SECURITIES PURCHASE AGREEMENT
Exhibit
10.1
This
Securities Purchase Agreement (this “Agreement”)
is
dated as of May 3, 2006, between Vineyard National Bancorp, a California
corporation (the “Company”),
and
the purchaser identified on the signature page hereto (the “Purchaser”).
WHEREAS,
subject to the terms and conditions set forth in this Agreement, the Company
desires to issue and sell to the Purchaser, and the Purchaser desires to
purchase from the Company, shares of Common Stock (as defined herein) as
set
forth herein on the Closing Date (as defined herein) pursuant to an effective
Registration Statement on Form S-3, Commission File No. 333-128015.
NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement,
and for other good and valuable consideration the receipt and adequacy of
which
are hereby acknowledged, the Company and the Purchaser agree as
follows:
ARTICLE
I.
DEFINITIONS
1.1 Definitions
.
In
addition to the terms defined elsewhere in this Agreement, for all purposes
of
this Agreement, the following terms have the meanings indicated in this Section
1.1:
“Action”
shall
have the meaning ascribed to such term in Section 3.1(j).
“Affiliate”
means
any Person that, directly or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with a Person, as
such
terms are used in and construed under Rule 144. With respect to a Purchaser,
any
investment fund or managed account that is managed on a discretionary basis
by
the same investment manager as such Purchaser will be deemed to be an Affiliate
of such Purchaser.
“Business
Day”
means
any day except Saturday, Sunday and any day that is a federal legal holiday
or a
day on which banking institutions in the State of New York are authorized
or
required by law or other governmental action to close.
“Closing”
means
the closing of the purchase and sale of the Shares pursuant to Section
2.1.
“Closing
Date”
means
the second (2nd)
Trading
Day following the date of this Agreement.
“Commission”
means
the United States Securities and Exchange Commission.
“Common
Stock”
means
the common stock of the Company, no par value, and any securities into which
such common stock may hereafter be reclassified.
“Common
Stock Equivalents”
means
any securities of the Company which would entitle the holder thereof to acquire
at any time Common Stock, including, without limitation, any debt, preferred
stock, rights, options, warrants or other instrument that is at any time
convertible into or exercisable or exchangeable for, or otherwise entitles
the
holder thereof to receive, Common Stock.
“Community
Reinvestment Act”
means
the Community Reinvestment Act of 1977, as amended.
“Company
Counsel”
means
Xxxxxx Xxxxx LLP.
“Disclosure
Materials”
means
the SEC Reports and the Schedules, considered together.
“Effective
Date”
means
the date that the Registration Statement was first declared effective by
the
Commission.
“Exchange
Act”
means
the Securities Exchange Act of 1934, as amended.
“Intellectual
Property Rights”
shall
have the meaning ascribed to such term in Section 3.1(p).
“Lien”
means
a
lien, charge, security interest, encumbrance, right of first refusal, preemptive
right or other restriction.
“Material
Adverse Effect”
means
any of (a) an adverse effect on the legality, validity or enforceability
of any
Transaction Document, (b) a material and adverse effect on the results of
operations, assets, business or condition (financial or otherwise) of the
Company and the Subsidiaries, taken as a whole, or (c) a material and adverse
impairment to the Company’s ability to perform, on a timely basis, its
obligations under any Transaction Document.
“Material
Permits”
shall
have the meaning ascribed to such term in Section 3.1(m).
“Per
Share Purchase Price”
equals
$26.50, subject
to adjustment for reverse and forward stock splits, stock dividends, stock
combinations and other similar transactions of the Common Stock that occur
after
the date of this Agreement and prior to the Closing.
“Person”
means
an individual or corporation, partnership, trust, incorporated or unincorporated
association, joint venture, limited liability company, joint stock company,
government (or an agency or subdivision thereof) or other entity of any
kind.
“Prospectus
Supplement”
means
the prospectus supplement filed with the Commission pursuant to Rule 424(b)
promulgated under the Securities Act and deemed to be part of the Registration
Statement at the time of effectiveness.
“RBC”
means
RBC Capital Markets Corporation.
“Rancho”
means
Rancho Bank.
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“Registration
Statement”
means
the registration statement on Form S-3 of the Company, (Commission File No.
333-128015) covering the sale by the Company to the Purchaser of the Shares,
including the Prospectus, amendments and supplements to such registration
statements or Prospectus, including pre- and post-effective amendments, all
exhibits thereto, and all material incorporated by reference or deemed to
be
incorporated by reference in such registration statements.
“Regulation
S-X”
means
Regulation S-X promulgated by the Commission pursuant to the Exchange
Act.
“Required
Approvals”
shall
have the meaning ascribed to such term in Section 3.1(e).
“Rule
144”
means
Rule 144 promulgated by the Commission pursuant to the Securities Act, as
such
rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect
as such
rule.
“Schedules”
means
the disclosure schedules prepared by the Company and attached to this
Agreement.
“SEC
Reports”
shall
have the meaning ascribed to such term in Section 3.1(h).
“Securities
Act”
means
the Securities Act of 1933, as amended.
“Shares”
means
the shares of Common Stock issued or issuable to the Purchaser pursuant to
this
Agreement.
“Short
Sale”
means
all “short sales” as defined in Rule 200 of Regulation SHO promulgated under the
Exchange Act.
“Subscription
Amount”
means,
as to the Purchaser, the amount set forth below the Purchaser’s signature block
on the signature page hereto, in United States dollars and in immediately
available funds.
“Subsidiary”
means
any “significant subsidiary” as defined in Rule 1-02(w) of Regulation S-X
promulgated by the Commission under the Exchange Act.
“Trading
Day”
means
(i) a day on which the Common Stock is traded on a Trading Market (other
than
the OTC Bulletin Board), or (ii) if the Common Stock is not listed on a Trading
Market (other than the OTC Bulletin Board), a day on which the Common Stock
is
traded in the over-the-counter market, as reported by the OTC Bulletin Board,
or
(iii) if the Common Stock is not quoted on the OTC Bulletin Board, a day
on
which the Common Stock is quoted in the over-the-counter market as reported
by
the National Quotation Bureau Incorporated (or any similar organization or
agency succeeding to its functions of reporting prices); provided
that in
the event that the Common Stock is not listed or quoted as set forth in (i),
(ii) and (iii) hereof, then Trading Day shall mean a Business Day.
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“Trading
Market”
means
whichever of the New York Stock Exchange, the American Stock Exchange, the
NASDAQ National Market, the NASDAQ Capital Market or OTC Bulletin Board on
which
the Common Stock is listed or quoted for trading on the date in question.
“Transaction
Documents”
means
this Agreement and any other instruments, documents or agreements executed
or
delivered in connection with the transactions contemplated hereunder, including,
without limitation, the Registration Statement.
“Transfer
Agent”
means
U.S. Stock Transfer Corporation.
“Vineyard
Bank”
means
Vineyard Bank, a California-charted commercial bank having its principal
place
of business in Rancho Cucamonga, California.
ARTICLE
II.
PURCHASE
AND SALE
2.1 Closing.
On the Closing Date, the Purchaser shall purchase from the Company and the
Company shall issue and sell to the Purchaser, a number of Shares equal to
the
Purchaser’s Subscription Amount divided by the Per Share Purchase Price. Upon
satisfaction of the conditions set forth in Section 2.3, the Closing shall
occur
telephonically or at such location as the parties shall mutually
agree.
