment of the amountspayable in accordance with the Declaration upon dissolution of the Issuer. ThisGuarantee will continue to be effective or will be reinstated, as the case maybe, if at any time any Holder of Capital Securities must restore payment of anysums paid under the Capital Securities or under this Guarantee.

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ARTICLE VIIINDEMNIFICATION

SECTION 7.1.  Exculpation.

(a)           No Indemnified Person shall beliable, responsible or accountable in damages or otherwise to the Guarantor orany Covered Person for any loss, damage or claim incurred by reason of any actor omission of such Indemnified Person in good faith in accordance with thisGuarantee and in a manner that such Indemnified Person reasonably believed tobe within the scope of the authority conferred on such Indemnified Person bythis Guarantee or by law, except that an Indemnified Person shall be liable forany such loss, damage or claim incurred by reason of such Indemnified Person’snegligence or willful misconduct with respect to such acts or omissions.

(b)           An Indemnified Person shall be fullyprotected in relying in good faith upon the records of the Issuer or theGuarantor and upon such information, opinions, reports or statements presentedto the Issuer or the Guarantor by any Person as to matters the IndemnifiedPerson reasonably believes are within such other Person’s professional orexpert competence and who, if selected by such Indemnified Person, has beenselected with reasonable care by such Indemnified Person, includinginformation, opinions, reports or statements as to the value and amount of theassets, liabilities, profits, losses, or any other facts pertinent to theexistence and amount of assets from which Distributions to Holders of CapitalSecurities might properly be paid.

SECTION 7.2.  Indemnification.

(a)           The Guarantor agrees to indemnify eachIndemnified Person for, and to hold each Indemnified Person harmless against,any and all loss, liability, damage, claim or expense incurred withoutnegligence or willful misconduct on the part of the Indemnified Person, arisingout of or in connection with the acceptance or administration of the trust ortrusts hereunder, including but not limited to the costs and expenses(including reasonable legal fees and expenses) of the Indemnified Persondefending itself against, or investigating, any claim or liability inconnection with the exercise or performance of any of the Indemnified Person’spowers or duties hereunder. The obligation to indemnify as set forth in thisSection 7.2 shall survive the resignation or removal of the Guarantee Trusteeand the termination of this Guarantee.

(b)           Promptly after receipt by anIndemnified Person under this Section 7.2 of notice of the commencement of anyaction, such Indemnified Person will, if a claim in respect thereof is to bemade against the Guarantor under this Section 7.2, notify the Guarantor inwriting of the commencement thereof; but the failure so to notify the Guarantor(i) will not relieve the Guarantor from liability under paragraph (a) aboveunless and to the extent that the Guarantor did not otherwise learn of suchaction and such failure results in the forfeiture by the Guarantor ofsubstantial rights and defenses and (ii) will not, in any event, relieve theGuarantor from any obligations to any Indemnified Person other than theindemnification obligation provided in paragraph (a) above. The Guarantor shallbe entitled to appoint counsel of the Guarantor’s choice at the Guarantor’s

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expense to represent theIndemnified Person in any action for which indemnification is sought (in whichcase the Guarantor shall not thereafter be responsible for the fees andexpenses of any separate counsel retained by the Indemnified Person or Personsexcept as set forth below); provided, however, that such counselshall be satisfactory to the Indemnified Person. Notwithstanding the Guarantor’selection to appoint counsel to represent the Indemnified Person in any action,the Indemnified Person shall have the right to employ separate counsel(including local counsel), and the Guarantor shall bear the reasonable fees,costs and expenses of such separate counsel (and local counsel), if (i) the useof counsel chosen by the Guarantor to represent the Indemnified Person wouldpresent such counsel with a conflict of interest, (ii) the actual or potentialdefendants in, or targets of, any such action include both the IndemnifiedPerson and the Guarantor and the Indemnified Person shall have reasonablyconcluded that there may be legal defenses available to it and/or otherIndemnified Persons which are different from or additional to those availableto the Guarantor, (iii) the Guarantor shall not have employed counselsatisfactory to the Indemnified Person to represent the Indemnified Personwithin a reasonable time after notice of the institution of such action or (iv)the Guarantor shall authorize the Indemnified Person to employ separate counselat the expense of the Guarantor. The Guarantor will not, without the priorwritten consent of the Indemnified Persons, settle or compromise or consent tothe entry of any judgment with respect to any pending or threatened claim,action, suit or proceeding in respect of which indemnification or contributionmay be sought hereunder (whether or not the Indemnified Persons are actual orpotential parties to such claim or action) unless such settlement, compromiseor consent includes an unconditional release of each Indemnified Person fromall liability arising out of such claim, action, suit or proceeding.

SECTION 7.3.  Compensation;Reimbursement of Expenses.

