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STOCK AND NOTE PURCHASE AGREEMENT
BY AND AMONG
COMMUNITY WEST BANCSHARES,
A CALIFORNIA CORPORATION
AND
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇,
▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, AND ▇▇▇▇▇ ▇. ▇▇▇▇
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NOVEMBER 16, 1999
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STOCK AND NOTE PURCHASE AGREEMENT
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This Stock and Note Purchase Agreement, dated as of November 16, 1999 (the
"AGREEMENT"), is entered into by and among Community West Bancshares, a
California corporation (the "COMPANY"), and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇ (collectively, the "PURCHASERS").
RECITALS
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WHEREAS, on the terms and conditions set forth in this Agreement, the
Purchasers desire to purchase and the Company desires to issue and sell 582,924
shares (the "SHARES") of common stock of the Company, no par value ("COMMON
STOCK"), for an aggregate price of $12.925;
WHEREAS, certain of the Purchasers and C. ▇▇▇▇▇ ▇▇▇▇▇▇▇ (collectively,
"OPTIONEES") intend to exercise currently outstanding options to acquire 40,257
shares of Common Stock (the "OPTION SHARES") for aggregate cash consideration to
the Company of $328,296.25;
WHEREAS, on the terms and conditions set forth in this Agreement and a
promissory note, the form of which is attached hereto as Exhibit B, ▇▇▇▇▇▇▇ ▇.
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▇▇▇▇▇▇▇ (the "LENDER") also desires to lend $3,565,625 to the Company, and the
Company desires to accept the loan; and
WHEREAS, the parties desire that the Company contribute the proceeds from the
sale of stock and the loan to Goleta National Bank (the "BANK"), a direct
wholly-owned subsidiary of the Company, as a capital contribution in order to
increase the capital ratios and the regulatory classification of the Bank;
NOW, THEREFORE, in consideration of the foregoing recitals, the mutual covenants
and promises contained herein and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto agree
as follows:
ARTICLE I
PURCHASE OF STOCK; REGISTRATION RIGHTS
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1.1 Purchase of Shares for Cash. Upon the terms and subject to the
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conditions contained herein, each Purchaser shall purchase from the Company, and
the Company shall issue and sell to each Purchaser, the number of Shares set
forth opposite such Purchaser's name in Schedule 1 hereto, at the price per
Share set forth in Section 1.2.
1.2 Purchase Price. The price per Share shall be $12.925. Each
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Purchaser shall pay the aggregate amount set forth opposite such Purchaser's
name in Schedule 1 hereto.
1.3 Registration Rights. The Purchasers shall have the right to
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require the registration of their Shares under the Securities Act of 1933, as
amended, and the parties hereto shall have the other rights and obligations, set
forth in Exhibit A hereto.
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1.4 Share Certificates. Until May 16, 2001, certificates evidencing the
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Shares, together with stock powers relating thereto executed by each of the
Purchasers, shall be held by the Company to facilitate the Redemption Right (as
defined in Article IX).
ARTICLE II
ISSUANCE OF LOAN
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2.1 Issuance of Loan. Upon the terms and subject to the conditions
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contained herein, Lender agrees to lend to the Company at the First Closing (as
defined below) an amount equal to $3,565,625 (the "Loan").
2.2 Promissory Note. The Loan shall be evidenced by a promissory note
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in the form of Exhibit B hereto, payable to the order of Lender in the original
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principal amount of $3,565,625 (together with any replacement, modification,
renewal, amendment or substitution thereof, the "PROMISSORY NOTE").
ARTICLE III
CLOSING
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3.1 First Closing. The first closing of the purchase and sale of a
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portion of the Shares and the issuance of the Loan (the "FIRST CLOSING") shall
take place on November 16, 1999 at the offices of Community West Bancshares,
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, after the satisfaction or
waiver of all the conditions contained in Articles VI and VII hereof.
(a) Deliveries. At the First Closing,
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(i) each Purchaser shall pay to the Company in cash the amount
set forth as the purchase price opposite such Purchaser's name in
Schedule 2 hereto and the Company will issue to each Purchaser the
number of Shares set forth opposite such Purchaser's name in Schedule
2 hereto
(ii) the Optionees shall exercise options to acquire 40,257
Option Shares and shall pay to the Company aggregate cash
consideration therefor of $328,296.25; and
(iii) the Lender will lend to the Company in cash the entire
amount of the Loan, and the Company shall deliver to the Lender the
Promissory Note duly executed by the Company.
(b) Contribution to Bank. Simultaneously with the First Closing, the
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Company shall contribute all of the proceeds from the sale of the Shares
and from the Loan to the Bank as an equity capital contribution in order to
increase the capital ratios and the regulatory classification of the Bank.
3.2(a) Second Closing. On or before November 22, 1999, each of the
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Purchasers listed in Schedule 3 hereto, will pay to the Company in cash the
amount set forth as the purchase price opposite such Purchaser's name in
Schedule 3 hereto and the Company will issue to each Purchaser the number of
Shares set forth opposite such Purchaser's name in Schedule 3 hereto (the
"SECOND CLOSING").
(b) Prepayment of Loan. Simultaneously with the Second Closing, the
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Company shall prepay $279,981.35 of the unpaid principal balance of the
Loan, together with interest accrued thereunder on the amount of principal
so prepaid, to the Lender.
ARTICLE IV
REPRESENTATIONS OF THE COMPANY
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4.1 The Company hereby represents and warrants to each Purchaser and
the Lender as follows:
(a) Capitalization; Title to Shares. The authorized capital stock of
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the Company consists solely of 10,000,000 shares of Common Stock, no par
value per share. There are 5,479,149 shares of Common Stock issued and
outstanding, all of which have been duly authorized and are validly issued,
fully paid and non-assessable. Except for options to acquire 320,324 shares
and shares to be issued pursuant to this Agreement, there are outstanding
no securities convertible into, exchangeable for, or carrying the right to
acquire, equity securities of the Company, or subscriptions, warrants,
options, rights, calls, agreements, demands or other arrangements or
commitments of any character obligating the Company to issue or dispose of
any of its equity securities or any ownership interest therein or otherwise
relating to the capital stock of the Company. The Shares have been duly
authorized, and, upon receipt by the Company of the purchase price therefor
in accordance with terms of this Agreement, will be validly issued, fully
paid, nonassessable. The sale and delivery of the Shares to the Purchasers
pursuant to this Agreement will vest in the Purchasers legal and valid
title to the Shares, free and clear of any and all liens, security
interests, pledges, mortgages, charges, limitations, claims, restrictions,
rights of first refusal, rights of first offer, rights of first negotiation
or other encumbrances of any kind or nature whatsoever (collectively,
"ENCUMBRANCES"), other than Encumbrances created by any such Purchaser or
under applicable securities laws.