2.2 Deliveries
.
(a) On
the
Closing Date, the Company shall:
(i) deliver
the number of Shares equal to the Purchaser’s Subscription Amount divided by the
Per Share Purchase Price, in accordance with the Purchaser’s election on the
Purchaser’s signature page hereto by either:
(1) electronic
book-entry at The Depository Trust Company (“DTC”), registered in the Investor’s
name and address as set forth below, and released by the Transfer Agent,
to the
Investor at the Closing. No later than one (1) Business Day after the execution
of this Agreement by the Purchaser and the Company, the Purchaser shall:
(I)
direct the broker-dealer at which the account or accounts to be credited
with
the Shares are maintained, which broker-dealer shall be a DTC participant,
to
set up a Deposit/Withdrawal at Custodian (“DWAC”) instructing the Transfer Agent
to credit such account or accounts with the Shares by means of an electronic
book entry delivery, and (II) remit by wire transfer the amount of funds
equal
to the aggregate purchase price for the shares being purchased by the Purchaser
to the following account:
Vineyard
Bank
Rancho
Cucamonga, CA
ABA
#
000-000-000
Account
Name: Vineyard National Bancorp
Account
#: 0000000; or
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(2) delivery
versus payment (“DVP”) through DTC (i.e., the Company shall deliver Shares
registered in the Purchaser’s name and address as set forth below and released
by the Transfer Agent to the Purchaser at the Closing directly to the account(s)
at RBC Capital Markets Corporation identified by the Purchaser and
simultaneously therewith payment shall be made from such account(s) to the
Company through DTC). No later than one (1) Business Day after the execution
of
this Agreement by the Purchaser and the Company, the Purchaser shall: (I)
notify
RBC of the account or accounts at RBC Capital Markets Corporation to be credited
with the Shares being purchased by such Investor, and (II) confirm that the
account or accounts at RBC Capital Markets Corporation to be credited with
the
Shares being purchased by the Purchaser have a minimum balance equal to the
aggregate purchase price for the Shares being purchased by the
Investor.
In
both
instances, it is the Purchaser’s responsibility to (A) make the necessary wire
transfer or confirm the proper account balance in a timely manner and (B)
arrange for settlement by way of DWAC or DVP in a timely manner. If the
Purchaser does not deliver the aggregate purchase price for the Shares or
does
not make proper arrangements for settlement in a timely manner, the Shares
may
not be delivered at Closing to the Purchaser or the Purchaser may be excluded
from the Closing altogether;
(ii) deliver
or cause to be delivered to the Purchaser any prospectus and Prospectus
Supplement as required under the Securities Act; and
(iii) deliver
or cause to be delivered to the Purchaser a legal opinion of Company Counsel,
in
the form of Exhibit
A
attached
hereto, addressed to the Purchaser and providing that RBC and the Purchaser
are
entitled to rely thereon.
(b) On
the
Closing Date, the Purchaser shall deliver or cause to be delivered to the
Company the Purchaser’s Subscription Amount by either:
(i) if
the
Purchaser elects to settle the Shares pursuant to Section 2.2(a)(i)(1), then
on
the Closing Date, the Purchaser shall remit by wire transfer the amount of
funds
equal to the aggregate purchase price for the Shares being purchased by the
Purchaser to an account designated by the Company;
(ii) if
the
Purchaser elects to settle the Shares pursuant to Section 2.2(a)(i)(2), then
no
later than one (1) Business Day after the execution of this Agreement by
the
Purchaser and the Company, the Purchaser shall confirm that the account or
accounts at RBC Capital Markets Corporation to be credited with the Shares
being
purchased by the Purchaser have a minimum balance equal to the aggregate
purchase price for the Shares being purchased by the Purchaser.
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2.3 Closing
Conditions.
(a) The
obligations of the Company hereunder in connection with the Closing are subject
to the following conditions being met:
(i) all
representations and warranties of the Purchaser contained herein were true
and
correct on the date hereof and remain true and correct as of the Closing
Date;
(ii) all
obligations, covenants and agreements of the Purchaser required to be performed
at or prior to the Closing Date shall have been performed;
(iii) the
Purchaser shall have delivered the Subscription Amount in accordance with
Section 2.2(b) of this Agreement; and
(iv) the
transactions contemplated in each of those other Securities Purchase Agreements,
each dated the date hereof and each containing terms and conditions
substantially similar to the terms and conditions hereof, shall be consummated
prior to, simultaneous with or immediately following the transactions
contemplated hereby.
(b) The
obligations of the Purchaser hereunder in connection with the Closing are
subject to the following conditions being met or waived in writing by the
Purchaser:
(i) all
representations and warranties of the Company contained herein were true
and
correct on the date hereof and remain true and correct as of the Closing
Date;
(ii) all
obligations, covenants and agreements of the Company required to be performed
at
or prior to the Closing Date shall have been performed;
(iii) the
Company shall have delivered the items set forth in Section 2.2(a) of this
Agreement;
(iv) there
shall have been no Material Adverse Effect with respect to the Company since
the
date hereof;
(v) the
Prospectus Supplement shall have been filed with the Commission and the
Registration Statement shall be effective and available for the issuance
and
sale of the Shares hereunder;
(vi) RBC
shall
have received signed letters from Vavrinek, Trine, Day & Co., LLP (“VTD”)
and, to the extent the Closing is on or after the date the Company’s Form 10-Q
for the quarterly period ended March 31, 2006, KPMG LLP (“KPMG”), addressed to
RBC and dated, respectively, the date of this Agreement and the Closing Date,
in
form and substance reasonably satisfactory to RBC, containing statements
and
information of the type ordinarily included in accountants’ “comfort letters”
with respect to the financial statements and certain financial information
contained (directly or via incorporation by reference) in the Registration
Statement;
6
(vii) no
order
preventing or suspending the use of any prospectus or the Prospectus Supplement
shall have been or shall be in effect and no order suspending the effectiveness
of the Registration Statement shall be in effect and no proceedings for such
purpose shall be pending before or threatened by the Commission, and any
requests for additional information on the part of the Commission (to be
included in the Registration Statement or the prospectus or the Prospectus
Supplement or otherwise) shall have been complied with to the satisfaction
of
the Commission and the Purchaser;
(viii) from
the
date hereof to the Closing Date, trading in the Common Stock shall not have
been
suspended by the Commission and, at any time prior to the Closing Date, trading
in securities generally as reported by Bloomberg Financial Markets shall
not
have been suspended or limited, or minimum prices shall not have been
established on securities whose trades are reported by such service, or on
any
Trading Market, nor shall a banking moratorium have been declared either
by the
United States or New York state authorities nor shall there have occurred
any
material outbreak or escalation of hostilities or other national or
international calamity of such magnitude in its effect on, or any material
adverse change in, any financial market which, in each case, in the reasonable
judgment of the Purchaser, makes it impracticable or inadvisable to purchase
the
Shares at the Closing; and
(ix) the
transactions contemplated in each of those other Securities Purchase Agreements,
each dated the date hereof and each containing terms and conditions
substantially similar to the terms and conditions hereof, shall be consummated
prior to, simultaneous with or immediately following the transactions
contemplated hereby.
ARTICLE
III.
