Exhibit 10.4

$[           ]
 
Anchor BanCorp Wisconsin Inc.
 
Senior Notes due [       ]
 
PURCHASE AGREEMENT
 
[              ], 2013
Ladies and Gentlemen:
 
Anchor BanCorp Wisconsin Inc., a Wisconsin corporation (the “Company”), hereby
agrees with the several purchasers named in Schedule I hereto (the “Purchasers”)
as follows:
 
1.      Issuance of Notes. Subject to the terms and conditions herein contained,
the Company proposes to issue and sell to the Purchasers up to $[       ]
aggregate principal amount of the Company’s Senior Notes due [       ] (each a
“Note” and, collectively, the “Notes”).  The coupon rate on the Notes will be
[       ]% per annum if the yield on the current five-year U.S. Treasury note
(the “UST Rate”) is not greater than [       ]% as indicated on the Bloomberg
reference page BBT at 12:00 p.m., New York, New York time on the second business
day prior to the Closing Date (as defined herein) (the “Determination Time”);
provided, however, that if the UST Rate is greater than [       ]% at the
Determination Time, then the coupon rate to be paid (out to the second decimal
point) on the Notes will increase by the corresponding increase in the UST Rate
over [       ]%, up to a maximum coupon rate on the Notes of [       ]%.  The
Notes will be issued pursuant to an Indenture, substantially in the form
attached hereto as Exhibit A (the “Indenture”), to be dated on or about the
Closing Date, between the Company and Wilmington Trust, National Association, as
trustee (the “Trustee”).
 
On or prior to the date hereof, the Company delivered to the Purchasers a letter
(a “Disclosure Letter”) setting forth, among other things, items the disclosure
of which is necessary or appropriate either in response to an express disclosure
requirement contained in a provision hereof or as an exception to one or more
representations or warranties contained in Section 3; provided that information
which is reasonably apparent on its face that it relates to another provision of
this Agreement, shall also be deemed to be Previously Disclosed (as defined
below) information with respect to such other provision. All references in this
Agreement to information which has been “Previously Disclosed” means information
set forth in the Disclosure Letter or in (i) the Company’s Annual Report on Form
10-K for the fiscal year ended March 31, 2013 (“Form 10-K”), as filed by it with
the Securities and Exchange Commission (“SEC”), (ii) the Company’s Annual Report
on Form 10-K/A for the fiscal year ended March 31, 2013, as filed by it with the
SEC or (iii) any Current Report on Form 8-K, as filed or furnished by the
Company with the SEC since April 1, 2013 (the foregoing, collectively, the
“Company Reports”).
 
This Agreement, the Indenture and the Notes are collectively referred to herein
as the “Documents,” and the transactions contemplated thereby and in the Stock
Purchase Agreements, each dated of even date herewith, by and between the
parties listed thereto (the “Stock Purchase Agreements”), are collectively
referred to herein as the “Transactions.”  Following the date of this Agreement
and prior to the Closing Date, subject to the approval of the Company, if there
 

 
1

--------------------------------------------------------------------------------

 

 
are any additional purchasers of the Notes, such purchasers shall enter into a
joinder agreement to this Agreement, the form of which is attached hereto as
Exhibit B (the “Joinder Agreement”), pursuant to which such purchasers shall
become parties to this Agreement.
 
2.      Purchase, Sale and Delivery. On the basis of the representations,
warranties, agreements and covenants herein contained and subject to the terms
and conditions herein set forth, the Company agrees to issue and sell to each
Purchaser, severally and not jointly, and each Purchaser, severally and not
jointly, agrees to purchase from the Company, at a purchase price of 100% of the
aggregate principal amount thereof, the aggregate principal amount of the Notes
set forth in Schedule I opposite the name of such Purchaser, plus any additional
principal amount of Notes which such Purchaser may become obligated to purchase
pursuant to the provisions of Section 10 hereof. Subject to the satisfaction
(or, to the extent permitted, waiver) of the conditions set forth in Section 6
hereof, delivery to the Purchasers of and payment for the Notes shall be made at
a closing (the “Closing”) to take place contemporaneously with the closing of
the transactions contemplated by the Securities Purchase Agreements at the
offices of Skadden, Arps, Slate, Meagher & Flom LLP located at Four Times
Square, New York, New York, 10036 (or at such other place as shall be reasonably
acceptable to the Purchasers), as soon as practicable, but in no event later
than the second business day after the satisfaction or waiver of the conditions
set forth in Section 6 hereof (excluding conditions that, by their terms, cannot
be satisfied until the Closing, but the Closing shall be subject to the
satisfaction or waiver of those conditions).  The date of the Closing is
referred to as the “Closing Date.”
 
Subject to Section 5(c)(i) , the Notes to be purchased by the Purchasers
hereunder will be represented by one or more global certificates in book-entry
form which will be deposited by or on behalf of the Company through the
facilities of The Depository Trust Company (“DTC”) or its designated custodian,
and registered in the name of Cede & Co.  Such global certificate or
certificates representing the Notes shall be registered in such name or names
and denominations as such Purchasers may request, against payment by such
Purchasers of the purchase price therefor by immediately available federal funds
bank wire transfer to such bank account or accounts as the Company shall
designate to the Purchasers at least two business days prior to the Closing. The
global certificates representing the Notes shall be made available to the
Purchasers for inspection at the offices of Skadden, Arps, Slate, Meagher & Flom
LLP, Four Times Square, New York, New York 10036 (or such other place as shall
be reasonably acceptable to the Purchasers) not later than 10:00 a.m., New York,
New York time one business day immediately preceding the Closing Date.
 
3.      Representations and Warranties of the Company. The Company represents
and warrants to, and agrees with, the Purchasers that, as of the date hereof and
as of the Closing Date:
 
(a)      Reporting Compliance. The Company is subject to, and is in compliance
in all material respects with, the reporting requirements of Section 13 and
Section 15(d), as applicable, of the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC thereunder (collectively, the
“Exchange Act”). The Company Reports, at the time they were or hereafter are
filed or furnished with the SEC, complied in all material respects with the
requirements of the Exchange Act and did not and do not include any untrue
statement of a material fact or omit to state a material fact necessary to
 

 
2

--------------------------------------------------------------------------------

 

 
make the statements therein, in the light of the circumstances under which they
were made, not misleading.  As of the date of this Agreement, no executive
officer of the Company has failed to make the certifications required of him or
her under Section 302 or 906 of the Sarbanes-Oxley Act of 2002.
 
(b)      Preparation of Financial Statements. Each of the consolidated balance
sheets of the Company and the Subsidiaries and the related consolidated
statements of income, stockholders’ equity and cash flows, together with the
notes thereto, included in any Company Report filed with the SEC on or after
March 31, 2010 and prior to the date of this Agreement (collectively, the
“Financial Statements”), (1) have been prepared from, and are in accordance
with, the books and records of the Company and the Subsidiaries, (2) complied,
as of their respective date of such filing, in all material respects with
applicable accounting requirements and with the published rules and regulations
of the SEC with respect thereto, (3) have been prepared in accordance with GAAP
applied on a consistent basis and (4) present fairly in all material respects
the consolidated financial position of the Company and the Subsidiaries at the
dates and the consolidated results of operations, changes in stockholders’
equity and cash flows of the Company and the Subsidiaries for the periods stated
therein (subject to the absence of notes and non-material year-end audit
adjustments in the case of unaudited Company Financial Statements).  All other
financial, statistical and market and industry data and forward-looking
statements (within the meaning of Section 27A of the Securities Act of 1933, as
amended (the “Securities Act”) and Section 21E of the Exchange Act) contained in
the Company Reports are fairly and accurately presented, in all material
respects, are based on or derived from sources that the Company believes to be
reliable and accurate and are presented on a reasonable basis. To the extent
applicable, all disclosures contained in the Company Reports regarding “non-GAAP
financial measures” (as such term is defined by the SEC’s rules and regulations)
comply with Regulation G of the Exchange Act and Item 10 of Regulation S-K under
the Exchange Act, as applicable, in all material respects.
 
(c)      Disclosure Controls and Procedures.   The records, systems, controls,
data and information of the Company and the Subsidiaries are recorded, stored,
maintained and operated under means (including any electronic, mechanical or
photographic process, whether computerized or not) that are under the exclusive
ownership and direct control of the Company or the Subsidiaries or accountants
(including all means of access thereto and therefrom), except for any
nonexclusive ownership and nondirect control that would not reasonably be
expected to have a material adverse effect on the system of internal accounting
controls described below in this Section 3(c).  The Company (A) has implemented
and maintains an effective system of “disclosure controls and procedures” (as
defined in Rule 13a-15(e) of the Exchange Act) to ensure that material
information relating to the Company, including its consolidated subsidiaries, is
made known to the chief executive officer and the chief financial officer of the
Company by others within those entities, (B) has implemented and maintains
internal controls over financial reporting (as defined in Rule 13a-15(f) of the
Exchange Act) and (C) has disclosed, based on its most recent evaluation prior
to the date of this Agreement, to the Company’s outside auditors and the audit
committee of the Board of Directors (x) any significant deficiencies and
material weaknesses in the design or operation of internal control over
 

 
3

--------------------------------------------------------------------------------

 

 
financial reporting that are reasonably likely to adversely affect the Company’s
ability to record, process, summarize and report financial information, and (y)
any fraud, whether or not material, that involves management or other employees
who have a significant role in the Company’s internal controls over financial
reporting.  The statements relating to disclosure controls and procedures made
by the principal executive officers (or their equivalents) and principal
financial officers (or their equivalents) of the Company in the certifications
required by the Sarbanes-Oxley Act of 2002 and the rules and regulations
promulgated in connection therewith (the “Sarbanes-Oxley Act”) are complete and
correct in all material respects. As of the date of this Agreement, the Company
has no knowledge of any reason that its outside auditors and its chief executive
officer and chief financial officer shall not be able to give the certifications
and attestations required pursuant to the rules and regulations adopted pursuant
to Section 404 of the Sarbanes-Oxley Act, without qualification, when next
due.  Since December 31, 2009, (i) neither the Company nor any Subsidiary nor,
to the knowledge of the Company, any director, officer, employee, auditor,
accountant or representative of the Company or any Subsidiary has received or
otherwise had or obtained knowledge of any material complaint, allegation,
assertion or claim, whether written or oral, regarding the accounting or
auditing practices, procedures, methodologies or methods of the Company or any
Subsidiary or their respective internal accounting controls, including any
material complaint, allegation, assertion or claim that the Company or any
Subsidiary has engaged in questionable accounting or auditing practices, and
(ii) no attorney representing the Company or any Subsidiary, whether or not
employed by the Company or any Subsidiary, has reported evidence of a material
violation of securities laws, breach of fiduciary duty or similar violation by
the Company or any of its officers, directors, employees or agents to the Board
of Directors or any committee thereof or to any director or officer of the
Company.
 
(d)      Independent Accountants. McGladrey LLP (“McGladrey”), the Company’s
independent auditor, who has certified and expressed its opinion with respect to
the audited financial statements and related notes contained the Company
Reports, is (i) an independent registered public accounting firm with respect to
the Company and the Subsidiaries within the applicable rules and regulations
adopted by the SEC and as required by the Securities Act, (ii) in compliance
with the applicable requirements relating to the qualification of accountants
under Regulation S-X and (iii) a registered public accounting firm as defined by
the Public Company Accounting Oversight Board whose registration has not been
suspended or revoked and who has not requested such registration to be
withdrawn. To the Company’s knowledge, McGladrey is not and has not been in
violation of the auditor independence requirements of the Sarbanes-Oxley Act in
respect of the Company.
 
