Document:

pmts_Ex10_1

		
			Exhibit 10.1
		

		
			 
		

		
			Execution Copy
		

		
			 
		

		
			FIRST AMENDMENT TO CREDIT AGREEMENT
		

		
			 
		

		
			This FIRST AMENDMENT TO FIRST LIEN CREDIT AGREEMENT dated as of December 31, 2016 (this “Amendment”), is entered into among CPI ACQUISITION, INC., a Delaware corporation (“Borrower”), CPI CARD GROUP INC., a Delaware corporation (“Holdings”), the other Loan Parties, and THE BANK OF NOVA SCOTIA (“Scotiabank”), as administrative agent for the lenders (in such capacity, “Administrative Agent”).
		

		
			 
		

		
			W I T N E S S E T H  :
		

		
			 
		

		
			WHEREAS, pursuant to the First Lien Credit Agreement, dated as of August 17, 2015 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), among Borrower, Holdings, the financial institutions from time to time party thereto (each individually, a “Lender”, and collectively, the “Lenders”), and Administrative Agent, among others, the Lenders have made Loans and other extensions of credit to Borrower which remain outstanding;
		

		
			 
		

		
			WHEREAS, Borrower has requested that Administrative Agent amend the Credit Agreement as described herein pursuant to clause (B) to the proviso to Section 9.02(b) of the Credit Agreement; and
		

		
			 
		

		
			WHEREAS, Administrative Agent is willing to make the amendments to the Credit Agreement provided herein, but only on the terms and conditions set forth herein.
		

		
			 
		

		
			NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:
		

		
			 
		

		
			ARTICLE I
		

		
			DEFINITIONS
		

		
			 
		

		
			Section 1.1          Defined Terms.  Unless otherwise defined herein, capitalized terms used herein have the meanings assigned in the Credit Agreement and the other Loan Documents, and the following term shall have the following meaning:
		

		
			 
		

		
			“Effective Date” shall have the meaning assigned to that term in Article III of this Amendment.
		

		
			 
		

		
			ARTICLE II
		

		
			AMENDMENTS
		

		
			 
		

		
			Section 2.1          Amendment to Section 1.01: Defined Terms.  Section 1.01 of the Credit Agreement shall be amended on the Effective Date by amending and restating the definition of “Available Amount” as follows:
		

		
			 
		

		
			“Available Amount” means, at any time (a) the sum at such time of (i) $15,000,000, plus without duplication (ii) Cumulative Excess Cash Flow for each fiscal year of Holdings in respect of which financial statements have been delivered under Section 5.01(a), plus (iii) the Net Proceeds from any sale or issuance of any Equity Interests (other than Disqualified Equity Interests and Cure Amounts) by Holdings or from any capital
		

		
			 
		

		
			
		

		
			

		 

		

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			contributions in respect of Equity Interests (other than Disqualified Equity Interests and Cure Amounts) of Holdings, in each case to the extent such Net Proceeds are directly contributed to, and received by, the Borrower, plus (iv) the Net Proceeds of any Disposition of Investments made pursuant to Section 6.04(h) or (t) in reliance on the Available Amount, plus (v) to the extent not otherwise included, the aggregate amount of cash dividends, distributions, interest, fees, premiums, returns of capital, repayments of principal, income or profit returned to the Borrower or any Restricted Subsidiary in respect of Investments made pursuant to Section 6.04(h) or (t) in reliance on the Available Amount (up to the amount of the Investment), plus (vi) amounts declined by any Lender and retained by the Borrower pursuant to Section 2.11(f), plus (vii) the fair market value of all Qualified Equity Interests of the Borrower issued upon conversion or exchange of Indebtedness or Disqualified Equity Interests of the Borrower or any of its Restricted Subsidiaries after the Closing Date, together with the fair market value of any assets constituting Permitted Investments received upon such conversion or exchange minus (b) the sum at such time of (i) all prepayments required to be made under Section 2.11(d) (without giving effect to the first proviso in such Section) in respect of Excess Cash Flow, (ii) Restricted Payments previously made under Section 6.07(a)(ix) in reliance on the Available Amount, (iii) prepayments of Indebtedness previously made under Section 6.07(b)(v) in reliance on the Available Amount and (iv) Investments previously made under Section 6.04(h) and (t) in reliance on the Available Amount.
		

