January 30, 2009
United States
Department of the Treasury
1500
Pennsylvania Avenue, NW
Washington,
D.C. 20220
Valley Commerce
Bancorp
200 S. Court
Street
Visalia, CA
93291
Ladies and
Gentlemen:
Reference is
made to that certain Letter Agreement incorporating the Securities
Purchase Agreement – Standard Terms dated of even date
herewith (the “ Securities Purchase Agreement ”)
by and among United States Department of Treasury (“
Investor ”) and Valley Commerce Bancorp (“
Company ”). Investor and Company desire to set forth
herein certain additional agreements regarding Company’s
commitment to the holder of the Preferred Shares after the closing
of the transactions contemplated by the Securities Purchase
Agreement. Terms that are defined in the Securities
Purchase Agreement are used in this letter agreement as so
defined.
In order to
comply with California Corporations Code §212(a), the Company
has modified section 7(b) of the Standard Provisions of each of the
Certificate of Designations attached as Annex A and Annex
B to the Securities Purchase Agreement (collectively, the
“ Certificates of Designations ”) to provide in
pertinent part as follows:
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“Whenever, at any time or times, dividends
payable on the shares of Designated Preferred Stock have not been
paid for an aggregate of six quarterly Dividend Periods or more,
whether or not consecutive, the holders of the Designated Preferred
Stock shall have the right, with holders of shares of any one or
more other classes or series of Voting Parity Stock outstanding at
the time, voting together as a class, to elect two
directors…”
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By its
execution hereof, the Company hereby confirms and agrees that as of
the date hereof and at all times while any shares of the Designated
Preferred Stock (as defined in each Certificate of Designations)
are outstanding or issuable upon exercise of the Warrant it shall
maintain a range of directors of the Company that will permit the
holder of the Preferred Shares to elect two directors in accordance
with said sections 7(b). Currently Section 2.2 (the
“ Applicable Provision ”) of the Company’s
bylaws (the “ Bylaws ”) provides for a range of
directors of no less than eight (8) and no more than fifteen
(15). At all times while any shares of the Designated
Preferred Stock are outstanding, the Company shall not fill more
than thirteen (13) director positions. In the event the
Company desires to increase the number of directors beyond thirteen
(13), then the Company shall be required to amend the Bylaws to
increase the maximum directors to always allow for at least two
open director seats for the holders of the Preferred Shares to
elect in accordance with Section 7(b) of the Standard Terms of the
Certificate of
United States
Department of Treasury
Valley Commerce
Bancorp
January 30,
2009
Determination
of Preferences of Series B Fixed Rate Cumulative Perpetual
Preferred Stock of Valley Commerce Bancorp and Section 7(b) of the
Standard Terms of the Certificate of Determination of Preferences
of Series C Fixed Rate Cumulative Perpetual Preferred Stock of
Valley Commerce Bancorp (and to amend the bylaws to provide that
such provision may not be modified, amended or repealed by the
Company’s board of directors (or any committee thereof) or
without the affirm