(e)      No Material Adverse Change. Subsequent to the respective dates as of
which information is contained in the Company Reports, except as Previously
Disclosed, (i) neither the Company nor any of the Subsidiaries has incurred any
liabilities, direct or contingent, including without limitation any losses or
interference with its business from fire, explosion, flood, earthquakes,
accident or other calamity, whether or not covered by insurance, or from any
strike, labor dispute or court or governmental action, order or decree, that are
material, individually or in the aggregate, to the Company and the
 

 
4

--------------------------------------------------------------------------------

 

 
Subsidiaries, taken as a whole, or has entered into any transactions not in the
ordinary course of business, (ii) neither the Company nor any of the
Subsidiaries has made or declared any distribution or dividend in cash or in
kind to their respective stockholders or issued or repurchased any shares of
their respective capital stock or other equity interests, and (iii) there has
not been any material adverse change in the business, assets, liabilities,
properties, results of operations or condition (financial or otherwise) of the
Company and the Subsidiaries, taken as a whole (each of clauses (i), (ii) and
(iii), a “Material Adverse Change”).
 
(f)      Subsidiaries. Each of the Company’s subsidiaries that is a “significant
subsidiary” as defined in Rule 1-02 of Regulation S-X (each a “Subsidiary” and
collectively, the “Subsidiaries”) is listed on Schedule II attached hereto.
 
(g)      Incorporation and Good Standing of the Company and its Subsidiaries;
Material Adverse Effect.  As of the date of this Agreement, the Company and each
of the Subsidiaries (i) has been organized or formed, as the case may be, is
validly existing, duly qualified to do business and is in good standing under
the laws of its jurisdiction of organization, (ii) has all requisite power and
authority to carry on its business and to own, lease and operate its properties
and assets as it is now being conducted and (iii) is duly qualified or licensed
to do business and is in good standing as a foreign corporation, partnership or
other entity as the case may be, authorized to do business in each jurisdiction
in which the nature of such businesses or the ownership or leasing of such
properties requires such qualification, except where the failure to be so
qualified would not, individually or in the aggregate, have a Material Adverse
Effect (as defined herein).  As used in this Agreement, the term “Material
Adverse Effect” means any fact, event, change, condition, development,
circumstance or effect that, individually or in the aggregate, (1) would
reasonably be expected to be material and adverse to the business, assets,
liabilities, properties, results of operations or condition (financial or
otherwise) of the Company and the Subsidiaries, taken as a whole, other than any
such fact, event, change, condition, development, circumstance or effect
attributable to, resulting from, arising out of or relating to (i) the Company’s
anticipated voluntary bankruptcy petition under Chapter 11 of Title 11 of the
United States Code, 11 U.S.C. §§ 101, et seq., in the United States Bankruptcy
Court for the Western District of Wisconsin (the “Bankruptcy Court”), (ii) any
change or proposed change, after the date hereof, in banking or similar laws,
rules or regulations of general applicability or interpretations thereof by
Governmental Authorities (as defined herein), (iii) any change, after the date
hereof, in GAAP or interpretations thereof, (iv) changes, after the date hereof,
affecting the financial services industry generally, the United States economy
or general economic conditions, including changes in prevailing interest rates,
credit markets, secondary or mortgage market conditions or housing price
appreciation/depreciation trends, including changes to any previously correctly
applied asset marks resulting therefrom, (v) national or international political
or social conditions, including the engagement by the United States in
hostilities or escalation thereof, whether or not pursuant to the declaration of
a national emergency or war, or the occurrence of any military or terrorist
attack upon the United States, or any of its territories, possessions, or
diplomatic or consular offices, (vi) the failure of the Company to meet any
internal or public projections, forecasts, estimates or guidance for any period
ending after March 31, 2013; provided that the exception in
 

 
5

--------------------------------------------------------------------------------

 

 
this clause (vii) shall not prevent or otherwise affect a determination that any
fact, event, change, condition, development, circumstance or effect underlying
such a failure has resulted in, or contributed to, a Material Adverse Effect,
(viii) any actions taken with the prior written consent of the Purchaser, (ix)
the Regulatory Agreements (defined herein) applicable to the Company or the Bank
(as defined herein), or (x) compliance with the terms of, or the taking of any
action required by, this Agreement, except in the case of the foregoing clauses
(ii), (iii), (iv) or (v), to the extent any fact, event, change, condition,
development, circumstance or effect referred to therein has or would reasonably
be expected to have a disproportionate impact on the business, assets,
liabilities, properties, results of operations or condition (financial or
otherwise) of the Company and the Subsidiaries, taken as a whole, relative to
other similarly situated industry participants, or (2) would materially impair
the ability of the Company and the Subsidiaries to perform their respective
obligations under the Documents or to consummate the Closing.
 
The Company is a savings and loan holding company under the Home Owners’ Loan
Act (the “HOLA”).  As of the Closing Date, as a result of the Delaware
Conversion (as defined herein), and subject to confirmation of the Plan of
Reorganization (as defined herein) by the Bankruptcy Court, the Company shall be
a corporation duly organized and validly existing under the laws of the State of
Delaware, duly qualified to do business and in good standing in all
jurisdictions where its ownership or leasing of property or the conduct of its
business requires it to be so qualified and failure to be so qualified would
have or reasonably be expected to have a Material Adverse Effect and will have
corporate power and authority to own its properties and assets and to carry on
its business as it is then being conducted.  AnchorBank, fsb (the “Bank”) is
validly existing as a federal savings association and its charter is in full
force and effect.  The Bank’s deposit accounts are insured by the Deposit
Insurance Fund of the Federal Deposit Insurance Corporation (the “FDIC”) to the
fullest extent permitted by Federal Deposit Insurance Act and the rules and
regulations of the FDIC thereunder, and all premiums and assessments required to
be paid in connection therewith have been paid when due, and no proceeding for
the revocation or termination of such insurance has been instituted or is
pending or, to the knowledge of the Company, is threatened or
contemplated.  Under the Plan of Reorganization, the Company will (i) convert
from a Wisconsin corporation to a Delaware corporation in accordance with
Section 265 of the Delaware General Corporation Law (the “Delaware Conversion”)
and (ii) amend and restate the Articles of Incorporation  (the “Amended
Charter”) in order to, among other things, increase the number of authorized
shares of Common Stock to at least 2,000,000,000 shares or such larger number as
the board of directors of the Company (the “Board of Directors”) determines is
necessary to effectuate the Transactions and adopt certain restrictions on
acquisitions and dispositions of securities and to make certain other changes.
 
(h)      Capitalization and Other Capital Stock Matters. All of the issued and
outstanding shares of capital stock of the Company and each of the Subsidiaries
have been duly authorized and validly issued, are fully paid and nonassessable
and were not issued in violation of, and are not subject to, any preemptive or
similar rights. All of the outstanding shares of capital stock or other equity
interests of each of the Subsidiaries are owned, directly or indirectly, by the
Company, free and clear of all liens, security interests, mortgages, pledges,
charges, equities, claims or restrictions on transferability or
 

 
6

--------------------------------------------------------------------------------

 

 
encumbrances of any kind (collectively, “Liens”), other than those imposed by
the Securities Act and the securities or “Blue Sky” laws of certain U.S. state
jurisdictions. Except as Previously Disclosed, there are no outstanding (A)
options, warrants or other rights to purchase from the Company or any of the
Subsidiaries, (B) agreements, contracts, arrangements or other obligations of
the Company or any of the Subsidiaries to issue or (C) other rights to convert
any obligation into or exchange any securities for, in the case of each of
clauses (A) through (C), shares of capital stock of or other ownership or equity
interests in the Company or any of the Subsidiaries.
 
(i)      Legal Power and Authority. Subject to the confirmation of a plan of
reorganization of the Company (the “Plan of Reorganization”) by order of the
Bankruptcy Court, the Company has the corporate power and authority to enter
into this Agreement and, subject to the completion of the Delaware Conversion
and effectiveness of the Amended Charter, to carry out its obligations hereunder
and thereunder.  The execution, delivery and performance of this Agreement, have
been duly authorized by the affirmative vote of at least a majority of the
directors on the Board of Directors.  No other corporate proceedings or
stockholder actions are necessary for the execution and delivery by the Company
of this Agreement, the performance by the Company of its obligations hereunder
or the consummation by the Company of the transactions contemplated hereby.
 
(j)      The Agreement and the Indenture. This Agreement has been duly and
validly authorized, executed and delivered by the Company. The Indenture has
been duly and validly authorized by the Company. The Indenture, when executed
and delivered by the Company and the Trustee, will constitute a legal, valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, except that the enforcement thereof may be subject to (i)
bankruptcy, insolvency, reorganization, receivership, moratorium, fraudulent
conveyance, fraudulent transfer or other similar laws now or hereafter in effect
relating to creditors’ rights generally and (ii) general principles of equity
(whether applied by a court of law or equity) and the discretion of the court
before which any proceeding therefor may be brought.
 
(k)      Notes. The Notes have been duly and validly authorized by the Company
and when issued and delivered to and paid for by the Purchasers in accordance
with the terms of this Agreement and the Indenture, will have been duly
executed, authenticated, issued and delivered and will constitute legal, valid
and binding obligations of the Company, entitled to the benefit of the
Indenture, and enforceable against the Company in accordance with their terms,
except that the enforcement thereof may be subject to (i) bankruptcy,
insolvency, reorganization, receivership, moratorium, fraudulent conveyance,
fraudulent transfer or other similar laws now or hereafter in effect relating to
creditors’ rights generally and (ii) general principles of equity (whether
applied by a court of law or equity) and the discretion of the court before
which any proceeding therefor may be brought. When executed and delivered, the
Notes will be substantially in the form contemplated by the Indenture.
 
(l)      Compliance with Existing Instruments. Neither the Company nor any of
the Subsidiaries is (i) in violation of its certificate of incorporation, bylaws
or other organizational documents (the “Charter Documents”); (ii) except as
Previously
 

 
7

--------------------------------------------------------------------------------

 

 
Disclosed, in violation of any U.S. federal, state or local statute, law
(including, without limitation, common law) or ordinance, or any judgment,
decree, rule, regulation, order or injunction (collectively, “Applicable Law”)
of any court, administrative agency or commission or other governmental
authority or instrumentality, whether federal, state, local or foreign, or any
applicable industry self-regulatory organization (each, a “Governmental
Authority”), applicable to any of them or any of their respective properties; or
(iii) except as Previously Disclosed, in breach of or default under any material
bond, debenture, note, loan or other evidence of indebtedness, indenture,
mortgage, deed of trust, lease or any other agreement or instrument (in each
case, excluding deposits) to which any of them is a party or by which any of
them or their respective property is bound (collectively, the “Applicable
Agreements”), except, in the case of clauses (ii) and (iii) for such violations,
breaches or defaults that would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. Except as Previously
Disclosed, all Applicable Agreements are in full force and effect and are legal,
valid and binding obligations. There exists no condition that, with the passage
of time or otherwise, would constitute (a) a violation of such Charter Documents
or Applicable Laws, (b) a breach of or default or a “Debt Repayment Triggering
Event” (as defined below) under any Applicable Agreement or (c) result in the
imposition of any penalty or the acceleration of any indebtedness. As used
herein, a “Debt Repayment Triggering Event” means any event or condition that
gives, or with the giving of notice or lapse of time would give, the holder of
any note, debenture or other evidence of indebtedness (or any person acting on
such holder’s behalf) the right to require the repurchase, redemption or
repayment of all or a portion of such indebtedness by the Company or any of the
Subsidiaries or any of their respective properties.
 
(m)      No Conflicts.  Except as Previously Disclosed, neither the execution
and delivery by the Company of the Documents, the performance by the Company of
its obligations thereunder nor the consummation of the Transactions, nor
compliance by the Company with any of the provisions of any of the foregoing,
will (A) violate, conflict with, or result in a breach of any provision of, or
constitute a default (or an event which, with notice or lapse of time or both,
would constitute a default) under, or result in the termination of, or
accelerate the performance required by, or result in a right of termination or
acceleration of, or result in the creation of, a Lien on any assets of the
Company or any of the Subsidiaries, the imposition of any penalty or a Debt
Repayment Triggering Event under or pursuant to (i) subject to completion of the
Delaware Conversion and the effectiveness of the Amended Charter, the Charter
Documents, (ii) any material Applicable Agreement or (B) violate in any material
respect (i) any Applicable Law or (ii) any order, writ, judgment, injunction,
decree, determination or award binding upon or affecting the Company. After
consummation of the Transactions, no Default (as defined in the Indenture) or
Event of Default (as defined in the Indenture) will exist.
 
