Document:

Exhibit 10.1

Exhibit 10.1

UNITED STATES OF AMERICA

BEFORE THE

BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM

WASHINGTON, D.C.

STATE OF NEVADA

FINANCIAL INSTITUTIONS DIVISION

LAS VEGAS, NEVADA

			
	 	 	 
	Written Agreement by and among
	 	Docket Nos. 09-053-WA/RB-HC
09-053-WA/RB-SM

COMMUNITY BANCORP 

Las Vegas, Nevada

COMMUNITY BANK OF NEVADA 

Las Vegas, Nevada

FEDERAL RESERVE BANK OF SAN FRANCISCO

San Francisco, California

and

NEVADA FINANCIAL INSTITUTIONS DIVISION

Las Vegas, Nevada

WHEREAS, in recognition of their common goal to maintain the financial soundness of Community
Bancorp, Las Vegas, Nevada (“Bancorp”), a registered bank holding company, and its subsidiary bank,
Community Bank of Nevada, Las Vegas, Nevada (the “Bank”), a state chartered bank that is a member
of the Federal Reserve System, Bancorp, the Bank, the Federal Reserve Bank of San Francisco (the
“Reserve Bank”), and the State of Nevada, Financial Institutions Division (the “Division”) have
mutually agreed to enter into this Written Agreement (the “Agreement”); and

 

 

 

WHEREAS, on May 21, 2009, the boards of directors of Bancorp and the Bank, at a duly
constituted joint meeting, adopted a resolution authorizing and directing Mr. Edward M . Jamison,
Chairman, President and Chief Executive Officer, to enter into this Agreement on behalf of Bancorp
and the Bank, and consenting to compliance with each and every applicable provision of this
Agreement, by Bancorp, the Bank, and its 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, Bancorp, the Bank, the Reserve Bank, and the Division 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 and the Division 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, the Bank’s credit risk management practices, the adequacy of loan
loss reserves, liquidity policies and planning, and capital;

(b) a description of the information and reports that will be 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, concentrations of credits, allowance for loan and lease losses
(“ALLL”), capital, liquidity, and earnings; and

(c) the establishment of written procedures to ensure corrective actions are promptly taken to
address regulatory findings.

 

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Credit Risk Management

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

(a) To identify, limit, and manage concentrations of credit that are consistent with the
Interagency Guidance on Concentrations in Commercial Real Estate Lending, Sound Risk Management
Practices, dated December 12, 2006 (SR 07-1);

(b) to periodically review and revise risk exposure limits to address changes in market
conditions and strategies to minimize credit losses;

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

(d) to enhance stress testing of loan and portfolio segments; and

(e) to enhance management’s monitoring and controlling of problem assets.

Loan Review Program

3. Within 60 days of this Agreement, the Bank shall submit to the Reserve Bank and the
Division an acceptable written plan to strengthen the Bank’s loan review program that shall, at a
minimum, address, consider, and include:

(a) Loan grading standards and criteria for assessing the credit quality of the loans;

(b) loan grading descriptions and a scale that adequately identifies the degree of risk in the loans;

 

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(c) controls to ensure consistent application of loan grading standards and criteria to the
loan portfolio;

(d) policies and procedures regarding the scope and frequency of the loan review;

(e) a process to review and document the accrual status of loans in the loan portfolio; and

(f) quarterly written reports to the Bank’s board of directors that accurately identifies
loans that are not in conformance with the Bank’s loan policy, the status of loans that are
adversely graded, and the prospects for full collection or strengthening of the quality of
adversely graded loans.

Asset Improvement

4. (a) The Bank shall not, directly or indirectly, extend or renew any credit to or for the
benefit of any borrower, including any related interest of the borrower, who is obligated to the
Bank in any manner on any extension of credit or portion thereof that has been charged off by the
Bank or classified, in whole or in part, “loss” in the report of examination of the Bank that was
conducted by the Reserve Bank and the Division and conveyed to Bancorp and the Bank on March 13,
2009 (“Report of Examination”) or in any subsequent report of examination, as long as such credit
remains uncollected.