Otherthan as provided in the Fee Agreement of even date herewith between theGuarantor, Cohen & Company and the Guarantee Trustee, the Guarantor agrees:

(a)           to pay to the Guarantee Trustee fromtime to time such compensation for all services rendered by it hereunder as theparties shall agree to from time to time (which compensation shall not belimited by any provision of law in regard to the compensation of a trustee ofan express trust); and

(b)           except as otherwise expresslyprovided herein, to reimburse the Guarantee Trustee upon request for allreasonable expenses, disbursements and advances incurred or made by it inaccordance with any provision of this Guarantee (including the reasonablecompensation and the expenses and disbursements of its agents and counsel),except any such expense, disbursement or advance as may be attributable to itsnegligence or willful misconduct.

The provisions of this Section 7.3 shall survive theresignation or removal of the Guarantee Trustee and the termination of thisGuarantee.

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ARTICLE VIIIMISCELLANEOUS

SECTION 8.1.  Successorsand Assigns.

Allguarantees and agreements contained in this Guarantee shall bind thesuccessors, assigns, receivers, trustees and representatives of the Guarantorand shall inure to the benefit of the Holders of the Capital Securities thenoutstanding. Except in connection with any merger or consolidation of theGuarantor with or into another entity or any sale, transfer or lease of theGuarantor’s assets or capital stock to another entity, in each case to theextent permitted under the Indenture, the Guarantor may not assign its rightsor delegate its obligations under this Guarantee without the prior approval ofthe Holders of not less than a Majority in liquidation amount of the CapitalSecurities.

SECTION 8.2.  Amendments.

Exceptwith respect to any changes that do not adversely affect the rights of Holdersof the Capital Securities in any material respect (in which case no consent ofHolders will be required), this Guarantee may be amended only with the priorapproval of the Holders of not less than a Majority in liquidation amount ofthe Capital Securities. The provisions of the Declaration with respect toamendments thereof shall apply equally with respect to amendments of theGuarantee.

SECTION 8.3.  Notices.

Allnotices provided for in this Guarantee shall be in writing, duly signed by theparty giving such notice, and shall be delivered, telecopied or mailed by firstclass mail, as follows:

(a)           If given to the Guarantee Trustee, atthe Guarantee Trustee’s mailing address set forth below (or such other addressas the Guarantee Trustee may give notice of to the Holders of the CapitalSecurities):

U.S. Bank NationalAssociation225 Asylum Street, 23rd FloorHartford, CT 06103Attention:  Corporate Trust ServicesChino Statutory Trust I

With a copy to:

U.S. Bank NationalAssociationOne Federal Street, 3rd FloorBoston, MA  02110Attention:  Corporate Trust ServicesChino Statutory Trust ITelecopy:  (617) 603-6683Telephone: (617) 603-6549

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(b)           If given to the Guarantor, at the Guarantor’smailing address set forth below (or such other address as the Guarantor maygive notice of to the Holders of the Capital Securities and to the GuaranteeTrustee):

Chino Commercial Bancorp14345 Pipeline AvenueChino, California 91710Attention: Dann H. BowmanTelecopy: (909) 465-1279Telephone: (909) 393-8880

(c)           If given to any Holder of the CapitalSecurities, at the address set forth on the books and records of the Issuer.

Allsuch notices shall be deemed to have been given when received in person,telecopied with receipt confirmed, or mailed by first class mail, postageprepaid, except that if a notice or other document is refused delivery orcannot be delivered because of a changed address of which no notice was given,such notice or other document shall be deemed to have been delivered on thedate of such refusal or inability to deliver.

SECTION 8.4.  Benefit.

ThisGuarantee is solely for the benefit of the Holders of the Capital Securitiesand, subject to Section 2.1(a), is not separately transferable from the CapitalSecurities.

SECTION 8.5.  GoverningLaw.

THISGUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OFTHE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF(OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW).

SECTION 8.6.  Counterparts.

This Guarantee may contain more than one counterpartof the signature page and this Guarantee may be executed by the affixing of thesignature of the Guarantor and the Guarantee Trustee to any of such counterpartsignature pages. All of such counterpart signature pages shall be read asthough one, and they shall have the same force and effect as though all of thesigners had signed a single signature page.

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THISGUARANTEE is executed as of the day and year first above written.
|            | **CHINO COMMERCIAL BANCORP,  as Guarantor**               |
|------------|-----------------------------------------------------------|
| ** ** |                                                      |
| ** ** |                                                      |
|       | By:                                                       | */s/ Dann H. Bowman* | * * |
|       | Name:                                                     | Dann H. Bowman |   |
|       | Title:                                                    | President and Chief  Executive Officer |   |
| ** ** | ** **                                                |
| ** ** | ** **                                                |
| ** ** | **U.S. BANK NATIONAL ASSOCIATION, as  Guarantee Trustee** |
| ** ** | ** **                                                |
| ** ** |                                                      |
|       | By:                                                       | * * | */s/ Paul D. Allen* | * * |
|       | Name:                                                     |   | Paul D. Allen |   |
|       | Title:                                                    |   | Vice President |   |
|            |                                                           |  |  |  |  |  |  |

 

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