(n)      No Consents. No notice to, registration, declaration or filing with,
exemption or review by, or authorization, order, consent or approval of, any
Governmental Authority, or expiration or termination of any statutory waiting
period, is necessary for the consummation by the Company of the Transactions,
other than (i) the securities or blue sky laws of the various states and
filings, notices, approvals or
 

 
8

--------------------------------------------------------------------------------

 

 
clearances required under federal or state banking laws or the Regulatory
Agreements (as defined here), (ii) those that have already been obtained and are
in full force and effect and (iii) those that are required or permitted to be
obtained after the date hereof, including the filing of a Current Report on Form
8-K with the SEC as may be required under the Securities Act and the Exchange
Act and the receipt of the Required Approvals (as defined herein), as the case
may be, regarding the Documents and the Transactions.
 
(o)      No Material Applicable Laws or Proceedings. (i) No Applicable Law shall
have been enacted, adopted, passed or issued, (ii) no stop order suspending the
qualification or exemption from qualification of any of the Notes in any
jurisdiction shall have been issued and no proceeding for that purpose shall
have been commenced or, to the Company’s knowledge, after due inquiry, be
pending or contemplated as of the Closing Date and (iii) except as Previously
Disclosed, there is no action, claim, suit, demand, hearing, notice of violation
or deficiency, or proceeding pending or, to the knowledge of the Company or any
of the Subsidiaries, after due inquiry, threatened or contemplated by
Governmental Authorities or threatened by others (collectively, “Proceedings”)
that, with respect to clauses (i), (ii) and (iii) of this paragraph (A) would,
as of the date hereof and on the Closing Date, restrain, enjoin, prevent or
interfere with the consummation of the Transactions or (B) would, individually
or in the aggregate, have a Material Adverse Effect.
 
(p)      Knowledge as to Required Approvals.  As of the date of this Agreement,
the Company has no knowledge of any reason relating to the Company or any
Subsidiary why the Required Approvals (as defined herein) will not be obtained
without the imposition of any Burdensome Condition (as defined herein).
 
(q)           All Necessary Permits. The Company and each Subsidiary has all
material permits, licenses, franchises, authorizations, orders, and approvals
of, and has made all material filings, applications, and registrations with,
Governmental Authorities that are required in order to permit it to own or lease
its properties and assets and to carry on its business as presently conducted
and that are material to the business of the Company or such Subsidiary; all
such material permits, licenses, certificates of authority, orders and approvals
are in full force and effect, and all such material filings, applications and
registrations are current, and, to the knowledge of the Company, no suspension
or cancellation of any of them is threatened.
 
(r)      Properties and Leases. Except for any Permitted Liens (as defined
herein), the Company and the Subsidiaries have good title free and clear of any
Liens to all real and personal property reflected in the Company’s consolidated
balance sheet as of March 31, 2013 included in the Form 10-K for the period then
ended, and all real and personal property acquired since such date, except such
real and personal property as has been repossessed or as has been disposed of in
the ordinary course of business and, as of the Closing Date, all such real and
personal property will be free and clear of all Liens.  “Permitted Liens“ means
(1) Liens for taxes and other governmental charges and assessments arising in
the ordinary course which are not yet due and payable, (2) Liens of landlords
and Liens of carriers, warehousemen, mechanics and materialmen and other like
Liens arising in the ordinary course of business for sums not yet due and
payable and
 

 
9

--------------------------------------------------------------------------------

 

 
(3) other Liens or imperfections on property which are not material in amount
and do not materially detract from the value of or materially impair the
existing use of the property affected by such Lien or imperfection.  Except as
has not had or would not be expected to have a Material Adverse Effect, all
leases of real property and all other leases pursuant to which the Company or
such Subsidiary, as lessee, leases real or personal property are valid and
effective in accordance with their respective terms and there is not, under any
such lease, any existing material default by the Company or such Subsidiary or
any event which, with notice or lapse of time or both, would constitute such a
material default.
 
(s)      Tax Law Compliance. Each of the Company and the Subsidiaries has timely
filed all federal, state, county, local and foreign Tax Returns (as defined
herein) required to be filed by it, and all such filed Tax Returns are true,
correct and complete in all material respects, and paid all Taxes (as defined
herein) owed by it and no material Taxes owed by it or assessments received by
it are delinquent.  With respect to Taxes not yet due, the Company has made
adequate provision in the financial statements of the Company (in accordance
with GAAP).  The federal income Tax Returns of the Company and the Company for
the fiscal year ended March 31, 2010, and for all fiscal years prior thereto,
are for the purposes of routine audit by the Internal Revenue Service (the
“IRS“) closed because of the expiration of the statute of limitations, and no
claims for additional Taxes for such fiscal years are pending.  Neither the
Company nor any Subsidiary has waived any statute of limitations with respect to
Taxes or agreed to any extension of time with respect to a Tax assessment or
deficiency, in each case that is still in effect, or has pending a request for
any such extension or waiver.  Neither the Company nor any Subsidiary is a party
to any pending action or proceeding for the assessment or collection of Taxes
and no material deficiencies have been proposed in writing by any Governmental
Authority in connection with an audit or examination of the Tax Returns of the
Company or any Subsidiary which has not been settled, resolved and fully
satisfied, or for which reserves adequate in accordance with GAAP have not been
provided on the Financial Statements.  Each of the Company and the Subsidiaries
has withheld and paid all material Taxes that it is required to withhold from
amounts owing to employees, creditors or other third parties.  Neither the
Company nor any Subsidiary is a party to, is bound by or has any material
obligation under, any Tax sharing or Tax indemnity agreement or similar contract
or arrangement other than any contract or agreement between or among the Company
and any Subsidiary.  Neither the Company nor any Subsidiary has participated in
any “reportable transaction” within the meaning of Treasury Regulations Section
1.6011-4, or any other transaction requiring disclosure under analogous
provisions of state, local or foreign law.  Neither the Company nor any
Subsidiary has liability for the Taxes of any person other than the Company or
any Subsidiary under Treasury Regulations Section 1.1502-6 (or any similar
provision of state, local or foreign law) as a transferee, successor or
otherwise.  Neither the Company nor any Subsidiary has been a “distributing
corporation” or a “controlled corporation” in any distribution in which the
parties to such distribution treated the distribution as one to which Section
355 of the Internal Revenue Code of 1986, as amended (the “Code”), is
applicable.  The Company has not been a United States real property holding
corporation within the meaning of Section 897 of the Code during the applicable
period specified in Section 897(c)(1)(A)(ii) of the Code.  Neither the Company
nor any Subsidiary has undergone an “ownership change” within the meaning of
Code Section 382(g), and the
 

 
10

--------------------------------------------------------------------------------

 

 
consummation of the Transactions should not cause an “ownership change” within
the meaning of Code Section 382(g).  Neither the Company nor any Subsidiary will
be required to include any item of income in, or exclude any item of deduction
from, taxable income for any period (or any portion thereof) ending after the
Closing as a result of any: (1) installment sale or other open transaction
disposition made on or prior to the Closing; (2) prepaid amount received on or
prior to the Closing; (3) written and legally binding agreement with a
Governmental Authority relating to Taxes for any taxable period ending on or
before the Closing; (4) change in method of accounting in any taxable period
ending on or before the Closing; or (5) election under Section 108(i) of the
Code.  For the purpose of this Agreement, the term “Tax” (including, with
correlative meaning, the term “Taxes”) shall mean any and all domestic or
foreign, federal, state, local or other taxes, customs, duties, governmental
fees or other like assessments or charges of any kind (together with any and all
interest, penalties, additions to tax and additional amounts imposed with
respect thereto) imposed by any Governmental Authority, including taxes on or
with respect to income, franchises, windfall or other profits, gross receipts,
property, transfer, sales, use, license, alternative or add on minimum,
escheatment or unclaimed property, capital stock, payroll, employment,
unemployment, social security, workers’ compensation or net worth, and taxes in
the nature of excise, withholding, ad valorem or value added or similar taxes,
and the term “Tax Return” means any return, report, information return or other
document (including any related or supporting information, and attachments and
exhibits) filed or required to be filed with respect to Taxes, including,
without limitation, all information returns relating to Taxes of third parties,
any claims for refunds of Taxes and any amendment or supplements to any of the
foregoing.  “Treasury Regulation” means any final, proposed or temporary
regulation of the Treasury under the Code and any successor regulation.
 
(t)      Intellectual Property Rights. (i) Each of the Company and the
Subsidiaries own (free and clear of any claims, Liens, exclusive licenses or
non-exclusive licenses not granted in the ordinary course of business) or have a
valid license to use all trademarks, service marks, brand names, domain names,
certification marks, trade dress and other indications of origin, the goodwill
associated with the foregoing and registrations in any jurisdiction of, and
applications in any jurisdiction to register, the foregoing, including any
extension, modification or renewal of any such registration or application;
inventions, discoveries and ideas, whether patentable or not, in any
jurisdiction; patents, applications for patents (including divisions,
continuations, continuations in part and renewal applications), and any
renewals, extensions or reissues thereof, in any jurisdiction; trade secrets and
rights in any jurisdiction to limit the use or disclosure thereof by any person;
writings and other works, whether copyrightable or not, in any jurisdiction; and
registrations or applications for registration of copyrights in any
jurisdiction, and any renewals or extensions thereof; and any similar
intellectual property or proprietary rights (collectively, “Intellectual
Property”) used in or necessary to carry on their business as currently
conducted, and (ii) such Intellectual Property referenced in clause (i) above is
valid, subsisting and enforceable, and is not subject to any outstanding order,
judgment, decree or agreement adversely affecting the Company’s or the
Subsidiaries’ use of, or rights to, such Intellectual Property.  The Company and
the Subsidiaries have sufficient rights to use all Intellectual Property used in
their business as presently conducted, all of which rights shall survive
unchanged the consummation of the
 

 
11

--------------------------------------------------------------------------------

 

 
Transactions.  Neither the Company nor any Subsidiary has received any written
notice of infringement or misappropriation of, or any conflict with, the rights
of others with respect to any Intellectual Property.  To the Company’s
knowledge, no third party has infringed, misappropriated or otherwise violated
the Intellectual Property rights of the Company or any Subsidiary.  There is no
litigation, opposition, cancellation, proceeding, objection or claim pending,
asserted, or, to the Company’s knowledge, threatened in writing against the
Company or any Subsidiary concerning the ownership, validity, registerability,
enforceability, infringement or use of, or licensed right to use, any
Intellectual Property.  To the knowledge of the Company, none of the Company or
any Subsidiary is using or enforcing any Intellectual Property owned by or
licensed to the Company or any Subsidiary in a manner that would be expected to
result in the abandonment, cancellation or unenforceability of such Intellectual
Property.
 
(u)      Litigation and Other Proceedings; No Undisclosed Liabilities.  There is
no pending claim, action, suit, investigation or proceeding against the Company
or any Subsidiary, nor is any such claim, action, suit, investigation or
proceeding, to the knowledge of the Company, threatened, nor is the Company or
any Subsidiary subject to any order, judgment or decree, in each case, except as
has not had and would not reasonably be expected to have a Material Adverse
Effect.  Neither the Company nor any of the Subsidiaries has any liabilities or
obligations of any nature (absolute, accrued, contingent or otherwise) which are
not properly reflected or reserved against in the financial statements described
in Section 3(b) to the extent required to be so reflected or reserved against in
accordance with GAAP, except for liabilities that have arisen since March 31,
2013 in the ordinary and usual course of business and consistent with past
practice and that have not had and would not reasonably be expected to have a
Material Adverse Effect.
 