 

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(b) The Bank shall not, directly or indirectly, extend or renew any credit to or for the
benefit of any borrower, including any related interest of the borrower, whose extension of credit
has been classified “doubtful” or “substandard” in the Report of Examination or in any subsequent
report of examination, without the prior approval of the board of directors. The board of directors shall
document in writing the reasons for the extension of credit or renewal,
specifically certifying that: (i) the extension of credit is necessary to protect the Bank’s
interest in the ultimate collection of the credit already granted or (ii) the extension of credit
is in full compliance with the Bank’s written loan policy, is adequately secured, and a thorough
credit analysis has been performed indicating that the extension or renewal is reasonable and
justified, all necessary loan documentation has been properly and accurately prepared and filed,
the extension of credit will not impair the Bank’s interest in obtaining repayment of the already
outstanding credit, and the board of directors reasonably believes 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 board of directors meetings, 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)).

5. (a) Within 60 days of this Agreement, the Bank shall submit to the Reserve Bank and the
Division an acceptable written plan designed to improve the Bank’s position through repayment,
amortization, liquidation, additional collateral, or other means on each loan or other asset in
excess of $1 million, including other real estate owned (“OREO”), that (i) is past due as to
principal or interest more than 90 days as of the date of this Agreement; (ii) is on the Bank’s
problem loan list; or (iii) was adversely classified in the Report of Examination.

(b) Within 30 days of the date that any additional loan or other asset in excess of $1
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 and the Division an acceptable written plan
to improve the Bank’s position on such loan or asset.

 

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(c) Within 30 days after the end of each calendar quarter thereafter, the Bank shall submit a
written progress report to the Reserve Bank and the Division 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, extension report, and past due/non-accrual report.

Allowance for Loan and Lease Losses

6. (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 and the
Division.

(b) Within 60 days of this Agreement, the Bank shall review and revise its ALLL methodology
consistent with relevant supervisory guidance, including the Interagency Policy Statements on the
Allowance for Loan and Lease Losses, dated July 2, 2001 and December 13, 2006, and the findings and
recommendations regarding the ALLL set forth in the Report of Examination, and submit a
description of the revised methodology to the Reserve Bank and the Division. The revised ALLL
methodology shall be designed to maintain an adequate ALLL and shall address, consider, and
include, at a minimum, the reliability of the Bank’s loan grading system, the volume of criticized
loans, concentrations of credit, the current level of past due and nonperforming loans, past loan
loss experience, evaluation of probable losses in the Bank’s loan portfolio,
including adversely classified loans, and the impact of market conditions on loan and collateral
valuations and collectibility.

 

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(c) Within 60 days of this Agreement, the Bank shall adopt an acceptable written program for
the maintenance of an adequate ALLL . The program shall include policies and procedures to
ensure adherence to the 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 and the Division, 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 ALLL for that
quarter.

Capital Plan

7. Within 60 days of this Agreement, Bancorp shall submit to the Reserve Bank and the Division
an acceptable joint written plan to maintain sufficient capital at Bancorp on a consolidated basis,
and the Bank as a separate legal entity on a stand-alone basis. The plan shall, at a minimum,
address, consider, and include:

(a) Bancorp’s current and future capital requirements, 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);

 

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(b) the Bank’s current and future capital requirements, 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 Bancorp’s and the Bank’s future
capital requirements;

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

(f) procedures for Bancorp and the Bank to notify the Reserve Bank and the Division, in
writing, no more than 30 days after the end of any quarter in which any of Bancorp’s consolidated
capital ratios or the Bank’s capital ratios (total risk-based, Tier 1, or leverage) fall below the
appropriate plan’s minimum ratios and to submit to the Reserve Bank and the Division an acceptable
written plan that details the steps Bancorp or the Bank, as appropriate, will take to increase
Bancorp’s or the Bank’s capital ratios to or above the respective plan’s minimum within 30 days of
such calendar quarter-end date.

 

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Strategic Plan and Budget

8. (a) Within 60 days of this Agreement, the Bank shall submit to the Reserve Bank and the
Division a strategic plan to improve the Bank’s earnings and overall condition and a budget for 2009 that
shall, at a minimum, shall provide for or describe:

	 	(i)	 	goals and strategies for improving the Bank’s earnings;
	 
	 	(ii)	 	the responsibilities of the board of directors regarding the definition, approval,
implementation, and monitoring of the strategic plan and budget;
	 
	 	(iii)	 	an identification of the major areas in, and means by which the board of directors and
management shall seek to improve the Bank’s earnings and operating performance;
	 
	 	(iv)	 	identification of risks associated with CRE concentrations, including steps to control and
mitigate such risks; and
	 
	 	(v)	 	a realistic and comprehensive budget for calendar year 2009, that includes the operating
assumptions that form the basis for, and adequately support, major projected income, expense,
and balance sheet components.

(b) A strategic plan and budget for each calendar year subsequent to 2009 shall be submitted
to the Reserve Bank and the Division at least 30 days prior to the beginning of that calendar year.

Liquidity Management

9. Within 60 days of this Agreement, the Bank shall submit to the Reserve Bank and the
Division acceptable revised written policies and procedures designed 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 and reporting of the Bank’s liquidity position and funding
mismatches;

 

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(b) additional tools to measure and estimate liquidity needs on an ongoing basis;

(c) revision of limits identified in the liquidity policy; and

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

10. Within 60 days of this Agreement, the Bank shall revise and submit to the Reserve Bank and
the Division an acceptable written contingency funding plan that, at a minimum, identifies
available sources of liquidity and includes adverse scenario planning.

Brokered Deposits

11. The Bank shall not increase the amount of brokered deposits above the amount outstanding
as of the effective date of this Agreement.

12. Within 30 days of this Agreement, the Bank shall submit to the Reserve Bank and the
Division a written plan for reducing the Bank’s reliance on brokered deposits and other wholesale
funding sources. The plan shall include details as to the current composition of brokered deposits
by maturity and explain the means by which such deposits will be paid or rolled over. On the tenth
day of each month, the Bank shall provide a written progress report to Reserve Bank and Division
detailing the level, source, and use of the brokered deposits with specific reference to progress
under the Bank’s plan. For purposes of this Agreement, brokered deposits are defined in Section
337.6 (a)(2) of the Federal Deposit Insurance Corporation’s regulations (12 C.F.R. § 337.6 (a)(2))
to include any deposits funded by third party agents or nominees for depositors, including deposits
managed by a trustee or custodian when each individual beneficial interest is  entitled to or asserts a right to
federal deposit insurance.

 

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Dividends

13. (a) Bancorp 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”), and, as to the Bank, the Division.

(b) Bancorp 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) Bancorp and its nonbank subsidiary 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.

(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 Bancorp’s 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. Bancorp 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).

 

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Debt and Stock Redemption

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

Regulatory Reports

15. Bancorp and the Bank shall immediately take steps to ensure that all required regulatory
reports and notices filed with the Federal Reserve and the FFIEC accurately reflect Bancorp’s and
the Bank’s financial condition and are filed in accordance with the applicable instructions for
preparation.

Compliance with Laws and Regulations

16. (a) 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 (12
C.F.R. §§ 225.71 et seq).

(b) Bancorp and 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).

Approval and Implementation of Plans, Policies, Procedures, and Program

17. (a) The Bank and Bancorp shall submit written plans, policies, procedures, and a program
that are acceptable to the Reserve Bank, and as applicable, the Division, within the time periods set forth in
paragraphs 1, 2, 3, 5, 6(c), 7, 9 and 10 of this Agreement.

 

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(b) Within 10 days of approval by the Reserve Bank and the Division, the Bank and Bancorp, as
applicable, shall adopt the approved plans, policies, procedures, and program. Upon adoption, the
Bank shall implement the approved plans, policies, procedures, and program and thereafter fully
comply with them.

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

Communications

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

	 	 	 	 	 
	 

	 	(a)
	 	Mr. Kevin Zerbe

Vice President

Federal Reserve Bank of San Francisco

101 Market Street

San Francisco, California 94105
	 
	 	 	 	 
	 

	 	(b)
	 	Mr. George Burns

Commissioner

State of Nevada

Financial Institutions Division

2785 E. Desert Inn, Suite 180

Las Vegas, Nevada 89121
	 
	 	 	 	 
	 

	 	(c)
	 	Mr. Edward M . Jamison

President, Chief Executive Officer

Community Bancorp and Community Bank of Nevada

400 S. 4th Street, Suite 215

Las Vegas, Nevada 89101

Progress Reports

19. Within 30 days after the end of each calendar quarter following the date of this
Agreement, the boards of directors of Bancorp and the Bank shall furnish to the Reserve Bank and the Division
written progress reports detailing the form and manner of all actions taken to secure compliance
with the provisions of this Agreement and the results thereof. The Reserve Bank and the Division
may, in writing, modify the reporting schedule or discontinue the requirement for progress reports.