(b) Organization. The Company is a corporation duly organized, validly
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existing and in good standing under the laws of the State of California and
has all requisite corporate power and authority to own its properties and
carry on its business as it is now being conducted. The Company is duly
qualified to do business and is in good standing as a foreign corporation
in all jurisdictions where its ownership of property or assets or the
nature of its business makes such qualification necessary, except where the
failure to so qualify would not in the aggregate have a material adverse
effect on the condition (financial or otherwise), business, net worth,
results of operations, earnings, properties or prospects, whether or not
arising in the ordinary course of business, of the Company and its
subsidiaries considered as a whole.
(c) Power and Authority; Effect of Agreement. The Company has all
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requisite power and authority to execute and deliver this Agreement and the
agreements, certificates, instruments or other documents to be executed and
delivered in connection herewith, including, but not limited to, the
Promissory Note of even date herewith (collectively, the "ANCILLARY
DOCUMENTS"), and to consummate the transactions contemplated hereby and
thereby. Each of this Agreement and the Ancillary Documents has been duly
and validly executed and delivered by the Company and constitutes the valid
and binding obligation of the Company, in each case enforceable against the
Company in accordance with its terms, except to the extent that such
enforceability may be limited by (A) bankruptcy, insolvency,
reorganization, moratorium (whether general or specific) or similar laws of
general application now or hereafter in effect relating to creditors'
rights generally, and (B) general principles of equity. The execution,
delivery and performance by the Company of this Agreement and the Ancillary
Documents and the consummation by the Company of the transactions
contemplated hereby and thereby will not, with or without the giving of
notice or the lapse of time, or both, (i) violate or conflict with any
provision of law, rule or regulation to which the Company or the Bank is
subject or by which any of the property of the Company or the Bank is
encumbered, (ii) violate or conflict with any order, judgment or decree
applicable to the Company or the Bank, (iii) violate or conflict with any
provision of the charter or the Bylaws of the Company or the Bank or (iv)
result in a violation or breach of, or permit any third party to modify,
terminate or rescind any term or provision of, or constitute a default
under, any material contract or instrument, including, without limitation,
any indenture, mortgage, deed of trust, promissory note, loan agreement or
industrial revenue bond, if any, to which the Company or the Bank is a
party or by which any of the property of the Company or the Bank is
encumbered, or result in the creation of an Encumbrance on any of the
assets of the Company or the Bank.
ARTICLE V
REPRESENTATIONS OF THE PURCHASERS AND THE LENDER
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5.1 Each Purchaser and the Lender severally hereby represents and
warrants that:
(a) He or she is an individual and has all requisite legal capacity
and authority to enter into this Agreement and to consummate the
transactions contemplated hereby.
(b) This Agreement has been duly and validly authorized, executed and
delivered by such Purchaser or Lender and constitutes a valid and binding
obligation of such Purchaser or Lender, enforceable against such Purchaser
or Lender in accordance with its terms, except as such enforcement may be
limited by (i) bankruptcy, insolvency, reorganization, moratorium (whether
general or specific) or similar laws of general application now or
hereafter in effect relating to creditors' rights generally and (ii)
general principles of equity.
(c) Such Purchaser is acquiring the Shares for his or her own account,
not as a nominee or agent for any other person, with no present intention
to transfer, sell, convey, or dispose of any of the Shares.
(d) Such Purchaser or Lender has had an opportunity to ask questions
of and to receive answers from the officers of the Company, or a person or
persons acting on the Company's behalf, concerning the terms and conditions
of the purchase of the Shares and issuance of the Loan pursuant hereto.
(e) Such Purchaser or Lender is an "accredited investor" (as defined
in Regulation D promulgated under the Securities Act of 1933, as amended
(the "1933 ACT")) and is able to bear the economic risk of his or her
investment in the Shares and/or the Loan pursuant to this Agreement and
such Purchaser has given consideration as to whether he or she can afford
to hold the Shares for an indefinite period and whether, at this time, such
Purchaser could afford a complete loss of his or her investment in the
Shares.
(f) Such Purchaser understands that there is no public market for the
Shares and that the Shares have not been registered under 1933 Act or under
any state securities ("BLUE SKY") laws, and therefore the Shares cannot be
resold unless registered and qualified under the 1933 Act and Blue Sky laws
or unless an exemption from registration and qualification is available.
ARTICLE VI
CONDITIONS TO THE COMPANY'S OBLIGATIONS
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The obligations of the Company contained herein with respect to the
issuance of the Shares to a Purchaser and the issuance of the Promissory Note to
the Lender are subject to the satisfaction, on or prior to the First Closing, of
the following conditions:
6.1 Additional Documents. Such Purchaser and Lender shall execute and
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deliver such additional documents reasonably requested by the Company that are
necessary or advisable to carry out the provisions of this Agreement.
6.2 Representations and Warranties True. Such Purchaser's and Lender's
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representations and warranties contained in Article V hereof shall be true at
and as of the First Closing, as if made on and as of such date.
ARTICLE VII
CONDITIONS TO EACH PURCHASER'S AND LENDER'S OBLIGATIONS
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The obligations of each Purchaser contained herein to purchase the Shares
from the Company and the obligation of the Lender to make the Loan to the
Company are subject to the satisfaction, on or prior to the First Closing, of
the following conditions:
7.1 Additional Documents. The Company shall execute and deliver such
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additional documents reasonably requested by any Purchaser or the Lender that
are necessary or advisable to carry out the provisions of this Agreement.
7.2. Representations and Warranties True. The Company's
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representations and warranties contained in Article IV hereof shall be true at
and as of the First Closing, as if made on and as of such date.
7.3 Ancillary Documents. Simultaneously with the sale to the
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Purchasers of the Shares and the issuance of the Loan at the Closing, the
Company shall have executed and delivered to the Lender the Promissory Note
substantially in the form attached hereto as Exhibit B.
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7.4 Closing by All Purchasers. The Purchasers collectively shall have
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purchased the aggregate number of Shares set forth in Schedule 2 hereto and the
Optionees shall have performed in accordance with the provisions of Section
3.1(a)(ii) hereof.
7.5 Contribution to Bank. The Company shall have performed its
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obligation under Section 3.1(b) hereof.
7.6 Notification from OCC. The Bank shall have received written
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notification from the Office of the Comptroller of the Currency that, upon
consummation of the First Closing and the Company's performance of its
obligation under Section 3.1(b) hereof, the Bank is deemed "adequately
capitalized" under the Prompt Corrective Action provisions of the Federal
Deposit Insurance Act, as amended.
