WARRANT TO PURCHASE COMMON
STOCK
THE SECURITIES
REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF
EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT
UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO
AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS. THIS
INSTRUMENT IS ISSUED SUBJECT TO THE RESTRICTIONS ON TRANSFER AND
OTHER PROVISIONS OF A SECURITIES PURCHASE AGREEMENT BETWEEN THE
ISSUER OF THESE SECURITIES AND THE INVESTOR REFERRED TO THEREIN, A
COPY OF WHICH IS ON FILE WITH THE ISSUER. THE SECURITIES
REPRESENTED BY THIS INSTRUMENT MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED EXCEPT IN COMPLIANCE WITH SAID AGREEMENT. ANY SALE OR
OTHER TRANSFER NOT IN COMPLIANCE WITH SAID AGREEMENT WILL BE
VOID.
WARRANT
to purchase
237,712
Shares of Common Stock
of Plumas Bancorp
Issue Date: January 30, 2009
1. Definitions . Unless the context
otherwise requires, when used herein the following terms shall have
the meanings indicated.
“ Affiliate ” has the meaning
ascribed to it in the Purchase Agreement.
“ Appraisal Procedure ” means
a procedure whereby two independent appraisers, one chosen by the
Company and one by the Original Warrantholder, shall mutually agree
upon the determinations then the subject of appraisal. Each party
shall deliver a notice to the other appointing its appraiser within
15 days after the Appraisal Procedure is invoked. If within
30 days after appointment of the two appraisers they are
unable to agree upon the amount in question, a third independent
appraiser shall be chosen within 10 days thereafter by the
mutual consent of such first two appraisers. The decision of the
third appraiser so appointed and chosen shall be given within
30 days after the selection of such third appraiser. If three
appraisers shall be appointed and the determination of one
appraiser is disparate from the middle determination by more than
twice the amount by which the other determination is disparate from
the middle determination, then the determination of such appraiser
shall be excluded, the remaining two determinations shall be
averaged and such average shall be binding and conclusive upon the
Company and the Original Warrantholder; otherwise, the average of
all three determinations shall be binding upon the Company and the
Original Warrantholder. The costs of conducting any Appraisal
Procedure shall be borne by the Company.
“ Board of Directors ” means
the board of directors of the Company, including any duly
authorized committee thereof.
“ Business Combination ”
means a merger, consolidation, statutory share exchange or similar
transaction that requires the approval of the Company’s
stockholders.
“ business day ” means any
day except Saturday, Sunday and any day on which banking
institutions in the State of New York generally are authorized or
required by law or other governmental actions to close.
“ Capital Stock ” means
(A) with respect to any Person that is a corporation or
company, any and all shares, interests, participations or other
equivalents (however designated) of capital or capital stock of
such Person and (B) with respect to any Person that is not a
corporation or company, any and all partnership or other equity
interests of such Person.
“ Charter ” means, with
respect to any Person, its certificate or articles of
incorporation, articles of association, or similar organizational
document.
“ Common Stock ” has the
meaning ascribed to it in the Purchase Agreement.
“ Company ” means the Person
whose name, corporate or other organizational form and jurisdiction
of organization is set forth in Item 1 of Schedule A
hereto.
“ conversion ” has the
meaning set forth in Section 13(B).
“ convertible securities ”
has the meaning set forth in Section 13(B).
“ CPP ” has the meaning
ascribed to it in the Purchase Agreement.
“ Exchange Act ” means the
Securities Exchange Act of 1934, as amended, or any successor
statute, and the rules and regulations promulgated
thereunder.
“ Exercise Price ” means the
amount set forth in Item 2 of Schedule A
hereto.
“ Expiration Time ” has the
meaning set forth in Section 3.
