Document:

STOCK
      PURCHASE AGREEMENT

     

    BETWEEN

     

    BRIDGE
      CAPITAL HOLDINGS

     

    AND

     

    CARPENTER
      FUND MANAGER GP, LLC 

     

    AS
      GENERAL PARTNER 

     

    OF

    

      EACH
        OF
        THE FOLLOWING INVESTMENT-RELATED LIMITED PARTNERSHIPS:

       

      CARPENTER
        COMMUNITY BANCFUND, L.P.

      CARPENTER
        COMMUNITY BANCFUND-A, L.P.

      AND

      CARPENTER
        COMMUNITY BANCFUND-CA, L.P.

      

      DATED
        AS
        OF DECEMBER 4, 2008

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    TABLE
      OF CONTENTS

     

    
      	
              Article I

            	
              DEFINITIONS
                AND CONSTRUCTION

            	
              1

            
	
               

            	
              1.1

            	
              Definitions

            	
              1

            
	 	
              1.2

            	
              Construction

            	
              7

            
	
              Article II

            	
              PURCHASE
                AND SALE

            	
              7

            
	 	
              2.1

            	
              Purchase
                and Sale of Shares

            	
              7

            
	 	
              2.2

            	
              Time
                and Place of Closing

            	
              7

            
	 	
              2.3

            	
              Closing
                Events

            	
              8

            
	
              Article III

            	
              CLOSING
                CONDITIONS

            	
              8

            
	 	
              3.1

            	
              Conditions
                to Manager’s Obligations

            	
              8

            
	 	
              3.2

            	
              Conditions
                to Company’s Obligations

            	
              10

            
	
              Article IV

            	
              REPRESENTATIONS
                AND WARRANTIES OF THE COMPANY

            	
              10

            
	 	
              4.1

            	
              Organization
                of the Company

            	
              11

            
	 	
              4.2

            	
              Subsidiaries

            	
              12

            
	 	
              4.3

            	
              Corporate
                Power; Due Authorization

            	
              12

            
	 	
              4.4

            	
              Capitalization

            	
              13

            
	 	
              4.5

            	
              Organization
                of the Bank

            	
              13

            
	 	
              4.6

            	
              Subsidiaries
                of the Bank

            	
              13

            
	 	
              4.7

            	
              Capitalization
                of the Bank

            	
              14

            
	 	
              4.8

            	
              Agreement
                Not in Contravention; Consents.

            	
              14

            
	 	
              4.9

            	
              Valid
                Issuance of Stock

            	
              15

            
	 	
              4.10

            	
              Offering

            	
              15

            
	 	
              4.11

            	
              Absence
                of Material Changes

            	
              16

            
	 	
              4.12

            	
              Financial
                Statements

            	
              17

            
	 	
              4.13

            	
              Undisclosed
                Liabilities

            	
              17

            
	 	
              4.14

            	
              Litigation;
                Governmental Proceedings; Absence of Basis for Adverse
                Action

            	
              17

            
	 	
              4.15

            	
              Compliance
                with Applicable Laws; Operating Authorities

            	
              18

            
	 	
              4.16

            	
              No
                Employment Controversies

            	
              19

            
	 	
              4.17

            	
              Tax
                Matters.

            	
              19

            
	 	
              4.18

            	
              Transactions
                with Affiliates

            	
              21

            
	 	
              4.19

            	
              Loans

            	
              22

            
	 	
              4.20

            	
              Other
                Activities of the Company and the Bank

            	
              23

            
	 	
              4.21

            	
              Material
                Agreements; No Defaults

            	
              23

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

      TABLE
        OF CONTENTS

      (continued)

    

     

    
      	 	 	 	
              Page

            
	 	 	 	 
	 	
              4.22

            	
              Real
                Property Owned or Leased

            	
              23

            
	 	
              4.23

            	
              Real
                Estate Owned

            	
              23

            
	 	
              4.24

            	
              Title
                to Property

            	
              24

            
	 	
              4.25

            	
              Condition,
                Use, and Operation of Property

            	
              24

            
	 	
              4.26

            	
              Insurance
                Coverage

            	
              24

            
	 	
              4.27

            	
              Employment
                and Similar Agreements; Obligations Upon Change in Control

            	
              25

            
	 	
              4.28

            	
              Benefit
                Plans

            	
              25

            
	 	
              4.29

            	
              Intellectual
                Property

            	
              28

            
	 	
              4.30

            	
              Brokered
                Deposits

            	
              28

            
	 	
              4.31

            	
              Brokers

            	
              28

            
	 	
              4.32

            	
              Hazardous
                Materials

            	
              28

            
	 	
              4.33

            	
              Compliance
                with Policies

            	
              29

            
	 	
              4.34

            	
              Confidentiality

            	
              29

            
	 	
              4.35

            	
              Corporate
                Records

            	
              29

            
	 	
              4.36

            	
              NASDAQ

            	
              29

            
	 	
              4.37

            	
              Accuracy:
                Completeness of Information

            	
              29

            
	 	
              4.38

            	
              Public
                Reports; Sarbanes-Oxley Compliance

            	
              29

            
	 	
              4.39

            	
              Bank
                Secrecy Act; Patriot Act

            	
              30

            
	 	
              4.40

            	
              Risk
                Management Instruments

            	
              30

            
	 	
              4.41

            	
              Accounting
                Records: Data Processing

            	
              31

            
	 	
              4.42

            	
              S-3
                Eligibility

            	
              31

            
	
              Article V

            	
              REPRESENTATIONS
                AND WARRANTIES OF THE MANAGER

            	
              31

            
	 	
              5.1

            	
              Authorization;
                Corporate Power

            	
              31

            
	 	
              5.2

            	
              Purchase
                for Own Account

            	
              31

            
	 	
              5.3

            	
              Disclosure
                of Information

            	
              32

            
	 	
              5.4

            	
              Investment
                Experience

            	
              32

            
	 	
              5.5

            	
              Accredited
                Investor Status

            	
              32

            
	 	
              5.6

            	
              Restricted
                Securities

            	
              32

            
	 	
              5.7

            	
              Residence

            	
              32

            
	 	
              5.8

            	
              Brokers’
                and Finders’ Fees

            	
              33

            
	 	
              5.9

            	
              Access
                to Information

            	
              33

            
	 	
              5.10

            	
              Certain
                Trading Activities

            	
              33

            

    

     

    
      
        
        

      

      
        -ii-

        
          

        

      

      
        
        

      

    

     

    
      TABLE
        OF CONTENTS

      (continued)

       

    

    
      	 	 	 	
              Page

            
	 	 	 	 
	 	
              5.11

            	
              No
                Governmental Review

            	
              33

            
	 	
              5.12

            	
              Regulation
                M

            	
              33

            
	
              Article VI

            	
              COVENANTS
                OF THE COMPANY

            	
              34

            
	 	
              6.1

            	
              Filings;
                Other Action

            	
              34

            
	 	
              6.2

            	
              Board
                of Directors

            	
              35

            
	 	
              6.3

            	
              Notification
                of Threatened Breach or Failure of Condition and Other
                Matters

            	
              36

            
	 	
              6.4

            	
              Interim
                Reports: Financial Statements

            	
              37

            
	 	
              6.5

            	
              Access
                to Information

            	
              37

            
	 	
              6.6

            	
              Conduct
                of Business

            	
              38

            
	 	
              6.7

            	
              Operations
                to Date of Closing

            	
              38

            
	 	
              6.8

            	
              Antidilution
                Protection; Right to Purchase Securities

            	
              40

            
	 	
              6.9

            	
              Certificate
                of Determination

            	
              40

            
	 	
              6.10

            	
              Reservation
                for Issuance

            	
              40

            
	 	
              6.11

            	
              Share
                Listing

            	
              40

            
	 	
              6.12

            	
              Change
                in Control Provisions

            	
              41

            
	 	
              6.13

            	
              Litigation

            	
              41

            
	 	
              6.14

            	
              Further
                Assurances

            	
              41

            
	 	
              6.15

            	
              Representations
                and Warranties

            	
              41

            
	 	
              6.16

            	
              Fees
                and Expenses

            	
              41

            
	 	
              6.17

            	
              S-3
                Eligibility

            	
              41

            
	
              Article VII

            	
              TERMINATION

            	
              41

            
	 	
              7.1

            	
              Right
                to Terminate Prior to Closing

            	
              41

            
	 	
              7.2

            	
              Effect
                of Termination

            	
              42

            
	
              Article VIII

            	
              INDEMNIFICATION

            	
              43

            
	 	
              8.1

            	
              Indemnification
                by the Company

            	
              43

            
	 	
              8.2

            	
              Indemnification
                by Manager

            	
              43

            
	 	
              8.3

            	
              Conduct
                of Indemnification Proceedings

            	
              43

            
	 	
              8.4

            	
              Contribution

            	
              44

            
	
              Article IX

            	
              RESTRICTIONS
                REGARDING TRANSFERS OF SHARES

            	
              44

            
	 	
              9.1

            	
              Legend

            	
              44

            
	 	
              9.2

            	
              Additional
                Restrictions on Transfers of Series B Preferred Stock

            	
              44

            
	 	
              9.3

            	
              Compliance
                with Securities Act

            	
              45

            

    

     

    
      
        
        

      

      
        -iii-

        
          

        

      

      
        
        

      

    

     

    
      TABLE
        OF CONTENTS

      (continued)

       

    

    
      	 	 	 	
              Page

            
	 	 	 	 
	 	
              9.4

            	
              Removal
                of Legends

            	
              45

            
	
              Article X

            	
              MISCELLANEOUS

            	
              45

            
	 	
              10.1

            	
              Legal
                Action

            	
              45

            
	 	
              10.2

            	
              Notices

            	
              45

            
	 	
              10.3

            	
              Agreement

            	
              46

            
	 	
              10.4

            	
              Waiver
                and Amendment

            	
              46

            
	 	
              10.5

            	
              Headings

            	
              47

            
	 	
              10.6

            	
              Severability

            	
              47

            
	 	
              10.7

            	
              Governing
                Law

            	
              47

            
	 	
              10.8

            	
              Counterparts

            	
              47

            
	 	
              10.9

            	
              Expenses

            	
              47

            
	 	
              10.10

            	
              Successors
                and Assigns

            	
              47

            
	
              EXHIBIT A  -  Schedule of Investors

            	
              A-1

            
	
              EXHIBIT B  -  Fully Diluted Capitalization

            	
              B-1

            
	
              EXHIBIT C  -  Certificate of Determination

            	
              C-1

            
	
              EXHIBIT D  -  Management Rights Letter

            	
              D-1

            
	
              EXHIBIT E  -  Registration Rights Agreement

            	
              E-1

            
	
              EXHIBIT F  -  Voting Agreement

            	
              F-1

            

    

    

    
      
        
        

      

      
        -iv-

        
          

        

      

      
        
        

      

    

    STOCK
      PURCHASE AGREEMENT

     

    THIS
      STOCK PURCHASE AGREEMENT (this “Agreement”)
      dated
      as of December 4, 2008 between BRIDGE CAPITAL HOLDINGS, a California corporation
      (the “Company”),
      and
      Carpenter Fund Manager GP, LLC (the “Manager”)
      on
      behalf of and as General Partner of each of the following investment-related
      limited partnerships: Carpenter Community BancFund, L.P.; Carpenter Community
      BancFund-A, L.P.; and Carpenter Community BancFund-CA, L.P. (collectively,
      the
“Investors”),
      regarding the purchase by the Investors of the Securities (as defined below).
      The Manager and the Company are collectively referred to herein as the
“Parties”
and
      individually referred to herein as a “Party.”
Unless
      otherwise defined herein, capitalized terms used herein are defined in
      Article I hereof.

     

    A. The
      Company is the record and beneficial owner of 100 percent of the issued and
      outstanding capital stock of Bridge Bank, N.A., a national banking association
      (the “Bank”).

     

    B. The
      Company desires to sell 300,000 shares (the “Shares”)
      at a
      price of $100.00 per share (the “Purchase
      Price”),
      of
      Series B Mandatorily Convertible Cumulative Perpetual Preferred Stock of the
      Company, having the terms set forth on Exhibit
      C
      (the
“Series B
      Preferred Stock”).
      The
      Series B Preferred Stock is convertible into shares of Series B-1 Mandatorily
      Convertible Cumulative Perpetual Preferred Stock (the “Series
      B-1 Preferred Stock”)
      (and
      together with the Series B Preferred Stock and the Series B-1 Preferred Stock
      are referred to as the “Preferred
      Stock”).
      The
      Preferred Stock is convertible into common stock of the Company (the
“Common
      Stock”).
      The
      term “Securities”
refers
      collectively to (1) the shares of Series B Preferred Stock purchased under
      this
      Agreement (2) the shares of Series B-1 Preferred Stock into which the Series
      B
      Preferred Stock is convertible and (3) the shares of Common Stock into which
      the
      Preferred Stock is convertible. 

     

    C. The
      Investors desire to purchase the Shares and thereby indirectly invest in the
      Bank, on the terms and subject to the conditions set forth in this Agreement.
      When purchased, the Series B Preferred Stock will be evidenced by share
      certificates incorporating the terms set forth in the certificate of
      determination for the Preferred Stock in the form attached as Exhibit
      C
      (the
“Preferred
      Stock Certificate of Determination”)
      made a
      part of the Company’s Articles of Incorporation, by filing of the Preferred
      Stock Certificate of Determination with the Secretary of State of the State
      of
      California (the “California
      Secretary”).

     

    NOW,
      THEREFORE, in consideration of the foregoing and the respective representations,
      warranties, covenants and other agreements set forth herein, and for other
      good
      and valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, the Parties, intending to be legally bound, agree as
      follows:

     

    ARTICLE
      I

    DEFINITIONS
      AND CONSTRUCTION

     

    1.1 Definitions.
      When
      used in this Agreement, each of the following terms shall have the following
      meaning unless the context otherwise requires: 

     

    “Acquisition”
shall
      mean the purchase of the Securities by the Investors pursuant to the terms
      and
      conditions of this Agreement.

     

    “Affiliate”
means
      an “affiliate” or “associate”, as defined under Rule 405 of the Securities
      Act.

     

    “Affiliated
      Group”
shall
      have the meaning ascribed to such term in Section 4.17(a)(i)
      hereof.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    “Agreement”
means
      this Stock Purchase Agreement, including all Exhibits and Schedules hereto,
      as
      the same may be hereafter amended.

     

    “Applicable
      Law”
shall
      mean any domestic or foreign, federal, state or local, statute, law, ordinance,
      rule, administrative interpretation, regulation, order, writ, injunction,
      directive, judgment, decree or other requirement of any Governmental Authority
      applicable, in the case of the Company, to the Company or its properties,
      assets, officers, directors, employees or agents (in connection with such
      officers’, directors’, employees’ or agents’ activities on behalf of it); in the
      case of the Bank, to the Bank or its properties, assets, officers, directors,
      employees or agents (in connection with such officers’, directors’, employees’
or agents’ activities on behalf of it) and, in the case of the Manager or
      Investors, to the Manager or Investors or their respective properties, assets,
      employees or agents (in connection with such employees’ or agents’ activities on
      behalf of it).

     

    “Bank”
shall
      have the meaning ascribed to such term in Recital A hereof. 

     

    “Bank
      Stock”
shall
      have the meaning ascribed to such term in Section 4.7(a) hereof.

     

    “BHCA”
shall
      mean the Bank Holding Company Act of 1956, as amended.

     

    “Board
      Recommendation”
has
      the
      meaning set forth in Section 6.1 (b).

     

    “Business
      Day”
shall
      mean any day other than a Saturday, Sunday or other day on which commercial
      banks in California are authorized or required by law to close.

     

    “Business
      Plan”
shall
      have the meaning ascribed to such term in Section 4.1 hereof.

     

    “CERCLA”
means
      the Comprehensive Environmental Response, Compensation and Liability Act of
      1980, 42 U.S.C. 9601 et seq., as amended or recodified.

     

    “California
      Secretary”
shall
      have the meaning ascribed to such term in Recital B hereto.

     

    “Closing”
shall
      have the meaning ascribed to such term in Section 2.2.

     

    “Closing
      Date”
shall
      have the meaning ascribed to such term in Section 2.2.

     

    “Code”
means
      the Internal Revenue Code of 1986, as amended or recodified.

     

    “Common
      Stock”
shall
      have the meaning ascribed to such term in Recital B hereof. 

     

    “Common
      Stock Derivatives”
shall
      have the meaning ascribed to such term in Section 6.8(a) hereof.

     

    “Company”
shall
      have the meaning ascribed to such term in the Preamble hereof. 

     

    “Company
      Financial Statements”
shall
      have the meaning ascribed to such term in Section 4.12(a). 

     

    “Company
      Reports”
shall
      have the meaning ascribed to such term in Section 4.38(a) 

     

    “Company
      Shareholders Meeting”
has
      the
      meaning set forth in Section 6.1(b).

     

    “Company
      Significant Agreement”
means
      any contract or agreement that is a “material contract” within the meaning of
      Item 601(b)(10) of Regulation S-K to be performed in whole or in part
      after the date of this Agreement entered into by the Company or the Bank.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    “Company
      Stock”
means
      the issued and outstanding capital stock of the Company.

     

    “Company
      Subsidiary”
has
      the
      meaning set forth in Section 4.2.

     

    “Comptroller”
means
      United States Comptroller of the Currency.

     

    “Corporations
      Code”
means
      the California Corporations Code, as amended to date.

     

    “Damages”
shall
      have the meaning ascribed to such term in Section 8.1 hereof. 

     

    “Definitive
      Proxy Statement”
has
      the
      meaning set forth in Section 6.1(b).

     

    “Environmental
      Laws”
shall
      have the meaning ascribed to such term in Section 4.32(d) hereof.

     

    “ERISA”
means
      the Employee Retirement Income Security Act of 1974, as amended.

     

    “Exchange
      Act”
means
      the Securities Exchange Act of 1934, as amended.

     

    “Fair
      Value”
means
      the cash price that might reasonably be anticipated in a current sale under
      all
      conditions requisite to a fair sale. A fair sale means that buyer and seller
      are
      each acting prudently, knowledgeably, and under no necessity to buy or sell
—
i.e., other than in a forced or liquidation sale.

     

    “FDIC”
means
      the Federal Deposit Insurance Corporation.

     

    “Federal
      Reserve Board”
means
      the Board of Governors of the Federal Reserve System or the applicable Federal
      Reserve Bank acting under delegated authority.

     

    “Financial
      Code”
means
      the California Financial Code, as amended.

     

    “Financial
      Statements”
means,
      collectively, the Company Prior Period Financial Statements, the Company Current
      Financial Statements, the Bank Prior Period Financial Statements and the Bank
      Current Financial Statements.

     

    “GAAP”
means
      generally accepted accounting principles, applied on a consistent
      basis.

     

    “GLB
      Act”
means
      the Gramm-Leach-Bliley Act of 1999, as amended from time to time.

     

    “Governmental
      Authority”
shall
      mean any foreign, domestic, federal, territorial, state or local governmental
      authority, quasi-governmental authority, court, government or self-regulatory
      organization, commission, tribunal, organization or any regulatory,
      administrative or other agency, or any political or other subdivision,
      department or branch of any of the foregoing.

     

    “Group”
shall
      have the meaning ascribed to such term in Section 4.17(a)(i)
      hereof.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    “Hazardous
      Material”
means
      any hazardous or toxic substance, material or waste which is or becomes
      regulated by any local governmental authority, the State of California or the
      United States Government. The term “Hazardous Material” includes, without
      limitation, any material or substance which is (i) defined as a “hazardous
      waste,” “extremely hazardous waste” or “restricted hazardous waste” under
      Sections 25115, 25117 or 25122.7, or listed pursuant to Section 25140, of the
      California Health and Safety Code Division 20, Chapter 6.5 (Hazardous Waste
      Control Law), (ii) defined as a “hazardous substance” under Section 25316 of the
      California Health and Safety Code, Division 20, Chapter 6.8
      (Carpenter-Presley-Tanner Hazardous Substance Account Act), (iii) defined as
      a
“hazardous material,” “hazardous substance,” or “hazardous waste” under Section
      25501 of the California Health and Safety Code, Division 20, Chapter 6.95
      (Hazardous Materials Release Response Plans and Inventory), (iv) defined as
      a
“hazardous substance” under Section 25281 of the California Health and Safety
      Code, Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances),
      (v) petroleum, (vi) asbestos, (vii) listed under Article IX hereof or defined
      as
      hazardous or extremely hazardous pursuant to Article 11 of Title 22 of the
      California Administrative Code, Division 4, Chapter 20, (viii) designated as
      a
“hazardous substance” pursuant to Section 311 of the Federal Water Pollution
      Control Act (33 U.S.C. 1317), (ix) defined as a “hazardous waste” pursuant to
      Section 1004 of the Federal Resource Conservation and Recovery Act, 42 U.S.C.
      6901 et seq. (42 U.S.C. 6903), or (x) defined as a “hazardous substance”
pursuant to Section 101 of CERCLA.

     

    “Indemnified
      Party”
shall
      have the meaning ascribed to such term in Section 8.3 hereof.

     

    “Indemnifying
      Party”
shall
      have the meaning ascribed to such term in Section 8.3 hereof.

     

    “Indemnified
      Persons”
shall
      have the meaning ascribed to such term in Section 8.3 hereof.

     

    “Intellectual
      Property”
means
      trademarks, service marks, brand names, certification marks, trade dress and
      other indications of origin, the goodwill associated with the foregoing and
      registrations and applications to register the foregoing; inventions,
      discoveries and ideas; patents and applications for patents; nonpublic
      information, trade secrets and confidential information and rights to limit
      the
      use or disclosure thereof by any person; writings and other works, whether
      copyrightable or not; and registrations or applications for registration of
      copyrights; and any similar intellectual property or proprietary
      rights.

     

    “Investors”
shall
      have the meaning ascribed to such term in the Preamble hereof.

     

    “IRS”
means
      the United States Internal Revenue Service.

     

    “Knowledge
      of the Company”
shall
      mean the actual knowledge of the President, Chief Financial Officer and Chief
      Operating Officer, Business Development Officer and Chief Information Officer
      after reasonable investigation.

     

    “Liability”
means
      and includes for any Person all items of indebtedness (including, without
      limitation, capitalized lease obligations), whether direct, indirect or
      contingent, which, in accordance with GAAP, would be included in determining
      liabilities as shown on the liability side of a balance sheet of such Person
      as
      of the date as of which indebtedness is to be determined, and also includes
      all
      indebtedness and liabilities of others assumed or guaranteed by such Person
      or
      in respect of which such Person is secondarily or contingently liable (other
      than by endorsement of instruments in the course of collection), whether by
      reason of any agreement to acquire such indebtedness or to supply or advance
      sums or otherwise, and any guarantee of any such item of indebtedness or any
      other obligation or any assurance with respect to the financial condition of
      any
      other Person, including without limitation any purchase or repurchase agreement
      or keep-well, take-or-pay or other arrangement of whatever nature having the
      effect of assuring or holding harmless any Person against loss with respect
      to
      any obligation of such other Person (but not including endorsements of
      instruments for deposit or collection in the ordinary course of
      business).

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    “Lien”
means
      any mortgage, hypothecation, pledge, security interest, agreement or
      arrangement, encumbrance, community property interest, equitable interest,
      claim, Tax, lien or charge, restriction or limitation of any kind (including
      any
      conditional sale or other title retention agreement or lease in the nature
      thereof or any restriction on the use, voting, transfer, receipt of income
      or
      other exercise of any attributes of ownership), any sale of receivables with
      recourse or any filing of a financing statement as debtor under the Uniform
      Commercial Code or any similar statute, or any agreement to grant, create,
      effect, enter into or file any of the foregoing.

     

    “Management
      Rights Letter”
shall
      mean that certain agreement, the form of which is attached hereto as
Exhibit
      D.

     

    “Manager”
shall
      have the meaning ascribed to such term in the Preamble hereof.

     

    “Manager
      Nominee”
shall
      have the meaning ascribed to such term in Section 6.2(a) hereof.

     

    “Material
      Adverse Effect”
shall
      mean, with respect to a Party or an Investor, any circumstance, event, change,
      development or effect that, individually or in the aggregate, (i) is material
      and adverse to the consolidated financial position, results of operations,
      business operations, condition (financial or otherwise) or prospects of that
      entity and its subsidiaries, or (ii) the ability of the entity to perform its
      obligations under this Agreement or the Other Transaction Documents or to obtain
      any government approvals required hereunder or to consummate the
      Closing
      provided,
      however
      , that
      in determining whether a Material Adverse Effect has occurred, there will be
      excluded any effect to the extent resulting from the following: (a) 
actions or omissions of the Company expressly required by the terms of this
      Agreement or any capital transaction disclosed before the date of this Agreement
      or taken with the prior written consent of the Manager, (b) the failure of
      the Company to meet any internal or public projections, forecasts, estimates
      or
      guidance (including guidance as to ”earnings drivers”) for any period ending on
      or after December 31, 2007 (but not the underlying causes of such failure),
      (c) the designation, sale and/or issuance of any TARP Preferred Stock or
      (d) the public disclosure of this Agreement.

     

    “Other
      Transaction Documents”
shall
      mean the Registration Rights Agreement, the Voting Agreements with Company
      directors and various executive officers, the Management Rights Letter and
      any
      other agreement, certificate, consent, document, instrument or waiver to be
      executed and/or delivered by or on behalf of a Person in connection with this
      Agreement.

     

    “Party”
shall
      have the meaning ascribed to such term in the Preamble hereof. 

     

    “Permitted
      Equity Rights”
has
      the
      meaning set for in Section 4.4(b).

     

    “Permitted
      Liens”
shall
      mean (i) mechanics’, carriers’, workers’ or repairmen’s Liens arising in
      the ordinary course of business and securing payments or obligations that are
      not due and payable, (ii) Liens for Taxes, assessments and other similar
      governmental charges arising in the ordinary course of business that are not
      due
      and payable, and (iii) Liens that arise under zoning, land use and other
      similar laws and other imperfections of title or encumbrances, if any, that
      do
      not, individually or in the aggregate, materially affect the value of the
      property subject thereto and do not, individually or in the aggregate,
      materially impair the use of the property subject thereto as presently
      used.

     

    “Person”
means
      any natural person, corporation, firm, partnership, association, government,
      governmental agency or any other entity.

     

    “Plan”
shall
      have the meaning ascribed to such term in Section 4.28 hereof.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    “Preferred
      Stock”
shall
      have the meaning ascribed to such term in Recital B hereto.

     

    “Preferred
      Stock Certificate of Determination”
shall
      have the meaning ascribed to such term in Recital C hereto.

     

    “Preliminary
      Proxy Statement”
has
      the
      meaning set forth in Section 6.1(b).

     

    “Previously
      Disclosed”
shall
      mean disclosed or made available in writing in connection with the transactions
      contemplated by this Agreement and dated not earlier than August 31, 2008 from
      the Party making such disclosure and delivered to the other Party. 

     

    “Property”
shall
      have the meaning ascribed to such term in Section 4.32(a) hereof.

     

    “Proxy
      Statement”
has
      the
      meaning set forth in Section 6.1(b).

     

    “Purchase
      Price”
shall
      have the meaning ascribed to such term in Recital B hereof.

     

    “Qualifying
      Ownership Interest”
shall
      have the meaning ascribed to such term in Section 6.5 hereof. 

     

    “Real
      Estate Owned”
shall
      mean all real estate or loans secured by real estate that are classified or
      would be classified as: “loans to facilitate;” “real estate owned;”
“in-substance foreclosure;” “in-substance repossession;” foreclosed real estate;
      real estate held for investment; real estate acquisition, or construction
      arrangements that are accounted for as investments in real estate; real estate
      that is held for sale (or that is intended to be sold within two years);
      property formerly but no longer used for the operations of the Bank; property
      originally acquired for future expansion but that is no longer intended to
      be
      used for that purpose; real estate acquired in any manner for debts previously
      contracted (even if the Bank has not yet received title to the property); real
      estate sold when (i) less than ten percent of the total sales price is in cash,
      (ii) there is financing by the Bank of all or a portion of the sales price
      on
      terms more favorable than those customarily required by the Bank when it is
      involved only as a lender, or (iii) the transaction does not transfer from
      the
      Bank to the purchaser the usual risks and all or most of the rewards of
      ownership; receivables resulting from sales of other real estate owned accounted
      for under the installment, cost recovery, reduced profit, or
      percentage-of-completion method of accounting in accordance with FASB Statement
      No. 66, “Accounting for Sales of Real Estate,” when the Investor’s initial
      investment is less than ten percent of the sales value of the real estate sold;
      other real estate owned sold under contract and accounted for under the deposit
      method of accounting in accordance with FASB Statement No. 66; and any other
      similar category of loan or real estate.

     

    “Registration
      Rights Agreement”
means
      that certain agreement the form of which is attached hereto as Exhibit
      E.

     

    “Regulatory
      Agreement”
means
      a
      cease-and-desist or other similar order, capital directive or enforcement action
      issued by, or written agreement, consent agreement or memorandum of
      understanding, capital directive, commitment letter or similar undertaking
      entered into with, a Governmental Authority that relates to the capital
      adequacy, liquidity and funding policies and practices, ability to pay
      dividends, credit, risk management or compliance policies, internal controls,
      management or operations or business, including compliance with applicable
      bank
      secrecy, anti-money laundering and consumer protection laws, regulations and
      interpretations of any Governmental Entity, of the Company or the
      Bank.

     

    “Requisite
      Shareholder Approval”
has
      the
      meaning set forth in Section 6.1(b).

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    “Restricted
      Securities”
shall
      have the meaning ascribed to such term in Section 9.3 hereof.

     

    “Returns”
shall
      have the meaning ascribed to such term in Section 4.17(a)(iii)
      hereof.

     

    “Rights
      Agreement”
means
      that certain Rights Agreement dated as of August 21, 2008 between the Company
      and American Stock Transfer & Trust Company, LLC.

     

    “Schedules”
shall
      mean the disclosure schedules described in Article IV of the Agreement which
      have been separately delivered by the Company to the Manager prior to execution
      of this Agreement.

     

    “SEC”
means
      the United States Securities and Exchange Commission.

     

    “Securities”
shall
      have the meaning ascribed to such term in Recital B hereto.

     

    “Securities
      Act”
means
      the Securities Act of 1933, as amended.

     

    “Series
      B Preferred Stock”
shall
      have the meaning ascribed to such term in Recital B hereof.

     

    “Series
      B-1 Preferred Stock”
shall
      have the meaning ascribed to such term in Recital B hereof.

     

    “Shares”
shall
      have the meaning ascribed to such term in Recital B hereof.

     

    “Shareholder
      Proposals”
shall
      have the meaning ascribed to such term in Section 6.1(b).

     

    “Taxes”
shall
      have the meaning ascribed to such term in Section 4.17(a)(ii)
      hereof.

     

    “TARP
      Securities”
means
      shares of preferred stock ,related warrants to purchase common stock and shares
      of common stock issued upon exercise of such warrants issued by the Company
      which are purchased by the U.S. Treasury or its designee(s) pursuant to the
      Emergency Economic Stabilization Act or the regulation or polices of the U.S.
      Treasury thereunder.

     

    “Trading
      Affiliates”
      shall
      have the meaning ascribed to such term in Section 5.10.

     

    “Voting
      Agreement”
means
      that form of voting agreement attached hereto as Exhibit
      F.

     

    1.2 Construction.
      Words
      and phrases defined in the plural shall also be used in the singular and vice
      versa and be construed in the plural or singular as appropriate and apparent
      in
      the context used. Unless otherwise specifically provided herein, accounting
      terms shall be given and assigned their usual meaning and effect as defined
      or
      used in GAAP.

     

    ARTICLE
      II

    PURCHASE
      AND SALE

     

    2.1 Purchase
      and Sale of Shares.
      Company
      agrees to sell to each Investor, and the Manager agrees to cause each Investor,
      severally and not jointly, to purchase from the Company, the number of Shares
      set forth beside such Investor’s name on Exhibit
      A
      hereto,
      at the Purchase Price. The Manager intends to cause the Investors to purchase
      the Shares through a private placement. 

     

    2.2 Time
      and Place of Closing.
      Subject
      to the terms and conditions hereof, the closing of the purchase of the
      Securities referred to in Recital B by Investors pursuant hereto (the
“Closing”)
      will
      take place at the offices of the Manager not later than the tenth (10th)
      business day (the “Closing
      Date”)
      after
      the day on which all the conditions in Article III have been satisfied or waived
      and in accord with the terms and conditions of this Agreement.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    2.3 Closing
      Events.
      At the
      Closing, the Company shall issue and deliver to each Investor a certificate
      in
      definitive form, registered in the name of such Investor, representing the
      number of the Shares to be purchased at such Closing by such Investor against
      the delivery to the Company by such Investor of the full Purchase Price of
      the
      Shares, paid by wire transfer of funds to the Company.

     

    ARTICLE
      III

    CLOSING
      CONDITIONS

     

    3.1 Conditions
      to Manager’s Obligations.
      The
      obligations of the Manager (and each Investor) at the Closing are subject to
      satisfaction of each of following conditions precedent (any or all of which
      may
      be waived by each of the Investors):

     

    (a) Representations
      and Warranties.
      The
      representations and warranties contained in this Agreement will, except as
      contemplated by this Agreement, be true and correct in all material respects
      (except that representations and warranties that are qualified as to materiality
      or as to absence of Material Adverse Effect will be true and correct in all
      respects), at the Closing Date with the same effect as though they were made
      on
      that date (except that representations and warranties that relate expressly
      to
      specified dates or periods need only to have been true and correct with regard
      to the specified dates or periods) and the Company will have delivered to the
      Manager (on behalf of each Investor) a certificate dated as of the Closing
      Date
      and signed by the President, Chief Financial Officer or Executive Vice President
      of the Company to that effect.

     

    (b) Performance.
      The
      Company will have performed and fulfilled in all material respects all its
      obligations and covenants under this Agreement required to have been fulfilled
      prior to or at such Closing.

     

    (c) No
      Action.
      No
      provision of any applicable law or regulation and no judgment, injunction,
      order
      or decree shall prohibit the Closing or shall prohibit the consummation of
      the
      transactions contemplated by this Agreement or the Other Transaction Documents.
      Further, no action, suit or proceeding shall be pending or, to the Company’s
      knowledge, threatened before any Governmental Authority or before any arbitrator
      wherein an unfavorable judgment, decree, injunction, order or ruling would
      prohibit the performance of this Agreement or the Other Transaction Documents
      or
      the consummation of any of the transactions contemplated by this Agreement
      or by
      the Other Transaction Documents, would declare unlawful the transactions
      contemplated by this Agreement or the Other Transaction Documents, or would
      cause such transactions to be rescinded or materially and adversely affect
      the
      right of an Investor to own the Shares and no judgment, decree, injunction,
      order or ruling shall have been entered which has any of the foregoing
      effects.

     

    (d) Consents.
      All
      consents, approvals and waivers by third parties or any party that are required
      (i) for the consummation of the transactions contemplated by this Agreement
      or
      by the Other Transaction Documents, or (ii) in order to prevent or cure a breach
      or violation of, or a default under, or a termination or modification of, or
      any
      right of acceleration of any Liability under, any Company Significant Agreement
      and so that each such agreement remains in full force and effect following
      the
      Closing, shall have been duly obtained, without the imposition of any condition
      that has or could reasonably be expected to have a Material Adverse Effect
      on
      the Company, the Investors or the Manager as determined in good faith by the
      Manager.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (e) Government
      Approvals.
      All
      material governmental and regulatory notices, filings, applications,
      authorizations, certifications and approvals, and other Licenses that are
      required for (i) the sale and issuance of the Shares to the Investors, and
      (ii)
      the consummation of the other transactions contemplated by this Agreement and
      the Other Transaction Documents, shall have been duly made and obtained without
      the imposition of any condition that, as determined in good faith by the
      Manager, has or could reasonably be expected to have a Material Adverse Effect
      on the Company, the Investors or the Manager. 

     

    (f) Board
      Position.
      The
      Company shall deliver to the Manager a copy of resolutions duly adopted by
      the
      Company’s Board of Directors and certified by the Company Secretary stating
      that, effective immediately upon the Closing, the Company Board of Directors
      and
      the Bank Board of Directors will be reconstituted so one person designated
      by
      the Manager and reasonably acceptable to the Board of Directors and its
      Governance and Nominating Committee will be appointed to serve on (i) the
      Company’s Board of Directors and (ii) the Bank’s Board of Directors until the
      next annual meeting of shareholders. 

     

    (g) Material
      Adverse Effect on Company.
      Subsequent to the date of this Agreement, there shall have been no event,
      transaction, condition or change that has had or would reasonably be expected
      to
      have a Material Adverse Effect on the Company.

     

    (h) Material
      Adverse Effect on Bank.
      Except
      as allowed by Schedule 3.1(h), subsequent to the date of this Agreement, there
      shall have been no event, transaction, condition or change that has had or
      would
      reasonably be expected to have a Material Adverse Effect on the
      Bank.

     

    (i) Securities
      Exemption.
      The
      offer and sale of the Securities to the Investors pursuant to this Agreement
      shall be exempt from the registration requirements of the Securities Act, the
      qualification requirements of the California Corporate Securities Law of 1968,
      and the registration and/or qualification requirements of all other state
      securities laws applicable to the Investors. 

     

    (j) Preferred
      Stock Certificate of Determination.
      A
      Preferred Stock Certificate of Determination shall have been duly filed with
      the
      California Secretary and such certificate of determination shall continue to
      be
      in full force and effect as of the Closing.

     

    (k) Change
      in Control Provisions.
      The (i)
      Company Board of Directors shall have adopted resolutions excluding the
      transactions contemplated by this Agreement from the definition of a “change in
      control” for any applicable Company Significant Agreement including any
      employment agreement filed with the SEC pursuant to Item 601 of Regulation
      S-K,
      and (ii) each participant of that certain Supplemental Executive Retirement
      Plan
      of Bridge Bank, N.A. shall have agreed to adopt a revised SERP agreement,
      reasonably acceptable to the Manager, which will clarify that the transactions
      contemplated by this Agreement will not trigger any “change in control” vesting
      provisions and that such revised SERP agreement will supersede and replace
      the
      original agreement. 

     

    (l) Other
      Transaction Documents.
      The
      Other Transaction Documents, duly executed by the parties thereto (other than
      such Investor but including the other Investors) shall have been delivered
      to
      the Investors.

     

    (m) Payments
      of Fees and Expenses.
      The
      Company shall have paid to the Manager the fees and expenses as described in
      Section 10.9.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (n) TARP
      Application.
      (i) The
      Company and/or the Bank shall have submitted an application to receive TARP
      capital at the maximum amount contemplated by the TARP program, and (ii) such
      application shall have been approved by December 10, 2008, and (iii) the Company
      and the Bank shall have satisfied all corporate, regulatory and legal
      requirements necessary to consummate the issuance of equity under the TARP
      program. 

     

    3.2 Conditions
      to Company’s Obligations.
      The
      obligations of the Company at the Closing are subject to the following
      conditions (any or all of which may be waived by the Company):

     

    (a) Representations
      and Warranties.
      The
      representations and warranties of the Manager contained in this Agreement as
      supplemented by the Schedules (and, if the Closing occurs, as amended by the
      Company Updates) will, except as contemplated by this Agreement, be true and
      correct in all material respects (except that representations and warranties
      that are qualified as to materiality or as to absence of Material Adverse Effect
      will be true and correct in all respects) at the Closing Date with the same
      effect as though made on that date (except that representations and warranties
      that relate expressly to specified dates or periods need only to have been
      true
      and correct with regard to the specified dates or periods), and the Manager
      will
      have delivered to the Company a certificate dated as of the Closing Date and
      signed by a duly authorized person to that effect.

     

    (b) Payment
      of Purchase Price.
      The
      Manager shall cause each Investor to have delivered to the Company the Purchase
      Price specified for such Investor on Exhibit
      A
      hereto
      in accordance with the provisions of Article II hereof. 

     

    (c) Performance.
      The
      Manager and Investors shall have performed or fulfilled all agreements,
      obligations and conditions contained herein and required to be performed or
      fulfilled by them as of the Closing.

     

    (d) Government
      Approvals.
      All
      governmental and regulatory notices, filings, applications, authorizations,
      certifications and approvals shall have been duly made and obtained without
      imposition of a condition that has or could reasonably be expected to have
      a
      Material Adverse Effect on the Company as determined in good faith by the
      Company.

     

    (e) No
      Actions.
      No
      order will have been entered by any court, by any bank regulatory authority
      or
      by any other governmental authority and be in force that invalidates this
      Agreement or the Other Transaction Documents or restrains the Parties or the
      Investors from completing the transactions that are the subject of this
      Agreement and the Other Transaction Documents and no action will be pending
      or
      threatened against the Company relating to the transactions that are the subject
      of this Agreement that presents a reasonable likelihood of resulting in an
      award
      of damages against the Company or any subsidiary that would be material to
      the
      Company and its subsidiaries taken as a whole.

     

    ARTICLE
      IV

    REPRESENTATIONS
      AND WARRANTIES OF THE COMPANY

     

    The
      Company represents and warrants to the Manager and the Investors that as of
      the
      date of this Agreement, and as of the date of the Closing, the statements
      contained in this Article IV are true and correct, except as set forth in the
      Schedules or as otherwise Previously Disclosed by the Company to the Manager.
      Whether or not specifically required by the specific terms of this Article
      IV or
      otherwise, the Company may modify the representations and warranties contained
      in this Agreement by disclosing relevant facts in the Schedules; provided,
      however,
      that
      for any such disclosure to be effective, it must indicate the specific section
      of this Agreement to which it relates (provided that any information set forth
      in any one Schedule shall be deemed to apply to each other applicable section
      thereof if its relevance to the information called for in such section is
      reasonably apparent). The disclosure of any information in the Schedules shall
      not be deemed to constitute an acknowledgment that such information is required
      to be disclosed in connection with the representations and warranties made
      by
      the Company in this Agreement or that it is material, nor shall such information
      be deemed to establish a standard of materiality. 

