Document:

ex4-3.htm

    
       

      WARRANT
TO PURCHASE PREFERRED STOCK

       

      THE
SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION
STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR
SUCH LAWS. THIS INSTRUMENT IS ISSUED SUBJECT TO THE RESTRICTIONS ON TRANSFER AND
OTHER PROVISIONS OF A SECURITIES PURCHASE AGREEMENT BETWEEN THE ISSUER OF THESE
SECURITIES AND THE INVESTOR REFERRED TO THEREIN, A COPY OF WHICH IS ON FILE WITH
THE ISSUER. THE SECURITIES REPRESENTED BY THIS INSTRUMENT MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH SAID AGREEMENT. ANY SALE OR
OTHER TRANSFER NOT IN COMPLIANCE WITH SAID AGREEMENT WILL BE VOID.

       

      WARRANT

      to
purchase

      385.00385

      Shares
of Preferred Stock

      of
Valley Commerce Bancorp

       

      Issue
Date: January 30, 2009

       

      1.           Definitions.  Unless
the context otherwise requires, when used herein the following terms shall have
the meanings indicated.

       

      “Board of Directors” means the
board of directors of the Company, including any duly authorized committee
thereof.

       

      “business day” means any day
except Saturday, Sunday and any day on which banking institutions in the State
of New York generally are authorized or required by law or other governmental
actions to close.

       

      “Charter” means, with respect
to any Person, its certificate or articles of incorporation, articles of
association, or similar organizational document.

       

      “Company” means the Person
whose name, corporate or other organizational form and jurisdiction of
organization is set forth in Item 1 of Schedule A hereto.

       

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

       

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      “Exercise Price” means the
amount set forth in Item 2 of Schedule A hereto.

       

      “Expiration Time” has the
meaning set forth in Section 3.

       

      “Issue Date” means the date
set forth in Item 3 of Schedule A hereto.

       

      “Liquidation Amount” means the
amount set forth in Item 4 of Schedule A hereto.

       

      “Original Warrantholder” means
the United States Department of the Treasury. Any actions specified to be taken
by the Original Warrantholder hereunder may only be taken by such Person and not
by any other Warrantholder.

       

      “Person” has the meaning given
to it in Section 3(a)(9) of the Exchange Act and as used in Sections 13(d)(3)
and 14(d)(2) of the Exchange Act.

       

      “Preferred Stock” means the
series of perpetual preferred stock set forth in Item 5 of Schedule A
hereto.

       

      “Purchase Agreement” means the
Securities Purchase Agreement – Standard Terms incorporated into the Letter
Agreement, dated as of the date set forth in Item 6 of Schedule A hereto, as
amended from time to time, between the Company and the United States Department
of the Treasury (the “Letter
Agreement”), including all annexes and schedules thereto.

       

      “Regulatory Approvals” with
respect to the Warrantholder, means, to the extent applicable and required to
permit the Warrantholder to exercise this Warrant for shares of Preferred Stock
and to own such Preferred Stock without the Warrantholder being in violation of
applicable law, rule or regulation, the receipt of any necessary approvals and
authorizations of, filings and registrations with, notifications to, or
expiration or termination of any applicable waiting period under, the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules
and regulations thereunder.

       

      “SEC” means the U.S.
Securities and Exchange Commission.

       

      “Securities Act” means the
Securities Act of 1933, as amended, or any successor statute, and the rules and
regulations promulgated thereunder.

       

      “Shares” has the meaning set
forth in Section 2.

       

      “Warrantholder” has the
meaning set forth in Section 2.

       

      “Warrant” means this Warrant,
issued pursuant to the Purchase Agreement.

       

      2.           Number of Shares; Exercise
Price.  This certifies that, for value received, the United
States Department of the Treasury or its permitted assigns (the “Warrantholder”) is entitled,
upon the terms and subject to the conditions hereinafter set forth, to acquire
from the Company, in whole or in part, after the receipt of all applicable
Regulatory Approvals, if any, up to an aggregate of the number of fully paid and
nonassessable shares of Preferred Stock set forth 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

        in Item 7
of Schedule A hereto (the “Shares”), at a purchase price
per share of Preferred Stock equal to the Exercise Price.

