Exhibit 10.1
 
SECURITIES PURCHASE AGREEMENT
 

 
This Securities Purchase Agreement (this “Agreement”) is dated as of September
14, 2012, by and among Customers Bancorp, Inc., a Pennsylvania corporation (the
“Company”), and each purchaser identified on the signature pages hereto (each,
including its successors and assigns, a “Purchaser” and collectively, the
“Purchasers”).
 
RECITALS
 
A.           The Company and each Purchaser are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by Section 4(2) of the Securities Act of 1933, as amended (the “Securities
Act”), and Rule 506 of Regulation D (“Regulation D”) as promulgated by the
United States Securities and Exchange Commission (the “Commission”) under the
Securities Act.
 
B.           Each Purchaser, severally and not jointly, wishes to purchase, and
the Company wishes to sell, upon the terms and conditions stated in this
Agreement, (i) that aggregate number of shares of voting common stock, $1.00 par
value per share, of the Company (the “Common Stock”), set forth below such
Purchaser’s name on the signature page of this Agreement (which aggregate amount
for all Purchasers together shall be [4,223,674] shares of Common Stock) and
(ii) that aggregate number of shares of Class B Non-Voting Common Stock, $1.00
par value per share, of the Company (the “Non-Voting Common Stock”), set forth
below such Purchaser’s name on the signature page of this Agreement (which
aggregate amount for all Purchasers together shall be [1,847,755] shares of
Non-Voting Common Stock).   The shares of Common Stock and Non-Voting Common
Stock being purchased hereunder are collectively referred to herein as the
“Shares.”
 
C.           The Company has engaged FBR Capital Markets & Co. as its exclusive
placement agent (the “Placement Agent”) for the offering of the Shares.
 
D.           Contemporaneously with the execution and delivery of this
Agreement, the parties hereto are executing and delivering a Registration Rights
Agreement, substantially in the form attached hereto as Exhibit A (the
“Registration Rights Agreement”), pursuant to which, among other things, the
Company will agree to provide certain registration rights with respect to the
Shares under the Securities Act and the rules and regulations promulgated
thereunder and applicable state securities laws.
 
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company and the Purchasers hereby
agree as follows:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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ARTICLE I
DEFINITIONS
 
1.1 Definitions.  In addition to the terms defined elsewhere in this Agreement,
for all purposes of this Agreement, the following terms shall have the meanings
indicated in this Section 1.1:
 
“Action” means any Proceeding, inquiry or notice of violation pending or, to the
Company’s Knowledge, threatened in writing against the Company, any Subsidiary
or any of their respective properties or any officer, director or employee of
the Company or any Subsidiary acting in his or her capacity as an officer,
director or employee before or by any federal, state, county, local or foreign
court, arbitrator, governmental or administrative agency, regulatory authority,
stock market, stock exchange or trading facility.
 
“Affiliate” means, with respect to any Person, any other Person that, directly
or indirectly through one or more intermediaries, Controls, is controlled by or
is under common control with such Person, as such terms are used in and
construed under Rule 405 under the Securities Act.
 
“Agency” has the meaning set forth in Section 3.1(oo).
 
“Agreement” shall have the meaning ascribed to such term in the Preamble.
 
“Bank” means Customers Bank, a Pennsylvania-chartered bank and wholly-owned
Subsidiary of the Company.
 
“Bank Regulatory Authorities” has the meaning set forth in Section 3.1(b)(ii).
 
“BHC Act” has the meaning set forth in Section 3.1(b)(ii).
 
“Board” has the meaning set forth in Section 2.2(a)(v).
 
“Business Day” means a day, other than a Saturday or Sunday, on which banks in
the City of New York are open for the general transaction of business.
 
“CIBC Act” means the Change in Bank Control Act.
 
“Closing” means the closing of the purchase and sale of the Shares pursuant to
this Agreement.
 
“Closing Bid Price” means, for any security as of any date, the last closing
price for such security on the Principal Trading Market, as reported by
Bloomberg, or, if the Principal Trading Market begins to operate on an extended
hours basis and does not designate the closing bid price then the last bid price
of such security prior to 4:00 p.m., New York City Time, as reported by
Bloomberg, or, if the Principal Trading Market is not the principal securities
exchange or trading market for such security, the last closing price of such
security on the principal securities exchange or trading market where such
security is listed or traded as reported by Bloomberg, or if the foregoing do
not apply, the last closing price of such security in the over-the-counter
market on the electronic bulletin board for such security as reported by
Bloomberg, or, if no closing bid price is reported for such security by
Bloomberg, the average of the bid prices of any market makers for such security
as reported in the “pink sheets” by OTC Markets Group Inc. If the Closing Bid
Price cannot be calculated for a security on a particular date on any of the
foregoing bases, the Closing Bid Price of such security on such date shall be
the fair market value as mutually determined by the Company and the holder. If
the Company and the holder are unable to agree upon the fair market value of
such security, then the Company shall, within two Business Days submit via
facsimile (a) the disputed determination to an independent, reputable investment
bank selected by the Company and approved by the holder or (b) the disputed
arithmetic calculation to the Company’s independent, outside accountant. The
Company shall cause at its expense the investment bank or the accountant, as the
case may be, to perform the determinations or calculations and notify the
Company and the holder of the results no later than ten Business Days from the
time it receives the disputed determinations or calculations. Such investment
bank’s or accountant’s determination or calculation, as the case may be, shall
be binding upon all parties absent demonstrable error. All such determinations
shall be appropriately adjusted for any stock dividend, stock split, stock
combination or other similar transaction during the applicable calculation
period.
 
 
 
 
 
 
 
 
 
 
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“Closing Date” means the Trading Day when all of the Transaction Documents have
been executed and delivered by the applicable parties thereto, and all of the
conditions set forth in Sections 2.1, 2.2, 5.1 and 5.2 hereof are satisfied or
waived, as the case may be, or such other date as the parties may agree.
 
“Commission” has the meaning set forth in the Recitals.
 
“Common Stock” has the meaning set forth in the Recitals, and also includes any
securities into which the Common Stock may hereafter be reclassified or changed.
 
“Company Counsel” means Stradley Ronon Stevens & Young, LLP.
 
“Company Deliverables” has the meaning set forth in Section 2.2(a).
 
“Company Reports” has the meaning set forth in Section 3.1(kk).
 
“Company’s Knowledge” means with respect to any statement made to the knowledge
of the Company, that the statement is based upon the actual knowledge of the
executive officers of the Company having responsibility for the matter or
matters that are the subject of the statement after reasonable investigation.
 
“Control” (including the terms “controlling”, “controlled by” or “under common
control with”) means the possession, direct or indirect, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.
 
“Department” has the meaning set forth in Section 3.1(b)(ii).
 
“Disclosure Materials” has the meaning set forth in Section 3.1(h).
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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“DTC” means The Depository Trust Company.
 
“Effective Date” means the date on which the initial Registration Statement
required by Section 2(a) of the Registration Rights Agreement is first declared
effective by the Commission.
 
“Environmental Laws” has the meaning set forth in Section 3.1(l).
 
“ERISA” has the meaning set forth in Section 3.1(qq).
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended, or any
successor statute, and the rules and regulations promulgated thereunder.
 
“FDIC” has the meaning set forth in Section 3.1(b)(ii).
 
“Federal Reserve” has the meaning set forth in Section 3.1(b)(ii).
 
“GAAP” means U.S. generally accepted accounting principles, as applied by the
Company.
 
“Indemnified Person” has the meaning set forth in Section 4.8(a).
 
“Insurer” has the meaning set forth in Section 3.1(oo).
 
“Intellectual Property” has the meaning set forth in Section 3.1(r).
 
“Lien” means any lien, charge, claim, encumbrance, security interest, right of
first refusal, preemptive right or other restriction of any kind.
 
“Legend Removal Date” has the meaning set forth in Section 4.1(c).
 
“Loan Investor” has the meaning set forth in Section 3.1(oo).
 
“Material Adverse Effect” means any of (i) a material and adverse effect on the
legality, validity or enforceability of any Transaction Document, (ii) a
material and adverse effect on the results of operations, assets, properties,
business, condition (financial or otherwise) or prospects of the Company and the
Subsidiaries, taken as a whole, or (iii) any adverse impairment to the Company’s
ability to perform in any material respect on a timely basis its obligations
under any Transaction Document.
 
“Material Contract” means any contract of the Company that was, or was required
to be, filed as an exhibit pursuant to Item 601 of Regulation S-K.
 
“Material Permits” has the meaning set forth in Section 3.1(p).
 
“Money Laundering Laws” has the meaning set forth in Section 3.1(hh).
 
“New York Courts” means the state and federal courts sitting in the State of New
York.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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“Non-Voting Common Stock” has the meaning set forth in the Recitals, and also
includes any securities into which the Non-Voting Common Stock may hereafter be
reclassified or changed.
 
“OFAC” has the meaning set forth in Section 3.1(gg).
 
“Outside Date” means the fifteenth (15th) day following the date of this
Agreement; provided that if such day is not a Business Day, the first day
following such day that is a Business Day.
 
“Person” means an individual, corporation, partnership, limited liability
company, trust, business trust, association, joint stock company, joint venture,
sole proprietorship, unincorporated organization, governmental authority or any
other form of entity not specifically listed herein.
 
“Placement Agent” has the meaning set forth in the Recitals.
 
“Principal Trading Market” means the Trading Market on which the Common Stock is
primarily listed on and quoted for trading, which, as of the date of this
Agreement and the Closing Date, shall be the OTC Bulletin Board.
 
“Proceeding” means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.
 
“Purchase Price” means $14.00 per Share.
 
“Purchaser Deliverables” has the meaning set forth in Section 2.2(b).
 
“Registration Rights Agreement” has the meaning set forth in the Recitals.
 
“Registration Statement” means a registration statement meeting the requirements
set forth in the Registration Rights Agreement and covering the resale by the
Purchasers of the Registrable Securities (as defined in the Registration Rights
Agreement).
 
“Regulation D” has the meaning set forth in the Recitals.
 
“Regulatory Agreement” has the meaning set forth in Section 3.1(mm).
 
“Required Approvals” has the meaning set forth in Section 3.1(e).
 
“Rule 144” means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.
 
“SEC Reports” has the meaning set forth in Section 3.1(h).
 
“Secretary’s Certificate” has the meaning set forth in Section 2.2(a)(v).
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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“Securities Act” means the Securities Act of 1933, as amended.
 
“Shares” has the meaning set forth in the Recitals.
 
“Subscription Amount” means with respect to each Purchaser, the aggregate amount
to be paid for the Shares purchased hereunder as indicated on such Purchaser’s
signature page to this Agreement next to the heading “Aggregate Purchase Price
(Subscription Amount)”.
 
“Subsidiary” means the Bank and any other entity in which the Company, directly
or indirectly, owns sufficient capital stock or holds a sufficient equity or
similar interest such that it is consolidated with the Company in the financial
statements of the Company.
 
“Trading Day” means (i) a day on which the Common Stock is listed or quoted and
traded on its Principal Trading Market or (ii) if the Common Stock is not quoted
on any Trading Market, a day on which the Common Stock is quoted in the
over-the-counter market as reported in the “pink sheets” by OTC Markets Group
Inc. (or any similar organization or agency succeeding to its functions of
reporting prices); provided, that in the event that the Common Stock is not
listed or quoted as set forth in (i) and (ii) hereof, then Trading Day shall
mean a Business Day.
 
“Trading Market” means whichever of the New York Stock Exchange, the NYSE Amex,
the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital
Market or the OTC Bulletin Board on which the Common Stock is listed or quoted
for trading on the date in question.
 
“Transactions” has the meaning set forth in Section 3.2(i).
 
“Transaction Documents” means this Agreement, the schedules and exhibits
attached hereto, and the Registration Rights Agreement.
 
“Transfer Agent” means Broadridge, or any successor transfer agent for the
Company.
 
ARTICLE II
PURCHASE AND SALE
 
2.1 Closing.
 
(a) Purchase of Shares.  Subject to the terms and conditions set forth in this
Agreement, at the Closing the Company shall issue and sell to each Purchaser,
and each Purchaser shall, severally and not jointly, purchase from the Company,
(i) the number of Shares constituting Common Stock and (ii) the number of Shares
constituting Non-Voting Common Stock, in each case set forth below such
Purchaser’s name on the signature page of this Agreement at a per Share price
equal to the Purchase Price.
 