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    No
      later
      than three (3) Business Days prior to the Closing Date, the Company shall
      supplement or amend the Schedules identified in this Article IV in writing
      with
      respect to any matter arising after the date of this Agreement which, if
      existing or occurring at the date of this Agreement, would have been required
      to
      be set forth or described in such Schedules or which is necessary to correct
      any
      information in such Schedules or in the representations and warranties of the
      Company herein which have been rendered inaccurate by such matter (the
“Company
      Update(s)”);
      provided,
      however,
      that
      with respect to any matters that constitute a Material Adverse Effect, the
      required Company Update shall be given promptly after the Company has Knowledge
      of the matter rather than three (3) Business Days prior to the Closing. In
      any
      event, if any Company Update is made and discloses matters that constitute
      a
      Material Adverse Effect that was not Previously Disclosed and the Manager has
      not, in its reasonable discretion, had an adequate opportunity to review and
      investigate the matter disclosed as of the scheduled Closing Date, or the
      Parties have not come to a resolution with respect thereto, notwithstanding
      any
      other provision of this Agreement to the contrary, the Manager may postpone
      the
      Closing for up to ten (10) Business Days. In the event the Closing occurs,
      the
      relevant representations and warranties of the Company to which the Company
      Updates relate shall be amended to the extent set forth in the Company Updates.
      In the event that an individual Company Update or more than one Company Update
      in the aggregate constitute(s) a Material Adverse Effect, the Manager may,
      at
      its sole election, notify the Company in writing that it is terminating the
      Agreement under Section 7.1(d) provided that the Manager delivers such notice
      not later than ten (10) Business Days after receipt of the last of the
      applicable Company Update(s). Upon timely delivery of the Manager’s proper
      notice of its election to terminate the Agreement to the Company pursuant to
      the
      immediately preceding sentence, all duties and obligations of the Company,
      Manager or Investors under this Agreement shall terminate and be null and void
      ab initio.

     

    Subject
      to the preceding two paragraphs, as of the date of this Agreement and the
      Closing (except to the extent any of the following representations and
      warranties expressly relates to a specific date and/or time, in which case
      the
      representation and warranty shall relate only to that specific date and/or
      time), the Company represents and warrants to Manager and the Investors as
      follows:

     

    4.1 Organization
      of the Company.
      The
      Company is a corporation duly organized, validly existing under, and by virtue
      of, the laws of the State of California, and is in good standing under such
      laws. The Bank is a corporation duly organized, validly existing under, and
      by
      virtue of, the laws of the United States of America. Each of the Company and
      the
      Bank has all requisite corporate power and authority to own and operate its
      properties and assets, and to carry on its business as presently conducted
      and
      as proposed to be conducted in their business plans (the “Business
      Plans”).
      Each
      of the Company and the Bank is duly qualified and authorized to transact
      business and is in good standing as a foreign corporation in each jurisdiction
      in which the failure so to qualify would have a Material Adverse Effect. True,
      correct and complete copies of the articles of incorporation and bylaws (or
      equivalent organizational documents), the minute books containing the records
      of
      meetings of the shareholders and board of directors since January 2008, and
      the
      stock certificate records of the Company and the Bank since September 11, 2008
      have been furnished or made available to the Manager. Neither the Company nor
      the Bank is in default under or in violation of any provision of its articles
      of
      incorporation or bylaws or the general corporate law of the jurisdiction of
      its
      incorporation.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    4.2 Subsidiaries.
      Schedule 4.2 sets forth a complete and correct list of all of Company’s
      subsidiaries as of the date hereof (individually a “Company
      Subsidiary”
and
      collectively the “Company
      Subsidiaries”),
      all
      shares of the outstanding capital stock of each of which, except as set forth
      in
      Schedule 4.2, are owned directly or indirectly by Company. No equity security
      of
      any Company Subsidiary is or may be required to be issued by reason of any
      option, warrant, scrip, preemptive right, right to subscribe to, call or
      commitment of any character whatsoever relating to, or security or right
      convertible into, shares of any capital stock of such subsidiary, and there
      are
      no contracts, commitments, understandings or arrangements by which any Company
      Subsidiary is bound to issue additional shares of its capital stock. All of
      such
      shares so owned by Company are fully paid and nonassessable and are owned by
      it
      free and clear of any lien, claim, charge, option, encumbrance or agreement
      with
      respect thereto. Except for the Bank (which is described in Section 4.5), each
      Company Subsidiary is a corporation duly incorporated, validly existing, duly
      qualified to do business and in good standing under the laws of its jurisdiction
      of incorporation, and has corporate power and authority to own or lease its
      properties and assets and to carry on its business as it is now being conducted
      except where the failure to be so qualified would not have a Material Adverse
      Effect. The Company is not a participant in any joint venture, partnership
      or
      similar arrangement. As used herein, the term “subsidiary”
shall
      mean any corporation or other entity more than 50 percent of the stock or other
      ownership interest of which (measured by virtue of voting rights) in the
      aggregate is now or hereafter owned by the Company. The Company’s direct or
      indirect ownership of any such shares or interests is not in violation of any
      prohibitions on ownership under any Applicable Law. 

     

    4.3 Corporate
      Power; Due Authorization.
      Subject
      to the receipt of any required governmental approvals and the filing of the
      Preferred Stock Certificate of Determination with the California Secretary,
      the
      Company has all requisite legal and corporate power and authority to execute
      and
      deliver this Agreement and the Other Transaction Documents to which it is a
      party, to sell and issue the Shares hereunder, and to carry out and thereby
      perform its obligations under the terms of this Agreement, the Other Transaction
      Documents and the transactions contemplated hereby and thereby. The board of
      directors of the Company has duly approved this Agreement and all Other
      Transaction Documents to which the Company is a party, and has duly authorized
      the execution and delivery of this Agreement and all Other Transaction Documents
      to which the Company is a party and the consummation of the transactions
      contemplated hereby and thereby in accordance with their terms. No other
      corporate proceedings on the part of the Company necessary to approve and
      authorize the execution and delivery of this Agreement and the Other Transaction
      Documents or the consummation of the transactions contemplated hereby and
      thereby in accordance with their terms, subject, in the case of the
      authorization and issuance of the shares of Series B-1 Preferred Stock and
      Common Stock to be issued on conversion of the Preferred Stock to be purchased
      or acquired under this Agreement, the receipt of the approval by the Company’s
      shareholders of the Shareholder Proposals. The only vote of the shareholders
      of
      the Company required to approve the conversion of the Preferred Stock into
      either Series B-1 Preferred Stock or Common Stock for purposes of Rule 4350
      of
      the Nasdaq Marketplace Rules, is a majority of votes cast on such proposal,
      provided that the total vote cast on the proposal represents 50% in interest
      of
      all securities entitled to vote on the proposal. To the Company’s Knowledge, all
      shares of Common Stock outstanding on the record date for a meeting at which
      a
      vote is taken with respect to the Shareholder Proposals shall be eligible to
      vote on such proposals. This Agreement, along with the Other Transaction
      Documents, when executed and delivered by the Company, will constitute valid
      and
      legally binding obligations of the Company, enforceable in accordance with
      their
      respective terms, subject to laws of general application relating to bankruptcy,
      insolvency and the relief of debtors and rules of law governing specific
      performance, injunctive relief or other equitable remedies.

     

    
      
        
        

      

      
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    4.4 Capitalization.
      The
      capitalization of the Company consists of the following:

     

    (a) Common
      Stock.
      A total
      of (i) 30,000,000 authorized shares of Common Stock, no par value, of which
      6,598,289 shares are issued and outstanding, plus any shares issued to the
      Investors or pursuant to Permitted Equity Rights subsequent to the date hereof
      and prior to any Closing, and (ii) 10,000,000 authorized shares of Preferred
      Stock, no par value, of which no shares are issued and outstanding. All such
      issued and outstanding shares have been or will be duly authorized and validly
      issued, fully paid and non-assessable, have been issued in compliance with
      the
      registration and qualification requirements of federal and state securities
      law
      or applicable exemptions therefrom, and are not subject to, nor were they issued
      in violation of, any preemptive rights or any rights of first refusal or similar
      rights. The Company has reserved 1,784,264 shares of Common Stock for issuance
      to employees pursuant to the Amended and Restated 2001 Stock Option Plan and
      the
      2006 Equity Incentive Plan which are the only stock option, stock purchase
      or
      similar incentive or benefit plan currently in effect with respect to the
      Company.

     

    (b) Options,
      Warrants, Reserved Shares.
      Except
      for the 1,784,264 shares of Common Stock reserved for issuance under the
      Company’s Amended and Restated 2001 Stock Option Plan and the 2006 Equity
      Incentive Plan under which 1,357,280 options have been issued as of the date
      hereof, (“Permitted
      Equity Rights”),
      there
      are no outstanding options, warrants, rights (including conversion or preemptive
      rights and other than rights issues under the Rights Agreement) or agreements
      for the purchase or acquisition from the Company of any shares of its capital
      stock or any securities convertible into or ultimately exchangeable or
      exercisable for any shares of the Company’s capital stock. No shares of the
      Company’s outstanding capital stock, or stock issuable upon exercise or exchange
      of any outstanding options, warrants or rights, or other stock issuable by
      the
      Company, are subject to any preemptive rights, rights of first refusal or other
      rights to purchase such stock (whether in favor or the Company or any other
      person), pursuant to any agreement or commitment of the Company. The Company
      is
      not a party or otherwise subject to any agreement or understanding, and there
      is
      no agreement or understanding between any persons or entities, which affects
      or
      relates to the voting or giving of written consents either by a director of
      the
      Company or with respect to acquisition, disposition, or voting of any capital
      stock of the Company.

     

    (c) Fully-Diluted
      Capitalization.
      Immediately after the Closing, the fully-diluted capitalization of the Company
      will be as set forth in Exhibit B
      hereto.

     

    4.5 Organization
      of the Bank.
      The
      Bank is a national banking association duly organized, validly existing and
      in
      good standing under the laws of the United States of America and has full power
      and all licenses, franchises, permits and other authorizations necessary to
      own
      or lease all of its properties and assets and to carry on its business as now
      conducted. The deposit accounts of the Bank are insured by the Bank Insurance
      Fund of the FDIC to the fullest extent permitted under Applicable Law. Neither
      the scope of the Bank’s business nor the location of its properties requires
      that the Bank be licensed or qualified in any jurisdiction other than the State
      of California. Complete, current and correct copies of the articles of
      association and bylaws of the Bank have been delivered or made available to
      the
      Manager and no changes therein have been made since the date of delivery
      thereof.

     

    4.6 Subsidiaries
      of the Bank.
      The
      Bank does not directly or indirectly own shares of any corporation or any
      interest in any entity, except for shares acquired in the regular course of
      securing or collecting a debt previously contracted in good faith in the
      ordinary course of conducting a commercial banking business. The Bank’s direct
      or indirect ownership of any such shares or interests is not in violation of
      any
      prohibitions on ownership under any Applicable Law.

     

    
      
        
        

      

      
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    4.7 Capitalization
      of the Bank.

     

    (a) The
      authorized capital stock of the Bank consists of 10,000,000 shares of common
      stock, no par value (“Bank
      Stock”),
      1,000
      shares of which are issued, outstanding and held of record and beneficially
      owned by the Company and 10,000,000 authorized shares of preferred stock, no
      par
      value, of which no shares are outstanding. All of the issued and outstanding
      shares of the capital stock of the Bank are duly and validly issued and
      outstanding, are fully paid and non-assessable and are owned of record and
      beneficially by the Company, free and clear of all Liens, pledges, encumbrances
      or charges of any kind or nature.

     

    (b) There
      are
      no outstanding or authorized (nor will there be at the Closing Dates): (i)
      shares of capital stock or equity securities of the Bank, except as described
      in
      subsection (a) above; (ii) subscriptions, options, warrants, convertible
      securities, calls, rights, commitments or any other agreements of any character
      relating to the issued or unissued capital stock or other securities of the
      Bank
      obligating the Bank to issue, deliver or sell, or cause to be issued, delivered
      or sold, additional shares of capital stock or other securities of the Bank
      or
      obligating the Bank to grant, extend or enter into any subscription, option,
      warrant, right, convertible security or other similar agreement or commitment;
      (iii) contractual obligations of the Bank to repurchase, redeem or otherwise
      acquire any outstanding shares of the Bank Stock; (iv) voting trusts or other
      agreements with respect to the voting of the Bank Stock to which the Bank is
      a
      party or, to the Company’s knowledge, to which any other Person is a party; or
      (v) bonds, debentures, notes or other indebtedness having the right to vote
      (or
      convertible into or exercisable for securities having the right to vote) on
      any
      matters on which the Bank’s shareholders may vote. All outstanding shares of the
      Bank’s capital stock were issued in compliance with Applicable Law.

     

    4.8 Agreement
      Not in Contravention; Consents.
      

     

    (a) Except
      as
      set forth in Schedule 4.8, the execution, delivery and performance of this
      Agreement and the Other Transaction Documents and the consummation of the
      transactions contemplated hereby and thereby by the Company do not and shall
      not
      (A) (i) conflict with or result in any breach of any of the terms,
      conditions or provisions of, (ii) constitute a default under,
      (iii) result in a violation of, (iv) give any third party the right to
      modify, terminate or accelerate, or cause the modification, termination or
      acceleration of, any right, benefit or Liability under, (v) result in the
      creation of any Lien upon the Stock, or the properties or assets of the Company
      or the Bank under, or (vi) require any authorization, consent, approval,
      exemption or other action by or notice or declaration to, or filing with, any
      Governmental Authority or any other Person, under the provisions of (B), (i)
      subject in the case of the authorization of the issuance of the shares of Common
      Stock to be issued on conversion of the Series B Convertible Preferred Stock
      to
      be purchased under this Agreement, to the receipt of the approval of the
      Company’s shareholders of the Shareholder Proposals, any provision of the
      Company articles of incorporation or bylaws or the Bank articles of association
      or bylaws, (ii) any Company Significant Agreement, each of which has been filed
      as an exhibit to the Company’s SEC filings pursuant to Item 601 of Regulation
      S-K, or (iii) any material License or (iv) Applicable Law, or any judgment,
      order or decree or other restriction of any Governmental Authority by which
      the
      Company or the Bank is bound or subject or by which any of the properties or
      assets of the Company or the Bank are bound or subject, in each case (except
      subsection (B)(i) above) where such conflict, breach, default, violation,
      modification, termination, or acceleration, or failure to obtain any authority,
      consent, approval, exemption or other action or to give any notice or make
      any
      policy would have a Material Adverse Effect on the Company and/or the
      Bank.

     

    
      
        
        

      

      
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    (b) Except
      as
      set forth in Schedule 4.8, no approval, consent or other action by, notice
      to,
      or registration or filing with, any Person is necessary for the Company to
      enter
      into this Agreement or for the Company to perform its obligations hereunder,
      subject, in each case where the failure to obtain or complete any such approval,
      consent or other action would have a Material Adverse Effect on the Company
      and/or the Bank.

     

    4.9 Valid
      Issuance of Stock.
      The
      shares of Series B Preferred Stock and Series B-1 Preferred Stock (upon filing
      of the related Preferred Stock Certificate of Determination with the California
      Secretary) have been duly authorized by all necessary corporate action. When
      issued and sold against receipt of the consideration therefore as provided
      in
      this Agreement and issued in accordance with the Preferred Stock Certificate
      of
      Determination, such shares of Series B Preferred Stock will be duly authorized
      and validly issued, fully paid and non-assessable, will not subject the holders
      thereof to personal liability, and, subject to accuracy of the Manager’s
      representations and warranties under Article V, will be issued in compliance
      with applicable federal and state securities laws. The shares of Series B-1
      Preferred Stock issuable upon conversion of the Series B Preferred Stock, upon
      filing of the related Preferred Stock Certificate of Determination with the
      California Secretary and receipt of approval or disapproval by the Company’s
      shareholders of the Shareholder Proposals, have been duly authorized by all
      necessary corporate action and when so issued will be validly issued, fully
      paid
      and non-assessable, will not subject the holders thereof to personal liability,
      and, subject to accuracy of the Manager’s representations and warranties under
      Article V, will be issued in compliance with applicable federal and state
      securities laws when issued in accordance with the Preferred Stock Certificate
      of Determination. The shares of Common Stock issuable upon conversion of the
      Preferred Stock, including any shares of Common Stock payable as dividends
      accrued on the Preferred Stock, will, upon receipt of approval or disapproval
      by
      the Company’s shareholders of the Shareholder Proposals and filing of the
      related Preferred Stock Certificate of Determination with the California
      Secretary, have been duly authorized by all necessary corporate action and
      when
      so issued upon such conversion will be validly issued, fully paid and
      non-assessable, will not subject the holders thereof to personal liability,
      and,
      subject to accuracy of the Manager’s representations and warranties under
      Article V, will be issued in compliance with applicable federal and state
      securities laws when issued in accordance with the Preferred Stock Certificate
      of Determination. The Preferred Stock and the Series B-1 Preferred Stock and
      Common Stock issuable upon conversion of the Preferred Stock including any
      Common Stock dividends will be free and clear of any Liens or encumbrances,
      other than any Liens or encumbrances created by or imposed upon the holders
      through no action of the Company; provided that the Preferred Stock and the
      shares of Series B-1 Preferred Stock and Common Stock issuable upon conversion
      of the Preferred Stock including any Common Stock dividends may be subject
      to
      restrictions on transfer under state and/or federal securities laws or the
      Other
      Transaction Documents. Except as set forth in this Agreement, the Other
      Transaction Documents or arising under the Rights Agreement, the Securities
      are
      not subject to any preemptive rights, rights of first refusal or restrictions
      on
      transfer.

     

    4.10 Offering.
      

     

    (a) Subject
      in part to, and assuming the accuracy of, the representations made by the
      Manager in Article V hereof, the offer and sale of the Shares to the Investors
      in accordance with this Agreement will be exempt from the registration and
      prospectus delivery requirements of the Securities Act, and the securities
      registration and qualification requirements of the currently effective
      provisions of the securities laws of the States in which the Investors are
      resident based upon their addresses set forth on the Schedule of Investors
      attached hereto as Exhibit
      A.

     

    (b) The
      outstanding shares of the capital stock of the Company and all outstanding
      options, warrants, convertible notes and other securities of the Company, if
      any, have been issued in full compliance with the registration and prospectus
      delivery requirements of the Securities Act, or in compliance with applicable
      exemptions therefrom, and with the registration and qualification requirements
      of all applicable securities laws of states of the United States, except where
      any such failure would not have a Material Adverse Effect on the
      Company.

     

    
      
        
        

      

      
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    4.11 Absence
      of Material Changes.
      Since
      December 31, 2007, and except as disclosed in subsequent Company Report filed
      with the SEC prior to the date of this Agreement if there has not
      been:

     

    (a) any
      occurrence, development or event of any nature that has had or may reasonably
      be
      expected to have, individually or in the aggregate, a Material Adverse Effect
      on
      the Company or the Bank;

     

    (b) any
      change in the accounting principles or practices of the Company or the Bank,
      other than such changes as required by GAAP or applicable regulatory
      requirements;

     

    (c) any
      material change in the credit policies or procedures of the Bank;

     

    (d) any
      material damage, destruction or loss, whether or not covered by insurance,
      affecting the business, properties, prospects, or financial condition of the
      Company or the Bank;

     

    (e) any
      waiver or compromise by the Company or the Bank of a valuable right or of a
      debt
      owed to it other than in the ordinary course of business ;

     

    (f) any
      satisfaction or discharge of any Lien, claim, or encumbrance or payment of
      any
      obligation by the Company or the Bank affecting the business, properties,
      prospects, or financial condition of the Company or the Bank, other than in
      the
      ordinary course of business;

     

    (g) any
      entering into or change in the terms of any Company Significant Agreement by
      which the Company or the Bank or any of their assets or properties is bound
      or
      to which the Company or any of such assets or properties is subject other than
      in the ordinary course of business;

     

    (h) any
      change in any compensation arrangement or agreement with any employee, officer,
      director, consultant, agent or shareholder of the Company or the Bank other
      than
      customary salary increase for staff not exceeding 10% of base
      compensation;

     

    (i) any
      sale,
      assignment, license or transfer of any material Intellectual Property Rights
      of
      the Company or the Bank;

     

    (j) any
      sale
      made or mortgage, pledge, transfer of a security interest in, or Lien created
      by
      the Company or the Bank with respect to any of its material properties or
      assets, except for Permitted Liens or in connection with Federal Home Loan
      Bank
      borrowings or in the ordinary course of business;

     

    (k) any
      loans
      or guarantees made by the Company or the Subsidiaries to or for the benefit
      of
      its employees, consultants, agents, shareholders, officers, or directors, or
      any
      members of their immediate families, other than customary travel advances and
      other advances made in the ordinary course of their business;

     

    (l) any
      declaration, setting aside, or payment of any dividend or other distribution
      of
      the Company’s or the Bank’s assets in respect of any of the Company’s or the
      Bank’s capital stock, or any direct or indirect redemption, purchase, or other
      acquisition of any of such stock by the Company or the Bank other than in
      connection with the Company’s equity incentive or stock bonus plans;
      and

     

    
      
        
        

      

      
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    (m) any
      agreement or commitment by the Company or the Subsidiaries to do any of the
      things described in this Section 4.11.

     

    4.12 Financial
      Statements.

     

    (a) Each
      of
      the consolidated balance sheets of the Company and the Company Subsidiaries
      and
      the related consolidated statements of income, shareholders’ equity and cash
      flows, together with the notes thereto (collectively, the “Company
      Financial Statements”),
      included in any Company Report filed with the SEC and as amended prior to the
      date of this Agreement, (1) have been prepared from, and are in accordance
      with,
      the books and records of the Company and the Company Subsidiaries, (2) complied
      as to form, as of their respective date of filing with the SEC, in all material
      respects with applicable accounting requirements and with the published rules
      and regulations of the SEC with respect thereto, (3) have been prepared in
      accordance with GAAP applied on a consistent basis during the periods involved
      (except as may be indicated in the notes and schedules thereto) and (4) present
      fairly in all material respects the consolidated financial position of the
      Company and the Company Subsidiaries as of the dates set forth therein and
      the
      consolidated results of operations, changes in shareholders’ equity and cash
      flows of the Company and the Company Subsidiaries on the date and for the
      periods stated therein, subject, in the case of any unaudited financial
      statements, to normal audit adjustments and the provisions of Regulation
      S-X.

     

    (b) The
      Company has delivered, or caused to be delivered, to the Manager true, correct
      and complete copies of all management or other letters delivered to the Company
      or the Bank by its independent auditing firm relating to the results of
      operations, financial statements or the internal controls of the Company or
      the
      Bank during any period from and after December 31, 2006.

     

    (c) There
      has
      been no disagreement between the Company and its independent auditing firm(s)
      since December 31, 2006 concerning any aspect of the manner in which the Company
      or the Bank maintains its books and records or the manner in which it has
      reported upon its financial condition and results of operations at any time
      during such period.

     

    4.13 Undisclosed
      Liabilities.
      Neither
      the Company nor the Bank has any liabilities of any nature, whether accrued,
      absolute, contingent or otherwise, and whether due or to become due, probable
      of
      assertion or not, except liabilities that (i) were incurred in the ordinary
      course of business or (ii) properly reflected or reserved against in the
      Company’s financial statements to the extent required to be so reflected or
      reserved against in accordance with GAAP or set forth in Schedule 4.13
      hereto.

     

    4.14 Litigation;
      Governmental Proceedings; Absence of Basis for Adverse Action.

     

    (a) Other
      than regular periodic examination by the Federal Reserve Board, FDIC and the
      Comptroller, there is not now, nor since December 31, 2007 has there been,
      any
      action, suit, claim, arbitration or administrative or other proceeding or,
      to
      the Knowledge of the Company, investigation by any Person, including without
      limitation any Governmental Authority, pending or, to the knowledge of the
      Company, threatened against, or directly and adversely affecting, (i) the
      Company or the Bank, or any of their respective properties or business or (ii)
      any current or former officer, director, employee or agent of the Company or
      the
      Bank (in connection with such officer’s, director’s, employee’s or agent’s
      activities on behalf of the Company or the Bank or that otherwise relate,
      directly or indirectly, to the Company or the Bank or any of their respective
      properties, securities or activities), nor, to the Knowledge of the Company,
      is
      there any basis for any of the foregoing.

     

    
      
        
        

      

      
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    (b) There
      is
      not now, nor during the last three years has there been, any action, suit,
      claim, arbitration or administrative or other proceeding or investigation by
      or
      on behalf of the Company or the Bank or any current or former officer, director,
      employee or agent of the Company or the Bank that relates, directly or
      indirectly, to the Company or the Bank or any of their respective properties
      or
      business, including the types of actions listed in Section 4.14(a) hereof,
      nor
      is there any basis for any of the foregoing.

     

    (c) There
      is
      not now, nor during the last three years has there been, any outstanding
      judgment, order, award, writ, injunction, decree, rule or regulation of any
      Governmental Authority applicable to the Company or the Bank or any of their
      respective properties or business.

     

    4.15 Compliance
      with Applicable Laws; Operating Authorities.

     

    (a) Neither
      the Company nor the Bank is in violation of, and has not violated or been
      charged with a violation of, any Applicable Law which would have a Material
      Adverse Effect on the Company and/or the Bank. Neither the Company’s nor the
      Bank’s business is being conducted in conflict with or in violation of, and has
      not been conducted in conflict with or in violation of, any Applicable Law
      which
      would have a Material Adverse Effect on the Company and/or the Bank. Except
      where the failure to do so would have a Material Adverse Effect on the Company
      and/or the Bank, the business of the Bank has been and is now being conducted
      in
      compliance with all Applicable Laws relating to banks, the business of banking
      or the insurance of bank deposits (including, without limitation, the Bank
      Secrecy Act of 1970, as amended, and regulations thereunder, federal and state
      currency transaction reporting requirements, truth in lending and all other
      applicable disclosure requirements for consumer loans, fair credit reporting,
      usury, equal credit opportunity, Community Reinvestment Act and other rules
      and
      regulations applicable to loans and lending practices).

     

    (b) To
      the
      Knowledge of the Company, neither the Bank nor any of its directors, officers,
      employees or agents, is subject to any civil or criminal liability for, or
      under
      investigation with respect to, violations of any Applicable Laws, including,
      without limitation, laws regulating extensions of credit or deposit practices,
      breach of fiduciary duty, misappropriation of funds or any other
      matter.

     

    (c) The
      Company and the Bank each has filed all documents and reports required to be
      filed by either of them with the FDIC, the Comptroller, the Federal Reserve
      Board, the Securities Exchange Commission or
      any
      other Governmental Authority having jurisdiction over material elements of
      their
      respective businesses, assets or properties
      and all
      such reports conform in all material respects with the requirements promulgated
      by such Governmental Authorities. As of their respective dates, all such filings
      were in compliance with the requirements of their respective forms and were
      true
      and complete in all material respects and did not contain any materially untrue
      statement of a fact or omit to state any material fact required to be stated
      therein or necessary to make the statements therein, in light of the
      circumstances under which they were made, not misleading. To
      the
      Knowledge of the Company, all compliance or corrective action relating to the
      Company and the Bank required by Governmental Authorities having jurisdiction
      over the Company or the Bank has been taken. Except
      as
      set forth on Schedule 4.15(c), neither the Company nor the Bank has received
      any
      notification, formally or informally, from any Governmental Authority (i)
      asserting that either of the Company or the Bank is not in compliance with
      any
      of the statutes, regulations or ordinances which such Governmental Authority
      enforces, or (ii) threatening to revoke any license, franchise, permit or
      governmental authorization of the Company or the Bank.

     

    
      
        
        

      

      
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    (d) Except
      as
      set forth on Schedule 4.15(d), neither the Company nor the Bank is a party
      to,
      nor is the Company or the Bank, or any of their respective assets or businesses
      subject to or the subject of, any written agreement, stipulation, conditional
      approval, memorandum of understanding, notice of determination, judgment,
      supervisory agreement, order, written directive, consent decree or other
      agreement with any Governmental Authority.

     

    (e) The
      Company and the Bank each hold all material registrations, licenses, permits
      and
      franchises as are required to conduct their respective businesses as now
      conducted (including, without limitation, any insurance or securities
      activities), and all such licenses, permits and franchises are valid and in
      full
      force and effect. No suspension of any of the foregoing operating rights or
      cancellation thereof has been initiated or threatened, and all filings,
      applications and registrations with respect thereto are current.

     

    4.16 No
      Employment Controversies.
      Except
      as set forth in Schedule 4.16, (a) there are no controversies or legal or
      administrative proceedings pending, threatened or, to the Knowledge of the
      Company, imminent against the Bank with respect to any current or former
      employees; (b) to the Knowledge of the Company, there are no efforts
      presently being made by any labor union seeking to organize any of the Bank’s
      employees; (c) the Bank has complied with all Applicable Laws relating to
      the employment of labor, including without limitation any provisions thereof
      relating to wages, hours, terms and conditions of employment, collective
      bargaining and the payment of social security and similar taxes and any laws
      respecting employment discrimination, disability discrimination, relating to
      leaves of absence, and occupational safety and health requirements; (d) the
      Bank is not liable for any arrears in the payment of wages, taxes, or penalties
      for failure to comply with any of the foregoing; (e) the Bank has not been
      engaged in any unfair labor practice, and there is no complaint for unfair
      labor
      practice against the Bank pending or threatened before the National Labor
      Relations Board or any comparable state, local or foreign agency; (f) there
      is no labor strike, dispute, slowdown or stoppage actually pending or threatened
      against or directly affecting the Bank; (g) no grievance or any arbitration
      proceeding arising out of or under collective bargaining agreements is pending
      and no claims therefor exist; (h) the Bank has not experienced any work
      stoppage or other labor difficulty; (i) there has been no demand, made or
      threatened, for recognition by any labor union and there has been no petition
      filed or threatened to be filed for an election respecting such recognition
      of a
      labor union; (j) the Bank is not delinquent in payments to any of its
      employees for any wages, salaries, commissions, bonuses or other direct
      compensation for any services performed by them to the date hereof or amounts
      required to be reimbursed to such employees that would be expected to have
      a
      Material Adverse Effect on the Bank or the Company; (k) the Bank is not
      delinquent in payment of any amounts required to be reimbursed to any of its
      employees that would be expected to have a Material Adverse Effect on the Bank
      or the Company; (l)  upon termination of the employment of any executive
      officer, neither the Company nor the Bank will by reason of anything done prior
      to the Closing be liable to any of said employees for so-called “severance pay”
or any other payments except as set forth in the Company Significant Agreements;
      and (l) there are no administrative proceedings relating to discrimination
      (including, without limitation, sex, age, race, national origin, religion,
      or
      handicap, disability, or veteran status) pending or threatened before any
      governmental or regulatory agency or authority).

     

    4.17 Tax
      Matters.
      

     

    (a) Definitions.
      For
      purposes of this Agreement, the following definitions shall apply:

     

    
      
        
        

      

      
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    (i) The
      term
“Group”
shall
      mean, individually and collectively, (w) the Company, (x) the Bank; (y) the
      affiliated group as defined in Section 1504(a) of the Code (“Affiliated
      Group”)
      of
      which the Bank is or has been a member at any time; and (z) any individual,
      trust, corporation, partnership, limited liability company or any other entity
      as to which the Company or the Bank is liable for Taxes incurred by such
      individual or entity either as a transferee, or pursuant to Treasury Regulations
      Section 1.1502-6, or pursuant to any other provision of federal, territorial,
      state, local or foreign law or regulations, including without limitation as
      part
      of a combined or unitary group. 

     

    (ii) The
      term
“Taxes”
shall
      mean all taxes, however denominated, including, without limitation, any
      interest, penalties or other additions that may become payable in respect
      thereof, imposed by any Governmental Authority, which taxes shall include,
      without limiting the generality of the foregoing, all income or profits taxes
      (including, without limitation, federal income taxes and state income taxes),
      alternative or add-on minimum taxes, estimated taxes, payroll and employee
      withholding taxes, back-up withholding and other withholding taxes, unemployment
      insurance, social security taxes, sales and use taxes, value added taxes, ad
      valorem taxes, excise taxes, franchise taxes, gross receipts taxes, business
      license taxes, occupation taxes, real and personal property taxes, stamp taxes,
      environmental taxes, transfer taxes, workers’ compensation and Pension Benefit
      Guaranty Corporation premiums, self dealing or prohibited transactions taxes,
      customs, duties, capital stock taxes, and other obligations of the same or
      of a
      similar nature to any of the foregoing, which the Group is required to pay,
      withhold or collect, whether disputed or not.

     

    (iii) The
      term
“Returns”
shall
      mean all reports, estimates, declarations of estimated tax, claims for refund,
      information statements and returns required to be prepared or filed in
      connection with, any Taxes, employee agreement or Plan, including any schedule
      or attachment thereto, and including any amendment thereof.

     

    (b) Returns
      Filed and Taxes Paid.
      All
      Returns required to be filed by or on behalf of any members of the Group prior
      to the Closing Date have been, or will be, duly filed on a timely basis, subject
      to any applicable extensions. Such Returns are true, correct and complete.
      All
      Taxes owed by any members of the Group (whether or not shown on any Return)
      have
      been paid in full on a timely basis, and no other Taxes are owing or payable
      by
      the Group with respect to items or periods covered by such Returns or with
      respect to any taxable period ending on or before the date of this
      representation and warranty for which a Return was due prior to such date.
      No
      claim has ever been made by any Governmental Authority for any jurisdiction
      in
      which any member of the Group does not file Returns that it is or may be subject
      to taxation by that jurisdiction. No security interests, Liens, encumbrances,
      attachments or similar interests exist on or with respect to any of the assets
      of the Group that arose in connection with any failure or alleged failure to
      pay
      any Taxes. Each member of the Group has withheld and paid all Taxes required
      to
      have been withheld and paid in connection with amounts paid or owing to any
      and
      all officers, directors, employees and agents (including, without limitation,
      any independent contractor, foreign person or other third Person) in compliance
      with all tax withholding provisions of applicable federal, state, local and
      foreign law (including, without limitation, income, social security, employment
      tax withholding, and withholding under Sections 1441 through 1446 of the Code).
      The Bank has timely complied with all requirements under Applicable Laws
      relating to information, reporting and withholding and other similar matters
      for
      customer and other accounts (including back-up withholding and furnishing of
      Forms 1099 and all similar reports).

     

    (c) Tax
      Reserves.
      The
      amount of the Group’s liability for unpaid Taxes for all periods ending on or
      before the last day of the month before the Closing Dates (including accruals
      for any exposure item) shall not, in the aggregate, exceed the amount of the
      liability accruals for Taxes, as such accruals are reflected on the Group’s
      balance sheet made available to the Manager in advance of the Closing Date.
      All
      such accruals are, or will be, recorded in accordance with GAAP.

     

    
      
        
        

      

      
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    (d) Returns
      Furnished.
      The
      Company has made and caused the Bank and/or any other member of the Group to
      make available to the Manager true, correct and complete copies of all federal
      and state income tax Returns for all periods that are open for federal and
      state
      tax purposes and all other Returns, including, without limitation, income tax
      audit reports, statements of income or gross receipts tax, franchise tax, sales
      tax and transfer tax, deficiencies, and closing or other agreements relating
      to
      income or gross receipts tax, franchise tax, sales tax and transfer tax received
      by the Group or on behalf of the Group, as well as draft Returns for the Group
      for all Taxes for all periods ending on or before the Closing Dates. The Company
      will cause the relevant member of the Group promptly to furnish to the Manager
      true, complete and correct copies of any other Returns filed by any member
      of
      the Group prior to the Closing Dates.

     

    (e) Tax
      Deficiencies; Audits; Statutes of Limitations.
      (i) No
      deficiencies have been asserted with respect to Taxes of the Group that remain
      unpaid; (ii) the Group is not a party to any action or proceeding for assessment
      or collection of Taxes, and no such action or proceeding has been asserted
      or
      threatened against the Group or any of its assets; and (iii) no waiver or
      extension of any statute of limitations is in effect with respect to any Taxes
      or Returns of the Group. The Returns of the Group for all tax years for which
      the statute of limitations has not expired have never been audited by a
      Governmental Authority (which term includes any taxing authority), nor is any
      such audit in process, pending or, to the Knowledge of the Company, threatened.
      Neither the Company nor any director or officer (or employee responsible for
      Tax
      matters) of any other member of the Group is aware of any facts or circumstances
      that, if known by any Governmental Authority would be reasonably likely to
      cause
      the Governmental Authority to assess any additional Taxes for any period for
      which Returns have been filed.

     

    (f) Accounting
      Method Changes.
      No
      member of the Group is required to include in its separate income any material
      adjustment pursuant to Sections 481 or 263A of the Code (or similar provisions
      of other law or regulations) by reason of a change in accounting method or
      otherwise, following the Closing, and the IRS (or any other Governmental
      Authority) has not proposed, and does not have under consideration, any such
      change in accounting method or other adjustment.

     

    (g) No
      Ownership Changes.
      To the
      knowledge of the Company, there has been no ownership change as defined in
      Section 382 of the Code with respect to any member of the Group, and neither
      the
      issuance of Securities under this Agreement nor any contemplated sales of TARP
      Securities would result in such an ownership change. 

     

    4.18 Transactions
      with Affiliates.

     

    Except
      as
      listed in Schedule 4.18 or as disclosed in the Company Reports, since
      December 31, 2007:

     

    (a) No
      current officer, director or employee of the Company or the Bank, any of their
      respective family members, any corporation or organization (other than the
      Bank)
      of which any of the foregoing Persons is an officer, director or beneficial
      owner of ten percent or more of any class of its equity securities, or any
      trust
      or other estate in which any of the foregoing Persons has a substantial
      beneficial interest or as to which such Person serves as a trustee or in a
      similar capacity, nor any current or former Affiliate of the Company or the
      Bank, has any material interest in any property, real or personal, tangible
      or
      intangible, used in or pertaining to the business of the Bank or in any
      transaction or series of similar transactions to which the Bank is a
      party;

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    (b) No
      such
      Person, if any, is indebted to the Company or the Bank, except for normal
      business expense advances;

     

    (c) Neither
      the Company nor the Bank is indebted to any such Person except for amounts
      due
      under normal salary or reimbursement or ordinary business expenses;

     

    (d) No
      such
      Person is a party to an Material Agreement with the Company or the Bank other
      than agreements related to employment or service as a director; 

     

    (e) No
      such
      Person has any other relationship or has engaged or engages in any other
      transaction or series of similar transactions that would be required to be
      disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC;
      and

     

    (f) All
      of
      the transactions referred to in this Section 4.18 hereof are transactions
      entered into in the ordinary course of business on an arm’s-length business
      pursuant to normal business terms and conditions.

     

    4.19 Loans.

     

    (a) With
      respect to each outstanding loan, lease or other extension of credit or
      commitment to extend credit by the Bank and except as would not have a Material
      Adverse Effect: (i) each of the foregoing is a legal, valid and binding
      obligation, is in full force and effect and is enforceable in accordance with
      its terms (except as may be limited by bankruptcy, insolvency, moratorium,
      reorganization or similar laws affecting the rights of creditors generally
      or
      equitable principles limiting the right to obtain specific performance or other
      similar relief); (ii) the Bank has duly performed in all material respects
      all
      of its obligations thereunder to the extent that such obligations to perform
      have accrued; (iii) all documents and agreements necessary for the Bank to
      enforce such loan, lease or other extension of credit are in existence and
      in
      the Bank’s possession; (iv) no claims, counterclaims, set-off rights or other
      rights have been asserted against the Bank, nor, to the Knowledge of the
      Company, do the grounds for any such claim, counterclaim, set-off rights or
      other rights exist, with respect to any such loans, leases or other extensions
      of credit which could impair the collectability thereof; and (v) each such
      loan,
      lease and extension of credit has been, in all material respects, originated
      and
      serviced in accordance with the Bank’s then applicable underwriting guidelines,
      the terms of the relevant credit documents and agreements and Applicable
      Law.

     

    (b) Except
      as
      listed in Schedule 4.19 (b), as of the date hereof, there are no loans,
      leases, other extensions of credit or commitments to extend credit of the Bank
      that have been or should have been classified by the Bank or its regulatory
      examiners, auditors or other credit examination personnel as “Watch,” “Other
      Assets (or Loans) Especially Mentioned,” “Substandard,” “Doubtful,”
“Classified,” “Criticized,” “Loss” or any comparable
      classification.

     

    (c) As
      of the
      date hereof there are no loans due to the Bank as to which any payment of
      principal, interest or any other amount is 90 days or more past
      due.

     

    (d) The
      allowances for possible loan and lease losses (including, without limitation,
      with respect to “covered transactions” and “loans to facilitate”) shown on the
      Financial Statements included in any Company Report filed with the SEC, as
      amended, were adequate in all respects under the requirements of GAAP and
      applicable regulatory accounting practices, in each case consistently applied,
      to provide for possible loan and lease losses as of September 30, 2008 and
      were
      in accordance with the safety and soundness standards administered by, and
      the
      practices and procedures of, the Comptroller.

     

    
      
        
        

      

      
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    4.20 Other
      Activities of the Company and the Bank.

     

    (a) The
      Company engages only in activities permissible under the BHCA and applicable
      Federal Reserve regulations. The Bank engages only in activities permissible
      under the National Bank Act and applicable Comptroller, Federal Reserve, and
      FDIC regulations.

     

    (b) Neither
      the Company nor the Bank, nor any officer, director or employee of the Company
      or the Bank acting in an agency capacity on behalf of the Company or Bank,
      is
      authorized to engage in or conduct, and does not engage in or conduct, any
      insurance activities, whether as principal, agent, broker or
      otherwise.

