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

 
EXCHANGE AGREEMENT

by and among

FIRST MERCHANTS CORPORATION,

FIRST MERCHANTS CAPITAL TRUST III

AND

THE UNITED STATES DEPARTMENT OF THE TREASURY

Dated as of June 30, 2010

 
 

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

 

TABLE OF CONTENTS
           
Page
         
ARTICLE I
   
THE CLOSING THE EXCHANGE OF CAPITAL SECURITIES FOR SERIES A PREFERRED STOCK
 
1
Section 1.1
 
The Capital Securities.
 
1
Section 1.2
 
The Closing.
 
2
Section 1.3
 
Interpretation.
 
4
ARTICLE II
   
EXCHANGE
 
4
Section 2.1
 
Exchange.
 
4
Section 2.2
 
Exchange Documentation.
 
4
ARTICLE III
   
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
 
5
Section 3.1
 
Existence and Power.
 
5
Section 3.2
 
Authorization and Enforceability.
 
5
Section 3.3
 
Valid Issuance of Capital Securities and Debentures.
 
6
Section 3.4
 
Non-Contravention.
 
6
Section 3.5
 
Representations and Warranties Regarding the Trust.
 
7
Section 3.6
 
No Company Material Adverse Effect.
 
8
Section 3.7
 
Brokers and Finders.
 
8
Section 3.8
 
Offering of Securities.
 
8
Section 3.9
 
Tier 1 Capital.
 
8
ARTICLE IV
   
COVENANTS
 
8
Section 4.1
 
Commercially Reasonable Efforts.
 
8
Section 4.2
 
Expenses.
 
8
Section 4.3
 
Exchange Listing.
 
8
Section 4.4
 
Access, Information and Confidentiality.
 
9
Section 4.5
 
Executive Compensation.
 
10
Section 4.6
 
Certain Notifications Until Closing.
 
11
Section 4.7
 
Tax Status of Debentures.
 
11
Section 4.8
 
TIA Qualification.
 
11
Section 4.9
 
Monthly Lending Reports.
 
11

 
i

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

 

ARTICLE V
   
ADDITIONAL AGREEMENTS
 
11
Section 5.1
 
Unregistered Capital Securities.
 
11
Section 5.2
 
Legend.
 
12
Section 5.3
 
Certain Transactions.
 
13
Section 5.4
 
Transfer of Capital Securities.
 
13
Section 5.5
 
Registration Rights.
 
14
Section 5.6
 
Restriction on Dividends and Repurchases.
 
14
Section 5.7
 
Repurchase of Investor Securities.
 
15
Section 5.8
 
Qualified Equity Offering.
 
15
Section 5.9
 
Bank or Thrift Holding Company Status.
 
15
Section 5.10
 
Compliance with Employ American Workers Act.
 
16
ARTICLE VI
   
MISCELLANEOUS
 
16
Section 6.1
 
Termination.
 
16
Section 6.2
 
Survival of Representations and Warranties.
 
16
Section 6.3
 
Amendment.
 
17
Section 6.4
 
Waiver of Conditions.
 
17
Section 6.5
 
Governing Law; Submission to Jurisdiction, Etc.
 
17
Section 6.6
 
Notices.
 
17
Section 6.7
 
Definitions.
 
19
Section 6.8
 
Assignment.
 
20
Section 6.9
 
Severability.
 
20
Section 6.10
 
No Third-Party Beneficiaries.
 
20
Section 6.11
 
Entire Agreement, Etc.
 
21
Section 6.12
 
Counterparts and Facsimile.
 
21

 
ii

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

 
 
LIST OF ANNEXES

ANNEX A:
 
AMENDED AND RESTATED DECLARATION OF TRUST AND TRUST AGREEMENT
ANNEX B:
 
GUARANTEE AGREEMENT
ANNEX C:
 
FIRST SUPPLEMENTAL INDENTURE
ANNEX D:
 
BASE INDENTURE
ANNEX E-1:
 
FORM OF OPINION
ANNEX E-2:
 
FORM OF OPINION
ANNEX F:
 
FORM OF WAIVER

Defined Terms
 
Affiliate
Section 6.7(b)
Agreement
Preamble
Bank
Section 1.2(d)(iv)
Base Indenture
Section 1.2(d)(iv)
Benefit Plans
Section 1.2(d)(vii)
Capital Securities
Recitals
Capitalization Date
Section 3.1(b)
Closing
Section 1.2(a)
Closing Date
Section 1.2(a)
Common Securities
Recitals
Common Stock
Section 3.1(b)
Company
Preamble
Company Material Adverse Effect
Section 6.7(c)
Company Subsidiaries
Section 4.4(a)
Compensation Regulations
Section 1.2(d)(vii)
Debentures
Recitals
Delaware Statutory Trust Act
Preamble
EAWA
Section 5.9
EESA
Section 1.2(d)(vii)
Exchange
Recitals
Exchange Act
Section 5.2(b)
First Supplemental Indenture
Section 1.2(d)(iv)
Governing Agreements
Section 1.2(d)(iv)
Governmental Entities
Section 1.2(c)
Guarantee Agreement
Section 1.2(d)(iv)
Indenture
Section 1.2(d)(iv)
Information
Section 4.4(c)
Investor
Preamble
Junior Stock
Section 5.5(c)
Parity Stock
Section 5.5(c)
Permitted Repurchases
Section 5.5(a)(ii)
Previously Disclosed
Section 6.7(d)

 
iii

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

 

Relevant Period
Section 1.2(d)(vii)
SEC
Section 6.7(d)
Section 4.5 Employee
Section 4.5(b)
Securities Act
Section 5.1
Securities Purchase Agreement
Recitals
Senior Executive Officers
Section 1.2(d)(vii)
Series A Preferred Stock
Recitals
Series A Shares
Recitals
Share Dilution Amount
Section 5.5(a)(ii)
Transfer
Section 5.3
Trust
Preamble
Trust Agreement
Section 1.2(d)(iii)
Trust Indenture Act
Section 4.8

 
iv

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

 

THIS EXCHANGE AGREEMENT, dated as of June 30, 2010 (this “Agreement”) by and
among First Merchants Corporation, an Indiana corporation (the “Company”), First
Merchants Capital Trust III (the “Trust”), a Delaware statutory trust created
under the Delaware Statutory Trust Act (as defined in the Trust Agreement), and
the United States Department of the Treasury (the “Investor”). All capitalized
terms used herein and not otherwise defined shall have the respective meanings
ascribed to them in the Securities Purchase Agreement.

BACKGROUND

WHEREAS, the Investor is, as of the date hereof, the beneficial owner of 116,000
shares of the Company’s preferred stock designated as “Fixed Rate Cumulative
Perpetual Preferred Stock, Series A”, having a liquidation amount of $1,000 per
share (the “Series A Preferred Stock”);

WHEREAS, the Company issued the Series A Preferred Stock pursuant to a Letter
Agreement (and the Securities Purchase Agreement incorporated by reference
therein), dated as of February 20, 2009 (the “Securities Purchase Agreement”),
between the Company and the Investor;

WHEREAS, the Company, the Trust and the Investor desire to exchange 46,400 newly
issued capital securities of the Trust (the “Capital Securities”), with a
liquidation amount of $1,000 per capital security, for 46,400 shares of the
Series A Preferred Stock (the “Series A Shares”) beneficially owned and held by
the Investor, on the terms and subject to the conditions set forth herein (the
“Exchange”); and

WHEREAS, in connection with the Exchange, the Trust proposes to use the Series A
Shares, together with the proceeds of the issuance and sale by the Trust to the
Company of 1,435 Fixed Rate Common Securities, with a liquidation amount of
$1,000 per Common Security (the “Common Securities”), to purchase $47,835,000
aggregate principal amount of the Debentures (as defined in the First
Supplemental Indenture).

NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound, the parties hereby agree as
follows:

ARTICLE I

THE CLOSING; THE EXCHANGE OF CAPITAL SECURITIES FOR SERIES A PREFERRED STOCK

Section 1.1       The Capital Securities.  The Capital Securities are being
issued to the Investor in the Exchange pursuant to Article II hereof. The shares
of Series A Preferred Stock exchanged for the Capital Securities pursuant to
Article II hereof are being reacquired by the Company and shall have the status
of authorized but unissued shares of preferred stock of the Company undesignated
as to series and may be designated or redesignated and issued or reissued, as
the case may be, as part of any series of preferred stock of the Company;
provided that such shares shall not be reissued as shares of Series A Preferred
Stock.

 
 

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

 

Section 1.2       The Closing.  (a)  The closing of the Exchange (the “Closing”)
will take place at the offices of Cadwalader, Wickersham & Taft LLP, One World
Financial Center, New York, New York 10281 at 9:00 a.m. EDT on the business day
after the day on which all of the conditions set forth in Sections 1.2(c) and
(d) are satisfied or waived (other than those conditions that by their terms
must be satisfied on the Closing Date, but subject to the satisfaction or waiver
of those conditions), or at such other place, time and date as shall be agreed
between the Company and the Investor. The time and date on which the Closing
occurs is referred to in this Agreement as the “Closing Date”.