“ Fair Market Value ” means,
with respect to any security or other property, the fair market
value of such security or other property as determined by the Board
of Directors, acting in good faith or, with respect to
Section 14, as determined by the Original Warrantholder acting
in good faith. For so long as the Original Warrantholder holds this
Warrant or any portion thereof, it may object in writing to the
Board of Director’s calculation of fair market value within
10 days of receipt of written notice thereof. If the Original
Warrantholder and the Company are unable to agree on fair market
value during the 10-day period following the delivery of the
Original Warrantholder’s objection, the Appraisal Procedure
may be invoked by either party to determine Fair Market Value by
delivering written notification thereof not later than the
30 th
day after delivery of the Original
Warrantholder’s objection.
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“ Governmental Entities ” has
the meaning ascribed to it in the Purchase Agreement.
“ Initial Number ” has the
meaning set forth in Section 13(B).
“ Issue Date ” means the date
set forth in Item 3 of Schedule A hereto.
“ Market Price ” means, with
respect to a particular security, on any given day, the last
reported sale price regular way or, in case no such reported sale
takes place on such day, the average of the last closing bid and
ask prices regular way, in either case on the principal national
securities exchange on which the applicable securities are listed
or admitted to trading, or if not listed or admitted to trading on
any national securities exchange, the average of the closing bid
and ask prices as furnished by two members of the Financial
Industry Regulatory Authority, Inc. selected from time to time by
the Company for that purpose. “Market Price” shall be
determined without reference to after hours or extended hours
trading. If such security is not listed and traded in a manner that
the quotations referred to above are available for the period
required hereunder, the Market Price per share of Common Stock
shall be deemed to be (i) in the event that any portion of the
Warrant is held by the Original Warrantholder, the fair market
value per share of such security as determined in good faith by the
Original Warrantholder or (ii) in all other circumstances, the
fair market value per share of such security as determined in good
faith by the Board of Directors in reliance on an opinion of a
nationally recognized independent investment banking corporation
retained by the Company for this purpose and certified in a
resolution to the Warrantholder. For the purposes of determining
the Market Price of the Common Stock on the “trading
day” preceding, on or following the occurrence of an event,
(i) that trading day shall be deemed to commence immediately
after the regular scheduled closing time of trading on the New York
Stock Exchange or, if trading is closed at an earlier time, such
earlier time and (ii) that trading day shall end at the next
regular scheduled closing time, or if trading is closed at an
earlier time, such earlier time (for the avoidance of doubt, and as
an example, if the Market Price is to be determined as of the last
trading day preceding a specified event and the closing time of
trading on a particular day is 4:00 p.m. and the specified event
occurs at 5:00 p.m. on that day, the Market Price would be
determined by reference to such 4:00 p.m. closing
price).
“ Ordinary Cash Dividends ”
means a regular quarterly cash dividend on shares of Common Stock
out of surplus or net profits legally available therefor
(determined in accordance with generally accepted accounting
principles in effect from time to time), provided that
Ordinary Cash Dividends shall not include any cash dividends paid
subsequent to the Issue Date to the extent the aggregate per share
dividends paid on the outstanding Common Stock in any quarter
exceed the amount set forth in Item 4 of Schedule A
hereto, as adjusted for any stock split, stock dividend, reverse
stock split, reclassification or similar transaction.
“ Original Warrantholder ”
means the United States Department of the Treasury. Any actions
specified to be taken by the Original Warrantholder hereunder may
only be taken by such Person and not by any other
Warrantholder.
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“ Permitted Transactions ”
has the meaning set forth in Section 13(B).
“ Person ” has the meaning
given to it in Section 3(a)(9) of the Exchange Act and as used
in Sections 13(d)(3) and 14(d)(2) of the Exchange
Act.
“ Per Share Fair Market Value
” has the meaning set forth in Section 13(C).
“ Preferred Shares ” means
the perpetual preferred stock issued to the Original Warrantholder
on the Issue Date pursuant to the Purchase Agreement.