     

    (c) Neither
      the Company nor the Bank, nor any officer, director or employee of the Company
      or the Bank acting in an agency capacity on behalf of the Company or Bank,
      is
      authorized to engage in or conduct, and does not engage in or conduct, any
      securities sales, underwriting, brokerage, management or dealing activities,
      whether as principal or agent, either directly or under contractual or other
      arrangements with third parties.

     

    (d) The
      Bank
      does not engage in any trust or custodial activities.

     

    4.21 Material
      Agreements; No Defaults.
      Except
      as listed in Schedule 4.21 hereof, there are no material breaches, violations,
      defaults (or events that have occurred that with notice, lapse of time or the
      happening or occurrence of any other event would constitute a default) or
      allegations or assertions of any of the foregoing by the Company or the Bank,
      as
      the case may be, or, to the Knowledge of the Company or the Bank, any other
      party with respect to any Company Significant Agreement and each Company
      Significant Agreement has been filed as an exhibit to the Company’s SEC filings
      pursuant to Item 601 of Regulation S-K.

     

    4.22 Real
      Property Owned or Leased.
      Schedule 4.22 hereto is a true, complete and correct list of all real property
      owned or leased by the Company or the Bank, other than Real Estate Owned, all
      buildings and other structural and material improvements located on the real
      property or portion thereof owned or leased (including, without limitation,
      for
      each lease a brief description of the Company’s or the Bank’s financial
      obligations under such lease, its expiration date and renewal terms and whether
      there is a requirement of consent by the lessor thereunder in connection with
      the Acquisition). The Company has delivered to the Manager true, correct and
      complete copies of all deeds and leases relating to the property referred to
      in
      this Section 4.22.

     

    4.23 Real
      Estate Owned.

     

    (a) Schedule
      4.23 hereto is a true, complete and correct list of all Real Estate Owned of
      the
      Company and the Bank, stating with respect to each its type, originating unit
      and carrying value and listing, for each such property, all buildings and other
      structural and material improvements located on such property or any portion
      thereof. The Company has delivered to the Manager true, correct and complete
      copies of all deeds relating to the property referred to in this Section
      4.23(a).

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    (b) All
      Real
      Estate Owned is booked, as of the date of this Agreement, and was booked, as
      of
      the date of foreclosure or in-substance foreclosure and in the Bank Financial
      Statements or the Company Financial Statements, as the case may be, at or lower
      than the lower of (i) net realizable value (which valuation takes into account
      disposition costs) and (ii) Fair Value less anticipated disposition
      costs.

     

    (c) Each
      of
      the Company and the Bank has good and marketable title to, or a valid and
      enforceable leasehold interest in, all of their respective Real Estate Owned,
      and such interest is free and clear of all Liens, charges or other encumbrances,
      except those related to real property taxes, local improvement district
      assessments, easements, covenants, restrictions and other matters of record
      which do not individually or in the aggregate have a Material Adverse Effect
      on
      the use and enjoyment of the relevant real property.

     

    (d) The
      specific valuation reserves in the Company Financial Statements or Bank
      Financial Statements, as the case may be, for all Real Estate Owned are adequate
      in relation to the assets in question in accordance with GAAP and applicable
      regulatory accounting principles.

     

    4.24 Title
      to Property.
      Each of
      the Company and the Bank has (a) good and marketable title to, or a valid and
      enforceable leasehold interest in, all of the properties and assets (real,
      personal or mixed, tangible or intangible) reflected as owned or leased by
      the
      Company or the Bank in their respective Financial Statements and in all
      properties and assets purchased or leased or otherwise acquired by the Company
      or the Bank after December 31, 2007 (except, in any such case, properties and
      assets disposed of since December 31, 2007, in the ordinary course of business),
      and (b) none of such properties or assets is subject to any mortgage, pledge,
      Lien, security interest, encumbrance, restrictive covenant, restriction or
      charge of any kind except (i) to the extent reflected in the Company Financial
      Statements or the Bank Financial Statements, as the case may be, (ii) Permitted
      Liens, or (iii) that do not interfere with the current or anticipated use,
      enjoyment or transferability of, or detract from the value as reflected in
      the
      Company Financial Statements and the Bank Financial Statements of, the
      properties or assets that are subject thereto. Each of the Company and the
      Bank
      has title or other rights to its assets sufficient for the conduct of its
      business as presently conducted.

     

    4.25 Condition,
      Use, and Operation of Property.

     

    (a) The
      physical assets and properties owned, operated or leased by the Company and
      the
      Bank are adequately maintained and in a customary state of repair, order and
      operating condition and are free from defects which could have a Material
      Adverse Effect on their current or future use.

     

    (b) 
      To the
      Knowledge of the Company the use and operation of such physical assets and
      properties is in compliance with all Applicable Laws, including, without
      limitation, all applicable building codes, environmental, health and safety,
      zoning and land use laws and other applicable local, state, and federal laws
      and
      regulations, and with all covenants, conditions, restrictions, easements,
      disposition agreements and similar matters affecting such physical assets and
      properties except where any noncompliance would not reasonably be expected
      to
      have a Material Adverse Effect on the Bank or the Company. 

     

    4.26 Insurance
      Coverage.
      The
      Company and the Bank have maintained and now maintain insurance in such amounts
      and covering such risks as is usually carried by prudent companies engaged
      in
      similar businesses and owning similar properties in the same general area in
      which it operates. Schedule 4.26 hereto is a true and correct list of, all
      the
      insurance policies and bonds maintained by the Company or the Bank, all of
      which
      are in full force and effect. No insurer under any such insurance policy or
      bond
      has canceled or indicated an intention to cancel or not to renew any such policy
      or bond effective at any time prior to the Closing or generally disclaimed
      liability thereunder. To the extent that any insurance policy or bond has been
      or will be canceled prior to the Closing Date, The Company shall, and agrees
      to
      cause the Bank to, obtain comparable insurance policies with comparable coverage
      prior to the Closing Dates. Neither the Company nor the Bank is in default
      under
      any such policy or bond, nor has it failed to give any notice or present any
      claims thereunder in a timely fashion.

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    4.27 Employment
      and Similar Agreements; Obligations Upon Change in Control.
      Neither
      the execution and delivery of this Agreement, nor the consummation of the
      transactions contemplated hereby (i) will require any payment by the Company
      or
      the Bank to, or any consent or waiver from, any officer, director, employee,
      contingent worker or agent of the Company or the Bank, or any other Person,
      (ii)
      will result in a change of any nature in the rights of any party under an
      agreement with any officer, director, employee, contingent worker or agent
      of
      the Company or the Bank, or any other Person, including, without limitation,
      any
      acceleration or change in the award, grant, vesting or determination of
      restricted stock, stock options, warrants, rights, bonuses, incentive
      compensation, deferred compensation, severance payments, or any other awards
      or
      contingent obligations of any nature whatsoever of the Company or the Bank,
      or
      (iii) will result in any prohibited transaction described in Section 406 of
      ERISA or Section 4975 of the Code for which an exemption is not available.
      Except for Company Significant Agreements, neither the Company nor the Bank
      has
      any agreements with any employee, contingent worker or officer that are
      inconsistent with the status of all employees, contingent workers and officers
      of the Company and the Bank being “at-will” employees or workers. Each reference
      in this Agreement to “officer,” “director,” “employee”, “contingent worker” or
“agent” of the Company or the Bank, unless otherwise specified, shall include,
      without limitation, both current and former officers, directors, employees,
      contingent workers and agents (including, without limitation, consultants),
      as
      the case may be, of the Company or the Bank.

     

    4.28 Benefit
      Plans.

     

    (a) The
      Company is in compliance in all material respects with all presently applicable
      provisions of the Employee Retirement Income Security Act of 1974, as amended,
      including the regulations and published interpretations thereunder (herein
      called “ERISA”);
      the
      Company has not incurred and does not expect to incur any liability under (i)
      Title IV of ERISA with respect to termination of, or withdrawal from, any
“pension
      plan”;
      or (ii)
      Sections 412 or 4971 of the Code. The term “Plan”
shall
      include (i) any “employee benefit plan” within the meaning of Section 3(1) of
      ERISA, whether or not subject to ERISA, any employee pension benefit plan within
      the meaning of Section 3(2) of ERISA (ii) any other plan, agreement, contract,
      program, arrangement, or policy providing benefits to officers, directors,
      employees, contingent workers or agents in connection with their performance
      of
      services (including, without limitation, profit sharing, pension, deferred
      compensation, change-in-control, bonus, stock option, stock purchase, severance,
      retainer, consulting, “cafeteria” benefits under Section 125 of the Code,
      health, welfare or incentive plan, agreement, contract, program, arrangement,
      or
      policy whether legally binding or not (written or oral), including any
      post-employment benefits), and (iii) any plan, agreement, contract, program,
      arrangement, or policy providing for “fringe benefits” to employees, officers,
      directors, contingent workers or agents, including but not limited to vacation,
      paid holidays, personal leave, employee discount, educational benefit or similar
      programs.

     

    (b) With
      respect to each Plan:

     

    (i) it
      has
      been administered in accordance with its terms and all Applicable Laws
      applicable to the Plan, including, without limitation, ERISA and the Code;
      

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

    (ii) no
      suits,
      actions, disputes, claims (other than routine claims for benefits made in the
      ordinary course of Plan administration for which Plan administrative review
      procedures have not been exhausted), arbitrations, administrative or other
      proceedings, or investigation by any Governmental Authority are pending,
      threatened or, to the knowledge of the Company, imminent against or with respect
      to the Plan, the Company, the Bank or any employer who is participating (or
      who
      has participated) in the Plan or any fiduciary of the Plan; and

     

    (iii) it
      provides that it may be amended or terminated at any time and, except for
      benefits protected under Section 411(d) of the Code, all benefits payable to
      current, terminated or retired employees or any beneficiary, including, without
      limitation, post employment health care or insurance benefits, may be amended
      or
      terminated by the Company or the Bank at any time without liability.

     

    (c) With
      respect to each Plan that is an employee benefit plan, as defined under Section
      3(3) of ERISA:

     

    (i) no
      prohibited transaction (as defined in Section 406 of ERISA or Section 4975
      of
      the Code) for which an exemption is not available and no breach of fiduciary
      responsibility has occurred;

     

    (ii) all
      reports, forms and other documents required to be filed with any Governmental
      Authority or distributed to participants or beneficiaries in the Plans
      (including, without limitation, summary plan descriptions, Forms 5500 and
      summary annual reports) have been timely filed (if applicable) and distributed
      (if applicable) and were accurate and complete. The Company has delivered,
      and
      has caused the Bank to deliver, to the Manager copies of all such reports,
      forms
      and documents required to have been filed or distributed for the preceding
      three
      years and any other documents relating to such Plans (including, without
      limitation, documents describing or establishing funding arrangements, plan
      documents, summary plan descriptions, agreements, employee handbooks, personnel
      manuals, copies of any correspondence with regulatory authorities, any
      attorneys’ response to an auditor’s request for information, and the most recent
      determination letters from the Internal Revenue Service);

     

    (iii) no
      accumulated funding deficiency (within the meaning of Section 302 of ERISA
      or
      Section 412 of the Code) has been incurred with respect to any Plan, whether
      or
      not waived; and

     

    (iv) no
      “reportable event” (as such term is used in Section 4043 of ERISA) has
      occurred.

     

    (d) Each
      Plan
      that is intended to qualify under Section 401(a) of the Code and Section 501(a)
      of the Code and its related trust, if any, complies in form and in operation
      with Section 401(a) and 501(a) of the Code and has been determined by the IRS
      to
      comply and nothing has occurred since the date of the determination letter,
      whether by action or by failure to act, that could cause the loss of the Plan’s
      (or the related trust’s) qualification.

     

    (e) Neither
      the Company nor the Bank has (i) ever maintained or made any contributions
      to,
      (ii) ever been a member of a controlled group which has maintained or
      contributed to, or (iii) ever been under common control with an employer that
      maintained or contributed to, any defined benefit pension plan subject to Title
      IV of ERISA, including any “multiemployer plan” (as defined in Section 3(37) of
      ERISA).

     

    (f) There
      are
      no negotiations, demands or proposals which are pending or have been made which
      concern matters now covered, or that would be covered, by the type of agreements
      that would be Plans.

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    (g) All
      required contributions, including, but not limited to, any required insurance
      premiums, to each Plan for all periods ending prior to the Closing Dates have
      been made or will be made prior to the Closing Date by the Company or the
      Bank.

     

    (h) All
      expenses and liabilities relating, including, but not limited to any required
      insurance premiums, to all of the Plans have been, and will on the Closing
      Date
      be, fully and properly accrued on the Company’s or the Bank’s, as the case may
      be, books and records and disclosed in the company Financial Statements and,
      if
      applicable, in Plan financial statements. No event has occurred and no condition
      or circumstance has existed that could result in a material increase in the
      benefits under or the expense of maintaining any such Plan from the level of
      benefits or expenses for the most recently completed fiscal year of such
      Plan.

     

    (i) Except
      to
      the extent required by the continuation of group health coverage provisions
      contained in Section 4980B of the Code and Sections 601 through 608 of ERISA
      or
      any similar Applicable Law, no Plan provides for any post-employment health
      care
      or insurance or any other welfare benefit to any employee, former employee
      or
      retiree of the Company or the Bank. Neither the Company nor the Bank, nor any
      current or former officer, director, employee or agent of the Company or the
      Bank, has made any promises, commitments or representations concerning
      post-employment health care or insurance or any other welfare benefit to any
      employee, former employee or retiree of the Company or the Bank.

     

    (j) Neither
      the Company nor the Bank has any commitment, intention or understanding to
      create, modify, terminate or adopt any Plan that would result in any additional
      liability.

     

    (k) Each
      Plan, to the extent applicable, is and has been administered in compliance
      with
      the continuation of group health coverage provisions contained in Section 4980B
      of the Code and Sections 601 through 608 of ERISA and the portability,
      nondiscrimination and confidentiality provisions of section 9801 et seq. of
      the
      Code, sections 701 et seq. of ERISA, and sections 2701 et seq. of the Public
      Health Service Act.

     

    (l) Neither
      the Company nor the Bank has any funding obligations or liabilities for benefits
      or claims pursuant to any Plan, which Plan is not intended to be qualified
      under
      Section 401(a) of the Code.

     

    (m) Any
      Plan
      may be terminated or amended without incurring any material liability other
      than
      a benefit liability accrued in accordance with the terms of such Plan
      immediately prior to such amendment, termination, or ceasing of
      contributions.

     

    (n) No
      insurance policy nor any other contract or agreement affecting any Plan requires
      or permits a retroactive increase in premiums or payments due
      thereunder.

     

    (o) Each
      Plan
      that is a “nonqualified deferred compensation plan” (within the meaning of
      Section 409A of the Code) to which the Company or the Bank is a party is
      evidenced by a writing that complies in form and has been operated in a manner
      that complies with the requirements of Code Section 409A and the applicable
      provisions of Treasury Regulations and other IRS guidance, and no additional
      tax
      under Section 409A(a)(1)(B) of the Code has been or is reasonably expected
      to be
      insured by any participant in any such Plan. 

    
      
        
        

      

      
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    4.29 Intellectual
      Property. The
      Company and the Bank own or have valid licenses to use all Intellectual Property
      which they consider to be material to their businesses taken as a whole, and
      have not received written notice of infringement or violation of any
      Intellectual Property which would reasonably be likely to have, individually
      and
      in the aggregate, a Material Adverse Effect with respect to the Company and
      the
      Bank.

     

    4.30 Brokered
      Deposits.
      Except
      as listed in Schedule 4.30, the Bank does not have any brokered deposits, as
      such deposits are defined by the FDIC.

     

    4.31 Brokers.
      The
      Company has not employed any investment banker, broker, financial advisor or
      finder in connection with the transactions contemplated hereby who might be
      entitled to a fee or any commission in connection with the transactions
      contemplated hereby.

     

    4.32 Hazardous
      Materials.

     

    (a) Neither
      the Company, the Bank nor any other Person has engaged or is engaging in any
      activity that involved or involves or might reasonably be expected to have
      involved or involve the release, generation, use, manufacture, treatment,
      transportation, storage in tanks or otherwise or disposal of Hazardous Material
      on or from any property that the Company or the Bank now owns or leases or
      has
      previously owned or leased, or to the Knowledge of the Company in which the
      Company or the Bank now holds any security interest, mortgage or other Lien
      or
      interest (“Property”).
      To
      the Knowledge of the Company, no Property is in violation of any Applicable
      Law
      relating to Hazardous Materials, industrial hygiene or to the environmental
      conditions on, under or about such Property, including, but not limited to,
      soil
      and ground water condition.

     

    (b) To
      the
      Knowledge of the Company, no (i) release, threatened release, discharge,
      spillage or migration of Hazardous Material, (ii) condition that has resulted
      or
      could result in any use, ownership or transfer restriction, or (iii) condition
      of actual or potential nuisance, has occurred on, onto or from any
      Property.

     

    (c) To
      the
      Knowledge of the Company, no condition exists that could give rise to any suit,
      claim, action, proceeding or investigation by any Person or Governmental
      Authority against the Company, the Bank or any other Person or any Property
      as a
      result of or in connection with any of the events described above or any other
      violations of Applicable Laws relating to Hazardous Material, industrial hygiene
      or environmental matters.

     

    (d) The
      Company and the Bank have obtained all approvals, authorizations, certificates,
      consents, licenses, orders, permits and other similar authorizations of all
      Governmental Authorities, or from any other Person, that are required under
      any
      Applicable Law relating to Hazardous Materials, industrial hygiene or to the
      environmental conditions on, under or about any Property (“Environmental
      Laws”).
      The
      Company and the Bank are in compliance with all terms and conditions of all
      permits issued under any Environmental Law and also are in compliance with
      all
      limitations, restrictions, conditions, standards, requirements, schedules and
      timetables required or imposed under all Environmental Laws.

     

    (e) Neither
      the Company nor the Bank are required or obligated to make any capital or other
      expenditures in excess of $50,000 to comply with any Environmental Law nor
      is
      there any reasonable basis on which any Governmental Authority will take any
      action that would require any such capital or other expenditure.

     

    (f) For
      purposes of this Agreement, the terms “disposal,” “release,” and “threatened
      release” shall have the definitions assigned thereto by the Comprehensive
      Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. 9601
      et seq., as amended (“CERCLA”).

    
      
        
        

      

      
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    4.33  Compliance
      with Policies.
      The
      Bank has followed in all material respects its applicable internal credit,
      risk
      management, compliance and similar policies and procedures in conducting the
      operations which are subject to such policies.

     

    4.34 Confidentiality.
      The
      Bank maintains adequate safeguards to protect and maintain the confidentiality
      of the non-public personally identifiable information of its customers and
      consumers in accordance with the GLB Act and other Applicable Law and has
      maintained the confidentiality of its customer lists, and has not granted to
      any
      third parties any rights to use such customer lists, including, without
      limitation, for purposes of soliciting the Bank’s customers or
      consumers.

     

    4.35 Corporate
      Records.
      The
      minute books of the Company and the Bank accurately reflect all material actions
      taken to date by the shareholders, board of directors and committees of the
      Company and the Bank, respectively, and contain true and complete copies of
      the
      articles of incorporation, bylaws and other charter documents, and all
      amendments thereto, of the Company and the Bank, respectively.

     

    4.36 NASDAQ.
      The
      Common Stock is registered pursuant to Section 12(g) of the Exchange Act and
      is
      quoted on the Nasaq Global Market and the Company has taken no action designed
      to, or likely to have the effect of, terminating the registration of the Common
      Stock under the 1934 Act or delisting the Common Stock from the Nasdaq Global
      Market, nor has the Company received any notification that the SEC or any
      Governmental Authority is contemplating terminating such registration or
      listing.

     

    4.37 Accuracy:
      Completeness of Information.
      The
      representations, warranties and other statements of the Company contained in
      this Agreement, Previously Disclosed or in any document, certificate or other
      writing provided to or to be provided to the Manager are, and all information
      furnished or to be furnished to the Manager by the Company pursuant to the
      provisions hereof or in connection with the transactions contemplated hereby
      is,
      true and correct in all material respects. The Company has not failed to state
      any material fact necessary to make such representations, warranties, statements
      and information not misleading in light of the circumstances in which they
      are
      made or furnished.

     

    4.38 Public
      Reports; Sarbanes-Oxley Compliance.
      

     

    (a) Since
      December 31, 2005, the Company and each Company Subsidiary has timely filed
      with
      the SEC and the Federal Reserve all reports required to be so filed, and the
      Bank has timely filed with the OCC all reports including without limitation
      Call
      Reports required to be so filed (the foregoing, collectively, the “Company
      Reports”)
      and
      has paid all material fees and assessments due and payable in connection
      therewith. As of their respective dates of filing, the Company Reports complied
      in all material respects with all statutes and applicable rules and regulations
      of the SEC, Federal Reserve and OCC, as applicable. To the Knowledge of the
      Company, as of the date of this Agreement, there are no outstanding comments
      from the SEC or any other Governmental Authority with respect to any Company
      Report. In the case of each such Company Report filed with or furnished to
      the
      SEC, such Company Report did not, as of its date or if amended prior to the
      date
      of this Agreement, as of the date of such amendment, contain an untrue statement
      of a material fact or omit to state a material fact required to be stated
      therein or necessary in order to make the statements made in it, in light of
      the
      circumstances under which they were made, not misleading and complied as to
      form
      in all material respects with the applicable requirements of the Securities
      Act
      and the Exchange Act. With respect to all other Company Reports, the Company
      Reports were complete and accurate in all material respects as of their
      respective dates. No executive officer of the Company or any Company Subsidiary
      has failed in any respect to make the certifications required of him or her
      under Section 302 or 906 of the Sarbanes-Oxley Act of 2002.

    
      
        
        

      

      
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    (b) The
      records, systems, controls, data and information of the Company and the Company
      Subsidiaries are recorded, stored, maintained and operated under means
      (including any electronic, mechanical or photographic process, whether
      computerized or not) that are under the exclusive ownership and direct control
      of the Company or the Company Subsidiaries or their accountants (including
      all
      means of access thereto and therefrom), except for any non-exclusive ownership
      and non-direct control that would not reasonably be expected to have a material
      adverse effect on the system of internal accounting controls described below
      in
      this Section 4.38(b).  The Company (A) has implemented and
      maintains disclosure controls and procedures (as defined in Rule 13a-15(e)
      of the Exchange Act) to ensure that material information relating to the
      Company, including the consolidated Company Subsidiaries, is made known to
      the
      chief executive officer and the chief financial officer of the Company by others
      within those entities, and (B) has disclosed, based on its most recent
      evaluation prior to the date hereof, to the Company’s outside auditors and the
      audit committee of the Board of Directors (x) any significant deficiencies
      and material weaknesses in the design or operation of internal controls over
      financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that
      are reasonably likely to adversely affect the Company’s ability to record,
      process, summarize and report financial information and (y) any fraud,
      whether or not material, that involves management or other employees who have
      a
      significant role in the Company’s internal controls over financial reporting.
      Since December 31, 2005 and until the date of this Agreement,
      (A) neither the Company nor any Company Subsidiary nor, to the knowledge of
      the Company, any director, officer, employee, auditor, accountant or
      representative of the Company or any Company Subsidiary has received or
      otherwise had or obtained knowledge of any material complaint, allegation,
      assertion or claim, whether written or oral, regarding the accounting or
      auditing practices, procedures, methodologies or methods of the Company or
      any
      Company Subsidiary or their respective internal accounting controls, including
      any material complaint, allegation, assertion or claim that the Company or
      any
      Company Subsidiary has engaged in questionable accounting or auditing practices,
      and (B) no attorney representing the Company or any Company Subsidiary,
      whether or not employed by the Company or any Company Subsidiary, has reported
      evidence of a material violation of securities laws, breach of fiduciary duty
      or
      similar violation by the Company or any of its officers, directors, employees
      or
      agents to the Board of Directors or any committee thereof or to any director
      or
      officer of the Company.

     

    (c) The
      Company is in compliance in all material respects with all current listing
      and
      corporate governance requirements and is in compliance in all material respects
      with all applicable provisions of the Sarbanes-Oxley Act of 2002 and the rules
      and regulations of the SEC.

     

    4.39 Bank
      Secrecy Act; Patriot Act.
      Neither
      the Company nor the Bank has received written notice of any regulatory concerns
      regarding its compliance with the Bank Secrecy Act (31 U.S.C. § 5322 et seq.) or
      related state or federal anti-money-laundering laws, regulations and guidelines,
      including without limitation those provisions of federal regulations requiring
      (i) the filing of reports, such as Currency Transaction Reports and Suspicious
      Activity Reports, (ii) the maintenance of records and (iii) the exercise of
      diligence in identifying customers. The Company and the Bank have adopted such
      procedures and policies as are necessary or appropriate to comply with Title
      III
      of the USA Patriot Act and, to the Company’s Knowledge, is in compliance with
      such law in all material respects. 

     

    4.40 Risk
      Management Instruments.
      Except
      as listed in Schedule 4.40, neither the Company nor the Bank is a party to
      or
      has agreed to enter into any interest rate swaps, caps, floors, collars, option
      agreements, or any exchange traded or over-the-counter equity. Neither the
      Company nor the Bank owns any securities that (i) are referred to generically
      as
“structured notes,” “high risk mortgage derivatives,” “capped floating rate
      notes,” or “capped floating rate mortgage derivatives,” or (ii) could have
      changes in value as a result of interest rate changes.

    
      
        
        

      

      
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    4.41 Accounting
      Records: Data Processing.

     

    (a) The
      Company and the Bank maintain records that accurately, validly and fairly
      reflect its transactions and dispositions of assets and maintain a system of
      internal accounting controls, policies and procedures sufficient to insure
      that
      (i) such transactions are executed in accordance with its management’s general
      or specific authorization, (ii) such transactions are recorded in conformity
      with GAAP and in such a manner as to permit preparation of financial statements
      in accordance with GAAP and any other criteria applicable to such statements
      and
      to maintain accountability for assets, (iii) access to assets is permitted
      only
      in accordance with management’s general or specific authorization, (iv) the
      recorded accountability for assets is compared with existing assets at
      reasonable intervals and appropriate action is taken with respect to any
      differences, and (v) records of such transactions are retained, protected and
      duplicated in accordance with prudent banking practices and applicable
      regulatory requirements.

     

    (b)  The
      data
      processing equipment, data transmission equipment, related peripheral equipment
      and software used by the Company and the Bank in the operation of their
      respective businesses (including any disaster recovery facility) to generate
      and
      retrieve such records (whether owned or leased by the Company or the Bank,
      or
      provided under any agreement or other arrangement with a third party for data
      processing services) are adequate for the needs of the Company and the
      Bank.

     

    4.42 S-3
      Eligibility.
      The
      Company is eligible to use a registration statement on Form S-3 (or any
      successor form or other appropriate form under the Securities Act) for an
      offering to be made on a continuous or delayed basis pursuant to Rule 415 under
      the Securities Act.

     

    ARTICLE
      V

    REPRESENTATIONS
      AND WARRANTIES OF THE MANAGER

     

    The
      Manager, on behalf of itself and the Investors, hereby represents and warrants
      to the Company, as of the date hereof, as follows: 

     

    5.1 Authorization;
      Corporate Power.
      The
      Manager has all requisite legal power and authority to execute and deliver
      this
      Agreement and the Transaction Documents and to carry out and perform its
      obligations under the terms of this Agreement and the Transaction Documents
      and
      the transactions contemplated hereby and thereby. This Agreement and each of
      the
      other Transaction Documents, when executed and delivered by the Manager and
      the
      Company, will constitute a valid and legally binding obligation of the Manager,
      enforceable in accordance with its terms, subject to laws of general application
      relating to bankruptcy, insolvency and the relief of debtors and rules of law
      governing specific performance, injunctive relief or other equitable
      remedies.

     

    5.2 Purchase
      for Own Account.
      The
      Securities to be purchased by each Investor hereunder will be acquired for
      investment for such Investor’s own account, not as a nominee or agent, and not
      with a view to the public resale or distribution thereof within the meaning
      of
      the Securities Act, and such Investor shall have no present intention of
      selling, granting, any participation in, or otherwise distributing the same.
      

    
      
        
        

      

      
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    5.3 Disclosure
      of Information.
      The
      Manager has received or has had full access to all the information it considers
      necessary or appropriate to make an informed investment decision with respect
      to
      the Securities to be purchased by such Investor under this Agreement. The
      Manager has had an opportunity to ask questions and receive answers from the
      Company regarding the terms and conditions of the offering of the Securities
      and
      to obtain additional information (to the extent the Company possessed such
      information or could acquire it without unreasonable effort or expense)
      necessary to verify any information furnished to the Manager or to which Manager
      had access. The Manager understands and acknowledges that any information issued
      by the Company, (i) was intended to describe the aspects of the Company’s
      business and prospects which the Company believes to be material, but were
      not
      necessarily an exhaustive description, and (ii) may have contained
      forward-looking statements involving known and unknown risks and uncertainties
      which may cause the Company’s actual results in future periods or plans for
      future periods to differ materially from what was anticipated and that no
      representations or warranties were or are being made with respect to any such
      forward-looking statements, provided that the Company believes such statements
      were reasonable when made and made such statements in good faith. The foregoing,
      however, does not in any way limit or modify the representations or warranties
      made by the Company in Article IV hereof.

     

    5.4 Investment
      Experience.
      Each
      Investor understands that the Securities have not been registered under the
      Securities Act or under any state securities laws. Each Investor also
      understands that the Securities are being offered and sold pursuant to an
      exemption from registration contained in the Securities Act based in part upon
      the Manager’s representations contained in this Agreement. Each Investor
      understands that the purchase of the Securities by the Investors involves
      substantial risk. Each Investor: (i) has experience as an investor in securities
      of companies in the development stage and acknowledges that such Investor is
      able to fend for itself, can bear the economic risk of such Investor’s
      investment in the Shares and has such knowledge and experience in financial
      or
      business matters that such Investor is capable of evaluating the merits and
      risk
      of this investment and/or (ii) has a preexisting personal or business
      relationship with the Company and certain of its officers, directors or
      controlling persons of a nature and duration that enable such Investor to be
      aware of the character, business acumen and financial circumstances of such
      person.

     

    5.5 Accredited
      Investor Status.
      Each
      Investor is an “accredited investor” within the meaning of Regulation D
      promulgated under the Securities Act.

     

    5.6 Restricted
      Securities.
      Each
      Investor understands that the Securities are characterized as “restricted
      securities” under the Securities Act inasmuch as they are being acquired from
      the Company in a transaction not involving a public offering and that under
      the
      Securities Act and applicable regulations thereunder such securities may be
      resold without registration under the Securities Act only in certain limited
      circumstances. Such Investor must bear the economic risk of this investment
      indefinitely unless the Securities are registered pursuant to the Securities
      Act, or an exemption from registration is available. Except for the obligations
      set forth in the Registration Rights Agreement attached as Exhibit E, such
      Investor understands that the Company has no present intention of registering
      the Securities, or any shares of its Common Stock. Such Investor also
      understands that there is no assurance that any exemption from registration
      under Securities Act will be available and that, even if available, such
      exemption may not allow Investor to transfer all or any portion of the Shares
      under the circumstances, in the amounts or at the times Investor might propose.
      In this connection, the Manager represents that such Investor is aware of the
      provisions of Rule 144 of SEC, as presently in effect, and understands the
      resale limitations imposed thereby and by the Securities Act. 

     

    5.7 Residence.
      If such
      Investor is a partnership, corporation, limited liability company or other
      entity, then such Investor resides in the office or offices of such Investor
      in
      which its investment decision was made, which is located at the address or
      addresses of such Investor set forth on Exhibit A hereto.

    
      
        
        

      

      
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    5.8 Brokers’
      and Finders’ Fees.
      The
      Manager has not incurred, and will not incur, directly or indirectly, any
      liability for brokerage or finders’ fees or agents’ commissions or any similar
      charges in connection with this Agreement or any transaction contemplated
      hereby.

     

    5.9 Access
      to Information.
      The
      Manager and each Investor has had the opportunity review all information,
      documents and things Previously Disclosed to the Manger and has been afforded
      (i) the opportunity to ask such questions as it has deemed necessary of, and
      to
      receive answers from, representatives of the Company concerning the terms and
      conditions of the offering of the Securities and the merits and risks of
      investing in the Securities; (ii) access to information about the Company and
      the Bank and their respective financial condition, results of operations,
      business, properties, management and prospects sufficient to enable it to
      evaluate its investment; and (iii) the opportunity to obtain such additional
      information that the Company possesses or can acquire without unreasonable
      effort or expense that is necessary to make an informed investment decision
      with
      respect to the investment. Neither such inquiries nor any other investigation
      conducted by or on behalf of such Investor or its representatives or counsel
      shall modify, amend or affect such Investor’s right to rely on the truth,
      accuracy and completeness of the Schedules and the Company’s representations and
      warranties contained in this Agreement and the Other Transaction Documents.
      Such
      Investor has sought such accounting, legal and tax advice as it has considered
      necessary to make an informed decision with respect to its acquisition of the
      Securities.

     

    5.10 Certain
      Trading Activities.
      Other
      than with respect to the transactions contemplated herein, since the time that
      such Investor was first contacted by the Company, the Manager or any other
      Person regarding the transactions contemplated hereby, neither the Investor
      nor
      any Affiliate of such Investor which (x) had knowledge of the transactions
      contemplated hereby, (y) has or shares discretion relating to such Investor’s
      investments or trading or information concerning such Investor’s investments,
      including in respect of the Common Stock, and (z) is subject to such Investor’s
      review or input concerning such Affiliate’s investments or trading
      (collectively, “Trading
      Affiliates”)
      has
      directly or indirectly, nor has any Person acting on behalf of or pursuant
      to
      any understanding with such Investor or Trading Affiliate, effected or agreed
      to
      effect any purchases or sales of the securities of the Company (including,
      without limitation, any short sales involving the Company’s securities).
      Notwithstanding the foregoing, in the case of a Investor and/or Trading
      Affiliate that is, individually or collectively, a multi-managed investment
      bank
      or vehicle whereby separate portfolio managers manage separate portions of
      such
      Investor’s or Trading Affiliate’s assets and the portfolio managers have no
      direct knowledge of the investment decisions made by the portfolio managers
      managing other portions of such Investor’s or Trading Affiliate’s assets, the
      representation set forth above shall apply only with respect to the portion
      of
      assets managed by the portfolio manager that have knowledge about the
      transactions contemplated by this Agreement. Other than to other Persons party
      to this Agreement and except for public disclosures required to be made pursuant
      to SEC rules and regulations upon execution of this Agreement, such Investor
      has
      maintained the confidentiality of all disclosures made to it in connection
      with
      this transaction (including the existence and terms of this
      transaction).

     

    5.11 No
      Governmental Review.
      Such
      Investor understands that no U.S. federal or state agency or any other
      government or governmental agency has passed on or made any recommendation
      or
      endorsement of the Securities or the fairness or suitability of the investment
      in the Securities nor have such authorities passed upon or endorsed the merits
      of the offering of the Securities.

     

    5.12 Regulation
      M.
      Such
      Investor is aware that the anti-manipulation rules of Regulation M under the
      Exchange Act may apply to sales of Shares and the Common Stock and other
      activities with respect to the Shares and the Common Stock by the
      Investors.

    
      
        
        

      

      
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    ARTICLE
      VI

    COVENANTS
      OF THE COMPANY

     

    6.1 Filings;
      Other Action.

     

    (a) Each
      party shall, and shall cause its Affiliates to, cooperate and consult with
      the
      other and use reasonable best efforts to prepare and file all necessary
      documentation, to effect all necessary applications, notices, petitions, filings
      and other documents, and to obtain all necessary permits, consents, orders,
      approvals and authorizations of, or any exemption by, all third parties and
      Governmental Entities, and the expiration or termination of any applicable
      waiting periods, necessary or advisable to consummate the transactions
      contemplated by this Agreement or by the Other Transaction Documents, and to
      perform the covenants contemplated hereby and thereby. Each party shall execute,
      and cause its Affiliates to execute, as applicable, and deliver both before
      and
      after the Closing such further certificates, agreements and other documents
      and
      to take such other actions as the other parties may reasonably request to
      consummate or implement such transactions or to evidence such events or matters.
      Each Investor and the Company will have the right to review in advance, and
      to
      the extent practicable each will consult with the other, in each case subject
      to
      applicable laws relating to the exchange of information, all the information
      relating to such other party, and any of their respective Affiliates, which
      appears in any filing made with, or written materials submitted to, any third
      party or any Governmental Entity in connection with the transactions
      contemplated by this Agreement and by the Other Transaction Documents. In
      exercising the foregoing right, each of the parties hereto agrees to act
      reasonably and as promptly as practicable. Each party hereto agrees to keep
      the
      other party apprised of the status of matters referred to in this Section
      6.1(a). Each Investor and the Company shall promptly furnish the other with
      copies of written communications received by it or its Affiliates from, or
      delivered by any of the foregoing to, any Governmental Entity in respect of
      the
      transactions contemplated by this Agreement or the Other Transaction Documents
      (other than any portions thereof that relate to confidential supervisory
      matters). 

    
      
        
        

      

      
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    (b) Unless
      this Agreement has been terminated pursuant to Section 7.1, the Company shall
      take all action necessary to duly call, give notice of, convene and hold a
      meeting of its shareholders (the “Company
      Shareholders Meeting”),
      as
      promptly as practicable after the SEC confirms that it has no further comments
      on the Company Proxy Statement to vote on proposals (collectively, the
“Shareholder
      Proposals”)
      to
      approve the following: (A) the authorization and issuance of the shares of
      Common Stock or Series B-1 Preferred Stock to be issued upon conversion of
      the
      Series B Preferred Stock, and the issuance of shares of Common Stock to be
      issued upon conversion of the Series B-1 Preferred Stock for purposes of Rule
      4350 of the Nasdaq Marketplace Rules, (B) any increase in the size of the Board
      of Directors as required by Section 6.2 hereof, and (C) any other proposals
      necessary to permit the Company to issue the Series B-1 Preferred Stock or
      Common Stock issuable upon conversion of the Series B Preferred Stock, and
      the
      issuance of shares of Common Stock to be issued upon conversion of the Series
      B-1 Preferred Stock, in accordance with the Preferred Stock Certificate of
      Determination. The Board of Directors shall, to the extent consistent with
      its
      fiduciary duties, unanimously recommend to the Company’s shareholders that such
      shareholders vote in favor of the Shareholder Proposals (the “Board
      Recommendation”).
      In
      connection with the Company Shareholders Meeting, the Company shall promptly
      prepare (and each Investor will reasonably cooperate with the Company to
      prepare) and file (but in no event more than thirty business days after the
      date
      of the Closing) with the SEC a preliminary proxy statement (which shall include
      the Board Recommendation)(the “Preliminary
      Proxy Statement”),
      shall
      use its reasonable best efforts to respond to any comments of the SEC or its
      staff and to cause a definitive proxy statement (which shall include, to the
      extent consistent with its fiduciary duties, the Board Recommendation) (“the
“Definitive
      Proxy Statement”
and,
      together with the Preliminary Proxy Statement, the “Proxy
      Statement”)
      related to the Company Shareholders Meeting to be mailed to the Company’s
      shareholders not more than five business days after clearance thereof by the
      SEC, shall use its reasonable best efforts to solicit proxies for approval
      of
      the Shareholder Proposals by the affirmative vote of a majority of the
      outstanding shares of Common Stock entitled to vote (the “Requisite
      Shareholder Approval”),
      and
      take all other reasonable actions necessary or advisable to secure the Requisite
      Shareholder Approval; provided,
      however,
      that
      the Company may extend the date of the Company Shareholders Meeting to the
      extent (x) necessary in order to obtain a quorum of its shareholders or (y)
      the
      Company reasonably determines that such delay is required by Applicable Law.
      The
      Company shall notify the Manager promptly of the receipt of any comments from
      the SEC or its staff and of any request by the SEC or its staff for amendments
      or supplements to such Proxy Statement or for additional information and will
      supply the Manager with copies of all correspondence between the Company or
      any
      of its representatives, on the one hand, and the SEC or its staff, on the other
      hand, with respect to such Proxy Statement.
      If at
      any time prior to the Company Shareholders Meeting there shall occur any event
      that is required to be set forth in an amendment or supplement to the Proxy
      Statement, the Company shall as promptly as practicable prepare and mail to
      its
      shareholders such an amendment or supplement, to the extent consistent with
      fiduciary duties of the board of directors. The Manager, each Investor and
      the
      Company agrees promptly to correct any information provided by it or on its
      behalf for use in the Proxy Statement if and to the extent that such information
      shall have become false or misleading in any material respect, and the Company
      shall as promptly as practicable prepare and mail to its shareholders an
      amendment or supplement to correct such information to the extent required
      by
      applicable laws and regulations. The Company shall consult with the Investors
      prior to filing any Proxy Statement, or any amendment or supplement thereto,
      and
      provide each Investor with a reasonable opportunity to comment thereon. In
      the
      event that the approval of any of the Shareholder Proposals is not obtained
      at
      such meeting, the Company shall include a proposal to approve (and, to the
      extent consistent with its fiduciary duties, the Board of Directors shall
      unanimously recommend approval of) each such proposal at a meeting of its
      shareholders no less than once in each subsequent six month period, capped
      at a
      maximum of four additional meetings.

     

    (c) Each
      Investor, on the one hand, and the Company, on the other hand, agrees, upon
      request, to furnish the other party with all information concerning itself,
      its
      Affiliates, directors, officers, partners and shareholders and such other
      matters as may be reasonably necessary or advisable in connection with the
      Proxy
      Statement and any other statement, filing, notice or application made by or
      on
      behalf of such other party or any of its Subsidiaries to any Governmental Entity
      in connection with the Closing and the other transactions contemplated by this
      Agreement and the Other Transaction Documents. 

