Document:

Exhibit
10.1

 

AGREEMENT FOR SALE OF COMMON STOCK
OF GRANITE EXCHANGE, INC.

 

BY AND AMONG

 

ROBERT M. AWALT, JUSTIN C. SWIFT,

 

GRANITE EXCHANGE, INC.

 

AND

 

THE BANK HOLDINGS

 

 

As of June 15, 2009

 

 

SCHEDULE INDEX

 

	
  Schedule 2.5(e)

  	
   

  	
  List of Physical Assets to
  be Transferred at Closing

  
	
  Schedule 3.2

  	
   

  	
  No Conflicts

  
	
  Schedule 3.4

  	
   

  	
  Financial Statements of
  Granite

  
	
  Schedule 3.6

  	
   

  	
  Undisclosed Liabilities;
  Adverse Changes

  
	
  Schedule 3.8

  	
   

  	
  Proceedings and Orders

  
	
  Schedule 3.9

  	
   

  	
  Absence of Certain Changes
  and Events

  
	
  Schedule 3.10

  	
   

  	
  Properties, Contracts,
  Employee Benefit Plans and Other Agreements

  
	
  Schedule 3.11

  	
   

  	
  Insurance

  
	
  Schedule 4.2

  	
   

  	
  Required Regulatory
  Consents, Approvals and Notices (To Be Provided by Buyer)

  
	
  Schedule 10.18

  	
   

  	
  List of Clients Subject to
  Non-Solicitation

  

 

i

 

STOCK
PURCHASE AND SALE AGREEMENT

 

THIS
STOCK PURCHASE AND SALE AGREEMENT (this “Agreement”)
is entered into as of June 15, 2009, by and among Robert M. Awalt, an
individual and Justin C. Swift, an individual 
(collectively “Buyer”), GRANITE EXCHANGE, INC., a  Nevada corporation (“Granite”),
and THE BANK HOLDINGS, a Nevada corporation
(“TBH”). 
Buyer, Granite and TBH are referred to collectively as the “parties” and
individually as a “party.”

 

RECITALS

 

A.                                    Granite is a
corporation organized and existing under the laws of Nevada with its principal
place of business located in Roseville, California.

 

B.                                    Buyer consists
of individuals residing in the State of California.

 

C.                                    Justin C. Swift
(“Swift”) and Robert M. Awalt (“Awalt”) were both previously affiliated with Granite and,
while so affiliated, were knowledgeable about the business affairs and business
plans of Granite up to and through the date of their respective separations
from Granite.

 

D.                                    As of the date
hereof, Granite has 100,000 shares of issued and outstanding common stock (the “Granite Stock”), of which TBH owns, directly or
beneficially, 100,000 shares.  Granite
also owns all of the outstanding shares of All-Star Exchange, Inc., a
Nevada corporation (“All-Star”).  References to
Granite include All-Star.

 

E.                                      The parties to
this Agreement desire to effect a transaction whereby Buyer will acquire the Granite
Shares from TBH (the “Acquisition”)
for the purchase price set forth below.

 

F.                                      There is currently
pending litigation between Granite and TBH on the one hand and Swift and Awalt
(among others), on the other, in the Superior Court of California, County of Sacramento,
case number 34-2008-00027481 (the “Action”),
which the parties wish to resolve, in part, by the Acquisition.  On March 18, 2009, the parties signed a
Settlement Agreement with regard to the Action, and the Acquisition is part of
that Settlement Agreement.  As a part of
the Settlement Agreement, and contemporaneously with this Agreement, the
parties are also executing a Release Agreement.

 

G.                                    The parties
wish to set forth certain other agreements among them.

 

AGREEMENTS

 

In consideration of the foregoing premises and the mutual promises,
covenants and agreements hereinafter set forth, the parties hereto hereby agree
as follows:

 

ARTICLE 1

 

DEFINITIONS

 

Section 1.1                                   Definitions.  In addition to those terms defined throughout
this Agreement, the following terms, when used herein, shall have the following
meanings.

 

 

(a)                                  “Affiliate”
means with respect to a particular Person, any other Person that directly or
indirectly controls, is directly or indirectly controlled by, or is directly or
indirectly under common control with such specified Person.

 

(b)                                 “Best Efforts”
means using all due speed that a prudent Person desirous of achieving a result
would use in similar circumstances to ensure that such result is achieved as
promptly and expeditiously as possible, provided, however,
that an obligation to use Best Efforts under this Agreement does not require
the Person subject to that obligation to take actions that would result in a
materially adverse change in the benefits to such Person of this Agreement and
the Acquisition.

 

(c)                                  “Business Day” means any day except Saturday, Sunday and any
day on which Granite is authorized or required by law or other government
action to close.

 

(d)                                 “Contract” means any agreement, contract, obligation, promise
or understanding (whether written or oral and whether express or implied) that
is legally binding.

 

(e)                                  “Knowledge” with respect to:

 

(i)                                     an individual means that
such person will be deemed to have “Knowledge” of a particular fact or other
matter if such individual is actually aware of such fact or other matter; and

 

(ii)                                  a Person (other
than an individual) means that such Person will be deemed to have “Knowledge”
of a particular fact or other matter if any individual who is serving as a
director or officer or manager of such Person (or in any similar capacity) has
Knowledge of such fact or other matter.

 

(f)                                    “Legal Requirement” means any material federal, state, local,
municipal, foreign, international, multinational or other administrative order,
constitution, law, ordinance, principle of common law, regulation, statute or
treaty, including without limitation the United States banking laws, rules and
regulations and the banking laws, rules and regulations of the States of
California and Nevada.

 

(g)                                 “Material Adverse Effect” means any change in or effect on
the business of Granite that would be materially adverse to the business,
financial condition or results of operations of Granite, other than any change,
effect, event or occurrence to the extent arising from or relating to (i) the
United States or the industry in general, (ii) actions taken pursuant to
the obligations of the parties expressly set forth in this Agreement or (iii) general
economic conditions.

 

(h)                                 “Order” means any award, decision, directive, injunction,
judgment, memorandum, order, regulatory agreement, ruling, subpoena or verdict
entered, issued, made or rendered by any court, administrative or other
governmental agency, including any Regulatory Authority, or by any arbitrator.

 

(i)                                     “Person” means any individual, corporation (including any
non-profit corporation), general or limited partnership, limited liability
company, joint venture, estate, trust, association, organization, labor union
or other entity or any Regulatory Authority.

 

(j)                                     “Proceeding” means any action, arbitration, audit, hearing,
investigation, litigation or suit (whether civil, criminal, administrative,
investigative or informal) commenced, brought, conducted or heard by or before,
or otherwise involving, any judicial or governmental authority, including a
Regulatory Authority, or arbitrator.

 

2

 

(k)                                  “Regulatory Authorities” means any federal, state or local
governmental body, agency or authority which under applicable statutes and
regulations:  (i) has supervisory,
judicial, administrative, police, taxing or other power or authority over Granite,
TBH or Buyer; (ii) is required to approve, or give its consent to the
Acquisition; or (iii) with which a filing must be made in connection
therewith, including in any case, the Secretary of State of California and/or
Nevada.

 

(m)                               “Tax” means any tax (including any income tax, capital gains
tax, value-added tax, sales tax, property tax, gift tax or estate tax), levy,
assessment, tariff, duty (including any customs duty), deficiency or other fee,
and any related charge or amount (including any fine, penalty, interest or
addition to tax), imposed, assessed or collected by or under the authority of
any Regulatory Authority or payable pursuant to any tax-sharing agreement or
any other Contract relating to the sharing or payment of any such tax, levy,
assessment, tariff, duty, deficiency or fee.

 

(n)                                 “Tax Return” means any return (including any information
return), report, statement, schedule, notice, form or other document or
information filed with or submitted to, or required to be filed with or
submitted to, any Regulatory Authority in connection with the determination,
assessment, collection or payment of any Tax or in connection with the
administration, implementation or enforcement of or compliance with any Legal
Requirement relating to any Tax.