ARTICLE VIII
RESTRICTIONS ON TRANSFER
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8.1 Restrictions on Transfer. Each Purchaser agrees that:
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(a) It shall not sell, assign, convey, hypothecate or in any other
manner transfer any of the Shares except in compliance with the 1933 Act
and any applicable Blue Sky laws.
(b) Each certificate representing the Shares issued pursuant to this
Agreement shall bear legends in substantially the following form: THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), OR QUALIFIED UNDER THE SECURITIES LAWS
OF ANY STATE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY, HYPOTHECATION AND RESALE AND MAY NOT BE TRANSFERRED,
HYPOTHECATED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE
STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR QUALIFICATION THEREUNDER
OR EXEMPTION THEREFROM. THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO
THE TERMS OF THAT CERTAIN STOCK AND NOTE PURCHASE AGREEMENT, DATED AS OF
NOVEMBER 16, 1999, BY AND AMONG COMMUNITY WEST BANCSHARES AND CERTAIN
PURCHASERS, A COPY OF WHICH MAY BE OBTAINED FROM THE SECRETARY OF THE
COMPANY.
ARTICLE IX
REDEMPTION RIGHT
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9.1. Redemption Right. The Company shall have the right to repurchase
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and redeem (the "REDEMPTION RIGHT") all or any portion of the Shares, together
with any rights, securities or additional stock that may be issued in respect of
Shares pursuant to a stock dividend, stock split, reorganization,
reclassification or other similar transaction, which shall also be deemed Shares
for purposes of the Redemption Right. The Redemption Right shall be exercisable
at any time and from time to time after the payment in full of all indebtedness
evidenced by the Promissory Note and on or before May 16, 2001, upon the
affirmative vote of a majority of those directors of the Company who are not
Purchasers or holders of Shares subject to the Redemption Right (the
"INDEPENDENT DIRECTORS"); provided, however, that the Redemption Right shall not
be exercisable if the purchase price per share for such redemption calculated
pursuant to Section 9.2 hereof equals less than $12.925.
9.2 Redemption Price. The purchase price per Share payable by the
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Company to the holder of a Share to be redeemed upon exercise of the Redemption
Right shall be determined in accordance with the following provisions:
(a) If the Common Stock of the Company at the time is listed or
admitted to trading on any stock exchange, then the purchase price per
Share shall be the average of the closing prices per share of Common Stock
during the most recent five trading days preceding the decision of the
Independent Directors to redeem the Shares on which shares of Common Stock
were actually traded, as such prices are officially quoted in the composite
tape of transactions on such exchange.
(b) If the Common Stock of the Company at the time is neither listed
nor admitted to trading on any stock exchange but is traded in the
over-the-counter market, then the purchase price per Share shall be the
average of the mean between the highest bid and lowest asked prices (or, if
such information is available, the closing selling price) of one share of
Common Stock during the most recent five trading days preceding the
decision of the Independent Directors to redeem the Shares on which shares
of Common Stock were actually traded, as such prices are reported by the
National Association of Securities Dealers through its Nasdaq system or any
successor system.
(c) If the Shares include securities other than Common Stock, the
price per Share to be paid in redemption of such securities shall be
determined in a manner similar to that described above for Common Stock.
9.3 Partial Redemptions. If the Company elects to exercise the
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Redemption Right with respect to only a portion of the outstanding Shares, the
redemption by the Company shall be made on a pro rata basis from each holder of
Shares based on the total number of Shares then held by each holder, unless the
Company and all of the holders agree to an alternate basis.
9.4 Share Certificates. All certificates evidencing any of the Shares,
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together with stock powers relating thereto executed by each of the Purchasers
and any subsequent holders, shall be held by the Company until May 16, 2001, and
each Purchaser hereby consents and agrees that the Company shall be constituted
as such Purchaser's attorney-in-fact to redeem and cancel Shares and replace
Share certificates pursuant to exercise of the Redemption Right without any
further act of such Purchaser.
ARTICLE X
MISCELLANEOUS
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10.1 Notices. Any notice, request, instruction or other document to be
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given hereunder by any party to the others shall be in writing and delivered in
person or by courier, telegraphed, telexed or by facsimile transmission or
mailed by certified mail, postage prepaid, return receipt requested (such mailed
notice to be effective on the date of such receipt is acknowledged), as follows:
Community West Bancshares
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
If to the Company: Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Dhiya El-Saden
With a copy to: Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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Attention:
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If to Purchasers: Telecopy:
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Attention:
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Telecopy:
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10.2 Governing Law; Choice of Forum. This Agreement shall be
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construed, interpreted and the rights of the parties determined in accordance
with the internal laws of the State of California without regard to the conflict
of law principles thereof.
10.3 Counterparts. This Agreement may be executed in two or more
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counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.4 Complete Agreement. This Agreement, the Schedules and Exhibits
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hereto and the documents delivered or to be delivered pursuant to this Agreement
contain or will contain the entire agreement among the parties hereto with
respect to the transactions contemplated herein and shall supersede all previous
oral and written and all contemporaneous oral negotiations, commitments and
understandings.
10.5 Modifications, Amendments and Waivers. The parties may, but only
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by written agreement:
(a) Extend the time for the performance of any of the obligations or
other acts of the parties hereto;
(b) Waive any inaccuracies in the representations and warranties
contained in this Agreement or in any document delivered pursuant to this
Agreement;
(c) Waive compliance with any of the covenants or agreements contained
in this Agreement; or
(d) Amend or supplement any of the provisions of this Agreement.
10.6 Headings and Interpretation. The headings contained in this
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Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. No party hereto, nor its
respective counsel, shall be deemed the drafter of this Agreement for purposes
of construing the provisions hereof. The language in all parts of this
Agreement shall in all cases be construed according to its fair meaning, and not
strictly for or against any party hereto.
10.7 Equitable Remedies. In addition to legal remedies, in recognition
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of the fact that remedies at law may not be sufficient, the parties hereto (and
their permitted successors) shall be entitled to equitable remedies for breaches
or defaults hereunder, including, without limitation, specific performance and
injunction.
10.8 Successors. This rights and obligations under this Agreement
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shall inure to the benefit of and be binding upon the respective successors and
assigns of the parties hereto. It shall be a condition to the valid transfer of
any Shares that the transferee agree in writing with the Company to be bound by
the terms of this Agreement applicable to the Purchasers; any purported transfer
of Shares in violation of this provision shall be void.
10.9 Gender and Number. In this Agreement, unless the context
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otherwise requires, the masculine, feminine and neuter genders and the singular
and the plural include one another.
