Document:

UNITED
STATES OF AMERICA

    BEFORE
THE

    BOARD OF
GOVERNORS OF THE FEDERAL RESERVE SYSTEM

    WASHINGTON,
D.C.

    

    
      
        
          
            
              	
                      Written
      Agreement by and among

                    	 
      	 
      
	 
      	
                      Docket
      Nos.    

                    	
                      10-025-WA/RB-HC

                    
	
                      UNITED
      SECURITY BANCSHARES

                    	 
      	
                      10-025-WA/RB-SM

                    
	
                      Fresno,
      California

                    	 
      	 
      
	 
      	 
      	 
      
	
                      UNITED
      SECURITY BANK

                    	 
      	 
      
	
                      Fresno,
      California

                    	 
      	 
      
	 
      	 
      	 
      
	
                      and

                    	 
      	 
      
	 
      	 
      	 
      
	
                      FEDERAL
      RESERVE BANK

                    	 
      	 
      
	
                       
      OF SAN FRANCISCO

                    	 
      	 
      
	
                      San
      Francisco, California

                    	 
      	 
      
	 
      	 
      	 
      

            

          

        

      

    

    

    WHEREAS,
in recognition of their common goal to maintain the financial soundness of United
Security Bancshares, Fresno, California (“Bancshares”), a registered
bank holding company,
and its subsidiary, United Security Bank, Fresno, California (the “Bank”), a
state chartered
bank that is a member of the Federal Reserve System, Bancshares, the Bank, and
the Federal
Reserve Bank of San Francisco (the “Reserve Bank”) have mutually agreed to enter
into this
Written Agreement (the “Agreement”); and

    

    WHEREAS, on 3/23 2010, the boards of directors of
Bancshares and the Bank, at duly constituted meetings, adopted
resolutions authorizing and directing Mr. Dennis Woods, President and Chief Executive Officer,
to enter into this Agreement on behalf of Bancshares and the Bank, and consenting to compliance
with each and every applicable provision of this Agreement by Bancshares and the Bank,
and their institution-affiliated parties, as defined in Sections 3(u) and 8(b)(3) of the
Federal Deposit Insurance Act, as amended (the “FDI Act”) (12 U.S.C. §§ 1813(u)
and 1818(b)(3)).

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    NOW,
THEREFORE, Bancshares, the Bank, and the Reserve Bank agree as
follows:

    

    Board
Oversight

    

    1.    Within 60 days of this Agreement, the
board of directors of the Bank shall submit to
the Reserve Bank a written plan to strengthen board oversight of the management
and operations
of the Bank. The plan shall, at a minimum, address, consider, and
include:

    

    (a)    The actions that the board of directors
will take to improve the Bank’s condition and maintain effective
control over, and supervision of, the Bank’s major operations and activities, including but not
limited to, credit risk management, liquidity, and earnings;

    

    (b)    the responsibility of the board of directors to monitor
management’s adherence to approved policies and
procedures, and applicable laws and regulations; and

    

    (c)    a description
of the information and reports that are regularly reviewed by the
board of directors in its oversight of the operations and management of the
Bank, including information
on the Bank’s adversely classified assets, allowance for loan and lease losses
(“ALLL”), capital, liquidity, and earnings.

    

    Credit
Risk Management

    

    2.    Within 60 days of this Agreement, the
Bank shall submit to the Reserve Bank an acceptable written plan to strengthen
credit risk management practices. The plan shall, at a minimum, address,
consider, and include:

    

    (a)    The
responsibility of the board of directors to establish appropriate risk tolerance
guidelines and risk limits;

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    

    (b)    timely and accurate
identification and quantification of credit risk within the loan
portfolio;

    

    (c)    strategies to
minimize credit losses and reduce the level of problem assets;

    

    (d)    procedures
for the on-going review of the investment portfolio to evaluate other-than
temporary-impairment (“OTTI”) and accurate accounting for OTTI;

    

    (e)    stress
testing of CRE loan and portfolio segments; and

    

    (f)    measures to
reduce the amount of Other Real Estate Owned (“OREO”).

