“ Affiliate ” means, with respect to any Person, any Person directly or indirectly controlling, controlled by or under common control with such other Person.

 

“ Applicable Regulatory Approval ” means, with respect to a particular Holder, all governmental, quasi-governmental, court or regulatory approvals, consents or statements of non-objection necessary to allow such Holder to acquire the shares of Common Stock issuable upon conversion of the Series A Preferred Stock held by it or to own or control such shares of Common Stock (taking into account Section 8(c), Section 9(g) and Section 9(h)) and the expiration or earlier termination of any required waiting period, including any approvals, consents or statements of non-objection required by any state or federal banking regulatory authority.

 

“ Board of Directors ” means the board of directors of the Company or, with respect to any action to be taken by such board of directors, any committee of the board of directors duly authorized to take such action.

 

“ Business Day ” means any day other than a Saturday, a Sunday or a day on which banks are required or permitted by law or executive order to be closed in the State of New York or Colorado.

 

“ Castle Creek ” means Castle Creek Capital Partners III, L.P.

 

“ Certificate of Designations ” means this Certificate of Designations of the Series A Preferred Stock.

 

“ Certificate of Incorporation ” means the Amended and Restated Certificate of Incorporation of the Company, as amended prior to the Issue Date and as amended by this Certificate of Designations and as may be further amended.

 

“ Closing Price ” of the Common Stock (or any other securities, cash or other property into which the Series A Preferred Stock becomes convertible in connection with any Reorganization Event) on any Trading Day means the reported last sale price per share (or, if no last sale price is reported, the average of the bid and ask prices per share or, if more than one in either case, the average of the average bid and the average ask prices per share) on such date as reported by the NASDAQ Stock Market, or, if the Common Stock (or such other property) is not listed on the NASDAQ Stock Market, then as reported by the principal national securities exchange on which the Common Stock (or such other property) is listed, or if the Common Stock (or such other property) is not so listed or quoted on a U.S. national securities exchange, or, if no closing price for the Common Stock (or such property) is so reported, the last quoted bid price for the Common Stock (or such property) in the over-the-counter market as reported by Pink Sheets LLC or similar organization, or, if that bid price is not available, the market price of the Common Stock (or such property) on that date as determined by a nationally recognized independent investment banking firm retained for this purpose by the Company. For the purposes of this Certificate of Designations, all references herein to the closing sale price and the last sale price reported of the Common Stock (or other property) on the NASDAQ Stock Market shall be the closing sale price and last reported sale price as reflected on the website of the NASDAQ Stock Market (www.nasdaq.com) and as reported by Bloomberg Professional Service; provided

 

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that in the event that there is a discrepancy between the closing price and the last reported sale price as reflected on the website of the NASDAQ Stock Market and as reported by Bloomberg Professional Service, the closing sale price and the last reported sale price on the website of the NASDAQ Stock Market shall govern.

 

“ Common Stock ” means the Company’s common stock, par value $0.001 per share.

 

“ Company ” has the meaning set forth in the preamble.

 

“ Conversion Date ” has the meaning set forth in Section 10(a).

 

“ Conversion Notice ” has the meaning set forth in Section 9(b).

 

“ Conversion Price ” means, for each share of Series A Preferred Stock, $1.80; provided, however, that:

 

(i)                                      in the event of the occurrence of an Unpaid Dividend as to a Dividend Payment Date (such Dividend Payment Date, the “ First Missed Dividend Date ”) and the failure of the Company to  pay such Unpaid Dividend by the Dividend Payment Date in the twelfth calendar month after the First Missed Dividend Date (such Dividend Payment Date, the “ First Missed Dividend Adjustment Date ”), the Conversion Price shall decrease on the first Business Day following the First Missed Dividend Adjustment Date by $0.04 with respect to the Unpaid Dividend relating to the First Missed Dividend Date and by an additional $0.04 with respect to  each Unpaid Dividend, if any, as to a Dividend Payment Date after the First Missed Dividend Date to and including the First Missed Dividend Adjustment Date;

 

(ii)                                   in the event of the occurrence of an Unpaid Dividend as to a Dividend Payment Date after the First Missed Dividend Adjustment Date, the Conversion Price shall decrease on the first Business Day following such Dividend Payment Date by an additional $0.04;

 

(iii)                                in the event of the occurrence of one or more Unpaid Dividends and the failure of the Company to pay such Unpaid Dividends by the Mandatory Conversion Date, and provided that such Unpaid Dividends have not by the Mandatory Conversion Date resulted in an adjustment to the Conversion Price pursuant to clause (i) or (ii) above, the Conversion Price shall be deemed to have decreased as of the first Business Day immediately preceding the Mandatory Conversion Price by an additional $0.04 with respect to each such Unpaid Dividend;