(v)      ERISA Matters. Each of the Company, the Subsidiaries and each ERISA
Affiliate (as hereinafter defined) has fulfilled its obligations, if any, under
the minimum funding standards of Section 302 of the United States Employee
Retirement Income Security Act of 1974, as amended (“ERISA”) with respect to
each “pension plan” (as defined in Section 3(2) of ERISA), subject to Section
302 of ERISA, which the Company, the Subsidiaries or any ERISA Affiliate
sponsors or maintains, or with respect to which it has (or within the last three
years had) any obligation to make contributions, and each such plan is in
compliance in all material respects with the presently applicable provisions of
ERISA and the Internal Revenue Code of 1986, as amended (the “Code”). None of
the Company; the Subsidiaries or any ERISA Affiliate has incurred any unpaid
liability to the Pension Benefit Guaranty Corporation (other than for the
payment of premiums in the ordinary course) or to any such plan under Title IV
of ERISA. “ERISA Affiliate” means a corporation, trade or business that is,
along with the Company or any Subsidiary, a member of a controlled group of
corporations or a controlled group of trades or businesses, as described in
Section 414 of the Code or Section 4001 of ERISA.
 
(w)      Labor Matters. Employees of the Company and the Subsidiaries are not
represented by any labor union nor are any collective bargaining agreements
otherwise in effect with respect to such employees.  No labor organization or
group of employees of the Company or any Subsidiary has made a pending demand
for recognition or
 

 
12

--------------------------------------------------------------------------------

 

 
certification, and there are no representation or certification proceedings or
petitions seeking a representation proceeding presently pending or, to the
Company’s knowledge, threatened to be brought or filed with the National Labor
Relations Board or any other labor relations tribunal or authority.  There are
no organizing activities, strikes, work stoppages, slowdowns, lockouts,
arbitrations or grievances, or other labor disputes pending or, to the knowledge
of the Company, threatened against or involving the Company or any
Subsidiary.  Each of the Company and the Subsidiaries is in compliance in all
material respects with all applicable laws with respect to employment and
employment practices, terms and conditions of employment, and wages and
hours.  To the Company’s knowledge, no executive officer is, or is now expected
to be, in violation of any material term of any employment contract,
confidentiality, disclosure or proprietary information agreement or
non-competition agreement or any other contract or agreement or any restrictive
covenant in favor of a third party, and, to the Company’s knowledge, the
continued employment of each such executive officer does not subject the Company
or any Subsidiary to any liability with respect to any of the foregoing matters.
 
(x)      Compliance with Environmental Laws. To the knowledge of the Company,
there is no legal, administrative, or other proceeding, claim or action pending
or threatened against the Company or any Subsidiary seeking to impose, or that
could reasonably be expected to result in the imposition of, on the Company or
any Subsidiary, any liability relating to the use, disposal or release of
hazardous substances or toxic substances or relating to the protection or
restoration of the environment or human exposure to hazardous or toxic
substances under any local, state or federal law, statute, regulation or
ordinance, including the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended (collectively, “Environmental Laws”).  Neither
the Company nor any Subsidiary is subject to any agreement, order, judgment or
decree by or with any Governmental Authority or third party imposing any
liability under any Environmental Laws.  Neither the Company nor any Subsidiary
(i) is in violation of any Environmental Laws, (ii) owns or operates any real
property contaminated with any substance that is in violation of any
Environmental Laws, or (iii) is liable for any off-site disposal or
contamination pursuant to any Environmental Laws.
 
(y)      Accounting System. The Company and each of the Subsidiaries make and
keep accurate books and records and maintain a system of internal accounting
controls and procedures sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management’s general or specific
authorization, (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 material
differences.
 
(z)      No Price Stabilization or Manipulation. Neither the Company nor any of
its affiliates has and, to the Company’s knowledge, after due inquiry, no one
acting on its behalf has, (i) taken, directly or indirectly, any action designed
to cause or to result in, or that has constituted or which might reasonably be
expected to constitute, the stabilization
 

 
13

--------------------------------------------------------------------------------

 

 
or manipulation of the price of any security of the Company, whether to
facilitate the sale or resale of any of the Notes or otherwise, (ii) sold, bid
for, purchased, or paid anyone any compensation for soliciting purchases of, any
of the Notes, or (iii) paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Company, other than,
with respect to clauses (ii) and (iii), Sandler O’Neill & Partners, L.P. (the
“Placement Agent”).
 
(aa)      Investment Company Act. Neither the Company nor any of its
Subsidiaries is an “investment company” that is required to be registered under
the Investment Company Act of 1940, as amended, and the rules and regulations of
the SEC thereunder (collectively, the “Investment Company Act”); and following
the Closing, the Company and the Subsidiaries will conduct their businesses in a
manner so as not to be required to register under the Investment Company Act.
 
(bb)      Agreements with Regulatory Agencies.  Except as Previously Disclosed,
neither the Company nor any Subsidiary is subject to any cease-and-desist or
other similar order or enforcement action issued by, or is a party to any
written agreement, consent agreement or memorandum of understanding with, or is
a party to any commitment letter or similar undertaking to, or is subject to any
capital directive by, or since March 31, 2010, has adopted any board resolutions
at the request of, any Governmental Authorities that currently restricts the
conduct of its business or that relates to its capital adequacy, its liquidity
and funding policies and practices, its ability to pay dividends, its credit,
risk management or compliance policies, its internal controls, its management,
or its operations or business (each item in this sentence, a “Regulatory
Agreement”), nor has the Company or any Subsidiary been advised since March 31,
2010 by any Governmental Authority that it is considering issuing, initiating,
ordering or requesting any such Regulatory Agreement.  Except as Previously
Disclosed, the Company and each Subsidiary are in compliance with each
Regulatory Agreement to which it is party or subject, and neither the Company
nor any has received any notice from any Governmental Authority indicating that
either the Company or any Subsidiary is not in compliance in all material
respects with any such Regulatory Agreement.
 
(cc)      Brokers and Finders.  Except for the Placement Agent, neither the
Company nor any Subsidiary nor any of their respective officers, directors or
employees has employed any broker or finder or incurred any liability for any
financial advisory fees, brokerage fees, commissions or finder’s fees, and no
broker or finder has acted directly or indirectly for the Company or any
Subsidiary, in connection with the Transactions.  Prior to the date of this
Agreement, the Company has disclosed to the Purchaser the economic and other
material terms of its arrangements with the Placement Agent in connection with
the Transactions.
 
(dd)      Loan Portfolio.
 
(1)      Each of the Company and each Subsidiary has complied with, and all
documentation in connection with the origination, processing, underwriting and
credit approval of any loan, lease or other extension of credit or commitment to
extend credit (“Loans”) originated, purchased or serviced by the Company or any
Subsidiary satisfied
 

 
14

--------------------------------------------------------------------------------

 

 
in all material respects, (i) all applicable laws with respect to the
origination, insuring, purchase, sale, pooling, servicing, subservicing or
filing of claims in connection with Loans, including all laws relating to real
estate settlement procedures, consumer credit protection, truth in lending laws,
usury limitations, fair housing, transfers of servicing, collection practices,
equal credit opportunity and adjustable rate mortgages, (ii) the
responsibilities and obligations relating to Loans set forth in any material
contract between the Company or any Subsidiary and any Agency  (as defined
herein), Loan Investor or Insurer, (iii) the applicable rules, regulations,
guidelines, handbooks and other requirements of any Agency, Loan Investor (as
defined herein) or Insurer (as defined herein), and (iv) the terms and
provisions of any material mortgage or other collateral documents and other Loan
documents with respect to each Loan.
 
(2)      No Agency, Loan Investor or Insurer has (i) claimed in writing that the
Company or any Subsidiary has violated or has not complied with the applicable
underwriting standards with respect to Loans sold by the Company or any
Subsidiary to a Loan Investor or Agency, or with respect to any sale of Loan
servicing rights to a Loan Investor, (ii) imposed in writing restrictions on the
activities (including commitment authority) of the Company or any Subsidiary or
(iii) indicated in writing to the Company or any Subsidiary that it has
terminated or intends to terminate its relationship with the Company or any
Subsidiary for poor performance, poor Loan quality or concern with respect to
the Company’s or any Subsidiary’s compliance with laws.
 
(3)      To the knowledge of the Company, the characteristics of the loan
portfolio of the Company have not materially changed from the characteristics of
the loan portfolio of the Company as of March 31, 2013 in a manner that could
reasonably be expected to result in a Material Adverse Effect with respect to
the Company.
 
For purposes of this Section 2(ee): (i) “Agency” means the Federal Housing
Administration, the Federal Home Loan Mortgage Corporation, the Farmers Home
Administration (now known as Rural Housing and Community Development Services),
the Federal National Mortgage Association, the United States Department of
Veterans’ Affairs, the Rural Housing Service of the U.S. Department of
Agriculture or any other federal or state agency with authority to (A) determine
any investment, origination, lending or servicing requirements with regard to
Loans originated, purchased or serviced by the Company or any Subsidiary or (B)
originate, purchase, or service Loans, or otherwise promote lending, including
state and local housing finance authorities; (ii)  “Loan Investor” means any
person (including an Agency) having a beneficial interest in any Loan
originated, purchased or serviced by the Company or any Subsidiary or a security
backed by or representing an interest in any such Loan; and (iii)  “Insurer”
means a person who insures or guarantees for the benefit of the Loan holder all
or any portion of the risk of loss upon borrower default on any of the Loans
originated, purchased or serviced by the Company or any Subsidiary, including
the Federal Housing Administration, the United States Department of Veterans’
Affairs, the Rural Housing Service of the U.S. Department of Agriculture and any
private mortgage insurer, and providers of hazard, title or other insurance with
respect to such Loans or the related collateral.
 

 
15

--------------------------------------------------------------------------------

 

 
(ee)      No Restrictions on Payments of Dividends. As of the Closing Date,
except as Previously Disclosed and for any Regulatory Agreement, there will be
no encumbrances or restrictions on the ability of any Subsidiary of the Company
(i) to pay dividends or make other distributions on such Subsidiary’s capital
stock or to pay any indebtedness to the Company or any other Subsidiary of the
Company, (ii) to make loans or advances or pay any indebtedness to, or
investments in, the Company or any other Subsidiary or (iii) to transfer any of
its property or assets to the Company or any other Subsidiary of the Company.
 
(ff)      Sarbanes-Oxley. There is and has been no failure on the part of the
Company and the Subsidiaries or any of the officers and directors of the Company
or any of the Subsidiaries, in their capacities as such, to comply with the
applicable provisions of the Sarbanes-Oxley Act.
 
(gg)      Risk Management; Derivatives.  The Company and the Subsidiaries have
in place risk management policies and procedures sufficient in scope and
operation to protect against risks of the type and in amounts expected to be
incurred by persons of similar size and in similar lines of business as the
Company and the Subsidiaries.  All derivative instruments, including swaps,
caps, floors and option agreements, whether entered into for the Company’s own
account, or for the account of one or more of the Subsidiaries or their
customers, were entered into (A) only for purposes of mitigating identified risk
and in the ordinary course of business, (B) in accordance with prudent practices
and in material compliance with all applicable laws, rules, regulations and
regulatory policies, and (C) with counterparties believed by the Company to be
financially responsible at the time; and each of them constitutes the valid and
legally binding obligation of the Company or one of the Subsidiaries,
enforceable in accordance with its terms.  Neither the Company nor the
Subsidiaries, nor, to the knowledge of the Company, any other party thereto, is
in breach of any of its obligations under any such agreement or arrangement.
 