10.10 Attorneys' Fees and Costs. Should any party hereto institute
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any action or proceeding in any court to enforce any provision of this
Agreement, the prevailing party shall be entitled to receive from the losing
party reasonable attorneys' fees and costs incurred in such action or
proceeding, whether or not such action or proceeding is prosecuted to judgment.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, or have
caused this Agreement to be duly executed on their respective behalf by their
respective officers thereunto duly authorized, as of the day and year first
above written.
COMPANY:
COMMUNITY WEST BANCSHARES
By:
Its:
PURCHASERS:
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------- ----------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------- ----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------- ----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------- ----------------------------
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇
LENDER:
By:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
SCHEDULE 1
TOTAL SHARE PURCHASE
PURCHASER NUMBER OF SHARES PURCHASE PRICE
-------------------- ---------------- ---------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 30,946 $ 399,977.05
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 7,736 $ 99,987.80
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 7,736 $ 99,987.80
▇▇▇▇ ▇. ▇▇▇▇▇ 7,736 $ 99,987.80
▇▇▇▇ ▇. ▇▇▇▇▇▇ 7,736 $ 99,987.80
▇▇▇▇ ▇. ▇▇▇▇▇▇ 232,108 $ 2,999,995.90
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 275,000 $ 3,554,375.00
▇▇▇▇▇ ▇. ▇▇▇▇ 13,926 $ 179,993.55
-------------------- ---------------- ---------------
TOTAL 582,924 $ 7,534,292.60
SCHEDULE 2
FIRST CLOSING
PURCHASER NUMBER OF SHARES PURCHASE PRICE
-------------------- ---------------- ---------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 30,946 $ 399,977.05
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 7,736 $ 99,987.80
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 7,736 $ 99,987.80
▇▇▇▇ ▇. ▇▇▇▇▇ 7,736 $ 99,987.80
▇▇▇▇ ▇. ▇▇▇▇▇▇ 232,108 $ 2,999,995.90
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 275,000 $ 3,554,375.00
-------------------- ---------------- ---------------
TOTAL 561,262 $ 7,254,311.30
SCHEDULE 3
SECOND CLOSING
PURCHASER NUMBER OF SHARES PURCHASE PRICE
-------------- ---------------- --------------
▇▇▇▇ ▇. ▇▇▇▇▇▇ 7,736 $ 99,987.80
▇▇▇▇▇ ▇. ▇▇▇▇ 13,926 $ 179,993.55
-------------- ---------------- --------------
TOTAL 21,662 $ 279,981.35
EXHIBIT A
REGISTRATION RIGHTS
ARTICLE I
DEFINITIONS
As used in this Exhibit A, the following capitalized terms shall have the
following respective meanings:
Agreement: The Agreement to which this Exhibit A is attached.
---------
Appraiser: A nationally recognized or major regional investment banking
---------
firm or firm of independent certified public accountants of recognized standing.
Business Day: A day other than a Saturday, Sunday or other day on which
-------------
state chartered banks in the State of California are authorized by law to remain
closed.
Common Stock: Common Stock, no par value, of the Company.
-------------
Company: Community West Bancshares, a California corporation, and any successor
-------
thereto.
Demand Registration: The meaning set forth in Section 2.02.
--------------------
Exchange Act: The Securities Exchange Act of 1934, as amended from time to
------------
time.
Expiration Date: 11:59 p.m., Los Angeles, California time, on November
----------------
16, 2009.
Holder: A holder of Registrable Securities.
------
NASD: National Association of Securities Dealers, Inc.
----
Nasdaq: The automated quotation system of the NASD.
------
Majority Holders: At any time of determination, the holders of a majority
-----------------
of the Registrable Securities.
Per Share Market Value: As of any particular date of determination, (i) if
----------------------
the Common Stock is then listed on a United States securities exchange or on
Nasdaq, the average of the closing sales prices (or, if no trade occurs on a
relevant day, the average of the closing bid and asked prices on such day) per
share of Common Stock (as reported by Bloomberg Information Services, Inc., or
any successor reporting service) on the principal United States securities
exchange on which the Common Stock is traded (or, if not traded on a national
securities exchange, on Nasdaq) on the five (5) consecutive Business Days
immediately preceding such date of determination, (ii) if the Common Stock is
not then listed on a United States securities exchange or on Nasdaq, the average
of the closing bid and asked prices per share of Common Stock in the United
States domestic over-the-counter market, as reported by the National Quotation
Bureau Incorporated (or similar organization or agency succeeding to its
functions of reporting prices), on the five (5) consecutive Business Days
immediately preceding such date of determination, or (iii) if the Common Stock
is not then publicly traded, the fair market value of a share of Common Stock as
of such date of determination as determined by an Appraiser selected in good
faith by the Company, whose fees and expenses shall be borne by the Company.
Person: An individual, partnership, joint venture, corporation, trust,
------
limited liability company, unincorporated organization or government or any
department or agency thereof.
Piggyback Registration and Piggyback Registration Rights: The respective
----------------------- -----------------------------
meanings set forth in Section 2.01.
Prospectus: Any prospectus included in any Registration Statement, as
----------
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by such
Registration Statement and all other amendments and supplements to the
Prospectus, including post-effective amendments and all material incorporated by
reference in such Prospectus.
Public Offering: A public offering of any of the Company's equity or debt
----------------
securities pursuant to a registration statement under the Securities Act.
Purchasers: The meaning set forth in the Agreement.
----------
Registrable Securities: The shares of Common Stock acquired by the
-----------------------
Purchasers pursuant to the Agreement (unless and until such securities have been
sold in a Public Offering or pursuant to Rule 144(k) promulgated under the
Securities Act), including, without limitation, securities that may thereafter
be issued by the Company in respect of any such securities by means of any stock
splits, stock dividends, recapitalizations, reclassifications or the like.
Registration Expenses: Any and all expenses incurred in connection with
----------------------
any registration or action incident to performance of or compliance by the
Company with Article II, including, without limitation, (i) all SEC, national
securities exchange and NASD registration and filing fees; all listing fees and
all transfer agent fees; (ii) all fees and expenses of complying with state
securities or blue sky laws (including the fees and disbursements of counsel for
the underwriters in connection with blue sky qualifications of the Registrable
Securities); (iii) all printing, mailing, messenger and delivery expenses and
(iv) all fees and disbursements of counsel for the Company and of its
accountants, including the expenses of any special audits and/or "cold comfort"
letters required by or incident to such performance and compliance, but
excluding underwriting discounts and commissions applicable to Registrable
Securities and fees of counsel or accountants retained by the holders of
Registrable Securities to advise them in their capacity as Holders of
Registrable Securities.