“ Pro Rata Repurchases ”
means any purchase of shares of Common Stock by the Company or any
Affiliate thereof pursuant to (A) any tender offer or exchange
offer subject to Section 13(e) or 14(e) of the Exchange Act or
Regulation 14E promulgated thereunder or (B) any other
offer available to substantially all holders of Common Stock, in
the case of both (A) or (B), whether for cash, shares of
Capital Stock of the Company, other securities of the Company,
evidences of indebtedness of the Company or any other Person or any
other property (including, without limitation, shares of Capital
Stock, other securities or evidences of indebtedness of a
subsidiary), or any combination thereof, effected while this
Warrant is outstanding. The “ Effective Date ”
of a Pro Rata Repurchase shall mean the date of acceptance of
shares for purchase or exchange by the Company under any tender or
exchange offer which is a Pro Rata Repurchase or the date of
purchase with respect to any Pro Rata Repurchase that is not a
tender or exchange offer.
“ Purchase Agreement ” means
the Securities Purchase Agreement — Standard Terms
incorporated into the Letter Agreement, dated as of the date set
forth in Item 5 of Schedule A hereto, as amended from
time to time, between the Company and the United States Department
of the Treasury (the “ Letter Agreement ”),
including all annexes and schedules thereto.
“ Qualified Equity Offering ”
has the meaning ascribed to it in the Purchase
Agreement.
“ Regulatory Approvals ” with
to the Warrantholder, means, to the extent applicable and required
to permit the Warrantholder to exercise this Warrant for shares of
Common Stock and to own such Common Stock without the Warrantholder
being in violation of applicable law, rule or regulation, the
receipt of any necessary approvals and authorizations of, filings
and registrations with, notifications to, or expiration or
termination of any applicable waiting period under, the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
and the rules and regulations thereunder.
“ SEC” means the U.S.
Securities and Exchange Commission.
“ Securities Act ” means the
Securities Act of 1933, as amended, or any successor statute, and
the rules and regulations promulgated thereunder.
“ Shares ” has the meaning
set forth in Section 2.
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“ trading day” means
(A) if the shares of Common Stock are not traded on any
national or regional securities exchange or association or
over-the-counter market, a business day or (B) if the shares
of Common Stock are traded on any national or regional securities
exchange or association or over-the-counter market, a business day
on which such relevant exchange or quotation system is scheduled to
be open for business and on which the shares of Common Stock
(i) are not suspended from trading on any national or regional
securities exchange or association or over-the-counter market for
any period or periods aggregating one half hour or longer; and (ii)
have traded at least once on the national or regional securities
exchange or association or over-the-counter market that is the
primary market for the trading of the shares of Common
Stock.
“ U.S. GAAP ” means United
States generally accepted accounting principles.
“ Warrantholder ” has the
meaning set forth in Section 2.
“ Warrant ” means this
Warrant, issued pursuant to the Purchase Agreement.
2. Number of Shares; Exercise Price
. This certifies that, for value received, the United States
Department of the Treasury or its permitted assigns (the
“Warrantholder”) is entitled, upon the terms and
subject to the conditions hereinafter set forth, to acquire from
the Company, in whole or in part, after the receipt of all
applicable Regulatory Approvals, if any, up to an aggregate of the
number of fully paid and nonassessable shares of Common Stock set
forth in Item 6 of Schedule A hereto, at a purchase price
per share of Common Stock equal to the Exercise Price. The number
of shares of Common Stock (the “Shares" ) and the
Exercise Price are subject to adjustment as provided herein, and
all references to “Common Stock,” “Shares”
and “Exercise Price” herein shall be deemed to include
any such adjustment or series of adjustments.