(hh)      Compliance with Laws and Other Matters; Insurance.  The Company and
each Subsidiary:
 
(1)      in the conduct of its business has been, since March 31, 2011, and is
in compliance in all material respects with all, and the condition and use of
its properties has not, since March 31, 2011, and does not violate or infringe
in any material respect any, applicable domestic (federal, state or local) or
foreign laws, statutes, ordinances, licenses, rules, regulations, judgments,
demands, writs, injunctions, orders or decrees applicable thereto or to
employees conducting its business, including the Troubled Asset Relief Program,
the Sarbanes-Oxley Act of 2002, the Equal Credit Opportunity Act, the Fair
Housing Act, the Community Reinvestment Act, the Home Mortgage Disclosure Act,
the Bank Secrecy Act of 1970 (the “BSA”), the Uniting and Strengthening America
by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA
PATRIOT) Act of 2001 (the “PATRIOT Act”), the Dodd-Frank Wall Street Reform and
Consumer Protection Act of 2010, all other applicable fair lending laws or other
laws relating to discrimination and applicable privacy and customer
 

 
16

--------------------------------------------------------------------------------

 

 
information requirements contained in any federal or state privacy law or
regulations, including Title V of the Gramm-Leach-Bliley Act of 1999;
 
(2)      has been, since March 31, 2011, compliant and currently is complying in
all material respects with and, to the knowledge of the Company, has not been,
since March 31, 2011, and is not under investigation with respect to, nor has
been threatened in writing by any Governmental Authorities to be charged with or
given notice of any material violation of, any applicable federal, state, local
and foreign laws, regulations, rules, judgments, injunctions or decrees;
 
(3)      has not, nor has any other person on behalf of the Company or any
Subsidiary that qualifies as a “financial institution” under U.S. anti-money
laundering laws, in each case since March 31, 2010, knowingly acted, by itself
or in conjunction with another, in any act in connection with the concealment of
any currency, securities or other proprietary interest that is the result of a
felony as defined in U.S. anti-money laundering laws (“Unlawful Gains”), nor
knowingly accepted, transported, stored, dealt in or brokered any sale, purchase
or any transaction of other nature for Unlawful Gains;
 
(4)      is presently insured, and since March 31, 2011 (or during such lesser
period of time as the Company has owned such Subsidiary) has been insured, for
reasonable amounts with, to the knowledge of the Company, financially sound and
reputable insurance companies against such risks as companies engaged in a
similar business would, in accordance with industry practice, customarily be
insured;
 
(5)      (A) is not aware of any facts or circumstances that would cause it to
believe that any non-public customer information has been disclosed to or
accessed by an unauthorized third-party in a manner that would cause it to
undertake any material remedial action; (B) has adopted and implemented in all
material respects an anti-money laundering program that contains adequate and
appropriate customer identification verification procedures that comply with the
PATRIOT Act and such anti-money laundering program meets the requirements in all
material respects of Section 352 of the PATRIOT Act and the regulations
thereunder, and it has complied in all respects with any requirements to file
reports and other necessary documents as required by the PATRIOT Act and the
regulations thereunder; and (C) will not knowingly directly or indirectly use
the proceeds of the sale of the Common Shares pursuant to Primary Investment
Transactions, or lend, contribute or otherwise make available such proceeds to
any Subsidiary, joint venture partner or other person, towards any sales or
operations in any country sanctioned by U.S. Office of Foreign Asset Control of
the Treasury (“OFAC”) or for the purpose of financing the activities of any
person currently subject to any U.S. sanctions administered by OFAC; and
 
(6)      has no knowledge of any facts and circumstances, and has no reason to
believe that any facts or circumstances exist, that would cause the Bank: (A) to
be deemed not to be in satisfactory compliance with the Community Reinvestment
Act of 1977 (the “CRA”) and the regulations promulgated thereunder, or to be
assigned a CRA rating by federal or state banking regulators of lower than
“satisfactory”; (B) to be operating in violation, in any material respect, of
the Bank Secrecy Act of 1970, the
 

 
17

--------------------------------------------------------------------------------

 

 
PATRIOT Act, any order issued with respect to anti-money laundering by OFAC, or
any other anti-money laundering statute, rule or regulation; or (C) not to be in
satisfactory compliance, in any material respect, with all applicable privacy of
customer information requirements contained in any applicable federal and state
privacy laws and regulations as well as the provisions of all information
security programs adopted by any such Subsidiary.
 
(ii)      Foreign Corrupt Practices and International Trade Sanctions.  Neither
the Company nor any Subsidiary, nor any of their respective directors, officers,
agents, employees or any other persons acting on their behalf (1) has violated
the Foreign Corrupt Practices Act, 15 U.S.C. § 78dd-1 et seq., as amended, or
any other similar applicable foreign, federal, or state legal requirement, (2)
has made or provided, or caused to be made or provided, directly or indirectly,
any payment or thing of value to a foreign official, foreign political party,
candidate for office or any other person knowing that the person will pay or
offer to pay the foreign official, party or candidate, for the purpose of
influencing a decision, inducing an official to violate their lawful duty,
securing any improper advantage, or inducing a foreign official to use their
influence to affect a governmental decision, (3) has paid, accepted or received
any unlawful contributions, payments, expenditures or gifts, (4) to the
knowledge of the Company, has violated or operated in noncompliance with any
export restrictions, money laundering law, anti-terrorism law or regulation,
anti-boycott regulations or embargo regulations, or (5) is currently subject to
any United States sanctions administered by OFAC.
 
(jj)      Stamp Taxes. There are no stamp or other issuance or transfer taxes or
duties or other similar fees or charges required to be paid in connection with
the execution and delivery of this Agreement or the issuance or sale of the
Notes.
 
(kk)      Derivative Financial Instruments. Any and all material swaps, caps,
floors, futures, forward contracts, option agreements (other than stock options
issued to the Company’s employees, directors, agents or consultants) and other
derivative financial instruments, contracts or arrangements, whether entered
into for the account of the Company or one of the Subsidiaries or for the
account of a customer of the Company or one of the Subsidiaries, were entered
into in the ordinary course of business and in accordance with Applicable Laws,
rules, regulations and policies of all applicable regulatory agencies and with
counterparties believed by the Company to be financially responsible at the
time. The Company and each of the Subsidiaries have duly performed in all
material respects all of their obligations thereunder to the extent that such
obligations to perform have accrued, and there are no breaches, violations or
defaults or allegations or assertions of such by any party thereunder which
would, singly or in the aggregate, reasonably be expected to result in a
Material Adverse Effect.
 
(ll)      Fiduciary Accounts.  To the knowledge of the Company, the Company and
the Subsidiaries have, in all material respects, properly administered all
accounts for which it acts as a fiduciary, including accounts for which it
serves as a trustee, agent, custodian, personal representative, guardian,
conservator or investment advisor, in accordance with the terms of the governing
documents, applicable federal and state Law and regulation and common law.  To
the knowledge of the Company, none of the
 

 
18

--------------------------------------------------------------------------------

 

 
Company, the Subsidiaries or any director, officer or employee of the Company or
the Subsidiaries has, in any material respect, committed any breach of trust or
fiduciary duty with respect to any such fiduciary account and the accountings
for each such fiduciary account are true and correct in all material respects
and accurately reflect the assets of such fiduciary account.
 
(mm)      Section 365(o).  Neither the Company nor any Subsidiary is subject to
any agreement, order, decree, law, regulation, resolution or other commitment
that falls within the scope of Section 365(o) of the Bankruptcy Code.
 
(nn)      Transactions With Affiliates and Employees. Except as contemplated by
the Transactions, none of the officers, directors, employees or Affiliates of
the Company or any Subsidiary is presently a party to any contract, arrangement
or transaction with the Company or any Subsidiary or to a presently contemplated
contract, arrangement or transaction (other than for services as employees,
officers and directors) that would be required to be disclosed pursuant to Item
404 of Regulation S-K promulgated under the Securities Act.
 
(oo)      Off Balance Sheet Arrangements.  There is no transaction, arrangement,
or other relationship between the Company (or any Subsidiary) and an
unconsolidated or other off balance sheet entity that is required to be
disclosed by the Company in its Exchange Act filings and is not so disclosed.
 
(pp)      Directors’ and Officers’ Insurance.  The Company (i) maintains
directors’ and officers’ liability insurance and fiduciary liability insurance
with, to the knowledge of the Company, financially sound and reputable insurance
companies with benefits and levels of coverage that have been Previously
Disclosed, (ii) has timely paid all premiums on such policies and (iii) there
has been no lapse in coverage during the term of such policies.
 
(qq)      Shell Company Status.  The Company is not, and has never been, an
issuer identified in Rule 144(i)(1).
 
(rr)      No Other Investor Representations and Warranties.  The Company has not
received, and is not relying on, any representations or warranties, written or
oral or express or implied, of any nature whatsoever, from the Purchaser or any
other person other in connection with the execution and delivery of this
Agreement than as specifically set forth in Section 4 of this Agreement.
 
(ss)      Certificates. Each certificate signed by any officer of the Company or
any of the Subsidiaries and delivered to the Purchasers shall be deemed a
representation and warranty by the Company or any such Subsidiary (and not
individually by such officer) to the Purchasers with respect to the matters
covered thereby.
 
4.      Representations and Warranties of Purchasers. Each of the Purchasers
represents and warrants to, and agrees with, the Company that, as of the date
hereof and as of the Closing Date:
 

 
19

--------------------------------------------------------------------------------

 

 
(a)      Legal Power and Authority.  The Purchaser has the requisite corporate,
partnership, limited liability company or other power and authority to execute,
deliver and perform its obligations under this Agreement and to consummate the
Transactions.
 
(b)      The Agreement. This Agreement has been duly and validly authorized,
executed and delivered by the Purchaser.
 
(c)      No Conflicts. Neither the execution, delivery and performance by the
Purchaser of the Documents to which it is a party, nor the consummation of the
Transactions, nor compliance by the Purchaser with any of the provisions of any
of the foregoing, will (A) violate, conflict with, or result in a breach of any
provision of, or constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) under, or result in the termination
of, or accelerate the performance required by, or result in a right of
termination or acceleration of, or result in the creation of, any Lien, upon any
of the properties or assets of the Purchaser under any of the terms, conditions
or provisions of (i) its certificate of limited partnership or partnership
agreement or similar government documents or (ii) any note, bond, mortgage,
indenture, deed of trust, license, lease, agreement or other instrument or
obligation to which the Purchaser is a party or by which it may be bound, or to
which the Purchaser or any of the properties or assets of the Purchaser may be
subject, or (B) subject to compliance with the statutes and regulations referred
to in the next paragraph, and assuming the accuracy of the representations and
warranties of the Company and performance of the covenants and agreements of the
Company contained herein, violate in any material respect any ordinance, permit,
concession, grant, franchise, law, statute, rule or regulation or any judgment,
ruling, order, writ, injunction or decree applicable to the Purchaser or any of
its properties, except in the case of clause (A)(ii) for such violations,
conflicts and breaches that would not have a material and adverse effect on the
ability of the Purchaser to consummate the transactions contemplated by the
Documents to which it is a party in a timely manner.
 
(d)      Investment.  The acquisition of the Notes by the Purchaser is for the
Purchaser’s own account, is for investment purposes only, and is not with a view
to, nor for offer or sale for the Company in connection with, the distribution
of any of the Notes.  The Purchaser is not participating and does not have a
participation in any such distribution or the underwriting of any such
distribution.  Such Purchaser does not have any contract, undertaking, agreement
or arrangement with any person or entity to sell, transfer or grant
participation to such person or entity or to any third person or entity with
respect to the Notes other than as set forth in this Agreement.
 
(e)      Knowledge and Experience.
 
(i)      The Purchaser has substantial experience in evaluating and investing in
private placement transactions of securities in companies similar to the Company
such that the Purchaser is capable of evaluating the merits and risks of its
investment in the Company and has the capacity to protect its own interests in
connection with such an investment. The Purchaser is an “accredited investor” as
defined in Rule 501 of Regulation D promulgated under the Securities Act. The
 

 
20

--------------------------------------------------------------------------------

 

 
Purchaser is able to bear the economic risk of holding the Notes indefinitely,
or losing its entire investment in the Company, which is not disproportionate to
the Purchaser’s net worth.
 
(ii)      The Purchaser acknowledges that such Purchaser and its advisors have
been furnished with all materials relating to the business, finances and
operations of the Company that have been requested by such Purchaser or its
advisors and has been given the opportunity to ask questions of, and to receive
answers from, persons acting on behalf of the Company concerning terms and
conditions of the transactions contemplated by this Agreement in order to make
an informed and voluntary decision to enter into such Agreement. Notwithstanding
the foregoing, such Purchaser acknowledges that, at the request of such
Purchaser, the Company has not disclosed or provided any material nonpublic
information in its possession to such Purchaser and that, notwithstanding the
withholding of any such material nonpublic information by the Company at the
request of such Purchaser, such Purchaser desire to enter into this Agreement
and the Transactions. Such Purchaser acknowledges that it has reviewed the
materials posted in the Company’s online data room, including the risk factors,
the Disclosure Letter and the Company Reports.
 