(b) Closing.  The Closing of the purchase and sale of the Shares shall take
place at the offices of Stradley Ronon Stevens & Young, LLP, on the Closing Date
or at such other locations or remotely by facsimile transmission or other
electronic means as the parties may mutually agree.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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(c) Form of Payment.  Unless otherwise agreed to by the Company and a Purchaser
(as to itself only), two Business Days prior to the Closing Date, (i) if the
Purchaser chooses to receive certificates evidencing its Shares on such
Purchaser’s Form of Ownership Questionnaire included as Exhibit B-2 hereto, (A)
the Company shall deliver to each Purchaser pdf copies of one or more stock
certificates, evidencing the number of Shares of Common Stock and the number of
Shares of Non-Voting Common Stock set forth on such Purchaser’s signature page
to this Agreement and (B) upon receipt thereof, each Purchaser shall wire its
Subscription Amount, in United States dollars and in immediately available
funds, in accordance with the Company’s written wire transfer instructions as
set forth on the Summary Instruction Sheet for Purchasers attached hereto; or
(ii) if the Purchaser chooses to hold its Shares in book-entry form with the
Transfer Agent on such Purchaser’s Form of Ownership Questionnaire included as
Exhibit B-2 hereto, (A) the Company shall issue written instructions to the
Transfer Agent authorizing the issuance on the Closing Date of the number of
Shares of Common Stock and the number of Shares of Non-Voting Common Stock set
forth on such Purchaser’s signature page to this Agreement to each such
Purchaser and (B) each Purchaser shall wire its Subscription Amount, in United
States dollars and in immediately available funds, in accordance with the
Company’s written wire transfer instructions as set forth on the Summary
Instruction Sheet for Purchasers attached hereto. The Transfer Agent will
deliver to each Purchaser who chooses to receive certificates evidencing its
Shares such Purchaser’s certificates after the Closing Date.
 
2.2 Closing Deliveries.
 
(a) Unless otherwise agreed to by the Company and a Purchaser (as to itself
only), on or prior to the Closing, the Company shall issue, deliver or cause to
be delivered to each Purchaser the following or PDF copies evidencing the
following (the “Company Deliverables”):
 
(i) this Agreement, duly executed by the Company;
 
(ii) one or more stock certificates or a book-entry account statement from the
Transfer Agent, evidencing the Shares of Common Stock and Non-Voting Common
Stock subscribed for by Purchaser hereunder, registered in the name of such
Purchaser or as otherwise set forth on such Purchaser’s Form of Ownership
Questionnaire included as Exhibit B-2 hereto (the “Stock Certificates”);
 
(iii) a legal opinion of Company Counsel, dated as of the Closing Date and in
the form attached hereto as Exhibit C, executed by such counsel and addressed to
the Purchasers;
 
(iv) the Registration Rights Agreement, duly executed by the Company;
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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(v) a certificate of the Secretary of the Company, in the form attached hereto
as Exhibit D (the “Secretary’s Certificate”), dated as of the Closing Date,
(a) certifying the resolutions adopted by the Board of Directors of the Company
(the “Board”) or a duly authorized committee thereof approving the transactions
contemplated by this Agreement and the other Transaction Documents and the
issuance of the Shares, (b) certifying the current versions of the articles of
incorporation, as amended, and bylaws, as amended, of the Company and
(c) certifying as to the signatures and authority of persons signing the
Transaction Documents and related documents on behalf of the Company;
 
(vi) a certificate of the Chief Executive Officer, President or Chief Financial
Officer of the Company, in the form attached hereto as Exhibit E, dated as of
the Closing Date, certifying to the fulfillment of the conditions specified in
Sections 5.1(a) and 5.1(b); and
 
(vii) a Certificate of Good Standing for the Company from the Pennsylvania
Secretary of State as of a recent date.
 
(b) Unless otherwise agreed to by the Company and a Purchaser (as to itself
only), on or prior to the Closing, each Purchaser shall deliver or cause to be
delivered to the Company the following (the “Purchaser Deliverables”):
 
(i) this Agreement, duly executed by such Purchaser;
 
(ii) its Subscription Amount, in U.S. dollars and in immediately available
funds, by wire transfer in accordance with the Company’s written instructions;
 
(iii) the Registration Rights Agreement, duly executed by such Purchaser; and
 
(iv) a fully completed and duly executed Certificate of Private Placement and
Accredited Investor Status, and Form of Ownership Questionnaire in the forms
attached hereto as Exhibits B-1 and B-2 , respectively.
 
ARTICLE III
REPRESENTATIONS AND WARRANTIES
 
3.1 Representations and Warranties of the Company.  The Company hereby
represents and warrants as of the date hereof and as of the Closing Date (except
for the representations and warranties that speak as of a specific date, which
shall be made as of such date), to each of the Purchasers that:
 
(a) Subsidiaries.  The Company has no direct or indirect Subsidiaries other than
those listed in Schedule 3.1(a) hereto. Except as set forth on Schedule 3.1(a),
The Company owns, directly or indirectly, all of the capital stock or comparable
equity interests of each Subsidiary free and clear of any and all Liens, and all
the issued and outstanding shares of capital stock or comparable equity interest
of each Subsidiary are validly issued and are fully paid, non-assessable and
free of preemptive and similar rights to subscribe for or purchase securities.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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(b) Organization and Qualification; Bank Regulations.
 
(i)           The Company and each of its Subsidiaries is an entity duly
incorporated or otherwise organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or organization (as
applicable), with the requisite power and authority to own or lease and use its
properties and assets and to carry on its business as currently conducted.
Neither the Company nor any Subsidiary is in violation of any of the provisions
of its respective certificate or articles of incorporation, bylaws or other
organizational or charter documents.  The Company and each of its Subsidiaries
is duly qualified to conduct business and is in good standing as a foreign
corporation or other entity in each jurisdiction in which the nature of the
business conducted or property owned by it makes such qualification necessary,
except where the failure to be so qualified or in good standing, as the case may
be, would not be expected to have a Material Adverse Effect.
 
(ii)           The Company is duly registered as a bank holding company under
the Bank Holding Company Act of 1956, as amended (the “BHC Act”).  The Bank is
the Company’s only Subsidiary banking institution.  The Bank holds the requisite
authority from the Pennsylvania Banking Department (the “Department”) to do
business as a state-chartered bank under the laws of the Commonwealth of
Pennsylvania.  Each of the Company and the Bank is in compliance with all laws
administered by the Board of Governors of the Federal Reserve System (the
“Federal Reserve”), the Federal Deposit Insurance Corporation (the “FDIC”), the
Department and any other applicable foreign, federal or state bank regulatory
authorities (together with the Department, the Federal Reserve and the FDIC, the
“Bank Regulatory Authorities”) with jurisdiction over the Company and its
Subsidiaries, except for any noncompliance that, individually or in the
aggregate, has not had and would not be reasonably expected to have a Material
Adverse Effect.  The deposit accounts of the Bank are insured up to applicable
limits by the FDIC, and all premiums and assessments required to be paid in
connection therewith have been paid when due.
 
(c) Authorization; Enforcement; Validity.  The Company has the requisite
corporate power and authority to enter into and to consummate the transactions
contemplated by each of the Transaction Documents to which it is a party and
otherwise to carry out its obligations hereunder and thereunder, including,
without limitation, to issue the Shares in accordance with the terms hereof. The
Company’s execution and delivery of each of the Transaction Documents and the
consummation by it of the transactions contemplated hereby and thereby
(including, but not limited to, the sale and delivery of the Shares) have been
duly authorized by all necessary corporate action on the part of the Company,
and no further corporate action is required by the Company, its Board or its
shareholders in connection therewith. Each of the Transaction Documents has been
(or upon delivery will have been) duly executed by the Company and is, or when
delivered in accordance with the terms hereof or thereof, will constitute the
legal, valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except (i) as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally the enforcement
of, creditors’ rights and remedies or by other equitable principles of general
application, (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable law.
There are no shareholder agreements, voting agreements, voting trust agreements
or similar agreements with respect to the Company’s capital stock to which the
Company is a party or, to the Company’s Knowledge, between or among any of the
Company’s shareholders.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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(d) No Conflicts.  The execution, delivery and performance by the Company of the
Transaction Documents and the consummation by the Company of the transactions
contemplated hereby or thereby (including, without limitation, the issuance of
the Shares) do not and will not (i) conflict with or violate any provisions of
the Company’s or any Subsidiary’s certificate or articles of incorporation,
bylaws or otherwise result in a violation of the organizational documents of the
Company or any Subsidiary, (ii) conflict with, or constitute a default (or an
event that with notice or lapse of time or both would result in a default)
under, result in the creation of any Lien upon any of the properties or assets
of the Company or any Subsidiary or give to others any rights of termination,
amendment, acceleration or cancellation (with or without notice, lapse of time
or both) of, any Material Contract, or (iii) subject to receipt of the Required
Approvals, conflict with or result in a violation of any law, rule, regulation,
order, judgment, injunction, decree or other restriction of any court or
governmental authority to which the Company is subject (including federal and
state securities laws and the rules and regulations thereunder, assuming the
correctness of the representations and warranties made by the Purchasers herein,
of any self-regulatory organization to which the Company or its securities are
subject, including the Principal Trading Market), or by which any property or
asset of the Company is bound or affected, except in the case of clauses
(ii) and (iii) such as would not have or reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
 
(e) Filings, Consents and Approvals.  Neither the Company nor any of its
Subsidiaries is required to obtain any consent, waiver, authorization or order
of, give any notice to, or make any filing or registration with, any court or
other federal, state, local or other governmental authority, self-regulatory
organization (including the Principal Trading Market) or other Person in
connection with the execution, delivery and performance by the Company of the
Transaction Documents (including, without limitation, the issuance of the
Shares), other than (i) the filing with the Commission of one or more
Registration Statements in accordance with the requirements of the Registration
Rights Agreement, (ii) filings required by applicable state securities laws,
(iii) the filing of a Notice of Exempt Offering of Securities on Form D with the
Commission under Regulation D of the Securities Act, (iv) the filings required
in accordance with Section 4.6 of this Agreement; and (v) those that have been
made or obtained prior to the date of this Agreement (collectively, the
“Required Approvals”).  The Company is unaware of any facts or circumstances
relating to the Company or its Subsidiaries which would be likely to prevent the
Company from obtaining or effecting any of the foregoing.
 
(f) Issuance of the Shares.  The issuance of the Shares has been duly authorized
and the Shares, when issued and paid for in accordance with the terms of the
Transaction Documents, will be duly and validly issued, fully paid and
non-assessable and free and clear of all Liens, other than restrictions on
transfer imposed by applicable securities laws, and shall not be subject to
preemptive or similar rights.  Assuming the accuracy of the representations and
warranties of the Purchasers in this Agreement and the accuracy of the
information disclosed on the Certificates of Private Placement and Accredited
Investor Status, the Shares will be issued in compliance with all applicable
federal and state securities laws.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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(g) Capitalization.  The number of shares and type of all authorized, issued and
outstanding capital stock, options and other securities of the Company (whether
or not presently convertible into or exercisable or exchangeable for shares of
capital stock of the Company) is set forth in Schedule 3.1(g) hereto. All of the
outstanding shares of capital stock of the Company are duly authorized, validly
issued, fully paid and non-assessable, have been issued in compliance in all
material respects with all applicable federal and state securities laws, and
none of such outstanding shares was issued in violation of any preemptive rights
or similar rights to subscribe for or purchase any capital stock of the Company.
No shares of the Company’s outstanding capital stock are subject to preemptive
rights or any other similar rights; other than as described in the SEC Reports,
there are no outstanding options, warrants, scrip, rights to subscribe to, calls
or commitments of any character whatsoever relating to, or securities or rights
convertible into, or exercisable or exchangeable for, any shares of capital
stock of the Company, or contracts, commitments, understandings or arrangements
by which the Company is or may become bound to issue additional shares of
capital stock of the Company or options, warrants, scrip, rights to subscribe
to, calls or commitments of any character whatsoever relating to, or securities
or rights convertible into, or exercisable or exchangeable for, any shares of
capital stock of the Company, other than those issued or granted pursuant to
compensatory plans, contracts or arrangements described in the SEC Reports;
other than as described in the SEC Reports, there are no material outstanding
debt securities, notes, credit agreements, credit facilities or other
agreements, documents or instruments evidencing indebtedness of the Company or
by which the Company is bound; except for the Registration Rights Agreement and
except as set forth in Schedule 3.1(g), there are no agreements or arrangements
under which the Company is obligated to register the sale of any of its
securities under the Securities Act; there are no outstanding securities or
instruments of the Company that contain any redemption or similar provisions,
and there are no contracts, commitments, understandings or arrangements by which
the Company is or may become bound to redeem a security of the Company or any of
its Subsidiaries; the Company does not have any stock appreciation rights or
“phantom stock” plans or agreements or any similar plan or agreement; and
neither the Company nor any of its Subsidiaries have any liabilities or
obligations required to be disclosed in the SEC Reports but not so disclosed in
the SEC Reports, which, individually or in the aggregate, will have or would
reasonably be expected to have a Material Adverse Effect.  There are no
securities or instruments issued by or to which the Company is a party
containing anti-dilution or similar provisions that will be triggered by the
issuance of the Shares.
 