(b)           Subject to the fulfillment or waiver of the conditions to the
Closing in this Section 1.2, at the Closing (i) the Trust will deliver (A) the
Capital Securities to the Investor, as evidenced by one or more certificates
dated the Closing Date and registered in the name of the Investor or its
designee(s) and (B) 69,600 shares of Series A Preferred Stock to the Investor,
as evidenced by one or more certificates dated the Closing Date and registered
in the name of the Investor or its designee(s), (ii) the Investor will deliver
the certificate representing 116,000 shares of Series A Preferred Stock to the
Trust, (iii) the Trust will use the Series A Shares, together with the proceeds
of the issuance and sale by the Trust to the Company of the Common Securities to
purchase $47,835,000 aggregate principal amount of the Debentures and (iv) the
Company will deliver to the Trust Debentures having an aggregate principal
amount of $47,835,000.

(c)           The respective obligations of each of the Investor, the Trust and
the Company to consummate the Exchange are subject to the fulfillment (or waiver
by the Company, the Trust and the Investor, as applicable) prior to the Closing
of the conditions that (i) any approvals or authorizations of all United States
and other governmental, regulatory or judicial authorities (collectively,
“Governmental Entities”) required for the consummation of the Exchange shall
have been obtained or made in form and substance reasonably satisfactory to each
party and shall be in full force and effect and all waiting periods required by
United States and other applicable law, if any, shall have expired and (ii) no
provision of any applicable United States or other law and no judgment,
injunction, order or decree of any Governmental Entity shall prohibit
consummation of the Exchange as contemplated by this Agreement.

(d)           The obligation of the Investor to consummate the Exchange is also
subject to the fulfillment (or waiver by the Investor) at or prior to the
Closing of each of the following conditions:

(i)            (A) the representations and warranties of the Company set forth
in Article III of this Agreement shall be true and correct in all respects as
though made on and as of the Closing Date (other than representations and
warranties that by their terms speak as of another date, which representations
and warranties shall be true and correct in all respects as of such other date)
and (B) the Company shall have performed in all material respects all
obligations required to be performed by it under this Agreement at or prior to
the Closing;

 
-2-

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

 

(ii)            the Investor shall have received a certificate signed on behalf
of the Company by a senior executive officer certifying to the effect that the
conditions set forth in Section 1.2(d)(i) have been satisfied;

(iii)           the Investor shall have received an amount equal to all accrued
and unpaid dividends on the Series A Shares to, but excluding, the Closing Date
in cash to an account designated by the Investor;

(iv)          the Company shall have delivered to the Investor the Amended and
Restated Declaration of Trust and Trust Agreement, in substantially the form
attached hereto as Annex A (the “Trust Agreement”), among the Company, U.S. Bank
Trust National Association, a national banking association, as property trustee
(the “Bank”), U.S. Bank Trust National Association, a national banking
association, as Delaware trustee, and Michael C. Rechin, an individual, Jami L.
Bradshaw, an individual, and Mark K. Hardwick, an individual, as administrative
trustees, and the several Holders (as defined in the Trust Agreement), the
Guarantee Agreement, in substantially the form attached hereto as Annex B (the
“Guarantee Agreement”), between the Company and the Bank, as guarantee trustee,
and the First Supplemental Indenture, in substantially the form attached hereto
as Annex C (the “First Supplemental Indenture”), between the Company and the
Bank, as trustee, which amends and supplements the Indenture in substantially
the form attached hereto as Annex D (the “Base Indenture”), between the Company
and the Bank; the Base Indenture and the First Supplemental Indenture are
together referred to herein as the “Indenture”; the Trust Agreement, the
Guarantee Agreement and the Indenture are collectively referred to herein as the
“Governing Agreements”;

(v)           the Trust shall have delivered certificates in proper form or,
with the prior consent of the Investor, evidence in book-entry form, evidencing
the Capital Securities to the Investor or its designee(s);

(vi)          the Company shall have delivered to the Investor written opinions
from outside counsel to the Company, addressed to the Investor and dated as of
the Closing Date, in substantially the forms attached hereto as Annexes E-1 and
E-2;

(vii)         (A) the Company shall have effected such changes to its
compensation, bonus, incentive and other benefit plans, arrangements and
agreements (including golden parachute, severance and employment agreements)
(collectively, “Benefit Plans”) with respect to its Senior Executive Officers
and any other employee of the Company or its Affiliates subject to Section 111
of the Emergency Economic Stabilization Act of 2008, as amended by the American
Recovery and Reinvestment Act of 2009, or otherwise from time to time (“EESA”),
as implemented by any guidance, rule or regulation thereunder, as the same shall
be in effect from time to time (collectively, the “Compensation Regulations”)
(and to the extent necessary for such changes to be legally enforceable, each of
its Senior Executive Officers and other employees shall have duly consented in
writing to such changes), as may be necessary, during the period in which any
obligation of the Company arising from financial assistance under the Troubled
Asset Relief Program remains outstanding (such period, as it may be further
described in the Compensation Regulations, the “Relevant Period”), in order to
comply with Section 111 of EESA or the Compensation Regulations and (B) the
Investor shall have received a certificate signed on behalf of the Company by a
Senior Executive Officer certifying to the effect that the condition set forth
in Section 1.2(d)(vii)(A) has been satisfied; “Senior Executive Officers” means
the Company's “senior executive officers” as defined in Section 111 of the EESA
and the Compensation Regulations; and

 
-3-

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

 

(viii)                   The Company shall have completed a placement of its
Common Stock yielding total gross proceeds of at least $24 million between
January 1, 2010 and the Closing Date.

Section 1.3        Interpretation.  When a reference is made in this Agreement
to “Recitals,” “Articles,” “Sections,” “Annexes” or “Schedules” such reference
shall be to a Recital, Article or Section of, or Annex or Schedule to, this
Agreement, unless otherwise indicated. The terms defined in the singular have a
comparable meaning when used in the plural, and vice versa. References to
“herein”, “hereof”, “hereunder” and the like refer to this Agreement as a whole
and not to any particular section or provision, unless the context requires
otherwise. The table of contents and headings contained in this Agreement are
for reference purposes only and are not part of this Agreement. Whenever the
words “include,” “includes” or “including” are used in this Agreement, they
shall be deemed followed by the words “without limitation.” No rule of
construction against the draftsperson shall be applied in connection with the
interpretation or enforcement of this Agreement, as this Agreement is the
product of negotiation between sophisticated parties advised by counsel. All
references to “$” or “dollars” mean the lawful currency of the United States of
America. Except as expressly stated in this Agreement, all references to any
statute, rule or regulation are to the statute, rule or regulation as amended,
modified, supplemented or replaced from time to time (and, in the case of
statutes, include any rules and regulations promulgated under the statute) and
to any section of any statute, rule or regulation include any successor to the
section. References to a “business day” shall mean any day except Saturday,
Sunday and any day on which banking institutions in New York, New York or
Wilmington, Delaware generally are authorized or required by law, regulation or
executive order to remain closed or are customarily closed.

ARTICLE II

EXCHANGE

Section 2.1       Exchange.  On the terms and subject to the conditions set
forth in this Agreement, (a) the Company and the Trust agree to issue the
Capital Securities to the Investor in exchange for the Series A Shares, and
(b) the Investor agrees to deliver to the Trust the Series A Shares in exchange
for the Capital Securities.

Section 2.2       Exchange Documentation.  Settlement of the Exchange will take
place on the Closing Date, at which time the Investor will cause delivery of the
Series A Shares to the Trust or its designated agent and the Company and the
Trust will cause delivery of the Capital Securities to the Investor or its
designated agent.

 
-4-

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

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

Except as Previously Disclosed, the Company represents and warrants to Investor
as of the date hereof and as of the Closing Date that:

Section 3.1       Existence and Power.

(a)           Organization, Authority and Significant Subsidiaries. The Company
is duly organized, validly existing and in good standing under the laws of the
State of Indiana and has all necessary power and authority to own, operate and
lease its properties and to carry on its business as it is being currently
conducted, and except as has not, individually or in the aggregate, had and
would not reasonably be expected to have a Company Material Adverse Effect, has
been duly qualified as a foreign corporation for the transaction of business and
is in good standing under the laws of each other jurisdiction in which it owns
or leases properties or conducts any business so as to require such
qualification; each subsidiary of the Company that is a “significant subsidiary”
within the meaning of Rule 1-02(w) of Regulation S-X under the Securities Act,
including, without limitation, First Merchants Bank, N.A., has been duly
organized and is validly existing in good standing under the laws of its
jurisdiction of organization. The Charter and bylaws of the Company, copies of
which have been provided to the Investor prior to the date hereof, are true,
complete and correct copies of such documents as in full force and effect as of
the date hereof.