Registration Statement: Any registration statement of the Company filed or to
-----------------------
be filed with the SEC under the Securities Act that covers any class of
securities included in the Registrable Securities, including all amendments
(including post-effective amendments) and supplements thereto, all exhibits
thereto and all material incorporated therein by reference.
SEC: The Securities and Exchange Commission or any other federal agency at the
---
time administering the Securities Act or the Exchange Act.
Securities Act: The Securities Act of 1933, as amended from time to time.
---------------
ARTICLE II
REGISTRATION UNDER THE SECURITIES ACT OF 1933
SECTION 2.01: PIGGYBACK REGISTRATION.
------------- -----------------------
(a) Right to Include Registrable Securities. If, at any time or from
-----------------------------------------
time to time, the Company proposes to register any of its Common Stock under the
Securities Act on any form for the registration of securities under such Act,
whether or not for its own account (other than by a registration statement on
Form S-4 or S-8 or any successor to such forms) (a "Piggyback Registration"), it
----------------------
shall as expeditiously as possible give written notice to all Holders of its
intention to do so and of such Holders' rights under this Section 2.01
("Piggyback Registration Rights"). Upon the written request of any such Holder
------------------------------
made within 20 days after receipt of any such notice for the inclusion in such
registration of a number of Registrable Securities specified in such notice, the
Company shall include in the applicable Registration Statement the Registrable
Securities so specified by such Holder in such notice, and the Company shall
keep such registration statement in effect and maintain compliance with all
applicable Federal and state laws and regulations for the period necessary for
such Holder to effect the proposed sale or other disposition (but in no event
for a period greater than 180 days). Such Piggyback Registration Rights shall
expire on the Expiration Date.
(b) Withdrawal of Piggyback Registration by Company. If, at any time
-------------------------------------------------
after giving written notice of its intention to register any securities in a
Piggyback Registration but prior to the effective date of the related
Registration Statement, the Company shall determine for any reason not to
register such securities, the Company shall give written notice of such
determination to each Holder and, thereupon, shall be relieved of its obligation
to register any Registrable Securities in connection with such Piggyback
Registration.
(c) Piggyback Registration of Underwritten Public Offerings. If a
-------------------------------------------------------
Piggyback Registration involves an offering by or through underwriters, then,
(i) all Holders requesting to have their Registrable Securities included in the
Company's Registration Statement must sell their Registrable Securities to the
underwriters selected by the Company on the same terms and conditions as apply
to other selling shareholders and (ii) any Holder requesting to have his or her
Registrable Securities included in such Registration Statement may elect in
writing, not later than three Business Days prior to the effectiveness of the
Registration Statement filed in connection with such registration, not to have
his or her Registrable Securities so included in connection with such
registration.
(d) Payment of Registration Expenses for Underwritten Piggyback
-----------------------------------------------------------------
Registration. The Company shall pay all Registration Expenses associated with
------------
each Piggyback Registration and the sale of shares thereunder.
(e) Priority in Piggyback Registration. If a Piggyback Registration
-------------------------------------
involves an underwritten offering and the managing underwriter advises the
Company and the Holders requesting registration that, in its opinion, the number
of securities requested to be included in such registration by the Holders and
other shareholders having the contractual right to do so exceeds the number that
can be sold in such offering without jeopardizing the success of the offering,
the Company will include in such registration (i) first, the securities the
Company proposes to register, issue and sell, (ii) second, securities of any
shareholders whose exercise of registration rights initiated the Company's
preparation of the applicable Registration Statement, and (iii) third, the
number of shares requested for inclusion in such registration by Holders, and by
any other shareholders having the contractual right to do so, that, in the
opinion of such underwriter, can be sold without jeopardizing the success of the
offering, with the number of shares to be included in such registration from
each such Holder and other shareholder to be reduced pro rata on the basis of
the relative number of shares each such Holder and other shareholder originally
requested to be included in such registration.
SECTION 2.02: DEMAND REGISTRATION.
------------- ---------------------
(a) Request for Registration. At any time after 180 days following the
------------------------
effective date of any Public Offering of Common Stock and prior to the
Expiration Date, the Majority Holders may demand registration by the Company for
a Public Offering of their Registrable Securities under the Securities Act so
long as the aggregate value (based on the Per Share Market Value) as of the date
of such demand of the Registrable Securities requested for inclusion in such
registration and Public Offering equals or exceeds $1 million (a "Demand
------
Registration"). Promptly after receiving such a demand, the Company shall
------------
notify all other Holders in writing of such demand and shall allow all other
Holders to participate in such Demand Registration. The Company shall be
obligated to undertake two Demand Registrations through effectiveness with the
SEC and closing; provided, however, that such obligation shall expire on the
Expiration Date.
(b) Nature of Offering. The Majority Holders may elect to have each
--------------------
Demand Registration cover either an underwritten Public Offering or a shelf
registration. The Company shall maintain any such shelf registration effective
with the SEC for a minimum of 180 days. The Majority Holders shall have the
right to select one or more managing underwriters for any underwritten Public
Offering with the consent of the Company, which consent shall not be
unreasonably withheld.
(c) Payment of Registration Expenses for Demand Registration. The
-------------------------------------------------------------
Company shall pay all Registration Expenses associated with each Demand
Registration and the sale of shares thereunder.