REPRESENTATIONS
AND WARRANTIES
3.1 Representations
and Warranties of the Company. The Company represents and warrants to the
Purchaser that, except as set forth in the Registration Statement:
(a) Subsidiaries.
The
Company has no direct or indirect Subsidiaries other than those listed in
the
SEC Reports. Except as disclosed in the SEC Reports and as set forth on
Schedule
3.1(a),
the
Company owns, directly or indirectly, all of the capital stock or comparable
equity interests of each Subsidiary free and clear of any and all Liens,
other
than restrictions on transfer under applicable securities laws, and all the
issued and outstanding shares of capital stock or comparable equity interests
of
each Subsidiary are validly issued and are fully paid, non-assessable and
free
of preemptive and similar rights.
7
(b) Organization
and Qualification.
The
Company and each Subsidiary is an entity duly incorporated or otherwise
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization (as applicable), with the
requisite power and authority to own and use its properties and assets and
to
carry on its business as currently conducted. Neither the Company nor any
Subsidiary is in violation of any of the provisions of its respective
certificate or articles of incorporation, bylaws or other organizational,
charter or equivalent documents. The Company and each Subsidiary is duly
qualified to conduct business and is in good standing as a foreign corporation
or other entity in each jurisdiction in which the nature of the business
conducted or property owned by it makes such qualification necessary, except
where the failure to be so qualified or in good standing, as the case may
be,
could not, individually or in the aggregate, have or reasonably be expected
to
have a Material Adverse Effect.
(c) Authorization;
Enforcement.
The
Company has the requisite corporate power and authority to enter into and
to
consummate the transactions contemplated by each of the Transaction Documents
and otherwise to carry out its obligations hereunder and thereunder. The
execution and delivery of each of the Transaction Documents by the Company
and
the consummation by it of the transactions contemplated hereby and thereby
have
been duly authorized by all necessary action on the part of the Company and
no
further consent or action is required by the Company, its Board of Directors
or
stockholders in connection herewith and therewith other than in connection
with
the Required Approvals. Each Transaction Document has been (or upon delivery
will have been) duly executed by the Company and, when delivered in accordance
with the terms hereof, will constitute the valid and binding obligation of
the
Company, enforceable against the Company in accordance with its terms, except
(i) as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally the enforcement of, creditors’ rights, (ii) as limited by
laws relating to the availability of specific performance, injunctive relief
or
other equitable remedies and (iii) insofar as indemnification and contribution
provisions may be limited by applicable laws.
(d) No
Conflicts.
The
execution, delivery and performance of the Transaction Documents by the Company
and the consummation by the Company of the transactions contemplated thereby
do
not and will not (i) conflict with or violate any provision of the Company’s or
any Subsidiary’s certificate or articles of incorporation, bylaws or other
organizational or charter documents, or (ii) conflict with, or constitute
a
default (or an event that with notice or lapse of time or both would become
a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both)
of,
any agreement, credit facility, debt or instrument (evidencing a Company
or
Subsidiary debt or otherwise) or other understanding to which the Company
or any
Subsidiary is a party or by which any property or asset of the Company or
any
Subsidiary is bound or affected, or (iii) subject to the Required Approvals,
result in a violation of any law, rule, regulation, order, judgment, injunction,
decree or other restriction of any court or governmental authority to which
the
Company or a Subsidiary is subject (including federal and state securities
laws
and regulations and the rules and regulations of any self-regulatory
organization to which the Company or its securities are subject), or by which
any property or asset of the Company or a Subsidiary is bound or affected;
except in the case of each of clauses (ii) and (iii), such as would not,
individually or in the aggregate, have or reasonably be expected to result
in a
Material Adverse Effect.
8
(e) Filings,
Consents and Approvals.
The
Company is not required to obtain any consent, approval (including, but not
limited to, the approval of the stockholders of the Company), waiver,
authorization or order of, give any notice to, or make any filing or
registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by the Company of the Transaction Documents, other
than
(i) filings required pursuant to Section 4.1 and Section 4.4, (ii) filings
required in connection with the issuance and listing on the Nasdaq National
Market of the Shares (iii) such filings as are required to be made under
applicable state securities laws and (iv) those that have been obtained prior
to
the date of this Agreement (collectively, the “Required
Approvals”).
(f) Issuance
of the Shares.
The
Shares have been duly authorized and, when issued and paid for in accordance
with this Agreement, will be duly and validly issued, fully paid and
nonassessable, free and clear of all Liens. The issuance by the Company of
the
Shares has been registered under the Securities Act and all of the Shares
are
freely transferable and tradable by the Purchaser without restriction.
The
Registration Statement is effective and available for the issuance of the
Shares
and
the
Company has not received any notice that the Commission has issued or intends
to
issue a stop-order with respect to the Registration Statement or that the
Commission otherwise has suspended or withdrawn the effectiveness of the
Registration Statement, either temporarily or permanently, or intends or
has
threatened in writing to do so. The “Plan of Distribution” section under the
Registration Statement permits the issuance and sale of the Shares
hereunder.
Upon receipt of the Shares
and
making payment for them in accordance with the terms hereof, the Purchaser
will
have good and marketable title to such purchased
Shares
and the
Shares will be freely tradable on the
Nasdaq
National Market.
(g) Capitalization.
The
number of shares and type of all authorized, issued and outstanding capital
stock of the Company, and all shares of Common Stock reserved for issuance
under
the Company’s various option and incentive plans, is set forth in the SEC
Reports. All outstanding shares of capital stock are duly authorized, validly
issued, fully paid and nonassessable and have been issued in compliance with
all
applicable securities laws. Except as set forth in the SEC Reports, no
securities of the Company are entitled to preemptive or similar rights, and
no
Person has any right of first refusal, preemptive right, right of participation,
or any similar right to participate in the transactions contemplated by the
Transaction Documents. Except as a result of the purchase and sale of the
Shares
and except as disclosed in the SEC Reports, there are no outstanding options,
warrants, scrip rights to subscribe to, calls or commitments of any character
whatsoever relating to, Common Stock Equivalents, or contracts, commitments,
understandings or arrangements by which the Company or any Subsidiary is
or may
become bound to issue additional shares of Common Stock, or Common Stock
Equivalents. Except as set forth in Schedule
3.1(g),
there
are no anti-dilution or price adjustment provisions contained in any security
issued by the Company (or in any agreement providing rights to security
holders). The issue and sale of the Shares will not, immediately or with
the
passage of time, obligate the Company to issue shares of Common Stock or
other
securities to any Person (other than the Purchaser) and will not result in
a
right of any holder of Company securities to adjust the exercise, conversion,
exchange or reset price under such securities.
9
(h) SEC
Reports; Financial Statements.
The
Company has filed all reports required to be filed by it under the Exchange
Act,
including pursuant to Section 13(a) or 15(d) thereof, for the twelve months
preceding the date hereof (the foregoing materials, including the exhibits
thereto, being collectively referred to herein as the “SEC
Reports”)
on a
timely basis or has timely filed a valid extension of such time of filing
and
has filed any such SEC Reports prior to the expiration of any such extension.
The Company has delivered to the Purchaser true, correct and complete copies
of
all SEC Reports filed within 10 days preceding the date hereof. As of their
respective dates, the SEC Reports complied in all material respects with
the
requirements of the Exchange Act and the rules and regulations of the Commission
promulgated thereunder, and none of the SEC Reports, when filed, contained
any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein,
in
the light of the circumstances under which they were made, not misleading.