 

(o)                                 “Threatened” means a claim, Proceeding, dispute, action or
other matter for which any demand or statement has been made (orally or in
writing) or any notice has been given (orally or in writing).

 

Section 1.2                                   Principles
of Construction. (a) In this Agreement, unless otherwise
stated or the context otherwise requires, the following uses apply:  (i) actions permitted under this
Agreement may be taken at any time and from time to time in the actor’s sole
discretion; (ii) references to a statute shall refer to the statute and
any successor statute, and to all regulations promulgated under or implementing
the statute or successor, as in effect at the relevant time; (iii) in
computing periods from a specified date to a later specified date, the words “from”
and “commencing on” (and the like) mean “from and including,” and the words “to,”
“until” and “ending on” (and the like) mean “to, but excluding”; (iv) references
to a governmental or quasi-governmental agency, authority or instrumentality
shall also refer to a regulatory body that succeeds to the functions of the
agency, authority or instrumentality; (v) indications of time of day mean Reno,
Nevada time; (vi) “including” means “including, but not limited to”; (vii) all
references to sections, schedules and exhibits are to sections, schedules and
exhibits in or to this Agreement unless otherwise specified; (viii) all
words used in this Agreement will be construed to be of such gender or number
as the circumstances require; and (ix) the captions and headings of
articles, sections, schedules and exhibits appearing in or attached to this
Agreement have been inserted solely for convenience of reference and shall not
be considered a part of this Agreement nor shall any of them affect the meaning
or interpretation of this Agreement or any of its provisions.

 

(b)                                 The Appendix, Exhibits and
Schedules referred to in this Agreement consist of the Appendix, Exhibits and
Schedules attached to this Agreement immediately following the signature page of
this Agreement, and such Appendix, Exhibits and Schedules are incorporated by
reference into this Agreement as if they were set forth in their entirety
herein.  The information contained in
each of the Schedules is further incorporated into each of the other Schedules by
that party.  The parties shall evidence
their respective review of the Schedules by initialing each Schedule.

 

(c)                                  All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles as consistently applied in the United States (“GAAP”).

 

3

 

ARTICLE 2

 

BASIC TERMS OF TRANSACTION

 

Section 2.1                                   The
Transaction.  Upon the
terms, subject to the conditions and in reliance upon the representations and
warranties herein made by the parties to each other, TBH shall sell, transfer,
convey and deliver to Buyer and Buyer shall purchase from TBH, all of the
Granite Stock.

 

Section 2.2                                   Effective
Time.  The “Closing” means the settlement of the obligations of Buyer
and TBH to each other under this Agreement, including the payment of the
Purchase Price to TBH and the delivery of any closing documents provided for
herein.  The Closing of the Acquisition
shall occur on June 30, 2009 (the “Closing Date”),
at such time and place as the parties shall mutually agree.  Buyer agrees that time shall be of the
essence with respect to the payment and performance of the obligations of Buyer
hereunder.

 

Section 2.3                                   Purchase
Price.  The
aggregate purchase price (“Purchase Price”)
of the Granite Stock shall be $425,000. 
After the Closing, TBH will have no further rights in respect of the 

Granite Stock.

 

Section 2.4                                   Buyer’s
Deliveries at Closing.  At
the Closing, Buyer shall deliver the following items to TBH:

 

(a)                                  the Purchase Price by wire
transfer of immediately available funds by no later than 10:00 a.m.,
Pacific Time on the Closing Date.  The
wire transfer shall be transmitted to Federal Reserve Bank of San Francisco,
for ABA no. 1212-0218-5 fbo Nevada Security Bank fbo The Bank Holdings, acct.
no. 0021002088;

 

(b)                                 a certificate executed by each
of Awalt and Swift dated the Closing Date stating that:  (i) all of the representations and
warranties of Buyer set forth in this Agreement are true and correct with the
same force and effect as if all of such representations and warranties were
made at the Closing Date, provided, however,
that to the extent such representations and warranties expressly relate to an
earlier date, such representations shall be true and correct in all material
respects on and as of such earlier date, and provided
further, that to the extent that such representations and warranties
are made in this Agreement subject to a standard of materiality or Knowledge,
such representations and warranties shall be true and correct in all respects;
and (ii) Buyer has performed or complied with all of the covenants and
obligations to be performed or complied with by it under the terms of this
Agreement on or prior to the Closing Date, provided, however,
that to the extent performance and compliance with such covenants and
obligations are subject in this Agreement to a standard of materiality, and
also with respect to the performance by Buyer of the covenant to pay the
Purchase Price, Buyer shall have performed and complied in all respects with
such covenants and obligations;

 

(c)                                  evidence of
acceptance of appointment to the board of directors of Granite the minimum
number of directors called for under the Bylaws of Granite, which appointment
shall be contingent upon the Closing; and

 

(d)                                 such other
documents as Granite or TBH may reasonably request.

 

All of such items shall be reasonably
satisfactory in form and substance to TBH and its counsel.

 

4

 

Section 2.5                                   TBH
Deliveries at Closing.  At the Closing,
TBH shall deliver the following items to Buyer:

 

(a)                                  certificates representing
the Granite Stock, duly endorsed in blank by the holder thereof;

 

(b)                                 a certificate executed by
the Chairman of TBH stating that:  (i) all
of the representations and warranties of TBH and Granite set forth in this
Agreement are true and correct with the same force and effect as if all of such
representations and warranties were made at the Closing Date, provided, however, that to the extent such representations
and warranties expressly relate to an earlier date, such representations shall
be true and correct in all material respects on and as of such earlier date,
and provided further, that to the extent
that such representations and warranties are made in this Agreement subject to
a standard of materiality or Knowledge, such representations and warranties
shall be true and correct in all respects; and (ii) each of TBH and
Granite have performed and complied with all of the covenants and obligations
to be performed or complied with by it under the terms of this Agreement on or
prior to the Closing Date, provided, however,
that to the extent performance and compliance with such covenants and
obligations are subject in this Agreement to a standard of materiality, each of
TBH and Granite shall have performed and complied in all respects with such
covenants and obligations;

 

(c)                                  copies of resolutions of the
board of directors of TBH and Granite, as applicable, authorizing and approving
this Agreement and the consummation of the transactions contemplated hereby,
certified as of the Closing Date by the Secretary or any Assistant Secretary of
TBH and Granite, as applicable;

 

(d)                                 resignations by
all of the current officers and members of the board of directors of Granite,
which resignations shall be contingent upon the Closing;

 

(e)                                  subject to Section 6.3(d),
all of the physical assets listed on Schedule 2.5(e) and the membership
currently owned at Catta Verdera Country Club, to the extent such membership is
transferable.  TBH and Buyer presently disagree
about the ownership of the membership, with TBH contending that it owns the
membership and Buyer contending that Granite owns the membership.  TBH, upon Closing, disclaims any ownership
interest in the membership and will not object to Buyer’s characterization that
the membership was and is owned by Granite. 
Buyer has independently investigated the status of the membership and
will pay any and all applicable transfer fees, membership dues, and other
financial obligations associated with the membership, including without
limitation any and all amounts past due. 
TBH and Granite make no representation or warranty regarding the transferability
of the membership or the amounts due to Catta Verdera Country Club;

 

(f)                                    subject to Section 6.3(d),
the books and records of Granite, which include the financial statements for
Granite for each of the last three (3) years, and all currently pending
contracts and records of closed transactions (except for older closed
transaction files, which are in off-site storage at Iron Mountain); and

 

(g)                                 such other
documents reasonably requested by Buyer which would be normal and customary in
the closing of a stock purchase transaction.

 

Section 2.6                                   Release
of Obligation to Pay $1,200. 
In Section 4 of the  Settlement
Agreement with regard to the Action, the Defendants in the Action agreed to pay
Downey Brand LLP the sum of $1,200 to reimburse Downey Brand’s payment to
mediator Richard Park.  Upon Closing, and
the timely payment by Buyer of the entire Purchase Price, TBH and Granite release
Defendants from their obligation to pay the $1,200 to Downey Brand.