SECTION 2.03: REGISTRATION PROCEDURES. If and whenever the Company is
------------- -----------------------
required to effect or cause the registration of any Registrable Securities under
the Securities Act as provided in this Article II, the Company shall use its
best efforts to take action pursuant to all applicable Federal and state laws
and regulations to permit the sale or other disposition of the applicable
Registrable Securities and shall, as expeditiously as practicable:
(a) promptly prepare and file with the SEC, and use its best efforts to
have declared effective by the SEC, the applicable Registration Statement, which
shall comply as to form in all material respects with the requirements of the
applicable form and include all financial statements required by the SEC to be
filed therewith;
(b) furnish to each selling Holder of Registrable Securities and the
underwriters, if any, without charge, as many copies of the Registration
Statement, the Prospectus or the Prospectuses (including each preliminary
prospectus) and any amendment or supplement thereto as they may reasonably
request no later than two days following its filing with the SEC, which, in any
event will be no later than two business days prior to the effective date of
such Registration Statement;
(c) (i) use its best efforts to prepare and file with the SEC such
amendments to the Registration Statement as may be necessary to keep it
effective for the applicable period; (ii) cause any Prospectus to be amended or
supplemented as required and to be filed as required by Rule 424 or any similar
rule that may be adopted under the Securities Act; (iii) respond as promptly as
practicable to any comments received from the SEC with respect to the
Registration Statement or any amendments thereto; and (iv) comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by the Registration Statements during the applicable period
in accordance with the intended method or methods of distribution by the
Holders;
(d) furnish to the selling Holders and underwriters, upon request and
without charge, as many copies of any Prospectus and any amendment or supplement
thereto as they may reasonably request in order to facilitate the public sale or
other disposition of the Registrable Securities;
(e) use its best efforts to register or qualify the Registrable
Securities under all applicable state securities or blue sky laws of such
jurisdictions in the United States and its territories and possessions as the
selling Holders and managing underwriters may reasonably request and keep such
registration or qualification effective during the period the Registration
Statement is required to be kept effective; provided, however, that in
connection therewith, the Company shall not be required to (i) qualify as a
foreign corporation to do business or to register as a broker or dealer in any
such jurisdiction where it would not otherwise be required to qualify or
register but for this Section 2.03(e), (ii) subject itself to taxation in any
such jurisdiction with respect to such registration or qualification, or (iii)
file a general consent to service of process in any such jurisdiction;
(f) notify the selling Holders and managing underwriters promptly (i) when
the Registration Statement and any post-effective amendment thereto has become
effective, (ii) when any amendment or supplement to a Prospectus has been filed
with the SEC, except for an amendment via incorporation by reference of
subsequent filings under the Exchange Act, (iii) of the issuance by the SEC or
any state securities authority of any stop order suspending the effectiveness of
the Registration Statement or any part thereof or the initiation of any
proceedings for that purpose, (iv) if the Company receives any notification with
respect to the suspension of the qualification of the Registrable Securities for
offer or sale in any jurisdiction or the initiation of any proceeding for such
purpose, and (v) of the happening of any event during the period the
Registration Statement is effective as a result of which (A) the Registration
Statement contains any untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading or (B) a Prospectus as then amended or supplemented
contains any untrue statement of a material fact or omits to state any material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(g) use its best efforts to obtain the withdrawal of any order suspending
the effectiveness of the Registration Statement by the SEC or any state
securities authority as promptly as possible;
(h) enter into such agreements (including an underwriting agreements) and
take all such other actions reasonably required in connection therewith in order
to expedite or facilitate the disposition of such Registrable Securities and in
such connection, if the registration is in connection with an underwritten
offering (i) make such representations and warranties to the underwriters in
such form, substance and scope as are customarily made by issuers to
underwriters in underwritten offerings and confirm the same if and when
requested; (ii) obtain opinions of counsel to the Company and updates thereof
(which counsel and opinions in form, scope and substance shall be reasonably
satisfactory to the underwriters) addressed to the underwriters and the Holders
covering the matters customarily covered in opinions requested in underwritten
offerings and such other matters as may be reasonably requested by such
underwriters; (iii) obtain "cold comfort" letters and updates thereof from the
Company's accountants addressed to the underwriters and the Holders, such
letters to be in customary form and to cover matters of the type customarily
covered in "cold comfort" letters to underwriters in connection with
underwritten offerings; (iv) set forth in full, in any underwriting agreement
entered into, the indemnification provisions and procedures of Section 2.04
hereof with respect to all parties to be indemnified pursuant to said Section;
and (v) deliver such documents and certificates as may be reasonably requested
by the underwriters to evidence compliance with clause (i) above and with any
customary conditions contained in the underwriting agreement or other agreement
entered into by the Company; the above shall be done at each closing under such
underwriting or similar agreement or as and to the extent required thereunder;
(i) make available for inspection by one or more representatives of the
selling Holders, any underwriter participating in any disposition pursuant to
such registration, and any attorney or accountant retained by such Holders or
underwriter, all financial and other records, pertinent corporate documents and
properties of the Company, and cause the Company's officers, directors and
employees to supply all information reasonably requested by any such
representatives in connection therewith;
(j) cooperate with the selling Holders and managing underwriters to
facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold and not bearing any Securities Act legend and
enable certificates for such shares to be issued for such numbers of shares and
registered in such names as the selling Holders and managing underwriters may
reasonably request; and
(k)use its best efforts to cause all Registrable Securities to be listed on
any securities exchange on which the Common Stock is then listed, or included on
Nasdaq if the Common Stock is then so included.
Each Holder of Registrable Securities as to which any registration is being
effected shall furnish to the Company such information regarding the
distribution of such securities and such other information as may otherwise be
required by the Securities Act to be included in such Registration Statement.
SECTION 2.04: INDEMNIFICATION.
------------- ---------------
(a) Indemnification by Company. In connection with each Registration
----------------------------
Statement relating to disposition of Registrable Securities, the Company shall
indemnify and hold harmless each Holder and each underwriter of Registrable
Securities and each Person, if any, who controls such Holder or underwriter
(within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act), and each of their respective officers, directors, employees,
agents and attorneys, against any and all losses, claims, damages and
liabilities, joint or several (including any reasonable investigation, legal and
other fees and expenses incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claim asserted), to which
they, or any of them, may become subject under the Securities Act, the Exchange
Act or other Federal or state law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement, Prospectus or preliminary prospectus or
any amendment thereof or supplement thereto, or arise out of or are based upon
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading;
provided, however, that such indemnity shall not inure to the benefit of any
Holder or underwriter (or any Person controlling such Holder or underwriter
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act) on account of any losses, claims, damages or liabilities arising
from the sale of Registrable Securities if such untrue statement or omission or
alleged untrue statement or omission was made in such Registration Statement,
Prospectus or preliminary prospectus, or such amendment or supplement, in
reliance upon and in conformity with information furnished in writing to the
Company by the Holder or underwriter specifically for use therein andprovided,
further, that with respect to any preliminary prospectus, the foregoing
indemnification shall not inure to the benefit of any Holder from whom the
person asserting any loss, claim, damage, liability or expense purchased
Registrable Securities, or to any person controlling such Holder, if copies of
the Prospectus were timely delivered to such Holder and a copy of the Prospectus
(as then amended or supplemented if the Company shall have timely furnished any
amendments or supplements thereto) was not sent or given by or on behalf of such
Holder to such person, if required by law to have been so delivered, at or prior
to the written confirmation of the sale of the Registrable Securities to such
person, and if such Prospectus (as so amended or supplemented) would have cured
the defect giving rise to such loss, claim, damage, liability or expense. This
indemnity agreement shall be in addition to any liability that the Company may
otherwise have.