The
Registration Statement and any prospectus included therein, including the
prospectus supplement to be filed covering the transactions covered hereby,
comply or will comply, as the case may be, in all material respects with
the
requirements of the Securities Act and the rules and regulations of the
Commission promulgated thereunder, and none of the Registration Statement
or any
such prospectus contains or contained any untrue statement of a material
fact or
omits or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the case of any
prospectus, in the light of the circumstances under which they were made,
not
misleading. The financial statements of the Company included in the SEC Reports
comply in all material respects with applicable accounting requirements and
the
rules and regulations of the Commission with respect thereto as in effect
at the
time of filing. Such financial statements have been prepared in accordance
with
United States generally accepted accounting principles applied on a consistent
basis during the periods involved (“GAAP”),
except as may be otherwise specified in such financial statements or the
notes
thereto and except that unaudited financial statements may not contain all
footnotes required by GAAP, and fairly present in all material respects the
financial position of the Company and its consolidated Subsidiaries as of
and
for the dates thereof and the results of operations and cash flows for the
periods then ended, subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments.
(i) Material
Changes.
Since
the date of the latest audited financial statements included within the
Company’s most recent Annual Report on Form 10-K, except as specifically
disclosed in the SEC Reports (i) there has been no event, occurrence or
development that has had or that could reasonably be expected to result in
a
Material Adverse Effect, (ii) neither the Company nor any Subsidiary has
incurred any liabilities (contingent or otherwise) other than (A) trade payables
and accrued expenses incurred in the ordinary course of business consistent
with
past practice and (B) liabilities not required to be reflected in the Company’s
consolidated financial statements pursuant to GAAP or required to be disclosed
in filings made with the Commission, (iii) neither the Company nor any
Subsidiary has altered its method of accounting, (iv) the Company has not
declared or made any dividend or distribution of cash or other property to
its
stockholders or purchased, redeemed or made any agreements to purchase or
redeem
any shares of its capital stock and (v) neither the Company nor any Subsidiary
has issued any equity securities to any officer, director or Affiliate, except
pursuant to existing Company or Subsidiary stock option plans. The Company
does
not have pending before the Commission any request for confidential treatment
of
information.
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(j) Litigation.
There
is no action, claim, suit, inquiry, notice of violation, proceeding or
investigation pending or, to the knowledge of the Company or any Subsidiary,
threatened against or affecting the Company or any Subsidiary or any of their
respective properties before or by any court, arbitrator, governmental or
administrative agency or regulatory authority (federal, state, county, local
or
foreign) (collectively, an “Action”)
which
(i) adversely affects or challenges the legality, validity or enforceability
of
any of the Transaction Documents or the Shares or (ii) except as specifically
disclosed in the SEC Reports, would, if there were an unfavorable decision,
individually or in the aggregate, have or reasonably be expected to result
in a
Material Adverse Effect. Neither the Company nor any Subsidiary nor any director
or officer of the Company or any Subsidiary is or has been the subject of
any
Action involving a claim of violation of or liability under federal or state
securities laws or a claim of breach of fiduciary duty. There has not been,
and
to the knowledge of the Company and any Subsidiary, there is not pending
or
contemplated, any investigation by the Commission involving the Company or
any
current or former director or officer of the Company. The Commission has
not
issued any stop order or other order suspending the effectiveness of any
registration statement filed by the Company under the Exchange Act or the
Securities Act.
(k) Labor
Relations.
No
material labor dispute exists or, to the knowledge of the Company and any
Subsidiary, is imminent with respect to any of the employees of the Company
or
any Subsidiary.
(l) Compliance.
Neither
the Company nor any Subsidiary (i) is, except as set forth on Schedule
3.1(l),
in
default under or in violation of (and no event has occurred that has not
been
waived that, with notice or lapse of time or both, would result in a default
by
the Company or any Subsidiary under), nor has the Company or any Subsidiary
received notice of a claim that it is in default under or that it is in
violation of, any indenture, loan or credit agreement or any other agreement
or
instrument to which it is a party or by which it or any of its properties
is
bound (whether or not such default or violation has been waived), (ii) is
in
violation of any order of any court, arbitrator or governmental body, or
(iii)
is or has been in violation of any statute, rule or regulation of any
governmental authority, including without limitation all foreign, federal,
state
and local laws applicable to its business,
which
violation would have a Material Adverse Effect. The Company is in compliance
with the requirements that are currently applicable to it under the
Xxxxxxxx-Xxxxx Act of 2002, as amended, and the rules and regulations
thereunder, except where such noncompliance would not have or reasonably
be
expected to result in a Material Adverse Effect.
11
(m) Material
Permits.
The
Company and each Subsidiary possess all certificates, authorizations and
permits
issued by the appropriate federal, state, local or foreign regulatory
authorities necessary to conduct their respective businesses as described
in the
SEC Reports, except where the failure to possess such permits could not have
or
reasonably be expected to result in a Material Adverse Effect (“Material
Permits”),
and
neither the Company nor any Subsidiary has received any notice of Actions
relating to the revocation or modification of any Material Permit.
(n) Application
of Takeover Protections.
There
is no control share acquisition, business combination, poison pill (including
any distribution under a rights agreement) or other similar anti-takeover
provision under the Company’s charter documents or the laws of its state of
incorporation that is or could become applicable to the Purchaser as a result
of
the Purchaser and the Company fulfilling their obligations or exercising
their
rights under the Transaction Documents, including, without limitation, as
a
result of the Company’s issuance of the Shares and the Purchaser’s ownership of
the Shares.
(o) Title
to Assets.
The
Company and each Subsidiary has good and marketable title in fee simple to
all
real property owned by them that is material to their respective business
and
good and marketable title in all personal property owned by the Company and
each
Subsidiary that is material to their respective business, in each case free
and
clear of all Liens, except for such Liens as do not materially affect the
value
of such property and do not materially interfere with the use made or proposed
to be made of such property by the Company and each Subsidiary. Any real
property and facilities or personal property held under lease by the Company
and
any Subsidiary is held by the Company and such Subsidiary, respectively,
under
valid, subsisting and enforceable leases with which the Company and such
Subsidiary are in compliance, except as could not, individually or in the
aggregate, have or reasonably be expected to have a Material Adverse
Effect.
(p) Patents
and Trademarks.
The
Company and each Subsidiary has, or has rights to use, all patents, patent
applications, trademarks, trademark applications, service marks, trade names,
copyrights, licenses and other similar rights necessary or material for use
in
connection with its respective business as described in the SEC Reports with
respect to which the failure to do so have could have a Material Adverse
Effect
(collectively, the “Intellectual
Property Rights”).
Neither the Company nor any Subsidiary has received written notice that any
of
the Intellectual Property Rights used by the Company or any Subsidiary violates
or infringes upon the rights of any Person. To the knowledge of the Company
and
each Subsidiary, all such Intellectual Property Rights are enforceable and
there
is no existing infringement by another Person of any of the intellectual
property rights of others.
(q) Listing
and Maintenance Requirements.