 

5

 

ARTICLE
3

 

REPRESENTATIONS
AND WARRANTIES OF TBH AND GRANITE

 

TBH and Granite hereby represents and warrants to Buyer as follows:

 

Section 3.1            Authorization;
Enforceability.  Each of TBH and Granite has the requisite
power and authority to enter into and perform its obligations under this
Agreement and the execution, delivery and performance of this Agreement by each
of TBH and Granite, and the consummation by it of its respective obligations
under this Agreement, have been authorized by all necessary actions of any kind
whatsoever (except for approval of the Acquisition and this Agreement by its
stockholder) and this Agreement constitutes a legal, valid and binding
obligation of each of TBH and Granite enforceable in accordance with its terms,
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization or other laws and subject to general principles of equity.

 

Section 3.2            No
Conflict.  Except as set forth in Schedule 3.2,
neither the execution nor the delivery of this Agreement nor the consummation
or performance of the Acquisition will, directly or indirectly (with or without
notice or lapse of time):  (a) contravene,
conflict with, or result in a violation of any provision of the charter or
bylaws of either TBH or Granite; (b) contravene, conflict with or result
in a violation of, or give any Regulatory Authority the bona fide
right to challenge the Acquisition or to exercise any remedy or obtain any
relief under, any Legal Requirement or Order to which either TBH, Granite, or
any of the assets owned or used by TBH or Granite, respectively, may be
subject; (c) contravene, conflict with, or result in a violation or breach
of any provision of, or give any Person the valid right to declare a default or
exercise any remedy under, or to accelerate the maturity or performance of, or
to cancel, terminate, or modify, any Contract where the same would have a
Material Adverse Effect; or (d) result in the creation of any lien, charge
or encumbrance upon or with respect to any of the assets owned or used by Granite.  Neither TBH nor Granite will be required to
give any notice to or obtain any consent from any Person in connection with the
execution and delivery of this Agreement or the consummation of the
Acquisition.

 

Section 3.3            Granite
Capitalization.  The authorized
capital stock of Granite consists, and immediately prior to the Closing will
consist, exclusively of 1,000,000 shares of common stock, par value $0.01, 100,000
of which shares are, and immediately prior to the Closing will be, duly authorized,
validly issued and outstanding.  There
are no unexpired or pending preemptive rights with respect to any shares of
capital stock of Granite.  There are no
outstanding securities of Granite which are convertible into or exchangeable
for any shares of Granite’s capital stock, and Granite is not a party to any
Contract relating to the issuance, sale or transfer of any equity securities or
other securities of Granite.  None of the
issued and outstanding shares of Granite’s capital stock was issued in
violation of any federal or state securities laws or any other Legal
Requirement.

 

Section 3.4            Financial
Statements.  True, correct and complete copies of the
following are set forth in Schedule 3.4:
Granite’s consolidated statement of condition and statement of operations for
the periods of December 31, 2008 and March 31, 2009 (collectively,
the “Financial Statements”).  The Financial Statements have been prepared
in accordance with all Legal Requirements and generally accepted accounting
practices applicable to Nevada corporations, and each of the Financial
Statements accurately, fairly and correctly presents the financial position,
assets, liabilities and the results of operations of Granite at the respective
dates and for the respective periods covered by such Financial Statements.

 

6

 

Section 3.5            Assets.  As of the date thereof, Granite had title to
all of the properties and assets as reflected on Granite’s most recent Financial
Statements (for the period ending March 31, 2009) other than:  (a) pledges or liens granted in
connection with repurchase or reverse repurchase agreements or otherwise
incurred in the ordinary course of business; and (b) minor defects and
irregularities in title and encumbrances that would not have a Material Adverse
Effect.

 

Section 3.6            Undisclosed
Liabilities; Adverse Changes.  Granite has no liabilities or obligations
except:  (a) as set forth in Schedule 3.6; (b) for liabilities or obligations
reflected or reserved against in the Financial Statements; and (c) for
current liabilities incurred in the ordinary course of business since the
respective dates of the Financial Statements.

 

Section 3.7            Taxes.  Granite has duly filed or will duly file all
Tax Returns required to be filed by it for all periods prior to and including March 31,
2009.  There is no claim or assessment
pending or Threatened against Granite for Taxes owed by Granite.  No audit, examination or investigation
related to Granite is presently being conducted or Threatened by any Regulatory
Authority.

 

Section 3.8            Proceedings
and Orders.  Attached as Schedule 3.8
is a true and correct list of all material Proceedings and Orders pending,
entered into or, to the Knowledge of Granite, Threatened against or affecting Granite
or any of its assets or business, involving any Regulatory Authority or other
Person.  Except to the extent indicated
in Schedule 3.8, no such pending or
Threatened Proceeding or Order would, alone or in the aggregate, have a
Material Adverse Effect.

 

Section 3.9            Absence
of Certain Changes and Events.  Except as set forth in Schedule 3.9
or as permitted by this Agreement, since its inception, Granite has conducted
its business only in the ordinary course of business and there has not been
with respect to Granite any:

 

(a)           change in Granite’s authorized or issued capital
stock; grant of any stock option or right to purchase shares of capital stock
of Granite; issuance of any security convertible into such capital stock or
evidences of indebtedness; grant of any registration rights; purchase,
redemption, retirement or other acquisition by Granite of any shares of any
such capital stock, declaration or payment of any dividend or other
distribution or payment in respect of shares of Granite’s capital stock; or

 

(b)           amendment to the charter or bylaws or any
resolutions adopted by the board of directors or the stockholders of Granite
relating thereto.

 

Section 3.10         Properties,
Contracts, Employee Benefit Plans and Other Agreements.  Schedule 3.10
lists or describes the following:

 

(a)           All real property owned by Granite and the principal
buildings and structures located thereon, and each lease of real property to
which Granite is a party;

 

(b)           except for any agreement, if any, between Granite
and Capital Exchange Services, LLC, each Contract to which Granite is a party
that involves performance of services or delivery of goods or materials by Granite;

 

(c)           except for financing leases made by Granite in the
ordinary course of business, each lease, rental, license, installment and
conditional sale agreement and other Contract to which Granite is a party
affecting the ownership of, leasing of, title to, use of, any personal
property;

 

(d)           except for “shrink wrap” licenses generally
applicable in the case of retail sales of software in the consumer market, each
licensing agreement or other Contract to which Granite is a

 

7

 

party
with respect to patents, trademarks, copyrights, or other intellectual property
(collectively, “Intellectual Property Assets”);

 

(e)           except for internal
Contracts concerning the sharing and distribution of tax obligations between
TBH, Granite and/or other subsidiaries of TBH, each joint venture, partnership
and other Contract (however named) to which Granite is a party involving a
sharing of profits, losses, costs or liabilities by Granite with any other
Person;

 

(f)            each Contract
to which Granite is a party containing covenants that in any way purport to
restrict the business activity of Granite or any current director, officer,
employee or stockholder of Granite or to limit Granite to engage in any line of
business or to compete with any Person;

 

(g)           each Contract
to which Granite is a party providing for payments to or by any Person based on
sales, purchases or profits, other than direct payments for goods;

 

(h)           any written
employment agreement or similar arrangement with any current director, officer,
employee or consultant of Granite;

 

(i)            each profit-sharing,
deferred compensation, bonus, stock ownership, stock purchase, pension,
incentive plan or agreement, retainer, employment, consulting, retirement,
employee welfare or benefit agreements, plans or arrangements (including
vacation, sick leave, salary continuation, service awards, severance pay,
medical, hospitalization, disability and life insurance) established,
maintained, sponsored or undertaken by Granite (or its parent or affiliates)
for the benefit of Granite’s current officers, directors or employees,
including each trust or other agreement with any custodian or any trustee for
funds held under any such agreement, plan or arrangement, and all other
Contracts or arrangements under which pensions, deferred compensation or other
retirement benefits are being paid or may become payable by Granite for the
benefit of Granite’s employees (collectively, the “Employee
Benefit Plans”), and, in respect to any of them, the latest reports
or forms, if any, filed with the Department of Labor and Pension Benefit
Guaranty Corporation under the Employee Retirement Income Security Act of 1974,
as amended (“ERISA”), any current financial or
actuarial reports and any currently effective private rulings or determination
letters from the Internal Revenue Service obtained by or for the benefit of Granite;

 

(j)            each executory
Contract entered into other than in the ordinary course of business that
contains or provides for an express undertaking by Granite to be responsible
for consequential damages;

 

(k)           each executory
Contract for capital expenditures in excess of $500;

 

(l)            each written
warranty, guaranty or other similar undertaking with respect to contractual
performance extended by Granite other than in the ordinary course of business;

 

(m)          each amendment,
supplement and modification in respect of any of the foregoing; and

 

(n)           Granite’s two current employees.