(iii)      The Purchaser has made its own investment decision based upon its own
judgment, due diligence and advice from such advisers as it has deemed necessary
and not upon any view expressed by any other person or entity, including,
without limitation, the Placement Agent. Neither such inquiries nor any other
due diligence investigations conducted by such Purchaser or its advisors or
representatives, if any, shall modify, amend or affect the Purchaser’s right to
rely on the Company’s representations and warranties contained herein. The
Purchaser is not relying upon, and has not relied upon, any advice, statement,
representation or warranty made by any person or entity by or on behalf of the
Company, including, without limitation, the Placement Agent, except for the
express statements, representations and warranties of the Company made or
contained in this Agreement. Furthermore, the Purchaser acknowledges that: (1)
the Placement Agent has not performed any due diligence review on behalf of the
Purchaser; (2) nothing in this Agreement or any other materials presented by or
on behalf of the Company to the Purchaser in connection with the purchase of the
Notes constitutes legal, tax or investment advice and such Purchaser has
consulted such legal, tax and investment advisors as it, in its sole discretion,
has deemed necessary or appropriate in connection with its purchase of the
Notes; and (3) the Purchaser received or had access to all of the information
such Purchaser deemed necessary in order to make its decision to invest in the
Notes.  The Placement Agent and its affiliates (and their respective officers,
directors, employees, agents, advisors, attorneys and consultants) are
third-party beneficiaries to this Section 4.
 
(f)      Financial Capability.  At Closing, the Purchaser will have available
funds necessary to consummate the Closing on the terms and conditions
contemplated by this Agreement and has the ability to bear the economic risks of
its prospective investment in the Notes and can afford the complete loss of such
investment.
 

 
21

--------------------------------------------------------------------------------

 

 
(g)      Knowledge as to Required Approvals.  As of the date of this Agreement,
the Purchaser has no knowledge of any reason relating to the Purchaser or any of
its Affiliates why the Required Approvals will not be obtained without the
imposition of any Burdensome Condition.
 
(h)      Brokers and Finders.  Neither the Purchaser nor any of its respective
officers, directors or employees has employed any broker or finder or incurred
any liability for any financial advisory fees, brokerage fees, commissions or
finder’s fees, and no broker or finder has acted directly or indirectly for the
Purchaser in connection with the transactions contemplated hereby.
 
5.      Covenants.
 
(a)      Legends.
 
(i)      The Purchasers acknowledge that the Notes have not been registered
under the Securities Act or under any state securities laws and agree that all
certificates or other instruments representing the Notes will bear the
restrictive legend set forth in the Indenture.
 
(ii)      In the event that any of the Notes (1) are sold pursuant to a
registration statement under the Securities Act or (2) are eligible to be
transferred without restriction in accordance with Rule 144 under the Securities
Act, the Company shall promptly issue new certificates or other instruments
representing such Notes, which shall not contain the restrictive legend
described in (i) above provided that the Purchasers surrender to the Company any
previously issued certificates or other instruments. Each Purchaser acknowledges
its primary responsibilities under the Securities Act and, accordingly, will not
sell or otherwise transfer the Notes or any interest therein without complying
with the requirements of the Securities Act and the rules and regulations
promulgated thereunder and the requirements set forth in this Agreement. Except
as otherwise provided below, while the below-referenced registration statement
remains effective, each Purchaser may sell Notes in accordance with the plan of
distribution contained in the registration statement and if it does so it shall
comply therewith and with the related prospectus delivery requirements unless an
exemption therefrom is available or unless the Notes are sold pursuant to Rule
144. Each Purchaser, severally and not jointly with the other Purchasers, agrees
that if it is notified by the Company in writing at any time that the
registration statement registering the resale of the Notes is not effective or
that the prospectus included in such registration statement no longer complies
with the requirements of Section 10 of the Securities Act, such Purchaser will
refrain from selling such Notes until such time as such Purchaser is notified by
the Company that such registration statement is effective or such prospectus is
compliant with Section 10 of the Exchange Act, unless such Purchaser is able to,
and does, sell such Notes pursuant to (x) an available exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act
ad in accordance with applicable state securities or blue sky laws, as evidenced
by a legal opinion of counsel
 

 
22

--------------------------------------------------------------------------------

 

 
reasonably satisfactory to the Company, if requested, or (y) Rule 144 under the
Securities Act.
 
(b)      Registration.
 
(i)      Subject to the terms and conditions of this Agreement, the Company
covenants and agrees that as promptly as practicable after the Closing Date (and
in any event no later than 90 days after the Closing Date), the Company shall
prepare and file with the SEC a shelf registration on an appropriate form under
Rule 415 under the Securities Act (a “Shelf Registration Statement”) covering
all of the Registrable Securities (as defined below), and, to the extent the
Shelf Registration Statement has not theretofore been declared effective, the
Company shall use commercially reasonable efforts to cause such Shelf
Registration Statement to be declared or become effective as promptly as
practicable (and in any event no later than 180 days after the Closing Date) and
to keep such Shelf Registration Statement continuously effective and in
compliance with the Securities Act and usable for the resale of such Registrable
Securities for a period from the date of its initial effectiveness until such
time as there are no Registrable Securities remaining (including by refiling
such Shelf Registration Statement (or a new Registration Statement) if the
initial Registration Statement expires). Notwithstanding the foregoing, if the
Company shall no longer be eligible to file a Shelf Registration Statement, then
the Company shall not be obligated to file or keep effective a Shelf
Registration Statement and the Company shall not be required to effect any other
registration with respect to the Registrable Securities unless and until
requested to do so in writing by the Purchasers or Holders; provided, that, in
such event that the Company becomes no longer eligible to file a Shelf
Registration Statement, any Purchaser or Holder shall have the right to demand
the registration (a “Demand Registration”) of the Registrable Securities, and,
in such event, the Company shall file with the SEC a registration statement (a
“Demand Registration Statement”) on an appropriate form covering all Registrable
Securities no less than 30 days following the Company’s receipt of notice of
such demand from any Purchaser or Holder, and further to the extent the Demand
Registration Statement has not theretofore been declared effective, the Company
shall use commercially reasonable efforts to cause such Demand Registration
Statement to be declared or become effective as promptly as practicable (and in
any event no later than 45 days after the Company’s receipt of notice of such
demand from any Purchaser or Holder).
 
(ii)      The Company shall not be required to effect a registration with
respect to securities that are not Registrable Securities, or if the Company has
notified the Purchasers and all other Holders that in the good faith judgment of
its Board of Directors, it would be materially detrimental to the Company or its
securityholders for such registration to be effected at such time, in which
event the Company shall have the right to defer such registration for a period
of not more than 90 days after receipt of the request of any Purchaser or any
other Holder.
 

 
23

--------------------------------------------------------------------------------

 

 
(iii)      All Registration Expenses incurred in connection with any
registration, qualification or compliance hereunder shall be borne by the
Company. All Selling Expenses incurred in connection with any registrations
hereunder shall be borne by the holders of the securities so registered pro rata
on the basis of the aggregate offering or sale price of the securities so
registered.
 
(iv)      The Company shall use its commercially reasonable efforts, for so long
as there are Registrable Securities outstanding, to take such actions as are
under its control to not become an ineligible issuer (as defined in Rule 405
under the Securities Act). In addition, whenever required to effect the
registration of any Registrable Securities or facilitate the distribution of
Registrable Securities pursuant to an effective Shelf Registration Statement or
Demand Registration Statement, the Company shall, as expeditiously as reasonably
practicable;
 
(1)      furnish to the Holders and any underwriters such number of copies of
the applicable registration statement and each such amendment and supplement
thereto (including in each case all exhibits) and of a prospectus, including a
preliminary prospectus, in conformity with the requirements of the Securities
Act, and such other documents as they may reasonably request in order to
facilitate the disposition of Registrable Securities owned or to be distributed
by them.
 
(2)      use its commercially reasonable efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Holders or any underwriter, to keep such registration or qualification in effect
for so long as such registration statement remains in effect, and to take any
other action which may be reasonably necessary to enable such seller to
consummate the disposition in such jurisdictions of the securities owned by such
Holder; provided that the Company shall not be required in connection therewith
or as a condition thereto to qualify to do business or to file a general consent
to service of process in any such states or jurisdictions; and
 
(3)      notify each Holder of Registrable Securities at any time when a
prospectus relating thereto is required to be delivered under the Securities Act
of the happening of any event as a result of which the applicable prospectus, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing;
 
(4)      give commercially reasonable written notice to the Holders:
 
(A)      when any registration statement filed pursuant to Section 5(b)(i) or
any amendment thereto has been filed with the SEC (except for any amendment
effected by the filing of a
 

 
24

--------------------------------------------------------------------------------

 

 
document with the SEC pursuant to the Exchange Act) and when such registration
statement or any post-effective amendment thereto has become effective;
 
(B)      of any request by the SEC for amendments or supplements to any
registration statement or the prospectus included therein or for additional
information;
 
(C)      of the issuance by the SEC of any stop order suspending the
effectiveness of any registration statement or the initiation of any proceedings
for that purpose;
 
(D)      of the receipt by the Company or its legal counsel of any notification
with respect to the suspension of the qualification of the Common Shares for
sale in any jurisdiction or the initiation or threatening of any proceeding for
such purpose; and
 
(E)      of the happening of any event that requires the Company to make changes
in any effective registration statement or the prospectus related to the
registration statement in order to make the statements therein not misleading
(which notice shall be accompanied by an instruction to suspend the use of the
prospectus until the requisite changes have been made).
 
(v)      Furnishing of Information.
 
(1)      Neither the Purchasers nor any Holder shall use any free writing
prospectus (as defined in Rule 405 under the Securities Act) in connection with
the sale of Registrable Securities without the prior written consent of the
Company.
 
(2)      It shall be a condition precedent to the obligations of the Company to
take any action pursuant to this Section 5(b) the Purchasers and/or the selling
Holders and the underwriters, if any, shall furnish to the Company such
information regarding themselves, the Registrable Securities held by them and
the intended method of disposition of such securities as shall be required to
effect the registered offering of their Registrable Securities.
 
(vi)      With a view to making available to the Purchasers and Holders the
benefits of certain rules and regulations of the SEC which may permit the sale
of the Registrable Securities to the public without registration, the Company
agrees to use its commercially reasonable efforts to:
 
(1)      make and keep public information available, as those terms are
understood and defined in Rule 144(c)(1) or any similar or analogous rule
promulgated under the Securities Act, at all times after the date of this
Agreement;
 

 
25

--------------------------------------------------------------------------------

 

 
(2)      (A) file with the SEC, in a timely manner, all reports and other
documents required of the Company under the Exchange Act, and (B) if at any time
the Company is not required to file such reports, make available, upon the
request of any Holder, such information necessary to permit sales pursuant to
Rule 144A under the Securities Act (including the information required by Rule
144A(d)(4) under the Securities Act);
 
(3)      so long as any Purchaser or a Holder owns any Registrable Securities,
furnish to the Purchasers or such Holder forthwith upon request: (A) a written
statement by the Company as to its compliance with the reporting requirements of
Rule 144 under the Securities Act, and of the Exchange Act; (B) a copy of the
most recent annual or quarterly report of the Company; and (C) such other
reports and documents as any Purchaser or Holder may reasonably request in
availing itself of any rule or regulation of the SEC allowing it to sell any
such securities to the public without registration; and
 
(4)      take such further action as any Holder may reasonably request, all to
the extent required from time to time to enable such Holder to sell Registrable
Securities without registration under the Securities Act.
 
(vii)      The rights to cause the Company to register the Registrable
Securities granted pursuant to Section 5(b)(i) may be assigned or otherwise
conveyed, in a transaction which complies with the requirements of the
Securities Act and all applicable state securities laws, by a Purchaser to a
transferee or assignee of the ten percent (10%) or more of the Notes.
 
(viii)      As used in this Section, the following terms shall have the
following respective meanings:
 
(1)      “Holder” means the Purchasers and any other holder of Registrable
Securities to whom the registration rights conferred by this Agreement have been
transferred in compliance with this Agreement.
 
