Exhibit 4
PASSIVITY COMMITMENT
Castle Creek Capital Partners IV, LP, Castle Creek Capital IV, LLC, Castle Creek Advisors IV, LLC, Pietrzak Advisory Corp., JME Advisory Corp., Ruh Advisory Corp., Legions IV Advisory Corp., and Mikesell Advisory Corp. (each, a “CCCP Acquirer”), and their subsidiaries and affiliates (collectively, “CCCP Acquirer Group”), will not, without the prior approval of the Board or its staff, directly or indirectly:
1. Exercise or attempt to exercise a controlling influence over the management or policies of Intermountain Community Bancorp (“IMCB”), Sandpoint, Idaho, or any of its subsidiaries;
2. Have or seek to have more than one representative of CCCP Acquirer Group serve on the board of directors of IMCB or any of its subsidiaries;
3. Permit any representative of the CCCP Acquirer Group who serves on the board of directors of IMCB or any of its subsidiaries to serve (i) as the chairman of the board of directors of IMCB or any of its subsidiaries, (ii) as the chairman of any committee of the board of directors of IMCB or any of its subsidiaries, (iii) as a member of any committee of the board of directors of IMCB or any of its subsidiaries if the CCCP Acquirer Group representative occupies more than 25 percent of the seats on the committee, (iv) as a member of a committee of the board of directors of IMCB if at any time such committee would have decisionmaking authority for policies or actions on managerial matters (other than decisions related to retaining third party consultants or advisers in connection with carrying out committee duties) unless (a) recommendations of such committee as to policy or actions on managerial matters are reviewed and approved or reviewed and ratified by the full board, (b) such committee is carrying out functions in accordance with a policy or parameters approved by the full board, or (c) Board staff authorizes service on a particular committee in light of all the facts and circumstances of the case, or (v) as a member of any committee if such representative has the authority or practical ability unilaterally to make, or block the making of, policy or other decisions that bind the board, any committee of the board, or management of IMCB;
4. Have or seek to have any employee or representative of the CCCP Acquirer Group serve as an officer, agent, or employee of IMCB or any of its subsidiaries;
5. Take any action that would cause IMCB or any of its subsidiaries to become a subsidiary of CCCP Acquirer Group;
6. Own, control, or hold with power to vote securities that (when aggregated with securities that the officers and directors of the CCCP Acquirer Group own, control, or hold with power to vote) represent 25 percent or more of any class of voting securities of IMCB or any of its subsidiaries;
7. Own or control equity interests that would result in the combined voting and nonvoting equity interests of the CCCP Acquirer Group and its officers and directors to equal or exceed 25 percent of the total equity capital of IMCB or any of its subsidiaries, except that, if the CCCP Acquirer Group and its officers and directors own, hold, or have the power to vote less than 15 percent of the outstanding shares of any classes of voting securities of IMCB, CCCP Acquirer Group and its officers and directors may own or control equity interests greater than 25 percent, but in no case more than 33.3 percent, of the total equity capital of IMCB or any of its subsidiaries;
8. Propose a director or slate of directors in opposition to a nominee or slate of nominees proposed by the management or board of directors of IMCB or any of its subsidiaries;
9. Enter into any agreement with IMCB or any of its subsidiaries that substantially limits the discretion of IMCB’s management over major policies and decisions, including, but not limited to, policies or decisions about employing and compensating executive officers; engaging in new business lines; raising additional debt or equity capital; merging or consolidating with another firm; or acquiring, selling, leasing, transferring, or disposing of material assets, subsidiaries, or other entities;
10. Solicit or participate in soliciting proxies with respect to any matter presented to the shareholders of IMCB or any of its subsidiaries;
11. Dispose or threaten to dispose (explicitly or implicitly) of equity interests of IMCB or any of its subsidiaries in any manner as a condition or inducement of specific action or non-action by IMCB or any of its subsidiaries; or
12. Enter into any other banking or nonbanking transactions with IMCB or any of its subsidiaries, except that the CCCP Acquirer Group may establish and maintain deposit accounts with IMCB, provided that the aggregate balance of all such deposit accounts does not exceed $500,000 and that the accounts are
maintained on substantially the same terms as those prevailing for comparable accounts of persons unaffiliated with IMCB.