The
Common Stock is registered pursuant to Section 12(g) of the Exchange Act,
and
neither the Company nor any Subsidiary has taken any action designed to,
or
which to its knowledge is likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act, nor has the Company
received any notification that the Commission is contemplating terminating
such
registration. The Company has not, in the two years preceding the date hereof,
received notice from any Trading Market to the effect that the Company is
not in
compliance with the listing or maintenance requirements thereof. The Company
is,
and has no reason to believe that it will not in the foreseeable future continue
to be, in compliance with the listing and maintenance requirements for continued
listing of the Common Stock on the Trading Market. The issuance and sale
of the
Securities under the Transaction Documents does not contravene the rules
and
regulations of the Trading Market on which the Common Stock is currently
listed
or quoted (including Rule 4350 of the Nasdaq Stock Market if the Trading
Market
is the Nasdaq National or Nasdaq Capital Market), and no approval of the
shareholders of the Company thereunder is required for the Company to issue
and
deliver to the Purchaser the maximum number of Shares contemplated by
Transaction Documents, including such as may be required pursuant to Nasdaq
Rule
4350.
12
(r) Disclosure.
Except
as provided in Schedule
3.1(r),
neither
the Company nor any Subsidiary nor any other Person acting on its or their
behalf has provided the Purchaser or its agents or counsel with any information
that constitutes or might constitute material, non-public information except
with respect to the transactions contemplated by the Transaction Documents
(which will be disclosed pursuant to Section 4.1). The Company understands
and
confirms that the Purchaser will rely on the foregoing representations and
covenants in effecting transactions in securities of the Company. All disclosure
provided to the Purchaser regarding the Company, any Subsidiary, their
respective businesses and the transactions contemplated hereby furnished
by or
on behalf of the Company or any Subsidiary with respect to the transactions
contemplated hereby and the representations and warranties made herein and
the
Schedules are true and correct and do not contain any untrue statement of
a
material fact or omit to state any material fact necessary in order to make
the
statements made therein, in the light of the circumstances under which they
were
made, not misleading. The Company acknowledges and agrees that the Purchaser
does not make or has not made any representations or warranties with respect
to
the transactions contemplated hereby other than those specifically set forth
in
Section 3.2 hereof.
(s) No
Integrated Offering.
Assuming
the accuracy of the Purchaser’s representations and warranties set forth in
Section 3.2, neither the Company, nor any of its affiliates, nor any Person
acting on its or their behalf has, directly or indirectly, made any offers
or
sales of any security or solicited any offers to buy any security, under
circumstances that would, to the knowledge of the Company, cause the sale
of the
Shares to be integrated with prior offerings by the Company for purposes
of any
applicable stockholder approval provisions, including, without limitation,
under
the rules and regulations of any exchange or automated quotation system on
which
any of the securities of the Company are listed or designated.
(t) Acknowledgment
Regarding Purchaser’s Purchase of Shares.
The
Company acknowledges and agrees that the Purchaser is acting solely in the
capacity of an arm’s length purchaser with respect to the Transaction Documents
and the transactions contemplated hereby. The Company further acknowledges
that
the Purchaser is not acting as a financial advisor or fiduciary of the Company
(or in any similar capacity) with respect to this Agreement and the transactions
contemplated hereby and any advice given by the Purchaser or any of its
respective representatives or agents in connection with this Agreement and
the
transactions contemplated hereby is merely incidental to the Purchaser’s
purchase of the Shares. The Company further represents to the Purchaser that
the
Company’s decision to enter into this Agreement has been based solely on the
independent evaluation of the transactions contemplated hereby by the Company
and its representatives.
13
(u) Acknowledgement
Regarding Trading Activity.
Anything in this Agreement or elsewhere herein to the contrary notwithstanding
(except for Section 4.7 hereof as to the Purchaser), it is understood and
agreed
by the Company (i) that none of the Purchaser or any Person to whom an offer
of
Shares has been made (each, an “Offeree”)
has
been asked to agree, nor has the Purchaser or Offeree agreed, to desist from
purchasing or selling, long and/or short, securities of the Company, or
“derivative” securities based on securities issued by the Company or to hold the
Shares, securities of the Company, or “derivative” securities based on
securities issued by the Company for any specified term; (ii) that past or
future open market or other transactions by the Purchaser or Offeree, including
without limitation, Short Sales or “derivative” transactions, before or after
the closing of this or future private placement transactions, may negatively
impact the market price of the Company’s publicly-traded securities; (iii) that
the Purchaser or Offeree, and counter parties in “derivative” transactions to
which the Purchaser or Offeree is a party, directly or indirectly, presently
may
have a “short” position in the Common Stock, and (iv) that the Purchaser or
Offeree shall not be deemed to have any affiliation with or control over
any
arm’s length counter-party in any “derivative” transaction.
(v) Transactions
With Affiliates and Employees.
None of
the officers or directors of the Company and, to the knowledge of the Company,
none of the employees of the Company is presently a party to any transaction
with the Company or any Subsidiary (other than for services as employees,
officers and directors or for loans granted in the ordinary course of business)
that either as of the date hereof would be, or, will after the date hereof
be,
required to be disclosed in an SEC Report pursuant to Item 404 of Regulation
S-K.
(w) Internal
Accounting Controls.
The
Company and the Subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed
in
accordance with management’s general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset accountability,
(iii)
access to assets is permitted only in accordance with management’s general or
specific authorization, and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate
action
is taken with respect to any differences. The Company has established disclosure
controls and procedures (as defined in Exchange Act rules 13a-14 and 15d-14)
for
the Company and designed such disclosure controls and procedures to ensure
that
material information relating to the Company, including its Subsidiaries,
is
made known to the certifying officers by others within those entities,
particularly during the period in which the Company’s Form 10-K or 10-Q, as the
case may be, is being prepared. The Company’s certifying officers have evaluated
the effectiveness of the Company’s controls and procedures as of a date within
90 days prior to the filing date of the Form 10-K for the Company’s most
recently ended fiscal year (such date, the “Evaluation Date”). The Company
presented in its most recently filed Form 10-K or Form 10-Q the conclusions
of
the certifying officers about the effectiveness of the disclosure controls
and
procedures based on their evaluations as of the Evaluation Date. Since the
Evaluation Date, there have been no significant changes in the Company’s
internal controls (as described in Item 308(c) of Regulation S-K under the
Exchange Act) or, to the Company’s knowledge, in other factors that could
significantly affect the Company’s internal controls.
14
(x) Investment
Company.
The
Company is not, and will not after the consummation of the offering of Shares
contemplated by this Agreement be, an “investment company” or an Affiliate of an
“investment company,” within the meaning of the Investment Company Act of 1940,
as amended.
(y) Certain
Fees.
Except
with respect to RBC, no brokerage or finder’s fees or commissions are or will be
payable by the Company to any broker, financial advisor or consultant, finder,
placement agent, investment banker, bank or other Person with respect to
the
transactions contemplated by this Agreement. The Purchaser shall have no
obligation with respect to any fees or with respect to any claims (other
than
such fees or commissions owed by the Purchaser pursuant to written agreements
executed by the Purchaser which fees or commissions shall be the sole
responsibility of the Purchaser ) made by or on behalf of other Persons for
fees
of a type contemplated in this Section 3.1(y) that may be due in connection
with
the transactions contemplated by this Agreement.
(z) Regulation
S-X.