     

    6.2 Board
      of Directors.

     

    (a) Effective
      upon the closing, subject to satisfaction of all legal and governance
      requirements regarding service as a director and, if required, the reasonable
      approval of a board nominating committee (such approval not to be unreasonably
      withheld or delayed), the Company will: appoint as a director of the Company
      and
      the Bank one individual nominated by the Manager (the “Manager
      Nominee”),
      and
      take
      such
      actions as may be required to appoint the Manager Nominee to serve on the Board
      of Directors of the Company and the Bank. 

    
      
        
        

      

      
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    (b) While
      the
      Investors own Securities representing at least ten (10) percent of the
      outstanding Common Stock (counting as shares owned by the Investors all shares
      into which shares of Series B Convertible Preferred Stock are convertible and
      assuming to the extent Investors shall purchase any additional shares of Common
      Stock, any later such additional purchases shall be deemed to be shares) of
      the
      Company, the Company will be required to (i) elect one person designated by
      the
      Manager and reasonably acceptable to the Board of Directors of the Company
      to
      the Board of Directors of the Bank and (ii) recommend to its shareholders one
      person designated by the Manager for election to the Board of Directors of
      the
      Company at the Company’s annual meeting, to the extent consistent with its
      fiduciary duties and subject to satisfaction of all legal and governance
      requirements regarding service as a director and, if required, the reasonable
      approval of a board nominating committee (such approval not to be unreasonably
      withheld or delayed). With respect to the Company Board of Directors, such
      individual designated by the Manager (including any successor nominee) duly
      selected in accordance with this Section 6.2(b) shall, subject to applicable
      law, be the Company’s and the nominating committee’s nominee to serve on the
      Company Board of Directors. The Company shall use its reasonable best efforts
      to
      have the person designated by the Manager elected as a director of the Company
      and the Company shall solicit proxies for each such person to the same extent
      as
      it does for any of its other nominees to the Board of Directors, to the extent
      consistent with the fiduciary duties of the Company’s Board of
      Directors.

     

    (c) If
      the
      Investors no longer holds the minimum number of Securities specified in Section
      6.2(b), the Manager will have no further rights under
      Section 6.2.

     

    (d) Subject
      to the procedures set forth in Section 6.2(b), if such individual ceases to
      serve as a director of the Company and the Bank for any reason, the Company
      shall cause the vacancy created thereby to be filled by an individual designated
      by the Manager, subject to the Company’s reasonable approval of the
      qualifications of such designated individual. If the individual designated
      by
      the Manager and nominated by the Company is not elected to the Board of
      Directors of the Company and the Bank, the Company shall immediately increase
      the size of such Board of Directors (subject to the Section 6.2(e) hereof)
      and
      appoint such individual (such individual to be different from the individual
      who
      was not elected by the shareholders of the Company) designated by the Manager
      to
      the Board of Directors of the Company and the Bank, following the procedures
      set
      forth in Section 6.2(b). 

     

    (e) If
      an
      increase in the size of the Board of Directors is required by this
      Section 6.2 and a corresponding increase to maintain an odd number of
      directors is required, then the Company and/or the Bank shall make such
      corresponding increase and such additional directorship shall remain vacant
      until the next meeting of the shareholders. No increase in the size of the
      Board
      of Directors of the Company or of the Bank shall be required by this
      Section 6 if it would cause the size of the Board of Directors of the
      Company or of the Bank to exceed the maximum size permitted under the Articles
      or Company bylaws or the Bank articles of association or bylaws; provided that
      the Company and/or the Bank, as the case may be, shall use its respective best
      efforts to amend such articles of incorporation, articles of association or
      bylaws to increase the number of directorships necessary to appoint the Manager
      Nominee, including, without limitation, submitting a shareholder proposal to
      amend the articles of incorporation or bylaws to increase the number of seats
      shall be submitted to a vote of shareholders at the Company Shareholders
      Meeting. 

     

    6.3 Notification
      of Threatened Breach or Failure of Condition and Other Matters.
      The
      Company shall give notice to the Manager promptly of the occurrence of, or
      the
      impending or threatened occurrence of, any event prior to the Closing that
      (i)
      would cause or constitute a breach of any of the Company’s representations,
      warranties, covenants or agreements set forth in this Agreement, or would cause
      any such representation or warranty to be misleading, or that might result
      in
      the nonfulfillment of any condition to the consummation of the transactions
      contemplated by this Agreement, or (ii) result in a Material Adverse Effect
      on
      the Company or the Bank. The notice shall describe the circumstances of such
      event and shall describe the steps being taken to remedy the consequence
      thereof.

    
      
        
        

      

      
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    6.4 Interim
      Reports: Financial Statements.

     

    (a) The
      Company shall have a continuing obligation from the date hereof until the
      Closing Date to report to the Manager in writing any material change affecting
      the representations and warranties or constituting a breach of any covenant
      set
      forth in this Agreement; provided that such report shall not relieve the Company
      of any liability for any breach of any representation, warranty, or covenant
      made by the Company or of any condition to the Manager’s obligation to
      close.

     

    (b) The
      Company shall maintain, and cause the Bank to, maintain its books of account
      and
      financial records in accordance with GAAP on a basis consistently applied and
      in
      accordance with regulatory accounting practices and requirements and such books
      of account and financial records will be accurate in all material respects.
      The
      Company shall, and cause the Bank to, provide to the Manager as soon as
      practicable, from the date hereof through the Closing (i) copies of all
      financial statements of and other written information provided to the Board
      of
      Directors of the Company and the Bank (or any committee thereof), (ii) copies
      of
      all reports filed by the Company or the Bank with the Securities and Exchange
      Commission, the Federal Reserve Board, the FDIC, the Comptroller or any other
      Governmental Authority, and (iii) copies of such other information and reports
      as the Manager may reasonably request relating to the Company or the
      Bank.

     

    6.5 Access
      to Information.
      From
      the date of this Agreement until the date when the Securities purchased pursuant
      to this Agreement and owned by the Investors represent less than five percent
      of
      the outstanding Common Stock (counting as shares owned by the Investors all
      shares of Common Stock into which shares of Preferred Stock are convertible
      and
      assuming to the extent Investors shall purchase any additional shares of Common
      Stock, any later such additional purchases shall be deemed to be shares) (with
      respect to the Investors, the “Qualifying
      Ownership Interest”),
      the
      Company will, and will cause each of its subsidiaries to, give the Manager
      and
      its respective representatives (including, without limitation, officers and
      employees of the Manager, and counsel, accountants, investment bankers,
      potential lenders and other professionals retained by the Manager) full access
      during normal business hours to all of their properties, books and records
      (including, without limitation, tax returns and appropriate work papers of
      independent auditors under normal professional courtesy, but excluding those
      books and records that under applicable banking or other laws, or under
      confidentiality agreements, are required to be kept confidential) and to
      knowledgeable personnel of the Company and to such other information as the
      Manager may reasonably request. The Manager will, and will cause its
      representatives to, hold all information received as a result of its access
      to
      the properties, books and records of the Company or its subsidiaries in
      confidence, except to the extent that information (i) is or becomes available
      to
      the public (other than through a breach of this Agreement), (ii) becomes
      available to the Manager or its representatives from a third party which,
      insofar as the Manager is aware, is not under an obligation to the Company
      or to
      a subsidiary to keep the information confidential, (iii) was known to the
      Manager or its representatives before it was made available to the Manager
      or
      its representative by the Company or a subsidiary, or (iv) otherwise is
      independently developed by the Manager or its representatives. The Manager
      will,
      at the Company’s request made at any time after the termination of this
      Agreement without the Closing’s taking place, or after the Investors cease to
      own a Qualifying Ownership Interest, deliver to the Company all documents and
      other material obtained by the Investors or their respective representatives
      from the Company or its subsidiaries in accordance with this Section 6.5 or
      otherwise in connection with the transactions that are the subject of this
      Agreement or evidence, subject to applicable law, that that material has been
      destroyed by the Investors. The Investors acknowledge that they are aware of,
      and will comply as to the Company with, applicable restrictions on the use
      of
      material nonpublic information imposed by the U.S. federal securities laws.
      Any
      examination or investigation made by the Investors, their representatives or
      any
      other Persons as contemplated by this Section 6.5 shall not affect any of the
      representations and warranties hereunder. In the event, and to the extent,
      that,
      as a result of any change in applicable law or regulation or a judicial or
      administrative interpretation of applicable law or regulation, it is reasonably
      determined that the rights afforded pursuant to this Section 6.5 are not
      sufficient for purposes of the Department of Labor’s “plan assets” regulations,
      to the extent such plan assets regulation applies to the investment in the
      Securities, the Investors and the Company shall cooperate in good faith to
      agree
      upon mutually satisfactory management access and information rights which will
      satisfy such regulation.

    
      
        
        

      

      
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    6.6 Conduct
      of Business.
      From
      the date of this Agreement until the Closing, the Company shall and shall cause
      the Bank to:

     

    (a) conduct
      its business in the ordinary course, in substantially the same manner as
      heretofore conducted, in accordance with Applicable Law, in such manner as
      to
      maintain the business, employees, customers and goodwill of the Bank and as
      is
      consistent with sound banking practices;

     

    (b) maintain,
      renew, keep in full force and effect and preserve its corporate existence,
      business organization and material rights, franchises, permits, and licenses
      and
      retain its present employee force so that all the foregoing will be available
      to
      the Manager at and after the Closing Dates; and

     

    (c) maintain
      its existing, or substantially equivalent, credit arrangements with banks and
      other financial institutions; and

     

    (d) use
      commercially reasonable efforts to continue its customer
      relationships.

     

    6.7 Operations
      to Date of Closing.
      In
      furtherance, and not in limitation, of the foregoing Section 6.6 hereof, from
      the date of this Agreement to the Closing, except with the prior written consent
      of the Manager or in connection with the issuance or sale of any TARP
      Securities:

     

    (a) The
      Company shall, and cause the Bank to, not (i) declare, pay, or make any dividend
      or distribution to the holders of the Company Stock or Bank Stock, except as
      expressly provided to the contrary in this Agreement; (ii) call, redeem,
      exchange for other securities, or otherwise acquire, any shares of the Company
      Stock or Bank Stock; (iii) sell or issue any debt or equity securities of the
      Company or the Bank or any rights or options to acquire or convert into such
      securities except for Permitted Equity Rights and shares issued upon the
      exercise of Permitted Equity Rights; (iv) otherwise change in any manner the
      issued and outstanding capital of the Company or the Bank; or (v) agree to
      do
      any of the foregoing; and if the Company takes any action that would require
      any
      antidilution adjustment to be made under the Preferred Stock Certificate of
      Determination on the date of this Agreement, the Company shall make appropriate
      adjustments such that the Investors will receive the benefit of such transaction
      as if the Securities to be purchased by the Purchaser at the Closing had been
      outstanding as of the date of such action;

     

    (b) Except
      as
      provided by this Agreement, the Company shall not change or amend the articles
      of incorporation or bylaws and the Bank shall not change or amend its articles
      of association or bylaws in any manner that would materially adversely conflict
      with or affect its authority to consummate the transactions contemplated in
      this
      Agreement and the Other Transaction Documents;

    
      
        
        

      

      
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    (c) The
      Company shall, and cause the Bank to, not organize any subsidiary, acquire
      capital stock or other equity securities of any corporation or acquire equity
      ownership interest in any business, except upon foreclosure of any existing
      loan
      or any loan permitted hereunder, or enter into any transactions other than
      in
      the ordinary course of business;

     

    (d) The
      Company shall, and cause the Bank to, not, except in the ordinary course of
      business of the Company and the Bank, (i) sell, pledge, encumber, or otherwise
      dispose of or transfer any loan or lease receivables; (ii) sell, lease, pledge,
      encumber or otherwise dispose of any fixed assets; or (iii) sell, lease, pledge,
      encumber or otherwise dispose of or transfer any of its other properties or
      assets, including without limitation any bonds or other securities;

     

    (e) The
      Company shall cause the Bank to not directly or indirectly terminate or reduce
      or commit to terminate or reduce any Federal Reserve Bank line of credit or
      the
      availability of any funds under any other loan or financing agreement pursuant
      to which the Bank is a borrower;

     

    (f) The
      Company shall cause the Bank to not, except in the ordinary course of business,
      (i) borrow or agree to borrow any money or incur any other Liabilities or
      guarantee the obligations of others (except pursuant to trade letters of credit,
      acceptance liabilities and endorsements of drafts and other commercial paper
      in
the ordinary course of business and in accordance with prudent practice); (ii)
      make or purchase loans or extend credit, including in the form of lease
      financing arrangements, or commit to do the same; (iii) commit to purchase
      or
      sell futures or forward contracts, or make any standby contracts or other option
      arrangements or obligations to purchase or sell option contracts; (iv) make
      any
      commitment to purchase foreign currencies or exchange U.S. dollars; (v) issue
      or
      commit to issue commercial or standby letters of credit or purchase
      participations therein; (vi) purchase bankers’ acceptances; (vii) borrow or lend
      securities; (viii) make or incur any other commitments or Liabilities or incur
      significant contingencies; or (ix) indemnify or agree to indemnify others or
      enter into any material commitment or make any material capital expenditures
      or
      commitments.

     

    (g) The
      Company shall cause the Bank to not, except upon foreclosure of an existing
      loan
      consistent with past practices, acquire or purchase any real property or
      interest therein (including, but limited to, any leasehold interest in any
      real
      property), other than real property or interests therein representing Liens
      securing loans permitted hereunder.

     

    (h) The
      Company shall cause the Bank to not materially change the Bank’s policies and
      practices with respect to liquidity management and cash flow planning, asset
      and
      liability management, investments, conflicts of interest, internal audit
      policies and practices, marketing, acceptance of demand and savings and time
      deposit accounts and certificates, lending, budgeting, profit, and tax planning,
      personnel policies and practices, electronic data processing, accounting or
      any
      other aspects of the operations or business of the Bank;

     

    (i) The
      Company will cause the Bank to not pay or agree to pay any increases in salary,
      bonuses or other compensation to any director, officer or employee of the Bank
      except in the ordinary course of business;

     

    (j) The
      Company will cause the Bank to not pay or agree to pay any increases under
      any
      employee agreement, or amend any existing, or enter into any new, employee
      agreement or adopt any new Plan or arrangement of any type, or amend any Plan
      or
      arrangement except in the ordinary course of business;

     

    (k) The
      Company shall, and will cause the Bank to, not violate any Applicable Law,
      or
      relinquish or terminate any rights, licenses, franchises, permits or other
      authorizations; and

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

     

    (l) The
      Company shall, and will cause the Bank to, keep in full force and effect
      insurance for all property, real, personal and mixed, owned or leased by the
      Bank and all such property shall be used, operated, maintained and repaired
      in a
      careful and reasonably efficient manner.

     

    6.8 Antidilution
      Protection; Right to Purchase Securities.

     

    (a) Except
      as
      provided in Section 6.8(b) hereof, if the Company sells shares of Common Stock
      or options, warrants or convertible or exchangeable securities that entitle
      the
      holder to acquire Common Stock (“Common
      Stock Derivatives”)
      to any
      person other than the Investors or any other affiliate of the Investors, then
      the Company will offer to sell to the Investors provided the Securities owned
      by
      the Investors collectively represent at least ten percent of the outstanding
      Common Stock (counting as shares owned by the Investors all shares of Common
      Stock into which shares of Preferred Stock are convertible and assuming to
      the
      extent Investors shall purchase any additional shares of Common Stock, any
      later
      such additional purchases shall be deemed to be shares), for the same purchase
      price as that at which it sells shares of Common Stock or Common Stock
      Derivatives to persons other than the Investors or their affiliates (with
      non-cash consideration valued at its fair market value), a number of shares
      of
      Common Stock or Common Stock Derivatives that is the fraction of the total
      number of shares of Common Stock or Common Stock Derivatives being sold to
      persons other than the Investors or their affiliates of which (i) the numerator
      is the number of shares of Common Stock owned by the Investors and/or their
      affiliates and includes the shares of Common Stock into which the Preferred
      Stock are convertible immediately before the sale to persons other than the
      Investors and their affiliates, and the denominator is (ii) the total number
      of
      shares of Common Stock that are outstanding, or are issuable on exercise of
      unexpired options or warrants, immediately before the sale to persons other
      than
      the Investors or their affiliates; provided, however, that if any such purchase
      is subject to regulatory approval or prohibited pursuant to Rule 4350 of the
      Nasdaq Marketplace Rules, then the Investors will be offered a smaller number
      of
      shares so as to comply with such rules. 

     

    (b) Section
      6.8(a) hereof will not apply to sales of any TARP Securities or Common Stock
      issuable thereunder or any shares of Common Stock that are issuable (i) upon
      exercise of options or warrants that are outstanding at the date of this
      Agreement, (ii) upon exercise, conversion or exchange of Common Stock
      Derivatives that were issued in transactions that were subject to Section 6.8(a)
      hereof (whether or not the Investors or their affiliates exercises the option
      given to them under that Section), or (iii) to employees, directors or
      consultants of the Company or its subsidiaries under an incentive plan or
      program, or as a bonus, that is or has been approved by the Company’s Board of
      Directors.

     

    6.9 Certificate
      of Determination.
      In
      connection with the Closing, the Company shall file the Preferred Stock
      Certificate of Determination for the Preferred Stock in the form attached to
      this Agreement as Exhibit
      C
      the
      State of California, and such Preferred Stock Certificate of Determination
      shall
      continue to be in full force and effect as of the Closing Date.

     

    6.10 Reservation
      for Issuance.
      The
      Company will reserve that number of shares of Common Stock and Series B-1
      Convertible Preferred Stock reasonably anticipated to be sufficient for issuance
      upon conversion of the Securities owned at any time by the Investors without
      regard to any limitation on such conversion and that number of shares of
      Preferred Stock reasonably anticipated to be sufficient for the payment of
      Preferred Stock dividends.

     

    6.11 Share
      Listing.
      From
      the date of this Agreement and until the receipt of Requisite Shareholder
      Approval, all outstanding Shares of Common Stock shall remain authorized for
      listing on Nasdaq and registered under Section 12 (g) of the 1934 Act and
      the maximum number of shares of Common Stock issuable upon conversion of the
      Preferred Stock shall have been authorized for listing on Nasdaq, subject to
      official notice of issuance (with the remaining shares to authorized for listing
      on Nasdaq (as promptly as practicable) upon receipt of the approval of the
      Company’s shareholders of the relevant Shareholder Proposals.

    
      
        
        

      

      
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    6.12 Change
      in Control Provisions.
      Prior
      to the Closing, (i) the Company Board of Directors shall have adopted
      resolutions excluding the transactions contemplated by this Agreement from
      the
      definition of a “change in control” for any employment agreement filed with the
      SEC pursuant to Item 601 of Regulation S-K, and (ii) each participant of that
      certain Supplemental Executive Retirement Plan of Bridge Bank, N.A. shall have
      agreed to adopt a revised SERP agreement, reasonably acceptable to the Manager
      which will clarify that the transactions contemplated by this Agreement will
      not
      trigger any “change in control” vesting provisions and that such revised SERP
      agreement will supersede and replace the original agreement. 

     

    6.13 Litigation.
      From
      the date of this Agreement and until the Closing, the Company and its
      subsidiaries shall promptly (and, in any event, not later than the date of
      release of such information to the public generally) notify the Manager of
      any
      litigation or governmental proceeding or investigation pending (or, to the
      Knowledge of the Company, threatened) against the Company, against any
      subsidiaries or against any officer, director, key employee, or principal
      shareholder of the Company or of any subsidiaries, that if adversely determined,
      could have a Material Adverse Effect on its present or proposed business,
      properties, assets, or condition (financial or otherwise) taken as a
      whole.

     

    6.14 Further
      Assurances.
      The
      Company shall execute and deliver, and cause the Bank to execute and deliver,
      such instruments and take such other actions as the Manager may reasonably
      require in order to carry out the intent of this Agreement.

     

    6.15 Representations
      and Warranties.
      Prior
      to the Closing, the Company will not take or omit to take, or permit the Bank
      to
      take or omit to take, any action the effect of the taking or omission of which
      would reasonably be expected to cause any of the representations and warranties
      in Article IV hereof to be inaccurate in any material respect at or at any
      time
      prior to the Closing.

     

    6.16 Fees
      and Expenses.
      On the
      Closing Date, the Company shall reimburse the Investors for all reasonable
      fees
      and expenses associated with the Investment including, but not limited to
      reasonable attorneys fees, incurred by the Investors in connection with this
      Agreement and the Other Transaction Documents and the transactions contemplated
      hereby and thereby, travel and other out-of-pocket expenses for this Agreement
      and the transactions contemplated hereby. 

     

    6.17 S-3
      Eligibility.
      Until
      all of the Preferred Stock or Common Stock issued upon conversion is freely
      tradeable, the Company shall use its reasonable best efforts to remain eligible
      to use a registration statement on Form S-3 (or any successor form or other
      appropriate form under the Securities Act) for an offering to be made on a
      continuous or delayed basis pursuant to Rule 415 under the Securities
      Act.

     

    ARTICLE
      VII

    TERMINATION

     

    7.1 Right
      to Terminate Prior to Closing.
      This
      Agreement may be terminated at any time prior to the Closing:

     

    (a) By
      mutual
      consent of the Company and the Manager.

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

     

    (b) By
      the
      Manager or by the Company, if, without fault of the terminating party, the
      Closing does not occur on or before February 15, 2009. 

     

    (c) By
      the
      Manager or the Company upon the denial of any required government approval
      or if
      any required government approval contains conditions or requirements (other
      than
      any conditions which are then standard or typical for transaction of the type
      contemplated by this Agreement) or any governmental corrective action is imposed
      on, or agreed to by, the Company or the Bank which in the reasonable opinion
      of
      the Board of Directors of the Company or of the Manager materially and adversely
      affects the economic and business benefits to the Company or the Investors
      of
      the transactions contemplated by this Agreement.

     

    (d) By
      the
      Manager, if (i) the Company and/or the Bank shall not have received approval
      of
      its application to receive TARP capital at the maximum amount contemplated
      by
      the TARP program by December 10, 2008, or (ii) the Company or the Bank shall
      not
      have satisfied all corporate, regulatory and legal requirements necessary to
      consummate the issuance of equity under the TARP program. 

     

    (e) By
      the
      Manager, if any conditions to closing set forth in Section 3.1 have not been
      satisfied by February 15, 2009. 

     

    (f) By
      the
      Company, if any conditions to closing set forth in Section 3.2 have not been
      satisfied by February 15, 2009. 

     

    (g) By
      the
      Manager, if it is determined that any of the representations and warranties
      of
      the Company contained in this Agreement was not complete and accurate in all
      material respects (or that any of the representations and warranties of the
      Company qualified as to materiality or Material Adverse Effect was not true
      and
      correct in all respects) on the date of this Agreement (after giving effect
      to
      any Company Update(s)) or any condition in Section 3.1 required to be satisfied
      prior to the Closing becomes incapable of satisfaction.

     

    (h) By
      the
      Company, with regard to the Manager, if it is determined that any of the
      representations and warranties of the Manager contained in this Agreement was
      not complete and accurate in all material respects (or that any of the
      representations and warranties of the Manager qualified as to materiality or
      Material Adverse Effect was not true and correct in all respects) on the date
      of
      this Agreement on any condition in Section 3.2 required to be satisfied prior
      to
      the Closing becomes incapable of satisfaction.

     

    7.2 Effect
      of Termination.
      If this
      Agreement is terminated pursuant to Section 7.1, after this Agreement is
      terminated, no party will have any further rights or obligations under this
      Agreement; provided, however that nothing contained in this Section will relieve
      any party of liability for any breach of this Agreement, or obligation pursuant
      to Article VII that occurs or arises from events that occurred before this
      Agreement is terminated.

     

    
      
        
        

      

      
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    ARTICLE
      VIII

    INDEMNIFICATION

    8.1 Indemnification
      by the Company.
      The
      Company agrees to indemnify and hold harmless Manager and the Investors, their
      Affiliates, officers, directors, employees, partners and agents, and each
      Person, if any, who controls, or (other than the Bank) is under the control
      of,
      Manager or the Investors within the meaning of Section 15 of the Securities
      Act
      or Section 20 of the Exchange Act (the “Indemnified
      Persons”)
      from
      and against any and all losses, claims, damages, liabilities and expenses
      (including reasonable expenses of investigation and reasonable attorneys’ fees
      and expenses) (“Damages”)
      caused
      by or relating to (i) any matter that is the subject of a representation and
      warranty of the Company contained in this Agreement and is not as represented
      and warranted, (ii) the Company’s failure to fulfill in any respect any of its
      obligations under this Agreement, or under any document delivered in accordance
      with this Agreement, or (iii) actual or threatened claims brought against the
      Company, the Company Subsidiaries, the Manager, the Investors or any of their
      respective Affiliates, officers, directors, partners, employees and agents
      in
      connection with or arising out of the entering into of this Agreement and the
      transactions contemplated by this Agreement, other than with regard to a failure
      or alleged failure of Manager, or the Investors, to fulfill its obligations
      under this Agreement. This indemnity shall be the sole and exclusive monetary
      remedy of Indemnified Persons after the Closing for any inaccuracy of any
      representation or warranty or any other breach of any covenant or agreement
      contained in this Agreement; provided
      that
      nothing herein shall limit in any way any such party’s remedies in respect of
      fraud by any other party in connection with the transactions contemplated
      hereby. The Company shall no, in any event, be liable or otherwise responsible
      to any Indemnified Person for any consequential or punitive damages of any
      such
      Indemnified Person (or any of its Affiliates) arising out of or relating to
      this
      Agreement or the performance or breach hereof.

     

    8.2 Indemnification
      by Manager.
      For a
      period of sixty (60) days after the Closing, Manager agrees to indemnify and
      hold harmless the Company, its officers, directors and agents and each Person,
      if any, (other than Manager) who controls, or is under the control of, the
      Company within the meaning of either Section 15 of the Securities Act or Section
      20 of the Exchange Act from and against any and all Damages caused by or
      relating to (i) any matter that is the subject of a representation and warranty
      contained herein and is not as represented and warranted of Manager, (ii)
      Manager’s, or the Investor’s, failure to fulfill in any respect any of its
      obligations under this Agreement, or under any document delivered in accordance
      with this Agreement, or (iii) actual or threatened claims brought against
      Manager and its subsidiaries or Affiliates, the Company or its Affiliates,
      or
      any of their respective officers, directors, partners, employees and agents
      in
      connection with or arising out of the entering into of this Agreement and the
      transactions contemplated hereby, other than with regard to a failure or alleged
      failure of the Company to fulfill its obligations under this
      Agreement.

     

    8.3 Conduct
      of Indemnification Proceedings.
      If any
      proceeding (including any governmental investigation) shall be instituted
      involving any Person in respect of which indemnity may be sought pursuant to
      Section 8.1 or Section 8.2, such Person (an “Indemnified
      Party”)
      shall
      promptly notify the Person against whom such indemnity may be sought (the
“Indemnifying
      Party”)
      in
      writing and the Indemnifying Party shall assume the defense thereof, including
      the employment of counsel reasonably satisfactory to such Indemnified Party,
      and
      shall assume the payment of all fees and expenses, provided that the failure
      of
      any Indemnified Party so to notify the Indemnifying Party shall not relieve
      the
      Indemnifying Party of its obligations hereunder except to the extent that the
      Indemnifying Party is materially prejudiced by such failure to notify. In any
      such proceeding, any Indemnified Party shall have the right to retain its own
      counsel, but the fees and expenses of such counsel shall be at the expense
      of
      such Indemnified Party unless (i) the Indemnifying Party and the Indemnified
      Party shall have mutually agreed to the retention of such counsel or (ii) in
      the
      reasonable judgment of such Indemnified Party representation of both parties
      by
      the same counsel would be inappropriate due to actual or potential differing
      interests between them. It is understood that, in connection with any proceeding
      or related proceedings in the same jurisdiction, the Indemnifying Party shall
      not be liable for the reasonable fees and expenses of more than one separate
      firm of attorneys (in addition to any local counsel) at any time for all such
      Indemnified Parties, and that all such fees and expenses shall be reimbursed
      as
      they are incurred. In the case of any such separate firm for the Indemnified
      Parties, such firm shall be designated in writing by the Indemnified Parties.
      The Indemnifying Party shall not be liable for any settlement of any proceeding
      effected without its written consent, but if settled with such consent, or
      if
      there be a final judgment for the plaintiff, the Indemnifying Party shall
      indemnify and hold harmless such Indemnified Parties from and against any loss
      or liability (to the extent stated above) by reason of such settlement or
      judgment. Without the prior written consent of the Indemnified Party, no
      Indemnifying Party shall effect any settlement of any pending or threatened
      proceeding in respect of which any Indemnified Party is or could have been
      a
      party and indemnity could have been sought hereunder by such Indemnified Party,
      unless such settlement includes an unconditional release of such Indemnified
      Party from all liability arising out of such proceeding.

    
      
        
        

      

      
        43

        
          

        

      

      
        
        

      

    

     

    8.4 Contribution.
      If the
      indemnification provided by Sections 8.1 or 8.2 is unavailable or insufficient
      to hold harmless an indemnified party in respect to any losses, claims, damages
      or liabilities (or actions or proceedings in respect thereof) provided by
      Sections 8.1 or 8.2, then each indemnifying party shall, in lieu of indemnifying
      such indemnified party, contribute to the amount paid or payable to such
      indemnified party as a result of such losses, claims, damages, liabilities,
      actions or proceedings in such proportions as appropriate to reflect the
      relative fault of the Company on the one hand, and Manager, on the other hand,
      in connection with any matter that is the subject of a representation and
      warranty that is not as represented and warranted or any failure to fulfill
      in
      any respect any obligations under this Agreement, or under any document
      delivered in accordance with this Agreement, which resulted in such losses,
      claims, damages, liabilities, actions or proceedings, as well as other relevant
      equitable considerations. The relative fault shall be determined by reference
      to, among other things, whether any breach by the Company, on the one hand,
      or
      Manager, on the other hand, and the parties’ relative intent, knowledge, access
      to information, and opportunity to correct or prevent such statement or
      omission. The Company and Manager agree that it would not be just and equitable
      if contribution pursuant to this Section 8.4 were determined by pro rata
      allocation or by any other method of allocation that did not take account of
      equitable considerations. Notwithstanding the provisions of this Section 8.4,
      the Manager shall not be required to contribute any amount exceeding the
      aggregate dollar amount paid by Manager for the Securities. 

     

    ARTICLE
      IX

    RESTRICTIONS
      REGARDING TRANSFERS OF SHARES

     

    9.1 Legend.
      Investors agree that all certificates or other instruments representing the
      Securities subject to this Agreement will bear a legend substantially to the
      following effect (and that the Preferred Stock certificates will have additional
      transfer restrictions as set forth in the Preferred Stock Certificate of
      Determination): THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN
      REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR SECURITIES LAWS
      OF
      ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT
      WHILE
      A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND
      APPLICABLE STATE SECURITIES LAWS OR PURSUANT
      TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS.

     

    9.2 Additional
      Restrictions on Transfers of Series B Preferred Stock.
      The
      shares of Series B Preferred Stock shall be transferable by the Investors or
      any
      of its Affiliates only as follows: (i) to an Affiliate of the Investor under
      common control with the Manager, if the transferee agrees in writing for the
      benefit of the Company (with a copy thereof to be furnished to the Company),
      to
      be bound by the terms of this Agreement, (ii) to an Affiliate of the Company,
      (iii) to any limited partner or shareholder of the Investors, (iv) to any
      limited partner or shareholder of the Investors as long as no sole limited
      partner or shareholder owns more than 15% of any class, (v) in a widely
      distributed public offering registered pursuant to the Securities Act, (vi)
      upon
      certification by the transferor in writing to the Company that the transferor
      believes that the transferee shall not, after giving effect to such transfer,
      own for purposes of the BHCA, and any rules and regulations promulgated
      thereunder, more than 2% of any class of voting securities of the Company
      outstanding at such time, or (vii) to a transferee that is acquiring a majority
      of the Company’s outstanding “voting securities” (as defined in the BHCA and any
      rules or regulations promulgated thereunder)(not including any voting securities
      such person is acquiring from the Investors or their Affiliates).

    
      
        
        

      

      
        44

        
          

        

      

      
        
        

      

    

     

    In
      connection with any transfer of shares of Series B Preferred Stock described
      in
      this Section 9.2 (iv), (v), (vi) and (vii), upon the request of the transferor,
      the transferor shall be entitled to surrender to the Company the shares of
      Series B Preferred Stock to be so transferred, and, upon such surrender, the
      Company shall issue to the transferee, in lieu of shares of Series B Preferred
      Stock surrendered, an equal number of shares of Series B Preferred Stock, as
      the
      case may be, having identical terms in all respects to the shares of Series
      B
      Preferred Stock so surrendered, except that the shares of Series B Preferred
      Stock issued to the transferee shall not be subject to the transfer restrictions
      set forth in this Section 9.2. 

     

    9.3 Compliance
      with Securities Act.
      The
      Manager may not cause the Investors to sell or transfer any Shares other than
      in
      a transaction that is registered under the Securities Act or is exempt from
      the
      registration requirements of the Securities Act. If the Manager causes the
      Investors to ask the Company to register a transfer of Shares in a transaction
      that is not registered under the Securities Act, the Company may refuse to
      register such transfer until it receives evidence that is reasonably
      satisfactory to the Company, that the sale or transfer is exempt from the
      registration requirements of the Securities Act. 

     

    9.4 Removal
      of Legends.
      If any
      Securities that were Restricted Securities become eligible for sale pursuant
      to
      Rule 144(k) or otherwise cease to be Restricted Securities, the Company shall,
      upon the request of the holder of such Shares, promptly remove the legend,
      if
      any, from the certificates for such Securities. “Restricted
      Securities”
means
      the Securities purchased by the Investors pursuant to this Agreement until
      such
      Securities are sold pursuant to a registration statement or until such
      Securities are sold or are eligible to be sold pursuant to Rule 144 or could
      be
      sold in their entirety in compliance with Rule 144 (including the volume
      limitations in Rule 144, unless the Securities could be sold pursuant to
      subsection (k) of Rule 144).

     

    ARTICLE
      X

    MISCELLANEOUS

     

    10.1 Legal
      Action.
      If any
      party hereto shall institute any legal action to enforce this Agreement or
      any
      provision hereof, it is agreed that the prevailing party shall be entitled
      to
      collect costs and expenses of litigation, including, without limitation,
      reasonable attorneys’ fees.

     

    10.2 Notices.
      Any
      notice or other communication under this Agreement must be in writing and will
      be deemed given when it is delivered in person or sent by facsimile or email
      (with proof of receipt at
      the
      facsimile number or email address to which it is required to be sent), on the
      business day after the day on which it is delivered to a major nationwide
      delivery service for overnight delivery, or on the fifth business day after
      the
      day on which it is mailed by first class mail from within the United States
      of
      America, to the following addresses (or such other address as may be specified
      after the date of this Agreement by the party to which the notice or
      communication is sent):

     

    If
      to the
      Company:

     

    Bridge
      Capital Holdings

    55
      Almaden Boulevard

    San
      Jose,
      California 95113 

    Facsimile
      No.: (408) 423-8520

    
      
        
        

      

      
        45

        
          

        

      

      
        
        

      

    

    

    With
      a
      copy (which will not constitute notice) to:

    

    Bingham
      McCutchen LP

    Three
      Embarcadero Center

    San
      Francisco, California 94111

    Attention:
      James M. Rockett

    Facsimile
      No.: (415) 393-2286

     

    If
      to the
      Manager:

     

    Carpenter
      Fund Manager GP,
      LLC

    5
      Park
      Plaza, Suite 950

    Irvine,
      California 92614

    Attn: Robert
      E.
      Sjogren, Secretary

    Voice:
      (949) 261-8888

    Facsimile
      No.: (949) 261-0880

     

    With
      a
      copy to:

     

    Mantt,
      Phelps & Phillips, LLP 

    695
      Town
      Center Drive, 14th Floor

    Costa
      Mesa, California 92626

    Attn: Angelee
      J. Harris

    Tel:
      (714) 338-2720

    
      Facsimile
        No.: (714) 371-2550 

    

     

    10.3 Agreement.
      This
      Agreement, the Exhibits hereto, any matters Previously Disclosed and any
      documents executed by the Parties simultaneously herewith represent the entire
      understanding of the Parties with reference to the transactions set forth herein
      and supersede all prior understandings and agreements heretofore made by the
      Parties. Except as otherwise expressly provided herein, no Person other than
      the
      Parties hereto shall have any right hereunder or be entitled to the benefit
      of
      any provision hereof.

     

    10.4 Waiver
      and Amendment.
      Except
      with respect to statutory requirements, any party hereto may by written
      instrument extend the time for the performance of any of the obligations or
      other acts of the other party and may waive (i) any inaccuracies of the other
      in
      the representations or warranties contained in this Agreement or in any document
      delivered pursuant hereto, (ii) compliance with any of the covenants,
      undertakings or agreements of the other party, or satisfaction of any of the
      conditions to its obligations, contained in this Agreement or (iii) the
      performance (including performance to the satisfaction of a party or its
      counsel) by the other party of any of its obligations set out herein. No failure
      or delay on the part of either party hereto in exercising any right, power
      or
      remedy hereunder shall operate as a waiver thereof, nor shall any single or
      partial exercise of any such right, power or remedy preclude any other or
      further exercise thereof or the exercise of any other right, power or remedy.
      Any waiver by a party of a condition to its obligation to perform this Agreement
      and to consummate the Closing hereunder shall be without prejudice to the rights
      or remedies such party may have arising out of any breach of any representation,
      warranty, covenant or other agreement hereunder. Neither this Agreement nor
      any
      provisions hereof may be amended, waived, modified or discharged except by
      an
      agreement in writing signed by the party against whom the enforcement of any
      amendment, waiver, change or discharge is sought.

    
      
        
        

      

      
        46

        
          

        

      

      
        
        

      

    

     

    10.5 Headings.
      The
      headings of the various sections of this Agreement have been inserted for
      convenience of reference only and shall not be deemed to be part of this
      Agreement.

     

    10.6 Severability.
      In case
      any provision contained in this Agreement should be invalid, illegal or
      unenforceable in any respect in any jurisdiction, as to such jurisdiction,
      such
      provision shall be ineffective to the extent of such invalidity, illegality
      or
      unenforceability, and the validity, legality and enforceability of the remaining
      provisions contained herein shall not in any way be affected or impaired
      thereby.

     

    10.7 Governing
      Law.
      This
      Agreement shall be governed by and construed in accordance with the internal
      laws of the State of California.

     

    10.8 Counterparts.
      This
      Agreement may be executed in two counterparts, each of which shall constitute
      an
      original, but all of which, when taken together, shall constitute but one
      instrument, and shall become effective when one or more counterparts have been
      signed by each party hereto and delivered to the other party.

     

    10.9 Expenses.
      The
      Company shall reimburse the Manager for all costs and expenses incurred by
      the
      Manager with respect to the negotiation, execution and delivery of, and the
      performance of the transactions contemplated by, this Agreement and the Other
      Transaction Documents including, but not limited to legal, accounting loan
      review and other due diligence related expenses.

     

    10.10 Successors
      and Assigns.
      The
      provisions hereof shall inure to the benefit of, and be binding upon, the
      successors, assigns, heirs, executors and administrators of the Parties hereto.
      

     

    [Signature
      page follows.]

    
      
        
        

      

      
        47

        
          

        

      

      
        
        

      

    

    

    IN
      WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed,
      where applicable by their duly authorized representatives, as of the first
      above
      written.

    

    
      	
              Company:

            
	 	 
	
              BRIDGE
                CAPITAL HOLDINGS

            
	 	 
	
              By:

            	  

	
              Name:

            
	
              Title:

            
	 	 
	
              Manager:

            
	 	 
	
              CARPENTER
                FUND MANAGER GP, LLC

            
	 	 
	
              
                ON
                  BEHALF OF, AND AS THE GENERAL PARTNER OF: CARPENTER COMMUNITY BANCFUND,
                  L.P., CARPENTER COMMUNITY BANCFUND-A, L.P. AND CARPENTER COMMUNITY
                  BANCFUND-CA, L.P.

              

            
	 	 
	
              By:

            	  

	 	
              Name:
                John D. Flemming

            
	 	
              Title:
                Managing Member

            

    

    
      
        
        

      

      
        48

        
          

        

      

      
        
        

      

    

    Exhibit
      A

    

    Schedule
      of Investors

     

    
      	 	 	 	 	
              No. of Shares

              Total

            	 
	
               

               

              Name & Address

            	 	
               

               

              Aggregate 

              Purchase Price

            	 	
               

              Series B 

              Preferred 

              Shares

            	 	
              Common 

              Stock (if 

              converted at 

              a $10.00 

              conversion 

              price)

            	 
	
              Carpenter
                Community 

              BancFund,
                LP

              c/o
                Carpenter Fund Manager GP LLC

              5
                Park Plaza

              Suite
                950

              Irvine,
                CA 92614

            	 	 	
              1,104,000.00

            	 	 	
              11,040

            	 	 	
              110,400

            	 
	 	 	 	 	 	 	 	 	 	 	 
	
              Carpenter
                Community 

              BancFund-A,
                LP

              c/o
                Carpenter Fund Manager GP LLC

              5
                Park Plaza

              Suite
                950

              Irvine,
                CA 92614

            	 	 	
              27,798,000.00

            	 	 	
              277,980

            	 	 	
              2,779,800

            	 
	 	 	 	 	 	 	 	 	 	 	 
	
              Carpenter
                Community 

              BancFund-CA,
                LP

              c/o
                Carpenter Fund Manager GP LLC

              5
                Park Plaza

              Suite
                950

              Irvine,
                CA 92614

            	 	 	
              1,098,000.00

            	 	 	
              10,980

            	 	 	
              109,800

            	 
	
              TOTAL

            	 	
              
              

              $

            	
              
              

              30,000,000.00

            	 	 	
              
              

              300,000

            	 	 	
              
              

              3,000,000

            	 

    

    

    
      
        
          Exhibit
            A

        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit
      B

    

    Fully-Diluted

    Capitalization

    

    
      	 	 	
              Outstanding Shares

            	 	
              Fully-Diluted, 

              Voting

            	 
	
              Post –Closing:

            	 	
              No.