		
			 
		

		
			ARTICLE III
		

		
			CONDITIONS PRECEDENT
		

		
			 
		

		
			Section 3.1         Conditions Precedent.  This Amendment shall not become effective unless and until each of the conditions precedent set forth below has been satisfied or the satisfaction thereof shall have been waived in writing by Administrative Agent (the date of satisfaction or waiver of such conditions being referred to as the “Effective Date”):
		

		
			 
		

		
			(a)          Receipt  by  Administrative  Agent  of  counterparts  of  this  Amendment,  duly executed and delivered by Administrative Agent, Borrower, Holdings and each other Loan Party;
		

		
			 
		

		
			(b)          The ten (10) Business Day notification period required by Section 9.02(g) of the Credit Agreement shall have expired without the receipt by the Administrative Agent of a written objection to this Amendment by the Required Lenders.
		

		
			 
		

		
			(c)          Borrower shall have paid the invoiced costs and expenses required to be paid pursuant to subsection 9.03 of the Credit Agreement.
		

		
			 
		

		
			Administrative Agent shall notify Borrower in writing upon the occurrence of the Effective Date.
		

		
			 
		

		
			
		

		
			

		 

		

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			ARTICLE IV
		

		
			RATIFICATION
		

		
			 
		

		
			Section 4.1          Ratification.  Each Loan Party hereby (i) ratifies and reaffirms all of its payment and performance obligations, contingent or otherwise, and each grant of security interests and Liens in favor of Administrative Agent or the Lenders, as the case may be, under each Loan Document to which it is a party, (ii) agrees and acknowledges that the Liens in favor of Administrative Agent and the Lenders under each Loan Document constitute valid, and to the extent required by the Loan Documents, first priority Liens on all of the Collateral and such Liens are not subject to avoidance, disallowance or subordination pursuant to any Requirement of Law, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally or by general equitable principles (whether enforcement is sought by proceedings in equity or at law), (iii) agrees and acknowledges the First Lien Obligations constitute legal, valid and binding obligations of the Loan Parties, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law), and that as of the Effective Date, (a) no offsets, defenses or counterclaims to the First Lien Obligations or any other causes of action with respect to the First Lien Obligations or the Loan Documents exist and (b) no portion of the First Lien Obligations is subject to avoidance, disallowance, reduction or subordination pursuant to any Requirement of Law, (iv) agrees that such ratification and reaffirmation is not a condition to the continued effectiveness of the Loan Documents, and (v) agrees that neither such ratification and reaffirmation, nor Administrative Agent’s nor any Lender’s solicitation of such ratification and reaffirmation, constitutes a course of dealing giving rise to any obligation or condition requiring a similar or any other ratification or reaffirmation from each party to the Credit Agreement with respect to any subsequent modifications, consent or waiver with respect to the Credit Agreement or other Loan Documents. Each Loan Party acknowledges and agrees that any of the Loan Documents to which it is a party or otherwise bound shall continue in full force and effect and that all of its obligations thereunder shall be valid and enforceable, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally or by general equitable principles (whether enforcement is sought by proceedings in equity or at law), and shall not be impaired or limited by the execution or effectiveness of this Amendment.  The Credit Agreement and each other Loan Document are in all respects hereby ratified and confirmed and neither the execution, delivery nor effectiveness of this Amendment shall operate as a waiver of any Default or Event of Default (whether or not known to Administrative Agent or any Lender), or any right, power or remedy of Administrative Agent or any Lender of any provision contained in the Credit Agreement or any other Loan Document, whether as a result of any Default, Event of Default or otherwise. This Amendment shall constitute a “Loan Document” for purposes of the Credit Agreement.
		