(b)           Capitalization. The authorized capital stock of the Company, and
the outstanding capital stock of the Company (including securities convertible
into, or exercisable or exchangeable for, capital stock of the Company) as of
the most recent fiscal month-end preceding the date hereof (the “Capitalization
Date”) is set forth on Schedule A. The outstanding shares of capital stock of
the Company have been duly authorized and are validly issued and outstanding,
fully paid and nonassessable, and subject to no preemptive rights (and were not
issued in violation of any preemptive rights). Except as provided in the
Warrant, as of the date hereof, the Company does not have outstanding any
securities or other obligations providing the holder the right to acquire shares
of the Company’s common stock (the “Common Stock”) that is not reserved for
issuance as specified on Schedule A, and the Company has not made any other
commitment to authorize, issue or sell any Common Stock. Since the
Capitalization Date, the Company has not issued any shares of Common Stock other
than (i) shares issued upon the exercise of stock options or delivered under
other equity-based awards or other convertible securities or warrants which were
issued and outstanding on the Capitalization Date and disclosed on Schedule A
and (ii) shares disclosed on Schedule A.

Section 3.2       Authorization and Enforceability.  (a)  The Company has the
corporate power and authority to execute and deliver this Agreement and the
Governing Agreements and to carry out its obligations hereunder and thereunder.

(b)           The execution, delivery and performance by the Company of this
Agreement and the Governing Agreements and the consummation of the transactions
contemplated hereby and thereby, have been duly authorized by all necessary
corporate action on the part of the Company and, if any, its stockholders, and
no further approval or authorization is required on the part of the Company.
This Agreement and the Governing Agreements are valid and binding obligations of
the Company, enforceable against the Company in accordance with its and their
terms, subject to the Bankruptcy Exceptions.

 
-5-

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

 

Section 3.3       Valid Issuance of Capital Securities and Debentures.  (a)  The
Capital Securities have been duly and validly authorized by all necessary
action, and, when issued and delivered pursuant to this Agreement, such Capital
Securities will be duly and validly issued and fully paid and nonassessable,
will not be issued in violation of any preemptive rights, will represent
nonassessable undivided beneficial interests in the assets of the Trust, will be
entitled to the benefits of the Trust Agreement and the Guarantee Agreement and
will not subject the holder thereof to personal liability.

(b)           The Debentures have been duly and validly authorized by the
Company and, when issued and delivered pursuant to the Indenture, such
Debentures will have been duly executed, authenticated, issued and delivered,
will constitute valid and legally binding obligations of the Company,
enforceable against the Company in accordance with their terms, subject to the
Bankruptcy Exceptions, will be in the form contemplated by, and entitled to the
benefits of, the Indenture, and will have the ranking set forth in the
Indenture.

Section 3.4       Non-Contravention.

  (a)  The execution, delivery and performance by the Company of this Agreement,
the Governing Agreements, and the consummation of the transactions contemplated
hereby and thereby, and compliance by the Company with the provisions hereof and
thereof, will not (A) violate, conflict with, or result in a breach of any
provision of, or constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) under, or result in the termination
of, or accelerate the performance required by, or result in a right of
termination or acceleration of, or result in the creation of, any lien, security
interest, charge or encumbrance upon any of the properties or assets of the
Company or any Company Subsidiary under any of the terms, conditions or
provisions of (i) its organizational documents or (ii) any note, bond, mortgage,
indenture, deed of trust, license, lease, agreement or other instrument or
obligation to which the Company or any Company Subsidiary is a party or by which
it or any Company Subsidiary may be bound, or to which the Company or any
Company Subsidiary or any of the properties or assets of the Company or any
Company Subsidiary may be subject, or (B) subject to compliance with the
statutes and regulations referred to in the next paragraph, violate any statute,
rule or regulation or any judgment, ruling, order, writ, injunction or decree
applicable to the Company or any Company Subsidiary or any of their respective
properties or assets except, in the case of clauses (A)(ii) and (B), for those
occurrences that, individually or in the aggregate, have not had and would not
reasonably be expected to have a Company Material Adverse Effect.

(b)           Other than the filing of any current report on Form 8-K required
to be filed with the SEC, such filings and approvals as are required to be made
or obtained under any state “blue sky” laws and such consents and approvals that
have been made or obtained, no notice to, filing with, exemption or review by,
or authorization, consent or approval of, any Governmental Entity is required to
be made or obtained by the Company in connection with the consummation by the
Company of the Exchange except for any such notices, filings, exemptions,
reviews, authorizations, consents and approvals the failure of which to make or
obtain would not, individually or in the aggregate, reasonably be expected to
have a Company Material Adverse Effect.

 
-6-

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

 

(c)           Except as would not, individually or in the aggregate, reasonably
be expected to have a Company Material Adverse Effect, (A) the execution,
delivery and performance by the Company of this Agreement and the consummation
of the transactions contemplated hereby (including for this purpose the
consummation of the Exchange) and compliance by the Company with the provisions
hereof will not (1) result in any payment (including any severance payment,
payment of unemployment compensation, “excess parachute payment” (within the
meaning of the Code), “golden parachute payment” (as defined in the EESA, as
implemented by the Compensation Regulations) or forgiveness of indebtedness or
otherwise) becoming due to any current or former employee, officer or director
of the Company or any Company Subsidiary from the Company or any Company
Subsidiary under any benefit plan or otherwise, (2) increase any benefits
otherwise payable under any benefit plan, (3) result in any acceleration of the
time of payment or vesting of any such benefits, (4) require the funding or
increase in the funding of any such benefits or (5) result in any limitation on
the right of the Company or any Company Subsidiary to amend, merge, terminate or
receive a reversion of assets from any benefit plan or related trust and
(B) neither the Company nor any Company Subsidiary has taken, or permitted to be
taken, any action that required, and no circumstances exist that will require
the funding, or increase in the funding, of any benefits or resulted, or will
result, in any limitation on the right of the Company or any Company Subsidiary
to amend, merge, terminate or receive a reversion of assets from any benefit
plan or related trust.

Section 3.5       Representations and Warranties Regarding the Trust.  (a)  The
Trust has been duly created, is validly existing in good standing as a statutory
trust under the Delaware Statutory Trust Act and is and will be treated as a
mere security device or “grantor trust” for federal income tax purposes under
existing law.

(b)           The Trust has the statutory trust power and authority to conduct
its business as contemplated by this Agreement and the Trust Agreement and is
not required to be authorized to do business in any other jurisdiction.

(c)           The execution, delivery and performance of this Agreement and the
Trust Agreement have been duly authorized by the Trust, and this Agreement and
the Trust Agreement will constitute valid and legally binding instruments of the
Trust, enforceable against the Trust in accordance with their terms, subject to
the Bankruptcy Exceptions. The Trust is not and will not be a party to or
otherwise be bound by any agreement other than the Governing Agreements and
those entered into in connection with the issuance of the Capital Securities and
the Common Securities.

(d)           The administrative trustees of the Trust are officers of the
Company and have been duly authorized by the Company to execute and deliver the
Trust Agreement.

(e)           The Trust is not now, nor after giving effect to the transactions
contemplated hereby will be, and the Trust is not controlled by, or acting on
behalf of any person which is, an “investment company” within the meaning of the
Investment Company Act of 1940, as amended.

 
-7-

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

 

Section 3.6       No Company Material Adverse Effect.  Since December 31, 2009,
no fact, circumstance, event, change, occurrence, condition or development has
occurred that, individually or in the aggregate, has had or would reasonably be
likely to have a Company Material Adverse Effect, except as disclosed on
Schedule B.

Section 3.7       Brokers and Finders.  No broker, finder or investment banker
is entitled to any financial advisory, brokerage, finder’s or other fee or
commission in connection with this Agreement or the transactions contemplated
hereby based upon arrangements made by or on behalf of the Company or any
Company Subsidiary for which the Investor could have any liability.

Section 3.8       Offering of Securities.  Neither the Company nor any person
acting on its behalf has taken any action (including any offering of any
securities of the Company under circumstances which would require the
integration of such offering with the offering of the Capital Securities under
the Securities Act and the rules and regulations of the SEC promulgated
thereunder), which might subject the offering, issuance or sale of the Capital
Securities to the Investor pursuant to this Agreement to the registration
requirements of the Securities Act.

Section 3.9        Tier 1 Capital.  After effecting the Exchange, the
outstanding trust preferred securities of the Company (including the Capital
Securities and all other outstanding trust preferred securities of the Company)
will not exceed the 25% limit on the amount of restricted core capital elements
includable in Tier 1 capital (as defined in 12 CFR Part 225 Appendix A).

ARTICLE IV

COVENANTS

Section 4.1       Commercially Reasonable Efforts.  Subject to the terms and
conditions of this Agreement, each of the parties will use its commercially
reasonable efforts in good faith to take, or cause to be taken, all actions, and
to do, or cause to be done, all things necessary, proper or desirable, or
advisable under applicable laws, so as to permit consummation of the Exchange as
promptly as practicable and otherwise to enable consummation of the transactions
contemplated hereby and shall use commercially reasonable efforts to cooperate
with the other party to that end.

Section 4.2       Expenses.  If requested by the Investor, the Company shall pay
all reasonable out-of-pocket and documented costs and expenses associated with
the Exchange, including (i) the reasonable fees, disbursements and other charges
of the Investor’s legal counsel and financial advisors, and (ii) the reasonable
fees, disbursements and other charges of the trustees for the Capital Securities
and the Debentures.

