Document:

Exhibit 10.1

 

AGREEMENT
BY AND BETWEEN

Independence
National Bank

Greenville,
South Carolina

and

The
Comptroller of the Currency

 

Independence National Bank, Greenville, South
Carolina (“Bank”), and the Comptroller of the Currency of the United States of
America (“Comptroller”) wish to protect the interests of the depositors, other
customers, and shareholders of the Bank, and, toward that end, wish the Bank to
operate safely and soundly and in accordance with all applicable laws, rules and
regulations.

 

The Comptroller has found unsafe or unsound banking
practices relating to financial performance, asset quality, asset-liability
risk management, and credit administration at the Bank.

 

In consideration of the above premises, it is
agreed, between the Bank, by and through its duly elected and acting Board of
Directors (“Board”), and the Comptroller, through his authorized
representative, that the Bank shall operate at all times in compliance with the
articles of this Agreement.

 

ARTICLE I

 

JURISDICTION

 

(1)   This Agreement shall be construed to be a “written agreement
entered into with the agency” within the meaning of 12 U.S.C. § 1818(b)(1).

 

(2)   This Agreement shall be construed to be a “written agreement
between such depository institution and such agency” within the meaning of
12 U.S.C. § 1818(e)(1) and 12 U.S.C. § 1818(i)(2).

 

 

(3)   This Agreement shall be construed to be a “formal written
agreement” within the meaning of 12 C.F.R. § 5.51(c)(6)(ii).  See 12 U.S.C. § 1831i.

 

(4)   This Agreement shall be construed to be a “written agreement”
within the meaning of 12 U.S.C. § 1818(u)(1)(A).

 

(5)   All reports or plans which the Bank or Board has agreed to submit
to the Assistant Deputy Comptroller pursuant to this Agreement shall be
forwarded to the:

 

Assistant
Deputy Comptroller

Carolinas
Field Office

212
South Tryon Street, Suite 700

Charlotte,
NC 28281

 

ARTICLE II

 

COMPLIANCE COMMITTEE

 

(1)   Within thirty (30) days, the Board shall appoint a Compliance
Committee of at least five (5) directors, of which no more than one (1) shall
be an employee or controlling shareholder of the Bank or any of its affiliates
(as the term “affiliate” is defined in 12 U.S.C. § 371c(b)(1)), or a
family member of any such person.  Upon
appointment, the names of the members of the Compliance Committee and, in the
event of a change of the membership, the name of any new member shall be
submitted in writing to the Assistant Deputy Comptroller.  The Compliance Committee shall be responsible
for monitoring and coordinating the Bank’s adherence to the provisions of this
Agreement.

 

(2)   The Compliance Committee shall meet at least monthly.

 

(3)   Within thirty (30) days, and every ninety (90) days thereafter,
the Compliance Committee shall submit a written progress report to the Board
setting forth in detail:

 

 

(a)                                  a description
of the action needed to achieve full compliance with each Article of this
Agreement;

 

(b)                                 actions taken
to comply with each Article of this Agreement; and

 

(c)                                  the results and
status of those actions.

 

(4)   The Board shall forward a copy of the Compliance Committee’s
report, with any additional comments by the Board, to the Assistant Deputy
Comptroller within ten (10) days of receiving such report.

 

ARTICLE III

 

BOARD OVERSIGHT, MANAGEMENT AND STAFFING

 

(1)   Within sixty (60) days, the Compliance Committee shall complete a
review of current management and Board supervision presently being provided to
the Bank, the Bank’s management structure, and its staffing requirements in
light of the Bank’s present condition. 
The findings and recommendations of the Compliance Committee shall be
set forth in a written report to the Board. 
At a minimum, the report shall contain:

 

(a)                                  an evaluation
of each executive officer’s duties and capacity to effectively carry out such
duties;

 

(b)                                 an evaluation
of current staffing levels and competency;

 

(c)                                  an assessment
of the Board’s strengths and weaknesses along with a director education program
designed to strengthen identified weaknesses;

 

(d)                                 an assessment
of whether Board members are receiving adequate information on the operation of
the Bank to enable them to fulfill their fiduciary responsibilities and other
responsibilities under law;

 

 

(e)                                  recommendations
to expand the scope, frequency and sufficiency of information provided to the
Board by management; and

 

(f)                                    recommendations
to correct or eliminate any other deficiencies in the supervision or
organizational structure of the Bank.

 

(2)   Copies of the Board’s written plan and the Compliance Committee’s
study shall be forwarded to the Assistant Deputy Comptroller.  The Assistant Deputy Comptroller shall retain
the right to determine the adequacy of the report and its compliance with the
terms of this Agreement.  In the event
the written plan, or any portion thereof, is not implemented, the Board shall
immediately advise the Assistant Deputy Comptroller, in writing, of specific
reasons for deviating from the plan.

 

ARTICLE IV

 

STRATEGIC PLAN

 

(1)   Within forty-five (45) days, the Board shall adopt, implement, and
thereafter ensure Bank adherence to an updated written strategic plan for the
Bank covering at least a three-year period. 
The strategic plan shall establish objectives for the Bank’s overall
risk profile, earnings performance, growth, balance sheet mix, off-balance
sheet activities, liability structure, capital adequacy, reduction in the
volume of nonperforming assets, product line development and market segments
that the Bank intends to promote or develop, together with strategies to
achieve those objectives and, at a minimum, include:

 

(a)                                  a mission
statement that forms the framework for the establishment of strategic goals and
objectives;

 

(b)                                 an assessment
of the Bank’s present and future operating environment;

 

 

(c)                                  the development
of strategic goals and objectives to be accomplished over the short and long
term;

 

(d)                                 an evaluation
of the Bank’s internal operations, staffing requirements, Board and management
information systems and policies and procedures for their adequacy and
contribution to the accomplishment of the goals and objectives developed under
(1)(c) of this Article;

 

(e)                                  a management
employment and succession program to promote the retention and continuity of
capable management;

 

(f)                                    an action plan
to reduce the bank’s reliance on brokered deposits and other noncore funding
sources;

 

(g)                                 an action plan
to improve bank earnings and accomplish identified strategic goals and
objectives, including individual responsibilities, accountability and specific
time frames;

 

(h)                                 a financial
forecast to include projections for major balance sheet and income statement
accounts and desired financial ratios over the period covered by the strategic
plan;

 

(i)                                     control systems
to mitigate risks associated with planned new products, growth, or any proposed
changes in the Bank’s operating environment;

 

(j)                                     systems to
monitor the Bank’s progress in meeting the plan’s goals and objectives; and

 

(k)                                  the revisions
to the strategic plan required under Article VIII, Dependence on Wholesale
or Credit Sensitive Liabilities.