In
connection with the acquisition (by merger, consolidation or otherwise) of
Rancho by the Company, the Company is not required to include historical
financial information under Rule 3.05 of Regulation S-X or pro forma financial
information under Rule 11.01 of Regulation S-X in the Registration
Statement.
(aa) Auditors.
Effective March 28, 2006, the Company changed auditors from VTD to KPMG.
During
the period from the date of VTD’s original engagement by the Company through the
date of their resignation, the Company had no disagreements with VTD on any
matter of accounting principles or practices, financial statement disclosure,
or
auditing scope or procedures, which disagreements, if not resolved to the
former
auditors’
satisfaction, would have caused them to make reference to the subject matter
of
the disagreement in connection with their report on the Company’s financial
statements. There
are
no disagreements of any kind presently existing between KPMG and the
Company.
(bb) Insurance.
The
Company and the Subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent
and customary in the businesses in which the Company and the Subsidiaries
are
engaged. Neither the Company nor any Subsidiary has any reason to believe
that
it will not be able to renew its existing insurance coverage as and when
such
coverage expires or to obtain similar coverage from similar insurers as may
be
necessary to continue its business without a significant increase in
cost.
15
(cc) Press
Releases.
The
press releases disseminated by the Company during the twelve months preceding
the date of this Agreement do not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made and when made, not misleading.
(dd) Community
Reinvestment Act.
The
most recent regulatory rating given to Vineyard Bank as to compliance with
the
Community Reinvestment Act is “satisfactory.” To the knowledge of the Company,
since Vineyard Bank’s last regulatory examination of Community Reinvestment Act
compliance, Vineyard Bank has not received any complaints as to Community
Reinvestment Act compliance.
3.2 Representations
and Warranties of the Purchaser
.
The
Purchaser hereby represents and warrants as of the date hereof and as of
the
Closing Date to the Company as follows:
(a) Organization;
Authority.
The
Purchaser is an entity duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization with full right,
corporate, limited liability company or partnership power and authority to
enter
into and to consummate the transactions contemplated by this Agreement and
otherwise to carry out its obligations hereunder. The execution, delivery
and
performance by the Purchaser of this Agreement have been duly authorized
by all
necessary corporate, limited liability company, partnership or similar action
on
the part of the Purchaser. This Agreement has been duly executed by the
Purchaser, and when delivered by the Purchaser in accordance with the terms
hereof, will constitute the valid and legally binding obligation of the
Purchaser, enforceable against it in accordance with its terms, except (i)
as
limited by general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions
may be
limited by applicable law. The Purchaser was not formed and is not being
used
solely for the purpose of purchasing or holding the Shares pursuant to this
Agreement.
(b) Distribution.
The
Purchaser is purchasing the Shares for its own account and not with a view
to
distribution. The Purchaser (i) does not have any agreement or understanding,
directly or indirectly, with any Person to distribute any of the Shares,
and
(ii) has no present plan, intention or understanding and has made no
arrangement to sell any Shares at any predetermined time or for any
predetermined price. The Purchaser is not required to be registered as a
broker-dealer under Section 15 of the Exchange Act.
(c) Purchaser
Status.
The
Purchaser is either (i) a Qualified Institutional Buyer within the meaning
of
Rule 144A under the Securities Act or (ii) an “accredited investor” as defined
in Rule 501(a) under the Securities Act.
16
(d) No
Trading.
The
Purchaser represents and warrants that, except as otherwise disclosed to
the
Company in writing, from April 24, 2006 (the
“Discussion Time”), up
through the execution of this Agreement, the Purchaser did not, directly
or
indirectly, execute any Short Sales or engage in any other trading in the
Common
Stock or any derivative security thereof.
The
Company acknowledges and agrees that the Purchaser does not make or has not
made
any representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in this Section 3.2.
ARTICLE
IV.
OTHER
AGREEMENTS OF THE PARTIES
4.1 Securities
Laws Disclosure; Publicity. The Company shall, by 8:30 a.m., Eastern time,
on
the second Trading Day following the date hereof, issue a press release and
file
a Current Report on Form 8-K which attaches as exhibits all agreements relating
to this transaction, including, but not limited to, this Agreement, in each
case
reasonably acceptable to counsel to the Purchaser, disclosing the material
terms
of the transactions contemplated hereby, and shall file the prospectus
supplement delivered by the Company in connection herewith with the Commission
via the XXXXX system on a timely basis. Notwithstanding the foregoing, the
Company shall not publicly disclose the name of the Purchaser, or include
the
name of the Purchaser in any filing with the Commission or any regulatory
agency
or Trading Market, except as set forth in the exhibits to be attached to
the
Form 8-K contemplated above, without the prior written consent of the Purchaser
(such consent not to be unreasonably withheld), except (i) as required by
federal securities law and (ii) to the extent such disclosure is required
by law
or Trading Market regulations, in which case the Company shall provide the
Purchaser with prior notice of such disclosure permitted under subclause
(i) or
(ii).
4.2 Non-Public
Information. The Company covenants and agrees that neither it nor any other
Person acting on its behalf will provide the Purchaser or its agents or counsel
with any information that the Company believes constitutes material non-public
information, unless prior thereto the Purchaser shall have executed a written
agreement regarding the confidentiality and use of such information. The
Company
understands and confirms that the Purchaser shall be relying on the foregoing
representations in effecting transactions in securities of the
Company.
4.3 Indemnification
of Purchaser. Subject to the provisions of this Section 4.3, the Company
will
indemnify and hold the Purchaser and its directors, officers, stockholders,
partners, members, employees and agents (each, a “Purchaser Party”) harmless
from any and all losses, liabilities, obligations, claims, contingencies,
damages, costs and expenses, including all judgments, amounts paid in
settlements, court costs and reasonable attorneys’ fees and costs of
investigation that any such Purchaser Party may suffer or incur (the
“Indemnified Liabilities”) as a result of or relating to (a) any breach of any
of the representations, warranties, covenants or agreements made by the Company
in this Agreement or in the other Transaction Documents or (b) any Action
brought or made against such Purchaser Party by a third party (including
for
these purposes a derivative action brought on behalf of the Company) and
arising
out of or resulting from (i) the execution, delivery, performance or enforcement
of the Transaction Documents or any other certificate, instrument or document
contemplated hereby or thereby, (ii) any transaction financed or to be financed
in whole or in part, directly or indirectly, with the proceeds of the issuance
of the Shares, or (iii) the status of the Purchaser or holder of the Shares
as
an investor in the Company. The Company shall not be liable to the Purchaser
under this provision in respect of any Indemnified Liability if such liability
arises out of any misrepresentation by the Purchaser in Section 3.2 of this
Agreement. To the extent that the foregoing undertaking by the Company may
be
unenforceable for any reason, the Company shall make the maximum contribution
to
the payment and satisfaction of each of the Indemnified Liabilities which
is
permissible under applicable law. If any action shall be brought against
any
Purchaser Party in respect of which indemnity may be sought pursuant to this
Agreement, such Purchaser Party shall promptly notify the Company in writing,
and the Company shall have the right to assume the defense thereof with counsel
of its own choosing. Any Purchaser Party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the
fees
and expenses of such counsel shall be at the expense of such Purchaser Party
except to the extent that (i) the employment thereof has been specifically
authorized by the Company in writing, (ii) the Company has failed after a
reasonable period of time to assume such defense and to employ counsel or
(iii)
in such action there is, in the reasonable opinion of such separate counsel,
a
material conflict on any material issue between the position of the Company
and
the position of such Purchaser Party. The Company will not be liable to any
Purchaser Party under this Section 4.3 for any settlement by a Purchaser
Party
effected without the Company’s prior written consent, which consent shall not be
unreasonably withheld or delayed.