      

       

      3.           Exercise of Warrant;
Term.  Subject to Section 2, to the extent permitted by
applicable laws and regulations, the right to purchase the Shares represented by
this Warrant is exercisable, in whole or in part by the Warrantholder, at any
time or from time to time after the execution and delivery of this Warrant by
the Company on the date hereof, but in no event later than 5:00 p.m., New York
City time on the tenth anniversary of the Issue Date (the “Expiration Time”), by (A) the
surrender of this Warrant and Notice of Exercise annexed hereto, duly completed
and executed on behalf of the Warrantholder, at the principal executive office
of the Company located at the address set forth in Item 8 of Schedule A hereto
(or such other office or agency of the Company in the United States as it may
designate by notice in writing to the Warrantholder at the address of the
Warrantholder appearing on the books of the Company), and (B) payment of the
Exercise Price for the Shares thereby purchased, by having the Company withhold,
from the shares of Preferred Stock that would otherwise be delivered to the
Warrantholder upon such exercise, shares of Preferred Stock issuable upon
exercise of the Warrant with an aggregate Liquidation Amount equal in value to
the aggregate Exercise Price as to which this Warrant is so
exercised.

       

      If the
Warrantholder does not exercise this Warrant in its entirety, the Warrantholder
will be entitled to receive from the Company within a reasonable time, and in
any event not exceeding three business days, a new warrant in substantially
identical form for the purchase of that number of Shares equal to the difference
between the number of Shares subject to this Warrant and the number of Shares as
to which this Warrant is so exercised. Notwithstanding anything in this Warrant
to the contrary, the Warrantholder hereby acknowledges and agrees that its
exercise of this Warrant for Shares is subject to the condition that the
Warrantholder will have first received any applicable Regulatory
Approvals.

       

      4.           Issuance of Shares;
Authorization.  Certificates for Shares issued upon exercise of
this Warrant will be issued in such name or names as the Warrantholder may
designate and will be delivered to such named Person or Persons within a
reasonable time, not to exceed three business days after the date on which this
Warrant has been duly exercised in accordance with the terms of this Warrant.
The Company hereby represents and warrants that any Shares issued upon the
exercise of this Warrant in accordance with the provisions of Section 3 will be
duly and validly authorized and issued, fully paid and nonassessable and free
from all taxes, liens and charges (other than liens or charges created by the
Warrantholder, income and franchise taxes incurred in connection with the
exercise of the Warrant or taxes in respect of any transfer occurring
contemporaneously therewith). The Company agrees that the Shares so issued will
be deemed to have been issued to the Warrantholder as of the close of business
on the date on which this Warrant and payment of the Exercise Price are
delivered to the Company in accordance with the terms of this Warrant,
notwithstanding that the stock transfer books of the Company may then be closed
or certificates representing such Shares may not be actually delivered on such
date. The Company will at all times reserve and keep available, out of its
authorized but unissued preferred stock, solely for the purpose of providing for
the exercise of this Warrant, the aggregate number of shares of Preferred Stock
then issuable upon exercise of this Warrant at any time. The Company will use
reasonable best efforts to ensure that the Shares may be issued 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

        without
violation of any applicable law or regulation or of any requirement of any
securities exchange on which the Shares are listed or traded.

      

       

      5.           No Rights as Stockholders;
Transfer Books.  This Warrant does not entitle the
Warrantholder to any voting rights or other rights as a stockholder of the
Company prior to the date of exercise hereof. The Company will at no time close
its transfer books against transfer of this Warrant in any manner which
interferes with the timely exercise of this Warrant.

       

      6.           Charges, Taxes and
Expenses.  Issuance of certificates for Shares to the
Warrantholder upon the exercise of this Warrant shall be made without charge to
the Warrantholder for any issue or transfer tax or other incidental expense in
respect of the issuance of such certificates, all of which taxes and expenses
shall be paid by the Company.

       

      7.           Transfer/Assignment.

       

      (A)           Subject
to compliance with clause (B) of this Section 7, this Warrant and all rights
hereunder are transferable, in whole or in part, upon the books of the Company
by the registered holder hereof in person or by duly authorized attorney, and a
new warrant shall be made and delivered by the Company, of the same tenor and
date as this Warrant but registered in the name of one or more transferees, upon
surrender of this Warrant, duly endorsed, to the office or agency of the Company
described in Section 3. All expenses (other than stock transfer taxes) and other
charges payable in connection with the preparation, execution and delivery of
the new warrants pursuant to this Section 7 shall be paid by the
Company.