 

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Miscellaneous

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

21. The provisions of this Agreement shall be binding upon Bancorp, 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 and the Division, as applicable.

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

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) and by the Division pursuant to
Section NRS 658.115.

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the 21st day
of May, 2009.

	 	 	 	 	 	 	 	 	 	 	 
	COMMUNITY BANCORP COMMUNITY
BANK OF NEVADA	 	 	 	FEDERAL RESERVE BANK
 OF SAN FRANCISCO	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Edward M. Jamison
 

Edward M. Jamison
	 	 
	 	By:
	 	/s/ David Reiser
 

David Reiser
	 	 
	 

	 	Chairman, President and Chief Executive Officer
	 	 	 	 	 	Examining Officer	 	 
	 

	 		 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	THE STATE OF NEVADA

 Financial
Institutions Division	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	/s/ George Burns
 

George Burns
 Commissioner
	 	 

 

15Exhibit 10.1

Exhibit 10.1

UNITED STATES DEPARTMENT OF THE TREASURY

1500 Pennsylvania Avenue, NW

Washington, D.C. 20220

April 8, 2009

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 or Substitute Warrant (as defined below) with respect to, and/or exercise the Warrant
or Substitute 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.

UST
Seq. No. 200

 

 

 

In addition, the Company agrees that within 15 calendar days of the date hereof the Company
shall either (a) deliver to the Investor a notice of intent to repurchase the Warrant in accordance
with Section 4.9(b) of the Securities Purchase Agreement (the “Warrant Repurchase Notice”), or (b)
issue and deliver to the Investor a new warrant, in substantially the form of the Warrant, except
with the deletion of Section 13(H) thereof, to purchase the number of shares of Common Stock into
which the Warrant is then exercisable (the “Substitute Warrant”), which Substitute Warrant shall be
deemed the “Warrant” for all purposes under the Securities Purchase Agreement.

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 Company shall deliver a Substitute Warrant to the Investor within 5
calendar days of the earlier of the failure to agree on the Fair Market Value and the revocation of
the Warrant Repurchase Notice.

Effective as of the date of receipt of the Substitute Warrant, if applicable, the Investor
hereby provides notice, pursuant to Section 4.5(p) of the Securities Purchase Agreement, of its
intention to sell the Substitute 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.

[Remainder of this page intentionally left blank]

UST
Seq. No. 200

 

-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/ Duane Morse
 	 
	 	 	Name:  	Duane Morse 	 
	 	 	Title:  	Chief Risk and Compliance Officer 	 
	 
	 	BERKSHIRE HILLS BANCORP, INC.

 	 
	 	By:  	/s/
Kevin P. Riley	 
	 	 	Name:  	Kevin P. Riley	 
	 	 	Title:  	Executive
Vice President and CFO	 
	 

UST
Seq. No. 200

 

 

 

SCHEDULE A

General Information:

Date of Letter Agreement incorporating the
Securities Purchase Agreement: December 19, 2008

Name
of the Company: Berkshire Hills Bancorp, Inc.

Corporate or other organizational form of the
Company: Corporation

Jurisdiction of organization of the Company:
Delaware

Number and series of preferred stock issued to
the
Investor at the Closing: 40,000 shares of Fixed
Rate Cumulative Perpetual Preferred Stock, Series
A

Number of Initial Warrant Shares: 226,330

Terms of the Repurchase:

Number of Preferred Shares repurchased by
the Company: 40,000 (100%)

Share certificate number (representing the
Preferred Shares previously issued to the
Investor at the Closing): No. 1

Per share Liquidation Amount of Preferred
Shares: $1,000

Accrued and unpaid dividends on Preferred
Shares: $66,666.67

Aggregate
purchase price for Repurchased
Preferred Shares: $40,066,666.67

[Difference between the Preferred Shares and the
Repurchased Preferred Shares:]3 N/A

	 	 	 	 	 	 	 
	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

	 

	 	Beneficiary: a/c #629904
	 

 

	 	 	 
	3	 	Bracketed cell to be included if the Company is repurchasing less than 100% of the
Preferred Shares issued at Closing.

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