17
4.4 Reservation
and Listing
of
Common Stock.
The
Company shall promptly secure the listing of all of the Shares upon each
national securities exchange and automated quotation system, if any, upon
which
the Common Stock is then listed or quoted. The Company hereby agrees to use
commercially reasonable efforts to maintain the listing of the Shares on
a
Trading Market. The Company further agrees that if the Company applies to
have
the Common Stock traded on any other Trading Market, it will include in such
application all of the Shares and will take such other action as is necessary
to
cause all of the Shares to be listed on such other Trading Market as promptly
as
possible. The Company will take all action reasonably necessary to continue
the
listing and trading of the Common Stock on a Trading Market and will comply
in
all material respects with the Company’s reporting, filing and other obligations
under the bylaws or rules of the Trading Market.
4.5 [Intentionally
left blank.].
4.6 Approval
of Subsequent Equity Sales. The Company shall not issue Common Stock or Common
Stock Equivalents if such issuance would require stockholder approval of
the
transactions contemplated by the Transaction Documents pursuant to Rule 4350
of
the NASD Marketplace Rules or any similar rule of any other Trading Market,
unless and until such stockholder approval is obtained prior to such
issuance.
4.7 Trading
Limitations and Restrictions on Short Sales. The Purchaser represents, warrants,
covenants and agrees that (a) from the Discussion Time through the date hereof,
the Purchaser did not, and (b) from the date hereof until the date the
transactions
contemplated by this Agreement are first publicly announced by the Company
as
described in Section 4.1,
the
Purchaser will not, directly or indirectly, trade in the Common Stock or
execute
or effect (or cause to be executed or effected) any Short Sale in the Common
Stock. Furthermore, for the time period set forth in clause (b) above, the
Purchaser will not directly or indirectly sell, offer to sell, solicit offers
to
buy, dispose of, loan, pledge or grant any right with respect to shares of
Common Stock, except in compliance with all relevant securities laws and
regulations.
18
Notwithstanding
the foregoing, the Purchaser makes no representation, warranty or covenant
hereby that it will not engage in Short Sales in the securities of the
Company
after the time that the transactions contemplated by this Agreement are
first
publicly announced by the Company as described in Section
4.1.
4.8 Filing
of Prospectus Supplement. The Company will use its best efforts to cause
the
Registration Statement, if not effective at the time of execution of this
Agreement, to become effective as promptly as possible. The Company shall
prepare the Prospectus Supplement in a form approved by RBC and the Purchaser
and file such Prospectus Supplement pursuant to Rule 424(b) under the Securities
Act not later than the Commission’s close of business on the second Business Day
following the execution and delivery of this Agreement, or, if applicable,
such
earlier time as may be required by the rules and regulations promulgated
under
the Securities Act (the “Rules”). The Company shall promptly advise the
Purchaser in writing (A) when any post-effective amendment to the Registration
Statement shall have become effective or any supplement to the Prospectus
Supplement shall have been filed, (B) of any request by the Commission for
any
amendment of the Registration Statement or the Prospectus Supplement or for
any
additional information, (C) of the issuance by the Commission of any stop
order
suspending the effectiveness of the Registration Statement or of any order
preventing or suspending the use of the Prospectus Supplement, or the
institution or threatening of any proceeding for that purpose and (D) of
the
receipt by the Company of any notification with respect to the suspension
of the
qualification of the Shares for sale in any jurisdiction or the initiation
or
threatening of any proceeding for such purpose. The Company shall not file
any
amendment of the Registration Statement or the Prospectus Supplement relating
to
the transactions contemplated by this Agreement unless the Company has furnished
RBC and the Purchaser a copy for their review prior to filing and shall not
file
any such proposed amendment or supplement to which the Purchaser reasonably
objects. The Company shall use its best efforts to prevent the issuance of
any
such stop order and, if issued, to obtain as soon as possible the withdrawal
thereof. If, at any time when a prospectus relating to the Shares is required
to
be delivered under the Securities Act and the Rules (or, in lieu thereof,
the
notice referred to in Rule 173(a)), an event or development occurs as a result
of which the Prospectus Supplement as then amended or supplemented would
include
an untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein in the light of the circumstances
under
which they were made not misleading, or if it shall be necessary to amend
or
supplement the Prospectus Supplement to comply with the Securities Act or
the
Rules, the Company promptly shall prepare and file with the Commission, subject
to the fourth sentence of this Section 4.8, an amendment or supplement which
shall correct such statement or omission or an amendment which shall effect
such
compliance.
ARTICLE
V.
MISCELLANEOUS
5.1 Fees
and
Expenses. Except as otherwise set forth in this Agreement, each party shall
pay
the fees and expenses of its advisers, counsel, accountants and other experts,
if any, and all other expenses incurred by such party incident to the
negotiation, preparation, execution, delivery and performance of this Agreement.
The Company shall pay all stamp and other taxes and duties levied in connection
with the sale of the Shares.
19
5.2 Entire
Agreement. The Transaction Documents, together with the exhibits and schedules
thereto, contain the entire understanding of the parties with respect to
the
subject matter hereof and supersede all prior agreements and understandings,
oral or written, with respect to such matters, which the parties acknowledge
have been merged into the Transaction Documents, exhibits and
schedules.
5.3 Notices.
Any and all notices or other communications or deliveries required or permitted
to be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of (a) the date of transmission, if such notice
or
communication is delivered via facsimile at the facsimile number set forth
on
the signature pages attached hereto prior to 6:30 p.m. (New York City time)
on a
Trading Day, (b) the next Trading Day after the date of transmission, if
such
notice or communication is delivered via facsimile at the facsimile number
set
forth on the signature pages attached hereto on a day that is not a Trading
Day
or later than 6:30 p.m. (New York City time) on any Trading Day, (c) the
second
Trading Day following the date of mailing, if sent by U.S. nationally recognized
overnight courier service, or (d) in all other cases, upon actual receipt
by the
party to whom such notice is required to be given. The address for such notices
and communications shall be as set forth on the signature pages attached
hereto.
5.4 Amendments;
Waivers. No provision of this Agreement may be waived or amended except in
a
written instrument signed, in the case of an amendment, by the Company and
the
Purchaser or, in the case of a waiver, by the party against whom enforcement
of
any such waiver is sought. No waiver of any default with respect to any
provision, condition or requirement of this Agreement shall be deemed to
be a
continuing waiver in the future or a waiver of any subsequent default or
a
waiver of any other provision, condition or requirement hereof, nor shall
any
delay or omission of either party to exercise any right hereunder in any
manner
impair the exercise of any such right.
5.5 Construction.
The headings herein are for convenience only, do not constitute a part of
this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof. The language used in this Agreement will be deemed to be the language
chosen by the parties to express their mutual intent, and no rules of strict
construction will be applied against any party.
5.6 Successors
and Assigns
.