       

      (B)           The
transfer of the Warrant and the Shares issued upon exercise of the Warrant are
subject to the restrictions set forth in Section 4.4 of the Purchase Agreement.
If and for so long as required by the Purchase Agreement, this Warrant shall
contain the legends as set forth in Section 4.2(a) of the Purchase
Agreement.

       

      8.           Exchange and Registry of
Warrant.  This Warrant is exchangeable, upon the surrender
hereof by the Warrantholder to the Company, for a new warrant or warrants of
like tenor and representing the right to purchase the same aggregate number of
Shares. The Company shall maintain a registry showing the name and address of
the Warrantholder as the registered holder of this Warrant. This Warrant may be
surrendered for exchange or exercise in accordance with its terms, at the office
of the Company, and the Company shall be entitled to rely in all respects, prior
to written notice to the contrary, upon such registry.

       

      9.           Loss, Theft, Destruction or
Mutilation of Warrant.  Upon receipt by the Company of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of
this Warrant, and in the case of any such loss, theft or destruction, upon
receipt of a bond, indemnity or security reasonably satisfactory to the Company,
or, in the case of any such mutilation, upon surrender and cancellation of this
Warrant, the Company shall make and deliver, in lieu of such lost, stolen,
destroyed or mutilated Warrant, a new Warrant of like tenor and representing the
right to purchase the same aggregate number of Shares as provided for in such
lost, stolen, destroyed or mutilated Warrant.

       

      10.           Saturdays, Sundays,
Holidays, etc.  If the last or appointed day for the taking of
any action or the expiration of any right required or granted herein shall not
be a business day, 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

        then such
action may be taken or such right may be exercised on the next succeeding day
that is a business day.

      

       

      11.           Rule 144
Information.  The Company covenants that it will use its
reasonable best efforts to timely file all reports and other documents required
to be filed by it under the Securities Act and the Exchange Act and the rules
and regulations promulgated by the SEC thereunder (or, if the Company is not
required to file such reports, it will, upon the request of any Warrantholder,
make publicly available such information as necessary to permit sales pursuant
to Rule 144 under the Securities Act), and it will use reasonable best efforts
to take such further action as any Warrantholder may reasonably request, in each
case to the extent required from time to time to enable such holder to, if
permitted by the terms of this Warrant and the Purchase Agreement, sell this
Warrant without registration under the Securities Act within the limitation of
the exemptions provided by (A) Rule 144 under the Securities Act, as such rule
may be amended from time to time, or (B) any successor rule or regulation
hereafter adopted by the SEC. Upon the written request of any Warrantholder, the
Company will deliver to such Warrantholder a written statement that it has
complied with such requirements.

       

      12.           Adjustments and Other
Rights.  For so long as the Original Warrantholder holds this
Warrant or any portion thereof, if any event occurs that, in the good faith
judgment of the Board of Directors of the Company, would require adjustment of
the Exercise Price or number of Shares into which this Warrant is exercisable in
order to fairly and adequately protect the purchase rights of the Warrants in
accordance with the essential intent and principles of the Purchase Agreement
and this Warrant, then the Board of Directors shall make such adjustments in the
application of such provisions, in accordance with such essential intent and
principles, as shall be reasonably necessary, in the good faith opinion of the
Board of Directors, to protect such purchase rights as aforesaid.

       

      Whenever
the Exercise Price or the number of Shares into which this Warrant is
exercisable shall be adjusted as provided in this Section 12, the Company shall
forthwith file at the principal office of the Company a statement showing in
reasonable detail the facts requiring such adjustment and the Exercise Price
that shall be in effect and the number of Shares into which this Warrant shall
be exercisable after such adjustment, and the Company shall also cause a copy of
such statement to be sent by mail, first class postage prepaid, to each
Warrantholder at the address appearing in the Company’s records.

       

      13.           No
Impairment.  The Company will not, by amendment of its Charter
or through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid or
seek to avoid the observance or performance of any of the terms to be observed
or performed hereunder by the Company, but will at all times in good faith
assist in the carrying out of all the provisions of this Warrant and in taking
of all such action as may be necessary or appropriate in order to protect the
rights of the Warrantholder.