(h) SEC Reports; Disclosure Materials.  The Company has filed all reports,
schedules, forms, statements and other documents required to be filed by it
under the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof,
for the eighteen (18) months preceding the date hereof (the foregoing materials,
including the exhibits thereto and documents incorporated by reference therein,
being collectively referred to herein as the “SEC Reports” and together with
this Agreement and the schedules to this Agreement, the “Disclosure Materials”),
on a timely basis or has received a valid extension of such time of filing and
has filed any such SEC Reports prior to the expiration of any such extension. As
of their respective filing dates, the SEC Reports complied in all material
respects with the applicable requirements of the Exchange Act and the rules and
regulations of the Commission promulgated thereunder, and none of the SEC
Reports, when filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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(i) Financial Statements.  The financial statements of the Company and its
Subsidiaries included in the SEC Reports comply in all material respects with
applicable accounting requirements and the rules and regulations of the
Commission with respect thereto as in effect at the time of filing. Such
financial statements have been prepared in accordance with GAAP applied on a
consistent basis during the periods involved, except as may be otherwise
specified in such financial statements or the notes thereto and except that
unaudited financial statements may not contain all footnotes required by GAAP,
and fairly present in all material respects the balance sheet of the Company and
its Subsidiaries taken as a whole as of and for the dates thereof and the
results of operations and cash flows for the periods then ended, subject, in the
case of unaudited statements, to normal, year-end audit adjustments, which would
not be material, either individually or in the aggregate.
 
(j) Tax Matters.  The Company (i) has prepared and filed all foreign, federal
and state income and all other tax returns, reports and declarations required by
any jurisdiction to which it is subject, (ii) has paid all taxes and other
governmental assessments and charges that are material in amount, shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith, with respect to which adequate reserves have been
set aside on the books of the Company and (iii) has set aside on its books
provisions reasonably adequate for the payment of all taxes for periods
subsequent to the periods to which such returns, reports or declarations apply,
except, in the case of clauses (i) and (ii) above, where the failure to so pay
or file any such tax, assessment, charge or return would not have or reasonably
be expected to have a Material Adverse Effect.
 
(k) Material Changes.  Since the date of the latest audited financial statements
included within the SEC Reports, except as disclosed in subsequent SEC Reports
filed prior to the date hereof, (i) there have been no events, occurrences or
developments that have had or would reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect, (ii) the Company
has not incurred any material liabilities (contingent or otherwise) other than
(A) trade payables, accrued expenses and other liabilities incurred in the
ordinary course of business consistent with past practice and (B) liabilities
not required to be reflected in the Company’s financial statements pursuant to
GAAP or required to be disclosed in filings made with the Commission, (iii) the
Company has not altered materially its method of accounting or the manner in
which it keeps its accounting books and records, (iv) the Company has not
declared or made any dividend or distribution of cash or other property to its
shareholders or purchased, redeemed or made any agreements to purchase or redeem
any shares of its capital stock, (v) except as set forth in Schedule 3.1(k), the
Company has not issued any equity securities to any officer, director or
Affiliate, other than Common Stock issued pursuant to existing Company stock
option or stock purchase plans or executive and director arrangements disclosed
in the SEC Reports, (vi) there has not been any material change or amendment to,
or any waiver of any material right by the Company under, any Material Contract
under which the Company or any of its Subsidiaries is bound or subject, and
(vii) to the Company’s Knowledge, there has not been a material increase in the
aggregate dollar amount of: (A) the Bank’s nonperforming loans (including
nonaccrual loans and loans 90 days or more past due and still accruing interest)
or (B) the reserves or allowances established on the Company's or Bank's
financial statements with respect thereto. Except for the transactions
contemplated by this Agreement, no event, liability or development has occurred
or exists with respect to the Company or its Subsidiaries or their respective
business, properties, operations or financial condition that would be required
to be disclosed by the Company under applicable securities laws at the time this
representation is made that has not been publicly disclosed at least one Trading
Day prior to the date that this representation is made.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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(l) Environmental Matters.  Neither the Company nor any of its Subsidiaries
(i) is in violation of any statute, rule, regulation, decision or order of any
governmental agency or body or any court, domestic or foreign, relating to the
use, disposal or release of hazardous or toxic substances or relating to the
protection or restoration of the environment or human exposure to hazardous or
toxic substances (collectively, “Environmental Laws”), (ii) owns or operates any
real property contaminated with any substance that is in violation of any
Environmental Laws, (iii) is liable for any off-site disposal or contamination
pursuant to any Environmental Laws, or (iv) is subject to any claim relating to
any Environmental Laws; in each case, which violation, contamination, liability
or claim has had or would reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect; and, to the Company’s Knowledge, there is
no pending or threatened investigation that might lead to such a claim.
 
(m) Litigation.  There is no Action which (i) adversely affects or challenges
the legality, validity or enforceability of any of the Transaction Documents or
the issuance of the Shares or (ii) except as disclosed in the SEC Reports, is
reasonably likely to have a Material Adverse Effect, individually or in the
aggregate, if there were an unfavorable decision. Neither the Company nor any
Subsidiary, nor any director or officer thereof, is or has been the subject of
any Action involving a claim of violation of or liability under federal or state
securities laws or a claim of breach of fiduciary duty.  There has not been, and
to the Company’s Knowledge there is not pending or contemplated, any
investigation by the Commission involving the Company or any current or former
director or officer of the Company.  The Commission has not issued any stop
order or other order suspending the effectiveness of any registration statement
filed by the Company or any of its Subsidiaries under the Exchange Act or the
Securities Act.  There are no outstanding orders, judgments, injunctions, awards
or decrees of any court, arbitrator or governmental or regulatory body against
the Company or any executive officers or directors of the Company in their
capacities as such, which individually or in the aggregate, would reasonably be
expected to have a Material Adverse Effect.
 
(n) Employment Matters.  No labor dispute exists or, to the Company’s Knowledge,
is imminent with respect to any of the employees of the Company or any
Subsidiary which would have or reasonably be expected to have a Material Adverse
Effect. None of the Company’s or Subsidiaries’ employees is a member of a union
that relates to such employee’s relationship with the Company or Subsidiary, and
neither the Company nor any of its Subsidiaries is a party to a collective
bargaining agreement, and the Company and each Subsidiary believes that its
relationship with its employees is good.  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.  The Company is in compliance with all U.S.
federal, state, local and foreign laws and regulations relating to employment
and employment practices, terms and conditions of employment and wages and
hours, except where the failure to be in compliance would not have or reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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(o) Compliance.  Neither the Company nor any of its Subsidiaries (i) is in
default under or in violation of (and no event has occurred that has not been
waived that, with notice or lapse of time or both, would result in a default by
the Company or any of its Subsidiaries under), nor has the Company or any of its
Subsidiaries received written notice of a claim that it is in default under or
that it is in violation of, any Material Contract (whether or not such default
or violation has been waived), (ii) is in violation of any order of any court,
arbitrator or governmental body having jurisdiction over the Company, its
Subsidiaries or their respective properties or assets, or (iii) is in violation
of, or in receipt of written notice that it is in violation of, any statute,
rule, regulation, policy or guideline or order of any governmental authority,
self-regulatory organization (including the Principal Trading Market) applicable
to the Company or any of its Subsidiaries, or which would have the effect of
revoking or limiting FDIC deposit insurance, except in each case set forth in
(i), (ii) and (iii) of this paragraph as would not have or reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
 
(p) Regulatory Permits.  The Company and each of its Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their
respective businesses as currently conducted and as described in the SEC
Reports, except where the failure to possess such certificates, authorizations
or permits, individually or in the aggregate, has not and would not reasonably
be expected to have, individually or in the aggregate, a Material Adverse Effect
(“Material Permits”), and (i) neither the Company nor any of its Subsidiaries
has received any notice in writing of proceedings relating to the revocation or
material adverse modification of any such Material Permits and (ii) the Company
is unaware of any facts or circumstances that would give rise to the revocation
or material adverse modification of any Material Permits.
 
(q) Title to Assets.  The Company and its Subsidiaries have good and marketable
title to all real property and tangible personal property owned by them which is
material to the business of the Company and its Subsidiaries, taken as a whole,
in each case free and clear of all Liens except such as do not materially affect
the value of such property or do not interfere with the use made and proposed to
be made of such property by the Company and any of its Subsidiaries. Any real
property and facilities held under lease by the Company and any of its
Subsidiaries are held by them under valid, subsisting and enforceable leases
with such exceptions as are not material and do not interfere with the use made
and proposed to be made of such property and facilities by the Company and its
Subsidiaries.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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(r) Patents and Trademarks.  The Company and its Subsidiaries own, possess,
license or have other rights to use all foreign and domestic patents, patent
applications, trade and service marks, trade and service mark registrations,
trade names, copyrights, inventions, trade secrets, technology, Internet domain
names, know-how and other intellectual property (collectively, the “Intellectual
Property”) necessary for the conduct of their respective businesses as currently
conducted or as proposed to be conducted as disclosed in the SEC Reports except
where the failure to own, possess, license or have such rights would not have or
reasonably be expected to have a Material Adverse Effect.  Except as set forth
in the SEC Reports and except where such violations or infringements would not
have or reasonably be expected to have, either individually or in the aggregate,
a Material Adverse Effect, (a) there are no rights of third parties to any such
Intellectual Property; (b) there is no infringement by third parties of any such
Intellectual Property; (c) there is no pending or threatened Proceeding by
others challenging the Company’s and/or its Subsidiaries’ rights in or to any
such Intellectual Property; (d) there is no pending or threatened Proceeding by
others challenging the validity or scope of any such Intellectual Property; and
(e) there is no pending or threatened Proceeding by others that the Company
and/or any Subsidiary infringes or otherwise violates any patent, trademark,
service mark, trade name, copyright, invention, trade secret, technology,
Internet domain name, know-how or other proprietary rights of others.
 
(s) Insurance.  The Company and each of the Subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and in such
amounts as the Company believes to be prudent and customary in the businesses
and locations in which and where the Company and the Subsidiaries are
engaged.  All premiums due and payable under all such policies and bonds have
been timely paid, and the Company and its Subsidiaries are in material
compliance with the terms of such policies and bonds.  Neither the Company nor
any of its Subsidiaries has received any notice of cancellation of any such
insurance, nor, to the Company’s Knowledge, will it or any Subsidiary be unable
to renew their respective existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be necessary
to continue its business at a cost that would be materially higher than their
existing insurance coverage.
 
(t) Transactions With Affiliates and Employees.  Except as set forth in the SEC
Reports and other than the grant of stock options or other equity awards that
are not individually or in the aggregate material in amount, none of the
officers or directors of the Company and, to the Company’s Knowledge, none of
the employees of the Company, is presently a party to any transaction with the
Company or to a presently contemplated 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.
 
(u) Sarbanes-Oxley; Disclosure Controls.  The Company is in compliance in all
material respects with all of the provisions of the Sarbanes-Oxley Act of 2002
which are applicable to it. The Company maintains disclosure controls and
procedures (as such term is defined in Rule 13a-15(e) and 15d-15(e) under the
Exchange Act), and such disclosure controls and procedures are effective.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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(v) Certain Fees.  No Person will have, as a result of the transactions
contemplated by this Agreement, any valid right, interest or claim against or
upon the Company or a Purchaser for any commission, fee or other compensation
pursuant to any agreement, arrangement or understanding entered into by or on
behalf of the Company, other than the Placement Agent with respect to the offer
and sale of the Shares (which placement agent fees are being paid by the Company
and are set forth on Schedule 3.1(v)). The Company shall indemnify, pay, and
hold each Purchaser harmless against, any liability, loss or expense (including,
without limitation, attorneys’ fees and out-of-pocket expenses) arising in
connection with any such right, interest or claim.
 
(w) Private Placement.  Assuming the accuracy of the Purchasers’ representations
and warranties set forth in Section 3.2 of this Agreement and the accuracy of
the information disclosed in the Certificates of Private Placement and
Accredited Investor Status, no registration under the Securities Act is required
for the offer and sale of the Shares by the Company to the Purchasers under the
Agreement.  The issuance and sale of the Shares hereunder does not contravene
the rules and regulations of the Principal Trading Market.
 
(x) No Integrated Offering.  Assuming the accuracy of the Purchasers’
representations and warranties set forth in Section 3.2, none of the Company,
its Subsidiaries nor, to the Company’s Knowledge, any of its Affiliates or any
Person acting on its behalf has, directly or indirectly, at any time within the
past six months, made any offers or sales of any Company security or solicited
any offers to buy any security under circumstances that would (i) cause the
exemption from registration under Regulation D to be unavailable in connection
with the offer and sale by the Company of the Shares as contemplated hereby or
(ii) cause the offering of the Shares pursuant to this Agreement to be
integrated with prior offerings by the Company for purposes of the rules and
regulations, including without limitation any shareholder approval provisions,
of any Trading Market on which any of the securities of the Company are listed
or designated.
 
(y) Investment Company.  The Company is not, and immediately after receipt of
payment for the Shares will not be, an “investment company,” an “affiliated
person” of, “promoter” for or “principal underwriter” for, an entity
“controlled” by an “investment company,” within the meaning of the Investment
Company Act of 1940, as amended.
 