 

Copies of each document, plan or Contract listed and described on Schedule 3.10 will be made available during due
diligence.  Granite agrees to promptly
provide Buyer with copies of any such document, plan or Contract described this
Section 3.10 entered into by Granite on or after the date of this
Agreement.

 

8

 

Section 3.11         Insurance.  Schedule 3.11
lists and briefly describes the policies of insurance and bonds issued, owned
or held by or for the benefit of Granite (or its parent or affiliates).  Each such policy is, and Granite will use its
Best Efforts to keep each such policy, in full force and effect (except for any
expiring policy which is replaced by coverage at least as extensive) until the
Closing.  All premiums due on such
policies have been paid.

 

Section 3.12         Regulatory
Filings.  To the Knowledge of Granite and TBH, Granite
has filed in a timely manner all required filings with all Regulatory Authorities
having jurisdiction over Granite.

 

Section 3.13         Brokers
and Finders.  Neither Granite nor any Person acting on its
behalf has employed any broker, agent or finder or incurred any liability for
any brokerage fees, agents’ commissions or finders’ fees in connection with the
transactions contemplated herein.

 

ARTICLE
4

 

REPRESENTATIONS
AND WARRANTIES OF BUYER

 

Buyer hereby represents and warrants to TBH and Granite as follows:

 

Section 4.1            Authorization;
Enforceability.  Buyer has the
requisite power and authority to enter into and perform its obligations under
this Agreement and the execution, delivery and performance of this Agreement by
Buyer and the consummation by it of its obligations under this Agreement, have
been authorized by all necessary actions of any kind whatsoever, and the
execution, delivery and performance of this Agreement by Buyer and the
consummation by it of its obligations under this Agreement, will be on or prior
to the Closing Date duly authorized by all necessary actions of any kind
whatsoever.  This Agreement constitutes a
legal, valid and binding obligation of Buyer, enforceable in accordance with
its terms except as such enforcement may be limited by bankruptcy, insolvency,
reorganization or other similar laws and subject to general principles of
equity.

 

Section 4.2            No
Conflict.  Neither the execution nor the delivery of
this Agreement nor the consummation or performance of the Acquisition will,
directly or indirectly (with or without notice or lapse of time):  (a) contravene, conflict with, or result
in a violation of any provision of the articles of organization or operating
agreement of Buyer; (b) contravene, conflict with or result in a violation
of, or give any Regulatory Authority the bona fide right
to challenge the Acquisition or to exercise any remedy or obtain any relief
under, any Legal Requirement or Order to which Buyer, or any of the assets
owned or used by Granite, may be subject; (c) contravene, conflict with,
or result in a violation or breach of any provision of, or give any Person the
valid right to declare a default or exercise any remedy under, or to accelerate
the maturity or performance of, or to cancel, terminate, or modify, any
Contract where the same would be reasonably expected to have a material adverse
effect upon Buyer; or (d) result in the creation of any lien, charge or
encumbrance upon or with respect to any of the assets owned or used by
Buyer.  Except as set forth in Schedule 4.2 (as provided by Buyer), no consent of, approval
of, notice to or filing with any Regulatory Authorities having jurisdiction
over any aspect of the business or assets of Buyer, and no consent of, approval
of or notice to or filing with any Person, is required in connection with the
execution and delivery by Buyer of this Agreement or the consummation by Buyer
of the transactions contemplated hereby.

 

Section 4.3            Brokers
and Finders.  Neither Buyer nor any Person acting on its
behalf has employed any broker, agent or finder or incurred any liability for
any brokerage fees, agents’ commissions or finders’ fees in connection with the
transactions contemplated herein.

 

9

 

Section 4.4            Investigation
and Inquiry.   Buyer acknowledges that Swift was responsible
for day-to-day operations at Granite until in or about November 2008.  Buyer has been provided with the opportunity
to make a full and complete investigation as to all of the representations and
warranties contained in Article 3, to make an inquiry of Granite and TBH,
and to request documentation and other information regarding these
representations and warranties as well as the business of Granite in
general.  Buyer has been provided with
access to the books and records of Granite. 
Buyer has inspected, or had the opportunity to inspect, all fixed assets
listed on the Schedules hereto (whether owned or leased) and found them to be in
good condition and repair, free from structural defects, subject to ordinary
wear and tear and such minor defects as will not impair their continued normal
use.

 

ARTICLE
5

 

COVENANTS
OF TBH AND GRANITE

 

Section 5.1            Access
and Investigation.  Granite shall permit Swift and/or Awalt to have
access to the books, records and employees of Granite up to the Closing Date
for the sole purpose of conducting due diligence with respect to the
Acquisition.  This Section 5.1 shall
not require the disclosure of any information the disclosure of which to Buyer
would be prohibited by law.

 

Section 5.2            Operations
of Granite — Covenants of Granite. Between the date of this
Agreement and the Closing Date, Granite will:

 

(a)           conduct the business of Granite only in the ordinary
course of business, pursuant to existing policies and procedures;

 

(b)           use its Best
Efforts to preserve intact the current business organization of Granite, keep
available the services of the current officers, employees and agents of Granite,
and maintain the relations and good will with suppliers, customers, landlords,
creditors, employees, agents and others having business relationships with Granite;

 

(c)           inform Buyer concerning operational matters arising
out of the ordinary course and of a material nature;

 

(d)           maintain all of
its assets necessary for the conduct of its business in good operating
condition and repair, reasonable wear and tear and damage by fire or
unavoidable casualty excepted, and maintain policies of insurance upon its
assets and with respect to the conduct of its business in amounts and kinds
comparable to that in effect on the date hereof and pay all premiums on such
policies when due;

 

(e)           file in a
timely manner all required filings with all Regulatory Authorities and cause
such filings to be true and correct in all material respects prior to Closing;

 

(f)            not materially
increase the annual level of compensation of any employee or director, and not
grant any unusual or extraordinary bonuses, benefits or other forms of direct
or indirect compensation to any employee, director or consultant, except in
amounts in keeping with past practice by formulas or otherwise;

 

(g)           not issue any equity
securities or options, warrants, rights or convertible securities;

 

10

 

(h)           not pay any
dividends, redeem any securities, or otherwise cause assets of Granite to be
distributed to any of its shareholders;

 

(i)            not borrow any
funds, under existing credit lines or otherwise, except as reasonably necessary
for the ordinary operation of Granite’s business in a manner, and in amounts,
in keeping with historical practice;

 

(j)            maintain its
books, accounts and records in the usual, regular and ordinary manner, on a
basis consistent with prior years and comply with all Legal Requirements; and

 

(k)           terminate its
two remaining employees and pay any accrued benefits due to those employees, provided however that TBH shall have no responsibility with
respect to unemployment claims that any Granite employee may make against
Granite.

 

Section 5.3            Post-Closing
Obligation of TBH.    Upon Closing,
TBH will transmit the post-transaction change of control notices required by
California Financial Code section 51001, with a copy to Buyer.