 

(iv)                               the maximum adjustment pursuant to clauses (i), (ii) and (iii) above is $0.30 and in no event shall the downward adjustment of the Conversion Price pursuant to such clauses exceed $0.30; and

 

(v)                                  notwithstanding clauses (i) through (iv) above, in the event an adjustment in the Conversion Price occurs pursuant to Section 13, contemporaneously with such

 

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adjustment a corresponding adjustment shall be made in the $0.04 and $0.30 amounts used in this definition, including such amounts as they may previously have been adjusted pursuant to this clause (v) (each a “ Reference Amount ”) so that, after giving effect to such adjustment, each reference to the applicable Reference Amount shall be to an adjusted amount that bears the same ratio to the respective Reference Amount that the Conversion Price as adjusted pursuant to Section 13 bears to $1.80 (or the then applicable Conversion Price).

 

“ Conversion Rate ” means that number of Conversion Securities into which one share of Series A Preferred Stock shall be convertible pursuant to Section 8(a) or 9(a), determined by dividing the Liquidation Preference by the Conversion Price.

 

“ Conversion Securities ” means shares of Common Stock, Non-Voting Common Stock or Series B Preferred Stock, as the case may be, as determined pursuant to Section 9(h).

 

“ Current Market Price ” means, on any date, the average of the daily Closing Price per share of the Common Stock or other securities on each of the five consecutive Trading Days preceding the earlier of the day before the date in question and the day before the Ex-Date with respect to the issuance or distribution giving rise to an adjustment to the Conversion Price pursuant to Section 13.

 

“ DGCL ” has the meaning set forth in the preamble.

 

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

 

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

 

“ Exchange Property ” has the meaning set forth in Section 16(a).

 

“ Ex-Date ”, when used with respect to any issuance or distribution, means the first date on which the Common Stock or other securities trade without the right to receive the issuance or distribution giving rise to an adjustment to the Conversion Price pursuant to Section 13.

 

“ Holder ” means a Person in whose name the shares of the Series A Preferred Stock are registered, which may be treated by the Company and the Transfer Agent as the absolute owner of the shares of Series A Preferred Stock for the purpose of making payment and settling conversions and for all other purposes.

 

“ Investment Agreement ” means the Investment Agreement, dated as of May 6, 2009, by and among the Company, Castle Creek, Patriot, Relational and the other investors that may become party thereto from time to time, as it may be amended from time to time.

 

“ Issue Date ” means August 11, 2009, the original date of issuance of the Series A Preferred Stock.

 

“ Junior Securities ” has the meaning set forth in Section 3.

 

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“ Liquidation Preference ” means, as to the Series A Preferred Stock, $1,000 per share, plus all accrued but unpaid dividends thereon.

 

“ Mandatory Conversion Date ” means the fifth anniversary of the Issue Date.

 

“ Market Disruption Event ” means the occurrence or existence for more than one half hour period in the aggregate on any Scheduled Trading Day for the Common Stock (or any other securities, cash or other property into which the Series A Preferred Stock becomes convertible in connection with any Reorganization Event) of any suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the NASDAQ Stock Market or otherwise) in the Common Stock (or such other property) or in any options, contracts or future contracts relating to the Common Stock (or such other property), and such suspension or limitation occurs or exists at any time before 1:00 p.m. (New York City time) on such day.

 

“ Non-Voting Common Stock ” means the non-voting Common Stock of the Company, par value $0.001 per share, contemplated by Section 9(e) of the Investment Agreement.

 

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

 

“ Optional Conversion Date ” has the meaning set forth in Section 9(e).

 

“ Optional Convertibility Inception Date ” means the earlier to occur of (i) the date of the second anniversary of the Issue Date and (ii) the date of consummation of a Reorganization Event.

 

“ Parity Securities ” has the meaning set forth in Section 3.

 

“ Patriot ” means, collectively, Patriot Financial Partners, L.P. and Patriot Financial Partners Parallel, L.P.

 

“ Person ” means an individual, corporation, partnership, association, joint stock company, limited liability company, joint venture, trust, governmental entity, unincorporated organization or other legal entity.

 

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

 

“ Relational ” means collectively Relational Investors Mid-Cap Fund I, L.P. and Relational Investors Mid-Cap Fund II, L.P.

 

“ Reorganization Event ” has the meaning set forth in Section 16(a)(iv).

 

“ Scheduled Trading Day ” means a day that is scheduled to be a Trading Day on the primary U.S. national securities exchange or market on which the Common Stock is listed or, if the Common Stock is not listed on a U.S. national securities exchange, on the principal other market on which the Common Stock is then traded.