3. Exercise of Warrant; Term .
Subject to Section 2, to the extent permitted by applicable
laws and regulations, the right to purchase the Shares represented
by this Warrant is exercisable, in whole or in part by the
Warrantholder, at any time or from time to time after the execution
and delivery of this Warrant by the Company on the date hereof, but
in no event later than 5:00 p.m., New York City time on the tenth
anniversary of the Issue Date (the “ Expiration Time
”), by (A) the surrender of this Warrant and Notice of
Exercise annexed hereto, duly completed and executed on behalf of
the Warrantholder, at the principal executive office of the Company
located at the address set forth in Item 7 of Schedule A
hereto (or such other office or agency of the Company in the United
States as it may designate by notice in writing to the
Warrantholder at the address of the Warrantholder appearing on the
books of the Company), and (B) payment of the Exercise Price
for the Shares thereby purchased:
(i) by having the Company withhold, from
the shares of Common Stock that would otherwise be delivered to the
Warrantholder upon such exercise, shares of Common stock issuable
upon exercise of the Warrant equal in value to the aggregate
Exercise Price as to which this Warrant is so exercised based on
the Market Price of the Common Stock on the trading day on which
this Warrant is exercised and the Notice of Exercise is delivered
to the Company pursuant to this Section 3, or
(ii) with the consent of both the Company
and the Warrantholder, by tendering in cash, by certified or
cashier’s check payable to the order of the Company, or by
wire transfer of immediately available funds to an account
designated by the Company.
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If the Warrantholder does not exercise this
Warrant in its entirety, the Warrantholder will be entitled to
receive from the Company within a reasonable time, and in any event
not exceeding three business days, a new warrant in substantially
identical form for the purchase of that number of Shares equal to
the difference between the number of Shares subject to this Warrant
and the number of Shares as to which this Warrant is so exercised.
Notwithstanding anything in this Warrant to the contrary, the
Warrantholder hereby acknowledges and agrees that its exercise of
this Warrant for Shares is subject to the condition that the
Warrantholder will have first received any applicable Regulatory
Approvals.
4. Issuance of Shares; Authorization;
Listing . Certificates for Shares issued upon exercise of this
Warrant will be issued in such name or names as the Warrantholder
may designate and will be delivered to such named Person or Persons
within a reasonable time, not to exceed three business days after
the date on which this Warrant has been duly exercised in
accordance with the terms of this Warrant. The Company hereby
represents and warrants that any Shares issued upon the exercise of
this Warrant in accordance with the provisions of Section 3
will be duly and validly authorized and issued, fully paid and
nonassessable and free from all taxes, liens and charges (other
than liens or charges created by the Warrantholder, income and
franchise taxes incurred in connection with the exercise of the
Warrant or taxes in respect of any transfer occurring
contemporaneously therewith). The Company agrees that the Shares so
issued will be deemed to have been issued to the Warrantholder as
of the close of business on the date on which this Warrant and
payment of the Exercise Price are delivered to the Company in
accordance with the terms of this Warrant, notwithstanding that the
stock transfer books of the Company may then be closed or
certificates representing such Shares may not be actually delivered
on such date. The Company will at all times reserve and keep
available, out of its authorized but unissued Common Stock, solely
for the purpose of providing for the exercise of this Warrant, the
aggregate number of shares of Common Stock then issuable upon
exercise of this Warrant at any time. The Company will
(A) procure, at its sole expense, the listing of the Shares
issuable upon exercise of this Warrant at any time, subject to
issuance or notice of issuance, on all principal stock exchanges on
which the Common Stock is then listed or traded and
(B) maintain such listings of such Shares at all times after
issuance. The Company will use reasonable best efforts to ensure
that the Shares may be issued without violation of any applicable
law or regulation or of any requirement of any securities exchange
on which the Shares are listed or traded.
5. No Fractional Shares or Scrip .
No fractional Shares or scrip representing fractional Shares shall
be issued upon any exercise of this Warrant. In lieu of any
fractional Share to which the Warrantholder would otherwise be
entitled, the Warrantholder shall be entitled to receive a cash
payment equal to the Market Price of the Common Stock on the last
trading day preceding the date of exercise less the pro-rated
Exercise Price for such fractional share.
6. No Rights as Stockholders; Transfer
Books . This Warrant does not entitle the Warrantholder to any
voting rights or other rights as a stockholder of the Company prior
to the dale of exercise hereof. The Company will at no time close
its transfer books against transfer of this Warrant in any manner
which interferes with the timely exercise of this
Warrant.
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7. Charges, Taxes and Expenses .
Issuance of certificates for Shares to the Warrantholder upon the
exercise of this Warrant shall be made without charge to the
Warrantholder for any issue or transfer tax or other
incide
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