 

 

(2)   Within forty-five (45) days, the Board shall develop, implement,
and thereafter ensure Bank adherence to an updated three year capital
program.  The program shall include:

 

(a)                                  projections for
growth and capital requirements based upon a detailed analysis of the Bank’s
assets, liabilities, earnings, fixed assets, and off-balance sheet activities;

 

(b)                                 projections of
the sources and timing of additional capital to meet the Bank’s current and
future needs;

 

(c)                                  the primary
source(s) from which the Bank will strengthen its capital structure to
meet the Bank’s needs;

 

(d)                                 contingency
plans that identify alternative methods should the primary source(s) under
(c) above not be available; and

 

(e)                                  a dividend
policy that permits the declaration of a dividend only:

 

(i)                                     when the Bank
is in compliance with its approved capital program; and

 

(ii)                                  when the Bank
is in compliance with 12 U.S.C. §§ 56 and 60; and

 

(iii)                               with the prior
written determination of no supervisory objection by the Assistant Deputy
Comptroller.  Upon receiving a determination
of no supervisory objection from the Assistant Deputy Comptroller, the Bank
shall implement and adhere to the dividend policy.

 

(3)   Upon adoption, a copy of the plan shall be forwarded to the
Assistant Deputy Comptroller for review and prior written determination of no
supervisory objection.  Upon 

 

 

receiving a determination of no supervisory
objection from the Assistant Deputy Comptroller, the Bank shall implement and
adhere to the strategic plan.

 

(4)   The Board shall ensure that the Bank has processes, personnel, and
control systems to ensure implementation of and adherence to the plan developed
pursuant to this Article.

 

ARTICLE V

 

PROFIT PLAN

 

(1)   Within forty-five (45) days, the Board shall develop, implement,
and thereafter ensure Bank adherence to an updated written profit plan to
improve and sustain the earnings of the Bank. 
This plan shall include, at a minimum, the following elements:

 

(a)                                  identification
of the major areas in and means by which the Board will seek to improve the
Bank’s operating performance;

 

(b)                                 realistic and
comprehensive budgets, including projected balance sheets and year-end income
statements;

 

(c)                                  a budget review
process to monitor both the Bank’s income and expenses, and to compare actual
figures with budgetary projections; and

 

(d)                                 a description
of the operating assumptions that form the basis for major projected income and
expense components.

 

(2)   The budgets and related documents required in paragraph (1) above
shall be submitted to the Assistant Deputy Comptroller upon completion.

 

(3)   The Board shall submit to the Assistant Deputy Comptroller annual
budgets as described in paragraph (1) above for each year this Formal
Agreement remains in effect.  The budget
for each year shall be submitted on or before December 15, of the
preceding year.

 

 

(4)   The Board shall forward comparisons of its balance sheet and
profit and loss statement to the profit plan projections to the Assistant
Deputy Comptroller on a quarterly basis.

 

(5)   The Board shall ensure that the Bank has processes, personnel, and
control systems to ensure implementation of and adherence to the plan developed
pursuant to this Article.

 

ARTICLE VI

 

ASSET/LIABILITY
MANAGEMENT

 

(1)   Within sixty (60) days, the Board shall adopt, implement, and
thereafter ensure Bank adherence to an updated written liquidity, asset and
liability management policy.  In
formulating this policy, the Board shall refer to the “Liquidity” booklet, L-L,
of the Comptroller’s Handbook. 
The policy shall provide for a coordinated asset/liability management
strategy and, at a minimum, address:

 

(a)                                  adequate
management reports that enable the Board and management to monitor the Bank’s
liquidity position and maintain liquidity at an adequate level;

 

(b)                                 the liquidity,
maturity and pledging requirements of the investment portfolio;

 

(c)                                  development of
a comprehensive liquidity contingency plan;

 

(d)                                 guidelines
concerning the nature, extent, and purpose of the Bank’s use of brokered
deposits consistent with the Bank’s overall funds management strategies;

 

(e)                                  the nature,
extent and purpose of Bank borrowings;

 

(f)                                    limits on
concentrations of funding sources; and

 

 

(g)                                 periodic review
of the Bank’s adherence to the policy.

 

(2)   Upon adoption, a copy of the written policy shall be forwarded to the
Assistant Deputy Comptroller for review.

 

(3)   The Board shall ensure that the Bank has processes, personnel, and
control systems to ensure implementation of and adherence to the policy
developed pursuant to this Article.

 

(4)   The Asset/Liability Management Committee of the Board shall review
the Bank’s liquidity on a monthly basis. 
Such reviews shall consider:

 

(a)                                  a maturity
schedule of certificates of deposit, including large uninsured deposits;

 

(b)                                 the volatility
of demand deposits including escrow deposits;

 

(c)                                  the amount and
type of loan commitments and standby letters of credit;

 

(d)                                 an analysis of
the continuing availability and volatility of present funding sources; and

 

(e)                                  an analysis of
the impact of decreased cash flow from the Bank’s loan portfolio resulting from
delinquent and non-performing loans.

 

(5)   The
Asset/Liability Management Committee of the Board shall provide the full Board
with a written report of the results of the review required under subparagraph (4) of
this Article on a monthly basis.

 

(6)   The Board shall take appropriate action to ensure adequate sources
of liquidity in relation to the Bank’s needs. 
Monthly reports shall set forth liquidity requirements and sources and
establish a contingency plan.  Copies of
these reports shall be forwarded to the Assistant Deputy Comptroller in the
Bank’s quarterly report to the Assistant Deputy Comptroller.