 

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“ Senior Securities ” means any shares or equity securities that rank, with respect to dividend rights and rights on liquidation, winding up and dissolution of the Company, senior to the Series A Preferred Stock.

 

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

 

“ Series B Preferred Stock ” means the series of the Company’s preferred stock as contemplated by Section 9(e) of the Investment Agreement.

 

“ Trading Day ” means any day on which (i) there is no Market Disruption Event and (ii) the NASDAQ Stock Market is open for trading, or, if the Common Stock (or any other securities, cash or other property into which the Series A Preferred Stock becomes convertible in connection with any Reorganization Event) is not listed on the NASDAQ Stock Market, any day on which the principal national securities exchange on which the Common Stock (or such other property) is listed is open for trading, or, if the Common Stock (or such other property) is not listed on a national securities exchange, any Business Day. A “ Trading Day ” only includes those days that have a scheduled closing time of 4:00 p.m. (New York City time) or the then standard closing time for regular trading on the relevant exchange or trading system.

 

“ Transfer Agent ” means Computershare Investor Services, LLC, the Company’s duly appointed transfer agent, registrar, conversion and dividend disbursing agent for the Series A Preferred Stock, or such other successor entity as the Company may, in its sole discretion, appoint from time to time.

 

“ Unpaid Dividend ” means the Company’s failure to declare and pay dividends (including PIK Dividends or cash dividends) for any calendar quarter on the applicable Dividend Payment Date for any reason, including but not limited to restrictions under the DGCL or imposed by federal or state banking regulations or as may be imposed in writing by the Company’s primary federal or state banking regulators.

 

Section 3.                                             Ranking .  The Series A Preferred Stock will, with respect to dividend rights and rights on liquidation, winding-up and dissolution of the Company, rank (i) on a parity with each other class or series of preferred stock established after the Issue Date by the Company the terms of which expressly provide that such class or series will rank on a parity with the Series A Preferred Stock as to dividend rights and rights on liquidation, winding-up and dissolution of the Company (collectively referred to as “ Parity Securities ”) and (ii) senior to the Common Stock and each other class or series of capital stock outstanding or established after the Issue Date by the Company the terms of which do not expressly provide that it ranks on a parity with or senior to the Series A Preferred Stock as to dividend rights and rights on liquidation, winding-up and dissolution of the Company (collectively referred to as “ Junior Securities ”).  The Company has the right to authorize or issue additional shares or classes or series of Junior Securities or Parity Securities without the consent of the Holders subject to Section 6(b).

 

Section 4.                                             Dividends .

 

(a)                                   The Holders shall be entitled to receive with respect to each share of Series A Preferred Stock:

 

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(i)                                      from and after the Issue Date until the first Dividend Payment Date (as defined below) following the second anniversary of the Issue Date (the “ Option Dividend Termination Date ”), when, as and if declared by the Board of Directors, but only out of funds legally available therefor, dividends (subject to Section 4(b) below) on each February 15, May 15, August 15 and November 15, beginning on the first such date following the Issue Date (each, a “ Dividend Payment Date ”), at a rate per annum equal to 9.0% of the Liquidation Preference of each such share, payable at the Company’s option with respect to each Dividend Period either in (A) cash or (B) additional shares of Series A Preferred Stock (“ PIK Dividends ”) (provided that, to the extent payment of PIK Dividends on any Holder’s shares of Series A Preferred Stock, taken as a whole, would result in the payment of a fractional share of Series A Preferred Stock to such Holder, such fractional share shall instead be paid in cash); and

 

(ii)                                   from and after the Option Dividend Termination Date, when, as and if declared by the Board of Directors, but only out of funds legally available therefor, cash dividends (subject to Section 4(b) below) at a rate per annum equal to 9.0% of the Liquidation Preference of each such share, payable in arrears on each Dividend Payment Date.  If any Dividend Payment Date is not a Business Day, then dividends will be payable on the first Business Day following such date and dividends shall accrue to the actual payment date.

 

The term “ Dividend Period ” means each period from and including a Dividend Payment Date (or the Issue Date in the case of the first Dividend Period) to but excluding the next Dividend Payment Date. The amount of dividends payable for any Dividend Period shall be computed on the basis of a 360-day year consisting of twelve 30-day months.

