Document:

Letter agreement dated September 27, 2011 between the Company and the Treasury

 Exhibit 10.2 

 

			
	 Secretary of the Treasury
	  	
	 Bank of Commerce Holdings
	  	
	 SBLF Participant No. 106
	  	
	 September 27, 2011
	  	

  
 September 27, 2011

 United States Department of the Treasury 
 1500 Pennsylvania Avenue, NW 
 Washington, D.C. 20220 

Ladies and Gentlemen: 

Reference is made to that certain Securities Purchase Agreement dated of even date herewith (the “Securities Purchase
Agreement”) by and among Secretary of the Treasury (“Investor”) and Bank of Commerce Holdings (“Company”). Investor and Company desire to set forth herein certain additional agreements regarding
Company’s commitment to the holder of the Preferred Shares after the closing of the transactions contemplated by the Securities Purchase Agreement. Terms that are defined in the Securities Purchase Agreement are used in this letter agreement as
so defined. 
 In order to comply with California Corporations Code §212(a), the Company has modified section 7(c) of the
Standard Provisions of the Certificate of Determination attached as Annex F to the Securities Purchase Agreement (the “Certificate of Determination”) to provide in pertinent part as follows: 

“Whenever, at any time or times, (i) dividends on the shares of Designated Preferred Stock have not been declared and paid in
full within five (5) Business Days after each Dividend Payment Date for an aggregate of six (6) Dividend Periods or more, whether or not consecutive, and (ii) the aggregate liquidation preference of the then-outstanding shares of
Designated Preferred Stock is greater than or equal to $25,000,000, the holders of the Designated Preferred Stock, voting as a single class, shall have the right, but not the obligation, to elect two directors...” 

By its execution hereof, the Company hereby confirms and agrees that as of the date hereof and at all times while any shares of the
Designated Preferred Stock (as defined in the Certificate of Determination) are outstanding, it shall maintain a range of directors of the Company that will permit the holders of the Designated Preferred Stock to elect two directors in accordance
with said section 7(c). Currently Article III, Section 2 of Company’s bylaws (the “Applicable Provision”) of the Company’s bylaws (the “Bylaws”) provides for a range of directors of no less than seven
and no more than 13. At all times while any shares of the Designated Preferred Stock are outstanding, the Company shall not fill more than 11 director positions. In the event the Company desires to increase the number of directors beyond 11), then
the Company shall be required to amend the Bylaws to increase the maximum directors to always allow for at least two open director seats for the holders of the Designated Preferred Stock to elect in accordance with Section 7(c) of the Standard
Terms of the Certificate of 

  

			
	 SBLF Participant No. 106

M43762-1642251
	  	

			
	 Secretary of the Treasury
	  	
	 Bank of Commerce Holdings
	  	
	 SBLF Participant No. 106
	  	
	 September 27, 2011
	  	

  
 