            	 	
              %

            	 	
              No.

            	 	
              %

            	 
	
              Common Stock

            	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Current
                shareholders

            	 	 	
              6,598,289

            	 	 	
              79.9

            	 	 	
              6,598,289

            	 	 	
              58.1

            	 
	
              Current
                optionees (1)

            	 	 	
              1,357,280

            	 	 	
              16.4

            	 	 	
              1,357,280

            	 	 	
              12.0

            	 
	
              TARP
                Warrants

            	 	 	
              0

            	 	 	
              0

            	 	 	
              0

            	 	 	
              0

            	 
	
              Investors

            	 	 	
              0

            	 	 	
              0

            	 	 	
              0

            	 	 	
              0

            	 
	
              Total

            	 	 	
              7,955,569

            	 	 	
              96.4

            	 	 	
              8,354,240

            	 	 	
              73.6

            	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Preferred
                Stock

            	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              TARP

            	 	 	
              0

            	 	 	 	 	 	
              0

            	
              (2)

            	 	 	 
	
              Investors

            	 	 	
              300,000

            	 	 	
              3.6

            	 	 	
              3,000,000

            	
              (3)

            	 	
              26.4

            	 
	
              Total

            	 	 	
              300,000

            	 	 	
              3.6

            	 	 	
              3,000,000

            	 	 	
              26.4

            	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Aggregate

            	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Current
                shareholders

            	 	 	
              6,598,289

            	 	 	
              79.9

            	 	 	
              6,598,289

            	 	 	
              58.1

            	 
	
              Current
                optionees (1)

            	 	 	
              1,357,280

            	 	 	
              16.4

            	 	 	
              1,357,280

            	 	 	
              12.0

            	 
	
              TARP
                Preferred Stock

            	 	 	
              0

            	 	 	
              0

            	 	 	
              0

            	 	 	
              0

            	 
	
              TARP
                Warrants

            	 	 	
              0

            	 	 	
              0

            	 	 	
              398,671

            	 	 	
              3.5

            	 
	
              Investors
                Preferred Stock

            	 	 	
              300,000

            	 	 	
              3.6

            	 	 	
              3,000,000

            	
              (3)

            	 	
              26.4

            	 
	
              Total

            	 	 	
              8,255,569

            	 	 	
              100.0

            	 	 	
              11,354,240

            	 	 	
              100.0

            	 

    

    
       

      
        

      

    

    
      	
              (1)

            	
              Plus
                any options issued after the date hereof in accordance with the
                Agreement.

            

    

    
      	(2)	
              Presentation
                reflects lack of voting rights for TARP Preferred Stock.
                

            

    

    
      	(3)	
              Presented
                as if converted to voting common stock at conversion price of $10.00
                per
                share.

            

    

    

    Assumptions:

    
      	 	
              1.

            	
              Includes
                an assumed TARP funding which is not expected to occur until after
                funding
                by CCBF.

            

    

     

    
      	 	
              2.

            	
              The
                number of TARP preferred shares is unknown pending receipt of documents
                from Treasury. The potential voting impact is reasonably reflected
                in the
                fully-diluted column of the
                schedule.

            

    

     

    
      	 	
              3.

            	
              The
                number of shares reserved for TARP warrants is pending confirmation
                by
                Treasury.

            

    

     

    
      
        
          Exhibit
            B

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    EXHIBIT
      C 

     

    FORM
      OF

     

    CERTIFICATE
      OF DETERMINATION

     

    OF

     

    SERIES
      B PREFERRED STOCK AND SERIES B-1 PREFERRED STOCK

     

    OF

     

    BRIDGE
      CAPITAL HOLDINGS

     

    a
      California corporation

     

    Pursuant
      to Section 401(a) of the

    California
      General Corporation Law

     

    
      

    

     

    We
      Daniel
      P. Myers, President and Chief Executive Officer, and Thomas A. Sa, Executive
      Vice President and Chief Financial Officer, of Bridge Capital Holdings, a
      corporation organized and existing under the laws of California (hereinafter
      called the “Company”), do hereby certify as follows: 

     

    1. On
      ________, 2008 the Board of Directors of the Company adopted a resolution
      designating ______ shares of Preferred Stock as Series B Mandatorily Convertible
      Cumulative Perpetual Preferred Stock and ________ shares of Preferred Stock
      as
      Series B-1 Mandatorily Convertible Cumulative Perpetual Preferred
      Stock.

     

    2.
      No
      shares of Series B Mandatorily Convertible Perpetual Cumulative Preferred Stock
      and no shares of Series B-1 Mandatorily Convertible Cumulative Perpetual
      Preferred Stock have been issued.

     

    3.
      Pursuant to the authority conferred upon the Board of Directors by the Articles
      of Incorporation of the Company, the following resolution was duly adopted
      by
      the Board of Directors on ______, 2008 creating two series of Preferred Stock,
      one designated as the Series B Mandatorily Convertible Cumulative Perpetual
      Preferred Stock and the second designated as the Series B-1 Mandatorily
      Convertible Cumulative Perpetual Preferred Stock:

     

    “NOW,
      THEREFORE, BE IT RESOLVED, that the Board of Directors of the Company hereby
      establishes two series of Preferred Stock designated as (1) the “Series B
      Mandatorily Convertible Cumulative Perpetual Preferred Stock,” consisting of
      _______ shares and (2) the “Series B-1 Mandatorily Convertible Cumulative
      Perpetual Preferred Stock,” consisting of _______ shares, each series of which
      have following rights, preferences, privileges and restrictions:

     

    SERIES
      B AND SERIES B-1 PREFERRED STOCK:

     

    Section
      1. Designation.
      There
      are hereby created out of the authorized and unissued shares of preferred stock
      of the Company two series of preferred stock, one designated as the
“Series B Mandatorily Convertible Cumulative Perpetual Preferred Stock”
(the “Series B
      Preferred Stock”)
      and
      the second designated as the “Series B-1 Mandatorily Convertible Cumulative
      Perpetual Preferred Stock” (the “Series
      B-1 Preferred Stock”)
      (together, the Series B Preferred Stock and the Series B-1 Preferred Stock
      are
      referred to as the “Preferred
      Stock”).
      The
      number of shares constituting the Series B Preferred Stock shall be [___],
      no
      par value per share. The number of shares constituting the Series B-1 Preferred
      Stock shall be [___], no par value per share. 

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    Section
      2. Ranking.
      The
      Preferred Stock will, with respect to dividend rights and rights on liquidation,
      winding-up and dissolution, rank (i) junior to any preferred
      shares issued to the U.S. Treasury or its designee pursuant to the Emergency
      Economic Stabilization Act
      (the
“Senior
      Securities”)
      (ii) on a parity with each other and with each other class or series of
      preferred stock established after the Effective Date by the Company the terms
      of
      which expressly provide that such class or series will rank on a parity with
      the
      Preferred Stock as to dividend rights and rights on liquidation, winding-up
      and
      dissolution of the Company (collectively referred to as “Parity
      Securities”)
      and
      (iii) senior to the Company’s common stock (the “Common
      Stock”),
      the
      Series A Junior Preferred Stock and each other class or series of capital stock
      outstanding or established after the Effective Date by the Company the terms
      of
      which do not expressly provide that it ranks on a parity with or senior to
      the
      Preferred Stock as to dividend rights and rights on liquidation, winding-up
      and
      dissolution of the Company (collectively referred to as “Junior
      Securities”).
      

     

    The
      Company has the right to authorize or issue additional shares or classes or
      series of Junior Securities or Parity Securities without the consent of the
      Holders; provided however that until such time as all of the Series B
      Preferred Stock have been converted into shares of Common Stock, the Company
      shall not, without the prior written consent of the Series B Holders owning
      at
      least 50.1% of the then outstanding Series B Preferred Stock, create,
      authorize or designate any preferred stock of any class or series having any
      designations, preferences, relative, participating, optional or other rights
      ranking senior to or on parity with those of the Series B Preferred Stock;
      provided further, that, until such time as all of the Series B-1 Preferred
      Stock
      have been converted into shares of Common Stock, the Company shall not, without
      the prior written consent of the Series B-1 Holders owning at least 50.1% of
      the
      then outstanding Series B-1 Preferred Stock create, authorize or designate
      any
      preferred stock of any class or series having any designations, preferences,
      relative, participating, optional or other rights ranking senior to or on parity
      with those of the Series B-1 Preferred Stock.

     

    Section
      3. Definitions.
      The
      following terms shall have the meanings set forth below or in the section
      cross-referenced below, as applicable, whether used in the singular or the
      plural:

     

    “Affiliate”
has
      the
      meaning set forth in Rule 12b-2 under the Exchange Act.

     

    “Applicable
      Conversion Price”
means
      the Conversion Price in effect at any given time.

     

    “Articles
      of Incorporation”
means
      the Articles of Incorporation of the Company, as amended, and as amended by
      this
      Certificate of Determination and as it may be further amended.

     

    “Beneficially
      Own”
and
      its
      correlatives have the meaning set forth in Rule 13d-3 under the Exchange
      Act.

     

    “Board
      of Directors”
means
      the board of directors of the Company or any committee thereof duly authorized
      to act on behalf of such board of directors.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    “Business
      Day”
means
      any day other than a Saturday, Sunday or any other day on which banks in
      California are generally required or authorized by law to be
      closed.

     

    “Certificate
      of Determination”
means
      this Certificate of Determination of the Series B Mandatorily Convertible
      Cumulative Perpetual Preferred Stock and the Series B-1 Mandatorily Convertible
      Cumulative Perpetual Preferred Stock.

     

    “Closing
      Price”
of
      the
      Common Stock on any date of determination means the closing sale price or,
      if no
      closing sale price is reported, the last reported sale price of the shares
      of
      the Common Stock on the Nasdaq Global Market on such date. If the Common Stock
      is not traded on the Nasdaq Global Market on any date of determination, the
      Closing Price of the Common Stock on such date of determination means the
      closing sale price as reported in the composite transactions for the principal
      U.S. national or regional securities exchange on which the Common Stock is
      so
      listed or quoted, or, if no closing sale price is reported, the last reported
      sale price on the principal U.S. national or regional securities exchange on
      which the Common Stock is so listed or quoted, or if the Common Stock is not
      so
      listed or quoted on a U.S. national or regional securities exchange, the last
      quoted bid price for the Common Stock in the over-the-counter market as reported
      by Pink Sheets LLC or similar organization, or, if that bid price is not
      available, the market price of the Common Stock on that date as determined
      by a
      nationally recognized independent investment banking firm retained by the
      Company for this purpose.

     

    For
      purposes of this Certificate of Determination, all references herein to the
      “Closing Price” and “last reported sale price” of the Common Stock on the Nasdaq
      Global Market shall be such closing sale price and last reported sale price
      as
      reflected on the website of the Nasdaq Global Market (http://www.nasdaq.com)
      and
      as reported by Bloomberg Professional Service; provided that in the event that
      there is a discrepancy between the closing sale price or last reported sale
      price as reflected on the website of the Nasdaq Global Market and as reported
      by
      Bloomberg Professional Service, the closing sale price and last reported sale
      price on the website of the Nasdaq Global Market shall govern. 

     

    “Common
      Stock”
has
      the
      meaning set forth in Section 2.

     

    “Common
      Stock Equivalent”
means
      any security that directly or indirectly is convertible into, or exercisable
      for, shares of Common Stock.

     

    “Company”
means
      Bridge Capital Holdings, a corporation organized and existing under the laws
      of
      the state of California. 

     

    “Conversion
      Approvals”
means
      the collective reference to the Shareholder Approval and the Regulatory
      Approvals.

     

    “Conversion
      Cap Condition”
means
      that if a Shareholder Approval Date has not occurred, shares of Series B
      Preferred Stock may not directly or indirectly convert into shares of voting
      stock of the Company if such conversion would result in (a) the aggregate voting
      power of all outstanding voting stock issued pursuant to the direct or indirect
      conversion of shares of Series B Preferred Stock exceeding (b) the voting power
      of 19.99% of the Common Stock outstanding as of the Effective Date; provided,
      that for purposes of this definition, the conversion of shares of Series B-1
      Preferred Stock into shares of Common Stock shall be deemed an indirect
      conversion of shares of Series B Preferred Stock into shares of the voting
      stock
      of the Company if such shares of Series B-1 Preferred Stock originally derive
      from a conversion of shares of Series B Preferred Stock.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    “Conversion
      Price”
means
      for each of the Series B Preferred Stock and the Series B-1 Preferred Stock,
      the
      Stated Price Per Share, as adjusted pursuant to the terms set forth herein.
      

     

    “Current
      Market Price Condition”
means
      if, on any applicable date, including any conversion date of Preferred Stock
      into Common Stock or any Dividend Payment Date of the Preferred Stock, the
      Twenty Day Trailing Closing Price Per Share is such that each share of Series
      B
      and Series B-1 Preferred Stock, if converted, would convert into the number
      of
      shares of Common Stock that, in the aggregate and based on such Twenty Day
      Trailing Closing Price Per Share, would have a value equal to or greater than
      the Purchase Price Per Share. 

     

    “Dividend
      Payment Date”
has
      the
      meaning set forth in Section 4(a).

     

    “Dividend
      Period”
means
      each period from, and including, a Dividend Payment Date (or with respect to
      the
      first Dividend Period for each respective share of Preferred Stock, the original
      issuance date) to, but excluding, the following Dividend Payment Date.

     

    “Effective
      Date”
means
      the date on which shares of the Series B Preferred Stock are first
      issued.

     

    “Exchange
      Act”
means
      the Securities Exchange Act of 1934, as amended, and the rules and regulations
      promulgated thereunder.

     

    “Exchange
      Property”
has
      the
      meaning set forth in Section 11(a).

     

    “First
      Dividend Payment Date”
has
      the
      meaning set forth in Section 4(a).

     

    “First
      Full Mandatory Conversion Date”
has
      the
      meaning set forth in Section 8(f).

     

    “Full
      Mandatory Conversion Date”
means,
      with respect to the Preferred Stock of any Holder, the date the Company and
      such
      Holder, as applicable, have received all Conversion Approvals necessary to
      permit such Holder to convert such shares of Preferred Stock into authorized
      Common Stock or, as applicable, Series B-1 Preferred Stock, without such
      conversion resulting in a Violation.

     

    “Fundamental
      Change”
means
      the occurrence, after the Effective Date and prior to the Mandatory Conversion
      Date, of the events set forth in any one of the following paragraphs:

     

    (i) any
      Person is or becomes the Beneficial Owner, directly or indirectly, of securities
      of the Company (not including in the securities beneficially owned by such
      Person any securities acquired directly from the Company or its Affiliates)
      representing 20% or more of the combined voting power of the Company’s then
      outstanding securities, excluding any Person who becomes such a Beneficial
      Owner
      in connection with a transaction described in clauses (a), (b) or (c) of
      paragraph (iii) below; 

     

    (ii) within
      any twenty-four (24) month period, the following individuals cease for any
      reason to constitute a majority of the number of directors then serving on
      the
      Board of Directors: individuals who, on the Effective Date, constitute the
      Board
      of Directors and any new director (other than a director whose initial
      assumption of office is in connection with an actual or threatened election
      contest, including but not limited to a consent solicitation, relating to the
      election of directors of the Company) whose appointment or election by the
      Board
      of Directors or nomination for election by the Company’s shareholders was
      approved or recommended by a vote of at least two-thirds (2/3) of the directors
      then still in office who either were directors on the Effective Date hereof
      or
      whose appointment, election or nomination for election was previously so
      approved or recommended; 

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (iii) there
      is
      consummated a merger, consolidation of the Company, or any direct or indirect
      subsidiary of the Company with any other corporation or any recapitalization
      of
      the Company (for purposes of this paragraph (iii), a “Business
      Event”)
      unless, immediately following such Business Event (a) the directors of the
      Company immediately prior to such Business Event continue to constitute at
      least
      a majority of the Board of Directors of the Company, the surviving entity,
      or
      any parent thereof, (b) the voting securities of the Company outstanding
      immediately prior to such Business Event continue to represent (either by
      remaining outstanding or by being converted into voting securities of the
      surviving entity or any parent thereof), in combination with the ownership
      of
      any trustee or other fiduciary holding securities under an employee benefit
      plan
      of the Company or any subsidiary of the Company, at least 60% of the combined
      voting power of the securities of the Company or such surviving entity or any
      parent thereof outstanding immediately after such Business Event, and
      (c) in the event of a recapitalization, no Person is or becomes the
      Beneficial Owner, directly or indirectly, of securities of the Company or such
      surviving entity or any parent thereof (not including in the securities
      beneficially owned by such Person any securities acquired directly from the
      Company or its Affiliates) representing 20% or more of the combined voting
      power
      of the then outstanding securities of the Company or such surviving entity
      or
      any parent thereof (except to the extent such ownership existed prior to the
      Business Event); 

     

    (iv) the
      shareholders of the Company approve a plan of complete liquidation or
      dissolution of the Company; 

     

    (v) there
      is
      consummated an agreement for the sale, disposition, or long-term lease by the
      Company of substantially all of the Company’s assets, other than (a) such a
      sale, disposition or lease to an entity, at least 50% of the combined voting
      power of the voting securities of which are owned by shareholders of the Company
      in substantially the same proportions as their ownership of the Company
      immediately prior to such sale or disposition or 

     

    (vi) the
      distribution directly to the Company’s shareholders (in one distribution or a
      series of related distributions) of all of the stock of one or more subsidiaries
      of the Company that represent substantially all of the Company’s assets; or

     

    (vii) any
      other
      event that the Board of Directors, in its sole discretion, determines to be
      a
      Fundamental Change.

     

    Notwithstanding
      the foregoing, a “Fundamental
      Change”
under
      clauses (i) through (v) above shall not be deemed to have occurred by
      virtue of the consummation of any transaction or series of integrated
      transactions immediately following which the record holders of the Common Stock
      of the Company immediately prior to such transaction or series of transactions
      continue to have substantially the same proportionate ownership in one or more
      entities which, singly or together, immediately following such transaction
      or
      series of transactions, own all or substantially all of the assets of the
      Company as constituted immediately prior to such transaction or series of
      transactions.

     

    “Holder”
means
      collectively the Series B Holders and the Series B-1 Holders. 

     

    “Junior
      Securities”
has
      the
      meaning set forth in Section 2.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    “Liquidation
      Preference”
means,
      as to the Series B and Series B-1 Preferred Stock, the sum of (i) the
      Purchase Price Per Share (subject to appropriate adjustment in the event of
      any
      stock dividend, stock split, combination or similar recapitalization), plus
      (ii) the amount of all accrued but unpaid dividends thereon, whether or not
      declared, together with any other dividends declared but unpaid in respect
      of
      such share to the date fixed for distribution. 

     

    “Parity
      Securities”
has
      the
      meaning set forth in Section 2.

     

    “Per
      Share Price”
means,
      with respect to any issuance of any class or series of Common Stock Equivalent,
      (A) the aggregate purchase price, including any exercise price (net of any
      brokerage, transaction, acquisition, advisory, due diligence, origination or
      similar fees, but excluding expense reimbursements and underwriting discounts,
      fees or commissions), paid or payable for such Common Stock Equivalents in
      such
      issuance, divided by (B) the number of shares of Common Stock into which
      all such Common Stock Equivalents would be converted if they were so converted
      immediately following such issuance.

     

    “Person”
means
      a
      legal person, including any individual, corporation, estate, partnership, joint
      venture, association, joint-stock company, limited liability company or
      trust.

     

    “Preferred
      Certificate”
has
      the
      meaning set forth in Section 17(a). 

     

    “Preferred
      Stock”
has
      the
      meaning set forth in Section 1.

     

    “Purchase
      Price Per Share”
means
      One Hundred Dollars ($100.00).

     

    “Quarterly
      Dividends”
has
      the
      meaning set forth in Section 4(a).

     

    “Record
      Date”
has
      the
      meaning set forth in Section 4(b).

     

    “Regulatory
      Approvals”
means,
      with respect to any Holder, the receipt of approvals and authorizations of,
      filings and registrations with or notifications to, each only to the extent
      applicable and required, permit such Holder to acquire such Holder’s shares of
      Preferred Stock and to convert such Holder’s shares of Preferred Stock into
      Common Stock or, as applicable, Series B-1 Preferred Stock and to own such
      Common Stock and, as applicable, Series B-1 Preferred Stock, without such Holder
      being in violation of applicable law, including, without limitation,
      certification as a bank holding company by the United States Federal Reserve
      System, appropriate regulatory approvals by the Office of the Comptroller of
      the
      Currency and any other appropriate regulatory approvals.

     

    “Reorganization
      Event”
has
      the
      meaning set forth in Section 11(a).

     

    “Rights
      Agreement”
means
      that certain Rights Agreement dated as of August 21, 2008, by and between the
      Company and American Stock Transfer &Trust Company, LLC.

     

    “Senior
      Securities”
has
      the
      meaning set forth in Section 2.

     

    “Series
      A Junior Preferred Stock”
means
      the shares of the Company’s Series A Junior Participating Preferred Stock,
      no par value, reserved for issuance pursuant to the Rights
      Agreement.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    “Series
      B Holder”
means
      the record holder of shares of the Series B Preferred Stock, which record
      holder may be treated by the Company as the absolute owner of the shares of
      Series B Preferred Stock for the purpose of making payment and settling the
      related conversions and for all other purposes.

     

    “Series
      B Preferred Stock”
has
      the
      meaning set forth in Section 1.

     

    “Series
      B Quarterly Dividends”
has
      the
      meaning set forth in Section 4(a).

     

    “Series
      B-1 Holder”
means
      the record holder of shares of the Series B-1 Preferred Stock, which record
      holder may be treated by the Company as the absolute owner of the shares of
      Series B-1 Preferred Stock for the purpose of making payment and for all
      other purposes.

     

    “Series
      B-1 Preferred Stock”
has
      the
      meaning set forth in Section 1.

     

    “Series
      B-1 Quarterly Dividends”
has
      the
      meaning set forth in Section 4(a).

     

    “Shareholder
      Approval”
means
      all Shareholder Approvals under the Nasdaq Marketplace Rules necessary to
      approve the issuance of the Common Stock and, as applicable, issuance of the
      Series B-1 Preferred Stock, which are issuable upon conversion of the Preferred
      Stock issued in connection with the Stock Purchase Agreement.

     

    “Shareholder
      Approval Date”
means
      the date on which the Shareholder Approval is obtained by the Company, provided
      the Shareholder Approval Date can never occur and be valid pursuant to the
      terms
      of this Certificate of Determination after a Shareholder Disapproval Date has
      occurred.

     

    “Shareholder
      Disapproval”
means
      the Company has held one shareholder meeting to obtain Shareholder Approval,
      and
      at that meeting, the Company failed to obtain Shareholder Approval; for purposes
      of this definition, the Company has the authority to adjourn the meeting, if
      necessary, to permit further solicitation of proxies if there are not sufficient
      votes at the meeting to obtain the Shareholder Approval, and when the meeting
      is
      re-adjourned and finally held, then the Company will be deemed to have held
      one
      shareholder meeting. 

     

    “Shareholder
      Disapproval Date”
means
      the date, if any, on which the Shareholder Disapproval occurs. 

     

    “Spin-Off”
means
      a
      transaction in which the Company makes a distribution to all holders of shares
      of Common Stock consisting of capital stock of any class or series, or similar
      equity interests of, or relating to, a subsidiary or other business unit of
      the
      Company.

     

    “Stated
      Price Per Share”
means
      Ten Dollars ($10.00) per share of Series B Preferred Stock and Series B-1
      Preferred Stock as adjusted pursuant to the terms set forth herein.

     

    “Stock
      Purchase Agreement”
means
      that certain Stock Purchase Agreement dated as of [______, 2008], by and among
      the Company, Carpenter Community BancFund, LP, Carpenter Community BancFund-A,
      LP and Carpenter Community BancFund-CA, LP.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    “Trading
      Day”
means
      a
      day on which the shares of Common Stock: 

     

    (i) are
      not
      suspended from trading on any national or regional securities exchange or
      association or over-the-counter market at the close of business; and

     

    (ii) have
      traded at least once on the national or regional securities exchange or
      association or over-the-counter market that is the primary market for the
      trading of the Common Stock.

     

    “Twenty
      Day Trailing Closing Price Per Share”
means
      the average of the daily Closing Price per share of the Common Stock on each
      of
      the twenty consecutive Trading Days preceding the date in question.

     

    “Violation”
means
      any of the following circumstances resulting from any conversion of Preferred
      Stock or payment of Preferred Stock as a dividend: a violation of the
      Shareholder Approval requirements of the Nasdaq Marketplace Rules, or a
      violation of any rules or regulations of the United States Federal Reserve
      System or the Office of the Comptroller of the Currency.

     

    Section
      4. Dividends
      and Repurchases.
      

     

    (a) Quarterly
      Dividend.
      Holders
      of Series B Preferred Stock shall be entitled to receive cumulative cash
      dividends, payable when and as declared by the Board of Directors, but only
      out
      of assets legally available therefore, at an annual rate of 10% on the Purchase
      Price Per Share (subject to appropriate adjustment in the event of any stock
      dividend, stock split, combination or similar recapitalization or the like)(the
      “Series
      B Quarterly Dividends”).
      Holders of Series B-1 Preferred Stock shall be entitled to receive cumulative
      cash dividends payable when and as declared by the Board of Directors, but
      only
      out of assets legally available therefore, at an annual rate of 10% on the
      Purchase Price Per Share (subject to appropriate adjustment in the event of
      any
      stock dividend, stock split, combination or similar recapitalization or the
      like) (the “Series
      B-1 Quarterly Dividends”
and,
      together with the Series B Quarterly Dividends, the “Quarterly
      Dividends”).
      Quarterly Dividends are cumulative and shall accrue on each share of Preferred
      Stock (and the amount of any accrued and unpaid cash dividends for any prior
      Dividend Period on such share of Preferred Stock, if any) during each Dividend
      Period, whether or not declared and shall compound on each subsequent Dividend
      Payment Date (i.e. no dividends shall accrue on other dividends unless and
      until
      the first Dividend Payment Date for such other dividends has passed without
      such
      other dividends having been paid on such date). Subject to the foregoing,
      Quarterly Dividends shall be payable in arrears on January 15, April 15, July
      15
      and October 15 of each year (each, a “Dividend
      Payment Date”),
      commencing as of April 15, 2009 (the “First
      Dividend Payment Date”).
      If a
      Dividend Payment Date falls on a day that is not a Business Day, the Quarterly
      Dividends shall be paid on the next Business Day as if it were paid on the
      Dividend Payment Date, and no interest or other amount shall accrue on the
      dividend so payable for the period from and after that Dividend Payment Date
      to
      the date the dividend is paid. If (i) the Shareholder Approval Date has
      occurred, and (ii) accrued Quarterly Dividends (including, if applicable
      dividends on such amount) on each share of Preferred Stock are not declared
      and
      paid by the Board of Directors for four or more consecutive Dividend Payment
      Dates, then the Holder has the right to elect that such accrued and unpaid
      dividends be payable in shares of Common Stock equivalent in number to the
      amount of shares the accrued and unpaid cash dividends could purchase on the
      applicable Dividend Payment Date based on the Closing Price; provided,
      however,
      that
      cash may be issued solely in lieu of fractional shares. Notwithstanding the
      foregoing, at any date on or after January 15, 2010 through June 30,2010, if
      (i)
      all accrued Quarterly Dividends (including, if applicable, dividends on such
      amount) on the Preferred Stock are paid in full as of such date, (ii) the
      Current Market Price Condition has been satisfied as of such date, and (iii)
      the
      Conversion Approvals have been received, then the Company has the option to
      declare and fully pay Quarterly Dividends on the Preferred Stock that would
      otherwise accrue on the Preferred Stock through June 30, 2010 (the “Prepaid
      Dividends”),
      and
      if the Company declares and pays in full the Prepaid Dividends, then Quarterly
      Dividends shall cease to accrue on the Preferred Stock from the payment date
      of
      the Prepaid Dividends through June 30, 2010. 

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (b) Record
      Date.
      Quarterly Dividends declared by the Board of Directors shall be payable to
      the
      Series B and Series B-1 Holders of record, as applicable, as they appear on
      the
      Company’s stock register at the close of business on the first day of the month
      in which the relevant Dividend Payment Date occurs (the “Record
      Date”).
      The
      Record Date shall apply regardless of whether any particular Record Date is
      a
      Business Day.

     

    (c) Computation.
      Quarterly Dividends shall be computed on a 360/360 basis.

     

    (d) Cumulative
      Dividends.
      Subject
      to Section 4(g) and the last sentence of Section 4(a), dividends on the
      Preferred Stock shall be cumulative; in the event and to the extent that the
      Company fail to pay the Quarterly Dividends on the Preferred Stock (and
      regardless whether the Board of Directors shall have declared such dividends),
      the amount of the unpaid dividends shall cumulate in successive periods, until
      paid in full.

     

    (e) Actions
      Allowed.
      If
      Quarterly Dividends on all outstanding shares of the Preferred Stock for all
      past Dividend Periods, including the latest completed Dividend Period
      (including, if applicable as provided in Section 4(a) dividends on such amount)
      have not been authorized, declared, and paid or set aside for payment or, if
      applicable, pre-paid for the fifth and sixth Dividend Periods as described
      in
      Section 4(a), the Company shall not declare or pay dividends with respect to,
      or
      redeem purchase or acquire any Parity Securities or Junior Securities during
      the
      next succeeding Dividend Period, other than:

     

    (i) any
      declaration of a dividend in connection with any shareholders’ rights plan,
      including with respect to the Series A Junior Preferred Stock or any
      successor shareholders’ rights plan, or the issuance of rights, stock or other
      property under any shareholders’ rights plan,

     

    (ii) redemptions,
      purchases or other acquisitions or Junior Securities or Parity Securities in
      connection with any benefit plan or other similar arrangement with or for the
      benefit of any one or more employees, officers, directors or consultants or
      in
      connection with a dividend reinvestment or shareholder stock purchase
      plan,

     

    (iii) conversions
      into or exchanges for other Junior Securities or Parity Securities and cash
      solely in lieu of fractional shares of the Junior Securities or Parity
      Securities.

     

    If
      accrued Quarterly Dividends (including, if applicable as provided in Section
      4(a) dividends on such amount) for any Dividend Payment Date are not paid in
      full on the outstanding shares of the Preferred Stock and there are issued
      and
      outstanding shares of Parity Securities then all dividends declared on shares
      of
      the Preferred Stock and such Parity Securities shall be declared pro rata so
      that the respective amounts of such dividends shall bear the same ratio to
      each
      other as all accrued and unpaid dividends per share on the shares of the
      Preferred Stock (including, if applicable as provided in Section 4(a) above,
      dividends on such amount) and on all such Parity Securities otherwise payable
      (subject to their having been authorized by the Board of Directors out of
      legally available funds and including, in the case of any such Parity Securities
      that bear cumulative dividends, all accrued but unpaid dividends) bear to each
      other.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (f) Dividend
      Preference.
      If the
      Board of Directors declares and pays a cash dividend in respect of any shares
      of
      Common Stock, then the Board of Directors shall declare and pay to the Holders
      of the Preferred Stock a cash dividend in an amount per share of Preferred
      Stock
      equal to the product of (i) the per share dividend declared and paid in
      respect of each share of Common Stock and (ii) the number of shares of
      Common Stock into which a share of Preferred Stock would then be convertible,
      assuming receipt of Conversion Approvals. Dividends payable to the Holders
      pursuant to this Section 4(f) shall be payable on the same date that
      dividends are payable to holders of shares of Common Stock, and no dividends
      shall be payable to holders of shares of Common Stock unless the full dividends
      contemplated by this Section 4(f) are paid at the same time in respect of the
      Preferred Stock.

     

    (g) Dividend
      Cessation. If,
      by
      June 30, 2010, any Holder has not received from the Federal Reserve System
      any
      required approvals for conversion of the Preferred Stock to Common Stock and
      all
      other conditions for the conversion of the Preferred Stock into Common Stock
      have been met, then additional Quarterly Dividends shall cease to accrue on
      the
      Preferred Stock; provided, however, that the Preferred Stock would otherwise
      continue to be convertible under the terms of this Certificate of Determination.
      

     

    Section
      5. Liquidation.

     

    (a) Liquidation
      Preference.
      In the
      event the Company voluntarily or involuntarily liquidates, dissolves or winds
      up, subject to the rights of the Senior Securities, the Holders at the time
      shall be entitled to receive liquidating distributions in the amount of three
      times the Liquidation Preference per share of Preferred Stock, out of assets
      legally available for distribution to the Company’s shareholders, before any
      distribution of assets is made to the holders of the Common Stock or any other
      Junior Securities. Subject to the California General Corporation Law and other
      applicable law, after payment of the full amount of such liquidating
      distributions, Holders of the Preferred Stock shall be entitled to participate
      in any further distribution of the remaining assets of the Company as if each
      share of Preferred Stock had been converted, immediately prior to such
      liquidating distributions, into the number of shares of Common Stock equal
      to
      the Liquidation Preference divided by the Applicable Conversion Price.

     

    (b) Insufficient
      Assets or Proceeds to Pay the Liquidation Preference.
      In the
      event the assets of the Company, or proceeds thereof, available for distribution
      to shareholders upon any liquidation, dissolution or winding-up of the affairs
      of the Company, whether voluntary or involuntary, shall be insufficient to
      pay
      in full the amounts payable with respect to all outstanding shares of the
      Preferred Stock and the corresponding amounts payable on any Parity Securities,
      Holders of Preferred Stock and the holders of such Parity Securities shall
      share
      ratably in any distribution of assets of the Company in proportion to the full
      respective liquidating distributions to which they would otherwise be
      respectively entitled.

     

    (c) Transactions
      not Deemed a Liquidation.
      The
      Company’s consolidation or merger with or into any other entity, the
      consolidation or merger of any other entity with or into the Company, or the
      sale of all or substantially all of the Company’s property or business will not
      constitute its liquidation, dissolution or winding up.

     

    
      
        
        

      

      
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    Section
      6. Maturity.
      The
      Preferred Stock shall be perpetual unless converted in accordance with this
      Certificate of Determination.

     

    Section
      7. Redemptions.
      The
      Preferred Stock shall not be redeemable either at the Company’s option or at the
      option of Holders at any time.

     

    Section
      8. Conversion.
      

     

    (a) General.
      The
      Series B Preferred Stock shall either (i) partially or fully convert into Series
      B-1 Preferred Stock, or (ii) partially or fully convert into Common Stock as
      described in this Section 8. The Series B-1 Preferred Stock shall either
      partially or fully convert into Common Stock as described in this Section 8.
      

     

    The
      number of shares of Series B-1 Preferred Stock into which a share of Series
      B
      Preferred Stock shall potentially be convertible (subject to any limitations
      set
      forth in this Section 8) shall be determined on a one-to-one basis.

     

    The
      number of shares of Common Stock into which a share of Preferred Stock shall
      potentially be convertible (subject to any limitations set forth in this Section
      8) shall be determined by dividing (a) the Liquidation Preference by (b) the
      Applicable Conversion Price, plus any cash paid in lieu of fractional shares
      in
      accordance with Section 13.

     

    The
      conversion procedures are set forth in Section 9.

    

    (b) Partial
      Conversion of Series B Preferred Stock Into Series B-1 Preferred Stock Upon
      a
      Shareholder Disapproval.
      Whether
      or not all Regulatory Approvals have been received, as of the first Business
      Day
      following the Shareholder Disapproval Date, a certain limited number of shares
      of Series B Preferred Stock shall automatically convert into shares of Series
      B-1 Preferred Stock at the conversion rate set forth in Section 8(a), but the
      number of shares of Series B Preferred Stock that shall be converted is limited
      to that number that may convert without violating the Conversion Cap Condition
      and the remaining shares of Series B Preferred Stock shall remain outstanding;
      provided,
      however,
      that if
      converting the shares of Series B Preferred Stock into shares of Series B-1
      Preferred Stock does not violate the Conversion Cap Condition but would cause
      a
      Violation to occur as of such conversion date, then the maximum number of shares
      of Series B Preferred Stock, if any, that shall be converted is limited such
      that the number of shares of Series B-1 Preferred Stock that shall be issued
      upon the conversion will equal the maximum number that may be issued so as
      not
      to cause a Violation and the remaining shares of Series B Preferred Stock shall
      remain outstanding, it being understood that the first Business Day following
      each date when such conversion could occur without causing a Violation,
      additional automatic conversions of the limited number of shares of Series
      B
      Preferred Stock into shares of Series B-1 Preferred Stock will take place at
      any
      time, and from time to time, up to the maximum extent allowed so as not to
      cause
      a Violation until no further conversions of shares of Series B Preferred Stock
      into shares of Series B-1 Preferred Stock could occur without causing a
      violation of the Conversion Cap Condition. 

     

    
      
        
        

      

      
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    (c) Partial
      Conversion of Series B Preferred Stock Into Series B-1 Preferred Stock Upon
      Shareholder Approval.
      If all
      Regulatory Approvals have not been received as of the first Business Day
      following the Shareholder Approval Date, then, as of the first Business Day
      following the Shareholder Approval Date, each share of Series B Preferred Stock
      will automatically convert into shares of Series B-1 Preferred Stock at the
      conversion rate set forth in Section 8(a); provided,
      however,
      that,
      if converting shares of Series B Preferred Stock into shares of Series B-1
      Preferred Stock as of the first Business Day following the Shareholder Approval
      Date and pursuant to this Section 8(c) would cause a Violation to occur, then
      the maximum number of shares of Series B Preferred Stock, if any, that will
      be
      converted is limited such that the number of shares of Series B-1 Preferred
      Stock issued upon conversion will equal the maximum number that may be issued
      so
      as not to cause a Violation and the remaining shares of Series B Preferred
      Stock
      shall remain outstanding, it being understood that the first Business Day
      following each date when such conversion could occur without causing a
      Violation, additional automatic conversions of shares of Series B Preferred
      Stock into shares of Series B-1 Preferred Stock will take place at any time,
      and
      from time to time to the maximum extent allowed so as not to cause a Violation.
      

     

    (d) Full
      Conversion of Series B Preferred Stock Into Series B-1 Preferred Stock Upon
      Shareholder Approval.
      If all
      Regulatory Approvals have been received as of the first Business Day following
      the Shareholder Approval Date, then all of the shares of Series B Preferred
      Stock will automatically convert as of the first Business Day following the
      Shareholder Approval Date into shares of Series B-1 Preferred Stock at the
      conversion rate set forth in Section 8(a).

     

    (e) Holder
      Optional Conversion.
      If all
      Regulatory Approvals have been received, then upon the conversion events
      described in Section 8(b), Section 8(c) and Section 8(d) and subject to the
      limitations set forth in those sections, each Holder has the sole discretion,
      at
      any time and from time to time, to (i) elect to convert its shares of Series
      B
      Preferred Stock into either shares of Series B-1 Preferred Stock or shares
      of
      Common Stock, or a combination thereof, at the conversion rate set forth in
      Section 8(a) or (ii) elect to convert its shares of Series B-1 Preferred Stock,
      if any, into shares of Common Stock at the conversion rate set forth in Section
      8(a); provided,
      however,
      that
      the elections described in subclause (i) and (ii) above expire upon the full
      mandatory conversion of the Preferred Stock under Sections 8(f) or 8(g).
Provided,
      further,
      that
      the maximum number of shares of Series B Preferred Stock and Series B-1
      Preferred Stock that the Holder may elect to convert at any time pursuant to
      this Section 8(e) is limited to the maximum number of such shares that may
      be
      converted without violating the Conversion Cap Condition or Causing a Violation
      to occur, and any remaining shares of Preferred Stock held by such Holder shall
      remain outstanding. 

     

    (f) Full
      Mandatory Conversion.
      Notwithstanding any other provision of this Section 8, if the Full Mandatory
      Conversion Date occurs, then as of the first Business Day following the later
      of
      the (i) Full Mandatory Conversion Date or (ii) June 30, 2010 (such later date
      described in subparagraphs (i) and (ii) is referred to as the “First
      Full Mandatory Conversion Date”),
      each
      share of Series B Preferred Stock and Series B-1 Preferred Stock shall
      automatically convert into shares of Common Stock at the conversion rate set
      forth in Section 8(a); provided,
      however,
      that if
      the Current Market Price Condition has not been satisfied as of the First Full
      Mandatory Conversion Date, then each share of Series B Preferred Stock and
      Series B-1 Preferred Stock shall remain outstanding and a new full mandatory
      conversion date shall be scheduled to the date that is 6 months thereafter,
      and
      will continue to be scheduled in 6-month intervals until the Current Market
      Price Condition is satisfied as of a succeeding 6-month date, at which date,
      each share of Series B Preferred Stock and Series B-1 Preferred Stock shall
      automatically convert into shares of Common Stock at the conversion rate set
      forth in Section 8(a). Notwithstanding anything to the contrary in this Section
      8, in the event of Shareholder Disapproval, there shall be no conversion of
      shares of Preferred Stock into shares Common Stock unless so elected by the
      Holder thereof pursuant to Section 8(e).