       

      14.           Governing
Law.  This Warrant will be governed by and construed in
accordance with the federal law of the United States if and to the extent such
law is applicable, and otherwise in accordance with the laws of the State of New
York applicable to contracts made and to be performed entirely within such
State. Each of the Company and the Warrantholder agrees (a) to submit to the
exclusive jurisdiction and venue of the United States District Court for the

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

        District
of Columbia for any civil action, suit or proceeding arising out of or relating
to this Warrant or the transactions contemplated hereby, and (b) that notice may
be served upon the Company at the address in Section 17 below and upon the
Warrantholder at the address for the Warrantholder set forth in the registry
maintained by the Company pursuant to Section 8 hereof.

      

       

      To the
extent permitted by applicable law, each of the Company and the Warrantholder
hereby unconditionally waives trial by jury in any civil legal action or
proceeding relating to the Warrant or the transactions contemplated hereby or
thereby.

       

      15.           Binding
Effect.  This Warrant shall be binding upon any successors or
assigns of the Company.

       

      16.           Amendments.  This
Warrant may be amended and the observance of any term of this Warrant may be
waived only with the written consent of the Company and the
Warrantholder.

       

      17.           Notices.  Any
notice, request, instruction or other document to be given hereunder by any
party to the other will be in writing and will be deemed to have been duly given
(a) on the date of delivery if delivered personally, or by facsimile, upon
confirmation of receipt, or (b) on the second business day following the date of
dispatch if delivered by a recognized next day courier service. All notices
hereunder shall be delivered as set forth in Item 9 of Schedule A hereto, or
pursuant to such other instructions as may be designated in writing by the party
to receive such notice.

       

      18.           Entire
Agreement.  This Warrant, the forms attached hereto and
Schedule A hereto (the terms of which are incorporated by reference herein), and
the Letter Agreement (including all documents incorporated therein), contain the
entire agreement between the parties with respect to the subject matter hereof
and supersede all prior and contemporaneous arrangements or undertakings with
respect thereto.

       

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      [Form
of Notice of Exercise]

       

      Date:
_________

      TO:           Valley
Commerce Bancorp

       

      RE:           Election
to Purchase Preferred Stock

       

      The undersigned, pursuant to the
provisions set forth in the attached Warrant, hereby agrees to subscribe for and
purchase such number of shares of Preferred Stock covered by the Warrant such
that after giving effect to an exercise pursuant to Section 3(B) of the Warrant,
the undersigned will receive the net number of shares of Preferred Stock set
forth below. The undersigned, in accordance with Section 3 of the Warrant,
hereby agrees to pay the aggregate Exercise Price for such shares of Preferred
Stock in the manner set forth in Section 3(B) of the Warrant.

      

      Number of
Shares of Preferred
Stock:     _________________________

      

      The undersigned agrees that it is
exercising the attached Warrant in full and that, upon receipt by the
undersigned of the number of shares of Preferred Stock set forth above, such
Warrant shall be deemed to be cancelled and surrendered to the
Company.

       

      Holder:   _____________________________

      By:         
_____________________________  

      Name:     _____________________________                                                                 

      Title:       _____________________________                                                               

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by a
duly authorized officer.

       

      Dated: January 30,
2009

       

      
        
          
            	 	COMPANY: Valley
      Commerce Bancorp	 
	 	 	 	 
	
                     

                  	
                    By:
      

                  	/s/ Donald A.
      Gilles 	 
	 	 	Name:
      Donald A. Gilles 	 
	 	 	Title:
      President and CEO	 
	 	 	 	 

          

        

      

      

      
        
          	 	Attest:	 
	 	 	 	 
	
                   

                	
                  By:
      

                	/s/ Roy O.
      Estridge 	 
	 	 	Name: Roy
      O. Estridge	 
	 	 	Title:
      Chief
      Financial Officer	 
	 	 	 	 

        

      

       

      [Signature
Page to Warrant]

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      SCHEDULE
A

       

      
        	
                Item
      1

                Name:

                Corporate
      or other organizational form:

                Jurisdiction
      of organization:

                 

              	 	
                 

                Valley
      Commerce Bancorp

                Corporation

                California

              
	
                Item
      2

                Exercise
      Price:

                 

              	 	
                 

                $0.01
      per share

              
	
                Item
      3

                Issue
      Date:

                 

              	 	
                 

                January
      30, 2009

              
	
                Item
      4

                Liquidation
      Amount:

                 

              	 	
                 

                $1,000.00

              
	
                Item
      5

                Series
      of Perpetual Preferred Stock:

                 

              	 	
                 

                Fixed
      Rate Cumulative Perpetual Preferred Stock, Series C

              
	