    

    Asset
Improvement

    

    3.    The Bank shall not, directly or
indirectly, extend, renew, or restructure any credit to or for the benefit of any borrower,
including any related interest of the borrower, whose loans or other extensions of credit are
criticized in the report of examination of the Bank conducted by the Reserve Bank that commenced on June
8, 2009 (the “Report of Examination”) or in any subsequent report of examination,
without the prior approval of a majority of the full board of directors or a designated committee
thereof. The board of directors or its committee shall document in writing the reasons for the
extension of credit, renewal, or restructuring, specifically certifying that: (i) the
Bank’s risk management policies and practices for loan workout activity are acceptable; (ii)
the extension of credit is necessary to improve and protect the Bank’s interest in the ultimate
collection of the credit already granted and maximize its potential for collection; (iii) the
extension of credit reflects prudent underwriting based on reasonable repayment terms and is
adequately secured; and all necessary loan documentation has been properly and accurately prepared
and filed; (iv) the Bank has performed a comprehensive credit analysis indicating that the
borrower has the willingness and ability to repay the debt as supported by an adequate workout plan,
as necessary; and (v) the board of directors or its designated committee
reasonably believes that the extension of credit will not impair the
Bank’s interest in obtaining repayment of the
already outstanding credit and that the extension of credit or renewal will be
repaid according to its terms. The written certification shall be made a part
of the minutes of the meetings of the
board of directors or its committee, as appropriate, and a copy of the signed certification, together
with the credit analysis and related information that was used in the determination, shall be retained
by the Bank in the borrower’s credit file for subsequent supervisory review. For purposes of
this Agreement, the term “related interest” is defined as set forth in section 215.2(n) of Regulation
O of the Board of Governors of the Federal Reserve System (“Board of Governors”) (12
C.F.R. § 215.2(n)).

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    

    4.    (a)    Within 60 days of this Agreement, the
Bank shall submit to the Reserve Bank an acceptable written plan
designed to improve the Bank’s position through repayment, amortization,
liquidation, additional collateral, or other means on each loan, relationship,
or other asset in excess of $1.5 million
including OREO that are past due as to principal or interest more than 90 days as of the date of this
Agreement, are on the Bank’s problem loan list, or were adversely classified in the Report of
Examination.

    

    (b)    Within 30 days
of the date that any additional loan, relationship, or other asset in excess of $1.5 million
including OREO, becomes past due as to principal or
interest for more than 90 days, is on the Bank’s
problem loan list, or is adversely classified in any subsequent
report of examination of the Bank, the Bank shall submit to the Reserve Bank
an acceptable written plan to improve the Bank’s position on such loan,
relationship, or asset.

    

    (c)    Within 30 days after the end of each
calendar quarter thereafter, the Bank shall submit a written progress report
to the Reserve Bank to update each asset improvement plan,
which shall include, at a minimum, the carrying value of the loan or other asset
and changes in the nature and value of supporting collateral,
along with a copy of the Bank’s current problem loan list, a list of all loan
renewals and extensions without full collection of interest in the last quarter,
and past due/non-accrual report.

    
      
         

      

      
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    Allowance
for Loan and Lease Losses

    

    5.    (a)    Within 10 days of this Agreement, the
Bank shall eliminate from its books,
by charge-off or collection, all assets or portions of assets classified “loss”
in the Report of Examination that have not been previously collected in full or
charged off. Thereafter the Bank
shall, within 30 days from the receipt of any federal or state report of
examination, charge off all assets classified “loss” unless otherwise approved
in writing by the Reserve Bank.

    

    (b)    The Bank
shall maintain a sound process for determining, documenting, and recording an
adequate allowance for loan and lease losses (“ALLL”) in accordance with
regulatory reporting instructions and relevant supervisory guidance, including
the Interagency Policy Statements on the Allowance for Loan and Lease Losses,
dated July 2, 2001 (SR 01-17 (Sup)) and December 13, 2006 (SR
06-17).