(2)      “Holders’ Counsel” means one counsel for the selling Holders chosen by
Holders holding a majority interest in the Registrable Securities being
registered.
 
(3)      “Registrable Securities” means all Notes, provided that, once issued,
such securities will not be Registrable Securities when (A) they are sold
pursuant to an effective registration statement under the Securities Act, (B)
they may be sold pursuant to Rule 144 under the Securities Act without
limitation thereunder on volume and without the requirement for the Company to
be in compliance with the current public information required under Rule
144(c)(1), (C) they shall have ceased to be outstanding or (D) they have been
sold in a private transaction in which the transferor’s rights under this
Agreement are not assigned to the
 

 
26

--------------------------------------------------------------------------------

 

 
transferee of the securities. No Registrable Securities may be registered under
more than one registration statement at any one time.
 
(4)      “Registration Expenses” mean all expenses incurred by the Company in
effecting any registration pursuant to this Agreement (whether or not any
registration or prospectus becomes effective or final) or otherwise complying
with its obligations under this Section 5(b), including all registration, filing
and listing fees, printing expenses, fees and disbursements of counsel for the
Company, blue sky fees and expenses, expenses incurred in connection with any
“road show”, the reasonable fees and disbursements of Holders’ Counsel, and
expenses of the Company’s independent accountants in connection with any regular
or special reviews or audits incident to or required by any such registration,
but shall not include Selling Expenses.
 
(5)      “Selling Expenses” mean all discounts, selling commissions and stock
transfer taxes applicable to the sale of Registrable Securities and fees and
disbursements of counsel for any Holder (other than the fees and disbursements
of Holders’ Counsel included in Registration Expenses).
 
(c)      DTC.
 
(i)      The Company agrees to use its commercially reasonable efforts to have
the global certificate or certificates representing the Notes made eligible for
clearance and settlement through DTC as of the Closing; provided, however, that
if DTC determines, in its sole discretion, that the Notes cannot be made
eligible for clearance and settlement through DTC, the parties agree that the
Company shall deliver to the respective Purchasers of the Notes one or more
certificates representing the Notes in definitive form, registered in such name
or names and denominations as such Purchasers may request, against payment by
such Purchasers as set forth in Section 2.  To the extent the Notes are
delivered in definitive form, the parties agree to make any changes to the
Indenture necessary to effect the same.
 
(ii)      As promptly as practicable after any registration statement filed
pursuant to Section 5(b) hereof is declared effective, the Company shall use
commercially reasonable efforts to ensure the Registrable Securities shall be
eligible for clearance, settlement and trading in “book-entry” form through the
facilities of DTC.  The Registrable Securities will be represented by one or
more definitive global certificates in book-entry form and will be deposited by
or on behalf of the Company with DTC or its designated custodian, and registered
in the name of Cede & Co.
 
(d)      Payment of Expenses. Whether or not the Transactions are consummated or
this Agreement is terminated, the Company agrees to pay (i) all costs, expenses,
fees and taxes incident to and in connection with the negotiation, printing,
processing and
 

 
27

--------------------------------------------------------------------------------

 

 
distribution (including, without limitation, word processing and duplication
costs) and delivery of, each of the Documents, and the preparation, issuance and
delivery of the Notes, (ii) all fees and expenses of the counsel, accountants
and any other experts or advisors retained by the Company, (iii) all fees and
expenses (including fees and expenses of counsel) of the Company in connection
with approval of the Registrable Securities by DTC for book-entry transfer, (iv)
all fees charged by rating agencies in connection with the rating of the Notes,
and (v) all fees and expenses (including reasonable fees and expenses of
counsel) of the Trustee.
 
(e)      Transaction Documents. The parties agree to do and perform all things
required to be done and performed under the Documents prior to and after the
Closing Date.
 
(f)      Stabilization or Manipulation. The Company agrees not to take, directly
or indirectly, any action designed to or that might be reasonably expected to
cause or result in stabilization or manipulation of the price of the Notes or
any other reference security, whether to facilitate the sale or resale of the
Notes or otherwise.
 
(g)      Stamp Taxes. The Company agrees pay all stamp or other issuance or
transfer taxes or duties other similar fees or charges which may be imposed by
any governmental or regulatory authority in connection with the execution and
delivery of this Agreement or the issuance or sale of the Notes.
 
(h)      Reporting Requirements. The Company, until the completion of the
distribution of the Notes, will file all documents required to be filed with the
SEC pursuant to the Exchange Act within the time periods required by the
Exchange Act.
 
6.      Conditions. The obligations of the Purchasers to purchase the Notes
under this Agreement are subject to the performance by the Company of the
covenants and obligations hereunder and the satisfaction of each of the
following conditions:
 
(a)      Representations, Warranties and Agreements. All the representations and
warranties of the Company contained in this Agreement and in each of the other
Documents shall be true and correct in all material respects as of the date
hereof and on the Closing Date. On or prior to the Closing Date, the Company
shall have performed or complied with all of the agreements and satisfied all
conditions on their respective parts to be performed, complied with or satisfied
pursuant to the Documents (other than conditions to be satisfied by such other
parties, which the failure to so satisfy would not, individually or in the
aggregate, have a Material Adverse Effect).
 
(b)      Closing Deliverables. Each Purchaser shall have received on the Closing
Date:
 
(i)      Officers’ Certificate. A certificate dated the Closing Date, signed by
(1) the Chief Executive Officer and (2) the principal financial or accounting
officer of the Company, on behalf of the Company, to the effect that (A) the
representations and warranties set forth in Section 3 hereof, in each of the
Documents are true and correct in all material respects with the same force and
 

 
28

--------------------------------------------------------------------------------

 

 
effect as though expressly made at and as of the Closing Date, (B) the Company
has performed and complied with all agreements and satisfied all conditions in
all material respects on its part to be performed or satisfied at or prior to
the Closing Date, (C) on the Closing Date, since the date hereof or since the
date of the most recent financial statement in the Company Reports, no event or
events have occurred, no information has become known nor does any condition
exist that, individually or in the aggregate, would have a Material Adverse
Effect, (D) except as contemplated by the Transactions and the draft Plan of
Reorganization provided to each Purchaser, since the date of the most recent
financial statements in the Company Reports, neither the Company nor any other
Subsidiary has incurred any liabilities or obligations, direct or contingent,
not in the ordinary course of business, that are material to the Company and the
Subsidiaries, taken as a whole, or entered into any transactions not in the
ordinary course of business that are material to the business, condition
(financial or otherwise) or results of operations of the Company and the
Subsidiaries, taken as a whole, and there has not been any change in the capital
stock or long-term indebtedness of the Company or any other Subsidiary that is
material to the business, condition (financial or otherwise) or results of
operations of the Company and the Subsidiaries, taken as a whole, and (E) the
sale of the Notes has not been enjoined (temporarily or permanently).
 
(ii)      Secretary’s Certificate. A certificate, dated the Closing Date,
executed by the Secretary of the Company, certifying such matters as the
applicable Purchaser may reasonably request.
 
(iii)      Good Standing Certificates. Certificates, dated as of a date within
five days prior to the Closing Date or such other date as is reasonably
practical, evidencing qualification of the Company as a (1) domestic corporation
in good standing issued by the Secretary of State of the State of Delaware, and
(2) foreign corporation in good standing issued by the Secretaries of State (or
comparable office) of each of the jurisdictions in which the Company is
operates.
 
(iv)      Executed Documents. Each Purchaser shall have received fully executed
originals of each Document (each of which shall be in full force and effect),
and each certificate, letter and other document to be delivered in connection
with the Transactions.
 
(v)      Delivery of Notes.  The Company shall have executed and delivered to
the Purchasers one or more certificates representing the Notes (in global form
or definitive form as set forth in Section 5(c)) purchased by such Purchasers.
 
(c)      No Material Adverse Change. Subsequent to the respective dates as of
which information is given in the Company Reports, there shall not have been any
Material Adverse Change that would be reasonably expected to (1) make it
impracticable or inadvisable to proceed with the offering, sale or delivery of
the Notes on the terms and
 

 
29

--------------------------------------------------------------------------------

 

 
in the manner contemplated by this Agreement, or (2) materially impair the
investment quality of any of the Notes.
 
(d)      No Hostilities. There shall not exist any outbreak or escalation of
hostilities or other national or international calamity or crisis, including
acts of terrorism, or material adverse change or disruption in economic
conditions in, or in the financial markets of, the United States (it being
understood that any such change or disruption shall be relative to such
conditions and markets as in effect on the date hereof), if the effect of such
outbreak, escalation, calamity, crisis, act or material adverse change in the
economic conditions in, or in the financial markets of, the United States would
be reasonably expected to make it impracticable or inadvisable to market or
proceed with the offering or delivery of the Notes or to enforce contracts for
the sale of any of the Notes.
 
(e)      Banking Moratorium. There shall not exist (1) a declaration of a
banking moratorium by any Governmental Authority has occurred or the taking of
any action by any Governmental Authority after the date hereof in respect of its
monetary or fiscal affairs or (2) a material disruption in settlement or
clearing services that, in the case of clause (1) of this paragraph, that could
reasonably be expected to have a material adverse effect on the financial
markets in the United States.
 
(f)      Required Approvals.  All Governmental Approvals of the Board of
Governors of the Federal Reserve System (the “Federal Reserve”) and the Office
of the Comptroller of the Currency (the “OCC”) required to have been obtained at
or prior to the Closing Date for the consummation or effectiveness (as
applicable) of the applicable Transactions shall have been obtained and shall be
in full force and effect (such Governmental Approvals, the “Required
Approvals”); provided, however, that, with respect to the Purchaser, (A) no
Required Approval shall impose or contain any restraint or condition that would
reasonably be expected to impair in any material respect the benefits to the
Purchaser of the Investment and (B) no Required Approval shall require any
modification of governance arrangements with respect to, or impose any capital
or other support requirements on, the Purchaser or any of its Affiliates (each,
a “Burdensome Condition”).
 
(g)      Indebtedness.  On the Closing Date, the Company shall have no
outstanding Indebtedness (as defined in the Indenture), except Indebtedness
resulting from the issuance of the Notes.
 
(h)      Confirmation of the Plan of Reorganization.  The Plan of Reorganization
effecting the Transactions shall have been confirmed by the Bankruptcy Court and
shall have been substantially consummated.
 
(i)      Transactions under the Stock Purchase Agreements.  Contemporaneously
with the Closing, the Company shall consummate the transactions contemplated by
the Stock Purchase Agreements and shall have received proceeds of such issuance
in an amount not less than $[       ] million.
 

 
30

--------------------------------------------------------------------------------

 

 
(j)      Purchase of Notes.  The Company shall have confirmed in writing to the
Purchasers that it will be issuing an aggregate of not less than $[       ]
aggregate principal amount of Notes on the Closing Date pursuant to this
Agreement.
 
(k)      Indenture.  The Purchasers shall have received the Indenture duly
executed and delivered by the Company and the Trustee, and the Notes shall have
been (i) duly executed by the Company and (ii) authenticated by the Trustee.
 
7.      Indemnification and Contribution.
 
(a)      Indemnification by the Company. The Company agrees to indemnify and
hold harmless each Purchaser, its affiliates, directors, officers, partners,
employees and agents, and each person, if any, who controls any Purchaser within
the meaning of Section 15 of the Securities Act against any losses, claims,
damages or liabilities of any kind to which each Purchaser, affiliate, director,
officer, partner, employee, agent or such controlling person may become subject
under the Securities Act, the Exchange Act or other federal or state statutory
law or regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of the
Company, insofar as any such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon:
 
(i)      any untrue statement or alleged untrue statement of a material fact
contained in any Company Report or any registration statement, prospectus or any
amendment or supplement thereto filed or prepared pursuant to Section 5(b)
hereof (a “Registration Document”);
 
(ii)      the omission or alleged omission to state, in any Company Report or
any Registration Document thereto, a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; or
 
(iii)      any failure by the Company duly to perform or observe any term,
provision, covenant, agreement or condition required to be performed or observed
under this Agreement.
 