(z) Unlawful Payments.  Neither the Company nor any of its Subsidiaries, nor to
the Company’s Knowledge, any directors, officers employees, agents or other
Persons acting at the direction of or on behalf of the Company or any of its
Subsidiaries has, in the course of its actions for, or on behalf of, the Company
or any of its Subsidiaries: (a) directly or indirectly, used any corporate funds
for unlawful contributions, gifts, entertainment or other unlawful expenses
relating to foreign or domestic political activity; (b) made any direct or
indirect unlawful payments to any foreign or domestic governmental officials or
employees or to any foreign or domestic political parties or campaigns from
corporate funds; (c) violated any provision of the Foreign Corrupt Practices Act
of 1977, as amended; or (d) made any other unlawful bribe, rebate, payoff,
influence payment, kickback or other material unlawful payment to any foreign or
domestic government official or employee.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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(aa) Filing and Registration Requirements.  The Company’s Common Stock is not
required to be registered under Section 12(b) or Section 12(g) of the Exchange
Act.  The Company is obligated to file reports with the Commission pursuant to
Section 15(d) of the Exchange Act.  The Company has no plans or intentions to
cease filing reports with the Commission pursuant to Section 15(d) of the
Exchange Act, except to the extent such obligations are suspended as a result of
the obligation to file reports with the Commission pursuant to Section 13 of the
Exchange Act.
 
(bb) Application of Takeover Protections; Rights Agreements.  The Company has
not adopted any stockholder rights plan or similar arrangement relating to
accumulations of beneficial ownership of Common Stock and/or Non-Voting Common
Stock or a change in control of the Company.  The Company and its Board have
taken all action necessary to render inapplicable any control share acquisition,
business combination, poison pill (including any distribution under a rights
agreement) or other similar anti-takeover provision under the Company’s articles
of incorporation or other organizational documents or the laws of the
jurisdiction of its incorporation or otherwise which is or could become
applicable to any Purchaser as a direct consequence of the transactions
contemplated by this Agreement, including, without limitation, the Company’s
issuance of the Shares and any Purchaser’s ownership of the Shares.
 
(cc) Disclosure.  The Company confirms that neither it nor any of its officers
or directors nor any other Person acting on its or their behalf has provided,
and it has not authorized the Placement Agent to provide, any Purchaser or its
respective agents or counsel with any information that it believes constitutes
or could reasonably be expected to constitute material, non-public information
except insofar as the existence, provisions and terms of the Transaction
Documents and the proposed transactions hereunder may constitute such
information, all of which will be disclosed by the Company in the Press Release
as contemplated by Section 4.6 hereof. The Company understands and confirms that
each of the Purchasers will rely on the foregoing representations in effecting
transactions in securities of the Company. No event or circumstance has occurred
or information exists with respect to the Company or any of its Subsidiaries or
its or their business, properties, operations or financial conditions, which,
under applicable law, rule or regulation, requires public disclosure or
announcement by the Company but which has not been so publicly announced or
disclosed, except for the announcement of this Agreement and related
transactions.
 
(dd) 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.
 
(ee) Acknowledgment Regarding Purchase of Shares.  The Company acknowledges and
agrees that each of the Purchasers is acting solely in the capacity of an arm’s
length purchaser with respect to the Transaction Documents and the transactions
contemplated hereby and thereby.  The Company further acknowledges that no
Purchaser is acting as a financial advisor or fiduciary of the Company (or in
any similar capacity) with respect to the Transaction Documents and the
transactions contemplated thereby and any advice given by any Purchaser or any
of their respective representatives or agents in connection with the Transaction
Documents and the transactions contemplated thereby is merely incidental to the
Purchasers’ purchase of the Shares.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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(ff) Absence of Manipulation.  The Company has not, and to the Company’s
Knowledge no one acting on its behalf has, taken, directly or indirectly, any
action designed to cause or to result in the stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale of any
of the Shares.
 
(gg) OFAC.  Neither the Company nor any Subsidiary nor, to the Company’s
Knowledge, any director, officer, agent, employee, Affiliate or Person acting on
behalf of the Company or any Subsidiary is currently subject to any U.S.
sanctions administered by the Office of Foreign Assets Control of the U.S.
Treasury Department (“OFAC”); and the Company will not knowingly, directly or
indirectly, use the proceeds of the sale of the Shares, or lend, contribute or
otherwise make available such proceeds to any Subsidiary, joint venture partner
or other Person or entity, towards any sales or operations in any country
sanctioned by OFAC or for the purpose of financing the activities of any Person
currently subject to any U.S. sanctions administered by OFAC.
 
(hh) Money Laundering Laws.  The operations of each of the Company and any
Subsidiary are and have been conducted at all times in compliance with the money
laundering statutes of applicable jurisdictions, the rules and regulations
thereunder and any related or similar rules, regulations or guidelines, issued,
administered or enforced by any applicable governmental agency (collectively,
the “Money Laundering Laws”) and to the Company’s Knowledge, no action, suit or
proceeding by or before any court or governmental agency, authority or body or
any arbitrator involving the Company and/or any Subsidiary with respect to the
Money Laundering Laws is pending or threatened.
 
(ii) Compliance with Certain Banking Regulations.  The Company 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: (i) to be deemed not to be in
satisfactory compliance with the Community Reinvestment Act and the regulations
promulgated thereunder or to be assigned a CRA rating by federal or state
banking regulators of lower than “satisfactory”; (ii) to be deemed to be
operating in violation, in any material respect, of the Bank Secrecy Act of 1970
(or otherwise known as the “Currency and Foreign Transactions Reporting Act”),
the USA Patriot Act (or otherwise known as “Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001”), any order issued with respect to anti-money laundering by OFAC or any
other anti-money laundering statute, rule or regulation; or (iii) to be deemed
not to be in satisfactory compliance, in any material respect, with all
applicable privacy of customer information requirements contained in any federal
and state privacy laws and regulations as well as the provisions of all
information security programs adopted by the Bank.
 
(jj) No Additional Agreements.  Except with respect to closing mechanics, the
Company has no other agreements or understandings (including, without
limitation, side letters) with any Purchaser to purchase Shares on terms other
than as set forth herein.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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(kk) Reports, Registrations and Statements.  Since January 1, 2011, the Company
and each Subsidiary have filed all material reports, registrations and
statements, together with any required amendments thereto, that it was required
to file with the Bank Regulatory Authorities and any other applicable federal or
state securities or banking authorities, including, without limitation, all
financial statements and financial information required to be filed by it under
the Federal Deposit Insurance Act and the BHC Act. All such reports and
statements filed with any such regulatory body or authority are collectively
referred to herein as the “Company Reports.” All such Company Reports were filed
on a timely basis or the Company of the applicable Subsidiary, as applicable,
received a valid extension of such time of filing and has filed any such Company
Reports prior to the expiration of any such extension.  As of their respective
dates, the Company Reports complied in all material respects with all the rules
and regulations promulgated by the Bank Regulatory Authorities and any other
applicable foreign, federal or state securities or banking authorities, as the
case may be.
 
(ll) Bank Regulatory Capitalization.  As of June 30, 2012, the Bank met or
exceeded the standards necessary to be considered “well capitalized” under the
FDIC’s regulatory framework for prompt corrective action.
 
(mm) Agreements with Regulatory Agencies; Fiduciary Obligations.  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 December 31, 2010, has adopted any board resolutions at
the request of, any governmental entity that currently restricts in any material
respect the conduct of its business or that in any material manner 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 December 31, 2010 by any governmental entity that
it is considering issuing, initiating, ordering, or requesting any such
Regulatory Agreement.
 
Each of the Company and each Subsidiary has 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.  None of the
Company, any Subsidiary or any director, officer or employee of the Company or
any Subsidiary has 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 and accurately reflect the assets of such fiduciary
account.
 
(nn) No General Solicitation or General Advertising.  Neither the Company nor
any Person acting on its behalf has engaged or will engage in any form of
general solicitation or general advertising (within the meaning of Regulation D)
in connection with any offer or sale of the Shares.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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(oo) Mortgage Banking Business.  Except as has not had and would not reasonably
be expected to have a Material Adverse Effect:
 
(i) The Company and each of its Subsidiaries has complied with, and all
documentation in connection with the origination, processing, underwriting and
credit approval of any mortgage loan originated, purchased or serviced by the
Company or any of its Subsidiaries satisfied, (A) all applicable federal, state
and local laws, rules and regulations with respect to the origination, insuring,
purchase, sale, pooling, servicing, subservicing, or filing of claims in
connection with mortgage 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, (B) the responsibilities and
obligations relating to mortgage loans set forth in any agreement between the
Company or any of its Subsidiaries and any Agency, Loan Investor or Insurer, (C)
the applicable rules, regulations, guidelines, handbooks and other requirements
of any Agency, Loan Investor or Insurer and (D) the terms and provisions of any
mortgage or other collateral documents and other loan documents with respect to
each mortgage loan; and
 
(ii) No Agency, Loan Investor or Insurer has (A) claimed in writing that the
Company or any of its Subsidiaries has violated or has not complied with the
applicable underwriting standards with respect to mortgage loans sold by the
Company or any of its Subsidiaries to a Loan Investor or Agency, or with respect
to any sale of mortgage servicing rights to a Loan Investor, (B) imposed in
writing restrictions on the activities (including commitment authority) of the
Company or any of its Subsidiaries or (C) indicated in writing to the Company or
any of its Subsidiaries that it has terminated or intends to terminate its
relationship with the Company or any of its Subsidiaries for poor performance,
poor loan quality or concern with respect to the Company’s or any of its
Subsidiaries’ compliance with laws,
 
For purposes of this Section 3.1(oo):  (A) “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 (i) determine
any investment, origination, lending or servicing requirements with regard to
mortgage loans originated, purchased or serviced by the Company or any of its
Subsidiaries or (ii) originate, purchase, or service mortgage loans, or
otherwise promote mortgage lending, including state and local housing finance
authorities; (B) “Loan Investor” means any person (including an Agency) having a
beneficial interest in any mortgage loan originated, purchased or serviced by
the Company or any of its Subsidiaries or a security backed by or representing
an interest in any such mortgage loan; and (C) “Insurer” means a person who
insures or guarantees for the benefit of the mortgagee all or any portion of the
risk of loss upon borrower default on any of the mortgage loans originated,
purchased or serviced by the Company or any of its Subsidiaries, 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 mortgage loans or the related collateral.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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(pp) Risk Management Instruments.  Except as has not had or would not reasonably
be expected to have a Material Adverse Effect, since January 1, 2011, all
material 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 Company Subsidiaries, were entered into (1) only
in the ordinary course of business, (2) in accordance with prudent practices and
in all material respects with all applicable laws, rules, regulations and
regulatory policies and (3) with counterparties believed 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 Company Subsidiaries,
enforceable in accordance with its terms.  Neither the Company nor the Company
Subsidiaries, nor, to the Company’s Knowledge, any other party thereto, is in
breach of any of its material obligations under any such agreement or
arrangement.
 
(qq) ERISA.  The Company is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income Security Act
of 1974, as amended, including the regulations and published interpretations
thereunder (herein called “ERISA”); no “reportable event” (as defined in ERISA)
has occurred with respect to any “pension plan” (as defined in ERISA) for which
the Company would have any liability; the Company has not incurred and does not
expect to incur liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any “pension plan”; or (ii) Sections 412 or
4971 of the Internal Revenue Code of 1986, as amended, including the regulations
and published interpretations thereunder (the “Code”); and each “Pension Plan”
for which the Company would have liability that is intended to be qualified
under Section 401(a) of the Code is so qualified in all material respects and
nothing has occurred, whether by action or by failure to act, which would cause
the loss of such qualification.
 
(rr) Shell Company Status.  The Company is not, and has never been, an issuer
identified in Rule 144(i)(1).
 
(ss) Nonperforming Assets.  To the Company’s Knowledge, since the date of the
latest audited financial statements included within the SEC Reports, except as
disclosed in subsequent SEC Reports filed prior to the date hereof, the Company
believes that the Bank will be able to fully and timely collect substantially
all interest, principal or other payments when due under its loans, leases and
other assets that are not classified as nonperforming and such belief is
reasonable under all the facts and circumstances known to the Company and Bank,
and the Company believes that the amount of reserves and allowances for loan and
lease losses and other nonperforming assets established on the Company’s and
Bank’s financial statements is adequate and such belief is reasonable under all
the facts and circumstances known to the Company and Bank.
 