     

    (c)    Within 60
days of this Agreement, the Bank shall submit to the Reserve Bank an acceptable
written program for the maintenance of an adequate ALLL. The program shall
include policies and procedures to ensure adherence to the Bank’s revised ALLL
methodology and provide for periodic reviews and updates to the ALLL
methodology, as appropriate. The program shall also provide for a review of the
ALLL by the board of directors on at least a quarterly calendar basis. Any
deficiency found in the ALLL shall be remedied in the quarter it is discovered,
prior to the filing of the Consolidated Reports of Condition and Income, by
additional provisions. The board of directors shall maintain written
documentation of its review, including the factors considered and conclusions
reached by the Bank in determining the adequacy of the ALLL. During the term of this
Agreement, the Bank shall submit to the Reserve Bank, within 30 days
after the end of each calendar quarter, a written report regarding the board of
directors’ quarterly review of the ALLL and a description of any changes to the
methodology used in determining the amount of the ALLL for that
quarter.

    
      
         

      

      
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    Capital
Plan

    

    6.    Within 90 days of this Agreement, Bancshares shall submit to the
Reserve Bank an acceptable written plan to maintain
sufficient capital at Bancshares, on a consolidated basis, and Bancshares and the Bank shall
jointly submit to the Reserve Bank an acceptable written plan to maintain
sufficient capital at the Bank, as a separate legal entity on a stand-alone
basis. These plans shall, at a minimum, address,
consider, and include:

    

    (a)    Bancshares’
current and future capital needs, including compliance with the
Capital Adequacy Guidelines for Bank Holding Companies: Risk-Based Measure and
Tier 1 Leverage Measure, Appendices A and D of Regulation Y of the Board of
Governors (12 C.F.R. Part 225, App. A and D);

    

    (b)    the Bank’s
current and future capital needs, including compliance with the Capital Adequacy
Guidelines for State Member Banks: Risk-Based Measure and Tier 1 Leverage
Measure, Appendices A and B of Regulation H of the Board of Governors (12 C.F.R.
Part 208, App. A and B);

    

    (c)    the adequacy
of the Bank’s capital, taking into account the volume of classified credits,
concentrations of credit, ALLL, current and projected asset growth, and
projected retained earnings;

    

    (d)    the source
and timing of additional funds to
fulfill the consolidated organization’s and the Bank’s future capital
requirements; and

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    

    (e)    the requirements of Section 225.4(a) of
Regulation Y of the Board of Governors (12 C.F.R. § 225.4(a)) that Bancshares
serve as a source of strength to the Bank.

    

    7.    Bancshares and the Bank shall notify the Reserve
Bank, in writing, no more than 30 days after the end of any quarter in
which any of Bancshares’ consolidated capital ratios or the Bank’s capital
ratios (total risk-based, Tier 1, or leverage) fall below the approved capital
plan’s minimum ratios. Together with the notification, Bancshares and the Bank
shall submit an acceptable written plan that details the steps Bancshares or the
Bank, as appropriate, will take to increase Bancshares’ or the Bank’s capital
ratios to or above the approved capital plan’s minimums. 

    

    Liquidity/Funds
Management

    

    8.    Within 90
days of this Agreement, the Bank shall submit to the Reserve Bank an acceptable
written plan to improve management of the Bank’s liquidity position and funds
management practices. The plan shall, at a minimum, address, consider, and
include:

    

    (a)    Measures to
enhance the monitoring, measurement, and reporting of the Bank’s liquidity to
the board of directors;

    

    (b)    a timetable
to reduce reliance on short-term wholesale funding, including
brokered deposits; and

    

    (c)    specific
liquidity targets and parameters and the maintenance of sufficient liquidity to
meet contractual obligations and unanticipated demands.

    

    9.    Within 90
days of this Agreement, the Bank shall revise and submit to the
Reserve Bank an acceptable written contingency funding plan that, at a
minimum, includes adverse scenario planning and identifies and quantifies
available sources of liquidity for each scenario.