Section 4.3       Exchange Listing.  If requested by the Investor, the Company
and the Trust shall, at the Company’s expense, cause the Capital Securities, to
the extent the Capital Securities comply with applicable listing requirements,
and, after distribution thereof, the Debentures, to be listed on the Nasdaq
Global Select Market or other national stock exchange, subject to official
notice of issuance, and shall maintain such listing for so long as any Common
Stock is listed on such exchange. At the Investor’s request, the Company agrees
to take such action as may be necessary to change the minimum denominations of
the Capital Securities to $25 or such other amount as the Investor shall
reasonably request.

 
-8-

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

 

Section 4.4       Access, Information and Confidentiality.  (a)  From the date
hereof until the date when the Investor no longer holds any debt or equity
securities of the Company or an Affiliate of the Company acquired pursuant to
this Agreement, the Company will permit the Investor and its agents,
consultants, contractors and advisors (i) acting through the Company’s
Appropriate Federal Banking Agency, to examine the corporate books and make
copies thereof and to discuss the affairs, finances and accounts of the Company
and the subsidiaries of the Company (the “Company Subsidiaries”) with the
principal officers of the Company, all upon reasonable notice and at such
reasonable times and as often as the Investor may reasonably request and (ii) to
review any information material to the Investor’s investment in the Company
provided by the Company to its Appropriate Federal Banking Agency.

(b)           From the date hereof until the date when the Investor no longer
holds any debt or equity securities of the Company or an Affiliate of the
Company acquired pursuant to this Agreement, the Company shall permit, and shall
cause each of the Company’s Subsidiaries to permit (A) the Investor and its
agents, consultants, contractors, (B) the Special Inspector General of the
Troubled Asset Relief Program, and (C) the Comptroller General of the United
States access to personnel and any books, papers, records or other data, in each
case, to the extent relevant to ascertaining compliance with the financing terms
and conditions; provided that prior to disclosing any information pursuant to
clause (B) or (C), the Special Inspector General of the Troubled Asset Relief
Program and the Comptroller General of the United States shall have agreed, with
respect to documents obtained under this Agreement in furtherance of its
function, to follow applicable law and regulation (and the applicable customary
policies and procedures) regarding the dissemination of confidential materials,
including redacting confidential information from the public version of its
reports and soliciting the input from the Company as to information that should
be afforded confidentiality, as appropriate.

(c)           The Investor will use reasonable best efforts to hold, and will
use reasonable best efforts to cause its agents, consultants, contractors,
advisors, and United States executive branch officials and employees, to hold,
in confidence all non-public records, books, contracts, instruments, computer
data and other data and information (collectively, “Information”) concerning the
Company furnished or made available to it by the Company or its representatives
pursuant to this Agreement (except to the extent that such information can be
shown to have been (i) previously known by such party on a non-confidential
basis, (ii) in the public domain through no fault of such party or (iii) later
lawfully acquired from other sources by the party to which it was furnished (and
without violation of any other confidentiality obligation)); provided that
nothing herein shall prevent the Investor from disclosing any Information to the
extent required by applicable laws or regulations or by any subpoena or similar
legal process. The Investor understands that the Information may contain
commercially sensitive confidential information entitled to an exception from a
Freedom of Information Act request.

(d)           Nothing in this Section shall be construed to limit the authority
that the Special Inspector General of the Troubled Asset Relief Program, the
Comptroller General of the United States or any other applicable regulatory
authority has under law.

 
-9-

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

 

Section 4.5       Executive Compensation.

(a)           Benefit Plans.  During the Relevant Period, the Company shall take
all necessary action to ensure that the Benefit Plans of the Company and its
Affiliates comply in all respects with, and shall take all other actions
necessary to comply with, Section 111 of the EESA, as implemented by the
Compensation Regulations, and neither the Company nor any Affiliate shall adopt
any new Benefit Plan (i) that does not comply therewith or (ii) that does not
expressly state and require that such Benefit Plan and any compensation
thereunder shall be subject to any relevant Compensation Regulations adopted,
issued or released on or after the date any such Benefit Plan is adopted. To the
extent that EESA and/or the Compensation Regulations are amended or otherwise
change during the Relevant Period in a manner that requires changes to
then-existing Benefit Plans, or that requires other actions, the Company and its
Affiliates shall effect such changes to its or their Benefit Plans, and take
such other actions, as promptly as practicable after it has actual knowledge of
such amendments or changes in order to be in compliance with this Section 4.5(a)
(and shall be deemed to be in compliance for a reasonable period to effect such
changes).  In addition, the Company and its Affiliates shall take all necessary
action, other than to the extent prohibited by applicable law or regulation
applicable outside of the United States, to ensure that the consummation of the
transactions contemplated by this Agreement will not accelerate the vesting,
payment or distribution of any equity-based awards, deferred cash awards or any
nonqualified deferred compensation payable by the Company or any of its
Affiliates.

(b)           Additional Waivers.  After the Closing Date, in connection with
the hiring or promotion of a Section 4.5 Employee and/or the promulgation of
applicable Compensation Regulations or otherwise, to the extent any Section 4.5
Employee shall not have executed a waiver with respect to the application to
such Section 4.5 Employee of the Compensation Regulations, the Company shall use
its best efforts to (i) obtain from such Section 4.5 Employee a waiver in
substantially the form attached hereto as Annex F and (ii) deliver such waiver
to the Investor as promptly as possible, in each case, within sixty days of the
Closing Date or, if later, within sixty days of such Section 4.5 Employee
becoming subject to the requirements of this Section. “Section 4.5 Employee”
means (A) each Senior Executive Officer and (B) any other employee of the
Company or its Affiliates determined at any time to be subject to Section 111
of  EESA and the Compensation Regulations.

(c)           Clawback.  In the event that any Section 4.5 Employee receives a
payment in contravention of the provisions of this Section 4.5, the Company
shall promptly provide such individual with written notice that the amount of
such payment must be repaid to the Company in full within fifteen business days
following receipt of such notice or such earlier time as may be required by the
Compensation Regulations and shall promptly inform the Investor (i) upon
discovering that a payment in contravention of this Section 4.5 has been made
and (ii) following the repayment to the Company of such amount and shall take
such other actions as may be necessary to comply with the Compensation
Regulations.

(d)           Limitation on Deductions.  During the Relevant Period, the Company
agrees that it shall not claim a deduction for remuneration for federal income
tax purposes in excess of $500,000 for each Senior Executive Officer that would
not be deductible if Section 162(m)(5) of the Code applied to the Company.

 
-10-

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

 

(e)           Amendment to Prior Agreement. The parties agree that, effective as
of the date hereof, Section 4.10 of the Securities Purchase Agreement shall be
amended in its entirety by replacing such Section 4.10 with the provisions set
forth in this Section 4.5 and any terms included in this Section 4.5 that are
not otherwise defined in the Securities Purchase Agreement shall have the
meanings ascribed to such terms in this Agreement.

Section 4.6       Certain Notifications Until Closing.  From the date hereof
until the Closing, the Company shall promptly notify the Investor of (i) any
fact, event or circumstance of which it is aware and which would reasonably be
likely to cause any representation or warranty of the Company contained in this
Agreement to be untrue or inaccurate in any material respect or to cause any
covenant or agreement of the Company contained in this Agreement not to be
complied with or satisfied in any material respect and (ii) except as Previously
Disclosed, any fact, circumstance, event, change, occurrence, condition or
development of which the Company is aware and which, individually or in the
aggregate, has had or would reasonably be likely to have a Company Material
Adverse Effect; provided, however, that delivery of any notice pursuant to this
Section 4.6 shall not limit or affect any rights of or remedies available to the
Investor; provided, further, that a failure to comply with this Section 4.6
shall not constitute a breach of this Agreement or the failure of any condition
set forth in Section 1.2 to be satisfied unless the underlying Company Material
Adverse Effect or material breach would independently result in the failure of a
condition set forth in Section 1.2 to be satisfied.

Section 4.7       Tax Status of Debentures.  The Company agrees that, for so
long as any Debentures are outstanding, it will treat the Debentures as equity
in the Company for all U.S. federal income and state tax purposes and not claim
a deduction for interest on the Debentures for U.S. federal income or state tax
purposes.

Section 4.8       TIA Qualification.  In connection with any registration
pursuant to Section 5.5, the Company agrees to (i) qualify the Governing
Agreements under the Trust Indenture Act of 1939, as amended, and the rules and
regulations of the SEC promulgated thereunder (together, the “Trust Indenture
Act”), and (ii) ensure that the Governing Agreements comply in all material
respects with the applicable requirements of the Trust Indenture Act.

Section 4.9       Monthly Lending Reports.  During the Relevant Period, the
Company will detail in monthly reports submitted to the Investor the information
required by the CPP Monthly Lending Reports, as published on
www.financialstability.gov from time to time.