(b) Indemnification by Holder. In connection with each Registration
---------------------------
Statement, each selling Holder shall indemnify, to the same extent as the
indemnification provided by the Company in Section 2.04(a), the Company, its
directors and each officer who signs the Registration Statement and each Person
who controls the Company (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act) but only insofar as such losses, claims,
damages and liabilities arise out of or are based upon any untrue statement or
omission or alleged untrue statement or omission that was made in the
Registration Statement, the Prospectus or preliminary prospectus or any
amendment thereof or supplement thereto, in reliance upon and in conformity with
information furnished in writing by such Holder to the Company specifically for
use therein. In no event shall the liability of any selling Holder of
Registrable Securities hereunder be greater in amount than the dollar amount of
the net proceeds received by such Holder upon the sale of the Registrable
Securities giving rise to such indemnification obligation.
(c) Conduct of Indemnification Procedure. Any party that proposes to
------------------------------------
assert the right to be indemnified hereunder will, promptly after receipt of
notice of commencement of any action, suit or proceeding against such party in
respect of which a claim is to be made against an indemnifying party or parties
under this Section, notify each such indemnifying party of the commencement of
such action, suit or proceeding, enclosing a copy of all papers served. No
indemnification provided for in Section 2.04(a) or 2.04(b) shall be available to
any party who shall fail to give notice as provided in this Section 2.04(c) if
and to the extent that the party to whom notice was not given was unaware of the
proceeding to which such notice would have related and was prejudiced by the
failure to give such notice, but the omission so to notify such indemnifying
party of any such action, suit or proceeding shall not relieve it from any
liability that it may have to any indemnified party for contribution or
otherwise than under this Section. In case any such action, suit or proceeding
shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate in, and, to the extent that it shall wish, jointly with
any other indemnifying party similarly notified, to assume the defense thereof,
with counsel satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof and the approval by the indemnified party of such counsel, the
indemnifying party shall not be liable to such indemnified party for any legal
or other expenses, except as provided below and except for the reasonable costs
of investigation subsequently incurred by such indemnified party in connection
with the defense thereof. The indemnified party shall have the right to employ
its counsel in any such action, but the fees and expenses of such counsel shall
be at the expense of such indemnified party unless (i) the employment of counsel
by such indemnified party has been authorized in writing by the indemnifying
party, (ii) the indemnified party shall have reasonably concluded, based on the
advice of its counsel, that there may be a conflict of interest between the
indemnifying party and the indemnified party in the conduct of the defense of
such action (in which case the indemnifying party shall not have the right to
direct the defense of such action on behalf of the indemnified party) or (iii)
the indemnifying party shall not have employed counsel to assume the defense of
such action within a reasonable time after notice of the commencement thereof,
in each of which cases the fees and expenses of counsel shall be at the expense
of the indemnifying party, it being understood, however, that the indemnifying
party shall only be liable for the expenses of one separate counsel and local
counsel in each relevant jurisdiction, which counsel shall be reasonably
approved by the indemnifying party. An indemnifying party shall not be liable
for any settlement of any action, suit, proceeding or claim effected without its
written consent.
(d) Contribution. In order to provide for just and equitable
------------
contribution in circumstances in which the indemnification provided for in
Section 2.04(a) and 2.04(b) is due in accordance with its terms but for any
reason is held to be unavailable from the Company or any Holder, the Company and
the selling Holders shall contribute to the aggregate losses, claims, damages
and liabilities (including any investigation, legal and other fees and expenses
reasonably incurred in connection with, and any amount paid in settlement of,
any action, suit or proceeding or any claims asserted, but after deducting any
contribution received by the Company from persons other than the Holders, such
as persons who control the Company within the meaning of the Securities Act,
officers of the Company who signed any Registration Statement and directors of
the Company, who may also be liable for contribution) to which the Company and
one or more of the Holders may be subject in such proportion as is appropriate
to reflect the relative benefits received by the Company on the one hand and
each such Holder on the other from the offering of the Registrable Securities
or, if such allocation is not permitted by applicable law or indemnification is
not available as a result of the indemnifying party not having received notice
as provided in Section 2.04(c) hereof, in such proportion as is appropriate to
reflect not only the relative benefits referred to above but also the relative
fault of the Company on the one hand and each such Holder on the other in
connection with the statements or omissions that resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company and each
such Holder shall be deemed to be in the same proportion as (x) the total
proceeds from the offering (net of underwriting discounts but before deducting
expenses) received by the Company, bear to (y) the dollar amount of the net
proceeds received by such Holder upon the sale of the Registrable Securities
giving rise to such indemnification obligation. The relative fault of the
Company or any such Holder shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact
related to information supplied by the Company or any such Holder and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the Holders agree
that it would not be just and equitable if contribution pursuant to this Section
2.04(d) were determined by pro rata allocation (even if the Holders were treated
as one entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this Section 2.04(d), (i) in no case shall any
Holder be liable or responsible for any amount in excess of the dollar amount of
the net proceeds received by such Holder upon the sale of the Registrable
Securities giving rise to such indemnification obligation, and (ii) the Company
shall be liable and responsible for any amount in excess of such dollar amount;
provided, however, that no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 2.04, each person, if any, who
controls a Holder within the meaning of Section 15 of the Securities Act or
Section 20(a) of the Exchange Act shall have the same rights to contribution as
such Holder, and each person, if any, who controls the Company within the
meaning of the Section 15 of the Securities Act or Section 20(a) of the Exchange
Act, each officer of the Company who shall have signed any Registration
Statement and each director of the Company shall have the same rights to
contribution as the Company, subject in each case to clauses (i) and (ii) in the
immediately preceding sentence of this Section 2.04(d). Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim for
contribution may be made against another party or parties under this Section,
notify such party or parties from whom contribution may be sought, but the
omission so to notify such party or parties from whom contribution may be sought
shall not relieve the party or parties from whom contribution may be sought from
any other obligation it or they may have hereunder or otherwise than under this
Section 2.04. No party shall be liable for contribution with respect to any
action, suit, proceeding or claim settled without its written consent. Each
Holder's obligations to contribute pursuant to this Section 2.04(d) are several
in proportion to their respective shares sold and not joint.
(e) Specific Performance. The Company and the Holder acknowledge
---------------------
that remedies at law for the enforcement of this Section 2.04 may be inadequate
and intend that this Section 2.04 shall be specifically enforceable.