 

 

ARTICLE VII

 

INTEREST RATE RISK POLICY

 

(1)   Within sixty (60) days, the Board shall adopt, implement, and
thereafter ensure Bank adherence to an updated written interest rate risk
policy.  In formulating this policy, the
Board shall refer to the “Interest Rate Risk” booklet of the Comptroller’s
Handbook and OCC Bulletin 2000-16, Risk Modeling.   The policy shall provide for a coordinated
interest rate risk strategy and, at a minimum, address:

 

(a)                                  the
establishment of adequate management reports on which to base sound interest
rate risk management decisions;

 

(b)                                 establishment
and guidance of the Bank’s strategic direction and tolerance for interest rate
risk;

 

(c)                                  implementation
of effective tools to measure and monitor the Bank’s performance and overall interest
rate risk profile;

 

(d)                                 employment of
competent personnel to manage interest rate risk;

 

(e)                                  prudent limits
on the nature and amount of interest rate risk that can be taken;  and

 

(f)                                    periodic review
of the Bank’s adherence to the policy.

 

(g)                                 the establishment
of adequate model validation and back-testing policies, procedures and
processes.

 

(2)   Upon adoption, a copy of the written policy shall be forwarded to
the Assistant Deputy Comptroller for review.

 

(3)   The Board shall ensure that the Bank has processes, personnel, and
control systems to ensure implementation of and adherence to the policy
developed pursuant to this Article.

 

 

ARTICLE VIII

 

DEPENDENCE ON WHOLESALE OR CREDIT SENSITIVE LIABILITIES

 

(1)   Within ninety (90) days, the Bank shall improve the Bank’s
liquidity position and maintain adequate sources of stable funding given the
Bank’ s anticipated liquidity and funding needs.  Such actions shall include, but not be
limited to:

 

(a)                                  reduction of
wholesale or credit sensitive liabilities and/or increase of liquid assets;

 

(b)                                 revision of the
Bank’s strategic plan in light of the requirement of this Article; and

 

(c)                                  establishment
of prudent limits on the nature and amount of liquidity risk that can be taken.

 

ARTICLE IX

 

BROKERED DEPOSITS

 

(1)   The Bank may accept, renew or rollover Brokered Deposits (as
defined by 12 C.F.R. § 337.6(a)(2)) for deposit at the Bank only
after obtaining a prior written determination of no supervisory objection from
the Assistant Deputy Comptroller.

 

(2)   The limitation of paragraph (1) shall include the acquisition
of Brokered Deposits through any transfer, purchase, or sale of assets,
including Federal funds transactions administered through a deposit broker.

 

(3)   If the Bank seeks to acquire Brokered Deposits, the Board shall
apply to the Assistant Deputy Comptroller for written permission.  Such application shall contain, at a minimum,
the following:

 

 

(a)                                  the dollar
volume, maturities, and cost of the Brokered Deposits to be acquired;

 

(b)                                 the proposed
use of the Brokered Deposits, i.e., short-term liquidity or restructuring of
liabilities to reduce cost;

 

(c)                                  alternative
funding sources available to the Bank; and

 

(d)                                 the reasons why
the Bank believes that the acceptance of the Brokered Deposits does not constitute
an unsafe and unsound practice in its particular circumstances.

 

(4)   The Assistant Deputy Comptroller may require the submission of
such additional information as necessary to make an informed decision.  Upon consideration of the Bank’s application,
the Assistant Deputy Comptroller will determine whether the proposed
acquisition of Brokered Deposits may be accomplished in a safe and sound manner
and may condition the Bank’s acquisition as the Assistant Deputy Comptroller
shall deem appropriate.

 

ARTICLE X

 

CRITICIZED ASSETS

 

(1)   The Bank shall take immediate and continuing action to protect its
interest in those assets criticized in the ROE, in any subsequent Report of
Examination, by internal or external loan review, or in any list provided to
management by the National Bank Examiners during any examination.

 

(2)   Within sixty (60) days, the Board shall adopt, implement, and
thereafter ensure Bank adherence to a written program designed to eliminate the
basis of criticism of assets criticized in the ROE, in any subsequent Report of
Examination, or by any internal or external loan review, or 

 

 

in any list provided to management by the National
Bank Examiners during any examination as “doubtful,” “substandard,” or “special
mention.”  This program shall include, at
a minimum:

 

(a)           an identification of the expected sources of repayment;

 

(b)                                 the appraised
value of supporting collateral and the position of the Bank’s lien on such
collateral where applicable;

 

(c)                                  an analysis of
current and satisfactory credit information, including cash flow analysis where
loans are to be repaid from operations; and

 

(d)                                 the proposed
action to eliminate the basis of criticism and the time frame for its
accomplishment.

 

(3)   Upon adoption, a copy of the program for all criticized assets
equal to or exceeding three hundred thousand dollars ($300,000) shall be
forwarded to the Assistant Deputy Comptroller.

 

(4)   The Board shall ensure that the Bank has processes, personnel, and
control systems to ensure implementation of and adherence to the program
developed pursuant to this Article.

 

(5)   The Board, or a designated committee, shall conduct a review, on
at least a monthly basis, to determine:

 

(a)                                  the status of
each criticized asset or criticized portion thereof that equals or exceeds
three hundred thousand dollars ($300,000);

 

(b)                                 management’s
adherence to the program adopted pursuant to this Article;

 

(c)                                  the status and
effectiveness of the written program; and

 

(d)                                 the need to
revise the program or take alternative action.

 

(6)   A copy of each review shall be forwarded to the Assistant Deputy
Comptroller on a quarterly basis in a format similar to Appendix A, attached
hereto).

 

 

(7)   The Bank may extend credit, directly or indirectly, including
renewals, extensions or capitalization of accrued interest, to a borrower whose
loans or other extensions of credit are criticized in the ROE, in any
subsequent Report of Examination, in any internal or external loan review, or
in any list provided to management by the National Bank Examiners during any
examination and whose aggregate loans or other extensions exceed three hundred
thousand ($300 thousand) only if each of the following conditions is met:

 

(a)                                  the Board or
designated committee finds that the extension of additional credit is necessary
to promote the best interests of the Bank and that prior to renewing, extending
or capitalizing any additional credit, a majority of the full Board (or
designated committee) approves the credit extension and records, in writing,
why such extension is necessary to promote the best interests of the Bank; and

 

(b)                                 a comparison to
the written program adopted pursuant to this Article shows that the Board’s
formal plan to collect or strengthen the criticized asset will not be
compromised.

 

(8)   A copy of the approval of the Board or of the designated committee
shall be maintained in the file of the affected borrower.

 

ARTICLE XI

 

ALLOWANCE FOR LOAN AND LEASE LOSSES

 

(1)   Within sixty (60) days, the Board shall adopt, implement, and
thereafter ensure adherence to updated written policies and procedures for
maintaining an adequate Allowance for Loan and Lease Losses (“ALLL”) in
accordance with generally accepted accounting principles.