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    

    Earnings Plan and Budget

    

    10.   (a)    Within 60 days of this Agreement, the
Bank shall submit to the Reserve Bank a written revised business plan for
the remainder of 2010 to improve the Bank’s earnings and overall condition. The
plan, at a minimum, shall provide for or describe:

    

     (i)    a realistic
and comprehensive budget for the remainder of calendar year 2010, including
income statement and balance sheet projections; and

    

     (ii)   a description of
the operating assumptions that form the basis for, and adequately support,
major projected income, expense, and balance sheet components.

     

    (b)    During the
term of this Agreement, a
business plan and budget for each calendar year subsequent to 2010 shall be
submitted to the Reserve Bank at least 30 days prior to the beginning of that
calendar year. 

    

    Dividends
and Distributions

    

    11.      (a)    Bancshares and the Bank shall not declare or pay
any dividends without the prior written approval of the Reserve Bank and
the Director of the Division of Banking Supervision and Regulation of the Board
of Governors (the “Director”).

    

    (b)    Bancshares shall not take any
other form of payment representing a reduction in capital from the Bank without
the prior written approval of the Reserve Bank.

    

    (c)    Bancshares
and its nonbank subsidiaries shall not make any distributions of interest,
principal, or other sums on subordinated debentures or trust preferred
securities without the prior written approval of the Reserve Bank and the
Director.

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    

    (d)    All requests
for prior approval shall be received at least 30 days prior to the proposed
dividend declaration date, proposed distribution on subordinated debentures, and
required notice of deferral on trust preferred securities. All requests shall
contain, at a minimum, current and projected information, as
appropriate, on Bancshares’ capital, earnings, and cash flow; the Bank’s
capital, asset quality, earnings and ALLL needs; and identification of the
sources of funds for the proposed payment or distribution. Bancshares and the
Bank, as appropriate, must also demonstrate that the requested declaration or
payment of dividends is consistent with the Board of Governors’ Policy Statement
on the Payment of Cash Dividends by State Member Banks and Bank Holding
Companies, dated November 14, 1985 (Federal Reserve Regulatory Service, 4-877 at
page 4-323).

    

    Debt
and Stock Redemption

    

    12.      (a)    Bancshares shall not, directly or indirectly,
incur, increase, or guarantee any debt without the prior written
approval of the Reserve Bank. All requests for prior written approval shall contain, but not be
limited to, a statement regarding the purpose of the debt,
the terms of the debt, and the planned
source(s) for debt repayment, and an analysis of the cash flow resources available to meet
such debt
repayment.

    

    (b)    Bancshares shall not, directly or indirectly,
purchase or redeem any shares of its stock without the prior written
approval of the Reserve Bank.

    

    Compliance
with Laws and Regulations

    

    13.   The Bank shall immediately take all
necessary steps to correct all violations of law and regulation cited in the
Report of Examination. In addition, the board of directors of
the Bank shall take the necessary steps to ensure the Bank’s future
compliance with all applicable laws and regulations.

    

    14.   In appointing any new director or senior executive
officer, or changing the responsibilities
of any senior executive officer so that the officer would assume a different
senior executive
officer position, the Bank shall comply with the notice provisions of Section 32
of the FDI Act (12 U.S.C. § 1831i) and Subpart H of Regulation Y
of the Board of Governors of the Federal
Reserve System (the “Board of Governors”) (12 C.F.R. §§ 225.71 et
seq.).

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    

    15.   The Bank shall comply with the
restrictions on indemnification and severance payments of Section 18(k) of the FDI
Act (12 U.S.C. § 1828(k)) and Part 359 of the Federal Deposit Insurance Corporation’s
regulations (12 C.F.R. Part 359).