(tt) Change in Control.  The issuance of the Shares to the Purchasers as
contemplated by this Agreement will not trigger any rights under any “change of
control” provision in any of the agreements to which the Company or any of its
Subsidiaries is a party, including any employment, “change in control,”
severance or other compensatory agreements and any benefit plan, which results
in payments to the counterparty or the acceleration of vesting of benefits.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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(uu) Common Control.  The Company is not and, after giving effect to the
offering and sale of the Shares, will not be under the control (as defined in
the BHC Act and the Federal Reserve’s Regulation Y (12 CFR Part 225) (“BHC Act
Control”) of any company (as defined in the BHC Act and the Federal Reserve’s
Regulation Y).  The Company is not in BHC Act Control of any federally insured
depository institution other than the Bank.  The Bank is not under the BHC Act
Control of any company (as defined in the BHC Act and the Federal Reserve’s
Regulation Y) other than Company.  Neither the Company nor the Bank controls, in
the aggregate, more than five percent of the outstanding voting class, directly
or indirectly, of any federally insured depository institution.  The Bank is not
subject to the liability of any commonly controlled depository institution
pursuant to Section 5(e) of the Federal Deposit Insurance Act (12 U.S.C. §
1815(e)).
 
(vv) Registration Eligibility.  The Company is eligible to register the resale
of the Shares by the Purchasers using Form S-3 promulgated under the Securities
Act.
 
3.2 Representations and Warranties of the Purchasers.  Each Purchaser hereby,
for itself and for no other Purchaser, represents and warrants as of the date
hereof and as of the Closing Date to the Company and the Placement Agent as
follows:
 
(a) Organization; Authority.  If such Purchaser is an entity, it is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization with the requisite corporate, partnership,
limited liability company or other power and authority to enter into and to
consummate the transactions contemplated by the applicable Transaction Documents
and otherwise to carry out its obligations hereunder and thereunder. If such
Purchaser is an entity, the execution and delivery of this Agreement and
performance by such Purchaser of the transactions contemplated by this Agreement
have been duly authorized by all necessary corporate or, if such Purchaser is
not a corporation, such partnership, limited liability company or other
applicable like action, on the part of such Purchaser. If such Purchaser is an
entity, each of this Agreement and the Registration Rights Agreement has been
duly executed by such Purchaser, and when delivered by such Purchaser in
accordance with the terms hereof, will constitute the valid and legally binding
obligation of such Purchaser, enforceable against it in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws relating to,
or affecting generally the enforcement of, creditors’ rights and remedies or by
other equitable principles of general application.
 
(b) No Conflicts.  The execution, delivery and performance by such Purchaser of
this Agreement and the Registration Rights Agreement and the consummation by
such Purchaser of the transactions contemplated hereby and thereby will not
(i) result in a violation of the organizational documents of such Purchaser (if
such Purchaser is an entity), (ii) conflict with, or constitute a default (or an
event which with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which such Purchaser
is a party, or (iii) result in a violation of any law, rule, regulation, order,
judgment or decree (including federal and state securities laws) applicable to
such Purchaser, except in the case of clauses (ii) and (iii) above, for such
conflicts, defaults, rights or violations which would not, individually or in
the aggregate, reasonably be expected to have a material adverse effect on the
ability of such Purchaser to perform its obligations the Purchase Agreement and
the Registration Rights Agreement.  Other than any passivity and
anti-association commitments that the Federal Reserve may require such Purchaser
to deliver to the Federal Reserve in connection with Purchaser’s purchase
hereunder, and assuming the accuracy of the representations and warranties of
the Company and the performance of the covenants and agreements of the Company
contained herein, no notice to, registration, declaration or filing with,
exemption or review by, or authorization, order, consent or approval of, any
governmental entity is necessary for the consummation by Purchaser of the
transactions contemplated by this Agreement.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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(c) Investment Intent.  Such Purchaser understands that the Shares are
“restricted securities” and have not been registered under the Securities Act or
any applicable state securities law and is acquiring the Shares as principal for
its own account and not with a view to, or for distributing or reselling such
Shares or any part thereof in violation of the Securities Act or any applicable
state securities laws, provided, however, that by making the representations
herein, such Purchaser does not agree to hold any of the Shares for any minimum
period of time and reserves the right at all times to sell or otherwise dispose
of all or any part of such Shares pursuant to an effective registration
statement under the Securities Act or under an exemption from such registration
and in compliance with applicable federal and state securities laws.
Purchaser(s) understands that the Shares may not be resold unless they are
registered under the Securities Act or an exemption from registration is
available.  Purchaser(s) further understands that on May 8, 2012, the Company
decided to postpone the public offering contemplated in its previously filed
registration statement on Form S-1 (File No. 333-180392) and filed a formal
withdrawal of such registration statement with the SEC on such date.  Such
Purchaser is acquiring the Shares hereunder in the ordinary course of its
business. Such Purchaser does not presently have any agreement, plan or
understanding, directly or indirectly, with any Person to distribute or effect
any distribution of any of the Shares to or through any person or entity.
 
(d) Purchaser Status.  At the time such Purchaser was offered the Shares, it
was, and at the date hereof it is, an “accredited investor” as defined in Rule
501(a) under the Securities Act.
 
(e) General Solicitation.  Such Purchaser is not purchasing the Shares as a
result of any advertisement, article, notice or other communication regarding
the Shares published in any newspaper, magazine or similar media or broadcast
over television or radio or presented at any seminar or any other general
advertisement.  The offer to purchase the Shares was directly communicated to
such Purchaser by the Company or the Placement Agent.
 
(f) Experience of Such Purchaser.  Such Purchaser, either alone or together with
its representatives, has such knowledge, sophistication and experience in
business and financial matters so as to be capable of evaluating the merits and
risks of the prospective investment in the Shares, and has so evaluated the
merits and risks of such investment. Such Purchaser is able to bear the economic
risk of an investment in the Shares and, at the present time, is able to afford
a complete loss of such investment.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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(g) Access to Information.  Such Purchaser acknowledges that it has been
afforded (i) the opportunity to ask such questions as it has deemed necessary
of, and to receive answers from, representatives of the Company concerning the
terms and conditions of the offering of the Shares and the merits and risks of
investing in the Shares; (ii) access to information about the Company and the
Subsidiaries and their respective financial condition, results of operations,
business, properties, management and prospects sufficient to enable it to
evaluate its investment; and (iii) the opportunity to obtain such additional
information that the Company possesses or can acquire without unreasonable
effort or expense that is necessary to make an informed investment decision with
respect to the investment. Neither such inquiries nor any other investigation
conducted by or on behalf of such Purchaser or its representatives or counsel
shall modify, amend or affect such Purchaser’s right to rely on the truth,
accuracy and completeness of the Disclosure Materials and the Company’s
representations and warranties contained in the Transaction Documents. Such
Purchaser has sought such accounting, legal and tax advice and conducted and
completed such independent due diligence as it has considered necessary to make
an informed decision with respect to its acquisition of the Shares.
 
(h) Brokers and Finders.  Other than the Placement Agent with respect to the
Company (which fees are to be paid by the Company), no Person will have, as a
result of the transactions contemplated by this Agreement, any valid right,
interest or claim against or upon the Company or any Purchaser for any
commission, fee or other compensation pursuant to any agreement, arrangement or
understanding entered into by or on behalf of the Purchaser.
 
(i) Independent Investment Decision.  Such Purchaser has independently evaluated
the merits of its decision to purchase Shares pursuant to the Transaction
Documents, and such Purchaser confirms that it has not relied on the advice of
any other Purchaser’s business and/or legal counsel in making such decision.
Such Purchaser understands that 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 Shares constitutes legal, tax or investment advice. 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 Shares. Such Purchaser understands that (i) the Placement Agent
has acted solely as placement agent in connection with the transactions
contemplated by the Transaction Documents (the “Transactions”) and is not acting
as an underwriter or in any other capacity and is not and shall not be construed
as a fiduciary for such Purchaser, the Company or any other person or entity in
connection with the Transactions; and (ii) the Placement Agent has not made and
will not make any representation or warranty to such Purchaser, whether express
or implied, of any kind or character and has not provided any advice or
recommendation in connection with the Transactions.
 
(j) Reliance on Exemptions.  Such Purchaser understands that the Shares being
offered and sold to it in reliance on specific exemptions from the registration
requirements of U.S. federal and state securities laws and that the Company is
relying in part upon the truth and accuracy of, and such Purchaser’s compliance
with, the representations, warranties, agreements, acknowledgements and
understandings of such Purchaser set forth herein and the accuracy of the
information disclosed in the Certificates of Private Placement and Accredited
Investor Status in order to determine the availability of such exemptions and
the eligibility of such Purchaser to acquire the Shares.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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(k) No Governmental Review.  Such Purchaser understands that no U.S. federal or
state agency or any other government or governmental agency has passed on or
made any recommendation or endorsement of the Shares or the fairness or
suitability of the investment in the Shares nor have such authorities passed
upon or endorsed the merits of the offering of the Shares.
 
(l) Residency.  Such Purchaser’s residence (if an individual) or office in which
its investment decision with respect to the Shares was made (if an entity) are
located at the address immediately below such Purchaser’s name on its signature
page hereto.
 
3.3 The Company and each of the Purchasers acknowledge and agree that no party
to this Agreement has made or makes any representations or warranties with
respect to the transactions contemplated hereby other than those specifically
set forth in this Article III and the Transaction Documents.
 
ARTICLE IV
OTHER AGREEMENTS OF THE PARTIES
 
4.1 Transfer Restrictions.
 
(a) Compliance with Laws.  Notwithstanding any other provision of this Article
IV, each Purchaser covenants that the Shares may be disposed of only pursuant to
an effective registration statement under, and in compliance with the
requirements of, the Securities Act, or pursuant to an available exemption from,
or in a transaction not subject to, the registration requirements of the
Securities Act, and in compliance with any applicable state, federal or foreign
securities laws.  In connection with any transfer of the Shares other than (i)
pursuant to an effective registration statement, (ii) to the Company or (iii)
pursuant to Rule 144 (provided that the transferor provides the Company with
reasonable assurances (in the form of a seller representation letter and, if
applicable, a broker representation letter) that such securities may be sold
pursuant to such rule), the Company may require the transferor thereof to
provide to the Company and the Transfer Agent, at the transferor’s expense, an
opinion of counsel selected by the transferor and reasonably acceptable to the
Company and the Transfer Agent, the form and substance of which opinion shall be
reasonably satisfactory to the Company and the Transfer Agent, to the effect
that such transfer does not require registration of such Shares under the
Securities Act.  As a condition of transfer (other than pursuant to clauses (i),
(ii) or (iii) of the preceding sentence), any such transferee shall agree in
writing to be bound by the terms of this Agreement and shall have the rights of
a Purchaser under this Agreement and the Registration Rights Agreement with
respect to such transferred Shares.
 
(b) Legends.  Certificates evidencing the Shares shall bear any legend as
required by the “blue sky” laws of any state and a restrictive legend in
substantially the following form, until such time as they are not required under
Section 4.1(c) or applicable law:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS.  THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE
ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OR (B) AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED
BY A LEGAL OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY AND ITS
TRANSFER AGENT OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT (PROVIDED
THAT THE TRANSFEROR PROVIDES THE COMPANY WITH REASONABLE ASSURANCES (IN THE FORM
OF A SELLER REPRESENTATION LETTER AND, IF APPLICABLE, A BROKER REPRESENTATION
LETTER) THAT THE SECURITIES MAY BE SOLD PURSUANT TO SUCH RULE).  NO
REPRESENTATION IS MADE BY THE ISSUER AS TO THE AVAILABILITY OF THE EXEMPTION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT FOR RESALES OF THESE SECURITIES.
 
(c) Removal of Legends.  The restrictive legend set forth in Section 4.1(b)
above shall be removed and the Company shall issue a certificate without such
restrictive legend or any other restrictive legend to the holder of the
applicable Shares upon which it is stamped or issue to such holder by electronic
delivery at the applicable balance account at DTC, if (i) such Shares are
registered for resale under the Securities Act, (ii) such Shares are sold or
transferred pursuant to Rule 144 (if the transferor provides the Company with
reasonable assurances (in the form of a seller representation letter, and, if
applicable, a broker representation letter) that the Shares may be sold pursuant
to such rule), or (iii) such Shares are eligible for sale under Rule 144,
without the requirement for the Company to be in compliance with the current
public information required under Rule 144(c)(1) (or Rule 144(i)(2), if
applicable) as to such securities and without volume or manner-of-sale
restrictions.  Following the earlier of (i) the Effective Date or (ii) Rule 144
becoming available for the resale of Shares, without the requirement for the
Company to be in compliance with the current public information required under
Rule 144(c)(1) (or Rule 144(i)(2), if applicable) as to the Shares and without
volume or manner-of-sale restrictions, the Company shall instruct the Transfer
Agent to remove the legend from the Shares and shall cause its counsel to issue
any legend removal opinion required by the Transfer Agent.  Any fees (with
respect to the Transfer Agent, Company counsel or otherwise) associated with the
issuance of such opinion or the removal of such legend shall be borne by the
Company.  If a legend is no longer required pursuant to the foregoing, the
Company will no later than five (5) Trading Days following the delivery by a
Purchaser to the Transfer Agent (with notice to the Company) of a legended
certificate or instrument representing such Shares (endorsed or with stock
powers attached, signatures guaranteed, and otherwise in form necessary to
affect the reissuance and/or transfer) and a representation letter to the extent
required by Section 4.1(a) (such Trading Day, the “Legend Removal Date”),
deliver or cause to be delivered to such Purchaser a certificate or instrument
(as the case may be) representing such Shares that is free from all restrictive
legends.  The Company may not make any notation on its records or give
instructions to the Transfer Agent that enlarge the restrictions on transfer set
forth in this Section 4.1(c).  Certificates for Shares free from all restrictive
legends may be transmitted by the Transfer Agent to the Purchasers by crediting
the account of the Purchaser’s prime broker with DTC as directed by such
Purchaser.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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(d) Acknowledgement.  Each Purchaser hereunder acknowledges its primary
responsibilities under the Securities Act and accordingly will not sell or
otherwise transfer the Shares or any interest therein without complying with the
requirements of the Securities Act. Except as otherwise provided below, while
the Registration Statement remains effective, each Purchaser hereunder may sell
the Shares in accordance with the plan of distribution contained in the
registration statement and if it does so it will comply therewith and with the
related prospectus delivery requirements unless an exemption therefrom is
available or unless the Shares 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 Shares 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, the Purchaser will refrain from selling
such Shares until such time as the 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 Shares pursuant to an available exemption from the registration
requirements of Section 5 of the Securities Act.
 