 

 

The ALLL policies and procedures shall be consistent
with the guidance set forth in the Federal Financial Institutions Examination
Council’s “Interagency Policy Statement on the Allowance for Loan and Lease
Losses” dated December 13, 2006 (OCC Bulletin 2006-47) and with “Allowance
for Loan and Lease Losses,” booklet A-ALLL of the Comptroller’s
Handbook, and shall at a minimum include:

 

(a)                                  procedures for
determining whether a loan is impaired and measuring the amount of impairment,
consistent with FASB Statement of Financial Accounting Standards No. 114,
Accounting by Creditors for Impairment of a Loan;

 

(b)                                 procedures for
segmenting the loan portfolio and estimating loss on groups of loans,
consistent with FASB Statement of Financial Accounting Standards No. 5,
Accounting for Contingencies;

 

(c)                                  procedures for
validating the ALLL methodology; and

 

(d)                                 a process for
summarizing and documenting, for the Board’s review and approval, the amount to
be reported in the Consolidated Reports of Condition and Income (“Call Reports”)
for the ALLL.

 

(2)   The Board shall ensure that the Bank has processes, personnel, and
control systems to ensure implementation of and adherence to the policies and
procedures developed pursuant to this Article.

 

(3)   A copy of the Board’s program shall be submitted to the Assistant
Deputy Comptroller for review and prior written determination of no supervisory
objection. Upon receiving a determination of no supervisory objection from the
Assistant Deputy Comptroller, the Bank shall implement and adhere to the
program.

 

 

(4)   The program shall provide for a review of the Allowance by the
Board at least once each calendar quarter. 
Any deficiency in the Allowance shall be remedied in the quarter it is
discovered, prior to the filing of the Consolidated Reports of Condition and
Income, by additional provisions from earnings. 
Written documentation shall be maintained indicating the factors
considered and conclusions reached by the Board in determining the adequacy of
the Allowance.

 

ARTICLE XII

 

LOAN PORTFOLIO MANAGEMENT

 

(1)   Within sixty (60) days, the Board shall develop, implement, and
thereafter ensure Bank adherence to an updated written program to improve the
Bank’s loan portfolio management.  The
program shall include, but not be limited to:

 

(a)                                  a pricing
policy that takes into consideration costs, general overhead, and probable loan
losses, while providing for a reasonable margin of profit;

 

(b)                                 guidelines for
loans to insiders, including a statement that such loans will not be granted on
terms more favorable than those offered to similar outside borrowers;

 

(c)                                  guidelines and
limitations on concentrations of credit;

 

(d)                                 measures to
correct the deficiencies in the Bank’s lending procedures noted in any ROE;

 

(e)                                  procedures to
strengthen credit underwriting, particularly in the commercial real estate
(CRE)  portfolio;

 

(f)                                    an action plan
to control CRE growth;

 

(g)                                 procedures to
ensure satisfactory and perfected collateral documentation;

 

 

(h)                                 procedures to
ensure that extensions of credit are granted, by renewal or otherwise, to any
borrower only after obtaining and analyzing current and satisfactory credit
information;

 

(i)                                     procedures to
ensure conformance with loan approval requirements;

 

(j)                                     a system to
track and analyze exceptions;

 

(k)                                  procedures to
ensure conformance with Call Report instructions;

 

(l)                                     procedures to
track and analyze concentrations of credit, significant economic factors, and
general conditions and their impact on the credit quality of the Bank’s loan
and lease portfolios;

 

(m)                               procedures to
ensure the re-appraisal of property that defines the criteria for when a new or
adjusted appraisal is required based upon changes in market conditions or
original project plans; and

 

(n)                                 a comprehensive
loan review process that quantifies the overall level of credit risk and
assesses the quality of credit risk management.

 

(2)   Upon completion, a copy of the program shall be forwarded to the
Assistant Deputy Comptroller.

 

(3)   Within sixty (60) days, the Board shall develop, implement, and
thereafter ensure Bank adherence to updated systems which provide for effective
monitoring of:

 

(a)                                  early problem
loan identification to assure the timely identification and rating of loans and
leases based on lending officer submissions;

 

(b)                                 statistical
records that will serve as a basis for identifying sources of problem loans and
leases by industry, size, collateral, division, group, indirect dealer, and
individual lending officer;

 

 

(c)                                  previously
charged-off assets and their recovery potential;

 

(d)                                 compliance with
the Bank’s lending policies and laws, rules, and regulations pertaining to the
Bank’s lending function;

 

(e)                                  adequacy of
credit and collateral documentation; and

 

(f)                                    concentrations
of credit.

 

(4)   Within sixty (60) days, management will provide the Board with
written reports on a monthly basis, including, at a minimum, the following
information:

 

(a)                                  the
identification, type, rating, and amount of problem loans and leases;

 

(b)                                 the
identification and amount of delinquent loans and leases;

 

(c)                                  credit and
collateral documentation exceptions;

 

(d)                                 the identification
and status of credit related violations of law, rule or regulation;

 

(e)                                  the identity of
the loan officer who originated each loan reported in accordance with
subparagraphs (a) through (d) of this Article and paragraph;

 

(f)                                    an analysis of
concentrations of credit, significant economic factors, and general conditions
and their impact on the credit quality of the Bank’s loan and lease portfolios;

 

(g)                                 the
identification and amount of loans and leases to executive officers, directors,
principal shareholders (and their related interests) of the Bank; and

 

 

(h)                                 the
identification of loans and leases not in conformance with the Bank’s lending
and leasing policies, and exceptions to the Bank’s lending and leasing
policies.

 

(5)   The Board shall ensure that the Bank has processes, personnel, and
control systems to ensure implementation of and adherence to the program and
systems developed pursuant to this Article.

 

ARTICLE XIII

 

CONCENTRATIONS OF CREDIT

 

(1)           Within sixty (60) days, the Board shall adopt, implement,
and thereafter ensure Bank adherence to a written asset diversification program
consistent with OCC Banking Circular 255 and OCC Bulletin 2006-46, “Concentrations
in Commercial Real Estate Lending, Sound Risk Management Practices.”