ARTICLE V

ADDITIONAL AGREEMENTS

Section 5.1       Unregistered Capital Securities.  The Investor acknowledges
that the Capital Securities have not been registered under the Securities Act or
under any state securities laws.  The Investor (a) is acquiring the Capital
Securities pursuant to an exemption from registration under the Securities Act
solely for investment with no present intention to distribute them to any person
in violation of the Securities Act or any applicable U.S. state securities laws,
(b) will  not sell or otherwise dispose of any of the Capital Securities, except
in compliance with the registration requirements or exemption provisions of the
Securities Act and any applicable U.S. state securities laws and (c) has such
knowledge and experience in financial and business matters and in investments of
this type that it is capable of evaluating the merits and risks of the Exchange
and of making an informed investment decision.

 
-11-

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

 

Section 5.2       Legend.  (a) The Investor agrees that all certificates or
other instruments representing the Capital Securities will bear a legend
substantially to the following effect:

" THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES
LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF
EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH
ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER SUCH ACT OR SUCH LAWS.  EACH PURCHASER OF THE SECURITIES
REPRESENTED BY THIS INSTRUMENT IS NOTIFIED THAT THE SELLER MAY BE RELYING ON THE
EXEMPTION FROM SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER.  ANY TRANSFEREE OF THE SECURITIES REPRESENTED BY THIS INSTRUMENT BY
ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (2) AGREES THAT IT
WILL NOT OFFER, SELL OR OTHERWISE TRANSFER THE SECURITIES REPRESENTED BY THIS
INSTRUMENT EXCEPT (A) PURSUANT TO A REGISTRATION STATEMENT WHICH IS THEN
EFFECTIVE UNDER THE SECURITIES ACT, (B) FOR SO LONG AS THE SECURITIES
REPRESENTED BY THIS INSTRUMENT ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO
A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) TO THE ISSUER OR (D)
PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THE
SECURITIES REPRESENTED BY THIS INSTRUMENT ARE TRANSFERRED A NOTICE SUBSTANTIALLY
TO THE EFFECT OF THIS LEGEND.

NO EMPLOYEE BENEFIT OR OTHER PLAN SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), OR SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) (EACH, A “PLAN”), NO
ENTITY WHOSE UNDERLYING ASSETS INCLUDE “PLAN ASSETS” BY REASON OF ANY PLAN’S
INVESTMENT IN THE ENTITY (A “PLAN ASSET ENTITY”), AND NO PERSON INVESTING “PLAN
ASSETS” OF ANY PLAN, MAY ACQUIRE OR HOLD THIS CAPITAL SECURITIES CERTIFICATE OR
ANY INTEREST HEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE
EXEMPTIVE RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION
CLASS EXEMPTION (“PTCE”) 96-23, 95-60, 91-38, 90-1 OR 84-14 OR ANOTHER
APPLICABLE EXEMPTION WITH RESPECT TO SUCH PURCHASE OR HOLDING OR THE
REQUIREMENTS OF U.S. DEPARTMENT OF LABOR REGULATION SECTION 2550.401c-1 ARE
SATISFIED SUCH THAT NEITHER THE CAPITAL SECURITIES CERTIFICATE HELD BY THE
PURCHASER OR HOLDER NOR THE UNDERLYING ASSETS OF THE ISSUER TRUST CONSTITUTE
“PLAN ASSETS” UNDER ERISA OR THE CODE. ANY PURCHASER OR HOLDER OF THIS CAPITAL
SECURITIES CERTIFICATE OR ANY INTEREST HEREIN WILL BE DEEMED TO HAVE REPRESENTED
BY ITS PURCHASE AND HOLDING HEREOF THAT IT EITHER (A) IS NOT A PLAN OR A PLAN
ASSET ENTITY AND IS NOT PURCHASING SUCH SECURITIES ON BEHALF OF OR WITH “PLAN
ASSETS” OF ANY PLAN, OR (B) IS ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER
PTCE 96-23, 95-60, 91-38, 90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION WITH
RESPECT TO SUCH PURCHASE OR HOLDING OR U.S. DEPARTMENT OF LABOR REGULATION
SECTION 2550.401c-1."

 
-12-

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

 

(b)           In the event that any Capital Securities (i) become registered
under the Securities Act or (ii) are eligible to be transferred without
restriction in accordance with Rule 144 or another exemption from registration
under the Securities Act (other than Rule 144A), the Company shall issue new
certificates or other instruments representing such Capital Securities, which
shall not contain the applicable legend in Section 5.2(a) above; provided that
the Investor surrenders to the Company the previously issued certificates or
other instruments.

Section 5.3       Certain Transactions.  (a)  The Company will not merge or
consolidate with, 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 (or its ultimate parent entity), as the case may be (if not the
Company), expressly assumes the due and punctual performance and observance of
each and every covenant, agreement and condition of this Agreement and the
Governing Agreements to be performed and observed by the Company.

(b)           Without the prior written consent of the Investor, until such time
as the Investor shall cease to own any debt or equity securities of the Company
acquired pursuant to this Agreement, the Company shall not permit any of its
“significant subsidiaries” (as such term is defined in Rule 12b-2 promulgated
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) to
(i) engage in any merger, consolidation, statutory share exchange or similar
transaction following the consummation of which such significant subsidiary is
not wholly-owned by the Company, (ii) dissolve or sell all or substantially all
of its assets or property other than in connection with an internal
reorganization or consolidation involving wholly-owned subsidiaries of the
Company or (iii) issue or sell any shares of its capital stock or any securities
convertible or exercisable for any such shares, other than issuances or sales in
connection with an internal reorganization or consolidation involving
wholly-owned subsidiaries of the Company.

Section 5.4       Transfer of Capital Securities.  Subject to compliance with
applicable securities laws, the Investor shall be permitted to transfer, sell,
assign or otherwise dispose of (“Transfer”) all or a portion of the Capital
Securities at any time, and the Company shall take all steps as may be
reasonably requested by the Investor to facilitate the Transfer of the Capital
Securities.

 
-13-

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

 

Section 5.5       Registration Rights.  The Capital Securities and the Series A
Preferred Stock shall be Registrable Securities and, upon their issuance, the
provisions of Section 4.5 of the Securities Purchase Agreement shall be
applicable to them, including with the benefit, to the extent available, of the
tacking of any holding period from the date of issuance of the Series A
Preferred Stock.

Section 5.6       Restriction on Dividends and Repurchases.  (a)  Until such
time as the Investor ceases to own any debt or equity securities of the Company
or an Affiliate of the Company acquired pursuant to this Agreement, neither the
Company nor any Company Subsidiary shall, without the consent of the Investor:

(i)       declare or pay any dividend or make any distribution on the Common
Stock (other than (A) regular quarterly cash dividends of not more than the
amount of the last quarterly cash dividend per share declared or, if lower,
publicly announced an intention to declare, on the Common Stock prior to
October 14, 2008, as adjusted for any stock split, stock dividend, reverse stock
split, reclassification or similar transaction, (B) dividends payable solely in
shares of Common Stock and (C) dividends or distributions of rights or Junior
Stock in connection with a stockholders’ rights plan); or

(ii)       redeem, purchase or acquire any shares of Common Stock or other
capital stock or other equity securities of any kind of the Company, or any
trust preferred securities issued by the Company or any Affiliate of the
Company, other than (A) redemptions, purchases or other acquisitions of the
Capital Securities (which purchases shall be made on a pro rata basis, as
provided in Section 5.5(b)), (B) redemptions, purchases or other acquisitions of
shares of Common Stock or other Junior Stock, in each case in this clause (B) in
connection with the administration of any employee benefit plan in the ordinary
course of business (including purchases to offset the Share Dilution Amount (as
defined below) pursuant to a publicly announced repurchase plan) and consistent
with past practice; provided that any purchases to offset the Share Dilution
Amount shall in no event exceed the Share Dilution Amount, (C) purchases or
other acquisitions by a broker-dealer subsidiary of the Company solely for the
purpose of market-making, stabilization or customer facilitation transactions in
trust preferred securities of the Company or an Affiliate of the Company, Junior
Stock or Parity Stock in the ordinary course of its business, (D) purchases by a
broker-dealer subsidiary of the Company of trust preferred securities or capital
stock of the Company or an Affiliate of the Company for resale pursuant to an
offering by the Company of such trust preferred securities or capital stock
underwritten by such broker-dealer subsidiary, (E) any redemption or repurchase
of rights pursuant to any stockholders’ rights plan, (F) the acquisition by the
Company or any of the Company Subsidiaries of record ownership in Junior Stock,
Parity Stock or trust preferred securities of the Company or an Affiliate of the
Company for the beneficial ownership of any other persons (other than the
Company or any other Company Subsidiary), including as trustees or custodians,
and (G) the exchange or conversion of Junior Stock for or into other Junior
Stock or of Parity Stock or trust preferred securities of the Company or an
Affiliate of the Company for or into other Parity Stock (with the same or lesser
aggregate liquidation amount) or Junior Stock, in each case set forth in this
clause (G), solely to the extent required pursuant to binding contractual
agreements entered into prior to the date hereof or any subsequent agreement for
the accelerated exercise, settlement or exchange thereof for Common Stock
(clauses (C) and (F), collectively, the “Permitted Repurchases”). “Share
Dilution Amount” means the increase in the number of diluted shares outstanding
(determined in accordance with GAAP, and as measured from the date of the
Company’s most recently filed consolidated financial statements prior to the
Closing Date) resulting from the grant, vesting or exercise of equity-based
compensation to employees and equitably adjusted for any stock split, stock
dividend, reverse stock split, reclassification or similar transaction.