 

Section 5.4            Best
Efforts.  Granite and
TBH agree to use their Best Efforts to satisfy the covenants and the various
conditions to Closing in this Article and Article 8, respectively,
and to consummate the transactions contemplated hereby as promptly as
possible.  Granite and TBH will not
intentionally take or intentionally permit to be taken any action that would be
in breach of the terms or provisions of this Agreement or that would cause any
of its respective representations or warranties contained herein to be or
become untrue.

 

ARTICLE
6

 

COVENANTS
OF BUYER

 

Section 6.1            Regulatory
Approvals.  As promptly
as reasonably practicable after the date of this Agreement, Buyer will make or
cause to be made all filings required by Legal Requirements to be made to
consummate the Acquisition.  Copies of
all applications and notices submitted to a Regulatory Authority shall be
provided to TBH’s legal counsel within three (3) Business Days of the
filing.  In addition, Buyer shall provide
to TBH’s legal counsel all communication received from any Regulatory Authority
concerning the Acquisition within three (3) Business Days of receipt of
same by Buyer or its representatives.

 

Section 6.2            Best
Efforts.  Buyer
agrees to use its Best Efforts to satisfy the covenants and the various
conditions to Closing in this Article and Article 8, respectively,
and to consummate the transactions contemplated hereby as promptly as
possible.  Buyer will not intentionally
take or intentionally permit to be taken any action that would be in breach of
the terms or provisions of this Agreement or that would cause any of its
respective representations or warranties contained herein to be or become
untrue.

 

Section 6.3            Operations
of Granite.

 

(a)           Buyer agrees
that it will assume the liability related to any existing contracts and leases
for Granite.  Buyer shall cooperate with Granite
for any consents required related to this Transaction.  By the Closing Date, Granite shall convert all
services provided by TBH or its Affiliates, with the exception of deposits held
at Nevada Security Bank, to Granite, Buyer or a third party chosen by
Buyer.   Buyer agrees that upon the Closing of the
Acquisition, TBH shall have no further responsibility

 

11

 

related
to any contracts or leases of Granite. 
Buyer acknowledges that any agreements between Granite and TBH and/or its
affiliates (with the exception of deposit agreements between Granite and Nevada
Security Bank, which may be continued or terminated at the option of Buyer)
will be terminated at Closing, and the benefits provided thereunder will not
inure to the benefit of Granite or Buyer following the Closing Date.

 

(b)           Within two (2) Business
Days following the Closing, Buyer shall file or cause to be filed all requisite
notices and applications with all relevant Regulatory Authorities to change the
address, agent for service of process, and designated officers and directors,
or any other information reasonably  requested by TBH, of Granite and All-Star to information
not including any address, employee, officer or director of TBH or its
Affiliates.

 

(c)           Buyer will take
all steps necessary for Granite to have any and all insurance and bonds required
by the Regulatory Authorities in place as of the Closing of the Acquisition,
including but not limited to those required under the Nevada Revised Statutes
and California Financial Code.  Buyer
agrees that upon the Closing of the Acquisition, TBH shall have no further
responsibility related to any insurance coverage and bonds for Granite or its
directors, officers and employees.  Buyer
agrees that the responsibility for all benefits and services provided to
employees of Granite from and after Closing shall be the responsibility of
Granite alone.

 

(d)           Prior to Closing,
Buyer shall establish a new operating location for Granite and Buyer shall
commence Granite’s operations at that location upon Closing.  After Closing, commencing at or about 10:00 a.m.
on July 1, 2009, Buyer shall remove Granite’s property, including without
limitation paper files and the physical assets listed in Schedule 2.5(e), from
TBH’s facility located at 2270 Douglas Boulevard, Suite 200, in Roseville,
California (the “TBH Facility”).  By 5:00 p.m.
on July 1, 2009, Buyer shall cause Granite to discontinue any and all use
of the TBH Facility, e.g., Granite
shall not use the TBH Facility as a worksite, nor shall Granite’s phone lines
(877-937-1031, 800-988-5113, 916-367-6620 or 916-367-6626) ring to the TBH Facility.  In the event that Granite does not
discontinue all use of the TBH Facility by close of business on July 1,
2009, Buyer shall pay to TBH the sum of $500 per full or partial calendar day
of continued use.  In addition, Buyer
shall cause Granite to make new arrangements for electronic mail hosting and
website hosting, and TBH may discontinue such hosting as of 5:00 p.m. on July 1,
2009.

 

(e)           Buyer agrees
that, notwithstanding any agreement, understanding or policy to the contrary, any
tax benefit or loss carry forward currently carried on the consolidated
financial statements of TBH through December 31, 2008 will remain the
property of TBH and Granite will have no right to claim any such benefit on any
returned filed by it for any tax year commencing with 2009.

 

(f)            Buyers shall
promptly notify TBH regarding receipt from any tax authority of any
notification of the commencement of an audit, any request to extend the statute
of limitations, any statutory notice of deficiency, any revenue agent’s report,
any notice of proposed assessment, or any other similar notification of
potential adjustments to the tax liabilities of Granite or TBH, or any actual
or threatened collection enforcement activity by any tax authority with respect
to tax liabilities of Granite for any period during which TBH held shares of
Granite.  Further, Granite may not
compromise or otherwise settle or adjust any assertion or claim of a deficiency
in taxes (or interest thereon or penalties in connection therewith); file any
appeal from an asserted deficiency; file or amend any United States federal,
foreign, state or local tax return without TBH’s prior written approval; or
make any tax election or change any method or period of accounting unless
required by GAAP or applicable law for any period during which TBH held shares
of Granite.

 

(g)           TBH shall
include the income of Granite (including any deferred items triggered into
income by Income Tax Reg. §1.1502-13) on TBH’s consolidated federal and state
income tax returns

 

12

 

for
all periods through the end of the Closing Date.  TBH will pay any federal
and state income tax attributable to such income.  The tax benefits from
any net operating loss, credits or other tax attributes available from Granite
through the Closing Date, including any refund claims from carrying back such
items, will be used in the consolidated filings of TBH.  Granite shall
assist TBH by furnishing any needed tax information for the period that includes
the Closing Date.  The income of Granite shall be apportioned to the
period up to and including the Closing Date and to the period after the closing
date in accordance with Income tax Reg. §1.1502-76 by closing the books of
Granite at the end of the Closing Date.

 

(h)           Swift and Awalt
will maintain the books and records of Granite for a minimum of four (4) years
from the Closing Date and, upon request from TBH, will provide TBH with access
thereto for any legitimate business purpose of TBH which would include, but not
be limited to litigation, employment, regulatory or tax matters encompassing
any period during which TBH held shares of Granite.

 

ARTICLE
7

 

CONDITIONS
PRECEDENT TO OBLIGATIONS  OF BUYER

 

The obligation of Buyer to consummate the Acquisition and to take the
other actions required to be taken by them at the Closing are subject to the
satisfaction, at or prior to the Closing, of each of the following conditions
(any of which may be waived by Buyer, in whole or in part):

 

Section 7.1            Accuracy
of Representations and Warranties. 
All of the representations and warranties of TBH and Granite set forth
in this Agreement shall be true and correct in all material respects with the
same force and effect as if all of such representations and warranties were made
at the Closing Date, provided, however,
that to the extent such representations and warranties expressly relate to an
earlier date, such representations shall be true and correct in all material
respects on and as of such earlier date, and provided further,
that to the extent that such representations and warranties are made in this
Agreement subject to a standard of materiality or Knowledge, such
representations and warranties shall be true and correct in all respects.

 

Section 7.2            TBH’s
and Granite’s Performance.  Each of TBH and Granite shall have performed
or complied in all material respects with all of the covenants and obligations
to be performed or complied with by it under the terms of this Agreement on or
prior to the Closing Date, provided, however,
that to the extent performance and compliance with such covenants and
obligations are subject in this Agreement to a standard of materiality, TBH and
Granite shall have performed and complied in all respects with such covenants
and obligations.

 

Section 7.3            Documents
Satisfactory.  All proceedings, corporate or other, to be
taken by TBH and Granite in connection with the Acquisition, and all documents
incident thereto, shall be reasonably satisfactory in form and substance to
Buyer and its counsel, and TBH and Granite shall have made available to Buyer
for examination the originals or true and correct copies of all records and
documents relating to the business and affairs of Granite which Buyer may
reasonably request in connection with said transactions.