 

(2)           The program shall include, but not necessarily be limited
to, the following:

 

(a)                                  a review of the
balance sheet to identify any concentrations of credit;

 

(b)                                 a written
analysis of any concentration of credit identified above in order to identify
and assess the inherent credit, liquidity, and interest rate risk;

 

(c)                                  policies and
procedures to control and monitor concentrations of credit;

 

(d)                                 an action plan
approved by the Board to reduce the risk of any concentration deemed imprudent
in the above analysis;

 

(e)                                  a process to
monitor the performance of large CRE projects against projected absorption
rates;

 

 

(f)                                    a process to
ensure portfolio level stress tests or sensitivity analysis is performed to
quantify the impact of changing economic conditions on asset quality, earnings,
and capital;

 

(g)                                 a process to
establish, monitor and adjust CRE risk exposure limits and appropriate
sub-limits;

 

(h)                                 a process to
establish, monitor, and adjust insider risk exposure limits; and

 

(i)                                     establishment
of Board reports that:

 

(i)                                           aggregate
insider borrowings and show the amount supported by cash collateral (as
appropriately excluded in concurrence with regulations) for each insider; and

 

(ii)                                        track
individual aggregate insider exposure for compliance with Regulation O and the
Legal Lending Limit.

 

(3)           For purposes of this Article, a concentration of credit is
as defined in the “Loan Portfolio Management” booklet of the Comptroller’s
Handbook.

 

(4)           The Board shall ensure that future concentrations of
credit are subjected to the analysis required by subparagraph (b) of
paragraph (2) of this Article and that the analysis demonstrates that
the concentration will not subject the Bank to undue credit or interest rate
risk.

 

(5)           The Board shall forward a copy of any analysis performed
on existing or potential concentrations of credit to the Assistant Deputy
Comptroller immediately following the review.

 

(6)           The Board shall ensure that the Bank
has processes, personnel, and control systems to ensure implementation of and
adherence to the program developed pursuant to this Article.

 

 

ARTICLE XIV

 

CREDIT AND COLLATERAL EXCEPTIONS

 

(1)   Within ninety (90) days the Board shall obtain current and
satisfactory credit information on all loans lacking such information,
including those listed in the ROE, in any subsequent Report of Examination, in
any internal or external loan review, or in any listings of loans lacking such
information provided to management by the National Bank Examiners at the
conclusion of an examination.

 

(2)   Within sixty (60) days the Board shall ensure proper collateral
documentation is maintained on all loans and correct each collateral exception
listed in the ROE, in any subsequent Report of Examination, in any internal or
external loan review, or in any listings of loans lacking such information
provided to management by the National Bank Examiners at the conclusion of an
examination.

 

(3)   Effective immediately, the Bank may grant, extend, renew, alter or
restructure any loan or other extension of credit only after:

 

(a)                                  documenting the
specific reason or purpose for the extension of credit;

 

(b)                                 identifying the
expected source of repayment in writing;

 

(c)                                  structuring the
repayment terms to coincide with the expected source of repayment;

 

(d)                                 obtaining and
analyzing current and satisfactory credit information, including cash flow analysis,
where loans are to be repaid from operations;

 

(i)                                           Failure to
obtain the information in (3)(d) shall require a majority of the full
Board (or a delegated committee thereof) to certify in writing the specific
reasons why obtaining and analyzing the 

 

 

information in (3)(d) would be detrimental to
the best interests of the Bank.

 

(ii)                                  A copy of the
Board certification shall be maintained in the credit file of the affected
borrower(s).  The certification will be
reviewed by this Office in subsequent examinations of the Bank; and

 

(e)                                  documenting,
with adequate supporting material, the value of collateral and properly
perfecting the Bank’s lien on it where applicable.

 

ARTICLE XV

 

CONFLICT
OF INTEREST POLICY

 

(1)           Within ninety (90) days, the Board shall adopt, implement,
and thereafter ensure Bank adherence to an updated written, comprehensive
conflict of interest policy applicable to the Bank’s and the Bank holding
company’s directors, principal shareholders, executive officers, affiliates,
and employees (Insiders) and related interests of such Insiders. The policy, in
addition to defining a conflict of interest, shall address:

 

(a)                                  avoidance of
conflicts of interest and breaches of fiduciary duty, and the appearance of
conflicts of interest;

 

(b)                                 involvement in
the loan approval process of Insiders who may benefit directly or indirectly
from the decision to grant credit;

 

(c)                                  disclosure of
actual and potential conflicts of interest to the Board, and periodic
disclosure of “related interests” as defined by 12 C.F.R. Part 215;

 

 

(d)                                 requirements
for arms-length dealing in any transactions by Insiders, or their related
organizations, involving the Bank’s sale, purchase, or rental of property and
services;

 

(e)                                  disclosure of
any Insider’s material interest in the business of a borrower, an applicant, or
other customer of the Bank; and

 

(f)                                    restrictions on
and disclosure of receipt of anything of value by Insiders, directly or
indirectly, from borrowers, loan applicants, other customers, or suppliers of
the Bank.

 

(2)           Upon adoption, a copy of this conflict of interest policy
shall be forwarded to the Assistant Deputy Comptroller for review.

 

(3)           The Board shall ensure that the Bank has processes,
personnel, and control systems to ensure implementation of and adherence to the
policy developed pursuant to this Article.

 

ARTICLE XVI

 

VIOLATIONS OF LAW - LENDING LIMITS

 

(1)   The Bank shall not lend money or otherwise extend credit to any
borrower in violation of the Bank’s legal lending limit at 12 U.S.C. § 84
and the limits of
12 U.S.C. §§ 375a and 375b.

 

(2)   Within thirty (30) days, the Board shall cause all loans or other
extensions of credit which exceed the Bank’s legal lending limit at
12 U.S.C. § 84 and the
limits of 12 U.S.C. §§ 375a and 375b to be reduced to conforming
amounts.

 

 

(3)   Within thirty (30) days, the Board shall establish, implement, and
thereafter ensure Bank adherence to written procedures to prevent future
violations of 12 U.S.C. §§ 84, 375a and 375b.

 

(4)   The Board shall ensure that the Bank has policies, processes,
personnel, and control systems to ensure implementation of and adherence to the
procedures developed pursuant to this Article.

 

ARTICLE XVII

 

CLOSING

 

(1)   Although the Board has agreed to submit certain programs and
reports to the Assistant Deputy Comptroller for review or prior written
determination of no supervisory objection, the Board has the ultimate
responsibility for proper and sound management of the Bank.