EXHIBIT B
PROMISSORY NOTE
---------------
$3,565,625.00 Goleta, California
November 16, 1999
FOR VALUE RECEIVED, Community West Bancshares, a California corporation
("PAYOR"), promises to pay to the order of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ("PAYEE"), in
lawful currency of the United States of America, the principal sum of Three
Million, Five Hundred Sixty-Five Thousand, Six Hundred, Twenty-Five Dollars
($3,565,625.00) and to pay interest on the outstanding principal of this
Promissory Note (this "NOTE") in accordance with the terms of this Note. This
Note is delivered in connection with that certain Stock and Note Purchase
Agreement of even date (the "PURCHASE AGREEMENT") among Payor, Payee and the
other Purchasers (as defined in the Purchase Agreement). All payments of
principal, interest and other amounts payable under this Note shall be made by
wire transfer of immediately available funds to an account specified in writing
by Payee from time to time, without set-off or counterclaim whatsoever, and free
from, and without reduction for, any and all present or future taxes, levies,
imposts, duties, fees, charges, deductions, withholdings, restrictions or
conditions of any nature.
1. INTEREST. Interest shall begin to accrue on the unpaid principal
--------
balance of this Note commencing on the date hereof and continuing until
repayment of this Note in full at the rate of eight and one-quarter percent
(8.25%) per annum calculated on the basis of a 360 day year and actual days
elapsed. From and after the earlier of the Maturity Date or the Acceleration
Date (each as defined below), interest shall accrue on the unpaid principal
balance of this Note and on all unpaid interest accrued through the earlier of
the Maturity Date or the Acceleration Date under this Note until payment of this
Note in full at the rate of ten percent (10.00%) per annum calculated on the
basis of a 360 day year and actual days elapsed.
2. MATURITY. Subject to Section 4 hereof, the entire unpaid principal
--------
balance of this Note together with all accrued and unpaid interest under this
Note shall be due and payable on May 16, 2001 (the "MATURITY DATE"). All
payments received by Payee in respect of this Note shall be applied first
against costs of collection (if any), then against accrued and unpaid interest,
and then against principal.
3. PREPAYMENT. Payor shall be permitted to prepay the unpaid principal
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balance of this Note, in whole or in part, together with accrued but unpaid
interest under this Note at any time and from time to time without premium or
penalty. All prepayments received by Payee shall be applied in the order
provided in Section 2. Notwithstanding the foregoing, the prepayment of
$-----279,981.35 of the unpaid principal balance of this Note required by
Section 3.2 of the Purchase Agreement shall be accompanied by the payment of
only the interest accrued on the amount of principal so prepaid.
4. DEFAULT. Payor will be deemed to be in default under this Note, and
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the unpaid principal balance of this Note, together with all interest accrued
under this Note, will become immediately due and payable, upon any material
breach or default by the Company under this Note or the Purchase Agreement (such
due date being referred to herein as the "ACCELERATION DATE").
5. MISCELLANEOUS.
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(a) Payor hereby waives presentment, demand, protest, notice of dishonor,
diligence and all other notices, any release or discharge arising from any
extension of time, discharge of a prior party, release of any or all of any
security given from time to time for this Note, or other cause of release or
discharge other than actual payment in full hereof.
(b) Payee shall not be deemed, by any act or omission, to have waived any
of its rights or remedies hereunder unless such waiver is in writing and signed
by Payee and then only to the extent specifically set forth in such writing. A
waiver with reference to one event shall not be construed as continuing or as a
bar to or waiver of any right or remedy as to a subsequent event. No delay or
omission of Payee in exercising any right, whether before or after a default
hereunder, shall impair any such right or shall be construed to be a waiver of
any right or default, and the acceptance at any time by Payee of any past-due
amount shall not be deemed to be a waiver of the right to require prompt payment
when due of any other amounts then or thereafter due and payable.
(c) Time is of the essence hereof. Upon any default hereunder, Payee may
exercise all rights and remedies provided for herein and by law or equity,
including, but not limited to, the right to immediate payment in full of this
Note.
(d) The remedies of Payee as provided herein, or any one or more of them,
or in law or in equity, shall be cumulative and concurrent, and may be pursued
singularly, successively or together at Payee's sole discretion, and may be
exercised as often as occasion therefor shall occur.
(e) It is expressly agreed that if this Note is referred to an attorney or
if suit is brought to collect or interpret this Note or any part hereof or to
enforce or protect any rights conferred upon Payee by this Note or any other
document evidencing or securing this Note, then Payor promises and agrees to pay
all costs, including attorneys' fees, incurred by Payee.
6. NO USURY. Nothing contained in this Note or in any agreements
---------
between Payor and Payee shall be deemed to require the payment by Payor of
interest on the indebtedness evidenced by this Note in excess of the rate that
Payee may lawfully contract to charge under applicable usury and other laws (the
"MAXIMUM LEGAL RATE"). All agreements between Payor and Payee deemed to pertain
to this Note are expressly limited so that in no contingency or event shall the
amount paid or agreed to be paid to Payee for the use, forbearance, or detention
of money to be loaned hereunder exceed the Maximum Legal Rate. If, under any
circumstance whatsoever, the fulfillment of any obligation under this Note or
any other agreement between Payor and Payee deemed to pertain to this Note shall
involve exceeding the Maximum Legal Rate, then the obligation to be fulfilled by
Payor shall be reduced by the minimum amount necessary so that such obligation
shall not exceed the Maximum Legal Rate.
7. WAIVER OF JURY TRIAL. EACH OF PAYOR AND PAYEE HEREBY AGREES NOT TO
---------------------
ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE BY JURY, AND EACH WAIVES ANY RIGHT TO
TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER
EXIST WITH REGARD TO THIS NOTE. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN
KNOWINGLY AND VOLUNTARILY BY PAYOR AND PAYEE, AND IS INTENDED TO ENCOMPASS
INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO TRIAL BY JURY
WOULD OTHERWISE ACCRUE. PAYEE IS HEREBY AUTHORIZED TO FILE A COPY OF THIS
SECTION IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER.
8. GOVERNING LAW. The Note shall be governed by and construed in
--------------
accordance with the internal laws, and not the laws of conflicts or choice of
law, of the State of California and the applicable federal laws of the United
States of America.
9. AMENDMENTS AND WAIVERS. This Note may not be modified, amended,
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waived, extended, changed, discharged or terminated orally or by any act or
failure to act on the part of Payor or Payee, but only by an agreement in
writing signed by the party against whom enforcement of any modification,
amendment, waiver, extension, change, discharge or termination is sought.
10. SUCCESSORS AND ASSIGNS. This Note shall be binding upon and
------------------------
inure to the benefit of Payor and Payee, and their respective successors,
assigns, heirs, executors and administrators.
11. SEVERABILITY. Whenever possible, each provision of this Note shall
------------
be interpreted in such manner as to be effective and valid under applicable law,
but, if any provision of this Note shall be held to be prohibited or invalid
under applicable law, such provision shall be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Note.
IN WITNESS WHEREOF, Payor has executed this Note as of the date first above
written.
COMMUNITY WEST BANCSHARES
By:
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Name:
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Title:
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