 

Section 7.4            No
Proceedings.  Since the date of this Agreement, there must
not have been commenced or Threatened against Granite or Buyer, or against any
of their respective Affiliates, any Proceeding: 
(a) involving any challenge to, or seeking damages or other relief
in connection with, the Acquisition; or (b) that would reasonably be
expected to have the effect of preventing, delaying, making illegal or
otherwise interfering with the Acquisition; or (c) that would reasonably
be expected to have a Material Adverse Effect on the financial condition or
operations of Granite.

 

13

 

Section 7.5            No Claim Regarding Stock
Ownership or Sale Proceeds.  There must not have been made or Threatened
by any Person any bona fide claim asserting that
such Person:  (a) is the holder or
the beneficial owner of, or has the right to acquire or to obtain beneficial
ownership of, any stock of, or any other voting, equity or ownership interest
in, Granite; or (b) is entitled to all or any portion of the consideration
payable under the terms of this Agreement for the Acquired Shares.

 

Section 7.6            Absence of Material Adverse
Changes.  From the
date hereof to the Closing, there shall be and have been no occurrence or any
failure of an expected occurrence to occur that would have a Material Adverse
Effect.

 

Section 7.7            Consents
and Approvals.  Any consents
or approvals required to be secured by either party by the terms of this
Agreement or otherwise reasonably necessary in the opinion of Buyer to
consummate the Acquisition, including all necessary regulatory approvals, shall
have been obtained and shall be reasonably satisfactory to Buyer, and all
applicable waiting periods shall have expired.

 

Section 7.8            No Injunction.  There is no Legal Requirement or any
injunction or other Order that has been adopted or issued, or has otherwise
become effective, since the date of this Agreement that prohibits the
consummation by TBH or Granite of the Acquisition, or materially affects the
ongoing operations of Granite.

 

ARTICLE 8

 

CONDITIONS PRECEDENT TO
OBLIGATIONS OF TBH AND GRANITE

 

TBH’s and Granite’s respective obligation to consummate the Acquisition
and to take the other actions required to be taken by them at the Closing are
subject to the satisfaction, at or prior to the Closing, of each of the
following conditions (any of which may be waived by TBH or Granite, in whole or
in part):

 

Section 8.1            Accuracy of
Representations and Warranties. 
All of the representations and warranties of Buyer set forth in this
Agreement shall be true and correct in all material respects with the same
force and effect as if all of such representations and warranties were made at
the Closing Date, provided, however, that to the
extent such representations and warranties expressly relate to an earlier date,
such representations shall be true and correct in all material respects on and
as of such earlier date, and provided further,
that to the extent that such representations and warranties are made in this
Agreement subject to a standard of materiality or Knowledge, such
representations and warranties shall be true and correct in all respects.

 

Section 8.2            Buyer’s Performance.  Buyer shall have performed or complied in all
material respects with all of the covenants and obligations to be performed or
complied with by them, respectively, under the terms of this Agreement on or
prior to the Closing Date, provided, however,
that to the extent performance and compliance with such covenants and
obligations are subject in this Agreement to a standard of materiality, Buyer
shall have performed and complied in all respects with such covenants and obligations.

 

Section 8.3            Documents Satisfactory.  All proceedings, corporate or other, to be
taken by Buyer in connection with the Acquisition, and all documents incident
thereto, shall be reasonably satisfactory in form and substance to Granite and
its counsel.

 

14

 

Section 8.4            No Injunction.  There is no Legal Requirement or any
injunction or other Order that has been adopted or issued, or has otherwise
become effective, since the date of this Agreement that prohibits the
consummation by Buyer of the Acquisition.

 

ARTICLE 9

 

TERMINATION

 

Section 9.1            Reasons for Termination and
Abandonment.  This Agreement
may, by prompt written notice given to the other party prior to or at the
Closing, be terminated:

 

(a)           by
mutual consent of the board of directors or managers, as applicable, of each of
TBH, Granite and Buyer;

 

(b)           by
TBH or Granite if:  (i) a breach of
any provision of this Agreement has been committed by Buyer; (ii) such
breach has not been waived in writing by TBH; (iii) such breach has had,
or would reasonably be expected to have, a materially adverse change in the
benefits to TBH under this Agreement and the Acquisition, and (iv) such
breach has not been cured within ten days following the date that TBH has
provided Buyer with notice of such breach, provided, however,
that the condition set forth in clause (iii) of this paragraph need not be
satisfied to terminate this Agreement if such breach was the result of any
intentional or grossly negligent action, failure to act or misrepresentation of
or by Buyer, Swift or Awalt, or if the breach relates to Buyer’s failure to pay
the full amount of the Purchase Price payable to TBH pursuant to the terms of
this Agreement;

 

(c)           by
Buyer if:  (i) a breach of any provision
of this Agreement has been committed by TBH or Granite; (ii) such breach
has not been waived in writing by Buyer; (iii) such breach has had, or
would reasonably be expected to have, a materially adverse change in the
benefits to Buyer under this Agreement and the Acquisition, and (iv) such
breach has not been cured within thirty days following the date that Buyer has
provided TBH or Granite with notice of such breach provided,
however, that the condition set forth in clause (iii) of this
paragraph need not be satisfied to terminate this Agreement if such breach was
the result of any intentional or grossly negligent action, failure to act or
misrepresentation of or by TBH or Granite;

 

(d)           by
Buyer if:  (i) any of the conditions
in Article 7 has not been satisfied, or satisfaction of such a condition
is or becomes impossible, as of the Closing Date; (ii) such condition has
not been waived in writing by Buyer; and (iii) the failure of such
condition has had, or would reasonably be expected to have, a Material Adverse
Effect with respect to the benefits to Buyer under this Agreement and the
Acquisition, provided, however, that the
contingency set forth in clause (iii) of this paragraph need not be
satisfied to terminate this Agreement if the failure of such condition was the
result of any intentional or grossly negligent action, failure to act or
misrepresentation of or by TBH or Granite;

 

(e)           by
TBH or Granite if:  (i) any of the
conditions in Article 8 has not been satisfied within the time frames
specified, or satisfaction of such a condition is or becomes impossible, as of
the Closing Date; (ii) such condition has not been waived in writing by TBH;
and (iii) the failure of such condition has had, or would reasonably be
expected to have, a Material Adverse Effect with respect to the benefits to TBH
under this Agreement and the Acquisition, provided, however,
that the contingency set forth in clause (iii) of this paragraph need not
be satisfied to terminate this Agreement if the failure of such condition was
the result of any intentional or grossly negligent action, failure to act or misrepresentation
of or by Buyer; or

 

15

 

(f)            by
either Buyer or TBH if the Closing has not occurred, other than through the failure
of any party seeking to terminate this Agreement to comply fully with its
obligations under this Agreement, on or before June 30, 2009.

 

Section 9.2            Effect of Termination.  Each party’s right of
termination under Section 9.1 is in addition to any other rights it may
have under this Agreement or otherwise, and the exercise of a right of
termination will not be an election of remedies.  If this Agreement is terminated pursuant to Section 9.1,
all further obligations of the parties under this Agreement will terminate,
except that the obligations in Sections 10.8 and 10.11 will survive; provided, however, that
if this Agreement is terminated by a party because of the breach of the
Agreement by the other party or because one or more of the conditions to the terminating
party’s obligations under this Agreement is not satisfied as a result of the
other party’s failure to comply with its obligations under this Agreement, the
terminating party’s right to pursue all legal remedies will survive such
termination unimpaired.

 

ARTICLE 10

 

MISCELLANEOUS

 

Section 10.1         Non-Disparagement.  TBH and Granite agree that they will not (and
their respective officers, directors, employees, agents, and representatives
will not) disparage Buyer, and Buyer agrees that it will not (and Buyer’s
officers, directors, managers, members, employees, agents, and representatives
will not) disparage TBH or Granite, regardless of whether the Acquisition is
consummated or is terminated; provided, however,
that nothing in this Section 10.1 shall affect the prosecution and/or
defense of the Action in the event the Acquisition is not completed.