    

    Compliance
with the Agreement

    

    16.   (a)    Within 10 days of this Agreement, the board of
directors of the Bank shall appoint a committee (the “Compliance
Committee”) to monitor and coordinate the Bank’s compliance with the provisions of this
Agreement. The Compliance Committee shall include a majority of outside directors who are
not executive officers or principal shareholders of the Bank, as defined in Sections
215.2(e)(1) and 215.2 (m)(1) of Regulation O of the Board of Governors (12 C.F.R. §§ 215.2(e)(1) and
215.2(m)(1). At a minimum, the Compliance Committee shall meet at least monthly,
keep detailed minutes of each meeting, and report its findings to the board of directors of the
Bank.

    

    17.   Within 30 days
after the end of each calendar quarter following the date of
this Agreement, Bancshares and the Bank shall submit to the Reserve Bank
written progress reports detailing the form and manner of all actions taken
to secure compliance with this Agreement and the results
thereof.

    

    Approval
and Implementation of Plans and Program

    

    18.   (a)    The Bank, and as applicable, Bancshares
shall submit written plans and a program
that are acceptable to the Reserve Bank within the applicable time periods set
forth in paragraphs
2, 4(a), 4(b), 5(c), 6,7, 8, and 9 of this Agreement.

    
      
         

      

      
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    (b)    Within 10 days of approval by the
Reserve Bank, the Bank, and as applicable, Bancshares
shall adopt the approved plans and program. Upon adoption, the Bank, and as
applicable, Bancshares shall promptly implement the approved plans and
program.

    

    (c)    During the term of this Agreement, the
approved plans and program shall not be amended or rescinded without the
prior written approval of the Reserve Bank.

    

    Communications

    

    19.   All communications regarding this
Agreement shall be sent to: 

    

    
      
        
          	 
      	
                  (a)

                	
                  Mr.
      Joe A. Lozano

                
	 
      	 
      	
                  Examining
      Officer, Banking Supervision and Regulation

                
	 
      	 
      	
                  Federal
      Reserve Bank of San Francisco

                
	 
      	 
      	
                  101
      Market Street

                
	 
      	 
      	
                  San
      Francisco, California 94105

                
	 
      	 
      	 
      
	 
      	
                  (b)

                	
                  Mr.
      Dennis Woods

                
	 
      	 
      	
                  President
      and Chief Executive Officer

                
	 
      	 
      	
                  United
      Security Bancshares

                
	 
      	 
      	
                  United
      Security Bank

                  2126
      Inyo Street

                
	 
      	 
      	
                  Fresno,
      California 93721

                

        

      

    

    

    Miscellaneous

    

    20.   Notwithstanding any provision of
this Agreement, the Reserve Bank may, in its sole discretion, grant written
extensions of time to Bancshares and the Bank to comply with any provision of
this Agreement.

    

    21.   The provisions of
this Agreement shall be binding upon Bancshares, the Bank, and their
institution-affiliated parties, in their capacities as such, and their
successors and assigns.

     

    22.   Each provision of
this Agreement shall remain effective and enforceable until stayed, modified,
terminated, or suspended in writing by the Reserve Bank. 

     

    23.   The provisions of
this Agreement shall not bar, estop, or otherwise prevent the Board of
Governors, the Reserve Bank, or
any other federal or state agency from taking any other action affecting Bancshares, the
Bank, or any of their current or former institution-affiliated parties and their
successors and assigns.

    
      
         

      

      
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    24.    Pursuant to
Section 50 of the FDI Act (12 U.S.C. § 1831aa), this
Agreement is enforceable by the Board of Governors under Section 8 of the FDI
Act (12 U.S.C. § 1818).

    

    IN
WITNESS WHEREOF, the parties
have caused this Agreement to be executed as of the 23RD of
MARCH, 2010.