 

(2)   It is expressly and clearly understood that if, at any time, the
Comptroller deems it appropriate in fulfilling the responsibilities placed upon
him by the several laws of the United States of America to undertake any action
affecting the Bank, nothing in this Agreement shall in any way inhibit, estop,
bar, or otherwise prevent the Comptroller from so doing.

 

(3)   Any time limitations imposed by this Agreement shall begin to run
from the effective date of this Agreement. 
Such time requirements may be extended in writing by the Assistant
Deputy Comptroller for good cause upon written application by the Board.

 

(4)   The provisions of this Agreement shall be effective upon execution
by the parties hereto and its provisions shall continue in full force and
effect unless or until such provisions are amended in writing by mutual consent
of the parties to the Agreement or excepted, waived, or terminated in writing
by the Comptroller.

 

 

(5)   In each instance in this Agreement in which the Board is required
to ensure adherence to, and undertake to perform certain obligations of the
Bank, it is intended to mean that the Board shall:

 

(a)                                  authorize and
adopt such actions on behalf of the Bank as may be necessary for the Bank to
perform its obligations and undertakings under the terms of this Agreement;

 

(b)                                 require the
timely reporting by Bank management of such actions directed by the Board to be
taken under the terms of this Agreement;

 

(c)                                  follow-up on
any non-compliance with such actions in a timely and appropriate manner; and

 

(d)                                 require
corrective action be taken in a timely manner of any non-compliance with such
actions.

 

(6)   This Agreement is intended to be, and shall be construed to be, a
supervisory “written agreement entered into with the agency” as contemplated by
12 U.S.C. § 1818(b)(1), and expressly does not form, and may not be construed
to form, a contract binding on the Comptroller or the United States.  Notwithstanding the absence of mutuality of
obligation, or of consideration, or of a contract, the Comptroller may enforce
any of the commitments or obligations herein undertaken by the Bank under his
supervisory powers, including 12 U.S.C. § 1818(b)(1), and not as a matter
of contract law.  The Bank expressly
acknowledges that neither the Bank nor the Comptroller has any intention to
enter into a contract.  The Bank also
expressly acknowledges that no officer or employee of the Office of the
Comptroller of the Currency has statutory or other authority to bind the United
States, the U.S. Treasury Department, the Comptroller, or any other federal
bank regulatory agency or entity, or any officer or employee of 

 

 

any of those entities to a contract affecting the
Comptroller’s exercise of his supervisory responsibilities.  The terms of this Agreement, including this
paragraph, are not subject to amendment or modification by any extraneous
expression, prior agreements or prior arrangements between the parties, whether
oral or written.

 

IN TESTIMONY WHEREOF, the undersigned, authorized by
the Comptroller, has hereunto set his hand on behalf of the Comptroller.

 

 

	
  /s/ Kent D. Stone

  	
   

  	
  01/20/2010

  
	
  Kent
  D. Stone

  	
   

  	
  Date

  
	
  Assistant
  Deputy Comptroller

  	
   

  	
   

  
	
  Carolinas
  Field Office

  	
   

  	
   

  

 

IN TESTIMONY WHEREOF, the undersigned, as the duly
elected and acting Board of Directors of the Bank, have hereunto set their
hands on behalf of the Bank.

 

 

	
  /s/
  Robert M. Austell

  	
   

  	
  01/20/2010

  
	
  Robert
  M. Austell

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  
	
  /s/
  John W. Burnett

  	
   

  	
  01/20/2010

  
	
  John
  W. Burnett

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  
	
  /s/
  Billy J. Coleman

  	
   

  	
  01/20/2010

  
	
  Billy
  J. Coleman

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  
	
  /s/
  Jose De Ocampo

  	
   

  	
  01/20/2010

  
	
  Jose
  De Ocampo

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  
	
  /s/
  H. Neel Hipp, Jr.

  	
   

  	
  01/20/2010

  
	
  H.
  Neel Hipp, Jr.

  	
   

  	
  Date

  

 

 

	
  /s/
  James D. King

  	
   

  	
  01/20/2010

  
	
  James
  D. King

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  
	
  /s/
  William R. Mathis

  	
   

  	
  01/20/2010

  
	
  William
  R. Mathis

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  
	
  /s/
  Augustus A. McLean

  	
   

  	
  01/20/2010

  
	
  Augustus
  A. McLean

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  
	
  /s/
  Lawrence R. Miller

  	
   

  	
  01/20/2010

  
	
  Lawrence
  R. Miller

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  
	
  /s/
  Sudhirkumar C. Patel

  	
   

  	
  01/20/2010

  
	
  Sudhirkumar
  C. Patel

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Hasmukh
  P. Rama

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  
	
  /s/
  Donald H. Rex, Jr.

  	
   

  	
  01/20/2010

  
	
  Donald
  H. Rex, Jr.

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  
	
  /s/
  Charles D. Walters

  	
   

  	
  01/20/2010

  
	
  Charles
  D. Walters

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  
	
  /s/
  Roger W. Walters

  	
   

  	
  Date

  
	
  Roger
  W. Walters

  	
   

  	
  01/20/2010

  
	
   

  	
   

  	
   

  
	
  /s/
  Vivian A. Wong

  	
   

  	
  Date

  
	
  Vivian
  A. Wong

  	
   

  	
  01/20/2010Exhibit 10.5

 

 

CONFIDENTIALITY AGREEMENT - COWEN REPRESENTING
SELLER

 

December 11,
2009

 

Steven E. Hartman

Vice President

Levine Leichtman Capital
Partners, Inc.

335 North Maple Drive, Suite 130

Beverly Hills, California
90210

 

Dear Mr. Hartman,:

 

Re:          Confidential Information and
Evaluation Material

 

Cowen and Company, LLC (“Cowen”),
is acting on behalf of  Rubio’s Restaurants, Inc.  (the “Company”) to explore a possible strategic transaction
involving the Company (the “Transaction”). 
In that connection, you have requested financial and other information
concerning the business and affairs of the Company.  In consideration of furnishing you and your
directors, officers, employees, agents, affiliates, advisors and potential
financing sources (including such financing sources’ directors, officers,
employees, agents and advisors) (collectively, “Representatives”) such
financial and other information, you agree to treat, and to direct your
Representatives to treat, such information furnished to you by or on behalf of
the Company or its Representatives and all analyses, compilations, studies and
other materials containing or reflecting, in whole or in part, any such
information (collectively, “Evaluation Material”), as follows:

 

1.                                     You recognize and acknowledge the
competitive value and confidential nature of the Evaluation Material and the
damage that could result to the Company if any information contained therein is
disclosed to any third party.