		
			 
		

		
			ARTICLE V
		

		
			INTERPRETATION
		

		
			 
		

		
			Section 5.1          Continuing Effect of the Credit Agreement and the Other Loan Documents. Borrower, Holdings, the other Loan Parties, and Administrative Agent hereby acknowledge and agree that the Credit Agreement and each other Loan Document shall continue to be and remain unchanged and in full force and effect in accordance with its terms, except as expressly provided herein. Nothing herein shall be deemed to entitle Borrower, Holdings, or the other Loan Parties to a consent to, or a waiver, amendment, modification or other change of, any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or the other Loan Documents in similar or different circumstances.
		

		
			 
		

		
			Section 5.2          Defaults or Events of Default.    Nothing contained in this Amendment shall be construed or interpreted or is intended as a waiver of or limitation on any rights, powers, privileges or
		

		
			 
		

		
			
		

		
			

		 

		

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			remedies that Administrative Agent or the Lenders have or may have under the Credit Agreement or any other Loan Document on account of any Default or Event of Default.
		

		
			 
		

		
			ARTICLE VI
		

		
			MISCELLANEOUS
		

		
			 
		

		
			Section 6.1          Representations and Warranties.  Each of the Loan Parties hereby represents and warrants as of the date hereof (and, if the date hereof is not the Effective Date, as of the Effective Date) that, (a) no Default or Event of Default has occurred and is continuing, (b) all representations and warranties of the Loan Parties contained in the Loan Documents are true and correct in all material respects with the same effect as if made on and as of such date(s), except to the extent such representations and warranties specifically relate to an earlier date, in which case, such representations and warranties were true and correct in all material respects on and as of such earlier date (and except to the extent such representations and warranties are already qualified by materiality in which case such representations and warranties were true and correct in all respects with the same effect as if made on and as of such date(s)), (c) the execution, delivery and performance by such Loan Party of this Amendment, and the performance of each Loan Document by each Loan Party that is a party thereto, (i) are within such Loan Party’s corporate/limited liability company powers, (ii) have been duly authorized by all necessary corporate/limited liability company action, of such Loan Party, (iii) require no Governmental Approvals, except for Governmental Approvals (x) as have been obtained or will be obtained on or before the Effective Date, (y) the absence of which would not reasonably be expected to have a Material Adverse Effect, or (z) in connection with filings with respect to the Collateral, (iv) do not violate any provision of any law or any governmental rule or regulation applicable to Holdings, Borrower or any of its Subsidiaries, the Organizational Documents of Holdings, Borrower or any of its Subsidiaries or any order, judgment or decree of any court or other Governmental Authority binding on Holdings, Borrower or any of its Subsidiaries, except for any violation that would not reasonably be expected to result in a Material Adverse Effect, (v) do not conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any contractual obligation of Holdings, Borrower or any of its Subsidiaries, except for any conflict, breach or default that would not reasonably be expected to result in a Material Adverse Effect, (vi) will not result in or require the creation or imposition of any Lien upon any of the properties or assets of Holdings, Borrower or any of its Subsidiaries (other than any Liens created under any of the Loan Documents in favor of Administrative Agent on behalf of the Lenders and other Liens permitted by the Credit Agreement), (vii) require any approval of stockholders or any approval or consent of any Person under any material contractual obligation of Holdings, Borrower or any of its Subsidiaries, except for such approvals or consents (x) which have been obtained or will be obtained on or before the Effective Date or (y) the absence of which would not reasonably be expected to have a Material Adverse Effect, (d) this Amendment has been duly executed and delivered by each Loan Party, and (e) this Amendment, the Credit Agreement and each of the other Loan Documents constitutes a legally valid and binding obligation of such Loan Party enforceable against such Loan Party in accordance with their respective terms, except as such enforceability may be limited by the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally or by equitable principles.
		