                Item
      6

                Date
      of Letter Agreement between the Company and the United States Department
      of the Treasury:

                 

              	 	
                 

                January
      30, 2009

              
	
                Item
      7

                Number
      of shares of Preferred Stock:

                 

              	 	
                 

                385.00385

              
	
                Item
      8

                Company’s
      address:

              	 	
                200
      S. Court Street

                Visalia,
      CA 93291

                Attn:
      Chief Financial Officer

                 

              
	
                Item
      9

                Notice
      information:

              	 	
                Valley
      Commerce Bancorp

                200
      S. Court Street

                Visalia,
      CA 93291

                Attn:
      Chief Financial Officerex4-4.htm

     

    January
30, 2009

     

    United
States Department of the Treasury

    1500
Pennsylvania Avenue, NW

    Washington,
D.C. 20220

    

    Valley
Commerce Bancorp

    200 S.
Court Street

    Visalia,
CA 93291

    

    Ladies
and Gentlemen:

    

    Reference
is made to that certain Letter Agreement incorporating the Securities Purchase
Agreement – Standard Terms dated of even date herewith (the “Securities Purchase
Agreement”) by and among United States Department of Treasury (“Investor”) and Valley
Commerce Bancorp (“Company”). Investor and
Company desire to set forth herein certain additional agreements regarding
Company’s commitment to the holder of the Preferred Shares after the closing of
the transactions contemplated by the Securities Purchase
Agreement.  Terms that are defined in the Securities Purchase
Agreement are used in this letter agreement as so defined.

     

    In order
to comply with California Corporations Code §212(a), the Company has modified
section 7(b) of the Standard Provisions of each of the Certificate of
Designations attached as Annex A and Annex B to the
Securities Purchase Agreement (collectively, the “Certificates of
Designations”) to provide in pertinent part as follows:

     

    
      	 
      	
              “Whenever,
      at any time or times, dividends payable on the shares of Designated
      Preferred Stock have not been paid for an aggregate of six quarterly
      Dividend Periods or more, whether or not consecutive, the holders of the
      Designated Preferred Stock shall have the right, with holders of shares of
      any one or more other classes or series of Voting Parity Stock outstanding
      at the time, voting together as a class, to elect two
      directors...”

            	 
      

    

    

    By its
execution hereof, the Company hereby confirms and agrees that as of the date
hereof and at all times while any shares of the Designated Preferred Stock (as
defined in each Certificate of Designations) are outstanding or issuable upon
exercise of the Warrant it shall maintain a range of directors of the Company
that will permit the holder of the Preferred Shares to elect two directors in
accordance with said sections 7(b).  Currently Section 2.2 (the “Applicable Provision”) of the
Company’s bylaws (the “Bylaws”) provides for a range
of directors of no less than eight (8) and no more than fifteen
(15).  At all times while any shares of the Designated Preferred Stock
are outstanding, the Company shall not fill more than thirteen (13) director
positions.  In the event the Company desires to increase the number of
directors beyond thirteen (13), then the Company shall be required to amend the
Bylaws to increase the maximum directors to always allow for at least two open
director seats for the holders of the Preferred Shares to elect in accordance
with Section 7(b) of the Standard Terms of the Certificate of

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    United
States Department of Treasury

    Valley
Commerce Bancorp

    January
30, 2009

     

    Determination
of Preferences of Series B Fixed Rate Cumulative Perpetual Preferred Stock of
Valley Commerce Bancorp and Section 7(b) of the Standard Terms of the
Certificate of Determination of Preferences of Series C Fixed Rate Cumulative
Perpetual Preferred Stock of Valley Commerce Bancorp (and to amend the bylaws to
provide that such provision may not be modified, amended or repealed by the
Company’s board of directors (or any committee thereof) or without the
affirmative vote and approval of (x) the stockholders and (y) the holders of at
least a majority of the shares of Designated Preferred Stock outstanding at the
time of such vote and approval).