4.2 Acknowledgment of Dilution.  The Company acknowledges that the issuance of
the Shares may result in dilution of the outstanding shares of Common Stock and
Non-Voting Common Stock.  The Company further acknowledges that its obligations
under the Transaction Documents, including without limitation its obligation to
issue the Shares pursuant to the Transaction Documents, are unconditional and
absolute and not subject to any right of set off, counterclaim, delay or
reduction, regardless of the effect of any such dilution or any claim the
Company may have against any Purchaser and regardless of the dilutive effect
that such issuance may have on the ownership of the other shareholders of the
Company.
 
4.3 Furnishing of Information.  In order to enable the Purchasers to sell the
Shares under Rule 144 of the Securities Act, for a period of one year from the
Closing, the Company shall timely file (or obtain extensions in respect thereof
and file within the applicable grace period) with the Commission all reports
required to be filed pursuant to Section 15(d) or Section 13 of the Exchange
Act.  During such one year period, if the Company is not required to file
reports pursuant to such laws, it will prepare and furnish to the Purchasers and
make publicly available the information described in Rule 144(c)(2), if the
provision of such information will allow resales of the Shares pursuant to Rule
144.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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4.4 Form D and Blue Sky.  The Company agrees to timely file a Form D with
respect to the Shares as required under Regulation D.  The Company, on or before
the Closing Date, shall take such action as the Company shall reasonably
determine is necessary in order to obtain an exemption for or to qualify the
Shares for sale to the Purchasers at the Closing pursuant to this Agreement
under applicable securities or “Blue Sky” laws of the states of the United
States (or to obtain an exemption from such qualification).  The Company shall
make all filings and reports relating to the offer and sale of the Shares
required under applicable securities or “Blue Sky” laws of the states of the
United States following the Closing Date.
 
4.5 No Integration.  The Company shall not, and shall use its commercially
reasonable efforts to ensure that no Affiliate of the Company shall, sell, offer
for sale or solicit offers to buy or otherwise negotiate in respect of any
security (as defined in Section 2 of the Securities Act) that will be integrated
with the offer or sale of the Shares in a manner that would require the
registration under the Securities Act of the sale of the Shares to the
Purchasers, or that will be integrated with the offer or sale of the Shares for
purposes of the rules and regulations of any Trading Market such that it would
require stockholder approval prior to the closing of such other transaction
unless stockholder approval is obtained before the closing of such subsequent
transaction.
 
4.6 Securities Laws Disclosure; Publicity.  The Company shall, by 9:00 a.m., New
York City time, on the [first (1st) Business Day immediately following the]1
date of this Agreement, issue one or more press releases (collectively, the
“Press Release”) reasonably acceptable to the Purchasers disclosing all material
terms of the transactions contemplated hereby and shall file a Current Report on
Form 8-K (Item 7.01) disclosing any other material, nonpublic information that
the Company may have provided any Purchaser at any time prior to the filing of
the Press Release.  On or before 9:00 a.m., New York City time, on the first
(1st) Business Day immediately following the date of this Agreement, the Company
will file a Current Report on Form 8-K with the Commission describing the terms
of the Transaction Documents (and including as exhibits to such Current Report
on Form 8-K the material Transaction Documents (including, without limitation,
this Agreement and the Registration Rights Agreement)). If, following public
disclosure of the transactions contemplated hereby, this Agreement terminates
prior to Closing, the Company shall issue a press release disclosing such
termination by 9:00 a.m., New York City time, on the first Business Day
following the date of such termination.  Notwithstanding the foregoing, the
Company shall not publicly disclose the name of any Purchaser or any Affiliate
or investment adviser of any Purchaser, or include the name of any Purchaser or
any Affiliate or investment adviser of any Purchaser in any press release or in
any filing with the Commission (other than a Registration Statement) or any
regulatory agency or Trading Market, without the prior written consent of such
Purchaser, except (i) as required by the federal securities law in connection
with (A) any registration statement contemplated by the Registration Rights
Agreement and (B) the filing of final Transaction Documents with the Commission
and (ii) to the extent such disclosure is required by law, at the request of the
staff of the Commission or regulatory agency or under Trading Market
regulations, in which case the Company shall provide the Purchasers with prior
written notice of such disclosure permitted under this subclause (ii).  From and
after the issuance of the Press Release, no Purchaser shall be in possession of
any material, non-public information received from the Company, any Subsidiary
or any of their respective officers, directors or employees or the Placement
Agent.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1 To be deleted if signed prior to the open of the market.

 
 
 
 
 
 
 
 
 
 
 
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4.7 Non-Public Information.  Except with the express written consent of such
Purchaser and unless prior thereto such Purchaser shall have executed a written
agreement regarding the confidentiality and use of such information, the Company
shall not, and shall cause each Subsidiary and each of their respective
officers, directors, employees and agents, not to, and each Purchaser shall not
directly solicit the Company, any of its Subsidiaries or any of their respective
officers, directors, employees or agents to provide any Purchaser with any
material, non-public information regarding the Company or any of its
Subsidiaries from and after the filing of the Press Release.
 
4.8 Indemnification.
 
(a) Indemnification of Purchasers.  In addition to the indemnity provided in the
Registration Rights Agreement, the Company will indemnify and hold each
Purchaser and its directors, officers, shareholders, members, partners,
employees, agents and investment advisors (and any other Persons with a
functionally equivalent role of a Person holding such titles notwithstanding a
lack of such title or any other title), each Person who controls such Purchaser
(within the meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act), and the directors, officers, shareholders, agents, members,
partners, employees, agents or investment advisors (and any other Persons with a
functionally equivalent role of a Person holding such titles notwithstanding a
lack of such title or any other title) of such controlling person (each, an
“Indemnified Person”) harmless from any and all losses, liabilities,
obligations, claims, contingencies, damages, costs and expenses, including all
judgments, amounts paid in settlements, court costs and reasonable attorneys’
fees and costs of investigation that any such Indemnified Person may suffer or
incur as a result of (i) any breach of any of the representations, warranties,
covenants or agreements made by the Company in this Agreement or in the other
Transaction Documents or (ii) any action instituted against an Indemnified
Person in any capacity, or any of them or their respective Affiliates, by any
shareholder of the Company or other third party who is not an Affiliate of such
Indemnified Person, with respect to any of the transactions contemplated by this
Agreement.    The Company will not be liable to any Indemnified Person under
this Agreement to the extent, but only to the extent that a loss, claim, damage
or liability is directly attributable to any Indemnified Person’s breach of any
of the representations, warranties, covenants or agreements made by such
Indemnified Person in this Agreement or in the other Transaction Documents.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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(b) Conduct of Indemnification Proceedings.  Promptly after receipt by any
Indemnified Person of notice of any demand, claim or circumstances which would
or might give rise to a claim or the commencement of any Proceeding in respect
of which indemnity may be sought pursuant to Section 4.8(a), such Indemnified
Person shall promptly notify the Company in writing and the Company shall assume
the defense thereof, including the employment of counsel reasonably satisfactory
to such Indemnified Person, and shall assume the payment of all fees and
expenses; provided, however, that the failure of any Indemnified Person so to
notify the Company shall not relieve the Company of its obligations hereunder
except to the extent that the Company is actually and materially and adversely
prejudiced by such failure to notify (as determined by a court of competent
jurisdiction, which determination is not subject to appeal or further review).
In any such Proceeding, any Indemnified Person shall have the right to retain
its own counsel, but the fees and expenses of such counsel shall be at the
expense of such Indemnified Person unless: (i) the Company and the Indemnified
Person shall have mutually agreed to the retention of such counsel; (ii) the
Company shall have failed promptly to assume the defense of such Proceeding and
to employ counsel reasonably satisfactory to such Indemnified Person in such
Proceeding; or (iii) in the reasonable judgment of counsel to such Indemnified
Person, representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. The
Company shall not be liable for any settlement of any Proceeding effected
without its written consent, which consent shall not be unreasonably withheld,
delayed or conditioned. Without the prior written consent of the Indemnified
Person, the Company shall not effect any settlement of any pending or threatened
Proceeding in respect of which any Indemnified Person is or could have been a
party and indemnity could have been sought hereunder by such Indemnified Person,
unless such settlement includes an unconditional release of such Indemnified
Person from all liability arising out of such Proceeding.
 
4.9 Listing of Common Stock.  The Company agrees to list or include all Shares
constituting Common Stock on the New York Stock Exchange or the NASDAQ Global
Market as soon as reasonably practical after the Company files its annual report
on Form 10-K for the year ending December 31, 2012 with the Commission (but in
no event later than July 31, 2013).  Until such listing, the Company will use
its reasonable best efforts to maintain the listing of the Common Stock on the
OTC Bulletin Board.
 
4.10 Use of Proceeds.  The Company intends to use the net proceeds from the sale
of the Shares hereunder for the purpose of increasing its capital and for
general corporate purposes, including enabling the Bank to continue to meet its
regulatory capital requirements.
 
4.11 Limitation on Beneficial Ownership.  No Purchaser (and its Affiliates or
any other Persons with which it is acting in concert) will be entitled to
purchase (i) a number of Shares of Common Stock that would result in such
Purchaser becoming, directly or indirectly, together with its Affiliates, the
beneficial owner (as determined under Rule 13d-3 under the Exchange Act) of more
than 9.9% of the number of shares of Common Stock issued and outstanding (based
on the number of outstanding shares as of the Closing Date) or (ii) a number of
Shares that would result in such Purchaser becoming, directly or indirectly,
together with its Affiliates, the beneficial owner (as determined under Rule
13d-3 under the Exchange Act) of more than 19.0% of the aggregate number of
shares of Common Stock and Non-Voting Common Stock issued and outstanding (based
on the number of outstanding shares as of the Closing Date).
 
4.12 Certain Transactions.  The Company will not merge or consolidate into, or
sell, transfer or lease all or substantially all of its property or assets to,
any other party unless the successor, transferee or lessee party, as the case
may be (if not the Company), expressly assumes the due and punctual performance
and observance of each and every covenant and condition of this Agreement to be
performed and observed by the Company.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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4.13 No Change of Control.  The Company shall use reasonable best efforts to
obtain all necessary irrevocable waivers, adopt any required amendments and make
all appropriate determinations so that the issuance of the Shares to the
Purchasers will not trigger a “change of control” or other similar provision in
any of the material agreements to which the Company or any of its Subsidiaries
is a party, including without limitation any employment, “change in control,”
severance or other agreements and any benefit plan, which results in payments to
the counterparty or the acceleration of vesting of benefits.
 
4.14 No Additional Issuances.  Between the date of this Agreement and the
Closing Date, except for the issuance of shares of Common Stock issuable as of
the date hereof as set forth in Schedule 3.1(g) and the Shares being issued
pursuant to this Agreement, the Company shall not issue or agree to issue any
additional shares of Common Stock or Non-Voting Common Stock or other securities
which provide the holder thereof the right to convert such securities into, or
acquire, shares of Common Stock or Non-Voting Common Stock.
 
4.15 Conduct of Business.  From the date hereof until the earlier of the Closing
Date or the termination of this Agreement in accordance with its terms, except
as contemplated by this Agreement, the Company will, and will cause its
Subsidiaries to, operate their business in the ordinary course consistent with
past practice, preserve intact the current business organization of the Company,
use commercially reasonable efforts to retain the services of their employees,
consultants and agents, preserve the current relationships of the Company and
its Subsidiaries with material customers and other Persons with whom the Company
and its Subsidiaries have and intend to maintain significant relations, maintain
all of its operating assets in their current condition (normal wear and tear
excepted) and will not take or omit to take any action that would constitute a
breach of Section 3.1(k).
 