 

Section 10.2         Taxes and Related Matters.  None of the parties makes any representations
to any other party concerning the tax treatment related to the Acquisition.

 

Section 10.3         Legal Services Provided to Granite.  While Granite has been owned by TBH, legal
services have been provided to Granite, including but not limited to services
related to the Action and the Acquisition. 
Buyer agrees that such services shall be deemed to have been provided solely
to TBH, not Granite, such that Granite after Closing shall not be entitled to
obtain information or files from legal counsel who previously provided services
to Granite.  TBH, not Granite, shall be
responsible for paying for any legal services provided to Granite through
Closing.

 

Section 10.4         Governing Law.  All questions concerning the construction,
validity and interpretation of this Agreement, and the performance of the
obligations imposed by this Agreement shall be governed by the internal laws of
the State of Nevada without regard to conflicts of laws principles.

 

Section 10.5         Assignments, Successors and No Third
Party Rights.  No party may
assign any of its rights under this Agreement to any other Person without the
prior written consent of the other parties, which consent shall not be
unreasonably withheld, conditioned or delayed, provided,
however, that Buyer may assign its rights under this Agreement to
any Affiliate of Buyer without the consent of TBH or Granite so long as Buyer
continues to guarantee unconditionally the performance of all of its covenants
set forth in this Agreement.  Subject to
the preceding sentence, this Agreement and every representation, warranty, covenant,
agreement and provision hereof shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and permitted assigns.
Nothing expressed or referred to in this Agreement will be construed to give
any Person other than the parties to this Agreement any legal or equitable
right, remedy or claim under or with respect to this Agreement or any provision
of this Agreement.  This Agreement and
all of its provisions and conditions are for the sole and exclusive benefit of
the parties to this Agreement and their successors and assigns.

 

16

 

Section 10.6         Waiver. The rights and
remedies of the parties to this Agreement are cumulative and not
alternative.  Neither the failure nor any
delay by any party in exercising any right, power or privilege under this
Agreement or the documents referred to in this Agreement will operate as a
waiver of such right, power or privilege, and no single or partial exercise of
any such right, power or privilege will preclude any other or further exercise
of such right, power or privilege or the exercise of any other right, power or
privilege.  To the maximum extent
permitted by applicable law:  (a) no
claim or right arising out of this Agreement or the documents referred to in
this Agreement can be discharged by one party, in whole or in part, by a waiver
or renunciation of the claim or right unless in writing signed by the other
party; (b) no waiver that may be given by a party will be applicable
except in the specific instance for which it is given; and (c) no notice
to or demand on one party will be deemed to be a waiver of any obligation of
such party or of the right of the party giving such notice or demand to take
further action without notice or demand as provided in this Agreement or the
documents referred to in this Agreement.

 

Section 10.7         Modification.  This Agreement may only be
amended by a written agreement executed by all parties hereto.

 

Section 10.8         Expenses.  Except as otherwise
expressly provided in this Agreement, each party to this Agreement will bear
its respective expenses incurred in connection with the preparation, execution,
and performance of this Agreement and the Acquisition, including all fees and
expenses of agents, representatives, counsel, and accountants.  In the event of termination of this
Agreement, the obligation of each party to pay its own expenses will be subject
to any rights of such party arising from a breach of this Agreement by the
other party.

 

Section 10.9         Publicity.  Prior to the Closing Date and except as
required by law, the parties hereto will consult with each other before issuing
any press releases or otherwise making any public statements with respect to
this Agreement or the Acquisition and shall not issue any such press release or
make any such public statement without the prior consent of the other party,
which consent shall not be unreasonably withheld. Notwithstanding, TBH shall be
authorized to make all necessary regulatory filings related to the transaction
without consulting Buyer including the filings of Form 8-Ks and Form 10-Qs
or Form 10-Ks regarding the Agreement and the transactions contemplated by
the Agreement. Granite and Buyer will consult with each other concerning the
means by which Granite’s employees, customers and suppliers and others having
dealings with Granite will be informed of the Acquisition.

 

Section 10.10       Indemnification.

 

(a)           From
and after the Closing, TBH shall defend, indemnify and hold harmless the Buyer
(and any officers, directors, managers, members, employees, agents,
representatives and advisors of Buyer, as the case may be), for, from and
against any Damages arising out of, relating to or resulting from:  (i) any inaccuracy in or breach of any
representation or warranty made by either TBH or Granite in this Agreement, or (ii) the
failure of either TBH or Granite to perform or observe fully any covenant,
agreement or provision to be performed or observed by it pursuant to this
Agreement.  For purposes of this
Agreement, “Damages” shall mean any and all losses, liabilities, costs,
expenses, damages or judgments of any kind or nature whatsoever).

 

(b)           From
and after the Closing, Buyer shall defend, indemnify and hold harmless TBH (and
any officers, directors, employees, agents, representatives and advisors of TBH,
as the case may be), for, from and against any Damages arising out of or
resulting from:  (i) any inaccuracy
in or breach of any representation or warranty made by Buyer in this Agreement;
or (ii) the failure by Buyer to perform or observe any covenant, agreement
or condition to be performed or observed by it pursuant to this Agreement.

 

17

 

Section 10.11       Confidentiality.  Between the date of this Agreement and the
Closing Date, the parties, Swift and Awalt will maintain in confidence, and
will cause the directors, officers, managers, members, employees, agents and
advisors of TBH, Buyer and Granite, as applicable, to maintain in confidence,
and not use to the detriment of another party any written, oral or other
information obtained in confidence from another party in connection with this
Agreement or the Acquisition, unless:  (a) such
information is already known to such party or to others not bound by a duty of
confidentiality or such information becomes publicly available through no fault
of such party; (b) the use of such information is necessary or appropriate
in making any filing or obtaining any consent or approval required for the
consummation of the Acquisition; or (c) the furnishing or use of such
information is required by or necessary or appropriate in connection with any
Proceedings.  If the Acquisition is not
consummated, each party will return or destroy as much of such written
information as the other party may reasonably request.  The confidential information of any party
will be used solely for the purpose of evaluating the contemplated Acquisition,
and will be used for no other purpose. 
Unless otherwise requested by TBH or Granite, in the event this
Agreement is terminated, Swift and Awalt shall return to TBH all proprietary
information related to TBH and Granite, including but not limited to all
policies and procedures and all strategic documents related to Granite’s
business plan or the plans of TBH.

 

Section 10.12       Notices.  All notices, consents,
waivers and other communications under this Agreement must be in writing (which
shall include telecopier communication) and will be deemed to have been duly
given if delivered by hand or by nationally recognized overnight delivery
service (receipt requested), mailed by certified mail (return receipt
requested) with first class postage prepaid or telecopied if confirmed
immediately thereafter by also mailing a copy of any notice, request or other
communication by mail as required in this Section 10.12:

 

	
  (a)

  	
  If to Buyer, to:

  
	
   

  	
   

  
	
   

  	
  The Law Offices of Randy
  C. Renfro

  
	
   

  	
  455 Capitol Mall,
  Suite 230

  
	
   

  	
  Sacramento, CA 95814

  
	
   

  	
  Telephone: (916) 443-5893

  
	
   

  	
  Facsimile: (916) 443-6215

  
	
   

  	
  Email:
  taxlawyr@winfirst.com

  
	
   

  	
   

  
	
  (b)

  	
  if to TBH or Granite, to:

  
	
   

  	
   

  
	
   

  	
  The Bank Holdings

  
	
   

  	
  9990 Double R Boulevard

  
	
   

  	
  Reno, NV 89521

  
	
   

  	
  Attention: Jack Buchold

  
	
   

  	
  Telephone:

  	
  (775) 853-8600

  
	
   

  	
  Facsimile:

  	
  (775) 853-2056

  
	
   

  	
   

  
	
  with copies to:

