Exhibit 2.2 (G)
ESCROW AGREEMENT
PARTIES:
FORMER
SHAREHOLDERS AND OPTION HOLDERS
OF SERVICE 1 ST
BANCORP (the “ Former Stakeholders
”)
CENTRAL VALLEY COMMUNITY
BANK
a
California corporation (“ Parent Bank
”)
7100 North Financial Drive,
Suite 101
Fresno, CA 93720
(the “ Escrow
Agent ”)
DATE:
, 2008
BACKGROUND
The Former Stakeholders
are (i) former shareholders of Service 1 st Bancorp
(“ Company ”) who did not perfect their
dissenters’ rights under Article 13 of the California
Corporations Code in connection with the merger of Service 1
st Bancorp with and into Central Valley Community
Bancorp (“ Parent ”) contemplated by the
Reorganization Agreement (as hereinafter defined) and
(ii) directors, officers and employees of Company and Company
Bank (as hereinafter defined) who held stock options of Company at
the time of the Merger (as defined in the Reorganization
Agreement).
is
the representative of the Former Stakeholders (including his
successors, the “ Former Stakeholder Representative
”).
Parent, Parent Bank, Company
and Service 1 st Bank, a California banking corporation
(“ Company Bank ”) are parties to that certain
Reorganization Agreement and Plan of Merger dated as of
May 28, 2008 (the “ Reorganization Agreement
”) pursuant to which the sum of Three Million Five Hundred
Thousand and No/100 Dollars ($3,500,000.00) (including any interest
or other earnings thereon, the “ Escrowed Funds
”) is to be delivered to Escrow Agent to provide a source of
funds to secure the indemnity obligation of the Former Stakeholders
under Section 4.10 of the Reorganization Agreement.
Pursuant to the Reorganization Agreement, the Escrowed Funds are to
be delivered to Escrow Agent immediately upon the consummation of
the Merger.
Capitalized terms not
otherwise defined shall have the meaning ascribed thereto in the
Reorganization Agreement.
NOW,
THEREFORE, the
parties hereto agree as follows:
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1.
Escrow Account .
Company and Parent shall deliver, or cause to be delivered,
the Escrowed Funds to the
Escrow Agent immediately upon the consummation of the Merger.
The Escrow Agent shall hold the Escrowed Funds in an
account (the “ Escrow Account ”) pursuant to the
provisions of this Escrow Agreement.
2.
Investment of
Escrowed Funds .
Pending distribution of the Escrowed Funds in accordance with the
terms and conditions of the Reorganization Agreement and this
Escrow Agreement, all Escrowed Funds shall be invested and
reinvested by the Escrow Agent in accordance with the instructions
set forth on Exhibit A attached hereto and incorporated
herein by this reference .
3.
Reservations of Escrowed
Funds . In the event that Parent or Parent
Bank incurs any losses (including, without limitation, any
reduction in the book value or principal and interest owing and any
interest not recognized due to non-accrual status), liabilities,
costs, expenses, judgments, assessments, penalties, damages,
deficiencies, suits, actions, claims, proceedings, demands, and
causes of action, including but not limited to reasonable attorney
fees, court costs, and related expenses (collectively, the “
Claims ”) in connection that certain Loan
Participation Agreement dated as of January 3, 2006, by and
between First Bank, a Missouri corporation, and Company Bank
(“ Participation Agreement ”), including,
without limitation, any and all matters arising from, relating to
or in connection with the Loan (as defined in the Participation
Agreement), any and all actions or omissions in connection with the
Participation Agreement or the Loan, and the Complaint entitled
Regent Hotel, LLC v. First Bank et al . filed in Superior
Court of California, Sacramento, Case Number 34-2008-00009879
(“ Regent Litigation ”)(collectively, the
“ Indemnification Matters ”), Parent Bank shall
provide prompt written notice thereof to the Former Stakeholder
Representative (“ Indemnification Notice
”). Whenever Parent Bank gives an Indemnification
Notice to the Former Stakeholder Representative, it shall send a
copy thereof to the Escrow Agent. Promptly after receipt of
an Indemnification Notice, the Escrow Agent shall reserve on its
records an amount equal to Parent Bank’s best estimate (as
set forth in the Indemnification Notice) of the amount of Claims
related to the Indemnification Matters described in the
Indemnification Notice (the “ Reserved Funds
”). There is no limit on the number or timing of
Indemnification Notices that may be delivered by Parent Bank.
4.
Distributions of Escrowed
Funds . The Escrow Agent shall distribute the
Escrowed Funds in accordance with one or more of the following
provisions, as applicable:
(a)
If the Former Stakeholder
Representative objects to any Claim set forth in an Indemnification
Notice, it shall notify the Escrow Agent and Parent Bank in writing
of its objection (“ Objection Notice ”),
including the basis for such objection and the amount of the Claim
in controversy (“ Disputed Amount ”), within
five (5) business days of the date upon which the
Indemnification Notice is delivered to the Former Stakeholder
Representative.
(b)
If the Escrow Agent receives a
timely Objection Notice, (i) the Escrow Agent shall promptly
distribute to Parent Bank the amount by which the amount of the
Claim set forth in the Indemnification Notice exceeds the Disputed
Amount, and (ii) Parent Bank and the Former Stakeholders
Representative shall cooperate in good faith to resolve the
Disputed Amount. Any Indemnification Matter that is not
resolved by Parent Bank and the Former Stakeholder
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Representative within
thirty (30) days of the date upon which the Objection Notice is
delivered to Parent Bank shall be resolved by binding arbitration
in accordance with the rules and regulations of the American
Arbitration Association.
(c)
Unless the Escrow Agent
receives an Objection Notice within five (5) business days of
the date upon which the Indemnification Notice is delivered to the
Fund, the Escrow Agent shall pro
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