    

    
      
        	
                UNITED
      SECURITY BANCSHARES

              	 
      	
                FEDERAL
      RESERVE BANK

              
	
                 
      UNITED SECURITY BANK

              	 
      	
                 
      OF SAN FRANCISCO

              
	 
      	 
      	 
      	 
      	 
      
	
                By:

              	
                /s/ Dennis Woods

              	 
      	
                By:

              	
                /s/ Joe A. Lozano

              
	 
      	
                Dennis
      Woods

              	 
      	 
      	
                Joe
      A. Lozano

              
	 
      	
                President
      and Chief Executive Officer

              	 
      	 
      	
                Examining
      Officer

              

      

    

    
      
         

      

      
        12Unassociated Document

    

    
      	 
      	
              WARRANT

            	 
      
	
              March
      24, 2010

            	 
      	
              360,000
      Shares

            
	 
      	 
      	 
      

    

    WARRANT TO PURCHASE COMMON
STOCK

    

    VOID
AFTER 5:30 P.M., EASTERN

    TIME
ON THE EXPIRATION DATE

    

    THIS
WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE
SOLD, PLEDGED, HYPOTHECATED, DONATED OR OTHERWISE TRANSFERRED WITHOUT COMPLIANCE
WITH THE REGISTRATION OR QUALIFICATION PROVISIONS OF APPLICABLE FEDERAL AND
STATE SECURITIES LAWS OR APPLICABLE EXEMPTIONS THEREFROM.

    

    FOR VALUE
RECEIVED, NuGen Holdings, Inc., a Delaware corporation (the “Company”), hereby
agrees to sell upon the terms and on the conditions hereinafter set forth, but
no later than 5:30 p.m., Eastern Time, on the Expiration Date (as hereinafter
defined) to Uzi HaLevy (the “Holder”), under the
terms as hereinafter set forth, three hundred and sixty thousand (360,000) fully paid and
non-assessable shares of the Company’s Common Stock (the “Warrant Stock”), at a
purchase price of .one tenth of one cent ($0.001) per share (the “Warrant Price”),
pursuant to this warrant (this “Warrant”). The number
of shares of Warrant Stock to be so issued and Warrant Price are subject to
adjustment in certain events as hereinafter set forth.

    

    1.          Exercise of
Warrant.

    

    a.           The
Holder may exercise this Warrant according to its terms by (i) surrendering this
Warrant, properly endorsed, to the Company at the address set forth in Section
10, (ii) the subscription form attached hereto having then been duly executed by
the Holder (the “Form
of Exercise”), and (iii) payment of the purchase price being made to the
Company for the number of shares of the Warrant Stock specified in the
subscription form, or as otherwise provided in this Warrant, prior to 5:30 p.m.,
Eastern Time, on March 16, 2011 (the “Expiration Date”).
Such exercise shall be effected by the surrender of the Warrant, together with a
duly executed copy of the Form of Exercise, to Company at its principal office
and the payment to the Company of an amount equal to the aggregate Warrant Price
for the number of shares of Warrant Stock being purchased in cash, certified
check or wire transfer.

    

    b.           This
Warrant may be exercised in whole or in part so long as any exercise in part
hereof would not involve the issuance of fractional shares of Warrant Stock. If
exercised in part, the Company shall deliver to the Holder a new Warrant,
identical in form, in the name of the Holder, evidencing the right to purchase
the number of shares of Warrant Stock as to which this Warrant has not been
exercised, which new Warrant shall be signed by the Chairman, Chief Executive
Officer or President and the Secretary or Assistant Secretary of the Company.
The term Warrant as used herein shall include any subsequent Warrant issued as
provided herein.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    c.           No
fractional shares or scrip representing fractional shares shall be issued upon
the exercise of this Warrant. The Company shall pay cash in lieu of fractions
with respect to the Warrants based upon the fair market value of such fractional
shares of Common Stock (which shall be the closing price of such shares on the
exchange or market on which the Common Stock is then traded) at the time of
exercise of this Warrant.