     

    
      
        
        

      

      
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    (g) Company
      Optional Conversion.
      During
      any 6-month conversion period subsequent to the First Full Mandatory Conversion
      Date as described in Section 8(f), if the Current Market Price Condition is
      satisfied on any date during such period, then the Company has the option to
      convert each share of Series B Preferred Stock and Series B-1 Preferred Stock
      into shares of Common Stock at the conversion rate set forth in Section 8(a)
      as
      long as all accrued Quarterly Dividends (including, if applicable as provided
      in
      Section 4(a) above, dividends on such amount) are paid prior to conversion
      and
      the Board of Directors declares and fully pays Quarterly Dividends that would
      have accrued though the date of conversion. In addition, at any date on or
      after
      January 15, 2010 through June 30,2010, if (i) the Full Mandatory Conversion
      Date
      has occurred, (ii) all accrued Quarterly Dividends (including, if applicable
      as
      provided in Section 4(a) above, dividends on such amount) have been paid in
      full
      on the Preferred Stock, (iii) the Current Market Price Condition has been
      satisfied as of such date, and (iv) the Company declares and fully pays
      Quarterly Dividends that would have accrued through the date of conversion,
      then
      the Company has the option to convert each share of Series B Preferred Stock
      and
      Series B-1 Preferred Stock into shares of Common Stock at the conversion rate
      set forth in Section 8(a). 

     

    Section
      9. Conversion
      Procedures.
      

     

    (a) Conversion
      Notice.
      Upon
      occurrence of a Shareholder Disapproval Date, a Shareholder Approval Date,
      a
      Full Mandatory Conversion Date or another conversion date described in Section
      8
      with respect to shares of any Holder, the Company shall provide notice of
      partial or full conversion to such Holder. In addition to any information
      required by applicable law or regulation, such notice with respect to such
      Holder shall state, as appropriate: 

     

    (i) the
      conversion date applicable to such Holder; 

     

    (ii) the
      number of shares of Series B-1 Preferred Stock or Common Stock to be issued
      upon
      conversion of each share of Preferred Stock held of record by such Holder and
      subject to such mandatory conversion; 

     

    (iii) if
      the
      Holder has the election right described in Section 8(e), information about
      how
      the Holder shall give written notice to the Company about electing to convert
      the shares into either Series B-1 Preferred Stock or Common Stock, or a
      combination thereof; and

     

    (iv) the
      place
      or places where certificates for shares of Preferred Stock held of record by
      such Holder are to be surrendered for issuance of certificates representing
      shares of Series B-1 Preferred Stock or Common Stock.

     

    (b) Optional
      Conversion.
      If a
      Holder has the election right described in Section 8(e), at any time and from
      time to time, such Holder shall give written notice to the Company that such
      Holder elects to convert the Preferred Stock into Series B-1 Preferred Stock
      or
      Common Stock and, after receiving any applicable information required by
      applicable law or regulation, the Company shall as soon as practicable
      thereafter issue and deliver a certificate for such shares as the Holder is
      entitled. 

     

    
      
        
        

      

      
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    (c) Pro
      Rata Conversion.
      If a
      partial conversion of the Series B Preferred Stock is required pursuant to
      Section 8(b) or Section 8(c), then the shares of Series B Preferred Stock held
      shall, to the extent practicable, be converted on a pro rata basis among the
      Series B Holders. In the event that a Full Mandatory Conversion Date occurs
      and
      some, but not all, of the Conversion Approvals applicable to a particular Holder
      are obtained, such that the Full Mandatory Conversion Date shall have occurred
      with respect to some, but not all, of the shares of Preferred Stock held by
      such
      Holder, such Holder shall be entitled to select the shares to be surrendered
      pursuant to this Section 9 such that, after such surrender, the Holder no longer
      holds shares of Preferred Stock as to which the Full Mandatory Conversion Date
      shall have occurred. In the event that such Holder fails to surrender the
      required number of shares pursuant to this Section 9 within 30 days after
      delivery of the conversion notice, the Company shall, by written notice to
      such
      Holder, indicate which shares have been converted pursuant to Section 8.

     

    (d) Effect
      of Conversion on Preferred Stock.
      With
      respect to the conversion of Series B Preferred Stock into Series B-1 Preferred
      Stock, the share of Series B Preferred Stock shall cease to be outstanding
      (subject to the right of the Series B Holder to receive any accrued and unpaid
      dividends (including, if applicable, as provided in Section 4(a) above,
      dividends on such amount) on such share and any other payments to which such
      Holder is otherwise entitled pursuant to Section 8, Section 11 or
      Section 13, as applicable) and dividends shall no longer be declared on
      such share of Series B Preferred Stock, but dividends shall continue to be
      declared on the newly issued share of Series B-1 Preferred Stock. Effective
      immediately prior to the close of business on a conversion date with respect
      any
      share of Preferred Stock into Common Stock, dividends shall no longer be
      declared on any such converted share of Preferred Stock and such share of
      Preferred Stock shall cease to be outstanding, in each case, subject to the
      right of the Holder to receive any declared and unpaid dividends on such share
      and any other payments to which such Holder is otherwise entitled pursuant
      to
      Section 8, Section 11 or Section 13, as applicable. Prior to the
      close of business on any conversion date with respect to any share of Preferred
      Stock, shares of Common Stock or Series B-1 Preferred Stock issuable upon
      conversion thereof, or other securities issuable upon conversion of such share
      of Preferred Stock, shall not be deemed outstanding for any purpose, and the
      Holder thereof shall have no rights with respect to the Common Stock, the Series
      B-1 Preferred Stock or other securities issuable upon conversion (including
      voting rights, rights to respond to tender offers for the Common Stock or other
      securities issuable upon conversion and rights to receive any dividends or
      other
      distributions on the Common Stock or other securities issuable upon conversion)
      by virtue of holding such share of Preferred Stock except as otherwise provided
      herein.

     

    (e) Status
      of Converted Stock.
      Shares
      of Preferred Stock duly converted in accordance with this Certificate of
      Determination, or otherwise reacquired by the Company, will resume the status
      of
      authorized and unissued preferred stock, undesignated and, after all shares
      of
      Preferred Stock have been converted in full into Common Stock, available for
      future issuance. The Company may from time-to-time take such appropriate action
      as may be necessary to reduce the authorized number of shares of Preferred
      Stock. 

     

    (f) Treatment
      of Record Holder.
      The
      Person or Persons entitled to receive the Common Stock, Preferred Stock and/or
      cash, securities or other property issuable upon conversion of Preferred Stock
      shall be treated for all purposes as the record holders of such shares of Common
      Stock, Preferred Stock and/or securities as of the close of business on the
      applicable conversion date with respect thereto. In the event that a Holder
      shall not by written notice designate the name in which shares of Common Stock,
      Preferred Stock and/or cash, securities or other property (including payments
      of
      cash in lieu of fractional shares) to be issued or paid upon conversion of
      shares of Preferred Stock should be registered or paid or the manner in which
      such shares should be delivered, the Company shall be entitled to register
      and
      deliver such shares, and make such payment, in the name of the Holder and in
      the
      manner shown on the records of the Company.

     

    
      
        
        

      

      
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    (g) Surrender
      of Certificates.
      On any
      Preferred Stock conversion date, certificates representing shares of Common
      Stock or Series B-1 Preferred Stock, as applicable, shall be issued and
      delivered, or evidence of book-entry record ownership of the Common Stock
      delivered, to the Holder thereof or such Holder’s designee upon presentation and
      surrender of the certificate evidencing the Preferred Stock to the Company
      and,
      if required, the furnishing of appropriate endorsements and transfer documents
      and the payment of all transfer and similar taxes.

     

    Section
      10. Adjustments
      to Conversion Price for Dilutive Issuances.

     

    (a) Except
      as
      provided in Section 10(c), the Conversion Price is subject to the following
      adjustments.

     

    (i) Common
      Stock Dividends and Distributions.
      In the
      event the Company at any time or from time to time after the Effective Date
      issues, or fixes a record date for determination of holders of Common Stock
      entitled to receive, a dividend or other distribution payable in additional
      shares of Common Stock, then in each such event the Conversion Price will be
      reduced, concurrently with such issuance or, in the event such record date
      is
      fixed, as of the close of business on such record date, to a price equal to
      such
      Conversion Price in effect immediately prior to such reduction multiplying
      by a
      fraction:

     

    (A) the
      numerator of which equals the number of shares of Common Stock issued and
      outstanding immediately prior to the time of such issuance or the close of
      business on such record date; and 

     

    (B) the
      denominator of which equals (1) the number of shares of Common Stock issued
      and
      outstanding immediately prior to the time of such issuance or the close of
      business on such record date plus (2) the number of shares of Common Stock
      issuable in payment of such dividend or distribution.

     

    In
      the
      event that such dividend or distribution described in this clause (i) is not
      paid in full or made in full, the Conversion Price shall be readjusted,
      effective as of the close of business on such record date and thereafter the
      Conversion Price shall be adjusted pursuant to this clause (i) to reflect the
      actual payment of such dividend or distribution.

     

    (ii) Subdivisions,
      Combinations or Consolidations of the Common Stock.
      In the
      event the Company at any time or from time to time after the Effective Date
      subdivides, splits or combines the shares of Common Stock, then in each such
      event the Conversion Price will be adjusted, concurrently with such subdivision,
      split or combination, to a price equal to such Conversion Price in effect
      immediately prior to such subdivision, split or combination multiplied by a
      fraction:

     

    (A) the
      numerator of which equals the number of shares of Common Stock issued and
      outstanding immediately prior to the effective date of such subdivision, split
      or combination; and 

     

    (B) the
      denominator of which equals the number of shares of Common Stock issued and
      outstanding immediately after the opening of business on the effective date
      of
      such subdivision, split or combination.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    For
      the
      purposes of this clause (ii), the number of shares of Common Stock at the time
      outstanding shall not include shares acquired by the Company. If any
      subdivision, split or combination described in this clause (ii) is announced
      but
      the outstanding shares of Common Stock are not subdivided, split or combined,
      the Conversion Price shall be readjusted, effective as of the date the Board
      of
      Directors publicly announces its decision not to subdivide, split or combine
      the
      outstanding shares of Common Stock, to such Conversion Price that would be
      in
      effect if such subdivision, split or combination had not been
      announced.

     

    (iii) Issuance
      of Common Stock and Common Stock Equivalents.
      In the
      event the Company at any time or from time to time after the Effective Date
      issues any share of Common Stock or any Common Stock Equivalent for no
      consideration or at a Per Share Price less than the Conversion Price in effect
      immediately prior to such issuance (a “Dilutive Issuance”), then in each such
      event the Conversion Price will be reduced, concurrently with such Dilutive
      Issuance, to a price equal to such Conversion Price in effect immediately prior
      to such Dilutive Issuance multiplied by a fraction:

     

    (A) the
      numerator of which is equal to (1) the number of shares of Common Stock
      outstanding immediately prior to such Dilutive Issuance plus (2) the number
      of
      shares of Common Stock that the aggregate consideration received by the Company
      in connection with such Dilutive Issuance would purchase at the Conversion
      Price
      in effect immediately prior to such Dilutive Issuance; and

     

    (B) the
      denominator of which is equal to (1) the number of shares of Common Stock
      outstanding immediately prior to such Dilutive Issuance plus (2) the number
      of
      shares of Common Stock issued in connection with such Dilutive Issuance, if
      any,
      plus (3) the number of shares of Common Stock issuable upon full exercise or
      conversion of the Common Stock Equivalents (as set forth in the instrument
      relating thereto, assuming the satisfaction of any conditions to exercisability,
      convertibility or exchangeability but without regard to any provision contained
      therein for a subsequent adjustment of such number) issued in connection with
      such Dilutive Issuance, if any.

     

    (iv) Debt
      or Asset Distributions.
      In the
      event the Company at any time or from time to time after the Effective Date
      distributes to holders of its Common Stock shares of its capital stock (other
      than shares of Common Stock and other than as otherwise subject to adjustment
      pursuant to this Section 10), stock or other securities of other persons,
      evidences of indebtedness issued by the Company or other persons, assets
      (excluding cash dividends) or options or rights (excluding Common Stock
      Equivalents), or shall fix a record date for determination of holders of Common
      Stock entitled to receive such a distribution, in exchange for consideration
      in
      an amount less than the fair market value of the property so distributed, then
      in each such event the Conversion Price in effect immediately prior to such
      distribution will be reduced, concurrently with such distribution, to a price
      equal to such Conversion Price in effect immediately prior to such distribution
      multiplied by a fraction:

     

    (A) the
      numerator of which is equal to (1) the fair market value per share of Common
      Stock on such date minus (2) the fair market value of the portion of the
      distribution applicable to one share of Common Stock on such date as reasonably
      determined by the Board of Directors; and

     

    (B) the
      denominator of which is equal to the fair market value per share of Common
      Stock
      on such date.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    In
      the
      event that such distribution described in this clause (iv) is not so paid or
      made, the Conversion Price shall be readjusted, effective as of the date the
      Board of Directors publicly announces its decision not to pay or make such
      distribution, to the Conversion Price that would then be in effect if such
      distribution had not been declared.

     

    (v) Cash
      Distributions.
      In the
      event the Company at any time or from time to time after the Effective Date
      makes a distribution consisting exclusively of cash to all holders of the Common
      Stock, excluding (1) any cash dividend on the Common Stock to the extent a
      corresponding cash dividend is paid on the Preferred Stock pursuant to Section
      4(f), (2) any cash that is distributed in a Reorganization Event or as part
      of a
      Spin-Off, (3) any dividend or distribution in connection with the Company’s
      liquidation, dissolution or winding up, and (4) any consideration payable in
      connection with a tender or exchange offer made by the Company or any of its
      subsidiaries, then in each such event the Conversion Price in effect immediately
      prior to such distribution will be reduced, concurrently with such distribution,
      to a price equal to such Conversion Price in effect immediately prior to such
      distribution multiplied by a fraction:

     

    (A) the
      numerator of which is equal to (1) the Closing Price per share of Common Stock
      on the Trading Day immediately preceding such distribution minus (2) the amount
      per share of Common Stock of the distribution; and

     

    (B) the
      denominator of which is equal to the Closing Price per share of Common Stock
      on
      the Trading Day immediately preceding such distribution.

     

    In
      the
      event that such distribution described in this clause (v) is not so paid or
      made, the Conversion Price shall be readjusted, effective as of the date the
      Board of Directors publicly announces its decision not to pay or make such
      distribution, to the Conversion Price that would then be in effect if such
      distribution had not been declared.

     

    (vi) Self
      Tender Offers and Exchange Offers.
      In the
      event that at any time or from time to time the Company or any of its
      subsidiaries successfully completes a tender or exchange offer for Common Stock,
      but only where the cash and the value of any other consideration included in
      the
      payment per share of the Common Stock exceeds the Closing Price per share of
      the
      Common Stock on the Trading Day immediately succeeding the expiration of the
      tender or exchange offer, then the Conversion Price in effect at the close
      of
      business on such immediately succeeding Trading Day will be multiplied by the
      following fraction: 

     

    (A) the
      numerator of which is equal to (1) the Closing Price per share of Common Stock
      on the Trading Day immediately succeeding the expiration of the tender or
      exchange offer multiplied by (2) the number of shares of Common Stock
      outstanding immediately prior to the expiration of the tender or exchange offer
      (including any shares validly tendered and not withdrawn); and 

     

    (B) the
      denominator of which is equal to (1) the aggregate cash and fair market value
      of
      the other consideration payable in the tender or exchange offer, as determined
      by the Board of Directors, plus (2) the product of that number which is equal
      to
      (i) the Closing Price per share of Common Stock on the Trading Day immediately
      succeeding the expiration of the tender or exchange offer multiplied by (ii)
      the
      number of shares of Common Stock outstanding immediately after the expiration
      of
      the tender or exchange offer.

     

    
      
        
        

      

      
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    If
      the
      Company, or one of its subsidiaries, is obligated to purchase shares of Common
      Stock pursuant to any such tender offer or exchange offer, but the Company,
      or
      such subsidiary, is permanently prevented by applicable law from effecting
      any
      such purchases, or all such purchases are rescinded, then the Conversion Price
      shall be readjusted to be such Conversion Price that would then be in effect
      if
      such tender offer or exchange offer had not been made.

     

    (vii) Rights
      Plans.
      To the
      extent that the Company has a rights plan in effect with respect to the Common
      Stock upon any conversion date with respect to the conversion of Preferred
      Stock
      into Common Stock described in Section 8, then upon any such conversion of
      shares of the Preferred Stock into Common Stock, the Holders will receive,
      in
      addition to the shares of Common Stock, the rights under the rights plan;
      provided, however, that if the rights have separated from the shares of Common
      Stock before the applicable conversion date, then the Conversion Price will
      be
      adjusted at the time of separation as if the Company had made a distribution
      to
      all holders of the Common Stock as described in clause (iii) above, subject
      to readjustment in the event of the expiration, termination or redemption of
      such rights.

     

    (b) The
      Company may make such decreases in the Conversion Price, in addition to any
      other decreases required by this Section 10, if the Board of Directors deems
      it
      advisable to avoid or diminish any income tax to holders of the Common Stock
      resulting from any dividend or distribution of shares of Common Stock (or
      issuance of rights or warrants to acquire shares of Common Stock) or from any
      event treated as such for income tax purposes or for any other
      reason.

     

    (c) (i) All
      adjustments to the Conversion Price shall be calculated to the nearest 1/10
      of a
      cent. No adjustment in the Conversion Price shall be required if such adjustment
      would be less than $0.01; provided , that any adjustments which by reason of
      this subparagraph are not required to be made shall be carried forward and
      taken
      into account in any subsequent adjustment; provided further that upon any
      conversion of Preferred Stock to Common Stock pursuant to Section 8(e), 8(f)
      or
      8(g), adjustments to the Conversion Price will be made with respect to any
      such
      adjustment carried forward and which has not been taken into account before
      such
      date.

     

    (ii) The
      Applicable Conversion Price shall not be adjusted:

     

    (A) upon
      the
      issuance of any preferred shares and related warrants to the U.S. Treasury
      or
      its designee pursuant to the Emergency Economic Stabilization Act or any shares
      of Common Stock issued upon exercise of such warrants;

     

    (B) upon
      the
      issuance of any shares of Common Stock pursuant to any present or future plan
      providing for the reinvestment of dividends or interest payable on the Company’s
      securities and the investment of additional optional amounts in shares of Common
      Stock under any plan;

     

    (C) upon
      the
      issuance of up to 426,984 shares of Common Stock or rights or warrants to
      purchase those shares pursuant to any present or future employee, director
      or
      consultant benefit plan or program of or assumed by the Company or any of its
      subsidiaries;

     

    (D) upon
      the
      issuance of any shares of Common Stock pursuant to any option, warrant, right
      or
      exercisable, exchangeable or convertible security outstanding as of the
      Effective Date;

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    (E) for
      a
      change in the par value or no par value of Common Stock;

     

    (F) for
      accrued and unpaid dividends on the Preferred Stock; 

     

    (G) upon
      the
      payment of any dividend on the Preferred Stock, whether in the form of cash
      or
      additional shares of Preferred Stock;

     

    (H) upon
      the
      issuance of Common Stock upon the conversion of any of the Preferred Stock
      into
      Common Stock; or

     

    (I) upon
      the
      issuance of securities pursuant to the Stock Purchase Agreement.

     

    (d) Whenever
      the Conversion Price is to be adjusted in accordance with Section 10(a) or
      Section 10(b), the Company shall: (i) compute the Conversion Price in accordance
      with Section 10(a) or Section 10(b), taking into account the one cent threshold
      set forth in Section 10(c)(i); (ii) as soon as practicable following the
      occurrence of an event that requires an adjustment to the Conversion Price
      pursuant to Section 10(a) or Section 10(b), taking into account the one cent
      threshold set forth in Section 10(c) (or if the Company is not aware of such
      occurrence, as soon as practicable after becoming so aware), provide, or cause
      to be provided, a written notice to the Holders of the occurrence of such event;
      and (iii) as soon as practicable following the determination of the revised
      Conversion Price in accordance with Section 10(a) or Section 10(b), provide,
      or
      cause to be provided, a written notice to the Holders setting forth in
      reasonable detail the method by which the adjustment to the Conversion Price
      was
      determined and setting forth the revised Conversion Price.

     

    Section
      11. Reorganization
      Events.
      

     

    (a) Reorganization
      Events.
      In the
      event of: 

     

    (i) any
      consolidation or merger of the Company with or into another Person, in each
      case
      pursuant to which the Common Stock will be converted into cash, securities
      or
      other property of the Company or another Person; 

     

    (ii) any
      sale,
      transfer, lease or conveyance to another Person of all or substantially all
      of
      the property and assets of the Company, in each case pursuant to which the
      Common Stock will be converted into cash, securities or other property of the
      Company or another Person; 

     

    (iii) any
      reclassification of the Common Stock into securities including securities other
      than the Common Stock; or 

     

    (iv) any
      statutory exchange of the outstanding shares of Common Stock for securities
      of
      another Person (other than in connection with a merger or acquisition);

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    (any
      such
      event specified in this Section 11(a), a “Reorganization
      Event”);
      each
      share of Series B and Series B-1 Preferred Stock outstanding immediately
      prior to such Reorganization Event shall, without the consent of Holders, remain
      outstanding but shall become convertible, at the option of the Holders, into
      the
      kind of securities, cash and other property receivable in such Reorganization
      Event by the holder (excluding the counterparty to the Reorganization Event
      or
      an affiliate of such counterparty) of that number of shares of Common Stock
      into
      which the share of Series B and Series B-1 Preferred Stock would then be
      convertible (and assuming for purposes of this calculation, the receipt on
      the
      date such option is exercised of all Conversion Approvals) (such securities,
      cash and other property, the “Exchange
      Property”);
      provided,
      however,
      that if
      the Reorganization Event provides that each share of Common Stock shall receive
      Exchange Consideration in an amount such that each share of Series B and Series
      B-1 Preferred Stock would convert into, or receive consideration, that in the
      aggregate would be less than the Purchase Price Per Share, then notwithstanding
      the foregoing sentence, each share of Series B and Series B-1 Preferred Stock
      shall be entitled to receive that amount of securities, cash and other property
      receivable in such Reorganization Event by the holder (excluding the
      counterparty to the Reorganization Event or an affiliate of such counterparty)
      of that number of shares of Common Stock that will receive consideration
      equivalent to the Liquidation Preference. 

     

    (b) Reorganization
      Event Consideration.
      In the
      event that holders of the shares of Common Stock have the opportunity to elect
      the form of consideration to be received in such transaction, the consideration
      that the Holders are entitled to receive shall be deemed to be the types and
      amounts of consideration received by the majority of the holders of the shares
      of Common Stock that affirmatively make an election. The amount of Exchange
      Property receivable upon conversion of any Series B and Series B-1
      Preferred Stock shall be determined in accordance with the terms of Section
      8
      based on the Applicable Conversion Price in effect on the date immediately
      prior
      to such Reorganization Event; provided,
      however,
      that if
      the Reorganization Event provides that each share of Common Stock shall receive
      consideration in an amount such that each share of Series B and Series B-1
      Preferred Stock, would convert into, or receive consideration, that in the
      aggregate would be less than the Purchase Price Per Share, then notwithstanding
      the foregoing sentence, each share of Series B and Series B-1 Preferred Stock
      shall be entitled to receive that amount of securities, cash and other property
      receivable in such Reorganization Event by the holder (excluding the
      counterparty to the Reorganization Event or an affiliate of such counterparty)
      of that number of shares of Common Stock that will receive consideration
      equivalent to the Liquidation Preference. 

     

    (c) Successive
      Reorganization Events.
      The
      above provisions of this Section 11 shall similarly apply to successive
      Reorganization Events and the provisions of Section 10 shall apply to any
      shares of capital stock of the Company (or any successor) received by the
      holders of the Common Stock in any such Reorganization Event.

     

    (d) Reorganization
      Notice.
      The
      Company (or any successor) shall, within 20 days of the occurrence of any
      Reorganization Event, provide written notice to the Holders of such occurrence
      of such event and of the kind and amount of the cash, securities or other
      property that constitutes the Exchange Property. Failure to deliver such notice
      shall not affect the operation of this Section 11.

     

    (e) Fundamental
      Change.
      Notwithstanding anything to the contrary in this Section 11 or otherwise in
      this Certificate of Determination, in the event of any Fundamental Change that
      results from or in an agreement with any Person that constitutes a Fundamental
      Change and pursuant to which the Common Stock will be converted into or becomes
      entitled to receive cash, securities or other property or rights, such agreement
      must provide that either (i) the Series B Holders and the Series B-1
      Holders shall receive, on an as-converted basis, effective immediately prior
      to
      the event constituting consummation of such Fundamental Change so as to be
      entitled to participate therein, the securities, cash and other property or
      rights receivable in such transaction by a holder of shares of Common Stock
      that
      was not the counterparty to such transaction or an affiliate of such other
      party
      or (ii) that each share of Series B and Series B-1 Preferred Stock
      shall be converted into the number of shares of Common Stock equal to the
      Liquidation Preference divided by the Applicable Conversion Price. 

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    Section
      12. Voting
      Rights.

     

    (a) Series
      B Preferred Stock.
      Series
      B Holders will not have any voting rights, including the right to elect any
      directors, except (i) voting rights, if any, required by law, and
      (ii) voting rights, if any, described in Section 2 and this
      Section 12.

     

    (b) Series
      B-1 Preferred Stock.
      Each
      Series B-1 Holder will be entitled to ten votes for each share of Series B-1
      Preferred Stock held as of the applicable date on any matter that is submitted
      to a vote or for the consent of the shareholders of the Company, and, except
      as
      otherwise required by law or as set forth herein, shall have voting rights
      and
      powers equal to the voting rights and powers of the Common Stock. Each Series
      B-1 Holder shall be entitled to notice of any shareholders’ meeting in
      accordance with the Bylaws of the Company and shall be entitled to vote with
      the
      holders of Common Stock with respect to any matter upon which holders of Common
      Stock have the right to vote, except as otherwise provided herein or those
      matters required by law to be submitted to a class vote.

     

    (c) Protective
      Provisions.
      So long
      as any shares of Preferred Stock are outstanding, the vote or consent of the
      holders of a majority of the voting power represented by the then outstanding
      shares of Series B Preferred Stock and Series B-1 Preferred Stock, voting as
      a
      single class with all other classes and series of Parity Securities having
      similar voting rights then outstanding and with each series or class having
      a
      number of votes proportionate to the aggregate liquidation preference of the
      outstanding shares of such class or series, given in person or by proxy, either
      in writing without a meeting or by vote at any meeting called for the purpose,
      will be necessary for effecting or validating any amendment, alteration or
      repeal of any provision of the Articles of Incorporation (including this
      Certificate of Determination) or the Company’s bylaws that would increase or
      decrease the aggregate authorized shares of Series B or Series B-1 Preferred
      Stock or any Parity Security, increase or decrease the par value of the
      Series B or Series B-1 Preferred Stock or any Parity Security or alter or
      change the powers, preferences or special rights of the Series B or Series
      B-1 Preferred Stock or any Parity Security so as to affect them adversely.
      If an
      amendment, alteration or repeal described above would adversely affect one
      or
      more but not all series of preferred stock with like voting rights (including
      the Series B or Series B-1 Preferred Stock for this purpose), then only the
      series affected and entitled to vote shall vote as a class in lieu of all such
      series of preferred stock. 

     

    (d) Preferred
      Stock Conversion.
      Notwithstanding the foregoing, Holders shall not have any voting rights if,
      at
      or prior to the effective time of the act with respect to which such vote would
      otherwise be required, all outstanding shares of Preferred Stock shall have
      been
      converted into shares of Common Stock.

     

    Section
      13. Fractional
      Shares.

     

    (a) No
      fractional shares of Common Stock or Series B-1 Preferred Stock will be issued
      as a result of any conversion of shares of Preferred Stock.

     

    (b) In
      lieu
      of any fractional share of Common Stock or Series B-1 Preferred Stock, as
      applicable, otherwise issuable in respect of any mandatory conversion pursuant
      to Section 8, the Company shall pay an amount in cash (computed to the
      nearest cent) whether upon conversion to Common Stock or Series B-1 Preferred
      Stock equal to the same fraction of the Closing Price of the Common Stock
      determined as of the second Trading Day immediately preceding the conversion
      date. 

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    (c) If
      more
      than one share of Preferred Stock is surrendered for conversion at one time
      by
      or for the same Holder, the number of full shares of Common Stock or Series
      B-1
      Preferred Stock, as applicable, issuable upon conversion thereof shall be
      computed on the basis of the aggregate number of shares of the Preferred Stock
      so surrendered.

     

    Section
      14. Reservation
      of Preferred Stock and Common Stock.

     

    (a) Preferred
      Stock.
      The
      Company shall at all times take all actions as are reasonably necessary to
      ensure that a sufficient number of shares of Series B Preferred Stock and Series
      B-1 Preferred Stock are authorized and reserved for issuance to satisfy for
      at
      least 5 years past the Effective Date all Quarterly Dividends that may be
      declared and paid in shares of Preferred Stock. 

     

    (b) Stock
      Issuable on Conversion of Preferred Stock.
      The
      Company shall at all times reserve and keep available out of its authorized
      and
      unissued Common Stock and its authorized and unissued Series B-1 Preferred
      Stock, solely for issuance upon the conversion of shares of Series B
      Preferred Stock as provided in this Certificate of Determination, free from
      any
      preemptive or other similar rights, such (i) number of shares of Common Stock
      as
      shall from time to time be issuable upon the conversion of all the shares of
      Series B Preferred Stock then outstanding, assuming that the Applicable
      Conversion Price equaled the Stated Price Per Share and (ii) number of shares
      of
      Series B-1 Preferred Stock as shall from time to time be issuable upon the
      conversion of the shares of Series B Preferred Stock then outstanding, assuming
      the Applicable Conversion Price equaled the Stated Price Per Share. The Company
      shall at all times reserve and keep available out of its authorized and unissued
      Common Stock solely for issuance upon the conversion of shares of
      Series B-1 Preferred Stock as provided in this Certificate of
      Determination, free from any preemptive or other similar rights, such number
      of
      shares of Common Stock as shall from time to time be issuable upon the
      conversion of all the shares of Series B-1 Preferred Stock then
      outstanding, assuming that the Applicable Conversion Price equaled the Stated
      Price Per Share. For purposes of this Section 14(b), the number of shares
      of Common Stock that shall be deliverable upon the conversion of all outstanding
      shares of Preferred Stock shall be computed as if at the time of computation
      all
      such outstanding shares were held by a single Holder. The Company shall not
      issue capital stock at a price that would require the Conversion Price of the
      Preferred Stock to be reduced (pursuant to the provisions of Section 10
      hereof) to a price that would require the Company to issue shares of Common
      Stock upon the conversion of the Preferred Stock in excess of the then
      authorized but unissued shares of Common Stock.

     

    (c) Authorization.
      All
      shares of Common Stock or Series B-1 Preferred Stock delivered upon conversion
      of the Preferred Stock shall be duly authorized, validly issued, fully paid
      and
      non-assessable, free and clear of all liens, claims, security interests and
      other encumbrances (other than liens, charges, security interests and other
      encumbrances created by the Holders).

     

    (d) Compliance
      with Law.
      Prior
      to the delivery of any securities that the Company shall be obligated to deliver
      upon conversion of the Preferred Stock, the Company shall use its reasonable
      best efforts to comply with all federal and state laws and regulations with
      respect to each Holder thereunder requiring the registration of such securities
      with, or any approval of or consent to the delivery thereof by, any governmental
      authority.

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    Section
      15. Replacement
      Certificates.

     

    (a) The
      Company shall replace any mutilated stock certificate at the Holder’s expense
      upon surrender of that stock certificate to the Company. The Company shall
      replace stock certificates that become destroyed, stolen or lost at the Holder’s
      expense upon delivery to the Company of satisfactory evidence that the stock
      certificate has been destroyed, stolen or lost, together with any indemnity
      that
      may be required by the Company.

     

    (b) The
      Company shall not be required to issue any stock certificates representing
      the
      Preferred Stock one business days following the full conversion of the Prefered
      Stock into Common Stock as provided in Section 8(f) or 8(g). In place of the
      delivery of a replacement certificate following such date, the Company, upon
      delivery of the evidence and indemnity described in clause (a) above, shall
      deliver the shares of Common Stock (or evidence of book-entry record ownership
      of such Common Stock) pursuant to the terms of the Preferred Stock formerly
      evidenced by the certificate.

     

    Section
      16. No
      Impairment.
      The
      Company shall not amend its Articles of Incorporation or participate in any
      reorganization, transfer of assets, consolidation, merger, dissolution, issue
      or
      sale of securities or any other voluntary action for the purpose of avoiding
      or
      seeking to avoid the observance or performance of any of the terms to be
      observed or performed hereunder by the Company, but shall at all times in good
      faith assist in carrying out all such action as may be reasonably necessary
      or
      appropriate in order to protect the conversion rights of the holders of the
      Preferred Stock against dilution or other impairment as provided
      herein.

     

    Section
      17. Form
      and Transfer Restrictions.
      

     

    (a) Form.
      Certificates representing the Series B and Series B-1 Preferred Stock (each
      a
“Preferred
      Certificate”),
      shall
      be issued to Holders at their request. Each Preferred Certificate shall include
      a reference incorporating the terms of this Certificate of Determination. In
      addition, the Preferred Certificates may have notations, legends or endorsements
      required by law, stock exchange rules, agreements to which the Company is
      subject, if any, or usage (provided that any such notation, legend or
      endorsement is in a form acceptable to the Company). 

     

    (b) Transfer
      Restriction.
      The
      Series B Preferred Stock may only be transferred (i) to an affiliate of the
      initial investor or an affiliate of the Company, (ii) in a widespread public
      distribution, (ii) in transfers in which no transferee would receive 2% or
      more
      of the class or (iv) to a transferee that would control more than 50% of the
      voting securities of the Company without any transfer from the original
      investor.

     

    Section
      18. Miscellaneous.

     

    (a) All
      notices referred to herein shall be in writing, and, unless otherwise specified
      herein, all notices hereunder shall be deemed to have been given upon the
      earlier of receipt thereof or three Business Days after the mailing thereof
      if
      sent by registered or certified mail (unless first-class mail shall be
      specifically permitted for such notice under the terms of this Certificate
      of
      Determination) with postage prepaid, addressed: (i) if to the Company, to its
      office at 55 Almaden Boulevard, Suite 200, San Jose, California, Attention:
      Chief Financial Officer, or (ii) if to a Holder, to the address or facsimile
      number appearing on the Company’s shareholder records or such other address or
      facsimile number as such Holder may provide to the Company in accordance with
      this Section 18. 

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    (b) The
      Company shall pay any and all stock transfer and documentary stamp taxes that
      may be payable in respect of any issuance or delivery of shares of Preferred
      Stock or shares of Series B-1 Preferred Stock or Common Stock or other
      securities issued on account of Preferred Stock pursuant hereto or certificates
      representing such shares or securities. The Company shall not, however, be
      required to pay any such tax that may be payable in respect of any transfer
      involved in the issuance or delivery of shares of Series B Preferred Stock,
      Series B-1 Preferred Stock or Common Stock or other securities in a name other
      than that in which the shares of Preferred Stock with respect to which such
      shares or other securities are issued or delivered were registered, or in
      respect of any payment to any Person other than a payment to the registered
      holder thereof, and shall not be required to make any such issuance, delivery
      or
      payment unless and until the Person otherwise entitled to such issuance,
      delivery or payment has paid to the Company the amount of any such tax or has
      established, to the satisfaction of the Company, that such tax has been paid
      or
      is not payable. 

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    4.
      We
      further declare under penalty of perjury under the laws of the State of
      California that the matters set forth in this certificate are true and correct
      of our own knowledge. 

     

    
      	 	 	 
	 	
              Name:

            	
              Daniel
                P. Myers

            
	 	
              Its:

            	
              Chief
                Executive Officer

            
	 	 	 
	 	 	 
	 	
              Name:

            	
              Thomas
                A. Sa

            
	 	
              Its:

            	
              Chief
                Financial Officer

            

    

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      F

    

    December
      3, 2008

     

    Carpenter
      Fund Manager GP, LLC 

    5
      Park
      Plaza, Suite 950

    Irvine,
      CA 92614

    

    Ladies
      and Gentlemen:

    

    We
      understand that Carpenter Fund Manager GP, LLC (the “Manager”) on behalf of and
      as General Partner of each of the following investment-related limited
      partnerships: Carpenter Community BancFund, L.P.; Carpenter Community
      BancFund-A, L.P.; and Carpenter Community BancFund-CA, L.P. (collectively,
      the
“Investors”),
      and
      Bridge Capital Holdings (the “Company”) intend to enter into a Stock Purchase
      Agreement (the “Stock Purchase Agreement”) providing for the purchase by the
      Investors of Series B Mandatorily Convertible Preferred Stock of the Company
      (“Series
      B Preferred Stock”)
      (the
“Investment”).
      The
      Series B Preferred Stock is convertible into Common Stock of the Company
      (“Common
      Stock”)
      and
      Series B-1 Mandatorily Convertible Preferred Stock of the Company (“Series
      B-1 Preferred Stock”).
      The
      Series B Preferred Stock is also convertible into Common Stock (collectively,
      such Common Stock and Series B-1 Preferred Stock is referred to as “Conversion
      Shares”).
      

    

    The
      undersigned is a shareholder of the Company and is entering into this letter
      agreement to induce the Manager to enter into the Stock Purchase Agreement
      and
      consummate the proposed transactions.

    

    The
      undersigned confirms its agreement with you as follows: 

    

    1. The
      undersigned represents, warrants and agrees that Schedule I attached hereto
      sets
      forth the shares of the Company's capital stock of which the undersigned is
      the
      record or beneficial owner and that the undersigned is on the date hereof the
      lawful owner of the number of shares set forth therein, free and clear of all
      voting agreements and commitments of any kind and free and clear of all liens
      and encumbrances except as set forth in Schedule I. Except as set forth in
      Schedule I, the undersigned does not own or hold any rights to acquire any
      additional shares of the Company's capital stock (by exercise of stock options,
      warrants or otherwise) or any interest therein or any voting rights with respect
      to any additional shares.

    

    2. The
      undersigned agrees that, prior to the meeting of the shareholders of the Company
      contemplated by Section 6.1(b) of the Stock Purchase Agreement, or any
      adjournment or postponement thereof, the undersigned will not contract to sell,
      or otherwise transfer or dispose of any shares of the Company's capital stock
      or
      any interest therein or securities convertible thereinto or any voting rights
      with respect thereto, other than (i) the disposition of shares of the Company’s
      capital stock to pay the exercise price of stock options, as the case may be,
      (ii) bona fide gifts; or (ii) with the prior written consent of
      Manager.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    3. The
      undersigned agrees that all shares of the Company's capital stock beneficially
      owned by the undersigned for which it has voting rights at the record date
      for
      any meeting of shareholders of the Company called to consider and vote on the
      Investment and the Conversion Shares will be voted by the undersigned in favor
      of (A) the authorization and issuance of the shares of Conversion Shares for
      purposes of Rule 4350 of the NASDAQ Listed Company Manual, (B) any increase
      in
      the size of the Board of Directors as required by Section 6.2 of the Stock
      Purchase Agreement, and (B) any other proposals necessary to permit the Company
      to issue the Series B Preferred Stock and the Conversion Shares.

    

    4. Nothing
      contained herein is intended to prevent the undersigned from performing his
      or
      her duties as officer or director in exercising the Company’s rights or
      performing the Company’s obligations under the Stock Purchase
      Agreement.

    

    Please
      confirm that the foregoing correctly states the understanding between us by
      signing and returning to us a counterpart hereof.

    

    
      	 	
              Very
                truly yours,

            	 
	 	 	 
	 	     
	 
	 	
               [Name]

            	 

    

    

    Confirmed:
      December __, 2008

    

    Carpenter
      Fund Manager GP, LLC 

    

    
      	
              By:
                

            	  
	 
	 
	 	 	 	 
	 	
              Its:

            	   
	 

    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    SCHEDULE
      I 

    

    
      	
               

               

              NAME

            	 	
              SHARES

              OWNED

              DIRECTLY 

            	 	
              SHARES

              OWNED

              INDIRECTLY

            	 	
              SHARES

              WITH POWER

              TO VOTE

            	 	
              SHARES

              WITH SHARED

              POWER TO VOTE

            	 	
               

               

              LIENS

            	 	
              RIGHTS TO ACQUIRE

              ADDITIONAL SHARES

              OR VOTING RIGHTS

            
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 

    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    EXECUTION

     

    FORM
      OF

     

    REGISTRATION
      RIGHTS AGREEMENT

     

    among

     

    BRIDGE
      CAPITAL HOLDINGS 

     

    and

     

    THE
      HOLDERS NAMED HEREIN

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    TABLE
      OF CONTENTS

     

    
      	
              Section
                1.

            	
              DEFINITIONS

            	 	
              1

            
	 	
              1.1.

            	
              Defined
                Terms

            	 	
              1

            
	 	
              1.2.

            	
              General
                Interpretive Principles

            	 	
              4

            
	
              Section
                2.

            	
              REGISTRATION
                RIGHTS

            	 	
              4

            
	 	
              2.1.

            	
              Shelf
                Registration

            	 	
              4

            
	 	
              2.2.

            	
              Demand
                Registrations

            	 	
              5

            
	 	
              2.3.

            	
              Incidental
                Registrations

            	 	
              7

            
	 	
              2.4.

            	
              Black-out
                Periods

            	 	
              9

            
	 	
              2.5.

            	
              Registration
                Procedures

            	 	
              10

            
	 	
              2.6.

            	
              Underwritten
                Offerings

            	 	
              14

            
	 	
              2.7.

            	
              No
                Inconsistent Agreements; Additional Rights

            	 	
              14

            
	 	
              2.8.

            	
              Registration
                Expenses

            	 	
              15

            
	 	
              2.9.

            	
              Indemnification

            	 	
              15

            
	 	
              2.10.

            	
              Rules
                144 and 144A

            	 	
              18

            
	
              Section
                3.