 

2.                                     The term “Evaluation Material” does not
include any information which (a) is already lawfully in your possession
or known to you, provided that the source of such information is not known by
you to be subject to another confidentiality agreement or other obligation of
confidentiality with the Company or another party with respect to such
information, (b) has been made public other than by acts by you or your
Representatives in violation of this agreement or other obligation of
confidentiality, (c) becomes available to you on a nonconfidential basis
from a source that to your knowledge is entitled to disclose it on a
nonconfidential basis, or (d) is independently developed by you without
reference to other Evaluation Material.

 

3.                                       You agree that until the third
anniversary of the date hereof the Evaluation Material will be kept
confidential and will be used solely for the purpose of evaluating the
Transaction or to pursue any transaction 

 

 

or
course of action permitted by Section 10 below (when permitted to do so
under Section 10).  Until the third
anniversary of the date hereof, you agree not to disclose any of the Evaluation
Material to any third party, in any manner whatsoever, in whole or in part,
without the prior written consent of the Company, except that you may disclose
the Evaluation Material or portions thereof to your Representatives who need to
know such information (and who agree to use such information solely) for the
purpose of evaluating the Transaction, which Representatives shall be informed
of the confidential nature of the Evaluation Material and shall agree with you
to be bound by the confidentiality provisions of this agreement and not to
disclose any of the Evaluation Material to any other party.  You shall be responsible for any breach of
this agreement by any of your Representatives.

 

4.                                     Except to the extent required by law, the
Company agrees that until the third anniversary of the date hereof any
documents and other information (including without limitation any investment
proposal letters and term sheets) that you provide to the Company or to any of
its Representatives in connection with the Transaction (the “Transaction
Material”) will be kept confidential and will be used solely for the purpose of
evaluating the Transaction.  Except to
the extent required by law, until the third anniversary of the date hereof, the
Company agrees not to disclose any of the Transaction Material to any third
party, in any manner whatsoever, in whole or in part, without your prior
written consent, except that the Company may disclose the Transaction Material
or portions thereof to its Representatives who need to know such information
(and who agree to use such information solely) for the purpose of evaluating
the Transaction, which Representatives shall be informed of the confidential
nature of the Transaction Material and shall agree with the Company to be bound
by the confidentiality provisions of this agreement and not to disclose any of
the Transaction Material to any other party. 
The Company shall be responsible for any breach of this agreement by any
of its Representatives.

 

5.                                     In the event that either party hereto or
its Representatives are requested in any proceeding or pursuant to any law or
any rule or regulation of any governmental agency or authority to disclose
any Evaluation Material or Transaction Material, unless prohibited by
applicable law such party will give the other party hereto prompt notice of
such request so that such other party may seek an appropriate protective order
or other appropriate remedy and/or waive compliance with the provisions of this
agreement (and if such other party seeks such an order, the first party will
provide such cooperation as such other party shall reasonably request).  If, in the absence of a protective order, the
first party or its Representatives are nonetheless legally compelled to
disclose such Evaluation Material, such first party or its Representatives, as
the case may be, will furnish only that portion of the Evaluation Material or
Transaction Material which it is advised by

 

2

 

its
counsel is legally required, in which case it will not be subject to liability
hereunder; provided, however, that it gives such other party written notice of
the information to be disclosed as far in advance of its disclosure as is practicable
and uses its commercially reasonable efforts to obtain assurances that
confidential treatment will be accorded to such information.

 

6.                                     Without the prior written consent of the
Company, neither you nor any of your Representatives will disclose to any
person the fact that the Evaluation Material has been made available to you,
that discussions or negotiations are taking place concerning a Transaction
involving the Company or any of the terms, conditions or other facts with
respect to such Transaction, including the status thereof or the subject matter
of this agreement, except that you may make any such disclosure which your
counsel advises you is legally required, provided that you consult with the
Company or its advisors prior to any such required disclosure.

 

7.                                     You hereby acknowledge that you are
aware, and that you will advise your Representatives who are informed as to the
matters which are the subject of this letter, (i) that the United States
securities laws prohibit any person who has received from an issuer material,
non-public information concerning the matters which are the subject of this
letter from purchasing or selling securities of such issuer or from
communicating such information to any other person under circumstances in which
it is reasonably foreseeable that such person is likely to purchase or sell
securities and (ii) that you are familiar with the Securities and Exchange
Act of 1934, as amended (the “Exchange Act”), and the rules and
regulations promulgated thereunder and agree that you will neither use nor
cause any party to use, any Evaluation Material in contravention of the
Exchange Act or such rules and regulations including Rules 10b-5 and
14e-3.

 

8.                                     You hereby represent that, as of the date
hereof, you and your affiliates and associates (as such terms are defined in Rule 12b-2
under Exchange Act, beneficially own in the aggregate less than 5% of the
outstanding voting securities of the Company. 
For the avoidance of doubt, none of Alex Meruelo, Meruelo Enterprises, Inc.,
the Alex Meruelo Living Trust, Luis Armona or any of their respective related
entities or affiliates shall be considered your affiliate, associate or
Representative for any purpose under this agreement.

 

9.                                     Except as contemplated by the
Transaction, unless specifically invited in writing by the Company, for a
period of twelve months from the date hereof, you and your affiliates, as
defined in Rule 12b-2 under the Exchange Act, will not (and you and they
will not assist or encourage others to), directly or indirectly:

 

(a)          acquire or agree, offer, seek or propose
to acquire, or cause to be acquired, ownership (including, but not limited to,
beneficial

 

3

 

ownership
as defined in Rule 13d-3 under the Exchange Act) of any of the Company’s
assets or businesses, or any bank debt, claims or other obligations of the
Company, or any securities issued by the Company, or any rights or options to
acquire such ownership (other than those currently owned) (including from a third
party); or

 

(b)         seek or propose to influence or control
the management or policies of the Company or to obtain representation on the
Company’s Board of Directors, or solicit, or participate in the solicitation
of, any proxies or consents with respect to any securities of the Company, or
make any public announcement with respect to any of the foregoing or request
permission to do any of the foregoing; or

 

(c)          enter into any discussions, negotiations,
arrangements or understandings with any third party with respect to any of the
foregoing; or

 

(d)         seek or request permission or participate
in any effort to do any of the foregoing or make or seek permission to make any
public announcement with respect to the foregoing.