4.16 Avoidance of Control.  Notwithstanding anything to the contrary in this
Agreement, neither the Company nor any Subsidiary shall take any action
(including, without limitation, any redemption, repurchase, rescission or
recapitalization of Common Stock or Non-Voting Common Stock, or securities or
rights, options or warrants to purchase Common Stock or Non-Voting Common Stock,
or securities of any type whatsoever that are, or may become, convertible into
or exchangeable into or exercisable for Common Stock or Non-Voting Common Stock
in each case, where each Purchaser is not given the right to participate in such
redemption, repurchase, rescission or recapitalization to the extent of such
Purchaser’s pro rata proportion), that would cause (a) such Purchaser’s equity
of the Company (together with equity owned by such Purchaser’s Affiliates (as
such term is used under the BHC Act)) to exceed 33.3% of the Company’s total
equity (provided that there is no ownership or control in excess of 9.9% of any
class of voting securities of the Company by such Purchaser, together with such
Purchaser’s Affiliates) or (b) such Purchaser’s ownership of any class of voting
securities of the Company (together with the ownership by such Purchaser’s
Affiliates (as such term is used under the BHC Act) of voting securities of the
Company) to exceed 9.9%, in each case without the prior written consent of such
Purchaser, or to increase to an amount that would constitute “control” under the
BHC Act, the CIBC Act or any rules or regulations promulgated thereunder (or any
successor provisions) or otherwise cause such Purchaser to “control” the Company
under and for purposes of the BHC Act, the CIBC Act or any rules or regulations
promulgated thereunder (or any successor provisions).  Notwithstanding anything
to the contrary in this Agreement, no Purchaser (together with its Affiliates
(as such term is used under the BHC Act)) shall have the ability to purchase
more than 33.3% of the Company’s total equity or exercise any voting rights of
any class of securities in excess of 9.9% of the total outstanding voting
securities of the Company. In the event either the Company or a Purchaser
breaches its obligations under this Section 4.16 or believes that it is
reasonably likely to breach such an obligation, it shall promptly notify the
other parties hereto and shall cooperate in good faith with such parties to
modify ownership or make other arrangements or take any other action, in each
case, as is necessary to cure or avoid such breach.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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4.17 Most Favored Nation.  During the period from the date of this Agreement
through the Closing Date, neither the Company nor its Subsidiaries shall enter
into any additional, or modify any existing, agreements with any existing or
future investors in the Company or any of its Subsidiaries that have the effect
of establishing rights or otherwise benefiting such investor in a manner more
favorable in any material respect to such investor than the rights and benefits
established in favor of the Purchasers by this Agreement, unless, in any such
case, the Purchasers have been provided with such rights and benefits.
 
4.18 Mergers, Consolidations, Etc.  The Company’s Board of Directors will not
approve or permit the Company to enter into any merger, consolidation,
reclassification or other transaction (including, without limitation, a
transaction structured as a tender offer) in which the shares of Common Stock
are exchanged for or changed into other stock or securities, cash and/or any
other property (“Consideration”), unless in connection with such transaction
each share of Non-Voting Common Stock will at the same time be similarly
exchanged or changed in an amount per whole share equal to the aggregate amount
of Consideration (payable in kind) that each share of Common Stock would be
entitled to receive as a result of such transaction, provided that, to the
extent that any such exchange or change would either (A) cause such holder,
together with any other Person whose securities would be aggregated with such
holder’s securities for purposes of any bank regulation or law, to either (i)
collectively be deemed to own, control or have the power to vote securities
which (assuming, for this purpose only, full conversion and/or exercise of such
securities by the holder and such other Persons) would represent more than 9.9%
of any class of voting securities of the resulting corporation outstanding at
such time, or (ii) collectively be deemed to own or control securities which
(assuming, for this purpose only, full conversion and/or exercise of such
securities by the holder and such other Persons) would represent more than 19.0%
of the total equity securities of the resulting corporation issued and
outstanding at such time (clauses (i) and (ii), the “Ownership Limitations”), or
(B) require such holder to otherwise seek or obtain regulatory approval,
provision shall be made for such holder to receive either (I) non-voting
securities, to the extent such non-voting securities are authorized and
available under the resulting corporation’s organizational documents and, if
applicable, would obviate the need for regulatory approval, with respect to the
amount of securities which would otherwise exceed the Ownership Limitations or
for which regulatory approval would be required, in which case the Company shall
make appropriate provisions (in form and substance reasonably satisfactory to
the holders of a majority of the Non-Voting Common Stock then outstanding), and
take such actions necessary, to ensure that the rights and benefits of such
non-voting securities shall be substantially the same as the Non-Voting Common
Stock, or (II) to the extent the issuance of such non-voting securities is not
feasible or, if applicable, would not obviate the need for regulatory approval,
cash equal to the value of the Consideration that each share of Common Stock
would be entitled to receive as a result of such transaction with respect to the
amount of securities which would otherwise exceed the Ownership Limitations or
for which regulatory approval would be required.  Subject to the foregoing, in
the event the holders of Common Stock are provided the right to convert or
exchange Common Stock for stock or securities, cash and/or any other property,
then the holders of the Non-Voting Common Stock shall be provided the same right
based upon the number of shares of Common Stock such holders would be entitled
to receive if such shares of Non-Voting Common Stock were converted into, or
exchanged for, an equal number of shares of Common Stock immediately prior to
such offering.  In the event that the Company offers to repurchase shares of
Common Stock from its shareholders generally, the Company shall offer to
repurchase Non-Voting Common Stock pro rata based upon the number of shares of
Common Stock such holders would be entitled to receive if such shares were
converted into, or exchanged for, an equal number of shares of Common Stock
immediately prior to such repurchase.  In the event of any pro rata subscription
offer, rights offer or similar offer to holders of Common Stock, the Company
shall provide the holders of the Non-Voting Common Stock the right to
participate based upon the number of shares of Common Stock such holders would
be entitled to receive if such shares were converted into, or exchanged for, an
equal number of shares of Common Stock immediately prior to such offering;
provided that at the election of such holder, any shares issued with respect to
the Non-Voting Common Stock shall be issued in the form of Non-Voting Common
Stock rather than Common Stock.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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ARTICLE V
CONDITIONS PRECEDENT TO CLOSING
 
5.1 Conditions Precedent to the Obligations of the Purchasers to Purchase
Shares.  The obligation of each Purchaser to acquire Shares at the Closing is
subject to the fulfillment to such Purchaser’s satisfaction, on or prior to the
Closing Date, of each of the following conditions, any of which may be waived by
such Purchaser (as to itself only):
 
(a) Representations and Warranties.  The representations and warranties of the
Company contained herein shall be true and correct as of the date when made and
as of the Closing Date, as though made on and as of such date, except for such
representations and warranties that speak as of a specific date which shall be
true and correct as of such date.
 
(b) Performance.  The Company shall have performed, satisfied and complied in
all material respects with all covenants, agreements and conditions required by
the Transaction Documents to be performed, satisfied or complied with by it at
or prior to the Closing.
 
(c) No Injunction.  No statute, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, promulgated or endorsed
by any court or governmental authority of competent jurisdiction, nor shall
there have been any regulatory communication, that prohibits the consummation of
any of the transactions contemplated by the Transaction Documents.
 
(d) Consents.  The Company shall have obtained in a timely fashion any and all
consents, permits, approvals, registrations and waivers necessary for
consummation of the purchase and sale of the Shares, all of which shall be and
remain so long as necessary in full force and effect.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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(e) No Suspensions of Trading in Common Stock; Listing.  The Common Stock
(i) shall be designated for listing and quotation on the Principal Trading
Market and (ii) shall not have been suspended, as of the Closing Date, by the
Commission or the Principal Trading Market from trading on the Principal Trading
Market nor shall suspension by the Commission or the Principal Trading Market
have been threatened, as of the Closing Date, either (A) in writing by the
Commission or the Principal Trading Market or (B) by falling below the minimum
listing maintenance requirements of the Principal Trading Market.
 
(f) Company Deliverables.  The Company shall have delivered the Company
Deliverables in accordance with Section 2.2(a).
 
(g) Termination.  This Agreement shall not have been terminated as to such
Purchaser in accordance with Section 6.16 herein.
 
(h) Bank Regulatory Issues.  The purchase by such Purchaser of all Shares
subscribed for by such Purchaser hereunder shall not (i) cause such Purchaser or
any of its affiliates to violate any banking regulation, (ii) require such
Purchaser or any of its affiliates to file a prior notice under the CIBC Act, or
otherwise seek prior approval of any banking regulator, (iii) require such
Purchaser or any of its affiliates to become a bank holding company or otherwise
serve as a source of strength for the Company or any Subsidiary , (iv) cause
such Purchaser, together with any other Person whose Company securities would be
aggregated with such Purchaser’s Company securities for purposes of any bank
regulation or law, to collectively be deemed to own, control or have the power
to vote securities which (assuming, for this purpose only, full conversion
and/or exercise of such securities by the Purchaser and such other Persons)
would represent more than 9.9% of any class of voting securities of the Company
outstanding at such time or (v) cause such Purchaser, together with any other
Person whose Company securities would be aggregated with such Purchaser’s
Company securities for purposes of any bank regulation or law, to collectively
be deemed to own or control securities which (assuming, for this purpose only,
full conversion and/or exercise of such securities by the Purchaser and such
other Persons) would represent more than 19.0% of the aggregate number of shares
of Common Stock and Non-Voting Common Stock issued and outstanding (based on the
number of outstanding shares as of the Closing Date).
 
(i) No Burdensome Condition.  Since the date hereof, there shall not be any
action taken, or any law, rule or regulation enacted, entered, enforced or
deemed applicable to the Company or its Subsidiaries, such Purchaser (or its
Affiliates) or the transactions contemplated by this Agreement, by any bank
regulatory authority which imposes any restriction or condition on the Company
or its Subsidiaries or such Purchaser or any of its Affiliates (other than such
restrictions as are described in any passivity or anti-association commitments,
as may be amended from time to time, entered into by such Purchaser) which such
Purchaser determines, in its reasonable good faith judgment, is materially and
unreasonably burdensome on the Company’s business following the Closing or on
such Purchaser (or any of its Affiliates) or would reduce the economic benefits
of the transactions contemplated by this Agreement to such Purchaser to such a
degree that such Purchaser would not have entered into this Agreement had such
condition or restriction been known to it on the date hereof (any such condition
or restriction, a “Burdensome Condition”), and, for the avoidance of doubt, any
requirements to disclose the identities of limited partners, shareholders or
non-managing members of such Purchaser or its Affiliates or its investment
advisors shall be deemed a Burdensome Condition unless otherwise determined by
such Purchaser in its sole discretion.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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(j) Material Adverse Effect.  No Material Adverse Effect shall have occurred
since the date of this Agreement.
 
5.2 Conditions Precedent to the Obligations of the Company to sell Shares.  The
Company’s obligation to sell and issue the Shares to each Purchaser at the
Closing is subject to the fulfillment to the satisfaction of the Company on or
prior to the Closing Date of the following conditions, any of which may be
waived by the Company:
 
(a) Representations and Warranties.  The representations and warranties made by
such Purchaser in Section 3.2 hereof shall be true and correct as of the date
when made, and as of the Closing Date as though made on and as of such date,
except for representations and warranties that speak as of a specific date which
shall be true and correct as of such date.
 
(b) Performance.  Such Purchaser shall have performed, satisfied and complied in
all material respects with all covenants, agreements and conditions required by
the Transaction Documents to be performed, satisfied or complied with by such
Purchaser at or prior to the Closing Date.
 
(c) No Injunction.  No statute, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, promulgated or endorsed
by any court or governmental authority of competent jurisdiction, nor shall
there have been any regulatory communication, that prohibits the consummation of
any of the transactions contemplated by the Transaction Documents.
 
(d) Purchasers Deliverables.  Such Purchaser shall have delivered its Purchaser
Deliverables in accordance with Section 2.2(b).
 
(e) Termination.  This Agreement shall not have been terminated as to such
Purchaser in accordance with Section 6.16 herein.
 