This
Agreement shall be binding upon and inure to the benefit of the parties and
their successors and permitted assigns. The Company may not assign this
Agreement or any rights or obligations hereunder without the prior written
consent of the Purchaser. The Purchaser may assign any or all of its rights
under this Agreement to any Person to whom the Purchaser assigns or transfers
any Shares, provided such transferee agrees in writing to be bound, with
respect
to the transferred Shares, by the provisions hereof that apply to the
Purchaser.
5.7 No
Third-Party Beneficiaries. Except as provided in the second sentence of Section
5.16, this Agreement is intended for the benefit of the parties hereto and
their
respective successors and permitted assigns and is not for the benefit of,
nor
may any provision hereof be enforced by, any other Person, except as otherwise
set forth in Section 4.6.
20
5.8 Governing
Law. All questions concerning the construction, validity, enforcement and
interpretation of the Transaction Documents shall be governed by and construed
and enforced in accordance with the internal laws of the State of New York,
without regard to the principles of conflicts of law thereof. Each party
hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in The City of New York, Borough of Manhattan for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein (including with respect
to
the enforcement of any of the Transaction Documents), and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court,
that
such suit, action or proceeding is improper or inconvenient venue for such
proceeding. Each party hereby irrevocably waives personal service of process
and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices
to it under this Agreement and agrees that such service shall constitute
good
and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner
permitted by law. The
parties hereby waive all rights to a trial by jury. If
either
party shall commence an action or proceeding to enforce any provisions of
the
Transaction Documents, then the prevailing party in such action or proceeding
shall be reimbursed by the other party for its attorneys’ fees and other costs
and expenses incurred with the investigation, preparation and prosecution
of
such action or proceeding.
5.9 Survival.
The representations, warranties, covenants and agreements contained herein
shall
survive the Closing and delivery of the Shares.
5.10 Execution.
This Agreement may be executed in two or more counterparts, all of which
when
taken together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered
to the
other party, it being understood that both parties need not sign the same
counterpart. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid and binding obligation
of the
party executing (or on whose behalf such signature is executed) with the
same
force and effect as if such facsimile signature page were an original
thereof.
5.11 Severability.
If any provision of this Agreement is held to be invalid or unenforceable
in any
respect, the validity and enforceability of the remaining terms and provisions
of this Agreement shall not in any way be affected or impaired thereby and
the
parties will attempt to agree upon a valid and enforceable provision that
is a
reasonable substitute therefor, and upon so agreeing, shall incorporate such
substitute provision in this Agreement.
5.12 Rescission
and Withdrawal Right. Notwithstanding anything to the contrary contained
in (and
without limiting any similar provisions of) the Transaction Documents, whenever
the Purchaser exercises a right, election, demand or option under a Transaction
Document and the Company does not timely perform its related obligations
within
the periods therein provided, then the Purchaser may rescind or withdraw,
in its
sole discretion from time to time upon written notice to the Company, any
relevant notice, demand or election in whole or in part without prejudice
to its
future actions and rights.
21
5.13 Replacement
of Shares. If any certificate or instrument evidencing any Shares is mutilated,
lost, stolen or destroyed, the Company shall issue or cause to be issued
in
exchange and substitution for and upon cancellation thereof, or in lieu of
and
substitution therefor, a new certificate or instrument, but only upon receipt
of
evidence reasonably satisfactory to the Company of such loss, theft or
destruction and customary and reasonable indemnity, if requested. The applicants
for a new certificate or instrument under such circumstances shall also pay
any
reasonable third-party costs associated with the issuance of such replacement
Shares.
5.14 Remedies.
In addition to being entitled to exercise all rights provided herein or granted
by law, including recovery of damages, the Purchaser and the Company will
be
entitled to specific performance under the Transaction Documents. The parties
agree that monetary damages may not be adequate compensation for any loss
incurred by reason of any breach of obligations described in the foregoing
sentence and hereby agrees to waive in any action for specific performance
of
any such obligation the defense that a remedy at law would be
adequate.
5.15 Independent
Nature of Purchaser’s Obligations and Rights. The obligations of the Purchaser
under the Transaction Documents or any similar transaction document are several
and not joint with the obligations of any other purchase of the Company’s Common
Stock on the date hereof, and no such purchaser shall be responsible in any
way
for the performance of the obligations of any other purchaser under these
Transaction Documents or any similar transaction document. Nothing contained
herein or in any Transaction Document or in any other document executed in
connection with the sale of the Company’s Common Stock on the date hereof, and
no action taken by the Purchaser pursuant hereto or any other purchase pursuant
thereto, shall be deemed to constitute the purchasers as a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the purchasers are in any way acting in concert or as a
group
with respect to such obligations or the transactions contemplated by the
Transaction Documents or any other document executed in connection with the
sale
of the Company’s Common Stock on the date hereof. The Purchaser shall be
entitled to independently protect and enforce its rights, including, without
limitation, the rights arising out of this Agreement or out of the other
Transaction Documents, and it shall not be necessary for any other purchaser
to
be joined as an additional party in any proceeding for such purpose. The
Purchaser has been represented by its own separate legal counsel in their
review
and negotiation of the Transaction Documents. The Company has elected to
provide
all purchasers of the Company’s Common Stock on the date hereof with the same
terms and substantially similar transaction documents for the convenience
of the
Company and not because it was required or requested to do so by the
purchasers.
5.16 Acknowledgment
Regarding RBC. The Purchaser acknowledges that RBC is acting as a placement
agent for the Shares being offered hereby and will be compensated by the
Company
for acting in such capacity. The Purchaser further acknowledges that RBC
has
acted solely as agent of the Company in connection with the offering of the
Shares by the Company. The Purchaser further acknowledges that the provisions
of
Sections 2.3(b)(vi), 3.2(b) and 5.16 are for the benefit of and may be enforced
by RBC.
22
(Signature
Page Follows)
23
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized signatories as of the date first
indicated above.
|
Company
: VINEYARD NATIONAL BANCORP
|
Address
for Notice:
|
|
By:
______________________
Name:
Title:
|
0000
Xxxxxxxx Xxxxxxxxx
Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attn:
Xxxxxx Xxxx, Executive Vice President and Chief Financial
Officer
Fax:
(000) 000-0000
|
|
With
a copy to (which shall not constitute notice):
Xxxxxx
Xxxxx LLP
0000
X Xxxxxx, X.X.
Xxxxxxxxxx,
XX 00000
Attn:
Xxxxxxx X. Xxxx
Fax:
000-000-0000
|
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE
PAGES FOR PURCHASER FOLLOWS]
24
[PURCHASER
SIGNATURE PAGES TO VNBC SECURITIES PURCHASE AGREEMENT]
IN
WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement
to be duly executed by their respective authorized signatories as of the
date
first indicated above.
Name
of
Purchasing Entity:
Signature
of Authorized Signatory of Investing Entity:
Name
of
Authorized Signatory:
Title
of
Authorized Signatory:
Email
Address of Authorized Entity:
Fax:
Address
for Notice of Purchasing Entity:
DWAC
Instructions for Common Stock:
Subscription
Amount: $
Settlement
of Shares: In accordance with Section 2.2(a)(i), the Purchaser elects to
receive
delivery of its Shares pursuant to (CHECK ONE):
______
Section 2.2(a)(i)(1) - DWAC
______
Section 2.2(a)(i)(2) - Delivery versus payment
25
Disclosure
Schedules