 
-14-

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

 

(b)           Until such time as the Investor ceases to own any Capital
Securities, the Company shall not repurchase any Capital Securities from any
holder thereof, whether by means of open market purchase, negotiated
transaction, or otherwise, other than Permitted Repurchases, unless it offers to
repurchase a ratable portion of the Capital Securities then held by the Investor
on the same terms and conditions.

(c)           “Junior Stock” means Common Stock and any other class or series of
stock of the Company the terms of which expressly provide that it ranks junior
to the Capital Securities as to dividend rights and/or as to rights on
liquidation, dissolution or winding up of the Company. “Parity Stock” means any
class or series of stock of the Company the terms of which do not expressly
provide that such class or series will rank senior or junior to the Capital
Securities as to dividend rights and/or as to rights on liquidation, dissolution
or winding up of the Company (in each case without regard to whether dividends
accrue cumulatively or non-cumulatively).

(d)           The parties agree that, effective as of the date hereof,
Section 4.8 of the Securities Purchase Agreement shall be amended in its
entirety by replacing such Section 4.8 with the provisions set forth in this
Section 5.5 and any terms included in this Section 5.5 that are not otherwise
defined in the Securities Purchase Agreement shall have the meanings ascribed to
such terms in this Agreement.

Section 5.7       Repurchase of Investor Securities.  From and after the date of
this Agreement, the agreements set forth in Section 4.9 of the Securities
Purchase Agreement shall be applicable only following the redemption in whole of
the Capital Securities held by the Investor or the Transfer by the Investor of
all of the Capital Securities held by the Investor to one or more third parties
not affiliated with the Investor.

Section 5.8       Qualified Equity Offering.  The Company and the Investor
agree, for the avoidance of doubt, that none of the transactions contemplated by
this Agreement (including, without limitation, the issuance of the Debentures)
shall be deemed a Qualified Equity Offering under the Securities Purchase
Agreement or the Warrant.

Section 5.9       Bank or Thrift Holding Company Status.  (a)  The Company shall
maintain its status as a Bank Holding Company (or, if permitted to become a
Savings and Loan Holding Company in accordance with Subsection (b) below, such
status) for as long as the Investor owns any debt or equity securities of the
Company or an Affiliate of the Company acquired pursuant to this Agreement.

(b)           The Company may become a Savings and Loan Holding Company in
accordance with the requirements of the Home Owners’ Loan Act and applicable
regulations, provided that it has duly fulfilled any commitments to or other
requirements or obligations imposed by the Board of Governors of the Federal
Reserve System.

 
-15-

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

 

Section 5.10     Compliance with Employ American Workers Act.  Until the Company
is no longer deemed a recipient of funding under Title I of EESA or Section 13
of the Federal Reserve Act for purposes of the EAWA, as the same may be
determined pursuant to any regulations or other legally binding guidance
promulgated under EAWA, the Company shall comply, and the Company shall take all
necessary action to ensure that its subsidiaries comply, in all respects with
the provisions of the EAWA and any regulations or other legally binding guidance
promulgated under the EAWA. “EAWA” means the Employ American Workers Act
(Section 1611 of Division A, Title XVI of the American Recovery and Reinvestment
Act of 2009), Public Law No. 111-5, effective as of February 17, 2009, as may be
amended and in effect from time to time.

ARTICLE VI

MISCELLANEOUS

Section 6.1        Termination.  This Agreement may be terminated at any time
prior to the Closing:

(a)           by either the Investor or the Company if the Closing shall not
have occurred by the 30th calendar day following the date hereof; provided,
however, that in the event the Closing has not occurred by such 30th calendar
day, the parties will consult in good faith to determine whether to extend the
term of this Agreement, it being understood that the parties shall be required
to consult only until the fifth day after such 30th calendar day and not be
under any obligation to extend the term of this Agreement thereafter; provided
further that the right to terminate this Agreement under this Section 6.1(a)
shall not be available to any party whose breach of any representation or
warranty or failure to perform any obligation under this Agreement shall have
caused or resulted in the failure of the Closing to occur on or prior to such
date;

(b)           by either the Investor or the Company in the event that any
Governmental Entity shall have issued an order, decree or ruling or taken any
other action restraining, enjoining or otherwise prohibiting the transactions
contemplated by this Agreement and such order, decree, ruling or other action
shall have become final and nonappealable; or

(c)           by the mutual written consent of the Investor and the Company.

In the event of termination of this Agreement as provided in this Section 6.1,
this Agreement shall forthwith become void and there shall be no liability on
the part of either party hereto except that nothing herein shall relieve either
party from liability for any breach of this Agreement.

Section 6.2       Survival of Representations and Warranties.  The
representations and warranties of the Company and the Trust made herein or in
any certificates delivered in connection with the Closing shall survive the
Closing without limitation.

 
-16-

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

 

Section 6.3       Amendment.  No amendment of any provision of this Agreement
will be effective unless made in writing and signed by an officer or a duly
authorized representative of each of the Company and the Investor; provided that
the Investor may unilaterally amend any provision of this Agreement to the
extent required to comply with any changes after the date hereof in applicable
federal statutes. No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise of any
other right, power or privilege. The rights and remedies herein provided shall
be cumulative of any rights or remedies provided by law.

Section 6.4       Waiver of Conditions.  The conditions to each party’s
obligation to consummate the Exchange are for the sole benefit of such party and
may be waived by such party in whole or in part to the extent permitted by
applicable law. No waiver will be effective unless it is in a writing signed by
a duly authorized officer of the waiving party that makes express reference to
the provision or provisions subject to such waiver.

Section 6.5       Governing Law; Submission to Jurisdiction, Etc.  This
Agreement and any claim, controversy or dispute arising under or related to this
Agreement, the relationship of the parties, and/or the interpretation and
enforcement of the rights and duties of the parties shall be enforced, governed,
and construed in all respects (whether in contract or in tort) in accordance
with the federal law of the United States if and to the extent such law is
applicable, and otherwise in accordance with the laws of the State of New York
applicable to contracts made and to be performed entirely within such
State.  Each of the parties hereto agrees (a) to submit to the exclusive
jurisdiction and venue of the United States District Court for the District of
Columbia and the United States Court of Federal Claims for any and all civil
actions, suits or proceedings arising out of or relating to this Agreement or
the Governing Agreements (except with respect to the Trust Agreement in which
case each of the parties hereto agrees to submit to the non-exclusive
jurisdiction of such courts) or the Exchange contemplated hereby and (b) that
notice may be served upon (i) the Company at the address and in the manner set
forth for notices to the Company in Section 6.6 and (ii) the Investor at the
address and in the manner set forth for notices to the Investor in Section 6.6,
but otherwise in accordance with federal law.  To the extent permitted by
applicable law, each of the parties hereto hereby unconditionally waives trial
by jury in any civil legal action or proceeding relating to this Agreement or
the Governing Agreements or the Exchange contemplated hereby.

Section 6.6       Notices.  Any notice, request, instruction or other document
to be given hereunder by any party to the other will be in writing and will be
deemed to have been duly given (a) on the date of delivery if delivered
personally, or by facsimile, upon confirmation of receipt, or (b) on the second
business day following the date of dispatch if delivered by a recognized next
day courier service. All notices hereunder shall be delivered as set forth below
or pursuant to such other instructions as may be designated in writing by the
party to receive such notice.

 
-17-

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

 

If to the Company or the Trust:

First Merchants Corporation
200 East Jackson Street
P.O. Box 792
Muncie, Indiana 47305-2814
Attention: Mark K. Hardwick, Chief Financial Officer and Executive Vice
President
Facsimile:  (765) 747-1447
Email:  mhardwick@firstmerchants.com
Telephone:  (765) 751-1857

With a copy to:
 
David R. Prechtel, Esq.
Bingham McHale LLP
2700 Market Tower
10 West Market Street
Indianapolis, IN  46204-4900
Facsimile:  (317) 236-9907
Email:  dprechtel@binghammchale.com
Telephone:  (317) 968-5403

If to the Investor:

United States Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, DC 20220
Attention:  Chief Counsel Office of Financial Stability
Facsimile:  (202) 927-9225
Email:  OFSChiefCounselNotices@do.treas.gov

With a copy to:

Cadwalader, Wickersham & Taft LLP
One World Financial Center
New York, New York 10281
Attention:  Patrick T. Quinn
Facsimile:  (212) 504-6666
Email:  pat.quinn@cwt.com
Telephone:  (212) 504-6067
Attention:  William P. Mills
Facsimile:  (212) 504-6666
Email:  william.mills@cwt.com
Telephone:  (212) 504-6436

 
-18-

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

 

With a copy to:

Anderson, McCoy & Orta, P.C.
100 N. Broadway, 26th Floor
Oklahoma City, OK 73102
Attention:  J. Michael McCoy
Facsimile:  (405) 236-1448
Email:  mmccoy@amopc.com
Telephone:  (405) 230-1015

Section 6.7       Definitions.  (a)  When a reference is made in this Agreement
to a subsidiary of a person, the term “subsidiary” means any corporation,
partnership, joint venture, limited liability company or other entity (x) of
which such person or a subsidiary of such person is a general partner or (y) of
which a majority of the voting securities or other voting interests, or a
majority of the securities or other interests of which having by their terms
ordinary voting power to elect a majority of the board of directors or persons
performing similar functions with respect to such entity, is directly or
indirectly owned by such person and/or one or more subsidiaries thereof.