		
			 
		

		
			Section 6.2          Counterparts.  This Amendment may be executed by the parties hereto in any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument.  This Amendment may be transmitted and/or signed by telefacsimile and by signatures delivered in ‘PDF’ format by electronic mail.  The effectiveness of any such documents and signatures shall, subject to any Requirement of Law, have the same force and effect as an original copy with manual signatures and shall be binding on all Loan Parties, Agents and the Lenders.
		

		
			 
		

		
			
		

		
			

		 

		

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			Section 6.3.          GOVERNING LAW.   THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
		

		
			 
		

		
			Section 6.4           Consent of Other Loan Parties.  Each other Loan Party hereby (a) consents to this Amendment and the transactions contemplated hereby and (b) acknowledges and agrees that the guarantees (and all security therefor) contained in the Credit Agreement and the other Loan Documents previously executed by it are, and shall remain, in full force and effect after giving effect to this Amendment and all other prior modifications to the Credit Agreement, if any.
		

		
			 
		

		
			Section 6.5           Fees and Expenses.  Borrower acknowledges that under subsection 9.03 of the Credit Agreement Borrower is obligated to pay, and Borrower confirms that it shall pay promptly, all reasonable and documented out-of-pocket costs and expenses incurred by Administrative Agent in connection with the negotiation, preparation and execution of this Amendment, including all reasonable fees, charges and disbursements of Latham & Watkins LLP in connection therewith.
		

		
			 
		

		
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			IN WITNESS WHEREOF,  the parties hereto have caused this Amendment to be duly executed  and delivered by their proper and duly authorized officers as of the date first above written.
		

		
			 
		

			
					
						 

					
					
						CPI ACQUISITION, INC.

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By: 

					
					
						/s/ David Brush

				
	
					
						 

					
					
						Name:

					
					
						David Brush

				
	
					
						 

					
					
						Title:

					
					
						Chief Financial Officer

				

		
			 
		

		
			 
		

			
					
						 

					
					
						CPI CARD GROUP INC.

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By: 

					
					
						/s/ David Brush

				
	
					
						 

					
					
						Name:

					
					
						David Brush

				
	
					
						 

					
					
						Title:

					
					
						Chief Financial Officer

				

		
			 
		

		
			 
		

			
					
						 

					
					
						CPI CARD GROUP-INDIANA, INC.

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By: 

					
					
						/s/ David Brush

				
	
					
						 

					
					
						Name:

					
					
						David Brush

				
	
					
						 

					
					
						Title:

					
					
						Chief Financial Officer

				

		
			 
		

		
			 
		

			
					
						 

					
					
						CPI HOLDING CO.

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By: 

					
					
						/s/ David Brush

				
	
					
						 

					
					
						Name:

					
					
						David Brush

				
	
					
						 

					
					
						Title:

					
					
						Chief Financial Officer

				

		
			 
		

		
			 
		

			
					
						 

					
					
						CPI CARD GROUP-COLORADO, INC.

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By: 

					
					
						/s/ David Brush

				
	
					
						 

					
					
						Name:

					
					
						David Brush

				
	
					
						 

					
					
						Title:

					
					
						Chief Financial Officer

				

		
			 
		

		
			
		

		
			

		 

		

			Signature Page to First Amendment

		

 

		

		
			 
		

			
					
						 

					
					
						CPI CARD GROUP-MINNESOTA, INC.

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By: 

					
					
						/s/ David Brush

				
	
					
						 

					
					
						Name:

					
					
						David Brush

				
	
					
						 

					
					
						Title:

					
					
						Chief Financial Officer

				

		
			 
		

		
			 
		

			
					
						 

					
					
						CPI CARD GROUP-NEVADA, INC.