  
	
   

  	
   

  
	
   

  	
  Gary Steven Findley and
  Associates

  
	
   

  	
  1470 N. Hundley

  
	
   

  	
  Anaheim, CA 92806

  
	
   

  	
  Attention: Debra L. Barbin

  
	
   

  	
  Telephone:

  	
  (714) 630-7136

  
	
   

  	
  Facsimile:

  	
  (714) 630-7910

  
	
   

  	
   

  
	
   

  	
  and

  

 

18

 

	
   

  	
  Downey Brand LLP

  
	
   

  	
  621 Capitol Mall, 18th Floor

  
	
   

  	
  Sacramento, CA 95814

  
	
   

  	
  Attention: Jeffrey S.
  Galvin

  
	
   

  	
  Telephone: (916) 444-1000

  
	
   

  	
  Facsimile: (916) 444-2100

  

 

or to such other Person or place as the
parties shall furnish to each other in writing. 
Except as otherwise provided herein, all such notices, consents, waivers
and other communications shall be effective: 
(a) if delivered by hand, when delivered; (b) if mailed in the
manner provided in this Section 10.12, five (5) Business Days after
deposit with the United States Postal Service; (c) if delivered by
overnight express delivery service, on the next Business Day after deposit with
such service; and (d) if by facsimile, on the next Business Day upon
receipt of electronic confirmation.

 

Section 10.13       Entire Agreement.  This Agreement, any
documents executed by the parties pursuant to this Agreement and referred to
herein, the Settlement Agreement and the Release Agreements constitute a
complete and exclusive statement of the entire understanding and agreement of
the parties hereto with respect to their subject matter and supersede all other
prior agreements and understandings, written or oral, relating to such subject
matter between the parties.

 

Section 10.14       Severability.  Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
prohibited by or invalid under applicable law, such provision will be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement unless the consummation of the Acquisition is adversely affected
thereby.

 

Section 10.15       Further Assurances.  The parties agree:  (a) to furnish upon request to each
other such further information; (b) to execute and deliver to each other
such other documents; and (c) to do such other acts and things, all as the
other party may reasonably request for the purpose of carrying out the intent
of this Agreement and the documents referred to in this Agreement.

 

Section 10.16       Counterparts; Facsimiles.  This Agreement and any
amendments thereto may be executed in any number of counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same agreement.  One or more counterparts
of this Agreement may be delivered via facsimile with the intention that they
shall have the same effect as original executed counterparts hereof.

 

Section 10.17  Legal Costs.  If either party commences an
action against the other arising out of or in connection with this Agreement,
the prevailing party shall be entitled to have and recover from the losing
party reasonable attorney’s fees and costs of suit.

 

Section 10.18  Non-Solicitation.  Commencing with the Closing Date and ending six
months later (December 30, 2009), neither TBH nor any subsidiary of TBH
will, directly or indirectly, solicit any customer of Granite listed on
Schedule 10.18 hereof for the purpose of engaging in a 1031 exchange
transaction.

 

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

 

19

 

	
  ROBERT
  M. AWALT  

  	
   

  	
  JUSTIN
  C. SWIFT  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Robert M. Awalt

  	
   

  	
  /s/ Justin C. Swift

  
	
   

  	
   

  	
   

  
	
  GRANITE
  EXCHANGE, INC., a Nevada corporation  

  	
   

  	
  THE
  BANK HOLDINGS, a Nevada corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Hal Giomi

  	
   

  	
  By:

  	
  /s/ Hal Giomi

  
	
   

  	
  Chief Executive Officer

  	
   

  	
   

  	
  Chief Executive Officer

  

 

20EXHIBIT 10.1

 

	
   

  	
  Amelia Building

  
	
   

  	
  Norfolk,
  Virginia

  

 

SECOND
AMENDMENT TO PURCHASE AGREEMENT

 

THIS SECOND
AMENDMENT TO PURCHASE AGREEMENT (this “Amendment”) is made as
of May 20,  2009
by and between HUB PROPERTIES TRUST,
a Maryland real estate investment trust (the “Seller”), and SENIOR HOUSING PROPERTIES TRUST, a Maryland
real estate investment trust (the “Purchaser”).

 

W I T N E S S E T H

 

WHEREAS, the Seller
and the Purchaser executed a Purchase and Sale Agreement dated as of May 5,
2008, as amended by that certain First Amendment to Purchase Agreement, dated December 23,
2008 (as amended, the “Purchase Agreement”), with respect to the
Property (this and other capitalized terms used and not otherwise defined
herein shall have the meanings given such terms in the Purchase Agreement)
described in Exhibit A hereto; and

 

WHEREAS, the Seller
and the Purchaser now wish to amend the Purchase Agreement subject to and upon
the terms and conditions set forth herein;

 

NOW, THEREFORE, for good and
valuable consideration and in consideration of the mutual covenants of the
parties hereto, the mutual receipt and legal sufficiency of which is hereby
acknowledged, Landlord and Tenant hereby agree as follows:

 

1.                                       Section 2.2 is hereby
deleted in its entirety and the following is inserted in substitution therefor:

 

2.2           Closing.  The purchase and sale of the Property shall
be consummated at a closing (the “Closing”) to be held at the offices of
Sullivan & Worcester LLP, One Post Office Square, Boston,
Massachusetts, or at such other location as the Seller and the Purchaser may
agree, at 10:00 a.m., local time, on May 20, 2009 (the “Closing Date”).

 

2.                                       As amended
hereby, the Agreement is in full force and effect and is hereby ratified and
confirmed.

 

3.                                       This Amendment may be executed in a number of identical counterparts.  If so executed, each counterpart is to be
deemed an original for all purposes, and all such counterparts shall,
collectively, constitute one agreement. 
Such executed counterparts may be delivered by facsimile or by e-mail
(in .pdf

 

 

format) and any such counterparts so delivered shall be
deemed original documents for all purposes.

 

4.             The
Declaration of Trust of the Seller, a copy of which is duly filed with the
Department of Assessments and Taxation of the State of Maryland, provides that
the name “Hub Properties Trust” refers to the trustees under such Declaration
of Trust collectively as trustees, but not individually or personally, and that
no trustee, officer, shareholder, employee or agent of the Seller shall be held
to any personal liability, jointly or severally, for any obligation of, or
claim against, the Seller.  All persons
dealing with the Seller in any way shall look only to the assets of the Seller
for the payment of any sum or the performance of any obligation.

 

5.             The
Declaration of Trust of the Purchaser, a copy of which is duly filed with the
Department of Assessments and Taxation of the State of Maryland, provides that
the name “Senior Housing Properties Trust” refers to the trustees under such
Declaration of Trust collectively as trustees, but not individually or
personally, and that no trustee, officer, shareholder, employee or agent of the
Purchaser shall be held to any personal liability, jointly or severally, for
any obligation of, or claim against, the Purchaser.  All persons dealing with the Purchaser in any
way shall look only to the assets of the Purchaser for the payment of any sum
or the performance of any obligation.

 

[Signature page follows.]

 

 

IN WITNESS
WHEREOF, the Seller and the Purchaser have executed this Amendment under seal
as of the date above first written.

 

	
  WITNESS:

  	
   

  	
  SELLER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  HUB PROPERTIES TRUST, a Maryland real estate
  investment trust

  
	
  /s/
  Diane Bastianelli

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  John C. Popeo

  
	
   

  	
   

  	
   

  	
  John
  C. Popeo

  
	
   

  	
   

  	
   

  	
  Treasurer
  and Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
  WITNESS:

  	
   

  	
  PURCHASER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SENIOR HOUSING PROPERTIES TRUST

  
	
   

  	
   

  	
   

  
	
  /s/
  Diane Bastianelli

  	
   

  	
  By:

  	
  /s/
  David J. Hegarty

  
	
   

  	
   

  	
   

  	
  David
  J. Hegarty, President

  

 

 

EXHIBIT A

 

Address of Property

 

Amelia Building, 885
Kempsville, Norfolk, Virginia

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