Determination of Senior Non-Cumulative Perpetual Preferred Stock, Series B of Bank of Commerce Holdings (and to amend the Bylaws to provide that such provision may not be modified, amended or
repealed by the Company’s board of directors (or any committee thereof) or without the affirmative vote and approval of (x) the stockholders and (y) the holders of at least a majority of the shares of Designated Preferred Stock
outstanding at the time of such vote and approval). 
 In addition, by its execution hereof, the Company hereby confirms and
agrees that it will, within 15 days after the date of this letter agreement, amend the Applicable Provision by adding the following sentence at the end thereof: 
 “Notwithstanding anything in these bylaws to the contrary, for so long as Bank of Commerce Holding’s Senior Non-Cumulative Perpetual Preferred Stock, Series B (the “Designated Preferred
Stock”) is outstanding, (i) whenever, at any time or times, (a) dividends on the shares of Designated Preferred Stock have not been declared and paid in full within five (5) Business Days after each Dividend Payment Date (as
defined in the Certificate of Determination of the Designated Preferred Stock, hereinafter the “Certificate of Determination”) for an aggregate of six (6) quarterly Dividend Periods (as defined in the Certificate of
Determination) or more, whether or not consecutive and (b) the aggregate liquidation preference of the then outstanding shares of Designated Preferred Stock is greater than or equal to $25,000,000, the authorized number of directors shall
automatically be increased by two (but shall in no event be increased to a number of directors that is greater than the maximum number of directors set forth in Article III, Section 2 of these bylaws); and (ii) this sentence may not be
modified, amended or repealed by the corporation’s board of directors (or any committee thereof) or without the affirmative vote and approval of (x) the shareholders and (y) the holders of at least a majority of the shares of
Designated Preferred Stock outstanding at the time of such vote and approval.” 
 The parties hereto acknowledge that there
would be no adequate remedy at law if the Company fails to perform any of its obligations under this letter agreement and that the Investor may be irreparably harmed by any such failure, and accordingly agree that the Investor, in addition to any
other remedy to which it may be entitled at law or in equity, to the fullest extent permitted and enforceable under applicable law, shall be entitled to compel specific performance of the obligations of the Company under this letter agreement
without the necessity of proving the inadequacy of monetary damages as a remedy or the posting of a bond. 
 This letter
agreement and the Certificate of Determination constitute the entire agreement, and supersede all other prior agreements, understandings, representations and warranties, both written and oral, between the parties with respect to the subject matter
hereof. 
 This letter agreement may be executed in counterparts, each of which shall be deemed an original and all of which
shall together constitute one and the same instrument. This letter agreement shall be governed in all respects, including as to validity, interpretation and effect, by 

  

			
	 SBLF Participant No. 106

M43762-1642251
	  	

			
	 Secretary of the Treasury
	  	
	 Bank of Commerce Holdings
	  	
	 SBLF Participant No. 106
	  	
	 September 27, 2011
	  	

  
 
the internal laws of the State of California, without giving effect to the conflict of laws rules thereof. 
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	 SBLF Participant No. 106

M43762-1642251
	  	

			
	 Secretary of the Treasury
	  	
	 Bank of Commerce Holdings
	  	
	 SBLF Participant No. 106
	  	
	 September 27, 2011
	  	

  
  
 In witness whereof, this letter agreement has been duly executed by the authorized representatives of the parties hereto as of the date first above written. 

 

			
	BANK OF COMMERCE HOLDINGS
		
	By:	 	     /s/ Patrick J. Moty

	Name: Patrick J. Moty
	Title:   President and CEO
		
	By:	 	     /s/ Linda Miles

	Name: Linda Miles
	Title:   EVP and Chief Operating Officer
	
	SECRETARY OF THE TREASURY
		
	By:	 	  

	Name:
	Title:

  

			
	 SBLF Participant No. 106

M43762-1642251Letter agreement dated September 27, 2011 between the Company and the Treasury

 Exhibit 10.3 
 UNITED STATES DEPARTMENT OF THE TREASURY 
 1500 Pennsylvania Avenue, NW 
 Washington, D.C. 20220 

September 27, 2011 
 Ladies
and Gentlemen: 
 Reference is made to that certain Letter Agreement incorporating the Securities Purchase Agreement –
Standard Terms (the “Securities Purchase Agreement”), dated as of the date set forth on Schedule A hereto, between the United States Department of the Treasury (the “Investor”) and the company set forth on Schedule
A hereto (the “Company”). Capitalized terms used but not defined herein shall have the meanings assigned to them in the Securities Purchase Agreement. Pursuant to the Securities Purchase Agreement, at the Closing, the Company issued
to the Investor the number of shares of the series of its preferred stock set forth on Schedule A hereto (the “Preferred Shares”) and a warrant to purchase the number of shares of its common stock set forth on Schedule A hereto (the
“Warrant”). 
 In connection with the consummation of the repurchase (the “Repurchase”) by the
Company from the Investor, on the date hereof, of the number of Preferred Shares listed on Schedule A hereto (the “Repurchased Preferred Shares”), as permitted by the Emergency Economic Stabilization Act of 2008, as amended by the
American Recovery and Reinvestment Act of 2009: 
 (a) The Company hereby acknowledges receipt from the Investor
of the share certificate(s) set forth on Schedule A hereto representing the Preferred Shares; and 
 (b) The
Investor hereby acknowledges receipt from the Company of a wire transfer to the account of the Investor set forth on Schedule A hereto in immediately available funds of the aggregate purchase price set forth on Schedule A hereto, representing
payment in full for the Repurchased Preferred Shares at a price per share equal to the Liquidation Amount per share, together with any accrued and unpaid dividends to, but excluding, the date hereof. 