(b)           The term “Affiliate” means, with respect to any person, any person
directly or indirectly controlling, controlled by or under common control with,
such other person. For purposes of this definition, “control” (including, with
correlative meanings, the terms “controlled by” and “under common control with”)
when used with respect to any person, means the possession, directly or
indirectly, of the power to cause the direction of management and/or policies of
such person, whether through the ownership of voting securities by contract or
otherwise.

(c)           The term “Company Material Adverse Effect” means a material
adverse effect on (i) the business, results of operation or financial condition
of the Company and its consolidated subsidiaries taken as a whole; provided,
however, that Company Material Adverse Effect shall not be deemed to include the
effects of (A) changes after the date hereof in general business, economic or
market conditions (including changes generally in prevailing interest rates,
credit availability and liquidity, currency exchange rates and price levels or
trading volumes in the United States or foreign securities or credit markets),
or any outbreak or escalation of hostilities, declared or undeclared acts of war
or terrorism, in each case generally affecting the industries in which the
Company and its subsidiaries operate, (B) changes or proposed changes after the
date hereof in GAAP or regulatory accounting requirements, or authoritative
interpretations thereof, (C) changes or proposed changes after date hereof in
securities, banking and other laws of general applicability or related policies
or interpretations of Governmental Entities (in the case of each of these
clauses (A), (B) and (C), other than changes or occurrences to the extent that
such changes or occurrences have or would reasonably be expected to have a
materially disproportionate adverse effect on the Company and its consolidated
subsidiaries taken as a whole relative to comparable U.S. banking or financial
services organizations), or (D) changes in the market price or trading volume of
the Common Stock or any other equity, equity-related or debt securities of the
Company or its consolidated subsidiaries (it being understood and agreed that
the exception set forth in this clause (D) does not apply to the underlying
reason giving rise to or contributing to any such change); or (ii) the ability
of the Company to consummate the Exchange and the other transactions
contemplated by this Agreement and perform its obligations hereunder on a timely
basis.

 
-19-

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

 

(d)           The term “Previously Disclosed” means information set forth or
incorporated in the Company’s Annual Report on Form 10-K for the most recently
completed fiscal year of the Company filed with the Securities and Exchange
Commission (the “SEC”) prior to the date hereof or in its other reports and
forms filed with or furnished to the SEC under Sections 13(a), 14(a) or 15(d) of
the Exchange Act on or after the last day of the most recently completed fiscal
year of the Company and prior to the date hereof.

(e)           To the extent any securities issued pursuant to this Agreement or
the transactions contemplated hereby are registered in the name of a designee of
the Investor pursuant to Sections 1.2 or 6.8(c) or transferred to an Affiliate
of the Investor, all references herein to the Investor holding or owning any
debt or equity securities of the Company, Capital Securities or Registrable
Securities (and any like variations thereof) shall be deemed to refer to the
Investor, together with such designees and/or Affiliates, holding or owning any
debt or equity securities, Capital Securities or Registrable Securities (and any
like variations thereof), as applicable.

Section 6.8       Assignment.  Neither this Agreement nor any right, remedy,
obligation nor liability arising hereunder or by reason hereof shall be
assignable by any party hereto without the prior written consent of each other
party, and any attempt to assign any right, remedy, obligation or liability
hereunder without such consent shall be void, except (a) an assignment, in the
case of a Business Combination where such party is not the surviving entity, or
a sale of substantially all of its assets, to the entity which is the survivor
of such Business Combination or the purchaser in such sale, (b) as provided in
Sections 5.3 and 5.4 and (c) an assignment by the Investor of this Agreement to
an Affiliate of the Investor; provided that if the Investor assigns this
Agreement to an Affiliate, the Investor shall be relieved of its obligations
under this Agreement but (i) all rights, remedies and obligations of the
Investor hereunder shall continue and be enforceable and exercisable by such
Affiliate, (ii) the Company's obligations and liabilities hereunder shall
continue to be outstanding and (iii) all references to the Investor herein shall
be deemed to be references to such Affiliate.

Section 6.9       Severability.  If any provision of this Agreement, or the
application thereof to any person or circumstance, is determined by a court of
competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions hereof, or the application of such provision to persons or
circumstances other than those as to which it has been held invalid or
unenforceable, will remain in full force and effect and shall in no way be
affected, impaired or invalidated thereby, so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination, the parties shall
negotiate in good faith in an effort to agree upon a suitable and equitable
substitute provision to effect the original intent of the parties.

Section 6.10     No Third-Party Beneficiaries.  Nothing contained in this
Agreement, expressed or implied, is intended to confer upon any person or entity
other than the Company, the Trust and the Investor any benefit, right or
remedies, except that the provisions of Sections 4.4 and 5.4 shall inure to the
benefit of the persons holding Capital Securities during any tacked holding
period, as contemplated by that Section.

 
-20-

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

 

Section 6.11     Entire Agreement, Etc.  This Agreement (including the Annexes
and Schedules hereto) constitutes the entire agreement, and supersedes all other
prior agreements, understandings, representations and warranties, both written
and oral, between the parties, with respect to the subject matter hereof.  For
the avoidance of doubt, the Securities Purchase Agreement shall remain in full
force and effect.

Section 6.12     Counterparts and Facsimile.  For the convenience of the parties
hereto, this Agreement may be executed in any number of separate counterparts,
each such counterpart being deemed to be an original instrument, and all such
counterparts will together constitute the same agreement. Executed signature
pages to this Agreement may be delivered by facsimile and such facsimiles will
be deemed as sufficient as if actual signature pages had been delivered.

[Remainder of Page Intentionally Left Blank]

 
-21-

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

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.

 
FIRST MERCHANTS CORPORATION
             
By:
/s/ Mark K. Hardwick
 
Name:
Mark K. Hardwick
 
Title:
Chief Financial Officer and Executive Vice President
                 
FIRST MERCHANTS CAPITAL TRUST III
       
By:
FIRST MERCHANTS CORPORATION, as Depositor
       
By:
/s/ Mark K. Hardwick
   
Name:
Mark K. Hardwick
   
Title:
Chief Financial Officer and Executive Vice President
                 
UNITED STATES DEPARTMENT OF THE TREASURY
         
By:
/s/ David N. Miller
   
Name:
David N. Miller
   
Title:
Chief Investment Officer, OFS

[Signature Page to Exchange Agreement]

 
 

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

 

SCHEDULE A

CAPITALIZATION

Common Stock

Par value:  None

Total Authorized:  50,000,000

Outstanding:  25,523,224

Subject to warrants, options, convertible securities, etc.:  991,453 warrants
and 1,110,867 options

Reserved for benefit plans and other issuances:  1,509,927

Remaining authorized but unissued:  24,476,776

Shares issued after Capitalization Date (other than pursuant to warrants,
options, convertible securities, etc. as set forth above):  None

Preferred Stock

Par value:  None

Total Authorized:  500,000

Outstanding:  Series A 116,000

Reserved for issuance:

Remaining authorized but unissued:  384,000

Schedule A

 
 

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

 

SCHEDULE B

Response to Section 3.6:   None

Schedule B

 
 

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

 

ANNEX A

 
 

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

 

ANNEX B

 
 

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

 

ANNEX C

 
 

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

 

ANNEX D

 
 

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

 

ANNEX E-1

FORM OF OPINION

1.
The Trust has been duly created and is validly existing in good standing as a
statutory trust under the Delaware Statutory Trust Act, 12 Del. C. §§ 3801 et.
seq. (the “Delaware Statutory Trust Act”) and all filings required under the
Delaware Statutory Trust Act with respect to the creation and valid existence of
the Trust as a statutory trust have been made.

2.
Under the Delaware Statutory Trust Act and the Trust Agreement, the Trust has
the trust power and authority to own its properties and to conduct its business,
all as described in the Trust Agreement.

3.
The Trust Agreement constitutes a valid and binding obligation of the Company,
as depositor, and the Issuer Trustees (as defined in the Trust Agreement), and
is enforceable against the Company and the Issuer Trustees, in accordance with
its terms.

4.
Under the Delaware Statutory Trust Act and the Trust Agreement, the Trust has
the trust power and authority (i) to execute, deliver and perform its
obligations under this Agreement, (ii) to issue and sell and perform its
obligations under the Capital Securities and the Common Securities, and (iii) to
purchase and hold the Debentures.