            	
              MISCELLANEOUS

            	 	
              18

            
	 	
              3.1.

            	
              Term

            	 	
              18

            
	 	
              3.2.

            	
              Injunctive
                Relief

            	 	
              18

            
	 	
              3.3.

            	
              Attorneys’
                Fees

            	 	
              19

            
	 	
              3.4.

            	
              Notices

            	 	
              19

            
	 	
              3.5.

            	
              Successors,
                Assigns and Transferees

            	 	
              20

            
	 	
              3.6.

            	
              Governing
                Law; Service of Process; Consent to Jurisdiction

            	 	
              20

            
	 	
              3.7.

            	
              Headings

            	 	
              20

            
	 	
              3.8.

            	
              Severability

            	 	
              20

            
	 	
              3.9.

            	
              Amendment;
                Waiver

            	 	
              21

            
	 	
              3.10.

            	
              Counterparts

            	 	
              21

            

    

     

    
      
        
        

      

      
        i

        
          

        

      

      
        
        

      

    

     

    REGISTRATION
      RIGHTS AGREEMENT

     

    REGISTRATION
      RIGHTS AGREEMENT (this “Agreement”),
      dated
      as of December 4, 2008 by and between Bridge Capital Holdings, a California
      corporation (the “Issuer”)
      and
      Carpenter Fund Manager GP, LLC (the “Manager”)
      on
      behalf of and as General Partner of each of the following investment-related
      limited partnerships: Carpenter Community BancFund, L.P.; Carpenter Community
      BancFund-A, L.P.; and Carpenter Community BancFund-CA, L.P. (collectively,
      the
“Investors”).

     

    Recitals

     

    WHEREAS,
      the Issuer and the Manager on behalf of the Investors have entered into Stock
      Purchase Agreement (the “Stock
      Purchase Agreement”)
      pursuant to which the Investors shall, among other things, be issued shares
      of
      Series B Preferred Stock of the Company, which is convertible into shares of
      Series B-1 Preferred Stock. The Preferred Stock is convertible into Common
      Stock
      of the Company; and

     

    WHEREAS,
      as an inducement to the Investors to enter into the Stock Purchase Agreement,
      the Issuer has agreed to provide the registration rights set forth in this
      Agreement;

     

    Agreement

     

    NOW,
      THEREFORE, in consideration of the foregoing and the mutual promises, covenants
      and agreements of the parties hereto, and for other good and valuable
      consideration the receipt and sufficiency of which are hereby acknowledged,
      the
      parties hereto agree as follows:

     

    Section
      1. DEFINITIONS

     

    1.1.
      Defined
      Terms.
      As used
      in this Agreement, the following terms shall have the meanings set forth in
      this
      Section 1. All other capitalized terms shall have the meaning ascribed to them
      in the Stock Purchase Agreement.

     

    “Adverse
      Disclosure”
means
      public disclosure of material non-public information, which disclosure in the
      good faith judgment of the Board of Directors of the Issuer after consultation
      with counsel to the Issuer (i) would be required to be made in any Registration
      Statement so that such Registration Statement would not be materially
      misleading, (ii) would not be required to be made at such time but for the
      filing of such Registration Statement and (iii) would have a material adverse
      effect on the Issuer or its business or on the Issuer’s ability to effect a
      material acquisition, disposition or financing.

     

    “Agreement”
has
      the
      meaning set forth in the preamble hereto.

     

    “Board
      of Directors”
means
      the Board of Directors of the Issuer.

     

    “Certificate
      of Determination”
means
      the Certificate of Determination of the Issuer for the Series B Preferred Stock
      and the Series B-1 Preferred Stock.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    “Common
      Stock”
means
      the common stock of the Issuer and any securities of the Issuer or successor
      of
      the Issuer into which such Common Stock is reclassified or reconstituted or
      into
      which such stock is converted or otherwise exchanged in connection with a
      combination of shares, recapitalization, merger, sale of assets, consolidation
      or other reorganization or otherwise.

     

    “Demand
      Registration”
has
      the
      meaning set forth in Section 2.2(a).

     

    “Exchange
      Act”
means
      the Securities Exchange Act of 1934, as amended, and any successor thereto,
      and
      any rules and regulations promulgated thereunder, all as the same shall be
      in
      effect from time to time.

     

    “FINRA”
means
      the Financial Industry Regulatory Authority.

     

    “holder”
or
      “holders”
means
      any holder or holders of Registrable Securities who is a party hereto or who
      otherwise agrees in writing to be bound by the provisions of this Agreement
      pursuant to Section 3.5.

     

    “Incidental
      Registration”
has
      the
      meaning set forth in Section 2.3(a).

     

    “Investors”
has
      the
      meaning set forth in the preamble hereto.

     

    “Issuer”
has
      the
      meaning set forth in the preamble and shall include the Issuer’s successors by
      merger, acquisition, reorganization or otherwise.

     

    “Loss”
has
      the
      meaning set forth in Section 2.9(a).

     

    “Manager”
has
      the
      meaning set forth in the preamble hereto.

     

    “Person”
means
      any individual, firm, limited liability company or partnership, joint venture,
      corporation, joint stock company, trust or unincorporated organization,
      incorporated or unincorporated association, government (or any department,
      agency or political subdivision thereof) or other entity of any
      kind.

     

    “Preferred
      Stock”
means
      the Series B Preferred Stock and the Series B-1 Preferred Stock. 

     

    “Prospectus”
means
      the prospectus included in any Registration Statement, all amendments and
      supplements to such prospectus and all material incorporated by reference in
      such prospectus.

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    “Registrable
      Securities”
means
      (i) all outstanding shares of Series B Preferred Stock, (ii) all outstanding
      shares of the Series B-1 Preferred Stock, (iii) all shares of Common Stock
      issued and issuable upon conversion of the Series B Preferred Stock and the
      Series B-1 Preferred Stock, and (iv) any shares of Common Stock or other
      securities that may be issued or distributed or be issuable in respect thereof
      by way of, share split or other distribution, merger, consolidation, exchange
      offer, recapitalization or reclassification or similar transaction or exercise
      or conversion or adjustment; provided
      however
      that any of the foregoing securities shall cease to be “Registrable Securities”
to the extent (i) a Registration Statement with respect to their sale has been
      declared effective under the Securities Act and they have been disposed of
      pursuant to such Registration Statement, (ii) they have been distributed
      pursuant to Rule 144 (or any similar provision then in force) under the
      Securities Act or are transferable pursuant to such rule (without volume
      limitation or method of sale restrictions); or (iii) they shall have been
      otherwise transferred and (A) new certificates for them not bearing a legend
      restricting transfer under the Securities Act shall have been delivered by
      the
      Issuer and (B) may be publicly resold (without volume or method of sale
      restrictions) without registration under the Securities Act. For purposes of
      this Agreement, a “class” of Registrable Securities shall mean all Registrable
      Securities with the same terms and a “percentage” (or a “majority”) of the
      Registrable Securities (or, where applicable, of any other securities) shall
      be
      determined based on the number of shares of such securities, in the case of
      Registrable Securities which are equity securities. 

     

    “registration”
means
      a
      registration of the Registrable Securities for sale to the public under a
      Registration Statement.

     

    “Registration
      Statement”
means
      any registration statement of the Issuer filed with, or to be filed with, the
      SEC under the rules and regulations promulgated under the Securities Act,
      including the Prospectus, amendments and supplements to such registration
      statement, including post-effective amendments, and all exhibits and all
      material incorporated by reference in such registration statement.

     

    “SEC”
means
      the Securities and Exchange Commission.

     

    “Securities
      Act”
means
      the Securities Act of 1933, as amended, and any successor thereto, and any
      rules
      and regulations promulgated thereunder, all as the same shall be in effect
      from
      time to time.

     

    “Series
      B Preferred Stock”
means
      the Series B Preferred Stock issued pursuant to the Stock Purchase Agreement
      and
      any shares of Series B Preferred Stock issued as dividends on the Preferred
      Stock.

     

    “Series
      B-1 Preferred Stock”
means
      the Series B-1 Preferred Stock issuable upon conversion of the Series B
      Preferred Stock and any shares of Series B-1 Preferred Stock issued as dividends
      on the Preferred Stock. .

     

    “Shelf
      Registration”
means
      a
      registration effected pursuant to Section 2.1.

     

    “Shelf
      Registration Statement”
means
      a
      Registration Statement of the Issuer filed with the SEC on Form S-3 (or any
      successor form or other appropriate form under the Securities Act) for an
      offering to be made on a continuous or delayed basis pursuant to Rule 415 under
      the Act (or any similar rule that may be adopted by the SEC) covering the
      Registrable Securities.

     

    “TARP
      Securities”
      includes any preferred stock and warrants sold to the United States Department
      of the Treasury pursuant to the TARP Capital Purchase Plan and any shares of
      common stock issued upon exercise or conversion thereof.

     

    “Underwritten
      Offering”
means
      a
      registration in which securities of the Issuer are sold to an underwriter or
      underwriters on a firm commitment basis for reoffering to the
      public.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    1.2.
      General
      Interpretive Principles.
      Whenever used in this Agreement, except as otherwise expressly provided or
      unless the context otherwise requires, any noun or pronoun shall be deemed
      to
      include the plural as well as the singular and to cover all genders. The name
      assigned this Agreement and the section captions used herein are for convenience
      of reference only and shall not be construed to affect the meaning, construction
      or effect hereof. Unless otherwise specified, the terms “hereof,” “herein,”
“hereunder” and similar terms refer to this Agreement as a whole (including the
      exhibits, schedules and disclosure statements hereto), and references herein
      to
      Sections refer to Sections of this Agreement.

     

    Section
      2. REGISTRATION RIGHTS

     

    2.1.
       Shelf
      Registration.

     

    (a) Filing.
      Subject
      to Section 2.1(c), on or before the 45th day following a request by one or
      more
      holders of Registrable Securities, file with the SEC a Shelf Registration
      Statement relating to the offer and sale of the requested Registrable Securities
      by the holders thereof from time to time in accordance with the methods of
      distribution elected by such holders and shall use its reasonable best efforts
      to cause such Shelf Registration Statement to be declared effective under the
      Securities Act. 

     

    (b) Continued
      Effectiveness.
      Subject
      to Section 2.1(c), the Issuer shall use its reasonable best efforts to keep
      the
      Shelf Registration Statement continuously effective in order to permit the
      Prospectus forming a part thereof to be usable by the holders until the earlier
      of (i) the termination of this Agreement or (ii) the date when all of the
      Registerable Securities thereunder have been sold or are no longer Registerable
      Securities. The Issuer shall not be deemed to have used its reasonable best
      efforts to keep the Shelf Registration Statement effective if the Issuer
      voluntarily takes any action or omits to take any action that would result
      in
      the inability of any holder of Registrable Securities covered by such
      Registration Statement to be able to offer and sell any such Registrable
      Securities during the term of this Agreement, unless such action or omission
      is
      required by applicable law.

     

    (c) Suspension
      of Registration.
      If the
      filing, initial effectiveness or continued use of the Shelf Registration
      Statement at any time would require the Issuer to make an Adverse Disclosure,
      the Issuer may, upon giving prompt written notice of such action to the holders,
      delay the filing
      or initial
      effectiveness of, or suspend
      use of, the Shelf Registration Statement;
      provided,
      however, that the Issuer shall not be permitted to do so (A) more than one
      time
      during any six month period, (B) for a period exceeding 45 days on any one
      occasion or (C) for a period exceeding 90 days in any 12 month period. In the
      event the Issuer exercises its rights under the preceding sentence, the holders
      agree to suspend, immediately upon their receipt of the notice referred to
      above, their use of the Prospectus relating to the Shelf Registration in
      connection with any sale or offer to sell Registrable Securities. The Issuer
      shall immediately notify the holders upon the expiration of any period during
      which it exercised its rights under this Section 2.1(c). The Issuer represents
      that it has no knowledge of any circumstance that would reasonably be expected
      to cause the Issuer to exercise its rights under this Section
      2.1(c).

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    (d) Underwritten
      Offering.
      If the
      holders of not less than a majority of any class of Registrable Securities
      included in any offering pursuant to the Shelf Registration Statement so elect,
      such offering shall be in the form of an Underwritten Offering and the Issuer,
      if necessary, shall amend or supplement the Shelf Registration Statement for
      such purpose. The holders of a majority of the class of Registrable Securities
      included in such Underwritten Offering shall, after consulting with the Issuer,
      have the right to select the managing underwriter or underwriters for the
      offering.

     

    (e) Effect
      on Demand and Incidental Registration Obligation.
      The
      provisions of Section 2.2 shall not apply to a class of Registrable Securities
      at any time the Issuer has filed and is maintaining the effectiveness of a
      Shelf
      Registration Statement for such class and is complying with its obligations
      under this Section 2.1 with respect to all Registrable Securities, but the
      provisions of Section 2.3 shall apply whether or not the Issuer has filed and
      is
      maintaining the effectiveness of a Shelf Registration Statement. 

     

    2.2.
      Demand Registrations.

     

    
      
        (a)
          Demand
          by Holders

      

    

     

    (1) At
      any
      time the holders of not less than 25 percent of any class of the Registrable
      Securities may make a written request to the Issuer for registration of all
      or
      part of the Registrable Securities held by such holders. Any such requested
      registration shall hereinafter be referred to as a “Demand
      Registration.”
Each
      request for a Demand Registration shall specify the aggregate amount of
      Registrable Securities to be registered and the intended methods of disposition
      thereof.

     

    (2) Within
      ten days following receipt of any request for a Demand Registration, the Issuer
      shall deliver written notice of such request to all other holders of Registrable
      Securities of the class or classes to be registered. Thereafter, the Issuer
      shall include in such Demand Registration any additional Registrable Securities
      of each such class which the holder or holders thereof have requested in writing
      be included in such Demand Registration, provided that all requests therefor
      have been received by the Issuer within ten days of the Issuer’s having sent the
      applicable notice to such holder or holders. All such requests shall specify
      the
      aggregate amount and class of Registrable Securities to be registered and the
      intended method of distribution of the same. The Issuer may not include in
      such
      registration additional securities of the class or classes of the Registrable
      Securities to be registered hereunder, including securities to be sold for
      the
      Issuer’s own account or for the account of Persons who are not holders of
      Registrable Securities.

     

    (3) As
      promptly as practicable (and, in any event, within 45 days) following receipt
      of
      a request for a Demand Registration, the Issuer shall file a Registration
      Statement relating to such Demand Registration and shall use its reasonable
      best
      efforts to cause such Registration Statement to be declared effective under
      the
      Securities Act.

     

    (b) Limitation
      on Demand Registrations.
      In no
      event shall the Issuer be required to effect more than two Demand Registrations,
      nor shall the Issuer be required to effect more than one Demand Registration
      in
      any six month period.

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    (c) Demand
      Withdrawal.
      A
      holder may withdraw its Registrable Securities from a Demand Registration at
      any
      time. If all such holders do so, the Issuer shall cease all efforts to secure
      registration and such registration nonetheless shall be deemed a Demand
      Registration for purposes of Section 2.2(b) unless the withdrawal is based
      on
      (i) the reasonable determination of the holders who requested such registration
      that there has been, since the date of such request, a material adverse change
      in the business or prospects of the Issuer or in general market conditions
      or
      (ii) the acts or omissions of the Issuer.

     

    (d) Effective
      Registration.
      The
      Issuer shall be deemed to have effected a Demand Registration if the applicable
      Registration Statement is declared effective by the SEC and remains effective
      for not less than 180 days (or such shorter period as will terminate when all
      Registrable Securities covered by such Registration Statement have been sold
      or
      withdrawn),
      or,
      if
      such Registration Statement relates to an Underwritten Offering, such longer
      period as, in the opinion of counsel for the underwriter or underwriters, is
      required by law for the delivery of a Prospectus in connection with the sale
      of
      Registrable Securities by an underwriter or dealer. No Demand Registration
      shall
      be deemed to have been effected if an Underwritten Offering is contemplated
      by
      such Demand Registration and the conditions to closing specified in the
      applicable underwriting agreement are not satisfied by reason of a wrongful
      act,
      misrepresentation or breach of such underwriting agreement or this Agreement
      by
      the Issuer.

     

    (e) Suspension
      of Registration.
      If the
      filing, initial effectiveness or continued use of a Registration Statement
      in
      respect of a Demand Registration would result in an effective registration
      statement within 90 days of a underwritten offering by the Company of its equity
      securities for its own accounts or at any time would require the Issuer to
      make
      an Adverse Disclosure, the Issuer may, upon giving prompt written notice of
      such
      action to the holders, delay the filing
      or initial
      effectiveness of, or suspend use of, the such Registration Statement;
provided
      however
      that such right to delay registration shall be exercised by the Issuer (A)
      only
      if the Issuer h generally exercised (or is concurrently exercising) similar
      black-out rights against holders of similar securities that have registration
      rights and (2) not more than three times during any 12-month period and not
      more
      than 90 days in the aggregate in any 12-month period. In the event the Issuer
      exercises its rights under the preceding sentence, the holders agree to suspend,
      immediately upon their receipt of the notice referred to above, their use of
      the
      Prospectus relating to the Demand Registration in connection with any sale
      or
      offer to sell Registrable Securities. The Issuer shall immediately notify the
      holders of the expiration of any period during which it exercised its rights
      under this Section 2.2(e). The Issuer represents that it has no knowledge of
      any
      circumstance that would reasonably be expected to cause the Issuer to exercise
      its rights under this Section 2.2(e).

     

    (f) Underwritten
      Offering.
      If the
      holders of not less than a majority of the Registrable Securities of any class
      which are included in any offering pursuant to a Demand Registration so elect,
      such offering shall be in the form of an Underwritten Offering. The holders
      of a
      majority of the class of Registrable Securities included in such Underwritten
      Offering shall, after consulting with the Issuer, have the right to select
      the
      managing underwriter or underwriters for the offering subject to the right
      of
      the Issuer to select one co-managing underwriter reasonably acceptable to such
      holders.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    (g) Priority
      of Securities Registered Pursuant to Demand Registrations.
      If the
      managing underwriter or underwriters of a proposed Underwritten Offering of
      a
      class of Registrable Securities included in a Demand Registration (or, in the
      case of a Demand Registration not being underwritten, the holders of a majority
      of a class of Registrable Securities included in such Registration Statement),
      inform the holders of such Registrable Securities in writing that, in its or
      their opinion, the number of securities of such class requested to be included
      in such Demand Registration exceeds the number which can be sold in such
      offering without being likely to have a significant adverse effect on the price,
      timing or distribution of the class of securities offered or the market for
      the
      class of securities offered, the number of Registrable Securities of such class
      that can be included without having such an adverse effect shall be allocated
      pro rata
      among
      the holders which have requested participation in the Demand Registration
      (based, for each such holder, on the percentage derived by dividing (i) the
      number of Registrable Securities of such class which such holder has requested
      to include in such Demand Registration by (ii) the aggregate number of
      Registrable Securities of such class which all such holders have requested
      to
      include). To the extent that any Registrable Securities requested to be
      registered are so excluded, the holders shall have the right to one additional
      Demand Registration under this Section 2.2.

     

    (h) Registration
      Statement Form.
      Registrations under this Section 2.2 shall be on such appropriate registration
      form of the SEC (i) as shall be selected by the Issuer and as shall be
      reasonably acceptable to the holders of a majority of each class of Registrable
      Securities requesting participation in the Demand Registration and (ii) as
      shall
      permit the disposition of the Registrable Securities in accordance with the
      intended method or methods of disposition specified in the applicable holders’
requests for such registration.

     

    2.3.
      Incidental
      Registrations.

     

    
      
        (a)
          Participation

      

    

     

    (1) If
      the
      Issuer at any time proposes to file a Registration Statement with respect to
      any
      offering of its securities for its own account or for the account of any holders
      of its securities (other than (A) a registration under Section 2.1 or 2.2
      hereof, (B) a registration on Form S-4 or S-8 or any successor form to such
      forms,
      or (C) a
      registration of securities solely relating to an offering and sale to employees
      or directors of the Issuer pursuant to any employee stock plan or other employee
      benefit plan arrangement, then, as soon as practicable (but in no event less
      than 20 days prior to the proposed date of filing such Registration Statement),
      the Issuer shall give written notice of such proposed filing to all holders
      of
      Registrable Securities, and such notice shall offer the holders of such
      Registrable Securities the opportunity to register such number of Registrable
      Securities as each such holder may request in writing (an “Incidental
      Registration”).
      Subject to Section 2.3(b), the Issuer shall include in such Registration
      Statement all such Registrable Securities which are requested to be included
      therein within 20 days after the receipt by such holder of any such notice.
      If
      at any time after giving written notice of its intention to register any
      securities and prior to the effective date of the Registration Statement filed
      in connection with such registration, the Issuer shall determine for any reason
      not to register or to delay registration of such securities, the Issuer may,
      at
      its election, give written notice of such determination to each holder of
      Registrable Securities and, (x) in the case of a determination not to register,
      shall be relieved of its obligation to register any Registrable Securities
      in
      connection with such registration, and (y) in the case of a determination to
      delay registering, shall be permitted to delay registering any Registrable
      Securities for the same period as the delay in registering such other
      securities. 

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (2) If
      the
      offering pursuant to an Incidental Registration is to be an Underwritten
      Offering, then each holder making a request for its Registrable Securities
      to be
      included therein must, and the Issuer shall make such arrangements with the
      underwriters so that each such holder may participate in such Underwritten
      Offering on the same terms as the Issuer and other Persons selling securities
      in
      such Underwritten Offering. If the offering pursuant to such registration is
      to
      be on any other basis, then each holder making a request for an Incidental
      Registration pursuant to this Section 2.3(a) must participate in such offering
      on such basis. 

     

    (3) Each
      holder of Registrable Securities shall be permitted to withdraw all or part
      of
      such holder’s Registrable Securities from an Incidental Registration at any
      time; provided
      however
      that,
      except
      in
      the case of a withdrawal pursuant to Section 2.6(b), the Issuer shall be
      entitled to reimbursement from the holder of such withdrawn Registrable
      Securities for any SEC registration fees incurred by the Issuer in connection
      with the registration of the Registrable Securities being
      withdrawn.

     

    (b) Priority
      of Incidental Registration.
      If the
      managing underwriter or underwriters of any proposed Underwritten Offering
      of a
      class of securities included in an Incidental Registration (or in the case
      of an
      Incidental Registration not being underwritten, the Issuer) informs the holders
      of Registrable Securities of any class sought to be included in such
      registration in writing that, in its or their opinion, the total amount or
      kind
      of securities which such holders and any other Persons intend to include in
      such
      offering exceeds the number which can be sold in such offering without being
      likely to have a significant adverse effect on the price, timing or distribution
      of the class or classes of the securities offered or the market for the class
      or
      classes of securities offered or the Issuer’s common stock, then the securities
      of each class to be included in such registration shall be allocated as follows:
      

     

    (1) first,
      100% of
      the securities that the Issuer or (subject to Section 2.7) any Person (other
      than a holder of Registrable Securities) exercising a contractual right to
      demand registration has proposed to sell shall be included therein, if any;
      

     

    (2) second,
      and
      only if all the securities referenced in clause (i) have been included, the
      number of Registrable Securities of such class, if any, that, in the opinion
      of
      such underwriter or underwriters (or in the case of an Incidental Registration
      not being underwritten, the Issuer), can be sold without having such adverse
      effect shall be included therein, with such number to be allocated pro rata
      among
      the holders which have requested participation in the Incidental Registration
      (based, for each such holder, on the percentage derived by dividing (x) the
      number of Registrable Securities of such class which such holder has requested
      to include in such Incidental Registration by (y) the aggregate number of
      Registrable Securities of such class which all such holders have requested
      to
      include); and 

     

    (3) third,
      and
      only if all of the Registrable Securities referenced in clauses (1) and (2)
      have
      been included, any other securities eligible for inclusion in such registration
      shall be included therein.

     

    
      
        
        

      

      
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    2.4.
      Black-out
      Periods

     

    (a) Black-out
      Periods for Holders.
      In the
      event of a registration by the Issuer, the holders of Registrable Securities
      agree, if (i) requested by the Issuer (or, in the case of an Underwritten
      Offering, by the managing underwriter or underwriters) and (ii) such holders
      are
      offered an opportunity to participate in such registration pursuant to Section
      2.3(a) without any exclusion of holder securities pursuant to Section 2.3(b),
      not to effect any public sale or distribution (excluding any
      sale
      pursuant to Rule 144 or Rule 144A under the Securities Act) of any securities
      (except, in each case, as part of the applicable registration, if permitted)
      which securities are the same as or similar to those being registered in
      connection with such registration, or which are convertible into or exchangeable
      or exercisable for such securities, during the period beginning seven days
      before, and ending 90 days (or such lesser period as may be permitted by the
      Issuer or such managing underwriter or underwriters) after, the effective date
      of the Registration Statement filed in connection with such registration, to
      the
      extent such holders are timely notified in writing by the Issuer or the managing
      underwriter or underwriters.

     

    
      
        (b)
          Black-out
          Period for the Issuer and Others.
          

      

    

     

    (1) In
      the
      case of a registration of a class of Registrable Securities pursuant to Section
      2.1 or 2.2 (involving the offering and sale of equity securities or securities
      convertible into or exchangeable for equity securities), the Issuer agrees,
      if
      requested by the holders of a majority of such class of Registrable Securities
      to be sold pursuant to the such registration (or, in the case of an Underwritten
      Offering, by the managing underwriter or underwriters in such Underwritten
      Offering), not to effect (or register for sale) any public sale or distribution
      of any securities which are the same as or similar to those being registered,
      or
      which are convertible into or exchangeable or exercisable for such securities,
      during the period beginning seven days before, and ending 90 days (or such
      lesser period as may be permitted by such holders or such underwriter or
      underwriters) after, the effective date of the Registration Statement filed
      in
      connection with such registration (or, in the case of an Underwritten Offering
      under the Shelf Registration, the date of the closing under the underwriting
      agreement in connection therewith), to the extent the Issuer is timely notified
      in writing by a holder of Registrable Securities covered by such Registration
      Statement or the managing underwriter or underwriters. Notwithstanding the
      foregoing, the Issuer may effect a public sale or distribution of securities
      of
      the type described above and during the periods described above if the same
      (A)
      is made pursuant to registrations on Forms S-4 or S-8 or any successor form
      to
      such forms,
      or (B)
      as part of any registration of securities for offering and sale to employees
      or
      directors of the Issuer pursuant to any employee stock plan or other employee
      benefit plan arrangement. 

     

    (2) The
      Issuer agrees to use all reasonable efforts to obtain from each holder of
      restricted securities of the Issuer which are the same as or similar to those
      being registered by the Issuer, or which are convertible into or exchangeable
      or
      exercisable for any of its securities, an agreement not to effect any public
      sale or distribution of such securities (other than securities purchased in
      a
      public offering) during any period referred to in this Section 2.4(b), except
      as
      part of any such registration if permitted. Without limiting the foregoing
      (but
      subject to Section 2.7), if after the date hereof the Issuer grants any Person
      (other than a holder of Registrable Securities or TARP Securities) any rights
      to
      demand or participate in a registration, the Issuer agrees that the agreement
      with respect thereto shall include such Person’s agreement as contemplated by
      the previous sentence.

     

    
      
        
        

      

      
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    2.5.
      Registration
      Procedures.

     

    (a) In
      connection with the Issuer’s registration obligations in this Agreement, the
      Issuer will, subject to the limitations set forth herein, use its reasonable
      best efforts to effect any such registration so as to permit the sale of the
      applicable Registrable Securities in accordance with the intended method or
      methods of distribution thereof as expeditiously as reasonably practicable,
      and
      in connection therewith the Issuer will:

     

    (1) before
      filing a Registration Statement or Prospectus, or any amendments or supplements
      thereto and in connection therewith, furnish to the underwriter or underwriters,
      if any, and to one representative of the holders of each class of the
      Registrable Securities covered by such Registration Statement, copies of all
      documents prepared to be filed, which documents will be subject to the review
      of
      such underwriters and such holders and their respective counsel and, except
      in
      the case of a registration under Section 2.3, not file any Registration
      Statement or Prospectus or amendments or supplements thereto to which the
      holders of a majority of the class of Registrable Securities covered by the
      same
      or the underwriter or underwriters, if any, shall reasonably
      object;

     

    (2) prepare
      and file with the SEC such amendments or supplements to the applicable
      Registration Statement or Prospectus as may be (A) reasonably requested by
      any
      participating holder (to the extent such request relates to information relating
      to such holder); (B) necessary to keep such registration effective for the
      period of time required by this Agreement or (C) reasonably requested by the
      holders of a majority of any class of the participating Registrable
      Securities;

     

    (3) notify
      the selling holders of Registrable Securities and the managing underwriter
      or
      underwriters, if any, and (if requested) confirm such advice in writing, as
      soon
      as reasonably practicable after notice thereof is received by the Issuer (A)
      when the applicable Registration Statement or any amendment thereto has been
      filed or becomes effective and when the applicable Prospectus or any amendment
      or supplement thereto has been filed, (B) of any written comments by the SEC
      or
      any request by the SEC or any other federal or state governmental authority
      for
      amendments or supplements to such Registration Statement or Prospectus or for
      additional information, (C) of the issuance by the SEC of any stop order
      suspending the effectiveness of such Registration Statement or any order
      preventing or suspending the use of any preliminary or final Prospectus or
      the
      initiation or threat of any proceedings for such purposes and (D) of the receipt
      by the Issuer of any notification with respect to the suspension of the
      qualification of the Registrable Securities for offering or sale in any
      jurisdiction or the initiation or threat of any proceeding for such
      purpose;

     

    
      
        
        

      

      
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    (4) promptly
      notify each selling holder of Registrable Securities and the managing
      underwriter or underwriters, if any, when the Issuer becomes aware of the
      happening of any event as a result of which the applicable Registration
      Statement or Prospectus (as then in effect) contains any untrue statement of
      a
      material fact or omits to state a material fact necessary to make the statements
      therein (in the case of the Prospectus and any preliminary Prospectus, in light
      of the circumstances under which they were made) not misleading or, if for
      any
      other reason it shall be necessary to amend or supplement such Registration
      Statement or Prospectus in order to comply with the Securities Act and, in
      either case as promptly as reasonably practicable thereafter, prepare and file
      with the SEC an amendment or supplement to such Registration Statement or
      Prospectus which will correct such statement or omission or effect such
      compliance;

     

    (5) make
      every reasonable effort to prevent or obtain at the earliest possible moment
      the
      withdrawal of any stop order with respect to the applicable Registration
      Statement or other order suspending the use of any preliminary or final
      Prospectus;

     

    (6) promptly
      incorporate in a Prospectus supplement or post-effective amendment to the
      applicable Registration Statement such information as the managing underwriter
      or underwriters, if any, or the holders of a majority of the Registrable
      Securities of the class being sold agree should be included therein relating
      to
      the plan of distribution with respect to such Registrable Securities; and make
      all required filings of such Prospectus supplement or post-effective amendment
      as soon as reasonably practicable after being notified of the matters to be
      incorporated in such Prospectus supplement or post-effective
      amendment;

     

    (7) furnish
      to each selling holder of Registrable Securities and each managing underwriter,
      if any, without charge, as many conformed copies as such holder or managing
      underwriter may reasonably request of the applicable Registration
      Statement;

     

    (8) deliver
      to each selling holder of Registrable Securities and each managing underwriter,
      if any, without charge, as many copies of the applicable Prospectus (including
      each preliminary Prospectus) as such holder or managing underwriter may
      reasonably request (it being understood that the Issuer consents to the use
      of
      the Prospectus by each of the selling holders of Registrable Securities and
      the
      underwriter or underwriters, if any, in connection with the offering and sale
      of
      the Registrable Securities covered by the Prospectus) and such other documents
      as such selling holder or managing underwriter may reasonably request in order
      to facilitate the disposition of the Registrable Securities by such holder
      or
      underwriter;

     

    (9) on
      or
      prior to the date on which the applicable Registration Statement is declared
      effective, use its reasonable best efforts to register or qualify such
      Registrable Securities for offer and sale under the securities or “Blue Sky”
laws of each state and other jurisdiction of the United States, as any such
      selling holder or underwriter, if any, or their respective counsel reasonably
      requests in writing, and do any and all other acts or things reasonably
      necessary or advisable to keep such registration or qualification in effect
      so
      as to permit the commencement and continuance of sales and dealings in such
      jurisdictions for as long as may be necessary to complete the distribution
      of
      the Registrable Securities covered by the Registration Statement; provided,
      however, that the Issuer will not be required to qualify generally to do
      business in any jurisdiction where it is not then so qualified or to take any
      action which would subject it to taxation or general service of process in
      any
      such jurisdiction where it is not then so subject;

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    (10) cooperate
      with the selling holders of Registrable Securities and the managing underwriter,
      underwriters or agent, if any, to facilitate the timely preparation and delivery
      of certificates representing Registrable Securities to be sold and not bearing
      any restrictive legends;

     

    (11) not
      later
      than the effective date of the applicable Registration Statement, provide a
      CUSIP number for all Registrable Securities and provide the applicable transfer
      agent with printed certificates for the Registrable Securities which
      certificates shall be in a form eligible for deposit with The Depository Trust
      Company;

     

    (12) obtain
      for delivery to the holders of each class of Registrable Securities being
      registered and to the underwriter or underwriters, if any, an opinion or
      opinions from counsel for the Issuer dated the effective date of the
      Registration Statement or, in the event of an Underwritten Offering, the date
      of
      the closing under the underwriting agreement, in customary form, scope and
      substance, which counsel and opinions shall be reasonably satisfactory to a
      majority of the holders of each such class and underwriter or underwriters,
      if
      any, and their respective counsel;

     

    (13) in
      the
      case of an Underwritten Offering, obtain for delivery to the Issuer and the
      underwriter or underwriters, if any, with copies to the holders of Registrable
      Securities included in such registration, a cold comfort letter from the
      Issuer’s independent certified public accountants in customary form and covering
      such matters of the type customarily covered by cold comfort letters as the
      managing underwriter or underwriters reasonably request, dated the date of
      execution of the underwriting agreement and brought down to the closing under
      the underwriting agreement;

     

    (14) cooperate
      with each seller of Registrable Securities and each underwriter or agent, if
      any, participating in the disposition of such Registrable Securities and their
      respective counsel in connection with any filings required to be made with
      the
      FINRA;

     

    (15) use
      its
      reasonable best efforts to comply with all applicable rules and regulations
      of
      the SEC and make generally available to its security holders, as soon as
      reasonably practicable (but not more than 15 months) after the effective date
      of
      the applicable Registration Statement, an earnings statement satisfying the
      provisions of Section 11(a) of the Securities Act and the rules and regulations
      promulgated thereunder;

     

    (16) provide
      and cause to be maintained a transfer agent and registrar for all Registrable
      Securities covered by the applicable Registration Statement from and after
      a
      date not later than the effective date of such Registration
      Statement;

     

    (17) cause
      all
      Registrable Securities of a class covered by the applicable Registration
      Statement to be listed on each securities exchange on which any of the Issuer’s
      securities of such class are then listed or quoted and on each inter-dealer
      quotation system on which any of the Issuer’s securities of such class are then
      quoted;

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    (18) make
      available upon reasonable notice at reasonable times and for reasonable periods
      for inspection by a representative appointed by the holders of a majority of
      the
      Registrable Securities of each class covered by the applicable Registration
      Statement, by any managing underwriter or underwriters participating in any
      disposition to be effected pursuant to such Registration Statement and by any
      attorney, accountant or other agent retained by such sellers or any such
      managing underwriter, all pertinent financial and other records, pertinent
      corporate documents and properties of the Issuer, and cause all of the Issuer’s
      officers, directors and employees and the independent public accountants who
      have certified its financial statements to make themselves available to discuss
      the business of the Issuer and to supply all information reasonably requested
      by
      any such seller, underwriter, attorney, accountant or agent in connection with
      such Registration Statement as shall be necessary to enable them to exercise
      their due diligence responsibility (subject to the entry by each party referred
      to in this clause (18) into customary confidentiality agreements in a form
      reasonably acceptable to the Issuer);

     

    (19) in
      the
      case of an Underwritten Offering, cause the senior executive officers of the
      Issuer to participate in the customary “road show” presentations that may be
      reasonably requested by the managing underwriter in any such Underwritten
      Offering and otherwise to facilitate, cooperate with, and participate in each
      proposed offering contemplated herein and customary selling efforts related
      thereto; and 

     

    (20) promptly
      after the issuance of an earnings release or upon the request of any holder,
      prepare a current report on Form 8-K with respect to such earnings release
      or a
      matter of disclosure as requested by such holder and file such Form 8-K with
      the
      SEC.

     

    (b) The
      Issuer may require each selling holder of Registrable Securities as to which
      any
      registration is being effected to furnish to the Issuer such information
      regarding the distribution of such Securities and such other information
      relating to such holder and its ownership of the applicable Registrable
      Securities as the Issuer may from time to time reasonably request. Each holder
      of Registrable Securities agrees to furnish such information to the Issuer
      and
      to cooperate with the Issuer as necessary to enable the Issuer to comply with
      the provisions of this Agreement. The Issuer shall have the right to exclude
      any
      holder that does not comply with the preceding sentence from the applicable
      registration.

     

    (c) Each
      holder of Registrable Securities agrees by acquisition of such Registrable
      Securities that, upon receipt of any notice from the Issuer of the happening
      of
      any event of the kind described in Section 2.5(a)(4),
      such
      holder will discontinue disposition of its Registrable Securities pursuant
      to
      such Registration Statement until such holder’s receipt of the copies of the
      supplemented or amended Prospectus contemplated by Section 2.5(a)(4),
      or
      until such holder is advised in writing by the Issuer that the use of the
      Prospectus may be resumed, and has received copies of any additional or
      supplemental filings that are incorporated by reference in the Prospectus and,
      if so directed by the Issuer, such holder will deliver to the Issuer (at the
      Issuer’s expense) all copies, other than permanent file copies then in such
      holder’s possession, of the Prospectus covering such Registrable Securities
      which are current at the time of the receipt of such notice. In the event that
      the Issuer shall give any such notice in respect of a Demand Registration,
      the
      period during which the applicable Registration Statement is required to be
      maintained effective shall be extended by the number of days during the period
      from and including the date of the giving of such notice to and including the
      date when each seller of Registrable Securities covered by such Registration
      Statement either receives the copies of the supplemented or amended Prospectus
      contemplated by Section 2.5(a)(4)
      or is
      advised in writing by the Issuer that the use of the Prospectus may be
      resumed.

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    2.6.
      Underwritten
      Offerings.
      

     

    (a) Underwriting
      Agreements.
      If
      requested by the underwriters for any Underwritten Offering requested by holders
      pursuant to Section 2.1
      or
2.2,
      the
      Issuer and the holders of Registrable Securities to be included therein shall
      enter into an underwriting agreement with such underwriters, such agreement
      to
      be reasonably satisfactory in substance and form to the Issuer, the holders
      of a
      majority of each class of the Registrable Securities to be included in such
      Underwritten Offering and the underwriters, and to contain such terms and
      conditions as are generally prevailing in agreements of that type, including,
      without limitation, indemnities no less favorable to the recipient thereof
      than
      those provided in Section 2.9.
      The
      holders of any Registrable Securities to be included in any Underwritten
      Offering pursuant to Section 2.3
      shall
      enter into such an underwriting agreement at the request of the Issuer. All
      of
      the representations and warranties by, and the other agreements on the part
      of,
      the Issuer to and for the benefit of such underwriters included in each such
      underwriting agreement shall also be made to and for the benefit of such holders
      and any or all of the conditions precedent to the obligations of such
      underwriters under such underwriting agreement be conditions precedent to the
      obligations of such holders. No holder shall be required in any such
      underwriting agreement to make any representations or warranties to or
      agreements with the Issuer or the underwriters other than representations,
      warranties or agreements regarding such holder, such holders Registrable
      Securities, such holder’s intended method of distribution and any other
      representations required by law.

     

    (b) Price
      and Underwriting Discounts.
      In the
      case of an Underwritten Offering requested by holders pursuant to Section
2.1
      or
2.2,
      the
      price, underwriting discount and other financial terms for each class of
      Registrable Securities of the related underwriting agreement shall be determined
      by the holders of a majority of such class of Registrable Securities. In the
      case of any Underwritten Offering pursuant to Section 2.3,
      such
      price, discount and other terms shall be determined by the Issuer, subject
      to
      the right of the holders to withdraw their request to participate in the
      registration pursuant to Section 2.3(a)(3)
      after
      being advised of such price, discount and other terms.

     

    (c) Participation
      in Underwritten Offerings.
      No
      holder may participate in an Underwritten Offering unless such Person (i) agrees
      to sell such Person’s securities on the basis provided in any underwriting
      arrangements approved by the Persons entitled to approve such arrangements
      and
      (ii) completes and executes all questionnaires, powers of attorney, indemnities,
      underwriting agreements and other documents required under the terms of such
      underwriting arrangements.

     

    2.7.
      No
      Inconsistent Agreements; Additional Rights.
      Other
      than any agreement concerning TARP Securities, the Issuer will not enter into,
      and is not currently a party to, any agreement which is, or could be,
      inconsistent with the rights granted to the holders of Registrable Securities
      by
      this Agreement.

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    2.8.
      Registration
      Expenses.
      