ARTICLE VI
MISCELLANEOUS
 
6.1 Fees and Expenses.  The Company shall pay the reasonable legal fees and
expenses of Greenberg Traurig, LLP, counsel to certain Purchasers, incurred by
such Purchasers in connection with the transactions contemplated by the
Transaction Documents, up to a maximum amount of $30,000, which amount shall be
paid directly by the Company to Greenberg Traurig, LLP at the Closing or paid by
the Company to Greenberg Traurig, LLP upon termination of this Agreement so long
as such termination did not occur as a result of a material breach by such
Purchasers of any of their obligations hereunder (as the case may be).  Except
as set forth above and elsewhere in the Transaction Documents, the parties
hereto shall be responsible for the payment of all expenses incurred by them in
connection with the preparation and negotiation of the Transaction Documents and
the consummation of the transactions contemplated hereby.  The Company shall pay
all amounts owed to the Placement Agent relating to or arising out of the
transactions contemplated hereby.  The Company shall pay all Transfer Agent
fees, stamp taxes and other taxes and duties levied in connection with the sale
and issuance of the Shares to the Purchasers.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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6.2 Entire Agreement.  The Transaction Documents, together with the exhibits and
schedules thereto, contain the entire understanding of the parties with respect
to the subject matter hereof and supersede all prior agreements, understandings,
discussions and representations, oral or written, with respect to such matters,
which the parties acknowledge have been merged into such documents, exhibits and
schedules. At or after the Closing, and without further consideration, the
Company and the Purchasers will execute and deliver to the other such further
documents as may be reasonably requested in order to give practical effect to
the intention of the parties under the Transaction Documents.
 
6.3 Notices.  Any and all notices or other communications or deliveries required
or permitted to be provided hereunder shall be in writing and shall be deemed
given and effective on the earliest of (a) the date of transmission, if such
notice or communication is delivered via facsimile or e-mail (provided the
sender receives a machine-generated confirmation of successful facsimile
transmission or e-mail notification or confirmation of receipt of an e-mail
transmission) at the facsimile number or e-mail address specified in this
Section prior to 5:00 p.m., New York City time, on a Trading Day, (b) the next
Trading Day after the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile number specified in this Section on a
day that is not a Trading Day or later than 5:00 p.m., New York City time, on
any Trading Day, (c) the Trading Day following the date of mailing, if sent by
U.S. nationally recognized overnight courier service with next day delivery
specified, or (d) upon actual receipt by the party to whom such notice is
required to be given. The address for such notices and communications shall be
as follows:
 
If to the Company:
Customers Bancorp, Inc.
Suite 103, 1015 Penn Avenue
Wyomissing, PA 19610
Attention:  Jay S. Sidhu
    Chairman and Chief Executive Officer
Telephone:
Fax:
E-Mail:
 
   
With a copy to:
Stradley Ronon Stevens & Young, LLP
2600 One Commerce Square
Philadelphia, PA 19103
Attention:  Christopher S. Connell, Esq.
Telephone:
Fax:  (215) 564-8120
E-Mail:

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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If to a Purchaser:
To the address set forth under such Purchaser’s name on the signature page
hereof;
   

or such other address as may be designated in writing hereafter, in the same
manner, by such Person.
 
6.4 Amendments; Waivers; No Additional Consideration.  No amendment or waiver of
any provision of this Agreement will be effective with respect to any party
unless made in writing and signed by a duly authorized representative of such
party.  No consideration shall be offered or paid to any Purchaser to amend or
consent to a waiver or modification of any provision of any Transaction Document
unless the same consideration is also offered to all Purchasers who then hold
Shares.
 
6.5 Construction.  The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.  The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any party. This
Agreement shall be construed as if drafted jointly by the parties, and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Agreement or any of the
Transaction Documents.
 
6.6 Successors and Assigns.  The provisions of this Agreement shall inure to the
benefit of and be binding upon the parties and their successors and permitted
assigns. This Agreement, or any rights or obligations hereunder, may not be
assigned by the Company without the prior written consent of the Purchasers. Any
Purchaser may assign its rights hereunder in whole or in part to any Person to
whom such Purchaser assigns or transfers any Shares in compliance with the
Transaction Documents and applicable law, provided such transferee shall agree
in writing to be bound, with respect to the transferred Shares, by the terms and
conditions of this Agreement that apply to the “Purchasers”.
 
6.7 Third-Party Beneficiaries.  This Agreement is intended for the benefit of
the parties hereto and their respective successors and permitted assigns and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person, other than Indemnified Persons; except that each Purchaser acknowledges
that the Placement Agent is a third-party beneficiary entitled to rely on
Section 3.2 of this Agreement and receive the benefits of the representations
and warranties made by, and the responsibilities of, such Purchaser under
Section 3.2 of this Agreement.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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6.8 Governing Law.  All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York, without regard to the principles of conflicts of law thereof. Each party
agrees that all Proceedings concerning the interpretation, enforcement and
defense of the transactions contemplated by this Agreement and any other
Transaction Documents (whether brought against a party hereto or its respective
Affiliates, employees or agents) may be commenced on a non-exclusive basis in
the New York Courts. Each party hereto hereby irrevocably submits to the
non-exclusive jurisdiction of the New York Courts for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein (including with respect to the enforcement of any of
the Transaction Documents), and hereby irrevocably waives, and agrees not to
assert in any Proceeding, any claim that it is not personally subject to the
jurisdiction of any such New York Court, or that such Proceeding has been
commenced in an improper or inconvenient forum. Each party hereto hereby
irrevocably waives personal service of process and consents to process being
served in any such Proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. EACH PARTY HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
 
6.9 Survival.  Subject to applicable statute of limitations, the
representations, warranties, agreements and covenants contained herein shall
survive the Closing and the delivery of the Shares.
 
6.10 Execution.  This Agreement may be executed in two or more counterparts, all
of which when taken together shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that the parties need not sign
the same counterpart. In the event that any signature is delivered by facsimile
transmission, or by e-mail delivery of a “.pdf” format data file, such signature
shall create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) with the same force and effect as if such
facsimile signature page were an original thereof.
 
6.11 Severability.  If any provision of this Agreement is held to be invalid or
unenforceable in any respect, the validity and enforceability of the remaining
terms and provisions of this Agreement shall not in any way be affected or
impaired thereby and the parties will attempt to agree upon a valid and
enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.
 
6.12 Replacement of Shares.  If any certificate or instrument evidencing any
Shares is mutilated, lost, stolen or destroyed, the Company shall issue or cause
to be issued in exchange and substitution for and upon cancellation thereof, or
in lieu of and substitution therefor, a new certificate or instrument, but only
upon receipt of evidence reasonably satisfactory to the Company and the Transfer
Agent of such loss, theft or destruction and the execution by the holder thereof
of a customary lost certificate affidavit of that fact and an agreement to
indemnify and hold harmless the Company and the Transfer Agent for any losses in
connection therewith or, if required by the Transfer Agent, a bond in such form
and amount as is required by the Transfer Agent. The applicants for a new
certificate or instrument under such circumstances shall also pay any reasonable
third-party costs associated with the issuance of such replacement Shares. If a
replacement certificate or instrument evidencing any Shares is requested due to
a mutilation thereof, the Company may require delivery of such mutilated
certificate or instrument as a condition precedent to any issuance of a
replacement.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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6.13 Remedies.  In addition to being entitled to exercise all rights provided
herein or granted by law, including recovery of damages, each of the Purchasers
and the Company may be entitled to specific performance under the Transaction
Documents. The parties agree that monetary damages may not be adequate
compensation for any loss incurred by reason of any breach of obligations
described in the foregoing sentence and hereby agree to waive in any action for
specific performance of any such obligation (other than in connection with any
action for a temporary restraining order) the defense that a remedy at law would
be adequate.
 
6.14 Payment Set Aside.  To the extent that the Company makes a payment or
payments to any Purchaser pursuant to any Transaction Document or a Purchaser
enforces or exercises its rights thereunder, and such payment or payments or the
proceeds of such enforcement or exercise or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside, recovered
from, disgorged by or are required to be refunded, repaid or otherwise restored
to the Company, a trustee, receiver or any other Person under any law
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.
 
6.15 Independent Nature of Purchasers’ Obligations and Rights.  The obligations
of each Purchaser under any Transaction Document are several and not joint with
the obligations of any other Purchaser, and no Purchaser shall be responsible in
any way for the performance of the obligations of any other Purchaser under any
Transaction Document.  The decision of each Purchaser to purchase Shares
pursuant to the Transaction Documents has been made by such Purchaser
independently of any other Purchaser and independently of any information,
materials, statements or opinions as to the business, affairs, operations,
assets, properties, liabilities, results of operations, condition (financial or
otherwise) or prospects of the Company or any Subsidiary which may have been
made or given by any other Purchaser or by any agent or employee of any other
Purchaser, and no Purchaser and none of its agents or employees shall have any
liability to any other Purchaser (or any other Person) relating to or arising
from any such information, materials, statements or opinions.  Nothing contained
herein or in any other Transaction Document, and no action taken by any
Purchaser pursuant hereto or thereto, shall be deemed to constitute the
Purchasers as a partnership, an association, a joint venture or any other kind
of entity, or create a presumption that the Purchasers are in any way acting in
concert or as a group with respect to such obligations or the transactions
contemplated by the Transaction Documents.  Each Purchaser acknowledges that no
other Purchaser has acted as agent for such Purchaser in connection with making
its investment hereunder and that no Purchaser will be acting as agent of such
Purchaser in connection with monitoring its investment in the Shares or
enforcing its rights under the Transaction Documents.  Each Purchaser shall be
entitled to independently protect and enforce its rights, including without
limitation the rights arising out of this Agreement or out of the other
Transaction Documents, and it shall not be necessary for any other Purchaser to
be joined as an additional party in any Proceeding for such purpose.  It is
expressly understood and agreed that each provision contained in this Agreement
is between the Company and a Purchaser, solely, and not between the Company and
the Purchasers collectively and not between and among the Purchasers.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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6.16 Termination.  This Agreement may be terminated and the sale and purchase of
the Shares abandoned at any time prior to the Closing by either the Company or
any Purchaser (with respect to itself only) upon written notice to the other, if
the Closing has not been consummated on or prior to 5:00 p.m., New York City
time, on the Outside Date; provided, however, that the right to terminate this
Agreement under this Section 6.16 shall not be available to any Person whose
failure to comply with its obligations under this Agreement has been the cause
of or resulted in the failure of the Closing to occur on or before such
time.  The Company shall give prompt notice of any such termination to each
other Purchaser, and, as necessary, work in good faith to restructure the
transaction to allow each Purchaser that does not exercise a termination right
to purchase the full number of securities set forth below such Purchaser’s name
on the signature page of this Agreement while remaining in compliance with
Section 4.11. Nothing in this Section 6.16 shall be deemed to release any party
from any liability for any breach by such party of the terms and provisions of
this Agreement or the other Transaction Documents or to impair the right of any
party to compel specific performance by any other party of its obligations under
this Agreement.  In the event of a termination pursuant to this Section, the
Company shall promptly notify all non-terminating Purchasers.  Upon a
termination in accordance with this Section, the Company and the terminating
Purchaser(s) shall not have any further obligation or liability (including
arising from such termination) to the other, and no Purchaser will have any
liability to any other Purchaser under the Transaction Documents as a result
therefrom.
 
6.17 Rescission and Withdrawal Right.  Notwithstanding anything to the contrary
contained in (and without limiting any similar provisions of) the Transaction
Documents, whenever any Purchaser exercises a right, election, demand or option
under a Transaction Document and the Company does not timely perform its related
obligations within the periods therein provided, then such Purchaser may rescind
or withdraw, in its sole discretion from time to time upon written notice to the
Company, any relevant notice, demand or election in whole or in part without
prejudice to its future actions and rights.
 
6.18 Adjustments in Numbers and Prices. In the event of any stock split,
subdivision, dividend or distribution payable in shares of Common Stock or
Non-Voting Common Stock (or other securities or rights convertible into, or
entitling the holder thereof to receive directly or indirectly shares of Common
Stock or Non-Voting Common Stock), combination or other similar recapitalization
or event occurring after the date hereof and prior to the Closing, each
reference in any Transaction Document to a number of shares or a price per share
shall be deemed to be amended to appropriately account for such event.
 

 

 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
[SIGNATURE PAGE FOR COMPANY FOLLOWS]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
 
 

   
CUSTOMERS BANCORP, INC.
   
By: /s/ Thomas R. Brugger
  Name: Thomas R. Brugger   Title: Executive Vice President & CFO    

 
 
 
 
 
 

 

 

 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
 
[SIGNATURE PAGES FOR PURCHASERS FOLLOW]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
[Signature Page to Securities Purchase Agreement]
 
 
 
 
 
 

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NAME OF PURCHASER:
 
____________________________
 
By: ___________________________                                                       
Name:
Title:
 
Aggregate Purchase Price (Subscription Amount):
$__________
 
 
Number of Shares of Common Stock to be
Acquired: __________________
 
Number of Shares of Non-Voting Common Stock to
be Acquired: __________________
 
Tax ID No.: ____________________
 
Address for Notice:
 
__________________________________
__________________________________
__________________________________

 
 
Telephone No.:   ______________________
 
Facsimile No.:   _______________________
 
E-mail Address:   ______________________
 
Attention:  ____________________________
 
Delivery Instructions:
(if different than above)

c/o  _______________________________

Street:   ____________________________

City/State/Zip: ______________________

Attention: __________________________

Telephone No.: ____________________________
 
 
[Signature Page to Securities Purchase Agreement]
 
 
 
 
 

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