5.
Under the Delaware Statutory Trust Act and the Trust Agreement, the execution
and delivery by the Trust of this Agreement, and the performance by the Trust of
its obligations thereunder and under the Trust Securities (as defined in the
Trust Agreement), have been duly authorized by all necessary trust action on the
part of the Trust.

6.
Under the Delaware Statutory Trust Act, the certificate attached to the Trust
Agreement as Exhibit C is an appropriate form of certificate to evidence
ownership of the Capital Securities.  The Capital Securities have been duly
authorized for issuance by the Trust Agreement and, when issued and delivered in
accordance with the Trust Agreement and this Agreement, will be validly issued
and, subject to the qualifications set forth herein, fully paid and
non-assessable undivided beneficial interests in the assets of the Trust
entitled to the benefits of the Trust Agreement.  Each person to whom a Capital
Security is to be issued by the Trust (each a “Holder” and collectively the
“Holders”), as a beneficial owner of the Trust, will be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the State
of Delaware.  We note that the Holders may be obligated, pursuant to the Trust
Agreement, to (i) provide payment of a sum sufficient to cover taxes or other
governmental charges arising from transfers of Trust Securities Certificates and
the issuance of replacement Trust Securities Certificates (as defined in the
Trust Agreement), and (ii) provide security or indemnity in connection with
requests of or directions to the Property Trustee (as defined in the Trust
Agreement) to exercise its rights and powers under the Trust Agreement.

 
 

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

 

7.
The Common Securities have been duly authorized by the Trust Agreement and, when
issued and delivered in accordance with the terms of the Trust Agreement, will
be duly and validly issued, representing an undivided beneficial interest in the
assets of the Trust entitled to the benefits of the Trust Agreement.

8.
Under the Delaware Statutory Trust Act and the Trust Agreement, the issuance of
the Trust Securities is not subject to preemptive rights.

9.
The issuance and sale by the Trust of the Capital Securities and the Common
Securities, the purchase by the Trust of the Debentures, the execution, delivery
and performance by the Trust of this Agreement, the consummation by the Trust of
the transactions contemplated by this Agreement and compliance by the Trust with
its obligations under this Agreement do not violate (i) any of the provisions of
the Certificate of Trust (as defined in the Trust Agreement) or the Trust
Agreement or (ii) any law or administrative regulation of the State of Delaware
applicable to the Trust.

10.
No authorization, approval, consent or order of any Delaware court or any
Delaware governmental body or regulatory authority or agency is required to be
obtained by the Trust solely in connection with the issuance of the Trust
Securities and the consummation of the transactions contemplated by the Trust
Agreement and this Agreement, other than the filing of the Certificate with the
Secretary of State, which Certificate has been duly filed.

11.
The Holders (other than those Holders who reside or are domiciled in the State
of Delaware) do not have any liability for income taxes imposed by the State of
Delaware solely as a result of their participation in the Trust, and the Trust
will not be liable for any income tax imposed by the State of Delaware.

 
 

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

 

ANNEX E-2

FORM OF OPINION

1.
The Company is duly organized, validly existing and in good standing under the
laws of the State of Indiana and has all necessary power and authority to own,
operate and lease its properties and to carry on its business as it is being
currently conducted.

2.
First Merchants Bank has been duly organized and is validly existing and in good
standing under the laws of the State of Indiana and has all necessary power and
authority to own, operate and lease its properties and to carry on its business
as it is being currently conducted.

3.
The Company has the corporate power and authority to execute and deliver the
Agreement and the Governing Agreements and to carry out its obligations
thereunder.

4.
The execution, delivery and performance by the Company of the Agreement and the
Governing Agreements and the consummation of the transactions contemplated
thereby, have been duly authorized by all necessary corporate action on the part
of the Company and its stockholders, and no further approval or authorization is
required on the part of the Company.

5.
The Debentures have been duly and validly authorized by the Company.

6.
The Agreement is a valid and binding obligation of the Company and the Trust,
enforceable against the Company and the Trust in accordance with its terms,
except as the same may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally and general equitable principles, regardless of
whether such enforceability is considered in a proceeding at law or in equity.

7.
The Indenture, dated as of June 30, 2010, between the Company and U.S. Bank
Trust National Association, a national banking association, as trustee (the
“Indenture Trustee”), as supplemented by the First Supplemental Indenture, dated
as of June 30, 2010, between the Company and the Indenture Trustee (as so
supplemented, the “Indenture”), has been duly executed and delivered by the
Company; the Debentures issued and sold to the Trust pursuant to the Indenture
and the Trust Agreement in an aggregate principal amount of $47,835,000 have
been duly executed, authenticated, issued and delivered; and the Indenture and
the Debentures constitute valid and legally binding obligations of the Company
enforceable in accordance with their terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors’ rights and to general equity
principles.

8.
The Guarantee Agreement has been duly executed and delivered by the Company; and
the Guarantee Agreement constitutes a valid and legally binding obligation of
the Company enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors’ rights and to general
equity principles.

 
 

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

 

9.
Neither the Company nor the Trust is or, after giving effect to the issuance of
the Debentures pursuant to the Indenture and the Trust Agreement, and the Common
Securities and the Capital Securities pursuant to the Agreement and the Trust
Agreement, would be on the date hereof an “investment company” or an entity
“controlled” by an “investment company,” as such terms are defined in the
Investment Company Act of 1940, as amended.

10.
The Trust will be a mere security device or grantor trust that is not taxable as
a corporation (or a publicly traded partnership or taxable mortgage pool taxable
as a corporation) for U.S. federal income tax purposes and the Capital
Securities and Common Securities will be treated as undivided beneficial
ownership interests in the Debentures and any other property held by the Trust
for U.S. federal income tax purposes.

 
 

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

 

ANNEX F

FORM OF WAIVER

In consideration for the benefits I will receive as a result of the
participation of FIRST MERCHANTS CORPORATION (together with its subsidiaries and
affiliates, the "Company"), which is either my employer or the sole shareholder
of my employer, in the United States Department of the Treasury’s (the
"Treasury") Capital Purchase Program and/or any other economic stabilization
program implemented by the Treasury under the Emergency Economic Stabilization
Act of 2008 (as amended, supplemented, or otherwise modified, the "EESA") (any
such program, including the Capital Purchase Program, a "Program"), I hereby
voluntarily waive any claim against the United States (and each of its
departments and agencies) or the Company or my employer, or any of their
respective directors, officers, employees and agents for any changes to my
compensation or benefits that are required to comply with the executive
compensation and corporate governance requirements of Section 111 of the EESA,
as implemented by any guidance or regulations issued and/or to be issued
thereunder, including without limitation the provisions for the Capital Purchase
Program, as implemented by any guidance or regulation thereunder, including the
rules set forth in 31 C.F.R. Part 30, or any other guidance or regulations under
the EESA and the applicable requirements of the Exchange Agreement by and among
the Company and the Treasury dated as of June 30, 2010, as amended (such
requirements, the "Limitations").

I acknowledge that the Limitations may require modification or termination of
the employment, compensation, bonus, incentive, severance, retention and other
benefit plans, arrangements, policies and agreements (including so-called
"golden parachute" agreements), whether or not in writing, that I may have with
the Company or my employer or in which I may participate as they relate to the
period the United States holds any equity or debt securities of the Company
acquired through a Program or for any other period applicable under such Program
or Limitations, as the case may be, and I hereby consent to all such
modifications.

This waiver includes all claims I may have under the laws of the United States
or any other jurisdiction (whether or not in existence as of the date hereof)
related to the requirements imposed by the Limitations, including without
limitation a claim for any compensation or other payments or benefits I would
otherwise receive, any challenge to the process by which the Limitations are or
were adopted and any tort or constitutional claim about the effect of these
Limitations on my employment relationship and I hereby agree that I will not at
any time initiate, or cause or permit to be initiated on my behalf, any such
claim against the United States, the Company, my employer or their respective
directors, officers, employees or agents in or before any local, state, federal
or other agency, court or body.

I agree that, in the event and to the extent that the Compensation Committee of
the Board of Directors of the Company or similar governing body (the
"Committee") reasonably determines that any compensatory payment and benefit
provided to me, including any bonus or incentive compensation based on
materially inaccurate financial statements or performance criteria, would cause
the Company to fail to be in compliance with the Limitations (such payment or
benefit, an "Excess Payment"), upon notification from the Company, I shall repay
such Excess Payment to the Company within 15 business days. In addition, I agree
that the Company shall have the right to postpone any such payment or benefit
for a reasonable period of time to enable the Committee to determine whether
such payment or benefit would constitute an Excess Payment.

 
 

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

 

I understand that any determination by the Committee as to whether or not,
including the manner in which, a payment or benefit needs to be modified,
terminated or repaid in order for the Company to be in compliance with Section
111 of the EESA and/or the Limitations shall be a final and conclusive
determination of the Committee which shall be binding upon me. I further
understand that the Company is relying on this letter from me in connection with
its participation in a Program.

 
 

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

 

IN WITNESS WHEREOF, I execute this waiver on my own behalf, thereby
communicating my acceptance and acknowledgement to the provisions herein.

 
Respectfully,
             
Name:
 
Title:
 
Date:

 

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