Each CCCP Acquirer also certifies that:
13. CCCP Acquirer is not an affiliate of any other investor (excluding other CCCP Acquirers) in the proposed transaction (individually, each an “Investor,” and, collectively, the “Investors”);
14. CCCP Acquirer has reached its decision to invest in IMCB independently from the other Investors;
15. CCCP Acquirer is not managed or advised by an investment manager or investment advisor who performs the same services for any other Investor (excluding other CCCP Acquirers);
16. CCCP Acquirer (including any subsidiary or affiliate of a CCCP Acquirer) has not engaged and will not engage as part of a group consisting of substantially the same entities as the Investors, in substantially the same combination of interests, in any additional banking or nonbanking activities or business ventures in the United States without prior consultation with the Board;
17. CCCP Acquirer has not and will not enter into any agreements or understandings with any other Investor to act in concert for the purpose of exercising a controlling influence over IMCB or any of its subsidiaries, including, but not limited to, any agreements or understandings regarding the voting or transfer of shares of IMCB; and
18. Any director representing CCCP Acquirer will not collude or conspire with any other directors or shareholders of IMCB with respect to the exercise of any director’s voting rights. Nothing in this commitment shall limit a director’s ability to exercise its legitimate duties/rights as a director of IMCB, including the ability to consult with other directors and shareholders as appropriate.
The terms used in these commitments have the same meanings as set forth in the Bank Holding Company Act of 1956, as amended (“BHC Act”), and the Board’s Regulation Y. For purposes of these commitments, “Investor” includes any subsidiary or affiliate of the Investor.
Nothing in these commitments releases the CCCP Acquirer Group from compliance with the Change in Bank Control Act and the Board’s regulations
thereunder for any subsequent acquisition or increase in the percentage ownership of any class of voting shares of IMCB.
Each CCCP Acquirer understands that these commitments constitute conditions imposed in writing in connection with the Board’s findings and decisions related to CCCP Acquirer Group’s acquisition of up to 9.9 percent of the voting shares and 33.3 percent of the total equity of IMCB, including a determination that no filing under the BHC Act is required for this transaction by CCCP Acquirer Group, and, as such, may be enforced in proceedings under applicable law.
IN WITNESS WHEREOF, each of the undersigned has caused this Passivity Commitment to be executed and delivered by its proper and duly authorized officer as of the date set forth above.
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| CASTLE CREEK CAPITAL PARTNERS IV, LP | |
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| By: | /s/ John M. Eggemeyer |
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| Name: John M. Eggemeyer |
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| Title: Managing Principal |
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| CASTLE CREEK CAPITAL IV, LLC | |
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| By: | /s/ William J. Ruh |
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| Name: William J. Ruh |
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| Title: Managing Principal |
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| CASTLE CREEK ADVISORS IV, LLC | |
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| By: | /s/ J. Mikesell Thomas |
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| Name: J. Mikesell Thomas |
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| Title: Principal |
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| PIETRZAK ADVISORY CORP. | |
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| By: | /s/ John Pietrzak |
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| Name: John Pietrzak |
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| Title: President |
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| JME ADVISORY CORP. | |
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| By: | /s/ John M. Eggemeyer |
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| Name: John M. Eggemeyer |
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| Title: President |
[Signature Page to Passivity Commitment (CCCP)]
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| RUH ADVISORY CORP. | |
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| By: | /s/ William Ruh |
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| Name: William Ruh |
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| Title: President |
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| LEGIONS IV ADVISORY CORP. | |
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| By: | /s/ Mark Merlo |
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| Name: Mark Merlo |
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| Title: President |
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| MIKESELL ADVISORY CORP. | |
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| By: | /s/ J. Mikesell Thomas |
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| Name: J. Mikesell Thomas |
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| Title: President |
[Signature Page to Passivity Commitment (CCCP)]