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						/s/ David Brush

				
	
					
						 

					
					
						Name:

					
					
						David Brush

				
	
					
						 

					
					
						Title:

					
					
						Chief Financial Officer

				

		
			 
		

		
			 
		

			
					
						 

					
					
						EFT SOURCE, INC.

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						/s/ David Brush

				
	
					
						 

					
					
						Name:

					
					
						David Brush

				
	
					
						 

					
					
						Title:

					
					
						Chief Financial Officer

				

		
			 
		

		
			 
		

		
			
		

		
			

		 

		

			Signature Page to First Amendment

		

 

		

		
			 
		

			
					
						 

					
					
						THE BANK OF NOVA SCOTIA,

				
	
					
						 

					
					
						As Administrative Agent

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						/s/ Clement Yu

				
	
					
						 

					
					
						Name:

					
					
						Clement Yu

				
	
					
						 

					
					
						Title:

					
					
						Director

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						 

				
	
					
						 

					
					
						Name:

					
					
						 

				
	
					
						 

					
					
						Title:

					
					
						Analyst

				

		
			 
		

		 

		

			Signature Page to First Amendmentex_127738.htm

Exhibit 10.1

 

Voting Agreement and Irrevocable Proxy

 

This Voting Agreement and Irrevocable Proxy, dated as of October 4, 2018 (this "Agreement"), is made by and among Bank of Commerce Holdings ("BOCH"), and Merchants Holding Company ("MHC"), and the undersigned, individually and not jointly, each of whom is a shareholder of MHC and a director and/or an executive officer of MHC (each, a "Shareholder"). This Agreement is effective upon the signing of the Merger Agreement (as defined below).

 

Recital

 

As an inducement for BOCH and MHC to enter into the Agreement and Plan of Merger, dated October 4, 2018 (the "Merger Agreement"), under which, among other things, MHC will merge with and into BOCH, and The Merchants National Bank of Sacramento, a wholly owned subsidiary of MHC, will merge with and into Redding Bank of Commerce, a wholly owned subsidiary of BOCH (collectively, the "Merger"), each Shareholder agrees as follows:

 

Agreement

 

	
			1.

				
			Voting of Shares. Each Shareholder will vote (or cause to be voted) at any shareholder meeting of MHC to approve the Merger Agreement or any related transaction, or any adjournment or postponement thereof (a "MHC Meeting"), all shares of MHC common stock that such Shareholder owns of record or beneficially, with power to vote or direct the voting of such shares (collectively, the "Owned Shares"), in favor of (a) approval of the Merger Agreement and the transactions contemplated therein, including the Merger, (b) any other matter that is required to facilitate the transactions contemplated by the Merger Agreement, and (c) any proposal to adjourn or postpone such meeting to a later date if there are not sufficient votes to approve the Merger Agreement.

			

 

	
			2.

				
			Support of Directors. To the extent a Shareholder serves as a director on the board of directors of MHC, he or she agrees to (a) recommend the approval of the Merger Agreement and the transactions contemplated therein, including the Merger, to the shareholders of MHC and (b) refrain from any actions or omissions inconsistent with the foregoing, except as otherwise required by law, including without limitation the director's fiduciary duties to MHC and its shareholders.

			

 

	
			3.

				
			Ownership. On the date of this Agreement, each Shareholder represents and warrants, severally but not jointly, that the Owned Shares set forth on such Shareholder's signature page (a) are owned of record or beneficially by the Shareholder in the manner reflected thereon, (b) include all of the shares of MHC common stock owned of record or beneficially by the Shareholder, and (c) are free and clear of any proxy or voting restriction, claims, liens, encumbrances, and security interests, except (if applicable) as set forth on the Shareholder's signature page, which encumbrances or other items do not affect the ability of the Shareholder to perform his or her obligations under this Agreement. As of the date of this Agreement, each Shareholder has, and at any MHC Meeting each Shareholder will have (except as otherwise permitted by this Agreement), sole voting power and sole dispositive power with respect to all of the Shareholder's Owned Shares, except as otherwise reflected on the Shareholder's signature page.