    

    d.           In
the event of any exercise of the rights represented by this Warrant, a
certificate or certificates for the Warrant Stock so purchased, registered in
the name of the Holder, shall be delivered to the Holder within a reasonable
time after such rights shall have been so exercised. The person or entity in
whose name any certificate for the Warrant Stock is issued upon exercise of the
rights represented by this Warrant shall for all purposes be deemed to have
become the holder of record of such shares immediately prior to the close of
business on the date on which the Warrant was surrendered and payment of the
Warrant Price and any applicable taxes was made, irrespective of the date of
delivery of such certificate, except that, if the date of such surrender and
payment is a date when the stock transfer books of the Company are closed, such
person shall be deemed to have become the holder of such shares at the opening
of business on the next succeeding date on which the stock transfer books are
open. The Company shall pay any and all documentary stamp or similar issue or
transfer taxes payable in respect of the issue or delivery of shares of Common
Stock on exercise of this Warrant.

    

    2.          Disposition of Warrant Stock
and Warrant.

    

    a.           The
Holder hereby acknowledges that this Warrant and any Warrant Stock purchased
pursuant hereto are, as of the date hereof, not registered: (i) under the
Securities Act of 1933, as amended (the “Act”), on the ground
that the issuance of this Warrant is exempt from registration under Section 4(2)
of the Act as not involving any public offering or (ii) under any applicable
state securities law because the issuance of this Warrant does not involve any
public offering; and that the Company’s reliance on the Section 4(2) exemption
of the Act and under applicable state securities laws is predicated in part on
the representations hereby made to the Company by the Holder that it is
acquiring this Warrant and will acquire the Warrant Stock for investment for its
own account, with no present intention of dividing its participation with others
or reselling or otherwise distributing the same, subject, nevertheless, to any
requirement of law that the disposition of its property shall at all times be
within its control.

    

    The
Holder hereby agrees that it will not sell or transfer all or any part of this
Warrant and/or Warrant Stock unless and until it shall first have given notice
to the Company describing such sale or transfer and furnished to the Company
either (i) an opinion, reasonably satisfactory to counsel for the Company, of
counsel (skilled in securities matters, selected by the Holder and reasonably
satisfactory to the Company) to the effect that the proposed sale or transfer
may be made without registration under the Act and without registration or
qualification under any state law, or (ii) an interpretative letter from the
Securities and Exchange Commission to the effect that no enforcement action will
be recommended if the proposed sale or transfer is made without registration
under the Act.

     

    
      
         

      

      
        - 2
-

        
          

        

      

      
         

      

    

    
 

    b.           If,
at the time of issuance of the shares issuable upon exercise of this Warrant, no
registration statement is in effect with respect to such shares under applicable
provisions of the Act, the Company may at its election require that the Holder
provide the Company with written reconfirmation of the Holder’s investment
intent and that any stock certificate delivered to the Holder of a surrendered
Warrant shall bear legends reading substantially as follows:

    

    “THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF
THIS CERTIFICATE THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT.”

    

    In
addition, so long as the foregoing legend may remain on any stock certificate
delivered to the Holder, the Company may maintain appropriate “stop transfer”
orders with respect to such certificates and the shares represented thereby on
its books and records and with those to whom it may delegate registrar and
transfer functions.

    

    3.          Reservation of
Shares. The Company hereby agrees that at all times there shall be
reserved for issuance upon the exercise of this Warrant such number of shares of
its Common Stock as shall be required for issuance upon exercise of this
Warrant. The Company further agrees that all shares which may be issued upon the
exercise of the rights represented by this Warrant will be duly authorized and
will, upon issuance and against payment of the exercise price, be validly
issued, fully paid and non-assessable, free from all taxes, liens, charges and
preemptive rights with respect to the issuance thereof, other than taxes, if
any, in respect of any transfer occurring contemporaneously with such issuance
and other than transfer restrictions imposed by federal and state securities
laws.