 

10.                               Notwithstanding
paragraph 9, you or your affiliates may make a proposal to the Board of
Directors of the Company with respect to any transaction described in paragraph
9(a) and may take the actions with respect to such transaction as
described in paragraph 9(c), if the Company shall have entered into a
definitive agreement providing for, or, in the case of clause (ii) below, its Board of
Directors shall have recommended in favor of, (i) any direct or indirect
acquisition or purchase by any person or group of a majority of the common
stock or assets of the Company, (ii) any tender offer or exchange offer
that if consummated would result in any person or group acquiring a majority of
the common stock of the Company or (iii) any merger, consolidation, share
exchange or other business combination involving the Company which, if
consummated, would result in the shareholders of the Company immediately prior
to the consummation of such transaction ceasing to own at least a majority of
the equity interests in the surviving entity (or any direct or indirect parent
of such surviving entity).

 

11.                               In consideration of your covenants
herein, the Company agrees to provide to you such Evaluation Material as you
reasonably request during the four months following the date of this letter or
such longer period as you and the Company continue discussions regarding a
Transaction.  You agree that except as
and to the extent provided in a definitive written agreement with you with
respect to the Transaction, neither the Company nor you will be under any legal
obligation of any

 

4

 

kind
whatsoever with respect to a Transaction by virtue of this or any written or
oral expression with respect to a Transaction by any of the Company’s or your
directors, officers, employees, agents, advisors or other representatives.  All inquiries, requests for information and
other communications with the Company shall be made through Owen Hart or
another designated individual at Cowen.

 

12.                               Upon the Company’s request, you will
promptly return to the Company all copies of all Evaluation Material furnished
to you or your Representatives by or on behalf of the Company and will destroy
all analyses, compilations, summaries, studies and other material prepared by
you or your Representatives based in whole or in part on, or otherwise
containing or reflecting any of, the Evaluation Material; provided, however,
that notwithstanding the foregoing, you and your Representatives may each
retain a copy of all Evaluation Material and all such analyses, compilations,
summaries, studies and other material in separate files solely to comply with
your respective document retention policies. 
You hereby agree to promptly certify in a letter to the Company that the
return required hereunder and such destruction have been accomplished.

 

13.                               You understand that except as and to the
extent provided in a definitive written agreement with you with respect to the
Transaction, when, as and if it is executed and delivered (and subject to the
restrictions and conditions specified therein), neither the Company nor any of
its Representatives (including Cowen) makes any representation or warranty,
express or implied, as to the accuracy or completeness of the Evaluation
Material and you agree that neither the Company nor any of its Representatives
shall have any liability to you or any other party resulting from any use or
reliance on the Evaluation Material.

 

14.                               You agree that until the earlier of (a) the
consummation of a Transaction between the Company and you or (b) one year
from the date hereof, neither you nor any of your affiliates will, without the
prior written consent of the Company, (x) solicit to employ any person who
is at the time an employee of the Company (provided that a general solicitation
made through any publicly distributed media or a general solicitation conducted
through a search firm that is not specifically instructed to solicit employees
of the Company shall not constitute a violation of this Section 14), or (y) initiate
or maintain contact (except in the ordinary course of business) with any
officer, director, employee, supplier, distributor, broker or customer of the
Company for the purposes of obtaining information for use in evaluating a
Transaction.

 

15.                               The Company acknowledges and agrees that
you may be invested in, may invest in or consider investments in companies that
compete either directly or indirectly with the Company and that the execution
of this letter shall in no way be construed to prohibit or restrict your
ability to maintain, make or consider such investments.

 

5

 

16.                               You and the Company each agree that money
damages would not be a sufficient remedy for any breach of this agreement by
you or your Representatives or by the Company or its Representatives, and that,
in addition to all other remedies, you and the Company shall be entitled to
specific performance and injunctive or other equitable relief as a remedy for
any such breach, and you and the Company each further agree to waive, and to use
commercially reasonable efforts to cause your respective Representatives to
waive, any requirement for the securing or posting of any bond in connection
with any such remedy.

 

17.                               No failure or delay by you, the Company
or any of your or its  Representatives in
exercising any right, power or privilege under this agreement shall operate as
a waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise of any right, power or privilege hereunder.  No provision of this agreement may be waived,
amended or modified, in whole or in part, nor any consent given, except by way
of a writing signed by a duly authorized representative of each of you and the
Company, which writing specifically refers to this agreement and the provision
so amended or modified or for which such waiver or consent is given.  In the event that any provision of this
agreement shall be deemed invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions of the agreement shall
not in any way be affected or impaired thereby. 
This agreement is not intended to be a letter of intent or agreement in
principle, or otherwise commit or bind the Company or you, to negotiate the terms
of the proposed Transaction or to consummate the Transaction contemplated
herein.

 

18.                               This agreement shall be governed by and
construed in accordance with the laws of the State of California, applicable to
contracts made and to be performed therein, without giving effect to its
conflicts of laws, principles or rules. 
Each party hereto consents to personal jurisdiction in California and
voluntarily submits to the jurisdiction of the courts of California in any
action or proceeding with respect to this agreement, including the federal
district courts located in California. 
You agree that you may be served with process at your address set forth
on the first page hereof.  The
parties waive the right to a trial by jury in any dispute arising under this
agreement.

 

19.                               This agreement and all obligations
hereunder shall terminate on the third anniversary of the date hereof (unless
earlier terminated pursuant to the terms of this agreement).

 

6

 

Please acknowledge your
agreement to the foregoing by countersigning this letter in the place provided
below and returning it to Cowen.

 

 

	
   

  	
   

  	
  Very truly
  yours,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Rubio’s
  Restaurants, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: COWEN AND
  COMPANY, LLC

  
	
   

  	
   

  	
  As Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Loren
  Pannier

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Loren Pannier

  
	
   

  	
   

  	
  Chairman of the
  Special Committee

  
	
   

  	
   

  	
   

  
	
  Accepted and
  Agreed to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Levine Leichtman
  Capital Partners, Inc.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Steven E.
  Hartman

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Steven E.
  Hartman

  	
   

  	
   

  
	
  Vice President

  	
   

  	
   

  

 

7

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