			

 

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			4.

				
			Proxy.

			

 

	 	
			a.

				
			Appointment of Proxy. In order to better effect the provisions set forth in Section 1, each Shareholder revokes any previously executed proxies and constitutes and appoints Stephen A. Meyers, with full power of substitution, such Shareholder's true and lawful proxy and attorney-in-fact (the "Proxy Holder") to vote at any MHC Meeting all of such Shareholder's Owned Shares as provided in Section 1, with such modifications to the Merger Agreement as the parties to the Merger Agreement may make; provided, however, that this proxy will not apply with respect to any vote on the Merger Agreement if the Merger Agreement is amended so as to reduce the amount or form of consideration to be received by the shareholders of MHC or change the tax consequences of the receipt thereof under the Merger Agreement in its present form. This irrevocable proxy shall automatically terminate upon termination of this Agreement.

			

 

	 	
			b.

				
			Substitute. If for any reason the Proxy Holder becomes unable to perform his duties as Proxy Holder under this Agreement, Shareholder appoints David Inderkum ("Substitute") as substitute proxy to act as the Proxy Holder and vote all of each Shareholder's Owned Shares at any MHC Meeting as provided in Section 1, with such modifications to the Merger Agreement as the parties to the Merger Agreement may make; provided, however, that this proxy will not apply with respect to any vote on the Merger Agreement if the Merger Agreement is amended so as to reduce the amount or form of consideration to be received by the shareholders of MHC or change the tax consequences of the receipt thereof under the Merger Agreement in its present form. Notwithstanding the above, Shareholder may from time to time, in his or her discretion, appoint any other substitute proxy to act as the Proxy Holder upon prior written notice to BOCH and MHC.

			

 

	
			5.

				
			Acknowledgments.  Each Shareholder acknowledges that BOCH and MHC are relying on this Agreement in incurring expenses in connection with the transactions contemplated by the Merger Agreement and that the proxy granted under this Agreement is coupled with an interest and is irrevocable to the fullest extent permitted by applicable law. The vote of the Proxy Holder (and upon substitution, the Substitute under Section 4(b)) will control in any conflict between such vote of the Owned Shares and a vote by any substitute proxy holder or the Shareholder, and MHC agrees to recognize the vote of the Proxy Holder or upon substitution, the Substitute.

			

 

	
			6.

				
			No Transfer. Until the termination of this Agreement pursuant to Section 7(j), no Shareholder will sell, transfer, permit a lien or other encumbrance to be created with respect to, or grant any proxy in respect of (except for proxies solicited by the board of directors of MHC in connection with the MHC Meeting at which the Merger Agreement is presented for shareholder approval) any of the Owned Shares, unless all other parties to any such sale or other transaction enter into an agreement in form and substance satisfactory to BOCH embodying the benefits and rights contained in this Agreement.

			

 

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			7.

				
			Miscellaneous.

			

 

	 	
			a.

				
			Right of First Offer Agreement. The parties acknowledge that certain Owned Shares are subject to that Right of First Offer Agreement, dated December 1, 2009, entered into between MHC and Thomas M. Bolton, Jr. and Yvonne LeMaitre, Co-Trustees of the Merchants Holding Company Stock Share of the Survivor's Trust under the 1996 Bolton Family Trust dated April 2, 1996, as amended (the "RoFO Agreement"). To the extent the RoFO Agreement conflicts with the terms of, or otherwise restricts the transactions contemplated under, this Agreement, MHC hereby waives such conflict(s) or restriction(s).

			

 

	 	
			b.

				
			Individual Obligations. The obligations of each of the signatories to this Agreement are independent of one another and are not intended to be joint obligations of the undersigned. This Agreement is intended to be enforceable by BOCH against each Shareholder individually.

			

 

	 	
			c.