    

    4.          Exchange, Transfer or
Assignment of Warrant. This Warrant is exchangeable, without expense, at
the option of the Holder, upon presentation and surrender hereof to the Company
or at the office of its stock transfer agent, if any, for other Warrants of
different denominations, entitling the Holder or Holders thereof to purchase in
the aggregate the same number of shares of Common Stock purchasable hereunder.
Upon surrender of this Warrant to the Company or at the office of its stock
transfer agent, if any, with the Assignment Form annexed hereto duly executed
and funds sufficient to pay any transfer tax, the Company shall, without charge,
execute and deliver a new Warrant in the name of the assignee named in such
instrument of assignment and this Warrant shall promptly be canceled. This
Warrant may be divided or combined with other Warrants that carry the same
rights upon presentation hereof at the office of the Company or at the office of
its stock transfer agent, if any, together with a written notice specifying the
names and denominations in which new Warrants are to be issued and signed by the
Holder hereof.

    

    
      
         

      

      
        - 3
-

        
          

        

      

      
         

      

    

    

    

    5.          Loss, Theft, Destruction or
Mutilation. Upon receipt by the Company of evidence satisfactory to it,
in the exercise of its reasonable discretion, of the ownership and the loss,
theft, destruction or mutilation of this Warrant and, in the case of loss, theft
or destruction, of indemnity reasonably satisfactory to the Company and, in the
case of mutilation, upon surrender and cancellation thereof, the Company will
execute and deliver in lieu thereof, without expense to the Holder, a new
Warrant of like tenor dated the date hereof.

    

    6.          Warrant Holder Not a
Stockholder. The Holder of this Warrant, as such, shall not be entitled
by reason of this Warrant to any rights whatsoever as a stockholder of the
Company.

    

    7.          Notices. Any notice
required or contemplated by this Warrant shall be deemed to have been duly given
if transmitted by registered or certified mail, return receipt requested, or
nationally recognized overnight delivery service, to the Company at its
principal executive offices, or to the Holder at the name and address set forth
in the Warrant Register maintained by the Company.

    

    8.          Choice of Law. THIS
WARRANT IS ISSUED UNDER AND SHALL FOR ALL PURPOSES BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING
EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.

    

    9.          Jurisdiction and
Venue. The parties hereby irrevocably consent to the in personam
jurisdiction and venue of the courts of the State of New York and of any federal
court located in such State in connection with any action or proceeding arising
out of or relating to this Warrant. EACH PARTY HERETO WAIVES TRIAL BY JURY IN
ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF THIS WARRANT.

    

    [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

    

    
      
         

      

      
        - 4
-

        
          

        

      

      
         

      

       

    

    IN
WITNESS WHEREOF, the Company has duly caused this Warrant to be signed on its
behalf, in its corporate name and by its duly authorized officer, as of this
24th
day of March, 2010.

     

    
      
        
          	 	 	 	 
	
                   

                	
                  By:
      

                	/s/ Alan
      Pritzker	 
	 	Name:  
      	Alan
      Pritzker	 
	 	Title: 	Chief
      Financial Officer and Secretary	 
	 	 	 	 

        

      

    
      
         

      

      
        - 5
-

        
          

        

      

      
         

      

    

    

    

    FORM OF
EXERCISE

    

    (to be
executed by the registered holder hereof)

    

    

    

    The
undersigned hereby exercises the right to purchase _________ shares of common
stock (“Common
Stock”), of __________ evidenced by the within Warrant Certificate for a
Warrant Price of $______ per share and herewith makes payment of the purchase
price in full of (i) $__________ in cash. Kindly issue certificates for shares
of Common Stock (and for the unexercised balance of the Warrants evidenced by
the within Warrant Certificate, if any) in accordance with the instructions
given below.

    

    

    

    Dated:____________________
, 20___ .

    

    

    

    ______________________________

    

    Instructions
for registration of stock

    

    

    _____________________________

               Name
(Please Print)

    

    Social
Security or other identifying Number:

    

    Address:__________________________________

                          City/State
and Zip Code

    

    

    Instructions
for registration of certificate representing

    the
unexercised balance of Warrants (if any)

    

    

    _____________________________

    Name
(Please Print)

    

    Social
Security or other identifying Number: ___________

    

    Address:____________________________________

                                 
City, State and Zip Code

    

    
      
         

      

      
        - 6
-

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