     

    In
addition, by its execution hereof, the Company hereby confirms and agrees that
it will, within 15 days after the date of this letter agreement, amend the
Applicable Provision by adding the following sentence at the end
thereof:

     

    
      	 
      	
              “Notwithstanding
      anything in these bylaws to the contrary, for so long as the Corporation’s
      Fixed Rate Cumulative Perpetual Preferred Stock, Series B and the
      Corporation’s Fixed Rate Cumulative Perpetual Preferred Stock, Series C
      (collectively, the “Designated Preferred
      Stock”) (or any warrant to purchase any of the Designated Preferred
      Stock) is outstanding:  (i) whenever, at any time or times,
      dividends payable on the shares of Designated Preferred Stock have not
      been paid for an aggregate of six quarterly Dividend Periods (as defined
      in the Certificate of Determination for the Designated Preferred Stock) or
      more, whether or not consecutive, the authorized number of directors shall
      automatically be increased by two (but shall in no event be increased to a
      number of directors that is greater than the maximum number of directors
      set forth in this Section 2.2 of these bylaws); and (ii) this sentence may
      not be modified, amended or repealed by the Corporation’s board of
      directors (or any committee thereof) or without the affirmative vote and
      approval of (x) the stockholders and (y) the holders of at least a
      majority of the shares of Designated Preferred Stock outstanding at the
      time of such vote and approval.

            

    

    

    The
parties hereto acknowledge that there would be no adequate remedy at law if the
Company fails to perform any of its obligations under this letter agreement and
that the Investor may be irreparably harmed by any such failure, and accordingly
agree that the Investor, in addition to any other remedy to which it may be
entitled at law or in equity, to the fullest extent permitted and enforceable
under applicable law shall be entitled to compel specific performance of the
obligations of the Company under this letter agreement without the necessity of
proving the inadequacy of monetary damages as a remedy or the posting of a
bond.

     

    
      This
letter agreement and the Certificates of Designations constitute the entire
agreement, and supersedes all other prior agreements, understandings,
representations and warranties, both written and oral, between the parties with
respect to the subject matter hereof.

    

    
       

      This
letter agreement may be executed in counterparts, each of which shall be deemed
an original and all of which shall together constitute one and the same
instrument.  This letter agreement shall be governed in all respects,
including as to validity, interpretation and effect, by

    

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    United
States Department of Treasury

    Valley
Commerce Bancorp

    January
30, 2009

    

    the
internal laws of the State of California, without giving effect to the conflict
of laws rules thereof.

     

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        -3-

        
          

        

      

      
        
        

      

    

     

    In
witness whereof, this letter agreement has been duly executed by the authorized
representatives of the parties hereto as of the date first above
written.

     

    VALLEY
COMMERCE BANCORP

     

    
      	 
      	
              By:

            	      
              /s/
      Donald A. Gilles  

            	 
	 
      	
              Name:

            	
              Donald
      A. Gilles

            	 
	 
      	
              Title:

            	
              President
      and Chief Executive Officer

            	 
	 
      	 
      	 
      	 
	 
      	
              By:

            	      
              /s/
      Roy O. Estridge  

            	 
	 
      	
              Name:

            	
              Roy
      O. Estridge

            	 
	 
      	
              Title:

            	
              Executive
      Vice President and Chief Financial Officer

            	 
	 
      	 
      	 
      	 
	 
      	 
      	
              UNITED
      STATES DEPARTMENT OF THE TREASURY

            	 
	 
      	 
      	 
      	 
	 
      	
              By:

            	/s/ Neel
      Kashkari  	 
	 
      	
              Name:

            	Neel
      Kashkari  	 
	 
      	
              Title:

            	Interim Assistant
      Secretary for Financial Stability  	 

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
                 2.2 Number.  The
number of the corporation’s directors shall be not less than eight nor more than
fifteen, the exact number within such minimum and maximum limits to be fixed and
determined from time to time by resolution of a majority of the full Board or by
resolution of a majority of the shareholders at any meeting
thereof.  Notwithstanding anything in these bylaws to the contrary,
for so long as the Series B or Series C Fixed Rate Cumulative Perpetual
Preferred Stock (the “Designated Preferred Stock”)
is outstanding: (i) whenever, at any time or times, dividends payable on
the shares of Designated Preferred Stock have not been paid for an aggregate of
six quarterly Dividend Periods (as defined in the applicable Certificate of
Determination for the Designated Preferred Stock) or more, whether or not
consecutive, the authorized number of directors shall automatically be increased
by two (but shall in no event be increased to a number of directors that is
greater than the maximum number of directors set forth in Section 2.2 of
these bylaws); and (ii) this sentence may not be modified, amended or
repealed by the board of directors (or any committee thereof) or without the
affirmative vote and approval of (x) the stockholders and (y) the
holders of at least a majority of the shares of Designated Preferred Stock
outstanding at the time of such vote and approval.

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