				
			Binding Effect. This Agreement will inure to the benefit of, and will be binding upon, each Shareholder's heirs or legal representatives.

			

 

	 	
			d.

				
			Severability. If any provision of this Agreement or the application of such provision to any person or circumstances will be held invalid or unenforceable by a court of competent jurisdiction, such provision or application will be unenforceable only to the extent of such invalidity or unenforceability, and the remainder of the provision held invalid or unenforceable and the application of such provision to persons or circumstances, other than the party as to which it is held invalid, and the remainder of this Agreement, will not be affected.

			

 

	 	
			e.

				
			Reformation. If any court determines that the obligations and restrictions set forth in this Agreement are unenforceable, then the parties request such court to reform any unenforceable provisions to the maximum obligations or restrictions, term, and scope, as applicable, that such court finds enforceable.

			

 

	 	
			f.

				
			Expenses. Except as otherwise may be agreed in writing, all costs, fees, and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs, fees, and expenses.

			

 

	 	
			g.

				
			Amendments; Waivers. Any provision of this Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and signed (i) in the case of an amendment, by BOCH, MHC and the Shareholder to be bound by such amendment and (ii) in the case of a waiver, by the party against whom the waiver is to be effective. No failure or delay by any party in exercising any right, power, or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power, or privilege.

			

 

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			h.

				
			Governing Law; Venue. This Agreement will be governed by and construed in accordance with the laws of the State of California, except to the extent that federal law may govern certain matters. The parties must bring any legal proceeding arising out of this Agreement in state or federal courts located in Sacramento County, California. Each party consents to and submits to the jurisdiction of any such court.

			

 

	 	
			i.

				
			Remedies. Any breach of this Agreement entitles BOCH to injunctive relief and/or specific performance, as well as to any other legal or equitable remedies they may be entitled to, it being agreed that money damages alone would be an inadequate remedy for such breach. The rights and remedies of the parties to this Agreement are cumulative and not alternative.

			

 

	 	
			j.

				
			Termination of Agreement. This Agreement shall be effective from the date hereof and shall terminate and be of no further force and effect upon the earlier to occur of (i) the Effective Time (as defined in the Merger Agreement), (ii) such date and time as termination of the Merger Agreement in accordance with its terms, or (iii) upon mutual written agreement of the parties hereto to terminate this Agreement. Upon termination of this Agreement, no party shall have any further obligations or liabilities under this Agreement.

			

 

	 	
			k.

				
			Counterparts. This Agreement may be executed in one or more counterparts, including facsimile and/or scanned counterparts, each of which will be deemed an original, but all of which taken together will constitute one and the same document.

			

 

	 	
			l.

				
			Entire Understanding. This Agreement represents the entire understanding of the parties hereto and thereto with reference to the transactions contemplated hereby, and this Agreement, supersedes any and all other oral or written agreements heretofore made.

			

 

	 	
			m.

				
			Assignment. No party may assign either this Agreement or any of its rights, interests, or obligations hereunder without the prior written approval of the other parties. Subject to the preceding sentence, this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns.

			

 

 

[Signatures appear on the following pages]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first above written.

 

	BANK OF COMMERCE HOLDINGS	 	MERCHANTS HOLDING COMPANY	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	By:	Randall S. Eslick	 	By:	Stephen A. Meyers	 
	Its:	President and CEO	 	Its:	President and CEO	 

 

 

[Shareholder signatures appear on the following pages]

 

 

[Signature Page to Voting Agreement and Irrevocable Proxy]

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first above written.

 

	
			 

				
			SHAREHOLDER:

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

			
	
			 

				
			[Shareholder name]

				
			 

			

 

 

	
			Record Name of Shareholder

				
			Nature of Ownership

				
			Number of Owned Shares

			
	 	 	 
	 	 	 
	 	 	 

 

 

[Shareholder Signature Page to Voting Agreement and Irrevocable Proxy]

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