     

    (a) The
      Issuer shall pay all of the expenses set forth in this paragraph (a) in
      connection with a registration under this Agreement of Registrable Securities.
      Such expenses are (i) all registration and filing fees, and any other fees
      and
      expenses associated with filings required to be made with the SEC or the FINRA,
      (ii) all fees and expenses of compliance with state securities or “Blue Sky”
laws, (iii) all printing, duplicating, word processing, messenger, telephone,
      facsimile and delivery expenses (including expenses of printing certificates
      for
      the Registrable Securities in a form eligible for deposit with The Depository
      Trust Company and of printing prospectuses), (iv) all fees and disbursements
      of
      counsel for the Issuer and of all independent certified public accountants
      of
      the Issuer, (v) Securities Act liability insurance or similar insurance if
      the
      Issuer so desires or the underwriter or underwriters, if any, so require in
      accordance with then-customary underwriting practice, (vi) all fees and expenses
      incurred in connection with the listing of the Registrable Securities on any
      securities exchange or the quotation of the Registrable Securities on any
      inter-dealer quotation system, (vii) expenses of counsel to the underwriters
      and
      (viii) all applicable rating agency fees with respect to any applicable
      Registrable Securities. In addition, in all cases the Issuer shall pay its
      internal expenses (including, without limitation, all salaries and expenses
      of
      its officers and employees performing legal or accounting duties), the expense
      of any audit and the fees and expenses of any Person, including special experts,
      retained by the Issuer. In addition, the Issuer shall pay all reasonable fees
      and disbursements of one law firm or other counsel selected by the holders
      of a
      majority of the Registrable Securities being registered and all fees and
      expenses of accountants to the holders of Registrable Securities being sold
      but,
      in any case, not to exceed, in the aggregate, $40,000 per registration
      statement. 

     

    (b) The
      Issuer shall also be required to pay any other costs or expenses in the course
      of the transactions contemplated hereby; provided however, underwriting
      discounts and commissions and transfer taxes attributable to the sale of
      Registrable Securities shall be paid by holders participating in the offering.
      

     

    2.9.
      Indemnification.

     

    (a) Indemnification
      by the Issuer.
      The
      Issuer agrees to indemnify and hold harmless, to the full extent permitted
      by
      law, each holder of Registrable Securities and their respective officers,
      directors,
      advisors
      and agents and employees and each Person who controls (within the meaning of
      the
      Securities Act or the Exchange Act) such Persons from and against any and all
      losses, claims, damages, liabilities (or actions or proceedings in respect
      thereof, whether or not such indemnified party is a party thereto) and expenses
      (including reasonable costs of investigation and legal expenses), joint or
      several (each, a “Loss”
and
      collectively “Losses”),
      arising out of or based upon (i) any untrue or alleged untrue statement of
      a
      material fact contained in any Registration Statement under which such
      Registrable Securities were registered under the Securities Act (including
      any
      final, preliminary or summary Prospectus contained therein or any amendment
      thereof or supplement thereto or any documents incorporated by reference
      therein) or (ii) any omission or alleged omission to state therein a material
      fact required to be stated therein or necessary to make the statements therein
      (in the case of a Prospectus or preliminary Prospectus, in light of the
      circumstances under which they were made) not misleading; provided,
      however, that the Issuer shall not be liable to any indemnified party in any
      such case to the extent that any such Loss arises out of or is based upon an
      untrue statement or alleged untrue statement or omission or alleged omission
      made in any such Registration Statement in reliance upon and in conformity
      with
      written information furnished to the Issuer by such holder expressly for use
      in
      the preparation thereof. This indemnity shall be in addition to any liability
      the Issuer may otherwise have. Such indemnity shall remain in full force and
      effect regardless of any investigation made by or on behalf of such holder
      or
      any indemnified party and shall survive the transfer of such securities by
      such
      holder. The Issuer will also indemnify, if applicable and if requested,
      underwriters, selling brokers, dealer managers and similar securities industry
      professionals participating in any distribution pursuant hereto, their officers
      and directors and each Person who controls such Persons (within the meaning
      of
      the Securities Act and the Exchange Act) to the same extent as provided above
      with respect to the indemnification of the Indemnified Persons.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    (b) Indemnification
      by the Holders.
      Each
      selling holder of Registrable Securities agrees (severally and not jointly)
      to
      indemnify and hold harmless, to the full extent permitted by law, the Issuer,
      its directors and officers and each Person who controls the Issuer (within
      the
      meaning of the Securities Act and the Exchange Act) from and against any Losses
      resulting from any untrue statement of a material fact or any omission of a
      material fact required to be stated in the Registration Statement under which
      such Registrable Securities were registered under the Securities Act (including
      any final, preliminary or summary Prospectus contained therein or any amendment
      thereof or supplement thereto or any documents incorporated by reference
      therein), or necessary to make the statements therein (in the case of a
      Prospectus or preliminary Prospectus, in light of the circumstances under which
      they were made) not misleading, to the extent, but only to the extent, that
      such
      untrue statement or omission had been contained in any information furnished
      in
      writing by such selling holder to the Issuer specifically for inclusion in
      such
      Registration Statement. This indemnity shall be in addition to any liability
      such holder may otherwise have. Such indemnity shall remain in full force and
      effect regardless of any investigation made by or on behalf of the Issuer or
      any
      indemnified party. In no event shall the liability of any selling holder of
      Registrable Securities hereunder be greater in amount than the dollar amount
      of
      the proceeds received by such holder under the sale of the Registrable
      Securities giving rise to such indemnification obligation. The Issuer shall
      be
      entitled to receive indemnities from, if applicable and if requested,
      underwriters, selling brokers, dealer managers and similar securities industry
      professionals participating in the distribution, to the same extent as provided
      above (with appropriate modification) with respect to information so furnished
      in writing by such Persons specifically for inclusion in any Prospectus or
      Registration Statement. Each holder also shall indemnify any underwriters of
      the
      Registrable Securities, their officers and directors and each Person who
      controls such underwriters (within the meaning of the Securities Act) to the
      same extent as provided above with respect to the indemnification of the
      Issuer.

    
      
        
        

      

      
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    (c) Conduct
      of Indemnification Proceedings.
      Any
      Person entitled to indemnification hereunder will (i) give prompt written notice
      to the indemnifying party of any claim with respect to which it seeks
      indemnification (provided,
      however, that any delay or failure to so notify the indemnifying party shall
      relieve the indemnifying party of its obligations hereunder only to the extent,
      if at all, that it is actually and materially prejudiced by reason of such
      delay
      or failure) and (ii) permit such indemnifying party to assume the defense of
      such claim with counsel reasonably satisfactory to the indemnified party;
provided,
      however, that any Person entitled to indemnification hereunder shall have the
      right to select and employ separate counsel and to participate in the defense
      of
      such claim, but the fees and expenses of such counsel shall be at the expense
      of
      such Person unless (A) the indemnifying party has agreed in writing to pay
      such
      fees or expenses, (B) the indemnifying party shall have failed to assume the
      defense of such claim within a reasonable time after having received notice
      of
      such claim from the Person entitled to indemnification hereunder and to employ
      counsel reasonably satisfactory to such Person,
      (C)
      in
      the reasonable judgment of any such Person, based upon advice of its counsel,
      a
      conflict of interest exists between such Person and the indemnifying party
      with
      respect to such claims or (D) the indemnified party has reasonably concluded
      (based on advice of counsel) that there may be legal defenses available to
      it or
      other indemnified parties that are different from or in addition to those
      available to the indemnifying party (in which case, if the Person notifies
      the
      indemnifying party in writing that such Person elects to employ separate counsel
      at the expense of the indemnifying party, the indemnifying party shall not
      have
      the right to assume the defense of such claim on behalf of such Person). If
      such
      defense is not assumed by the indemnifying party, the indemnifying party will
      not be subject to any liability for any settlement made without its consent,
      but
      such consent may not be unreasonably withheld; provided,
      however, that an indemnifying party shall not be required to consent to any
      settlement involving the imposition of equitable remedies or involving the
      imposition of any material obligations on such indemnifying party other than
      financial obligations for which such indemnified party will be indemnified
      hereunder. If the indemnifying party assumes the defense, the indemnifying
      party
      shall have the right to settle such action without the consent of the
      indemnified party; provided,
      however, that the indemnifying party shall be required to obtain such consent
      (which consent shall not be unreasonably withheld) if the settlement includes
      any admission of wrongdoing on the part of the indemnified party or any
      restriction on the indemnified party or its officers or directors. No
      indemnifying party shall consent to entry of any judgment or enter into any
      settlement which does not include as an unconditional term thereof the giving
      by
      the claimant or plaintiff to each indemnified party of an unconditional release
      from all liability in respect to such claim or litigation. The indemnifying
      party or parties shall not, in connection with any proceeding or related
      proceedings in the same jurisdiction, be liable for the reasonable fees,
      disbursements and other charges of more than one separate firm (together with
      one firm of local counsel) at any one time from all such indemnified party
      or
      parties unless (x) the employment of more than one counsel has been authorized
      in writing by the indemnifying party or parties (y) a conflict or potential
      conflict exists or may exist (based on advice of counsel to an indemnified
      party) between such indemnified party and the other indemnified parties or
      (z)
      an indemnified party has reasonably concluded (based on advice of counsel)
      that
      there may be legal defenses available to it that are different from or in
      addition to those available to the other indemnified parties, in each of which
      cases the indemnifying party shall be obligated to pay the reasonable fees
      and
      expenses of such additional counsel or counsels.

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    (d) Contribution.
      If for
      any reason the indemnification provided for in the paragraphs (a) and (b) of
      this Section 2.9
      is
      unavailable to an indemnified party or insufficient to hold it harmless as
      contemplated by paragraphs (a) and (b) of this Section 2.9,
      then
      the indemnifying party shall contribute to the amount paid or payable by the
      indemnified party as a result of such Loss in such proportion as is appropriate
      to reflect the relative fault of the indemnifying party on the one hand and
      the
      indemnified party on the other. The relative fault shall be determined by
      reference to, among other things, whether the untrue or alleged untrue statement
      of a material fact or the omission or alleged omission to state a material
      fact
      relates to information supplied by the indemnifying party or the indemnified
      party and the parties’ relative intent, knowledge, access to information and
      opportunity to correct or prevent such untrue statement or omission.
      Notwithstanding anything in this Section 2.9(d)
      to the
      contrary, no indemnifying party (other than the Issuer) shall be required
      pursuant to this Section 2.9(d)
      to
      contribute any amount in excess of the amount by which the net proceeds received
      by such indemnifying party from the sale of Registrable Securities in the
      offering to which the Losses of the indemnified parties relate exceeds the
      amount of any damages which such indemnifying party has otherwise been required
      to pay by reason of such untrue statement or omission. The parties hereto agree
      that it would not be just and equitable if contribution pursuant to this Section
      2.9(d)
      were
      determined by pro rata
      allocation or by any other method of allocation that does not take account
      of
      the equitable considerations referred to in the immediately preceding paragraph.
      No person guilty of fraudulent misrepresentation (within the meaning of Section
      11(f) of the Securities Act) shall be entitled to contribution from any Person
      who was not guilty of such fraudulent misrepresentation. If
      indemnification is available under this Section 2.9,
      the
      indemnifying parties shall indemnify each indemnified party to the full extent
      provided in Sections 2.9(a)
      and
2.9(b)
      hereof
      without regard to the relative fault of said indemnifying parties or indemnified
      party.

     

    2.10.
      Rules
      144 and 144A.
      The
      Issuer covenants that it will file the reports required to be filed by it under
      the Securities Act and the Exchange Act and the rules and regulations adopted
      by
      the SEC thereunder (or, if the Issuer is not required to file such reports,
      it
      will, upon the request of any holder of Registrable Securities after the
      transfer date, make publicly available other information so long as necessary
      to
      permit sales pursuant to Rule 144 or 144A under the Securities Act, and it
      will
      take such further action as any holder of Registrable Securities may reasonably
      request, all to the extent required from time to time to enable such holder
      to
      sell Registrable Securities without registration under the Securities Act within
      the limitation of the exemptions provided by (i) Rule 144 or 144A or Regulation
      S under the Securities Act, as such Rules may be amended from time to time,
      or
      (ii) any similar rule or regulation hereafter adopted by the SEC. Upon the
      request of any holder of Registrable Securities, the Issuer will deliver to
      such
      holder a written statement as to whether it has complied with such requirements
      and, if not, the specifics thereof.

     

    Section
      3. MISCELLANEOUS

     

    3.1.
      Term.
      This
      Agreement shall terminate upon termination of the Stock Purchase Agreement
      and
      if the transactions contemplated by the Stock Purchase Agreement are completed
      on the date as of which (A) all of the Registrable Securities have been
      sold pursuant to a Registration Statement (but in no event prior to the
      applicable period referred to in Section 4(3) of the Securities Act and Rule
      174
      thereunder) or (B) the holders are permitted to sell their Registrable
      Securities under Rule 144 under the Securities Act (or any similar provision
      then in force permitting the sale of restricted securities) without limitation
      on the amount of securities sold or the manner of sale. The provisions of
      Section 2.9
      and
      Section 2.10
      shall
      survive any termination after completion of the transactions contemplated by
      the
      Stock Purchase Agreement.

     

    3.2.
      Injunctive
      Relief.
      It is
      hereby agreed and acknowledged that it will be impossible to measure in money
      the damages that would be suffered if the parties fail to comply with any of
      the
      obligations herein imposed on them and that in the event of any such failure,
      an
      aggrieved Person will be irreparably damaged and will not have an adequate
      remedy at law. Any such Person shall, therefore, be entitled (in addition to
      any
      other remedy to which it may be entitled in law or in equity) to injunctive
      relief, including, without limitation, specific performance, to enforce such
      obligations, and if any action should be brought in equity to enforce any of
      the
      provisions of this Agreement, none of the parties hereto shall raise the defense
      that there is an adequate remedy at law.

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    3.3.
      Attorneys’
      Fees.
      In any
      action or proceeding brought to enforce any provision of this Agreement or
      where
      any provision hereof is validly asserted as a defense, the successful party
      shall, to the extent permitted by applicable law, be entitled to recover
      reasonable attorneys’ fees in addition to any other available
      remedy.

     

    3.4.
      Notices.
      All
      notices, other communications or documents provided for or permitted to be
      given
      hereunder, shall be made in writing and shall be given either personally by
      hand-delivery, by facsimile transmission, by mailing the same in a sealed
      envelope, registered first-class mail, postage prepaid, return receipt
      requested, or by air courier guaranteeing overnight delivery:

     

    
      	 	
              (a)

            	
              if
                to the Issuer to:

            
	 	 	 
	 	 	
              BRIDGE
                CAPITAL HOLDINGS.

            
	 	 	
              55
                Almaden Boulevard

            
	 	 	
              San
                Jose, California 95113

            
	 	 	
              Attention:
                

            	
              Tom
                Sa

            
	 	 	
              Fax:
                

            	
              (408)
                423-8520

            
	 	 	 
	 	 	
              with
                copies to:

            
	 	 	 
	 	 	
              Bingham
                McCutchen LP

            
	 	 	
              Three
                Embarcadero Center

            
	 	 	
              San
                Francisco, California 94111

            
	 	 	
              Attention:
                James M. Rockett

            
	 	 	
              Facsimile
                No.: (415) 393-2286

            
	 	 	 
	 	
              (b)

            	
              if
                to the Manager to:

            
	 	 	
              CARPENTER
                FUND MANAGER GP, LLC

            
	 	 	
              5
                Park Plaza

            
	 	 	
              Suite
                950

            
	 	 	
              Irvine,
                CA 92614

            
	 	 	 
	 	 	
              Attention:

            	
              Robert
                E. Sjogren

            
	 	 	
              Fax:
                

            	
              (949)
                261-0880

            
	 	 	 
	 	 	
              with
                copies to:

            
	 	 	
              CARPENTER
                FUND MANAGER GP, LLC

            
	 	 	
              5
                Park Plaza

            
	 	 	
              Suite
                950

            
	 	 	
              Irvine,
                CA 92614

            
	 	 	 
	 	 	
              Attention:

            	
              John
                D. Flemming

            
	 	 	
              Fax:
                

            	
              (949)
                261-0880

            

    

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    Each
      holder, by written notice given to the Issuer in accordance with this Section
      3.4
      may
      change the address to which notices, other communications or documents are
      to be
      sent to such holder. All notices, other communications or documents shall be
      deemed to have been duly given: (i) at the time delivered by hand, if personally
      delivered; (ii) when receipt is acknowledged in writing by addressee, if by
      facsimile transmission; (iii) five business days after having been deposited
      in
      the mail, postage prepaid, if mailed by first class mail; and (iv) on the first
      business day with respect to which a reputable air courier guarantees delivery;
      provided,
      however,
      that
      notices of a change of address shall be effective only upon
      receipt.

     

    3.5.
      Successors,
      Assigns and Transferees.
      

     

    (a) The
      registration rights of any holder under this Agreement with respect to any
      Registrable Securities may be transferred and assigned, provided,
      however,
      that no
      such assignment shall be binding upon or obligate the Issuer to any such
      assignee unless and until the Issuer shall have received notice of such
      assignment as herein provided and a written agreement of the assignee to be
      bound by the provisions of this Agreement. Any transfer or assignment made
      other
      than as provided in the first sentence of this Section 3.5
      shall be
      null and void.

     

    (b) This
      Agreement shall be binding upon and shall inure to the benefit of the parties
      hereto, and their respective successors and permitted assigns.

     

    3.6.
      Governing
      Law; Service of Process; Consent to Jurisdiction.
      

     

    (a) THIS
      AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
      THE
      STATE OF CALIFORNIA APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED WITHIN
      THE
      STATE.

     

    (b) To
      the
      fullest extent permitted by applicable law, each party hereto (i) agrees that
      any claim, action or proceeding by such party seeking any relief whatsoever
      arising out of, or in connection with, this Agreement or the transactions
      contemplated hereby shall be brought only in the United States District Court
      for the Northern District of California and in any California State court
      located in the City of San Jose or San Francisco and not in any other State
      or
      Federal court in the United States of America or any court in any other country,
      (ii) agrees to submit to the exclusive jurisdiction of such courts located
      in
      the State of California for purposes of all legal proceedings arising out of,
      or
      in connection with, this Agreement or the transactions contemplated hereby
      and
      (iii) irrevocably waives any objection which it may now or hereafter have to
      the
      laying of the venue of any such proceeding brought in such a court and any
      claim
      that any such proceeding brought in such a court has been brought in an
      inconvenient forum.

     

    3.7.
      Headings.
      The
      section and paragraph headings contained in this Agreement are for reference
      purposes only and shall not in any way affect the meaning or interpretation
      of
      this Agreement.

     

    3.8.
      Severability.
      Whenever possible, each provision or portion of any provision of this Agreement
      will be interpreted in such manner as to be effective and valid under applicable
      law but if any provision or portion of any provision of this Agreement is held
      to be invalid, illegal or unenforceable in any respect under any applicable
      law
      in any jurisdiction, such invalidity, illegality or unenforceability will not
      affect any other provision or portion of any provision in such jurisdiction,
      and
      this agreement will be reformed, construed and enforced in such jurisdiction
      as
      if such invalid, illegal or unenforceable provision or portion of any provision
      had never been contained therein.

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    3.9.
      Amendment; Waiver.

     

    (a) This
      Agreement may not be amended or modified and waivers and consents to departures
      from the provisions hereof may not be given, except by an instrument or
      instruments in writing making specific reference to this Agreement and signed
      by
      the Issuer, the holders of a majority of Registrable Securities of each class
      then outstanding. Each holder of any Registrable Securities at the time or
      thereafter outstanding shall be bound by any amendment, modification, waiver
      or
      consent authorized by this Section 3.9(a),
      whether
      or not such Registrable Securities shall have been marked
      accordingly.

     

    (b) The
      waiver by any party hereto of a breach of any provision of this Agreement shall
      not operate or be construed as a further or continuing waiver of such breach
      or
      as a waiver of any other or subsequent breach. Except as otherwise expressly
      provided herein, no failure on the part of any party to exercise, and no delay
      in exercising, any right, power or remedy hereunder, or otherwise available
      in
      respect hereof at law or in equity, shall operate as a waiver thereof, nor
      shall
      any single or partial exercise of such right, power or remedy by such party
      preclude any other or further exercise thereof or the exercise of any other
      right, power or remedy.

     

    3.10.
      Counterparts.
      This
      Agreement may be executed in any number of separate counterparts and by the
      parties hereto in separate counterparts each of which when so executed shall
      be
      deemed to be an original and all of which together shall constitute one and
      the
      same agreement.

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the parties hereto have caused this instrument to be duly
      executed as of the date first written above.

     

    
      	 	
              BRIDGE CAPITAL HOLDINGS

            
	 	 
	 	
              By:

            	 
	 	 	
              Daniel P. Meyers, President and CEO

            
	 	 
	 	
              CARPENTER FUND MANAGER GP, LLC

            
	 	 
	 	
              By:

            	 
	 	 	
              John D. Flemming, Managing Member

            

    

    

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    Exhibit
      D

    

    [Bridge
      Capital Holdings Letterhead]

     

    December
      3, 2008

     

    Carpenter
      Fund Manager GP, LLC

    5
      Park
      Plaza, Suite 950

    Irvine,
      CA 92614

     

    Re:
      Management
      Rights 

     

    Gentlemen:

     

    This
      letter will confirm our agreement that pursuant to and effective as your
      purchase of 300,000 shares of Series B Mandatorily Convertible Cumulative
      Perpetual Preferred Stock of Bridge Capital Holdings (the “Company”), Carpenter
      Fund Manager GP, LLC (“Carpenter”), acting on behalf of each of the Carpenter
      Community BancFund, L.P., Carpenter Community BancFund-A, L.P., and the
      Carpenter Community BancFund-CA, L.P. (collectively, the “Investors”), shall be
      entitled to the following contractual management rights, in addition to any
      rights to non-public financial information, inspection rights and other rights
      specifically provided to all investors in the current financing ff Carpenter
      is
      not represented on the Company’s Board of Directors in its capacity as general
      partner of the Investors:

     

    1. Carpenter
      shall be entitled to consult with and advise management of the Company on
      significant business issues, including management’s proposed annual operating
      plans, and management will meet with the Investors regularly during each year
      at
      the Company’s facilities at mutually agreeable times for such consultation and
      advice and to review progress in achieving said plans.

     

    2. Carpenter
      may examine the books and records of the Company and inspect its facilities
      and
      may request information at reasonable times and intervals concerning the general
      status of the Company’s financial condition and operations, provided that access
      to trade secrets need not be provided.

     

    3.
      If
      Carpenter is not represented on the Company’s Board of Directors in its capacity
      as general partner of the Investors, the Company shall make available to a
      representative of Carpenter copies of all notices, minutes, consents and other
      material that the Company provides to its directors, except that the
      representative may be excluded from access to any material or meeting or portion
      thereof if the Company believes, upon advice of counsel, that such exclusion
      is
      reasonably necessary to preserve the attorney-client privilege, to protect
      trade
      secrets, or to comply with applicable law or regulation regarding the
      confidentiality of the contents of reports of examination prepared by the
      Federal Reserve Board or the Office of the Comptroller of the Currency, or
      for
      other similar reasons. Upon reasonable notice and at a scheduled meeting of
      the
      Board of Directors or such other time, if any, as the Board of Directors may
      determine in its sole discretion, such representative may address the Board
      of
      Directors with respect to Carpenter’s concerns regarding significant business
      issues facing the Company.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

     

    Carpenter
      agrees, and any representative of Carpenter will agree, to hold in confidence
      and trust and not disclose any confidential information provided to or learned
      by it in connection with its rights under this letter. 

     

    The
      rights described herein shall terminate and be of no further force or effect
      when the Investors no longer hold securities representing more than 5% of the
      outstanding common stock of the Company or any successor organization (counting
      as shares owned by the Investors all shares into which the convertible preferred
      shares are convertible and assuming to the extent Investors shall purchase
      any
      additional shares of common stock, any later such additional purchases shall
      be
      deemed to be shares for purposes of determining the outstanding percentage).
      The
      confidentiality provisions hereof will survive any such termination.

     

    
      	 	Very
              truly yours,
	 	 
	 	Bridge
              Capital Holdings
	 	 
	 	
              By:

            	 
	  	 	 
	 	
              Title:

            	 

    

     

    AGREED
      AND ACCEPTED:

     

    CARPENTER
      COMMUNITY BANCFUND, L.P., 

    CARPENTER
      COMMUNITY BANCFUND-A, L.P., 

    CARPENTER
      COMMUNITY BANCFUND-CA, L.P.

     

    
      	
              By:
                

            	
              CARPENTER
                FUND MANAGER GP, LLC

            	 
	
              Their:
                

            	
              General
                Partner

            	 
	 	 	 
	 	  	 
	
               

            	
              
                
                  
                    
                      
                        
                          
                            
                              By:   John
                                D.
                                Flemming

                            

                          

                        

                      

                    

                  

                

              

            	 
	
               

            	
              
                
                  Its:   Managing
                    MemberCONSULTING
        AGREEMENT

      

      

      THIS
        AGREEMENT
        is
        between COMPLIANCE
        SYSTEMS CORPORATION,
        a
        corporation organized under the laws of the State of Nevada, whose address
        is 90
        Pratt Oval, Glen Cove, NY 11542 (hereinafter referred to as the “Company”); and
        SUMMIT TRADING LIMITED, located at 120 Flagler Avenue, New Smyrna Beach,
        FL
        32169 (hereinafter referred to as the “Consultant”).

      

      WHEREAS,
        the Consultant is in the business of assisting public companies in strategic
        business planning and investor and public relations services designed to
        make
        the investing public knowledgeable about the Company by distributing full,
        fair,
        and accurate information about the Company; and

       

      WHEREAS,
        the Consultant may, during the period of time covered by this Agreement,
        present
        to the Company one or more plans of public and investor relations to utilize
        other business entities to achieve the Company’s goals of making the investing
        public knowledgeable about the Company by distributing full, fair and accurate
        information about the Company; and

       

      WHEREAS,
        the Company recognizes that the Consultant is not in the business of stock
        brokerage, investment advice or any other activities which require registration
        under either the Securities Act of 1933 (hereinafter “the Act”) or the
        Securities and Exchange Act of 1934 (hereinafter “the Exchange Act”),
        underwriting, banking, is not an insurance Company, nor does it offer services
        to the Company which may require regulation under federal or state securities
        laws and does not perform services or engage in acts which violate federal
        or
        state laws, including but not limited to federal or state securities or
        telecommunications laws (collectively the "Regulated Services");
        and

       

      WHEREAS,
        the parties agree, after having a complete understanding of the services
        desired
        and the services to be provided, that the Company desires to retain Consultant
        to provide such assistance through its services for the Company, and the
        Consultant is willing to provide such services to the Company;

       

      NOW,
        THEREFORE, in consideration of the mutual covenants and promises contained
        herein, the receipt and sufficiency of which is hereby acknowledged, the
        parties
        agree as follows:

       

      1. Duties
        and Involvement.

       

      The
        Company hereby engages Consultant to provide one or more plans, for coordination
        in executing the agreed-upon plan, and for using various business services
        as
        agreed by both parties. The plans may include, but not by way of limitation,
        the
        following services: consulting with the Company’s management concerning
        marketing surveys, availability to expand investor base, investor support,
        strategic business planning, broker relations, conducting due diligence
        meetings, attendance at conventions and trade shows, assistance in the
        preparation and dissemination of press releases and stockholder communications,
        review and assistance in updating a business plan, review and advise on the
        capital structure for the Company, assist in the development of an acquisition
        profile and structure, recommend financing alternatives and sources and consult
        on corporate finance and/or investment banking issues. The agreement is limited
        to the United States. In no event shall Consultant engage in any Regulated
        Services.

      
 

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      2. Relationship
        Among the Parties.

       

      Consultant
        acknowledges that it is not an officer, director or agent of the Company,
        it is
        not, and will not be, responsible for any management decisions on behalf
        of the
        Company, and may not commit the Company to any action. The Company represents
        that the Consultant does not have, through stock ownership or otherwise,
        the
        power neither to control the Company, nor to exercise any dominating influences
        over its management. Consultant understands and agrees that Consultant may
        be
        provided material, and non-public information and Consultant agrees not to
        trade
        any of the Company's securities while Consultant possesses or knows any of
        the
        material non-public information.

       

      Consultant
        understands and acknowledges that this Agreement shall not create or imply
        any
        agency relationship among the parties, and Consultant will not commit the
        Company in any manner, except when a commitment has been specifically authorized
        in writing by the Company. The Company and the Consultant agree that the
        relationship among the parties shall be that of independent
        contractor.

       

      3. Effective
        Date, Term and Termination.

       

      This
        Agreement shall be effective on December 1, 2008 and will continue until
        November 30, 2010 (the "Term"). This two-year Agreement can be modified only
        if
        mutually agreeable and in writing.

       

      4. Option
        to Renew and Extend.

       

      Company
        may renew this Agreement on the same terms by providing written notice to
        Consultant at any time prior to the expiration hereof.

       

      5. Compensation
        and Payment of Expenses.

       

      The
        Company agrees to pay Consultant the total sum one hundred forty thousand
        dollars ($140,000.00) payable in the form of Twenty-six Million Six Hundred
        Sixty-six Thousand Six Hundred Sixty-seven (26,666,667) shares of unregistered
        common stock of the Company valued at $.00525 per share, deliverable in four
        (4)
        equal installments as total and complete consideration for the services to
        be
        provided by the Consultant to the Company. The Company shall issue the stock
        upon execution of this Agreement and shall hold the Stock in escrow and deliver
        the stock to Consultant on each due date. The first installment is due and
        payable upon signing with an installment due and payable 90 days, 180 days
        and
        270 days from signing. The stock shall contain a Rule 144 restriction and
        shall
        be delivered to the Consultant upon the execution of this agreement with
        the
        time for delivery not to exceed ten days. Consultant agrees to make Chuck
        Arnold
        ("Arnold") personally available to the Company to perform the services. In
        the
        event Arnold dies during the Term or Arnold becomes Disabled (as defined
        herein)
        during the Term, the Company shall have the right to immediately terminate
        the
        Agreement, and upon termination Consultant agrees that any shares held by
        the
        Company in escrow shall be forfeited. For the purposes of this Agreement,
        Arnold
        shall be deemed "Disabled" in the event Arnold can not perform the services
        on
        behalf of the Consultant for sixty (60) consecutive days during the Term,
        or if
        Arnold is unable to perform the services on behalf of the Consultant for
        a total
        of ninety (90) days out of any three hundred sixty (360) day period during
        the
        Term.

      

      Company
        agrees to pay for all reasonable costs and expenses necessary for the employees
        working with Consultant and its representatives, including lodging, meals
        and
        travel as necessary. Company agrees to pay the costs of printing, due diligence
        shows, email, radio, television and other outside services that it approves
        in
        writing in conjunction with Consultant.

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

       

      6. Investment
        Representation.

       

      i.  The
        Company represents and warrants that it has provided Consultant, with access
        to
        all information available to the Company concerning its condition, financial
        and
        otherwise, its management, its business and its prospects. The Company
        represents that it has provided Consultant with all copies of the Company’s
        filings for the prior twelve (12) months, if any, (the “Disclosure Documents”)
        made under the rules and regulations promulgated under the Act, as amended,
        or
        the Exchange Act, as amended. Consultant acknowledges that the acquisition
        of
        the securities to be issued to Consultant, involves a high degree of risk.
        Consultant represents that it and its advisors have been afforded the
        opportunity to discuss the Company with its management. The Company represents
        that it has and will continue to provide Consultant, with any information
        or
        documentation necessary to verify the accuracy of the information contained
        in
        the Disclosure Documents and will promptly notify Consultant upon the filing
        of
        any registration statement or other periodic reporting documents filed pursuant
        to the Act or the Exchange Act. This information will include DTC sheets
        which
        shall be provided to Consultant no less than every two (2) weeks. 

       

      ii. Consultant
        represents that neither it nor its officers, directors or employees including
        but not limited to Chuck Arnold is not the subject to any disciplinary action
        by
        either FINRA any stat securities regulatory body or the Securities and Exchange
        Commission by virtue of any violations of their rules and regulations and
        neither is its affiliates nor subcontractors subject to any such disciplinary
        action. Consultant understands that it is Consultant's sole responsibility
        to
        comply will all applicable federal and state securities laws in the performance
        of the services and in the event Consultant is accused of or engaging in
        Regulated Services or engages in Regulated Services, Consultant shall be
        solely
        responsible and shall indemnify the Company for all losses, including legal
        fees
        as a result of being accused or engaging in Regulated Services. Consultant
        shall
        be responsible for the actions of any sub-contractors or entities recommended
        by
        Consultant, including, but not limited to, Regulated Services or violations
        of
        any federal or state law. Consultant agrees it is Consultant's sole
        responsibility to obtain appropriate licenses in the event Consultant engages
        in
        Regulated Services.

       

      iii. If
        required by United States law or regulation, Consultant will take necessary
        steps to prepare and file any necessary forms to comply with the transfer
        of the
        shares of stock from Company to Consultant, including, if required, form
        13(d).

       

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

       

      7. Issuance
        of and Registration of Securities and Liquidated
        Damages.

       

      Consultant
        understands and acknowledges that the shares of common stock are being acquired
        by Consultant for its own account, not on behalf of any other person, and
        are
        being acquired for investment purposes and not for distribution. Consultant
        represents that the common stock will be a suitable investment for Consultant
        taking into consideration the restrictions on transferability affecting the
        common stock.

       

      Company
        warrants to Consultant that it has complied with all corporate and legal
        requirements to issue said stock to Consultant, including, but not by way
        of
        limitations, directors’ approval of said issuance. 

       

      8. Services
        Not Exclusive.

       

      Consultant
        shall devote such of its time and effort necessary to the discharge of its
        duties hereunder. The Company acknowledges that Consultant is engaged in
        other
        business activities, and that it will continue such activities during the
        term
        of this Agreement. Consultant shall not be restricted from engaging in other
        business activities during the term of this Agreement.

       

      9. Confidentiality.

       

      Consultant
        acknowledges that it may have access to confidential information regarding
        the
        Company and its business. Consultant agrees that it will not, during or
        subsequent to the term of this Agreement, divulge, furnish or make accessible
        to
        any person (other than with the written permission of the Company) any knowledge
        or information or plans of the Company with respect to the Company or its
        business, including, but not by way of limitation, the products of the Company,
        whether in the concept or development stage, or being marketed by the Company
        on
        the effective date of this Agreement or during the term hereof.

       

      10. Covenant
        Not to Compete.

       

      During
        the term of this Agreement, Consultant warrants, represents and agrees that
        it
        will not directly participate in the information developed for and by the
        Company and will not compete directly with the Company in the Company’s primary
        industry or related fields.

       

      11. Indemnification.

       

      Company
        and Consultant agree to indemnify and hold harmless the other and its respective
        agents, officers, directors, subsidiaries, shareholders and employees against
        any losses, claims, damages or liabilities, joint or several, to which either
        party, or any such other person, may become subject, insofar as such losses,
        claims, damages or liabilities (or actions, suits or proceedings in respect
        thereof) arise out of a breach of this Agreement, a violation of federal
        or
        state law or are based upon any untrue statement or alleged untrue statement
        of
        any material fact contained in the registration statement, any preliminary
        prospectus, the prospectus, or any amendment or supplement thereto; or arise
        out
        of or are based upon the omission or alleged omission to state therein a
        material fact required to be stated therein, or necessary to make the statements
        therein not misleading; and the violating party shall reimburse the
        non-violating party, or any such other person, for any legal or other expenses
        reasonably incurred by the non-violating party, or any such other person,
        in
        connection with investigation or defending any such loss, claim, damage,
        liability, or action, suit or proceeding.

       

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

       

      12. “Piggyback
        Registration”.

       

      If
        the
        Company proposes to register any equity securities under the Securities Act
        for
        sale to the public for cash, whether for its own account or for the account
        of
        other security holders, or both, on each such occasion the Company will give
        written notice to Consultant, no less than fifteen (15) business days prior
        to
        the anticipated filing date, of its intention to do so. Upon the written
        request
        of Consultant, received by the Company no later than the tenth (10th)
        business day after receipt by the Consultant of the notice sent by the Company,
        to register, on the terms and conditions as the securities otherwise being
        sold
        pursuant to such registration, any of its registrable securities (which request
        shall state the intended method of disposition thereof), the Company will
        cause
        the registerable securities as to which registration shall have been so
        requested to be included in the securities to be covered by the Registration
        Statement proposed to be filed by the Company, on the same terms and conditions
        as any similar securities included therein, all to the extent requisite to
        permit the sale or other disposition by the Consultant (in accordance with
        its
        written request) of such registerable securities so registered; provided,
        however, that
        the
        Company may, at any time prior to the effectiveness of any such Registration
        Statement, in its sole discretion and with the consent of the Consultant,
        abandon the proposed offering in which the Consultant had requested to
        participate. Notwithstanding the foregoing, Company shall have no obligation
        to
        register any shares that are eligible for resale under Rule 144.

      

      13. Miscellaneous
        Provisions

       

      Section
        a  {THIS
        SECTION HAS BEEN INTENTIONALLY LEFT BLANK}

       

      Section
        b  Presumption.
        This
        Agreement or any section thereof shall not be construed against any party
        due to
        the fact that said Agreement or any section thereof was drafted by said
        party.

       

      Section
        c  Computation
        of Time.
        In
        computing any period of time pursuant to this Agreement, the day of the act,
        event or default from which the designated period of time begins to run shall
        be
        included, unless it is a Saturday, Sunday or a legal holiday, in which event
        the
        period shall begin to run on the next day which is not a Saturday, Sunday
        or a
        legal holiday, in which event the period shall run until the end of the next
        day
        thereafter which is not a Saturday, Sunday or legal holiday.

       

      Section
        d  Titles
        and Captions.
        All
        article, section and paragraph titles or captions contained in this Agreement
        are for convenience only and shall not be deemed part of the context nor
        affect
        the interpretation of this Agreement.

       

      Section
        e  Pronouns
        and Plurals.
        All
        pronouns and any variations thereof shall be deemed to refer to the masculine,
        feminine, neuter, singular or plural as the identity of the Person or Persons
        may require.

       

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

       

      Section
        f  Further
        Action.
        The
        parties hereto shall execute and deliver all documents, provide all information
        and take or forbear from all such action as may be necessary or appropriate
        to
        achieve the purposes of this Agreement.

       

      Section
        g  Good
        Faith, Cooperation and Due Diligence.
        The
        parties hereto covenant, warrant and represent to each other good faith,
        complete cooperation, due diligence and honesty in fact in the performance
        of
        all obligations of the parties pursuant to this Agreement. All promises and
        covenants are mutual and dependent.

       

      Section
        h  Savings
        Clause.
        If any
        provision of this Agreement, or the application of such provision to any
        person
        or circumstance, shall be held invalid, the remainder of this Agreement,
        or the
        application of such provision to persons or circumstances other than those
        as to
        which it is held invalid, shall not be affected thereby.

       

      Section
        i  Assignment.
        This
        Agreement may not be assigned by either party hereto without the written
        consent
        of the other, but shall be binding upon the successors of the
        parties.

       

      Section
        j  Arbitration.

       

      i.
        Any
        controversy or claim arising out of or relating to this contract, or the
        breach
        thereof, shall be settled by arbitration administered by the American
        Arbitration Association in accordance with its Commercial Arbitration Rules
        including the Emergency Interim Relief Procedures, and judgment on the award
        rendered by a single arbitrator may be entered in any court having jurisdiction
        thereof.

       

      ii.
        Any
        provisional remedy, which would be available from a court of law, shall be
        available to the parties to this Agreement from the Arbitrator pending
        arbitration. 

       

      iii.
        The
        situs of the arbitration shall be Nassau County, New York.

       

      iv.
        In
        the
        event that a dispute results in arbitration, the parties agree that the
        prevailing party shall be entitled to reasonable attorney’s fees to be fixed by
        the arbitrator.

       

      Section
        k  Notices.
        All
        notices required or permitted to be given under this Agreement shall be given
        in
        writing and shall be delivered, either personally or by express delivery
        service, to the party to be notified. Notice to each party shall be deemed
        to
        have been duly given upon delivery, personally or by courier (such as Federal
        Express or similar express delivery service), addressed to the attention
        of the
        officer at the address set forth heretofore, or to such other officer or
        addresses as either party may designate, upon at least ten (10) days’ written
        notice, to the other party.

       

      Section
        l  Governing
        law.
        The
        Agreement shall be construed by and enforced in accordance with the laws
        of the
        State of New York.

       

      Section
        m  Entire
        agreement.
        This
        Agreement contains the entire understanding and agreement among the parties.
        There are no other agreements, conditions or representations, oral or written,
        express or implied, with regard thereto. This Agreement may be amended only
        in
        writing signed by all parties.

       

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

       

      Section
        n  Waiver.
        A delay
        or failure by any party to exercise a right under this Agreement, or a partial
        or single exercise of that right, shall not constitute a waiver of that or
        any
        other right.

       

      Section
        o  Counterparts.
        This
        Agreement may be executed in duplicate counterparts, each of which shall
        be
        deemed an original, but all of which together shall constitute one and the
        same
        Agreement. In the event that the document is signed by one party and faxed
        to
        another the parties agree that a faxed signature shall be binding upon the
        parties to this agreement as though the signature was an original.

       

      Section
        p  Successors.
        The
        provisions of this Agreement shall be binding upon all parties, their successors
        and assigns.

       

      Section
        q  Counsel.
        The
        parties expressly acknowledge that each has been advised to seek separate
        counsel for advice in this matter and has been given a reasonable opportunity
        to
        do so.

       

      

       

      IN
        WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement
        to be effective as of the day and year provided herein.

       

      
        	 	 	 
	 	CONSULTANT:
	 	SUMMIT
                TRADING LIMITED
	 
 	 
 	 
 
	 	By:  	/s/ Richard
                J. Fixaris
	 	
                
Richard
                J. Fixaris, Attorney-in-fact
	 	 

      

      
         

        
          	 	 	 
	 	COMPANY:
	 	COMPLIANCE
                  SYSTEMS CORPORATION
	 
 	 
 	 
 
	 	By:  	/s/ Barry
                  M.
                  Brookstein
	 	
                  

                  Barry
                    M. Brookstein, Chief Financial Officer

                
	 	 

        

         

        
          
             

          

          
            7

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