The Investor and the Company hereby agree that, notwithstanding Section 4.4 of the Securities Purchase Agreement, immediately
following consummation of the Repurchase, but subject to compliance with applicable securities laws, the Investor shall be permitted to Transfer all or a portion of the Warrant with respect to, and/or exercise the Warrant for, all or a portion of
the number of shares of Common Stock issuable thereunder, at any time and without limitation, and Section 4.4 of the Securities Purchase Agreement shall be deemed to be amended in order to permit the foregoing. The Company shall take all steps
as may be reasonably requested by the Investor to facilitate any such Transfer. 

 In addition, the Company agrees that in the event it elects to repurchase the Warrant, it
shall deliver to the Investor within 15 calendar days of the date hereof a notice of intent to repurchase the Warrant, which notice shall be in accordance with Section 4.9(b) of the Securities Purchase Agreement (the “Warrant Repurchase
Notice”). In the event the Company does not deliver the Warrant Repurchase Notice to the Investor within 15 calendar days of the date hereof, the Investor hereby provides notice, pursuant to Section 4.5(p) of the Securities Purchase
Agreement, of its intention to sell the Warrant, such notice to be effective as of the first day following the end of such 15-day period. 
 In the event that the Company delivers a Warrant Repurchase Notice and the Company and the Investor fail to agree on the Fair Market Value of the Warrant pursuant to the procedures (including the
Appraisal Procedure), and in accordance with the time periods, set forth in Section 4.9(c) of the Securities Purchase Agreement or the Company revokes the delivery of such Warrant Repurchase Notice, then the Investor hereby provides notice of
its intention to sell the Warrant. 
 This letter agreement 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. 

This letter agreement may be executed in any number of separate counterparts, each such counterpart being deemed to be an original
instrument, and all such counterparts will together constitute the same agreement. Executed signature pages to this letter agreement may be delivered by facsimile and such facsimiles will be deemed sufficient as if actual signature pages had been
delivered. 
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 -2-

 In witness whereof, the parties have duly executed this letter agreement as of the date
first written above. 
  

					
	 UNITED STATES DEPARTMENT OF
 THE TREASURY

		
	By:	 	       /s/ Timothy G. Massad

		 	Name:	 	Timothy G. Massad
		 	Title:	 	 Assistant Secretary for Financial
 Stability

	
	 COMPANY: BANK OF COMMERCE
                       HOLDINGS

		
	By:	 	       /s/ Linda J. Miles

		 	Name:	 	Linda J. Miles
		 	Title:	 	 EVP and Chief Operating

Officer

 SCHEDULE A 

 

			
		
	General Information:	  	
		
	 Date of Letter Agreement incorporating the Securities Purchase Agreement:
	  	November 14, 2008
		
	 Name of the Company:
	  	Bank of Commerce Holdings
		
	 Corporate or other organizational form of the Company:
	  	Corporation
		
	 Jurisdiction of organization of the Company:
	  	California
		
	 Number and series of preferred stock issued to the Investor at the Closing:
	  	17,000
		
	 Number of Initial Warrant Shares:
	  	405,405
		
	Terms of the Repurchase:	  	
		
	 Number of Preferred Shares repurchased by the Company:
	  	17,000
		
	 Share certificate number (representing the Preferred Shares previously issued to the Investor at the Closing):
	  	N/A
		
	 Per share Liquidation Amount of Preferred Shares:
	  	$1,000
		
	 Accrued and unpaid dividends on Preferred Shares:
	  	$99,166.67
		
	 Aggregate purchase price for Repurchased Preferred Shares:
	  	$17,099,166.67
		
	Investor wire information for payment of purchase price:	  	 ABA Number: 021000018

Bank: The Bank of New York Mellon

Account Name: BETA EESA Preferred

Account
 Account Number:
GLA/111567

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