 

(b)                                  To the extent that any such dividends payable on the shares of Series A Preferred Stock on any Dividend Payment Date are not declared and paid, in full or otherwise, on such Dividend Payment Date, then such unpaid dividends shall not cumulate and shall cease to accrue and be payable and the Company shall have no obligation to pay, and the Holders shall have no right to receive, dividends accrued for the Dividend Period ending immediately prior to such Dividend Payment Date after such Dividend Payment Date, whether or not dividends are declared for any subsequent Dividend Period with respect to Series A Preferred Stock, Parity Securities, Junior Securities or any other class or series of capital stock or authorized preferred stock of the Company.  Holders shall not be entitled to any dividends, whether payable in cash, property or stock, in excess of full dividends for each Dividend Period on the Series A Preferred Stock. No interest, or sum of money in lieu of interest, shall be payable in respect of any dividend payment or failure to make any dividend payment.

 

(c)                                   Each dividend will be payable to Holders of record as they appear in the records of the Company at the close of business on the January 31, April 30, July 31 and October 31 immediately preceding the corresponding Dividend Payment Date.

 

Section 5.                                             Payment Restrictions .  During any time that any shares of Series A Preferred Stock are outstanding, the Company shall not (i) declare or pay dividends on, make distributions with respect to, or redeem, purchase or acquire, or make a liquidation payment with respect to, or pay or make available monies for the redemption of, any Common Stock or other Junior Securities, or (ii) redeem, purchase or acquire, or make a liquidation payment with respect to, or pay or make available monies for the redemption of, any Parity Securities (otherwise than

 

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pursuant to pro rata offers to purchase all or any pro rata portion of such Parity Securities and the Series A Preferred Stock), unless in each case full dividends on all outstanding shares of the Series A Preferred Stock have been paid or (in the case of current dividends) declared and set aside for payment (except for (w) dividends or distributions paid in shares of, or options, warrants or rights to subscribe for or purchase shares of, Common Stock or other Junior Securities, (x) redemptions or purchases by conversion or exchange of Junior Securities for or into other Junior Securities, or of Parity Securities for or into other Parity Securities or Junior Securities, (y) purchases by the Company or its Affiliates as a broker, dealer, advisor, fiduciary, trustee or comparable capacity in connection with transactions effected by or for the account of customers of the Company or customers of any of its subsidiaries or in connection with the distribution or trading of such capital stock and (z) acquisitions of shares of Common Stock in respect of exercises of employee equity awards or any related tax withholding).  When dividends are not paid in full (or declared and a sum sufficient for such full payment is not so set apart) for any Dividend Period on the Series A Preferred Stock and any Parity Securities, dividends declared on the Series A Preferred Stock and Parity Securities (whether cumulative or non-cumulative) shall only be declared pro rata so that the amount of dividends declared per share on the Series A Preferred Stock and such Parity Securities shall in all cases bear to each other the same ratio that accrued dividends per share on the shares of the Series A Preferred Stock (but without, in the case of any non-cumulative preferred stock, accumulation of unpaid dividends for prior Dividend Periods) and such Parity Securities bear to each other.

 

Section 6.                                             Voting Rights .

 

(a)                                   The Holders of the Series A Preferred Stock shall vote together with the holders of Common Stock on all matters upon which the holders of Common Stock are entitled to vote. Each share of Series A Preferred Stock shall be entitled to such number of votes as the number of shares of Common Stock into which such share of Series A Preferred Stock is convertible pursuant to the Conversion Rate at the time of the record date for any such vote (taking into account Section 9(h) hereof, provided that solely for the purposes of determining the number of votes to which each share of Series A Preferred Stock is entitled pursuant to this Section 6(a), the Conversion Price utilized in the definition of Conversion Rate shall be deemed to be $2.00, subject to adjustment in accordance with the provisions of Section 13 with the exception of subsection (b) thereof), and for the purpose of such calculation, shares of Common Stock sufficient for the full conversion of all shares of Series A Preferred Stock shall be deemed to be authorized for issuance under the Certificate of Incorporation on such date and shall be included in such calculation.

 

(b)                                  So long as any shares of Series A Preferred Stock are outstanding, the vote or consent of the Holders of a majority of the shares of Series A Preferred Stock at the time outstanding, voting as a single class with all other classes and series of Parity Securities having similar voting rights then outstanding and with each series or class having a number of votes proportionate to the aggregate liquidation preference of the outstanding shares of such class or series, given in person or by proxy, either in writing without a meeting or by vote at any meeting called for the purpose, will be necessary to effect or validate:

 

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(i)                                      any amendment, alteration or repeal of any provision of the Certificate of Incorporation (including this Certificate of Designations) that would alter or change the voting powers, preferences or special rights of the Series A Preferred Stock or any Parity Security;

 

(ii)                                   any amendment or alteration of the Certificate of Incorporation (including this Certificate of Designations) to authorize, create or increase, or to obligate the Company to authorize, issue or increase, the aut