Subject to the provisions hereof, the Company will reimburse, as incurred, each
Purchaser and its affiliates, directors, officers, employees, agents and each
such controlling persons for any legal or other expenses incurred by such person
in connection with investigating, defending against, settling, compromising,
paying or appearing as a third-party witness in connection with any such loss,
claim, damage, liability, expense or action in respect thereof; provided,
however, the Company will not be liable to the extent that (1) any untrue
statements or omissions, or alleged untrue statements or omissions, in any
Registration Document are based solely upon information regarding a Purchaser
furnished to the Company by such Purchaser expressly for use therein, or to the
extent that such information relates to such Purchaser or such Purchaser’s
proposed method of distribution of Registrable Securities and was reviewed and
expressly approved by such Purchaser expressly for use in the Registration
Document, or (2) the use by such
 

 
31

--------------------------------------------------------------------------------

 

 
Purchaser of an outdated or defective prospectus that is a Registration Document
after the Company has notified such Purchaser in writing that such prospectus is
outdated or defective and prior to the receipt by such Purchaser of an amended
or supplemented prospectus, but only if and to the extent that following the
receipt of the amended or supplemented prospectus the misstatement or omission
giving rise to such loss, claim, damage, liability, expense or action in respect
thereof would have been corrected. The indemnity agreement set forth in this
Section shall be in addition to any liability that the Company and the Bank may
otherwise have to the indemnified parties.
 
(b)      Notifications and Other Indemnification Procedures. As promptly as
reasonably practicable after receipt by an indemnified party under this Section
of notice of the commencement of any action for which such indemnified party is
entitled to indemnification under this Section, such indemnified party will, if
a claim in respect thereof is to be made against the indemnifying party under
this Section, notify the indemnifying party of the commencement thereof in
writing; but the omission to so notify the indemnifying party (i) will not
relieve such indemnifying party from any liability under Section 7(a) unless and
only to the extent it is materially prejudiced as a proximate result thereof and
(ii) will not, in any event, relieve the indemnifying party from any obligations
to any indemnified party other than the indemnification obligation provided in
Section 7(a). In case any such action is brought against any indemnified party,
and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it may elect, jointly with any other indemnifying party similarly notified
by written notice delivered to the indemnified party promptly after receiving
the aforesaid notice from such indemnified party, to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified party; provided,
however, that if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest, (ii) the defendants in any such action include both the indemnified
party and the indemnifying party, and the indemnified party shall have concluded
that a conflict may arise between the positions of the indemnifying party and
the indemnified party in conducting the defense of any such action or that there
may be one or more legal defenses available to it and/or other indemnified
parties that are different from or additional to those available to the
indemnifying party, or (iii) the indemnifying party shall not have employed
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after receipt by the indemnifying
party of notice of the institution of such action, then, in each such case, the
indemnifying party shall not have the right to direct the defense of such action
on behalf of such indemnified party or parties and such indemnified party or
parties shall have the right to select separate counsel to defend such action on
behalf of such indemnified party or parties at the expense of the indemnifying
party. After notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof and reasonable approval by such
indemnified party of counsel appointed to defend such action, the indemnifying
party will not be liable to such indemnified party under this Section for any
legal or other expenses, other than reasonable costs of investigation,
subsequently incurred by such indemnified party in connection with the defense
thereof, unless (i) the indemnified party shall have employed separate counsel
in accordance with the proviso to the immediately preceding sentence (it being
understood, however, that in connection
 

 
32

--------------------------------------------------------------------------------

 

 
with such action the indemnifying party shall not be liable for the fees and
expenses of more than one separate counsel (in addition to local counsel) in any
one action or separate but substantially similar actions in the same
jurisdiction arising out of the same general allegations or circumstances) or
(ii) the indemnifying party has authorized in writing the employment of counsel
for the indemnified party at the expense of the indemnifying party, in each of
which cases the fees and expenses of counsel shall be at the expense of the
indemnifying party and shall be paid as they are incurred. After such notice
from the indemnifying party to such indemnified party, the indemnifying party
will not be liable for the costs and expenses of any settlement of such action
effected by such indemnified party without the prior written consent of the
indemnifying party (which consent shall not be unreasonably withheld), unless
such indemnifying party waived in writing its rights under this Section, in
which case the indemnified party may affect such a settlement without such
consent.
 
(c)      Settlements. No indemnifying party shall be liable under this Section
for any settlement of any claim or action (or threatened claim or action)
effected without its written consent, which shall not be unreasonably withheld,
but if a claim or action settled with its written consent, or if there be a
final judgment for the plaintiff with respect to any such claim or action, each
indemnifying party jointly and severally agrees, subject to the exceptions and
limitations set forth above, to indemnify and hold harmless each indemnified
party from and against any and all losses, claims, damages or liabilities (and
legal and other expenses as set forth above) incurred by reason of such
settlement or judgment. No indemnifying party shall, without the prior written
consent of the indemnified party (which consent shall not be unreasonably
withheld), effect any settlement or compromise of any pending or threatened
proceeding in respect of which the indemnified party is or could have been a
party, or indemnity could have been sought hereunder by the indemnified party,
unless such settlement (A) includes an unconditional written release of the
indemnified party, in form and substance satisfactory to the indemnified party,
from all liability on claims that are the subject matter of such proceeding and
(B) does not include any statement as to an admission of fault, culpability or
failure to act by or on behalf of the indemnified party. Notwithstanding the
foregoing, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for legal or other
expenses as contemplated by Section 7(c), the indemnifying party agrees that it
shall be liable for any settlement or compromise of, or consent to the entry of
any judgment with respect to, any pending or threatened action or claim effected
without its written consent if (i) such settlement is entered into more than 30
days after receipt by such indemnifying party of the aforesaid request and (ii)
such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement or compromise
of, or consent to the entry of such judgment.
 
8.      Termination. (A) The Purchasers may terminate this Agreement (i) at any
time prior to the Closing Date by written notice signed by all Purchasers to the
Company if any of the events described in Sections 6(b)(v) (No Material Adverse
Change), 6(b)(vi) (No Hostilities) or 6(b)(vii) (Banking Moratorium) shall have
occurred of if the Purchasers shall decline to purchase the Notes for any reason
permitted by this Agreement or (ii) on the Closing Date if any condition
described in Section 6 is not fulfilled or waived in writing by the Purchasers
on or prior to the
 

 
33

--------------------------------------------------------------------------------

 

 
Closing Date. Any termination pursuant to this Section shall be without
liability on the part of (a) the Company to the Purchasers, except that the
Company shall be obligated to reimburse the expenses of the Purchasers pursuant
to Section 5(d) hereof or (b) the Purchasers to the Company, except, in the case
of each of clauses (a) and (b), that the provisions of Sections 8 and 9 hereof
shall at all times be effective and shall survive such termination.
 
(B)      In addition, this Agreement may be terminated prior to the Closing by
the Company or the Investor, upon written notice to the other party, in the
event that the Closing does not occur on or before the one hundred eightieth
(180th) day following the date of this Agreement; provided, however, that the
right to terminate this Agreement pursuant to this Section 8(B) shall not be
available to any party whose failure to fulfill any obligation under this
Agreement shall have been the cause of, or shall have resulted in, the failure
of the Closing to occur on or prior to such date.
 
9.      Survival. The representations and warranties, covenants, indemnities and
contribution and expense reimbursement provisions and other agreements of the
Company and the Bank, as applicable, set forth in or made pursuant to this
Agreement shall remain operative and in full force and effect, and will survive,
regardless of (i) any investigation, or statement as to the results thereof,
made by or on behalf of the Purchasers, (ii) the acceptance of the Notes, and
payment for them hereunder, and (iii) any termination of this Agreement.
 
10.      Miscellaneous.
 
(a)      Notices. Notices given pursuant to any provision of this Agreement
shall be addressed as follows: (i) if to the Company, to: Anchor BanCorp
Wisconsin Inc., 25 West Main Street, Madison, Wisconsin 53703, Attention: Mark
D. Timmerman, with a copy to: Skadden, Arps, Slate, Meagher & Flom LLP,
Attention: Sven G. Mickisch and Michael J. Zeidel, and (ii) if to the
Purchasers, to their respective addresses listed in Schedule I (or in any case
to such other address as the person to be notified may have requested in
writing).
 
(b)      Beneficiaries. This Agreement has been and is made solely for the
benefit of and shall be binding upon the Company, the Bank, the Purchasers and
to the extent provided in Section 6 hereof, the controlling persons, affiliates,
officers, directors, partners, employees, representatives and agents referred to
in Section 6 hereof and their respective heirs, executors, administrators,
successors and assigns, all as and to the extent provided in this Agreement, and
no other person shall acquire or have any right under or by virtue of this
Agreement. The term “successors and assigns” shall not include a purchaser of
any of the Notes from any Purchaser merely because of such purchase.
 
(c)      Governing Law; Jurisdiction; Waiver of Jury Trial; Venue. This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of New York. The Company and each Purchaser hereby expressly and
irrevocably (i) submits to the non-exclusive jurisdiction of the federal courts
sitting in the City of New York in any suit or proceeding arising out of or
relating to this Agreement or the Transactions, and (ii) waives (a) its right to
a trial by jury in any legal action or proceeding relating to this Agreement,
the Transactions or any course of conduct, course
 

 
34

--------------------------------------------------------------------------------

 

 
of dealing, statements (whether verbal or written) or actions of the Purchasers
and for any counterclaim related to any of the foregoing and (b) any obligation
which it may have or hereafter may have to the laying of venue of any such
litigation brought in any such court referred to above and any claim that any
such litigation has been brought in an inconvenient forum.
 
(d)      Entire Agreement; Counterparts. This Agreement constitutes the entire
agreement of the parties to this Agreement and supersedes all prior written or
oral and all contemporaneous oral agreements, understandings and negotiations
with respect to the subject matter hereof. This Agreement may be executed in two
or more counterparts, each one of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
 
(e)      Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
 
(f)      Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their commercially reasonable efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.
 
(g)      Amendment. This Agreement may be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may be given,
provided that the same are in writing and signed by all of the signatories
hereto.
 
(h)      Default by a Purchaser. If any one or more Purchasers shall fail to
purchase and pay for any of the Notes agreed to be purchased by such Purchaser
or Purchasers hereunder and such failure to purchase shall constitute a default
in the performance of its or their obligations under this Agreement, the
remaining Purchasers shall be obligated severally to take up and pay for (in the
respective proportions which the amount of Notes set forth opposite their names
in Schedule I hereto bears to the aggregate amount of Notes set forth opposite
the names of all the remaining Purchasers) the Notes which the defaulting
Purchaser or Purchasers agreed but failed to purchase; provided, however, that
in the event that the aggregate amount of Notes which the defaulting Purchaser
or Purchasers agreed but failed to purchase shall exceed 10% of the aggregate
amount of Notes set forth in Schedule I hereto, the remaining Purchasers shall
have the right to purchase all, but shall not be under any obligation to
purchase any, of the Notes, and if such nondefaulting Purchasers do not purchase
all the Notes, this Agreement will terminate without liability to any
nondefaulting Purchaser or the Company. In the event of a default by any
Purchaser as set forth in this Section 10, the Closing Date shall be postponed
for such period, not exceeding seven days, as the
 

 
35

--------------------------------------------------------------------------------

 

 
Company shall determine in order that the required changes in any other
documents or arrangements may be effected. Nothing contained in this Agreement
shall relieve any defaulting Purchaser of its liability, if any, to the Company
and any nondefaulting Purchaser for damages occasioned by its default hereunder.
 

 
36

--------------------------------------------------------------------------------

 

Please confirm that the foregoing correctly sets forth the agreement between the
Company and the Purchasers.
 

 
ANCHOR BANCORP WISCONSIN INC.
     
By:
     
Name:
  Mark D. Timmerman  
Title:
  Executive Vice President, Secretary and General Counsel

 

 
 

--------------------------------------------------------------------------------

 

 
Accepted and Agreed to:
 
Name:
 
Address:
     
By:
       
Name:
       
Title:
       

   
Address:
     
By:
       
Name:
       
Title:
       

   
Address:
     
By:
       
Name:
       
Title: