Exhibit 10.1

(Bank/Thrift)

[Execution Copy]

SMALL BUSINESS LENDING FUND – SECURITIES PURCHASE AGREEMENT

 

Xenith Bankshares, Inc.

  

0307

Name of Company    SBLF No.

 

901 E. Cary Street, Suite 1700      Corporation Street Address for Notices     
Organizational Form (e.g., corporation, national bank) Richmond    Virginia   
23219      Virginia City    State    Zip Code      Jurisdiction of Organization
Thomas W. Osgood      Board of Governors of the Federal Reserve System Name of
Contact Person to Receive Notices      Appropriate Federal Banking Agency

(804) 433-2206

  

(804) 433-2200

     September 21, 2011 Fax Number for Notices    Phone Number for Notices     
Effective Date

THIS SECURITIES PURCHASE AGREEMENT (the “Agreement”) is made as of the Effective
Date set forth above (the “Signing Date”) between the Secretary of the Treasury
(“Treasury”) and the Company named above (the “Company”), an entity existing
under the laws of the Jurisdiction of Organization stated above in the
Organizational Form stated above. The Company has elected to participate in
Treasury’s Small Business Lending Fund program (“SBLF”). This Agreement contains
the terms and conditions on which the Company intends to issue preferred stock
to Treasury, which Treasury will purchase using funds appropriated under SBLF.

This Agreement consists of the following attached parts, all of which together
constitute the entire agreement of Treasury and the Company (the “Parties”) with
respect to the subject matter hereof, superseding all prior written and oral
agreements and understandings between the Parties with respect to such subject
matter:

 

Annex A:    Information Specific to the Company and the Investment     Annex G:
   Form of Officer’s Certificate        Annex H:    Form of Supplemental Reports
Annex B:    Definitions     Annex I:    Form of Annual Certification Annex C:   
General Terms and Conditions     Annex J:    Form of Opinion Annex D:   
Disclosure Schedule     Annex K:    Form of Repayment Document Annex E:   
Registration Rights        Annex F:    Form of Certificate of Designation       

This Agreement may be executed in any number of counterparts, each being deemed
to be an original instrument, and all of which will together constitute the same
agreement. Executed signature pages to this Agreement may be delivered by
facsimile or electronic mail attachment.

[Signatures follow]

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(Bank/Thrift)

[Execution Copy]

 

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the
duly authorized representatives of the parties hereto as of the Effective Date.

 

THE SECRETARY OF THE TREASURY      XENITH BANKSHARES, INC. By:  

/s/ Don Graves

     By:  

/s/ Thomas W. Osgood

Name:  

Don Graves

     Name:  

Thomas W. Osgood

Title:  

Deputy Assistant Secretary

     Title:  

Executive Vice President and Chief Financial Officer

 

[Signature Page- SBLF Securities Purchase Agreement – SBLF0307 Xenith
Bankshares, Inc.]

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(Bank/Thrift)

[Execution Copy]

 

ANNEX A

INFORMATION SPECIFIC TO THE COMPANY AND THE INVESTMENT

 

Purchase Information

Terms of the Purchase:

 

Series of Preferred Stock Purchased:

   Senior Non-Cumulative Perpetual Preferred Stock, Series A

Per Share Liquidation Preference of Preferred Stock:

   $1,000 per share

Number of Shares of Preferred Stock Purchased:

   8,381

Dividend Payment Dates on the Preferred Stock:

   Payable quarterly in arrears on January 1, April 1, July 1 and October 1 of
each year.

Purchase Price:

   $8,381,000.00

 

Closing:

  

Location of Closing:

   Virtual

Time of Closing:

   10:00 a.m. (EST)

Date of Closing:

   September 21, 2011

Redemption Information

(Only complete if the Company was a CPP or CDCI participant; leave blank
otherwise.)

 

Prior Program:   

¨            CPP

 

¨            CDCI

Series of Previously Acquired Preferred Stock:    Number of Shares of Previously
Acquired Preferred Stock:    Repayment Amount:    Residual Amount:   

 

Annex A (Information Specific to the Company and the Investment)   Page 1

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Matching Private Investment Information    Treasury investment is contingent on
the Company raising Matching Private Investment (check one):   

¨            Yes

 

x            No

If Yes, complete the following (leave blank otherwise):    Aggregate Dollar
Amount of Matching Private Investment Required:    Aggregate Dollar Amount of
Matching Private Investment Received:    Class of securities representing
Matching Private Investment:    Date of issuance of Matching Private Investment:
  

 

Annex A (Information Specific to the Company and the Investment)   Page 2

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ANNEX B

DEFINITIONS

 

1. Definitions. Except as otherwise specified herein or as the context may
otherwise require, the following terms have the respective meanings set forth
below for all purposes of this Agreement.

“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 through one
or more intermediaries, 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.

“Application Date” means the date of the Company’s completed application to
participate in SBLF.

“Appropriate Federal Banking Agency” means the “appropriate Federal banking
agency” with respect to the Company or such Company Subsidiaries, as applicable,
as defined in Section 3(q) of the Federal Deposit Insurance Act (12 U.S.C.
Section 1813(q)). The Appropriate Federal Banking Agency is identified on the
cover page of this Agreement.

“Appropriate State Banking Agency” means, if the Company is a State-chartered
bank, the Company’s State bank supervisor (as defined in Section 3(r) of the
Federal Deposit Insurance Act, 12 U.S.C. § 1813(q).

“Bank Holding Company” means a company registered as such with the Federal
Reserve pursuant to 12 U.S.C. §1842 and the regulations of the Federal Reserve
promulgated thereunder.

“Call Report” has the meaning assigned thereto in Section 4102(4) of the SBJA.
If the Company is a Bank Holding Company or a Savings and Loan Holding Company,
unless the context clearly indicates otherwise: (a) the term “Call Report” shall
mean the Call Report(s) (as defined in Section 4102(4) of the SBJA) of the IDI
Subsidiary(ies); and (b) if there are multiple IDI Subsidiaries, all references
herein or in any document executed or delivered in connection herewith
(including the Certificate of Designation, the Initial Supplemental Report and
all Quarterly Supplemental Reports) to any data reported in a Call Report shall
refer to the aggregate of such data across the Call Reports for all such IDI
Subsidiaries.

“CDCI” means the Community Development Capital Initiative, as authorized under
the Emergency Economic Stabilization Act of 2008.

“Company Material Adverse Effect” means a material adverse effect on (i) the
business, results of operation or condition (financial or otherwise) 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 Signing Date in general

 

Annex B (Definitions)   Page 1

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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 Signing Date in GAAP, or authoritative
interpretations thereof, or (C) changes or proposed changes after the Signing
Date 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 (ii) the ability of the Company to consummate the
Purchase and other transactions contemplated by this Agreement and perform its
obligations hereunder and under the Certificate of Designation on a timely basis
and declare and pay dividends on the Dividend Payment Dates set forth in the
Certificate of Designations.

“CPP” means the Capital Purchase Program, as authorized under the Emergency
Economic Stabilization Act of 2008.

“Disclosure Schedule” means that certain schedule to this Agreement delivered to
Treasury on or prior to the Signing Date, setting forth, among other things,
items the disclosure of which is necessary or appropriate in response to an
express disclosure requirement contained in a provision hereof. The Disclosure
Schedule is contained in Annex D of this Agreement.

“Executive Officers” means the Company’s “executive officers” as defined in 12
C.F.R. § 215.2(e)(1) (regardless of whether or not such regulation is applicable
to the Company).

“Federal Reserve” means the Board of Governors of the Federal Reserve System.

“GAAP” means generally accepted accounting principles in the United States.

“General Terms and Conditions” and “General T&C” each mean Annex C of this
Agreement.

“IDI Subsidiary” means any Company Subsidiary that is an insured depository
institution.

“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
Preferred Shares as to dividend and redemption rights and/or as to rights on
liquidation, dissolution or winding up of the Company.

“knowledge of the Company” or “Company’s knowledge” means the actual knowledge
after reasonable and due inquiry of the “officers” (as such term is defined in
Rule 3b-2 under the Exchange Act) of the Company.

 

Annex B (Definitions)   Page 2

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“Matching Private Investment-Supported,” when used to describe the Company (if
applicable), means the Company’s eligibility for participation in the SBLF
program is conditioned upon the Company or an Affiliate of the Company
acceptable to Treasury receiving Matching Private Investment, as contemplated by
Section 4103(d)(3)(B) of the SBJA.

“Original Letter Agreement” means, if applicable, the Letter Agreement (and all
terms incorporated therein) pursuant to which Treasury purchased from the
Company, and the Company issued to Treasury, the Previously Acquired Preferred
Shares (or warrants exercised to acquire the Previously Acquired Preferred
Shares or the securities exchanged for the Previously Acquired Preferred Stock).

“Oversight Officials” means, interchangeably and collectively as context
requires, the Special Deputy Inspector General for SBLF Program Oversight, the
Inspector General of the Department of the Treasury, and the Comptroller General
of the United States.

“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 Preferred Shares 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).

“Preferred Shares” means the number of shares of Preferred Stock identified in
the “Purchase Information” section of Annex A opposite “Number of Shares of
Preferred Stock Purchased.”

“Preferred Stock” means the series of the Company’s preferred stock identified
in the “Purchase Information” section of Annex A opposite “Series of Preferred
Stock Purchased.”

“Previously Acquired Preferred Shares” means, if the Company participated in CPP
or CDCI, the number of shares of Previously Acquired Preferred Stock identified
in the “Redemption Information” section of Annex A opposite “Number of Shares of
Previously Acquired Preferred Stock.”

“Previously Acquired Preferred Stock” means, if the Company participated in CPP
or CDCI, the series of the Company’s preferred stock identified in the
“Redemption Information” section of Annex A opposite “Series of Previously
Acquired Preferred Stock.”

“Previously Disclosed” means information set forth on the Disclosure Schedule or
the Disclosure Update, as applicable; provided, however, that disclosure in any
section of such Disclosure Schedule or Disclosure Update, as applicable, shall
apply only to the indicated section of this Agreement; provided, further, that
the existence of Previously Disclosed information, pursuant to a Disclosure
Update, shall neither obligate Treasury to consummate the Purchase nor limit or
affect any rights of or remedies available to Treasury.

“Prior Program” means (a) CPP, if the Company is a participant in CPP
immediately prior to the Closing, or (b) CDCI, if the Company is a participant
in CDCI immediately prior to the Closing.

 

Annex B (Definitions)   Page 3

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“Publicly-traded” means a company that (i) has a class of securities that is
traded on a national securities exchange and (ii) is required to file periodic
reports with either the Securities and Exchange Commission or its primary
federal bank regulator.

“Purchase” means the purchase of the Preferred Shares by Treasury from the
Company pursuant to this Agreement.

“Repayment” means the repurchase set forth in the Repayment Document.

“Repayment Amount” means, if the Company participated in CPP or CDCI, the
aggregate amount payable by the Company as of the Closing Date to redeem the
Previously Acquired Preferred Stock in accordance with its terms, which amount
is set forth in the “Redemption Information” section of Annex A.

“Savings and Loan Holding Company” means a company registered as such with the
Office of Thrift Supervision or any successor thereto pursuant to 12 U.S.C.
§1467(a) and the regulations of the Office of Thrift Supervision promulgated
thereunder.

“SBJA” means the Small Business Jobs Act of 2010, as it may be amended from time
to time.

“Subsidiary” means any corporation, partnership, joint venture, limited
liability company or other entity (A) of which such person or a subsidiary of
such person is a general partner or (B) 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.

“Tax” or “Taxes” means any federal, state, local or foreign income, gross
receipts, property, sales, use, license, excise, franchise, employment, payroll,
withholding, alternative or add-on minimum, ad valorem, transfer or excise tax,
or any other tax, custom, duty, governmental fee or other like assessment or
charge of any kind whatsoever, together with any interest, penalty or addition
imposed by any Governmental Entity.

“Total Assets” means, with respect to an insured depository institution, the
total assets of such insured depository institution.

“Total Risk-Weighted Assets” means, with respect to an insured depository
institution, the risk-weighted assets of such insured depository institution.

“Warrant” has the meaning set forth in the Repayment Document.

 

Annex B (Definitions)   Page 4

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(Bank/Thrift)

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2. Index of Definitions. The following table, which is provided solely for
convenience of reference and shall not affect the interpretation of this
Agreement, identifies the location where capitalized terms are defined in this
Agreement:

 

Term

  

Location of Definition

Affiliate    Annex B, §1 Agreement    Cover Page Appropriate Federal Banking
Agency    Annex B, §1 Appropriate State Banking Agency    Annex B, §1 Bank
Holding Company    Annex B, §1 Bankruptcy Exceptions    General T&C, §2.5(a)
Board of Directors    General T&C, §2.6 Business Combination    General T&C,
§5.8 business day    General T&C, §5.12 Call Report    Annex B, §1
Capitalization Date    General T&C, §2.2 CDCI    Annex B, §1 Certificate of
Designation    General T&C, §1.3(d) Charter    General T&C, §1.3(d) Closing   
General T&C, §1.2(a) Closing Date    General T&C, §1.2(a) Closing Deadline   
General T&C, §5.1(a)(i) Code    General T&C, §2.14 Common Stock    General T&C,
§2.2 Company    Cover Page Company Financial Statements    General T&C, §1.3(i)
Company Material Adverse Effect    Annex B, §1 Company Reports    General T&C,
§2.9 Company Subsidiary; Company Subsidiaries    General T&C, §2.5(b) control;
controlled by; under common control with    Annex B, §1 CPP    Annex B, §1
Disclosure Schedule    Annex B, §1 Disclosure Update    General T&C, §1.3(h)
ERISA    General T&C, §2.14 Exchange Act    General T&C, §4.3 Executive Officers
   Annex B, §1 Federal Reserve    Annex B, §1 GAAP    Annex B, §1 Governmental
Entities    General T&C, §1.3(a) Holders    General T&C, §4.4(a) IDI Subsidiary
   Annex B, §1 Indemnitee    General T&C, §4.4(b) Information    General T&C,
§3.1(c)(iii) Initial Supplemental Report    General T&C, §1.3(j) Junior Stock   
Annex B, §1 knowledge of the Company; Company’s knowledge    Annex B, §1
Matching Private Investment    General T&C, §1.3(l) Matching Private
Investment-Supported    Annex B, § 1 Matching Private Investors    General T&C,
§1.3(l)

 

Annex B (Definitions)   Page 5

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officers    Annex B, §1 Oversight Officials    Annex B, §1 Parity Stock    Annex
B, §1 Parties    Cover Page Plan    General T&C, §2.14 Preferred Shares    Annex
B, §1 Preferred Stock    Annex B, §1 Previously Acquired Preferred Shares   
Annex B, §1 Previously Acquired Preferred Stock    Annex B, §1 Previously
Disclosed    Annex B, §1 Prior Program    General T&C, §1.2(c) Proprietary
Rights    General T&C, §2.21 Publicly-traded    Annex B, §1 Purchase    Annex B,
§1 Purchase Price    General T&C, §1.1(a) Regulatory Agreement    General T&C,
§2.19 Related Party    General T&C, §2.25 Repayment Document    General T&C,
§1.2(b)(ii)(E) Residual Amount    General T&C, §1.2(b)(ii)(B) Savings and Loan
Holding Company    Annex B, §1 SBJA    Annex B, §1 SBLF    Cover Page SEC   
General T&C, §2.11 Securities Act    General T&C, §2.1 Signing Date    Cover
Page Subsidiary    Annex B, §1 Quarterly Supplemental Report    General T&C,
§3.1(d)(i) Tax; Taxes    Annex B, §1 Transfer    General T&C, §4.3 Treasury   
Cover Page

3. Defined Terms in Annex K. Except for defined terms in Annex K that are
expressly cross-referenced in another part of this Agreement, terms defined in
Annex K are defined therein solely for purposes of Annex K and are not
applicable to other parts of this Agreement.

 

Annex B (Definitions)   Page 6

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ANNEX C

GENERAL TERMS AND CONDITIONS

 

CONTENTS OF GENERAL TERMS AND CONDITIONS

 

              Page  

ARTICLE I

 

PURCHASE; CLOSING

     3      1.1   

Purchase

     3      1.2   

Closing

     3      1.3   

Closing Conditions

     4   

ARTICLE II

 

REPRESENTATIONS AND WARRANTIES

     6      2.1   

Organization, Authority and Significant Subsidiaries

     6      2.2   

Capitalization

     6      2.3   

Preferred Shares

     7      2.4   

Compliance With Identity Verification Requirements

     7      2.5   

Authorization; Enforceability

     7      2.6   

Anti-takeover Provisions and Rights Plan

     8      2.7   

No Company Material Adverse Effect

     8      2.8   

Company Financial Statements

     9      2.9   

Reports

     9      2.10   

No Undisclosed Liabilities

     9      2.11   

Offering of Securities

     10      2.12   

Litigation and Other Proceedings

     10      2.13   

Compliance with Laws

     10      2.14   

Employee Benefit Matters

     11      2.15   

Taxes

     11      2.16   

Properties and Leases

     11      2.17   

Environmental Liability

     12      2.18   

Risk Management Instruments

     12      2.19   

Agreements with Regulatory Agencies

     12      2.20   

Insurance

     13      2.21   

Intellectual Property

     13      2.22   

Brokers and Finders

     13      2.23   

Disclosure Schedule

     13      2.24   

Previously Acquired Preferred Shares

     14      2.25   

Related Party Transactions

     14      2.26   

Ability to Pay Dividends

     14   

ARTICLE III

 

COVENANTS

     14      3.1   

Affirmative Covenants

     14      3.2   

Negative Covenants

     20   

 

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ARTICLE IV

 

ADDITIONAL AGREEMENTS

     21      4.1   

Purchase for Investment

     21      4.2   

Legends

     21      4.3   

Transfer of Preferred Shares

     22      4.4   

Rule 144; Rule 144A; 4(1 1/2) Transactions

     22      4.5   

Depositary Shares

     24      4.6   

Expenses and Further Assurances

     24   

ARTICLE V

 

MISCELLANEOUS

     24      5.1   

Termination

     24      5.2   

Survival

     25      5.3   

Amendment

     25      5.4   

Waiver of Conditions

     26      5.5   

Governing Law; Submission to Jurisdiction; etc.

     26      5.6   

No Relationship to TARP

     26      5.7   

Notices

     26      5.8   

Assignment

     27      5.9   

Severability

     27      5.10   

No Third Party Beneficiaries

     27      5.11   

Specific Performance

     27      5.12   

Interpretation

     27   

 

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ARTICLE I

PURCHASE; CLOSING

1.1 Purchase. On the terms and subject to the conditions set forth in this
Agreement, the Company agrees to sell to Treasury, and Treasury agrees to
purchase from the Company, at the Closing, the Preferred Shares for the
aggregate price set forth on Annex A (the “Purchase Price”).

1.2 Closing. (a) On the terms and subject to the conditions set forth in this
Agreement, the closing of the Purchase (the “Closing”) will take place at the
location specified in Annex A, at the time and on the date set forth in Annex A
or as soon as practicable thereafter, or at such other place, time and date as
shall be agreed between the Company and Treasury. 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
Section 1.3, at the Closing:

(i) if Treasury holds Previously Acquired Preferred Shares:

(A) the Purchase Price shall first be applied to pay the Repayment Amount;

(B) if the Purchase Price is less than the Repayment Amount, the Company shall
pay the positive difference (if any) between the Repayment Amount and the
Purchase Price (a “Residual Amount”) to Treasury’s Office of Financial Stability
by wire transfer of immediately available United States funds to an account
designated in writing by Treasury; and

(C) upon receipt of the full Repayment Amount (by application of the Purchase
Price and, if applicable, the Company’s payment of the Residual Amount),
Treasury and the Company will consummate the Repayment;

(D) the Company will deliver to Treasury a statement of adjustment as
contemplated by Section 13(J) of the Warrant, if applicable; and

(E) the Company and Treasury will execute and deliver a properly completed
repurchase document in the form attached hereto as Annex K, (the “Repayment
Document”).

(ii) the Company will deliver the Preferred Shares as evidenced by one or more
certificates dated the Closing Date and bearing appropriate legends as
hereinafter provided for, in exchange for payment in full of the Purchase Price
by application of the Purchase Price to the Repayment and by wire transfer of
immediately available United States funds to a bank account designated by the
Company in the Initial Supplemental Report.

 

Annex C (General Terms and Conditions)   Page 3

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1.3 Closing Conditions. The obligation of Treasury to consummate the Purchase is
subject to the fulfillment (or waiver by Treasury) at or prior to the Closing of
each of the following conditions:

(a) (i) any approvals or authorizations of all United States federal, state,
local, foreign and other governmental, regulatory or judicial authorities
(collectively, “Governmental Entities”) required for the consummation of the
Purchase 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 the purchase and sale of the Preferred Shares as contemplated by this
Agreement;

(b) (i) the representations and warranties of the Company set forth in
(A) Sections 2.7 and 2.26 shall be true and correct in all respects as though
made on and as of the Closing Date; (B) Sections 2.1, 2.2, 2.3, 2.4, 2.5, 2.6,
2.19, 2.22, 2.23, 2.24 and 2.25 shall be true and correct in all material
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 material
respects as of such other date); and (C) Sections 2.8 through 2.18 and Sections
2.20 through 2.21 (disregarding all qualifications or limitations set forth in
such representations and warranties as to “materiality”, “Company Material
Adverse Effect” and words of similar import) shall be true and correct 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 as of such other date), except to the
extent that the failure of such representations and warranties referred to in
this Section 1.3(b)(i)(C) to be so true and correct, individually or in the
aggregate, does not have and would not reasonably be expected to have a Company
Material Adverse Effect; and (ii) the Company shall have performed in all
respects all obligations required to be performed by it under this Agreement at
or prior to the Closing;

(c) the Company shall have delivered to Treasury a certificate signed on behalf
of the Company by an Executive Officer certifying to the effect that the
conditions set forth in Section 1.3(b) have been satisfied, in substantially the
form of Annex G;

(d) the Company shall have duly adopted and filed with the Secretary of State of
its jurisdiction of organization or other applicable Governmental Entity an
amendment to its certificate or articles of incorporation, articles of
association, or similar organizational document (“Charter”) in substantially the
form of Annex F (the “Certificate of Designation”) and the Company shall have
delivered to Treasury a copy of the filed Certificate of Designation with
appropriate evidence from the Secretary of State or other applicable
Governmental Entity that the filing has been accepted, or if a filed copy is
unavailable, a certificate signed on behalf of the Company by an Executive
Officer certifying to the effect that the filing of the Certificate of
Designation has been accepted, in substantially the form attached hereto as
Annex F;

(e) the Company shall have delivered to Treasury true, complete and correct
certified copies of the Charter and bylaws of the Company;

 

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(f) the Company shall have delivered to Treasury a written opinion from counsel
to the Company (which may be internal counsel), addressed to Treasury and dated
as of the Closing Date, in substantially the form of Annex J;

(g) the Company shall have delivered certificates in proper form or, with the
prior consent of Treasury, evidence of shares in book-entry form, evidencing the
Preferred Shares to Treasury or its designee(s);

(h) the Company shall have delivered to Treasury a copy of the Disclosure
Schedule on or prior to the Signing Date and, to the extent that any information
set forth on the Disclosure Schedule needs to be updated or supplemented to make
it true, complete and correct as of the Closing Date, (i) the Company shall have
delivered to Treasury an update to the Disclosure Schedule (the “Disclosure
Update”), setting forth any information necessary to make the Disclosure
Schedule true, correct and complete as of the Closing Date and (ii) Treasury, in
its sole discretion, shall have approved the Disclosure Update, provided,
however, that the delivery and acceptance of the Disclosure Update shall not
limit or affect any rights of or remedies available to Treasury;

(i) the Company shall have delivered to Treasury on or prior to the Signing Date
each of the consolidated financial statements of the Company and its
consolidated subsidiaries for each of the last three completed fiscal years of
the Company (which shall be audited to the extent audited financial statements
are available prior to the Signing Date) (together with the Call Reports filed
by the Company or the IDI Subsidiary(ies) for each completed quarterly period
since the last completed fiscal year, the “Company Financial Statements”);

(j) the Company shall have delivered to Treasury, not later than five
(5) business days prior to the Closing Date, a certificate (the “Initial
Supplemental Report”) in substantially the form attached hereto as Annex H
setting forth a complete and accurate statement of loans held by the Company (or
if the Company is a Bank Holding Company or a Savings and Loan Holding Company,
by the IDI Subsidiary(ies)) in each of the categories described therein, for the
time periods specified therein, (A) including a signed certification of the
Chief Executive Officer, the Chief Financial Officer and all directors or
trustees of the Company or the IDI Subsidiary(ies) who attested to the Call
Reports for the quarters covered by such certificate, that such certificate
(x) has been prepared in conformance with the instructions issued by Treasury
and (y) is true and correct to the best of their knowledge and belief; and
(B) completed for the last full calendar quarter prior to the Closing Date and
the four (4) quarters ended September 30, 2009, December 31, 2009, March 31,
2010 and June 30, 2010;

(k) prior to the Signing Date, the Company shall have delivered to Treasury, the
Appropriate Federal Banking Agency and, if the Company is a State-chartered
bank, the Appropriate State Banking Agency, a small business lending plan
describing how the Company’s business strategy and operating goals will allow it
to address the needs of small businesses in the area it serves, as well as a
plan to provide linguistically and culturally appropriate outreach, where
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(l) if the Company is Matching Private Investment-Supported, on or after
September 27, 2010 the Company or an Affiliate of the Company acceptable to
Treasury shall (i) have received equity capital (“Matching Private Investment”)
from one or more non-governmental investors (“Matching Private Investors”)
(A) in an amount equal to or greater than the Aggregate Dollar Amount of
Matching Private Investment Required set forth on Annex A (net of all dividends
paid with respect to, and all repurchases and redemptions of, the Company’s
equity securities), (B) that is subordinate in right of payment of dividends,
liquidation preference and redemption rights to the Preferred Shares and
(C) that is acceptable in form and substance to Treasury, in its sole discretion
and (ii) have satisfied the following requirements reasonably in advance of the
Closing Date: (A) delivery of copies of the definitive documentation for the
Matching Private Investment to Treasury, (B) delivery of the organizational
charts of such non-governmental investors to Treasury, each certified by the
applicable non-governmental investor and demonstrating that such
non-governmental investor is not an Affiliate of the Company, (C) delivery of
any other documents or information as Treasury may reasonably request, in its
sole discretion and (D) any other terms and conditions imposed by Treasury or
the Appropriate Federal Banking Agency, in their sole discretion.

ARTICLE II

REPRESENTATIONS AND WARRANTIES

The Company represents and warrants to Treasury that as of the Signing Date and
as of the Closing Date (or such other date specified herein):

2.1 Organization, Authority and Significant Subsidiaries. The Company has been
duly incorporated and is validly existing and in good standing under the laws of
its jurisdiction of organization, with the necessary power and authority to own,
operate and lease its properties and conduct 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 would be considered a
“significant subsidiary” within the meaning of Rule 1-02(w) of Regulation S-X
under the Securities Act of 1933 (the “Securities Act”), 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 Treasury prior to the Signing Date, are true, complete and correct
copies of such documents as in full force and effect as of the Signing Date and
as of the Closing Date.

2.2 Capitalization. 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 or similar rights (and were not
issued in violation of any preemptive rights). As of the Signing Date, the
Company does not have outstanding any securities or other obligations providing
the holder the right to acquire its common stock (“Common Stock”) or other
capital stock that is not reserved for issuance as specified in Part 2.2 of the
Disclosure Schedule, and the Company has not made any other commitment to
authorize, issue or sell any Common Stock or other capital stock. Since the last
day of the fiscal period covered by the last Call Report filed by

 

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the Company or the IDI Subsidiary(ies) prior to the Application Date (the
“Capitalization Date”), the Company has not (a) declared, and has no present
intention of declaring, any dividends on its Common Stock in a per-share amount
greater than the per-share amount of declared dividends that are reflected in
such Call Report; (b) declared, and has no present intention of declaring
(except as contemplated by the Certificate of Designation) any dividends on any
of its preferred stock in a per-share amount greater than the per-share amount
of declared dividends that are reflected in such Call Report; or (c) issued any
shares of Common Stock or other capital 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 in Part 2.2 of the Disclosure Schedule,
(ii) shares disclosed in Part 2.2 of the Disclosure Schedule, and (iii) if the
Company is Matching Private Investment-Supported, shares or other capital stock
representing Matching Private Investment disclosed in the “Matching Private
Investment” section of Annex A. Except as disclosed in Part 2.2 of the
Disclosure Schedule, the Company has no agreements providing for the accelerated
exercise, settlement or exchange of any capital stock of the Company for Common
Stock. Each holder of 5% or more of any class of capital stock of the Company
and such holder’s primary address are set forth in Part 2.2 of the Disclosure
Schedule. The Company has received a representation from each Matching Private
Investor that such Matching Private Investor has not received or applied for any
investment from the SBLF, and the Company has no reason to believe that any such
representation is inaccurate. If the Company is a Bank Holding Company or a
Savings and Loan Holding Company, (x) the percentage of each IDI Subsidiary’s
issued and outstanding capital stock that is owned by the Company is set forth
on Part 2.2 of the Disclosure Schedule; and (y) all shares of issued and
outstanding capital stock of the IDI Subsidiary(ies) owned by the Company are
free and clear of all liens, security interests, charges or encumbrances. Since
the Application Date, there has been no change in the organizational hierarchy
information regarding the Company that was available on the Application Date
from the National Information Center of the Federal Reserve System.

2.3 Preferred Shares. The Preferred Shares have been duly and validly
authorized, and, when issued and delivered pursuant to this Agreement, such
Preferred Shares will be duly and validly issued and fully paid and
non-assessable, will not be issued in violation of any preemptive rights, and
will rank pari passu with or senior to all other series or classes of preferred
stock, whether or not designated, issued or outstanding, with respect to the
payment of dividends and the distribution of assets in the event of any
dissolution, liquidation or winding up of the Company.

2.4 Compliance With Identity Verification Requirements. The Company and the
Company Subsidiaries (to the extent such regulations are applicable to the
Company Subsidiaries) are in compliance with the requirements of
Section 1020.220 of title 31, Code of Federal Regulations.

2.5 Authorization, Enforceability.

(a) The Company has the corporate power and authority to execute and deliver
this Agreement and to carry out its obligations hereunder (which includes the
issuance of the Preferred Shares). The execution, delivery and performance by
the Company of this Agreement and the consummation of the transactions
contemplated hereby have been duly

 

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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. This Agreement is a valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, subject to any
limitations of 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 (“Bankruptcy Exceptions”).

(b) The execution, delivery and performance by the Company of this Agreement and
the consummation of the transactions contemplated hereby and compliance by the
Company with the provisions hereof, will not (i) 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 subsidiary of the Company (each
subsidiary, a “Company Subsidiary” and, collectively, the “Company
Subsidiaries”) under any of the terms, conditions or provisions of (A) its
organizational documents or (B) 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 (ii) 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 (i)(B) and (ii), 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.

(c) Other than the filing of the Certificate of Designation with the Secretary
of State of its jurisdiction of organization or other applicable Governmental
Entity, such filings and approvals as are required to be made or obtained under
any state “blue sky” laws and such as 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 Purchase 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.

2.6 Anti-takeover Provisions and Rights Plan . The Board of Directors of the
Company (the “Board of Directors”) has taken all necessary action to ensure that
the transactions contemplated by this Agreement and the consummation of the
transactions contemplated hereby will be exempt from any anti-takeover or
similar provisions of the Company’s Charter and bylaws, and any other provisions
of any applicable “moratorium”, “control share”, “fair price”, “interested
stockholder” or other anti-takeover laws and regulations of any jurisdiction.

2.7 No Company Material Adverse Effect . Since the last day of the fiscal period
covered by the last Call Report filed by the Company or the IDI Subsidiary(ies)
prior to the

 

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Application Date, no fact, circumstance, event, change, occurrence, condition or
development has occurred that, individually or in the aggregate, has had or
would reasonably be expected to have a Company Material Adverse Effect.

2.8 Company Financial Statements. The Company Financial Statements present
fairly in all material respects the consolidated financial position of the
Company and its consolidated subsidiaries as of the dates indicated therein and
the consolidated results of their operations for the periods specified therein;
and except as stated therein, such financial statements (a) were prepared in
conformity with GAAP applied on a consistent basis (except as may be noted
therein) and (b) have been prepared from, and are in accordance with, the books
and records of the Company and the Company Subsidiaries.

2.9 Reports.

(a) Since December 31, 2007, the Company and each Company Subsidiary has filed
all reports, registrations, documents, filings, statements and submissions,
together with any amendments thereto, that it was required to file with any
Governmental Entity (the foregoing, collectively, the “Company Reports”) and has
paid all fees and assessments due and payable in connection therewith, except,
in each case, as would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect. As of their respective dates
of filing, the Company Reports complied in all material respects with all
statutes and applicable rules and regulations of the applicable Governmental
Entities.

(b) The records, systems, controls, data and information of the Company and the
Company Subsidiaries are recorded, stored, maintained and operated under means
(including any electronic, mechanical or photographic process, whether
computerized or not) that are under the exclusive ownership and direct control
of the Company or the Company Subsidiaries or their accountants (including all
means of access thereto and therefrom), except for any non-exclusive ownership
and non-direct control that would not reasonably be expected to have a material
adverse effect on the system of internal accounting controls described below in
this Section 2.9(b). The Company (i) has implemented and maintains adequate
disclosure controls and procedures to ensure that material information relating
to the Company, including the consolidated Company Subsidiaries, is made known
to the chief executive officer and the chief financial officer of the Company by
others within those entities, and (ii) has disclosed, based on its most recent
evaluation prior to the Signing Date, to the Company’s outside auditors and the
audit committee of the Board of Directors (A) any significant deficiencies and
material weaknesses in the design or operation of internal controls that are
reasonably likely to adversely affect the Company’s ability to record, process,
summarize and report financial information and (B) any fraud, whether or not
material, that involves management or other employees who have a significant
role in the Company’s internal controls over financial reporting.

2.10 No Undisclosed Liabilities. Neither the Company nor any of the Company
Subsidiaries has any liabilities or obligations of any nature (absolute,
accrued, contingent or otherwise) which are not properly reflected in the
Company Financial Statements to the extent required to be so reflected and, if
applicable, reserved against in accordance with GAAP applied on a consistent
basis, except for (a) liabilities that have arisen since the last fiscal year
end in the ordinary and usual course of business and consistent with past
practice and (b) liabilities that, individually or in the aggregate, have not
had and would not reasonably be expected to have a Company Material Adverse
Effect.

 

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2.11 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 any of the Preferred Shares under the Securities Act, and
the rules and regulations of the Securities and Exchange Commission (the “SEC”)
promulgated thereunder), which might subject the offering, issuance or sale of
any of the Preferred Shares to Treasury pursuant to this Agreement to the
registration requirements of the Securities Act.

2.12 Litigation and Other Proceedings. Except as would not, individually or in
the aggregate, reasonably be expected to have a Company Material Adverse Effect,
there is no (a) pending or, to the knowledge of the Company, threatened, claim,
action, suit, investigation or proceeding, against the Company or any Company
Subsidiary or to which any of their assets are subject nor is the Company or any
Company Subsidiary subject to any order, judgment or decree or (b) unresolved
violation, criticism or exception by any Governmental Entity with respect to any
report or relating to any examinations or inspections of the Company or any
Company Subsidiaries. There is no claim, action, suit, investigation or
proceeding pending or, to the Company’s knowledge, threatened against any
institution-affiliated party (as defined in 12 U.S.C. §1813(u)) of the Company
or any of the IDI Subsidiaries that, if determined or resolved in a manner
adverse to such institution-affiliated party, could result in such
institution-affiliated party being prohibited from participation in the conduct
of the affairs of any financial institution or holding company of any financial
institution and, to the Company’s knowledge, there are no facts or circumstances
could reasonably be expected to provide a basis for any such claim, action,
suit, investigation or proceeding.

2.13 Compliance with Laws. Except as would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect, the
Company and the Company Subsidiaries have all permits, licenses, franchises,
authorizations, orders and approvals of, and have made all filings, applications
and registrations with, Governmental Entities that are required in order to
permit them to own or lease their properties and assets and to carry on their
business as presently conducted and that are material to the business of the
Company or such Company Subsidiary. Except as set forth in Part 2.13 of the
Disclosure Schedule, the Company and the Company Subsidiaries have complied in
all respects and are not in default or violation of, and none of them is, to the
knowledge of the Company, under investigation with respect to or, to the
knowledge of the Company, have been threatened to be charged with or given
notice of any violation of, any applicable domestic (federal, state or local) or
foreign law, statute, ordinance, license, rule, regulation, policy or guideline,
order, demand, writ, injunction, decree or judgment of any Governmental Entity,
other than such noncompliance, defaults or violations that would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect. Except for statutory or regulatory restrictions of
general application, no Governmental Entity has placed any restriction on the
business or properties of the Company or any Company Subsidiary that would,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect.

 

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2.14 Employee Benefit Matters. Except as would not reasonably be expected to
have, either individually or in the aggregate, a Company Material Adverse
Effect: (a) each “employee benefit plan” (within the meaning of Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended (“ERISA”))
providing benefits to any current or former employee, officer or director of the
Company or any member of its “Controlled Group” (defined as any organization
which is a member of a controlled group of corporations within the meaning of
Section 414 of the Internal Revenue Code of 1986, as amended (the “Code”)) that
is sponsored, maintained or contributed to by the Company or any member of its
Controlled Group and for which the Company or any member of its Controlled Group
would have any liability, whether actual or contingent (each, a “Plan”) has been
maintained in compliance with its terms and with the requirements of all
applicable statutes, rules and regulations, including ERISA and the Code;
(b) with respect to each Plan subject to Title IV of ERISA (including, for
purposes of this clause (b), any plan subject to Title IV of ERISA that the
Company or any member of its Controlled Group previously maintained or
contributed to in the six years prior to the Signing Date), (1) no “reportable
event” (within the meaning of Section 4043(c) of ERISA), other than a reportable
event for which the notice period referred to in Section 4043(c) of ERISA has
been waived, has occurred in the three years prior to the Signing Date or is
reasonably expected to occur, (2) no “accumulated funding deficiency” (within
the meaning of Section 302 of ERISA or Section 412 of the Code), whether or not
waived, has occurred in the three years prior to the Signing Date or is
reasonably expected to occur, (3) the fair market value of the assets under each
Plan exceeds the present value of all benefits accrued under such Plan
(determined based on the assumptions used to fund such Plan) and (4) neither the
Company nor any member of its Controlled Group has incurred in the six years
prior to the Signing Date, or reasonably expects to incur, any liability under
Title IV of ERISA (other than contributions to the Plan or premiums to the
Pension Benefit Guaranty Corporation in the ordinary course and without default)
in respect of a Plan (including any Plan that is a “multiemployer plan”, within
the meaning of Section 4001(c)(3) of ERISA); and (c) each Plan that is intended
to be qualified under Section 401(a) of the Code has received a favorable
determination letter from the Internal Revenue Service with respect to its
qualified status that has not been revoked, or such a determination letter has
been timely applied for but not received by the Signing Date, and nothing has
occurred, whether by action or by failure to act, which could reasonably be
expected to cause the loss, revocation or denial of such qualified status or
favorable determination letter.

2.15 Taxes. Except as would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect, (a) the Company and the
Company Subsidiaries have filed all federal, state, local and foreign income and
franchise Tax returns (together with any schedules and attached thereto)
required to be filed through the Signing Date, subject to permitted extensions,
and have paid all Taxes due thereon, (b) all such Tax returns (together with any
schedules and attached thereto) are true, complete and correct in all material
respects and were prepared in compliance with all applicable laws and (c) no Tax
deficiency has been determined adversely to the Company or any of the Company
Subsidiaries, nor does the Company have any knowledge of any Tax deficiencies.

2.16 Properties and Leases. Except as would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect, the
Company and the Company Subsidiaries have good and marketable title to all real
properties and all other properties and assets owned by them, in each case free
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liens for Taxes), encumbrances, claims and defects that would affect the value
thereof or interfere with the use made or to be made thereof by them. Except as
would not, individually or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect, the Company and the Company Subsidiaries hold
all leased real or personal property under valid and enforceable leases with no
exceptions that would interfere with the use made or to be made thereof by them.

2.17 Environmental Liability. Except as would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect:

(a) there is no legal, administrative, or other proceeding, claim or action of
any nature seeking to impose, or that would reasonably be expected to result in
the imposition of, on the Company or any Company Subsidiary, any liability
relating to the release of hazardous substances as defined under any local,
state or federal environmental statute, regulation or ordinance, including the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
pending or, to the Company’s knowledge, threatened against the Company or any
Company Subsidiary;

(b) to the Company’s knowledge, there is no reasonable basis for any such
proceeding, claim or action; and

(c) neither the Company nor any Company Subsidiary is subject to any agreement,
order, judgment or decree by or with any court, Governmental Entity or third
party imposing any such environmental liability.

2.18 Risk Management Instruments. Except as would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect, all
derivative instruments, including, swaps, caps, floors and option agreements,
whether entered into for the Company’s own account, or for the account of one or
more of the Company Subsidiaries or its or their customers, were entered into
(i) only in the ordinary course of business, (ii) in accordance with prudent
practices and in all material respects with all applicable laws, rules,
regulations and regulatory policies and (iii) with counterparties believed to be
financially responsible at the time; and each of such instruments constitutes
the valid and legally binding obligation of the Company or one of the Company
Subsidiaries, enforceable in accordance with its terms, except as may be limited
by the Bankruptcy Exceptions. Neither the Company or the Company Subsidiaries,
nor, to the knowledge of the Company, any other party thereto, is in breach of
any of its obligations under any such agreement or arrangement other than such
breaches that would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect.

2.19 Agreements with Regulatory Agencies. Except as set forth in Part 2.19 of
the Disclosure Schedule, neither the Company nor any Company 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, 2007, has adopted any board resolutions at the request of, any
Governmental Entity that currently restricts the conduct of its business or that
in any material manner relates to its capital adequacy, its liquidity and
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its credit, risk management or compliance policies or procedures, its internal
controls, its management or its operations or business (each item in this
sentence, a “Regulatory Agreement”), nor has the Company or any Company
Subsidiary been advised since December 31, 2007, by any such Governmental Entity
that it is considering issuing, initiating, ordering, or requesting any such
Regulatory Agreement. The Company and each Company Subsidiary is in compliance
with each Regulatory Agreement to which it is party or subject, and neither the
Company nor any Company Subsidiary has received any notice from any Governmental
Entity indicating that either the Company or any Company Subsidiary is not in
compliance with any such Regulatory Agreement.

2.20 Insurance. The Company and the Company Subsidiaries are insured with
reputable insurers against such risks and in such amounts as the management of
the Company reasonably has determined to be prudent and consistent with industry
practice. The Company and the Company Subsidiaries are in material compliance
with their insurance policies and are not in default under any of the material
terms thereof, each such policy is outstanding and in full force and effect, all
premiums and other payments due under any material policy have been paid, and
all claims thereunder have been filed in due and timely fashion, except, in each
case, as would not, individually or in the aggregate, reasonably be expected to
have a Company Material Adverse Effect.

2.21 Intellectual Property. Except as would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect,
(i) the Company and each Company Subsidiary owns or otherwise has the right to
use, all intellectual property rights, including all trademarks, trade dress,
trade names, service marks, domain names, patents, inventions, trade secrets,
know-how, works of authorship and copyrights therein, that are used in the
conduct of their existing businesses and all rights relating to the plans,
design and specifications of any of its branch facilities (“Proprietary Rights”)
free and clear of all liens and any claims of ownership by current or former
employees, contractors, designers or others and (ii) neither the Company nor any
of the Company Subsidiaries is materially infringing, diluting, misappropriating
or violating, nor has the Company or any of the Company Subsidiaries received
any written (or, to the knowledge of the Company, oral) communications alleging
that any of them has materially infringed, diluted, misappropriated or violated,
any of the Proprietary Rights owned by any other person. Except as would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect, to the Company’s knowledge, no other person is
infringing, diluting, misappropriating or violating, nor has the Company or any
or the Company Subsidiaries sent any written communications since December 31,
2007, alleging that any person has infringed, diluted, misappropriated or
violated, any of the Proprietary Rights owned by the Company and the Company
Subsidiaries.

2.22 Brokers and Finders. Treasury has no liability for any amounts that any
broker, finder or investment banker is entitled to for 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.

2.23 Disclosure Schedule. The Company has delivered the Disclosure Schedule and,
if applicable, the Disclosure Update to Treasury and the information contained
in the Disclosure Schedule, as modified by the information contained in the
Disclosure Update, if applicable, is true, complete and correct.

 

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2.24 Previously Acquired Preferred Shares. If Treasury holds Previously Acquired
Preferred Shares:

(a) The Company has not breached any representation, warranty or covenant set
forth in the Original Letter Agreement or any of the other documents governing
the Previously Acquired Preferred Stock.

(b) The Company has paid to Treasury: (i) if the Previously Acquired Preferred
Stock is cumulative, all accrued and unpaid dividends and/or interest then due
on the Previously Acquired Preferred Stock; or (ii) if the Previously Acquired
Preferred Stock is non-cumulative, all unpaid dividends and/or interest due on
the Previously Acquired Preferred Shares for the fiscal quarter prior to the
Closing Date plus the accrued and unpaid dividends and/or interest due on the
Previously Acquired Preferred Shares as of the Closing Date for the fiscal
quarter in which the Closing shall occur.

2.25 Related Party Transactions. Neither the Company nor any Company Subsidiary
has made any extension of credit to any director or Executive Officer of the
Company or any Company Subsidiary, any holder of 5% or more of the Company’s
issued and outstanding capital stock, or any of their respective spouses or
children or to any Affiliate of any of the foregoing (each, a “Related Party”),
other than in compliance with 12 C.F.R Part 215 (Regulation O). Except as set
forth in Part 2.25 of the Disclosure Schedule, to the Company’s knowledge, no
Related Party has any (i) material commercial, industrial, banking, consulting,
legal, accounting, charitable or familial relationship with any vendor or
material customer of the Company or any Company Subsidiary that is not on
arms-length terms, or (ii) direct or indirect ownership interest in any person
or entity with which the Company or any Company Subsidiary has a material
business relationship that is not on arms-length terms (not including
Publicly-traded entities in which such person owns less than two percent (2%) of
the outstanding capital stock).

2.26 Ability to Pay Dividends. The Company has all permits, licenses,
franchises, authorizations, orders and approvals of, and has made all filings,
applications and registrations with, Governmental Entities and third parties
that are required in order to permit the Company to declare and pay dividends on
the Preferred Shares on the Dividend Payment Dates set forth in the Certificate
of Designation.

ARTICLE III

COVENANTS

3.1 Affirmative Covenants. The Company hereby covenants and agrees with Treasury
that:

(a) 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

 

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or desirable, or advisable under applicable laws, so as to permit consummation
of the Purchase 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.

(b) Certain Notifications Until Closing. From the Signing Date until the
Closing, the Company shall promptly notify Treasury of (i) any fact, event or
circumstance of which it is aware and which would reasonably be expected 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 expected to have a Company Material Adverse Effect;
provided, however, that delivery of any notice pursuant to this Section 3.1(b)
shall not limit or affect any rights of or remedies available to Treasury.

(c) Access, Information and Confidentiality.

(i) From the Signing Date until the date on which all of the Preferred Shares
have been redeemed in whole, the Company will permit, and shall cause each of
the Company’s Subsidiaries to permit, Treasury, the Oversight Officials and
their respective agents, consultants, contractors and advisors to (x) examine
any books, papers, records, Tax returns (including all schedules attached
thereto), data and other information; (y) make copies thereof; and (z) discuss
the affairs, finances and accounts of the Company and the Company Subsidiaries
with the personnel of the Company and the Company Subsidiaries, all upon
reasonable notice; provided, that:

 

  (A) any examinations and discussions pursuant to this Section 3.1(c)(i) shall
be conducted during normal business hours and in such manner as not to interfere
unreasonably with the conduct of the business of the Company;

 

  (B) neither the Company nor any Company Subsidiary shall be required by this
Section 3.1(c)(i) to disclose any information to the extent (x) prohibited by
applicable law or regulation, or (y) that such disclosure would reasonably be
expected to cause a violation of any agreement to which the Company or any
Company Subsidiary is a party or would cause a risk of a loss of privilege to
the Company or any Company Subsidiary (provided that the Company shall use
commercially reasonable efforts to make appropriate substitute disclosure
arrangements under circumstances where the restrictions in this clause
(B) apply);

 

  (C)

the obligations of the Company and the Company Subsidiaries to disclose
information pursuant to this Section 3.1(c)(i) to any Oversight Official or any
agent, consultant, contractor and

 

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  advisor thereof, such Oversight Official shall have agreed, with respect to
documents obtained under this Section 3.1(c)(i), 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 input from the
Company as to information that should be afforded confidentiality, as
appropriate; and

 

  (D) for avoidance of doubt, such examinations and discussions may, at
Treasury’s option, be conducted on site at any office of the Company or any
Company Subsidiary.

(ii) From the Signing Date until the date on which all of the Preferred Shares
have been redeemed in whole, the Company will deliver, or will cause to be
delivered, to Treasury:

 

  (A)

as soon as available after the end of each fiscal year of the Company, and in
any event within 90 days thereafter, a consolidated balance sheet of the Company
as of the end of such fiscal year, and consolidated statements of income,
retained earnings and cash flows of the Company for such year, in each case
prepared in accordance with GAAP applied on a consistent basis and setting forth
in each case in comparative form the figures for the previous fiscal year of the
Company and which shall be audited to the extent audited financial statements
are available;1

 

  (B) as soon as available after the end of the first, second and third
quarterly periods in each fiscal year of the Company, a copy of any quarterly
reports provided to other stockholders of the Company or Company management by
the Company;

 

  (C) as soon as available after the Company receives any assessment of the
Company’s internal controls, a copy of such assessment (other than assessments
provided by the Appropriate Federal Banking Agency or the Appropriate State
Banking Agency that the Company is prohibited by applicable law or regulation
from disclosing to Treasury);

 

  (D) annually on a date specified by Treasury, a completed survey, in a form
specified by Treasury, providing, among other things, a description of how the
Company has utilized the funds the

 

 

1 

To the extent that the Company informed the Treasury on the Signing Date that it
does not prepare financial statements in accordance with GAAP in the ordinary
course, the Treasury may consider other annual financial reporting packages
acceptable to it in its sole discretion.

 

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  Company received hereunder in connection with the sale of the Preferred Shares
and the effects of such funds on the operations and status of the Company;

 

  (E) as soon as such items become effective, any amendments to the Charter,
bylaws or other organizational documents of the Company; and

 

  (F) at the same time as such items are sent to any stockholders of the
Company, copies of any information or documents sent by the Company to its
stockholders.

(iii) Treasury will use reasonable best efforts to hold, and will use reasonable
best efforts to cause its agents, consultants, contractors and 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 (A) previously known by such party on a non-confidential basis, (B) in
the public domain through no fault of such party or (C) 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 Treasury from disclosing any Information to the extent required by
applicable laws or regulations or by any subpoena or similar legal process.
Treasury understands that the Information may contain commercially sensitive
confidential information entitled to an exception from a Freedom of Information
Act request.

(iv) Treasury’s information rights pursuant to Section 3.1(c)(ii)(A), (B), (C),
(E) and (F) and Treasury’s right to receive certifications from the Company
pursuant to Section 3.1(d) may be assigned by Treasury to a transferee or
assignee of the Preferred Shares with a liquidation preference of no less than
an amount equal to 2% of the initial aggregate liquidation preference of the
Preferred Shares.

(v) Nothing in this Section shall be construed to limit the authority that any
Oversight Official or any other applicable regulatory authority has under law.

(vi) The Company shall provide to Treasury all such information as Treasury may
request from time to time for the purpose of carrying out the study required by
Section 4112 of the SBJA.

(d) Quarterly Supplemental Reports and Annual Certifications.

(i) Concurrently with the submission of Call Reports by the Company or the IDI
Subsidiary(ies) (as the case may be) for each quarter ending after the Closing
Date, the Company shall deliver to Treasury a certificate in substantially the
form attached hereto as Annex H setting forth a complete and accurate statement
of loans held by the Company in each of the categories described therein, for
the time periods specified therein, (A) including a signed certification of the
Chief Executive Officer, the Chief Financial Officer and all directors or

 

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trustees of the Company or the IDI Subsidiary(ies) who attested to the Call
Report for the quarter covered by such certificate, that such certificate
(x) has been prepared in conformance with the instructions issued by Treasury
and (y) is true and correct to the best of their knowledge and belief;
(B) completed for such quarter (each, a “Quarterly Supplemental Report”).

(ii) Within ninety (90) days after the end of each fiscal year of the Company
during which the Initial Supplemental Report is submitted pursuant to
Section 1.3(j) or the first ten (10) Quarterly Supplemental Reports are
submitted pursuant to Section 3.1(d)(i), the Company shall deliver to Treasury a
certification from the Company’s independent auditors that the Initial
Supplemental Report and/or Quarterly Supplemental Reports during such fiscal
year are complete and accurate with respect to accounting matters, including
policies and procedures and controls over such.

(iii) Until the date on which the Preferred Shares are redeemed pursuant to
Section 5 of the Certificate of Designation, within ninety (90) days after the
end of each fiscal year of the Company, the Company shall deliver to Treasury a
certificate in substantially the form attached hereto as Annex I, signed on
behalf of the Company by an Executive Officer.

(iv) If any Initial Supplemental Report or Quarterly Supplemental Report is
inaccurate, Treasury shall be entitled to recover from the Company, upon demand,
the amount of any difference between (x) the amount of the dividend payment(s)
actually made to Treasury based on such inaccurate report and (y) the correct
amount of the dividend payment(s) that should have been made, but for such
inaccuracy. The Company shall provide Treasury with a written description of any
such inaccuracy within three (3) business days after the Company’s discovery
thereof.

(v) Treasury shall have the right from time to time to modify Annex H, by
posting an amended and restated version of Annex H on Treasury’s web site, to
conform Annex H to (A) reflect changes in GAAP, (B) reflect changes in the form
or content of, or definitions used in, Call Reports, or (C) to make
clarifications and/or technical corrections as Treasury determines to be
reasonably necessary. Notwithstanding anything herein to the contrary, upon
posting by Treasury on its web site, Annex H shall be deemed to be amended and
restated as so posted, without the need for any further act on the part of any
person or entity. If any such modification includes a change to the caption or
number of any line item of Annex H, any reference herein to such line item shall
thereafter be a reference to such re-captioned or re-numbered line item.

(e) Bank and Thrift Holding Company Status. If the Company is a Bank Holding
Company or a Savings and Loan Holding Company on the Signing Date, then the
Company shall maintain status as a Bank Holding Company or Savings and Loan
Holding Company for as long as Treasury owns any Preferred Shares. The Company
shall redeem all Preferred Shares held by Treasury prior to terminating its
status as a Bank Holding Company or Savings and Loan Holding Company.

(f) Predominantly Financial. For as long as Treasury owns any Preferred Shares,
the Company, to the extent it is not itself an insured depository institution,
agrees to

 

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remain predominantly engaged in financial activities. A company is predominantly
engaged in financial activities if the annual gross revenues derived by the
company and all subsidiaries of the company (excluding revenues derived from
subsidiary depository institutions), on a consolidated basis, from engaging in
activities that are financial in nature or are incidental to a financial
activity under subsection (k) of Section 4 of the Bank Holding Company Act of
1956 (12 U.S.C. 1843(k)) represent at least 85 percent of the consolidated
annual gross revenues of the company.

(g) Capital Covenant. From the Signing Date until the date on which all of the
Preferred Shares have been redeemed in whole, the Company and the Company
Subsidiaries shall maintain such capital as may be necessary to meet the minimum
capital requirements of the Appropriate Federal Banking Agency, as in effect
from time to time.

(h) Reporting Requirements. Prior to the date on which all of the Preferred
Shares have been redeemed in whole, the Company covenants and agrees that, at
all times on or after the Closing Date, (i) to the extent it is subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, it shall
comply with the terms and conditions set forth in Annex E or (ii) as soon as
practicable after the date that the Company becomes subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, it shall comply with
the terms and conditions set forth in Annex E.

(i) Transfer of Proceeds to Depository Institutions. If the Company is a Bank
Holding Company or a Savings and Loan Holding Company, the Company shall
immediately transfer to the IDI Subsidiaries, as equity capital contributions
(in a manner that will cause such equity capital contributions to qualify for
inclusion in the Tier 1 capital of the IDI Subsidiaries), not less than ninety
percent (90%) of the proceeds it receives in connection with the sale of
Preferred Shares; provided, however, that:

(A) no IDI Subsidiary shall receive any amount pursuant to this Section 3.1(i)
in excess of (A) three percent (3%) of the insured depository institution’s
Total Risk-Weighted Assets as reported in its Call Report filed immediately
prior to the Application Date, if the insured depository institution has Total
Assets of more than $1,000,000,000 and less than $10,000,000,000 as of
December 31, 2009 or (B) five percent (5%) of the IDI Subsidiary’s Total
Risk-Weighted Assets as reported in its Call Report filed immediately prior to
the Application Date, if the IDI Subsidiary has Total Assets of $1,000,000,000
or less as of December 31, 2009; and

(B) if Treasury held any Previously Acquired Preferred Shares immediately prior
to the Closing Date, the amount required to be transferred pursuant this
Section 3.1(i) shall be ninety percent (90%) of the difference obtained by
subtracting the Repayment Amount from the Purchase Price (unless the Purchase
Price is less than the Repayment Amount, in which case no amount shall be
required to be transferred pursuant to this Section 3.1(i)).

(j) Outreach to Minorities, Women and Veterans. The Company shall comply with
Section 4103(d)(8) of the SBJA.

 

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(k) Certification Related to Sex Offender Registration and Notification Act. The
Company shall obtain from any business to which it makes a loan that is funded
in whole or in part using funds from the Purchase Price a written certification
that no principal of such business has been convicted of a sex offense against a
minor (as such terms are defined in section 111 of the Sex Offender Registration
and Notification Act, 42 U.S.C. §16911). The Company shall retain all such
certifications in accordance with standard recordkeeping practices established
by the Appropriate Federal Banking Agency.

3.2 Negative Covenants. The Company hereby covenants and agrees with Treasury
that:

(a) Certain Transactions.

(i) The Company shall 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 to be performed and observed by the Company.

(ii) Without the prior written consent of Treasury, until such time as Treasury
shall cease to own any Preferred Shares, the Company shall not permit any of its
“significant subsidiaries” (as such term is defined in Rule 12b-2 promulgated
under the Exchange Act) to (A) 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, (B) 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 (C) 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.

(b) Restriction on Dividends and Repurchases. The Company covenants and agrees
that it shall not violate any of the restrictions on dividends, distributions,
redemptions, repurchases, acquisitions and related actions set forth in the
Certificate of Designation, which are incorporated by reference herein as if set
forth in full.

(c) Related Party Transactions. Until such time as Treasury ceases to own any
debt or equity securities of the Company, including the Preferred Shares, the
Company and the Company Subsidiaries shall not enter into transactions with
Affiliates or related persons (within the meaning of Item 404 under the SEC’s
Regulation S-K) unless (A) such transactions are on terms no less favorable to
the Company and the Company Subsidiaries than could be obtained from an
unaffiliated third party, and (B) have been approved by the audit committee of
the Board of Directors or comparable body of independent directors of the
Company, or if there are no independent directors, the Board of Directors,
provided that the Board of Directors shall maintain written documentation which
supports its determination that the transaction meets the requirements of clause
(A) of this Section 3.2(c).

 

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ARTICLE IV

ADDITIONAL AGREEMENTS

4.1 Purchase for Investment. Treasury acknowledges that the Preferred Shares
have not been registered under the Securities Act or under any state securities
laws. Treasury (a) is acquiring the Preferred Shares 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 Preferred Shares, 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 Purchase and of making an
informed investment decision.

4.2 Legends. (a) Treasury agrees that all certificates or other instruments
representing the Preferred Shares will bear a legend substantially to the
following effect:

“THE SECURITIES REPRESENTED BY THIS INSTRUMENT ARE NOT SAVINGS ACCOUNTS,
DEPOSITS OR OTHER OBLIGATIONS OF A BANK AND ARE NOT INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.

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
(THE “144A EXEMPTION”). IF ANY TRANSFEREE OF THE SECURITIES REPRESENTED BY THIS
INSTRUMENT IS ADVISED BY THE TRANSFEROR THAT SUCH TRANSFEROR IS RELYING ON THE
144A EXEMPTION, SUCH TRANSFEREE 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

 

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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.

THIS INSTRUMENT IS ISSUED SUBJECT TO THE RESTRICTIONS ON TRANSFER AND OTHER
PROVISIONS OF A SECURITIES PURCHASE AGREEMENT BETWEEN THE ISSUER OF THESE
SECURITIES AND TREASURY, A COPY OF WHICH IS ON FILE WITH THE ISSUER. THE
SECURITIES REPRESENTED BY THIS INSTRUMENT MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED EXCEPT IN COMPLIANCE WITH SAID AGREEMENT. ANY SALE OR OTHER TRANSFER
NOT IN COMPLIANCE WITH SAID AGREEMENT WILL BE VOID.”

(b) In the event that any Preferred Shares (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 Preferred Shares, which shall not contain
the applicable legends in Section 4.2(a); provided that Treasury surrenders to
the Company the previously issued certificates or other instruments.

4.3 Transfer of Preferred Shares. Subject to compliance with applicable
securities laws, Treasury shall be permitted to transfer, sell, assign or
otherwise dispose of (“Transfer”) all or a portion of the Preferred Shares at
any time, and the Company shall take all steps as may be reasonably requested by
Treasury to facilitate the Transfer of the Preferred Shares, including without
limitation, as set forth in Section 4.4, provided that Treasury shall not
Transfer any Preferred Shares if such transfer would require the Company to be
subject to the periodic reporting requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934 (the “Exchange Act”) and the Company was not
already subject to such requirements. In furtherance of the foregoing, the
Company shall provide reasonable cooperation to facilitate any Transfers of the
Preferred Shares, including, as is reasonable under the circumstances, by
furnishing such information concerning the Company and its business as a
proposed transferee may reasonably request and making management of the Company
reasonably available to respond to questions of a proposed transferee in
accordance with customary practice, subject in all cases to the proposed
transferee agreeing to a customary confidentiality agreement.

4.4 Rule 144; Rule 144A; 4(1 1/2) Transactions. (a) At all times after the
Signing Date, the Company covenants that (1) it will, upon the request of
Treasury or any subsequent holders of the Preferred Shares (“Holders”), use its
reasonable best efforts to (x), to the extent any Holder is relying on Rule 144
under the Securities Act to sell any of the Preferred Shares, make “current
public information” available, as provided in Section (c)(1) of Rule 144 (if the
Company is a “Reporting Issuer” within the meaning of Rule 144) or in Section
(c)(2) of Rule

 

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144 (if the Company is a “Non-Reporting Issuer” within the meaning of Rule 144),
in either case for such time period as necessary to permit sales pursuant to
Rule 144, (y), to the extent any Holder is relying on the so-called “Section
4(1 1/2)” exemption to sell any of its Preferred Shares, prepare and provide
to such Holder such information, including the preparation of private offering
memoranda or circulars or financial information, as the Holder may reasonably
request to enable the sale of the Preferred Shares pursuant to such exemption,
or (z) to the extent any Holder is relying on Rule 144A under the Securities Act
to sell any of its Preferred Shares, prepare and provide to such Holder the
information required pursuant to Rule 144A(d)(4), and (2) it will take such
further action as any Holder may reasonably request from time to time to enable
such Holder to sell Preferred Shares without registration under the Securities
Act within the limitations of the exemptions provided by (i) the provisions of
the Securities Act or any interpretations thereof or related thereto by the SEC,
including transactions based on the so-called “Section 4(1 1/2)” and other
similar transactions, (ii) Rule 144 or 144A under the Securities Act, as such
rules may be amended from time to time, or (iii) any similar rule or regulation
hereafter adopted by the SEC; provided that the Company shall not be required to
take any action described in this Section 4.4(a) that would cause the Company to
become subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act if the Company was not subject to such requirements prior to taking
such action. Upon the request of any Holder, the Company will deliver to such
Holder a written statement as to whether it has complied with such requirements
and, if not, the specifics thereof.

(b) The Company agrees to indemnify Treasury, Treasury’s officials, officers,
employees, agents, representatives and Affiliates, and each person, if any, that
controls Treasury within the meaning of the Securities Act (each, an
“Indemnitee”), against any and all losses, claims, damages, actions,
liabilities, costs and expenses (including reasonable fees, expenses and
disbursements of attorneys and other professionals incurred in connection with
investigating, defending, settling, compromising or paying any such losses,
claims, damages, actions, liabilities, costs and expenses), joint or several,
arising out of or based upon any untrue statement or alleged untrue statement of
material fact contained in any document or report provided by the Company
pursuant to this Section 4.4 or any omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.

(c) If the indemnification provided for in Section 4.4(b) is unavailable to an
Indemnitee with respect to any losses, claims, damages, actions, liabilities,
costs or expenses referred to therein or is insufficient to hold the Indemnitee
harmless as contemplated therein, then the Company, in lieu of indemnifying such
Indemnitee, shall contribute to the amount paid or payable by such Indemnitee as
a result of such losses, claims, damages, actions, liabilities, costs or
expenses in such proportion as is appropriate to reflect the relative fault of
the Indemnitee, on the one hand, and the Company, on the other hand, in
connection with the statements or omissions which resulted in such losses,
claims, damages, actions, liabilities, costs or expenses as well as any other
relevant equitable considerations. The relative fault of the Company, on the one
hand, and of the Indemnitee, on the other hand, shall be determined by reference
to, among other factors, whether the untrue statement of a material fact or
omission to state a material fact relates to information supplied by the Company
or by the Indemnitee and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission;
the Company and Treasury agree that it would not be just and

 

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equitable if contribution pursuant to this Section 4.4(c) were determined by pro
rata allocation or by any other method of allocation that does not take account
of the equitable considerations referred to in Section 4.4(b). No Indemnitee
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from the Company if the
Company was not guilty of such fraudulent misrepresentation.

4.5 Depositary Shares. Upon request by Treasury at any time following the
Closing Date, the Company shall promptly enter into a depositary arrangement,
pursuant to customary agreements reasonably satisfactory to Treasury and with a
depositary reasonably acceptable to Treasury, pursuant to which the Preferred
Shares may be deposited and depositary shares, each representing a fraction of a
Preferred Share, as specified by Treasury, may be issued. From and after the
execution of any such depositary arrangement, and the deposit of any Preferred
Shares, as applicable, pursuant thereto, the depositary shares issued pursuant
thereto shall be deemed “Preferred Shares” and, as applicable, “Registrable
Securities” for purposes of this Agreement.

4.6 Expenses and Further Assurances. (a) Unless otherwise provided in this
Agreement, each of the parties hereto will bear and pay all costs and expenses
incurred by it or on its behalf in connection with the transactions contemplated
under this Agreement, including fees and expenses of its own financial or other
consultants, investment bankers, accountants and counsel.

(b) The Company shall, at the Company’s sole cost and expense, (i) furnish to
Treasury all instruments, documents and other agreements required to be
furnished by the Company pursuant to the terms of this Agreement, including,
without limitation, any documents required to be delivered pursuant to
Section 4.4 above, or which are reasonably requested by Treasury in connection
therewith; (ii) execute and deliver to Treasury such documents, instruments,
certificates, assignments and other writings, and do such other acts necessary
or desirable, to evidence, preserve and/or protect the Preferred Shares
purchased by Treasury, as Treasury may reasonably require; and (iii) do and
execute all and such further lawful and reasonable acts, conveyances and
assurances for the better and more effective carrying out of the intents and
purposes of this Agreement, as Treasury shall reasonably require from time to
time.

ARTICLE V

MISCELLANEOUS

5.1 Termination. This Agreement shall terminate upon the earliest to occur of:

(a) termination at any time prior to the Closing:

(i) by either Treasury or the Company if the Closing shall not have occurred on
or before the 30th calendar day following the date on which Treasury issued its
preliminary approval of the Company’s application to participate in SBLF (the
“Closing Deadline”); provided, however, that in the event the Closing has not
occurred by the Closing Deadline, 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 calendar day after
the Closing Deadline and not be under any obligation to extend the term of

 

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this Agreement thereafter; provided, further, that the right to terminate this
Agreement under this Section 5.1(a)(i) 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; or

(ii) by either Treasury 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

(iii) by the mutual written consent of Treasury and the Company; or

(b) the date on which all of the Preferred Shares have been redeemed in whole;
or

(c) the date on which Treasury has transferred all of the Preferred Shares to
third parties which are not Affiliates of Treasury.

In the event of termination of this Agreement as provided in this Section 5.1,
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.

5.2 Survival.

(a) This Agreement and all representations, warranties, covenants and agreements
made herein shall survive the Closing without limitation.

(b) The covenants set forth in Article III and Annex E and the agreements set
forth in Article IV shall, to the extent such covenants do not explicitly
terminate at such time as Treasury no longer owns any Preferred Shares, survive
the termination of this Agreement pursuant to Section 5.1(c) without limitation
until the date on which all of the Preferred Shares have been redeemed in whole.

(c) The rights and remedies of Treasury with respect to the representations,
warranties, covenants and obligations of the Company herein shall not be
affected by any investigation conducted with respect to, or any knowledge
acquired (or capable of being acquired) at any time by Treasury or any of its
personnel or agents with respect to the accuracy or inaccuracy of, or compliance
with, any such representation, warranty, covenant or obligation.

5.3 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 party, except as set forth in Section 3.1(d)(v). 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.

 

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5.4 Waiver of Conditions. The conditions to each party’s obligation to
consummate the Purchase 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.

5.5 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 Purchase 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 5.7 and (ii) Treasury at
the address and in the manner set forth for notices to the Company in
Section 5.7, 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 PURCHASE CONTEMPLATED HEREBY.

5.6 No Relationship to TARP. The parties acknowledge and agree that (i) the SBLF
program is separate and distinct from the Troubled Asset Relief Program
established by the Emergency Economic Stabilization Act of 2008; and (ii) the
Company shall not, by virtue of the investment contemplated hereby, be
considered a recipient under the Troubled Asset Relief Program.

5.7 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 to the Company shall be delivered as set forth on the cover
page of this Agreement, or pursuant to such other instruction as may be
designated in writing by the Company to Treasury. All notices to Treasury shall
be delivered as set forth below, or pursuant to such other instructions as may
be designated in writing by Treasury to the Company.

If to Treasury:

The Secretary of the Treasury

1500 Pennsylvania Avenue, NW

Washington, D.C. 20220

Attention: Small Business Lending Fund, Office of Domestic Finance

E-mail: SBLFComplSubmissions@treasury.gov

 

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5.8 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 the 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 merger, consolidation,
statutory share exchange or similar transaction that requires the approval of
the Company’s stockholders (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) an assignment of certain rights as provided in Sections 3.1(c) or
Annex E or (c) an assignment by Treasury of this Agreement to an Affiliate of
Treasury; provided that if Treasury assigns this Agreement to an Affiliate,
Treasury shall be relieved of its obligations under this Agreement but (i) all
rights, remedies and obligations of Treasury hereunder shall continue and be
enforceable by such Affiliate, (ii) the Company’s obligations and liabilities
hereunder shall continue to be outstanding and (iii) all references to Treasury
herein shall be deemed to be references to such Affiliate.

5.9 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.

5.10 No Third Party Beneficiaries. Other than as expressly provided herein,
nothing contained in this Agreement, expressed or implied, is intended to confer
upon any person or entity other than the Company and Treasury (and any
Indemnitee) any benefit, right or remedies.

5.11 Specific Performance. The parties agree that irreparable damage would occur
in the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms. It is accordingly agreed that the parties
shall be entitled (without the necessity of posting a bond) to specific
performance of the terms hereof, this being in addition to any other remedies to
which they are entitled at law or equity.

5.12 Interpretation. When a reference is made in this Agreement to “Articles” or
“Sections” such reference shall be to an Article or Section of the Annex of this
Agreement in which such reference is contained, unless otherwise indicated. When
a reference is made in this Agreement to an “Annex”, such reference shall be to
an Annex 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 to be followed by the words

 

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“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 entered into 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 the State
of New York or the District of Columbia generally are authorized or required by
law or other governmental actions to close.

 

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ANNEX D

DISCLOSURE SCHEDULE

 

 

Part 2.2 Capitalization

 

Capital stock reserved for issuance in connection with securities or obligations
giving the holder thereof the right to acquire such capital:  

438,572 outstanding options to purchase shares of Common Stock

 

563,760 outstanding warrants to purchase shares of Common Stock

Shares issued since the Capitalization Date upon exercise of options or pursuant
to equity-based awards, warrants, or convertible securities:   None All other
shares issued since the Capitalization Date:   None Holders of 5% or more of any
class of capital stock   Primary Address

BankCap Partners Fund (29.15%)

 

2000 McKinney Avenue, Suite 820

Dallas, Texas 75201

If the Company is a Bank Holding Company or Savings and Loan Holding Company,
complete the following (leave blank otherwise):

 

Name of IDI Subsidiary

  Percentage of IDI Subsidiary’s capital stock owned by the Company

Xenith Bank

  100%

 

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Part 2.7 Material Adverse Effect

List any exceptions to the representation and warranty in Section 2.7 of the
General Terms and Conditions. If none, please so indicate by checking the
box:  x.

 

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Part 2.13 Compliance With Laws

List any exceptions to the representation and warranty in the second sentence of
Section 2.13 of the General Terms and Conditions. If none, please so indicate by
checking the box:  x.

 

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Part 2.19 Regulatory Agreements

List any exceptions to the representation and warranty in Section 2.19 of the
General Terms and Conditions. If none, please so indicate by checking the
box:  ¨.

As part of an application to the Federal Reserve Board (the “FRB”) that was
approved on December 7, 2009, Xenith Bank (a Company Subsidiary) submitted a
business plan to the FRB. In the business plan, Xenith Bank indicated that it
will operate within the parameters of the business plan submitted to the FRB for
the three-year period ending December 22, 2012. The business plan sets forth
minimum leverage and risk-based capital ratios of at least 10% and 12%,
respectively, through 2012. Although neither the Company nor any Company
Subsidiary has made any commitments to the FRB, Xenith Bank understands that it
must obtain prior written approval of the FRB before making any material change
to its business plan. Xenith Bank currently meets all minimum capital adequacy
requirements to which it is subject, including those contained in the business
plan submitted to the FRB.

 

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Part 2.25 Related Party Transactions

List any exceptions to the representation and warranty in Section 2.25 of the
General Terms and Conditions. If none, please so indicate by checking the
box:  x.

 

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ANNEX E

REGISTRATION RIGHTS

 

1. Definitions. Terms not defined in this Annex shall have the meaning ascribed
to such terms in the Agreement. As used in this Annex E, the following terms
shall have the following respective meanings:

(a) “Holder” means Treasury and any other holder of Registrable Securities to
whom the registration rights conferred by this Agreement have been transferred
in compliance with Section 9 of this Annex E.

(b) “Holders’ Counsel” means one counsel for the selling Holders chosen by
Holders holding a majority interest in the Registrable Securities being
registered.

(c) “Pending Underwritten Offering” means, with respect to any Holder forfeiting
its rights pursuant to Section 11 of this Annex E, any underwritten offering of
Registrable Securities in which such Holder has advised the Company of its
intent to register its Registrable Securities either pursuant to Section 2(b) or
2(d) of this Annex E prior to the date of such Holder’s forfeiture.

(d) “Register”, “registered”, and “registration” shall refer to a registration
effected by preparing and (A) filing a registration statement or amendment
thereto in compliance with the Securities Act and applicable rules and
regulations thereunder, and the declaration or ordering of effectiveness of such
registration statement or amendment thereto or (B) filing a prospectus and/or
prospectus supplement in respect of an appropriate effective registration
statement on Form S-3.

(e) “Registrable Securities” means (A) all Preferred Shares and (B) any equity
securities issued or issuable directly or indirectly with respect to the
securities referred to in the foregoing clause (A) by way of conversion,
exercise or exchange thereof, or share dividend or share split or in connection
with a combination of shares, recapitalization, reclassification, merger,
amalgamation, arrangement, consolidation or other reorganization, provided that,
once issued, such securities will not be Registrable Securities when (1) they
are sold pursuant to an effective registration statement under the Securities
Act, (2) they shall have ceased to be outstanding or (3) they have been sold in
any transaction in which the transferor’s rights under this Agreement are not
assigned to the transferee of the securities. No Registrable Securities may be
registered under more than one registration statement at any one time.

(f) “Registration Expenses” mean all expenses incurred by the Company in
effecting any registration pursuant to this Agreement (whether or not any
registration or prospectus becomes effective or final) or otherwise complying
with its obligations under this Annex E, including all registration, filing and
listing fees, printing expenses, fees and disbursements of counsel for the
Company, blue sky fees and expenses, expenses incurred in connection with any
“road show”, the reasonable fees and disbursements of Holders’ Counsel, and
expenses of the Company’s independent accountants in connection with any regular
or special reviews or audits incident to or required by any such registration,
but shall not include Selling Expenses.

 

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(g) “Rule 144”, “Rule 144A”, “Rule 159A”, “Rule 405” and “Rule 415” mean, in
each case, such rule promulgated under the Securities Act (or any successor
provision), as the same shall be amended from time to time.

(h) “Selling Expenses” mean all discounts, selling commissions and stock
transfer taxes applicable to the sale of Registrable Securities and fees and
disbursements of counsel for any Holder (other than the fees and disbursements
of Holders’ Counsel included in Registration Expenses).

(i) “Special Registration” means the registration of (A) equity securities
and/or options or other rights in respect thereof solely registered on Form S-4
or Form S-8 (or successor form) or (B) shares of equity securities and/or
options or other rights in respect thereof to be offered to directors, members
of management, employees, consultants, customers, lenders or vendors of the
Company or Company Subsidiaries or in connection with dividend reinvestment
plans.

2. Registration.

(a) The Company covenants and agrees that as promptly as practicable after the
date that the Company becomes subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act (and in any event no later than 30 days
thereafter), the Company shall prepare and file with the SEC a Shelf
Registration Statement covering all Registrable Securities (or otherwise
designate an existing shelf registration on an appropriate form under Rule 415
under the Securities Act (a “Shelf Registration Statement”) filed with the SEC
to cover the Registrable Securities), and, to the extent the Shelf Registration
Statement has not theretofore been declared effective or is not automatically
effective upon such filing, the Company shall use reasonable best efforts to
cause such Shelf Registration Statement to be declared or become effective and
to keep such Shelf Registration Statement continuously effective and in
compliance with the Securities Act and usable for resale of such Registrable
Securities for a period from the date of its initial effectiveness until such
time as there are no Registrable Securities remaining (including by refiling
such Shelf Registration Statement (or a new Shelf Registration Statement) if the
initial Shelf Registration Statement expires). Notwithstanding the foregoing, if
the Company is not eligible to file a registration statement on Form S-3, then
the Company shall not be obligated to file a Shelf Registration Statement unless
and until requested to do so in writing by Treasury.

(b) Any registration pursuant to Section 2(a) of this Annex E shall be effected
by means of a Shelf Registration Statement on an appropriate form under Rule 415
under the Securities Act (a “Shelf Registration Statement”). If any Holder
intends to distribute any Registrable Securities by means of an underwritten
offering it shall promptly so advise the Company and the Company shall take all
reasonable steps to facilitate such distribution, including the actions required
pursuant to Section 2(d) of this Annex E; provided that the Company shall not be
required to facilitate an underwritten offering of Registrable Securities unless
(i) the expected gross proceeds from such offering exceed $200,000 or (ii) such
underwritten offering includes all of the outstanding Registrable Securities
held by such Holder. The lead underwriters in any such distribution shall be
selected by the Holders of a majority of the Registrable Securities to be
distributed.

 

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(c) The Company shall not be required to effect a registration (including a
resale of Registrable Securities from an effective Shelf Registration Statement)
or an underwritten offering pursuant to Section 2 of this Annex E: (A) with
respect to securities that are not Registrable Securities; or (B) if the Company
has notified all Holders that in the good faith judgment of the Board of
Directors, it would be materially detrimental to the Company or its security
holders for such registration or underwritten offering to be effected at such
time, in which event the Company shall have the right to defer such registration
for a period of not more than 45 days after receipt of the request of any
Holder; provided that such right to delay a registration or underwritten
offering shall be exercised by the Company (1) only if the Company has generally
exercised (or is concurrently exercising) similar black-out rights against
holders of similar securities that have registration rights and (2) not more
than three times in any 12-month period and not more than 90 days in the
aggregate in any 12-month period.

(d) If during any period when an effective Shelf Registration Statement is not
available, the Company proposes to register any of its equity securities, other
than a registration pursuant to Section 2(a) of this Annex E or a Special
Registration, and the registration form to be filed may be used for the
registration or qualification for distribution of Registrable Securities, the
Company will give prompt written notice to all Holders of its intention to
effect such a registration (but in no event less than ten days prior to the
anticipated filing date) and will include in such registration all Registrable
Securities with respect to which the Company has received written requests for
inclusion therein within ten business days after the date of the Company’s
notice (a “Piggyback Registration”). Any such person that has made such a
written request may withdraw its Registrable Securities from such Piggyback
Registration by giving written notice to the Company and the managing
underwriter, if any, on or before the fifth business day prior to the planned
effective date of such Piggyback Registration. The Company may terminate or
withdraw any registration under this Section 2(d) of this Annex E prior to the
effectiveness of such registration, whether or not any Holders have elected to
include Registrable Securities in such registration.

(e) If the registration referred to in Section 2(d) of this Annex E is proposed
to be underwritten, the Company will so advise all Holders as a part of the
written notice given pursuant to Section 2(d) of this Annex E. In such event,
the right of all Holders to registration pursuant to Section 2 of this Annex E
will be conditioned upon such persons’ participation in such underwriting and
the inclusion of such person’s Registrable Securities in the underwriting if
such securities are of the same class of securities as the securities to be
offered in the underwritten offering, and each such person will (together with
the Company and the other persons distributing their securities through such
underwriting) enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting by the Company;
provided that Treasury (as opposed to other Holders) shall not be required to
indemnify any person in connection with any registration. If any participating
person disapproves of the terms of the underwriting, such person may elect to
withdraw therefrom by written notice to the Company, the managing underwriters
and Treasury (if Treasury is participating in the underwriting).

 

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(f) If either (x) the Company grants “piggyback” registration rights to one or
more third parties to include their securities in an underwritten offering under
the Shelf Registration Statement pursuant to Section 2(b) of this Annex E or
(y) a Piggyback Registration under Section 2(d) of this Annex E relates to an
underwritten offering on behalf of the Company, and in either case the managing
underwriters advise the Company that in their reasonable opinion the number of
securities requested to be included in such offering exceeds the number which
can be sold without adversely affecting the marketability of such offering
(including an adverse effect on the per share offering price), the Company will
include in such offering only such number of securities that in the reasonable
opinion of such managing underwriters can be sold without adversely affecting
the marketability of the offering (including an adverse effect on the per share
offering price), which securities will be so included in the following order of
priority: (A) first, in the case of a Piggyback Registration under Section 2(d)
of this Annex E, the securities the Company proposes to sell, (B) then the
Registrable Securities of all Holders who have requested inclusion of
Registrable Securities pursuant to Section 2(b) or Section 2(d) of this Annex E,
as applicable, pro rata on the basis of the aggregate number of such securities
or shares owned by each such Holder and (C) lastly, any other securities of the
Company that have been requested to be so included, subject to the terms of this
Agreement; provided, however, that if the Company has, prior to the Signing
Date, entered into an agreement with respect to its securities that is
inconsistent with the order of priority contemplated hereby then it shall apply
the order of priority in such conflicting agreement to the extent that it would
otherwise result in a breach under such agreement.

3. Expenses of Registration. All Registration Expenses incurred in connection
with any registration, qualification or compliance hereunder shall be borne by
the Company. All Selling Expenses incurred in connection with any registrations
hereunder shall be borne by the holders of the securities so registered pro rata
on the basis of the aggregate offering or sale price of the securities so
registered.

4. Obligations of the Company. Whenever required to effect the registration of
any Registrable Securities or facilitate the distribution of Registrable
Securities pursuant to an effective Shelf Registration Statement, the Company
shall, as expeditiously as reasonably practicable:

(a) Prepare and file with the SEC a prospectus supplement or post-effective
amendment with respect to a proposed offering of Registrable Securities pursuant
to an effective registration statement, subject to Section 4 of this Annex E,
keep such registration statement effective and keep such prospectus supplement
current until the securities described therein are no longer Registrable
Securities.

(b) Prepare and file with the SEC such amendments and supplements to the
applicable registration statement and the prospectus or prospectus supplement
used in connection with such registration statement as may be necessary to
comply with the provisions of the Securities Act with respect to the disposition
of all securities covered by such registration statement.

(c) Furnish to the Holders and any underwriters such number of copies of the
applicable registration statement and each such amendment and supplement thereto
(including in

 

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each case all exhibits) and of a prospectus, including a preliminary prospectus,
in conformity with the requirements of the Securities Act, and such other
documents as they may reasonably request in order to facilitate the disposition
of Registrable Securities owned or to be distributed by them.

(d) Use its reasonable best efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky
laws of such jurisdictions as shall be reasonably requested by the Holders or
any managing underwriter(s), to keep such registration or qualification in
effect for so long as such registration statement remains in effect, and to take
any other action which may be reasonably necessary to enable such seller to
consummate the disposition in such jurisdictions of the securities owned by such
Holder; provided that the Company shall not be required in connection therewith
or as a condition thereto to qualify to do business or to file a general consent
to service of process in any such states or jurisdictions.

(e) Notify each Holder of Registrable Securities at any time when a prospectus
relating thereto is required to be delivered under the Securities Act of the
happening of any event as a result of which the applicable prospectus, as then
in effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing.

(f) Give written notice to the Holders:

(i) when any registration statement or any amendment thereto has been filed with
the SEC (except for any amendment effected by the filing of a document with the
SEC pursuant to the Exchange Act) and when such registration statement or any
post-effective amendment thereto has become effective;

(ii) of any request by the SEC for amendments or supplements to any registration
statement or the prospectus included therein or for additional information;

(iii) of the issuance by the SEC of any stop order suspending the effectiveness
of any registration statement or the initiation of any proceedings for that
purpose;

(iv) of the receipt by the Company or its legal counsel of any notification with
respect to the suspension of the qualification of the applicable Registrable
Securities for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose;

(v) of the happening of any event that requires the Company to make changes in
any effective registration statement or the prospectus related to the
registration statement in order to make the statements therein not misleading
(which notice shall be accompanied by an instruction to suspend the use of the
prospectus until the requisite changes have been made); and

(vi) if at any time the representations and warranties of the Company contained
in any underwriting agreement contemplated by Section 4(j) of this Annex E cease
to be true and correct.

 

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(g) Use its reasonable best efforts to prevent the issuance or obtain the
withdrawal of any order suspending the effectiveness of any registration
statement referred to in Section 4(f)(iii) of this Annex E at the earliest
practicable time.

(h) Upon the occurrence of any event contemplated by Section 4(e) or 4(f)(v) of
this Annex E, promptly prepare a post-effective amendment to such registration
statement or a supplement to the related prospectus or file any other required
document so that, as thereafter delivered to the Holders and any underwriters,
the prospectus will not contain an untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading. If the Company
notifies the Holders in accordance with Section 4(f)(v) to suspend the use of
the prospectus until the requisite changes to the prospectus have been made,
then the Holders and any underwriters shall suspend use of such prospectus and
use their reasonable best efforts to return to the Company all copies of such
prospectus (at the Company’s expense) other than permanent file copies then in
such Holders’ or underwriters’ possession. The total number of days that any
such suspension may be in effect in any 12-month period shall not exceed 90
days.

(i) Use reasonable best efforts to procure the cooperation of the Company’s
transfer agent in settling any offering or sale of Registrable Securities,
including with respect to the transfer of physical stock certificates into
book-entry form in accordance with any procedures reasonably requested by the
Holders or any managing underwriter(s).

(j) If an underwritten offering is requested pursuant to Section 2(b) of this
Annex E, enter into an underwriting agreement in customary form, scope and
substance and take all such other actions reasonably requested by the Holders of
a majority of the Registrable Securities being sold in connection therewith or
by the managing underwriter(s), if any, to expedite or facilitate the
underwritten disposition of such Registrable Securities, and in connection
therewith in any underwritten offering (including making members of management
and executives of the Company available to participate in “road shows”, similar
sales events and other marketing activities), (A) make such representations and
warranties to the Holders that are selling stockholders and the managing
underwriter(s), if any, with respect to the business of the Company and its
subsidiaries, and the Shelf Registration Statement, prospectus and documents, if
any, incorporated or deemed to be incorporated by reference therein, in each
case, in customary form, substance and scope, and, if true, confirm the same if
and when requested, (B) use its reasonable best efforts to furnish the
underwriters with opinions of counsel to the Company, addressed to the managing
underwriter(s), if any, covering the matters customarily covered in such
opinions requested in underwritten offerings, (C) use its reasonable best
efforts to obtain “cold comfort” letters from the independent certified public
accountants of the Company (and, if necessary, any other independent certified
public accountants of any business acquired by the Company for which financial
statements and financial data are included in the Shelf Registration Statement)
who have certified the financial statements included in such Shelf Registration
Statement, addressed to each of the managing underwriter(s), if any, such
letters to be in customary form and covering matters of the type customarily
covered in “cold comfort” letters, (D) if an underwriting agreement is entered
into, the same shall contain indemnification provisions and procedures customary
in underwritten offerings (provided that Treasury shall not be obligated to
provide any indemnity), and (E) deliver such documents and certificates as may
be reasonably requested by the Holders of a majority of the Registrable
Securities being sold in

 

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connection therewith, their counsel and the managing underwriter(s), if any, to
evidence the continued validity of the representations and warranties made
pursuant to clause (A) above and to evidence compliance with any customary
conditions contained in the underwriting agreement or other agreement entered
into by the Company.

(k) Make available for inspection by a representative of Holders that are
selling stockholders, the managing underwriter(s), if any, and any attorneys or
accountants retained by such Holders or managing underwriter(s), at the offices
where normally kept, during reasonable business hours, financial and other
records, pertinent corporate documents and properties of the Company, and cause
the officers, directors and employees of the Company to supply all information
in each case reasonably requested (and of the type customarily provided in
connection with due diligence conducted in connection with a registered public
offering of securities) by any such representative, managing underwriter(s),
attorney or accountant in connection with such Shelf Registration Statement.

(l) Use reasonable best efforts to cause all such Registrable Securities to be
listed on each national securities exchange on which similar securities issued
by the Company are then listed or, if no similar securities issued by the
Company are then listed on any national securities exchange, use its reasonable
best efforts to cause all such Registrable Securities to be listed on such
securities exchange as Treasury may designate.

(m) If requested by Holders of a majority of the Registrable Securities being
registered and/or sold in connection therewith, or the managing underwriter(s),
if any, promptly include in a prospectus supplement or amendment such
information as the Holders of a majority of the Registrable Securities being
registered and/or sold in connection therewith or managing underwriter(s), if
any, may reasonably request in order to permit the intended method of
distribution of such securities and make all required filings of such prospectus
supplement or such amendment as soon as practicable after the Company has
received such request.

(n) Timely provide to its security holders earning statements satisfying the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder.

 

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5. Suspension of Sales. Upon receipt of written notice from the Company that a
registration statement, prospectus or prospectus supplement contains or may
contain an untrue statement of a material fact or omits or may omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading or that circumstances exist that make inadvisable use of
such registration statement, prospectus or prospectus supplement, each Holder of
Registrable Securities shall forthwith discontinue disposition of Registrable
Securities until such Holder has received copies of a supplemented or amended
prospectus or prospectus supplement, or until such Holder is advised in writing
by the Company that the use of the prospectus and, if applicable, prospectus
supplement may be resumed, and, if so directed by the Company, such Holder shall
deliver to the Company (at the Company’s expense) all copies, other than
permanent file copies then in such Holder’s possession, of the prospectus and,
if applicable, prospectus supplement covering such Registrable Securities
current at the time of receipt of such notice. The total number of days that any
such suspension may be in effect in any 12-month period shall not exceed 90
days.

6. Termination of Registration Rights. A Holder’s registration rights as to any
securities held by such Holder (and its Affiliates, partners, members and former
members) shall not be available unless such securities are Registrable
Securities.

7. Furnishing Information.

(a) No Holder shall use any free writing prospectus (as defined in Rule 405) in
connection with the sale of Registrable Securities without the prior written
consent of the Company.

(b) It shall be a condition precedent to the obligations of the Company to take
any action pursuant to Section 4 of this Annex E that the selling Holders and
the underwriters, if any, shall furnish to the Company such information
regarding themselves, the Registrable Securities held by them and the intended
method of disposition of such securities as shall be required to effect the
registered offering of their Registrable Securities.

8. Indemnification.

(a) The Company agrees to indemnify each Holder and, if a Holder is a person
other than an individual, such Holder’s officers, directors, employees, agents,
representatives and Affiliates, and in the case of Treasury, Treasury’s
officials, and each person, if any, that controls a Holder within the meaning of
the Securities Act (each, an “Indemnitee”), against any and all losses, claims,
damages, actions, liabilities, costs and expenses (including reasonable fees,
expenses and disbursements of attorneys and other professionals incurred in
connection with investigating, defending, settling, compromising or paying any
such losses, claims, damages, actions, liabilities, costs and expenses), joint
or several, arising out of or based upon any untrue statement or alleged untrue
statement of material fact contained in any registration statement, including
any preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto or any documents incorporated therein by
reference or contained in any free writing prospectus (as such term is defined
in Rule 405) prepared by the Company or authorized by it in writing for use by
such Holder (or any amendment or supplement thereto); or any omission to state
therein a material fact required to be stated therein or necessary to make the

 

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statements therein, in light of the circumstances under which they were made,
not misleading; provided, that the Company shall not be liable to such
Indemnitee in any such case to the extent that any such loss, claim, damage,
liability (or action or proceeding in respect thereof) or expense arises out of
or is based upon (A) an untrue statement or omission made in such registration
statement, including any such preliminary prospectus or final prospectus
contained therein or any such amendments or supplements thereto or contained in
any free writing prospectus (as such term is defined in Rule 405) prepared by
the Company or authorized by it in writing for use by such Holder (or any
amendment or supplement thereto), in reliance upon and in conformity with
information regarding such Indemnitee or its plan of distribution or ownership
interests which was furnished in writing to the Company by such Indemnitee for
use in connection with such registration statement, including any such
preliminary prospectus or final prospectus contained therein or any such
amendments or supplements thereto, or (B) offers or sales effected by or on
behalf of such Indemnitee “by means of” (as defined in Rule 159A) a “free
writing prospectus” (as defined in Rule 405) that was not authorized in writing
by the Company.

(b) If the indemnification provided for in Section 8(a) of this Annex E is
unavailable to an Indemnitee with respect to any losses, claims, damages,
actions, liabilities, costs or expenses referred to therein or is insufficient
to hold the Indemnitee harmless as contemplated therein, then the Company, in
lieu of indemnifying such Indemnitee, shall contribute to the amount paid or
payable by such Indemnitee as a result of such losses, claims, damages, actions,
liabilities, costs or expenses in such proportion as is appropriate to reflect
the relative fault of the Indemnitee, on the one hand, and the Company, on the
other hand, in connection with the statements or omissions which resulted in
such losses, claims, damages, actions, liabilities, costs or expenses as well as
any other relevant equitable considerations. The relative fault of the Company,
on the one hand, and of the Indemnitee, on the other hand, shall be determined
by reference to, among other factors, whether the untrue statement of a material
fact or omission to state a material fact relates to information supplied by the
Company or by the Indemnitee and the parties’ relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission;
the Company and each Holder agree that it would not be just and equitable if
contribution pursuant to this Section 8(b) of this Annex E were determined by
pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in Section 8(a) of this
Annex E. No Indemnitee guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from the Company if the Company was not guilty of such fraudulent
misrepresentation.

9. Assignment of Registration Rights. The rights of Treasury to registration of
Registrable Securities pursuant to Section 2 of this Annex E may be assigned by
Treasury to a transferee or assignee of Registrable Securities; provided,
however, the transferor shall, within ten days after such transfer, furnish to
the Company written notice of the name and address of such transferee or
assignee and the number and type of Registrable Securities that are being
assigned.

10. Clear Market. With respect to any underwritten offering of Registrable
Securities by Holders pursuant to this Annex E, the Company agrees not to effect
(other than pursuant to such registration or pursuant to a Special Registration)
any public sale or distribution, or to file any Shelf Registration Statement
(other than such registration or a Special Registration) covering

 

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any preferred stock of the Company or any securities convertible into or
exchangeable or exercisable for preferred stock of the Company, during the
period not to exceed ten days prior and 60 days following the effective date of
such offering or such longer period up to 90 days as may be requested by the
managing underwriter for such underwritten offering. The Company also agrees to
cause such of its directors and senior executive officers to execute and deliver
customary lock-up agreements in such form and for such time period up to 90 days
as may be requested by the managing underwriter.

11. Forfeiture of Rights. At any time, any holder of Registrable Securities
(including any Holder) may elect to forfeit its rights set forth in this Annex E
from that date forward; provided, that a Holder forfeiting such rights shall
nonetheless be entitled to participate under Section 2(d) – (f) of this Annex E
in any Pending Underwritten Offering to the same extent that such Holder would
have been entitled to if the Holder had not withdrawn; and provided, further,
that no such forfeiture shall terminate a Holder’s rights or obligations under
Section 7 of this Annex E with respect to any prior registration or Pending
Underwritten Offering.

12. Specific Performance. The parties hereto acknowledge that there would be no
adequate remedy at law if the Company fails to perform any of its obligations
under this Annex E and that Holders from time to time may be irreparably harmed
by any such failure, and accordingly agree that such Holders, in addition to any
other remedy to which they may be entitled at law or in equity, to the fullest
extent permitted and enforceable under applicable law shall be entitled to
compel specific performance of the obligations of the Company under this Annex E
in accordance with the terms and conditions of this Annex E.

13. No Inconsistent Agreements. The Company shall not, on or after the Signing
Date, enter into any agreement with respect to its securities that may impair
the rights granted to Holders under this Annex E or that otherwise conflicts
with the provisions hereof in any manner that may impair the rights granted to
Holders under this Annex E. In the event the Company has, prior to the Signing
Date, entered into any agreement with respect to its securities that is
inconsistent with the rights granted to Holders under this Annex E (including
agreements that are inconsistent with the order of priority contemplated by
Section 2(f) of Annex E) or that may otherwise conflict with the provisions
hereof, the Company shall use its reasonable best efforts to amend such
agreements to ensure they are consistent with the provisions of this Annex E.

14. Certain Offerings by Treasury. An “underwritten” offering or other
disposition shall include any distribution of such securities on behalf of
Treasury by one or more broker-dealers, an “underwriting agreement” shall
include any purchase agreement entered into by such broker-dealers, and any
“registration statement” or “prospectus” shall include any offering document
approved by the Company and used in connection with such distribution.

 

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ANNEX F

FORM OF CERTIFICATE OF DESIGNATION

 

[SEE ATTACHED]

 

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ARTICLES OF AMENDMENT

TO

AMENDED AND RESTATED ARTICLES OF INCORPORATION

OF

XENITH BANKSHARES, INC.

TO CREATE A NEW SERIES OF PREFERRED STOCK

DESIGNATED AS

SENIOR NON-CUMULATIVE PERPETUAL PREFERRED STOCK, SERIES A

I.

The name of the corporation is Xenith Bankshares, Inc., a corporation organized
and existing under the laws of the Commonwealth of Virginia (the “Corporation”).

II.

In accordance with the provisions of Section 13.1-639 of the Virginia Stock
Corporation Act (the “VSCA”) and the authority conferred on the Board of
Directors of the Corporation by the Corporation’s Amended and Restated Articles
of Incorporation (the “Articles of Incorporation”), the Articles of
Incorporation are hereby amended to create a new series of shares of Preferred
Stock, par value $1.00 per share, of the Corporation designated as “Senior
Non-Cumulative Perpetual Preferred Stock, Series A”.

The designation and number of shares of such series, and the voting and other
powers, preferences and relative, participating, optional or other rights, and
the qualifications, limitations and restrictions thereof, of the shares of such
series, are as follows:

Part 1. Designation and Number of Shares. There is hereby created out of the
authorized and unissued shares of preferred stock of the Corporation a series of
preferred stock designated as the “Senior Non-Cumulative Perpetual Preferred
Stock, Series A” (the “Designated Preferred Stock”). The authorized number of
shares of Designated Preferred Stock shall be 8,381.

Part 2. Standard Provisions. The Standard Provisions contained in Schedule A
attached hereto are incorporated herein by reference in their entirety and shall
be deemed to be a part of these Articles of Amendment to the same extent as if
such provisions had been set forth in full herein.

Part 3. Definitions. The following terms are used in these Articles of Amendment
(including the Standard Provisions in Schedule A hereto) as defined below:

(a) “Common Stock” means the common stock, par value $1.00 per share, of the
Corporation.

 

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(b) “Definitive Agreement” means that certain Securities Purchase Agreement by
and between Corporation and Treasury, dated as of the Signing Date.

(c) “Junior Stock” means the Common Stock and any other class or series of stock
of the Corporation the terms of which expressly provide that it ranks junior to
Designated Preferred Stock as to dividend and redemption rights and/or as to
rights on liquidation, dissolution or winding up of the Corporation.

(d) “Liquidation Amount” means $1,000 per share of Designated Preferred Stock.

(e) “Minimum Amount” means (i) the amount equal to twenty-five percent (25%) of
the aggregate Liquidation Amount of Designated Preferred Stock issued on the
Original Issue Date or (ii) all of the outstanding Designated Preferred Stock,
if the aggregate liquidation preference of the outstanding Designated Preferred
Stock is less than the amount set forth in the preceding clause (i).

(f) “Parity Stock” means any class or series of stock of the Corporation (other
than Designated Preferred Stock) the terms of which do not expressly provide
that such class or series will rank senior or junior to Designated Preferred
Stock as to dividend rights and/or as to rights on liquidation, dissolution or
winding up of the Corporation (in each case without regard to whether dividends
accrue cumulatively or non-cumulatively). Without limiting the foregoing, Parity
Stock shall include the Corporation’s Common Stock.

(g) “Signing Date” means September 21, 2011.

(h) “Treasury” means the United States Department of the Treasury and any
successor in interest thereto.

Part 4. Certain Voting Matters. Holders of shares of Designated Preferred Stock
will be entitled to one vote for each such share on any matter on which holders
of Designated Preferred Stock are entitled to vote, including any action by
written consent.

*        *        *         *        *

 

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Schedule A

STANDARD PROVISIONS

Section 1. General Matters. Each share of Designated Preferred Stock shall be
identical in all respects to every other share of Designated Preferred Stock.
The Designated Preferred Stock shall be perpetual, subject to the provisions of
Section 5 of these Standard Provisions. The Designated Preferred Stock shall
rank equally with Parity Stock and shall rank senior to Junior Stock with
respect to the payment of dividends and the distribution of assets in the event
of any dissolution, liquidation or winding up of the Corporation, as set forth
below.

Section 2. Standard Definitions. As used herein with respect to Designated
Preferred Stock:

(a) “Acquiror,” in any Holding Company Transaction, means the surviving or
resulting entity or its ultimate parent in the case of a merger or consolidation
or the transferee in the case of a sale, lease or other transfer in one
transaction or a series of related transactions of all or substantially all of
the consolidated assets of the Corporation and its subsidiaries, taken as a
whole.

(b) “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 through
one or more intermediaries, 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) “Applicable Dividend Rate” has the meaning set forth in Section 3(a).

(d) “Appropriate Federal Banking Agency” means the “appropriate Federal banking
agency” with respect to the Corporation as defined in Section 3(q) of the
Federal Deposit Insurance Act (12 U.S.C. Section 1813(q)), or any successor
provision.

(e) “Articles of Amendment” means the Articles of Amendment filed by the
Corporation relating to the Designated Preferred Stock, of which these Standard
Provisions form a part, as it may be amended from time to time.

(f) “Articles of Incorporation” means the Amended and Restated Articles of
Incorporation of the Corporation, as they may be amended from time to time.

(g) “Bank Holding Company” means a company registered as such with the Board of
Governors of the Federal Reserve System pursuant to 12 U.S.C. §1842 and the
regulations of the Board of Governors of the Federal Reserve System thereunder.

(h) “Baseline” means the “Initial Small Business Lending Baseline” set forth on
the Initial Supplemental Report, subject to adjustment pursuant to Section 3(a).

 

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(i) “Business Combination” means a merger, consolidation, statutory share
exchange or similar transaction that requires the approval of the Corporation’s
shareholders.

(j) “Business Day” means any day except Saturday, Sunday and any day on which
banking institutions in the State of New York or the District of Columbia
generally are authorized or required by law or other governmental actions to
close.

(k) “Bylaws” means the Amended and Restated Bylaws of the Corporation, as they
may be amended from time to time.

(l) “Call Report” has the meaning assigned thereto in Section 4102(4) of the
Small Business Jobs Act of 2010, as it may be amended from time to time (the
“SBJA”). If the Corporation is a Bank Holding Company or a Savings and Loan
Holding Company, unless the context clearly indicates otherwise: (a) the term
“Call Report” shall mean the Call Report(s) (as defined in Section 4102(4) of
the SBJA) of the IDI Subsidiary(ies); and (b) if there are multiple IDI
Subsidiaries, all references herein or in any document executed or delivered in
connection herewith (including the Articles of Amendment, the Initial
Supplemental Report and all Quarterly Supplemental Reports) to any data reported
in a Call Report shall refer to the aggregate of such data across the Call
Reports for all such IDI Subsidiaries.

(m) “Charge-Offs” means the net amount of loans charged off by the Corporation
or, if the Corporation is a Bank Holding Company or a Savings and Loan Holding
Company, by the IDI Subsidiary(ies) during quarters that begin on or after the
Signing Date, determined as follows:

(i) if the Corporation or the applicable IDI Subsidiary is a bank, by
subtracting (A) the aggregate dollar amount of recoveries reflected on line
RIAD4605 of its Call Reports for such quarters from (B) the aggregate dollar
amount of charge-offs reflected on line RIAD4635 of its Call Reports for such
quarters (without duplication as a result of such dollar amounts being reported
on a year-to-date basis); or

(ii) if the Corporation or the applicable IDI Subsidiary is a thrift, by
subtracting (A) the sum of the aggregate dollar amount of recoveries reflected
on line VA140 of its Call Reports for such quarters and the aggregate dollar
amount of adjustments reflected on line VA150 of its Call Reports for such
quarters from (B) the aggregate dollar amount of charge-offs reflected on line
VA160 of its Call Reports for such quarters.

(n) “CPP Lending Incentive Fee” has the meaning set forth in Section 3(e).

(o) “Current Period” has the meaning set forth in Section 3(a)(i)(2).

(p) “Dividend Payment Date” means January 1, April 1, July 1, and October 1 of
each year.

(q) “Dividend Period” means the period from and including any Dividend Payment
Date to, but excluding, the next Dividend Payment Date; provided, however, the
initial Dividend Period shall be the period from and including the Original
Issue Date to, but excluding, the next Dividend Payment Date (the “Initial
Dividend Period”).

 

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(r) “Dividend Record Date” has the meaning set forth in Section 3(b).

(s) “Dividend Reference Period” has the meaning set forth in Section 3(a)(i)(2).

(t) “GAAP” means generally accepted accounting principles in the United States.

(u) “Holding Company Preferred Stock” has the meaning set forth in
Section 7(c)(v).

(v) “Holding Company Transaction” means the occurrence of (a) any transaction
(including, without limitation, any acquisition, merger or consolidation) the
result of which is that a “person” or “group” within the meaning of
Section 13(d) of the Securities Exchange Act of 1934, as amended, (i) becomes
the direct or indirect ultimate “beneficial owner,” as defined in Rule 13d-3
under that Act, of common equity of the Corporation representing more than 50%
of the voting power of the outstanding Common Stock or (ii) is otherwise
required to consolidate the Corporation for purposes of generally accepted
accounting principles in the United States, or (b) any consolidation or merger
of the Corporation or similar transaction or any sale, lease or other transfer
in one transaction or a series of related transactions of all or substantially
all of the consolidated assets of the Corporation and its subsidiaries, taken as
a whole, to any Person other than one of the Corporation’s subsidiaries;
provided that, in the case of either clause (a) or (b), the Corporation or the
Acquiror is or becomes a Bank Holding Company or Savings and Loan Holding
Company.

(w) “IDI Subsidiary” means any Corporation Subsidiary that is an insured
depository institution.

(x) “Increase in QSBL” means:

(i) with respect to the first (1st) Dividend Period, the difference obtained by
subtracting (A) the Baseline from (B) QSBL set forth in the Initial Supplemental
Report; and

(ii) with respect to each subsequent Dividend Period, the difference obtained by
subtracting (A) the Baseline from (B) QSBL for the Dividend Reference Period for
the Current Period.

(y) “Initial Dividend Period” has the meaning set forth in the definition of
“Dividend Period”.

(z) “Initial Supplemental Report” means a certificate in substantially the form
provided by Treasury setting forth a complete and accurate statement of loans
held by the Corporation (or if the Corporation is a Bank Holding Company or a
Savings and Loan Holding Company, by the IDI Subsidiary(ies)) in each of the
categories described therein, for the time

 

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periods specified therein, (A) including a signed certification of the Chief
Executive Officer, the Chief Financial Officer and all directors or trustees of
the Corporation or the IDI Subsidiary(ies) who attested to the Call Reports for
the quarters covered by such certificate, that such certificate (x) has been
prepared in conformance with the instructions issued by Treasury and (y) is true
and correct to the best of their knowledge and belief; and (B) completed for the
last full calendar quarter prior to the Closing Date and the four (4) quarters
ended September 30, 2009, December 31, 2009, March 31, 2010 and June 30, 2010.

(aa) “Corporation Subsidiary” means any subsidiary of the Corporation.

(bb) “Liquidation Preference” has the meaning set forth in Section 4(a).

(cc) “Matching Private Investment-Supported,” when used to describe the
Corporation (if applicable), means the Corporation’s eligibility for
participation in the SBLF program is conditioned upon the Corporation or an
Affiliate of the Corporation acceptable to Treasury receiving Matching Private
Investment, as contemplated by Section 4103(d)(3)(B) of the SBJA.

(dd) “Non-Qualifying Portion Percentage” means, with respect to any particular
Dividend Period, the percentage obtained by subtracting the Qualifying Portion
Percentage from one (1).

(ee) “Original Issue Date” means the date on which shares of Designated
Preferred Stock are first issued.

(ff) “Percentage Change in QSBL” has the meaning set forth in Section 3(a)(ii).

(gg) “Person” means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint-stock company, limited
liability company or trust.

(hh) “Preferred Director” has the meaning set forth in Section 7(c).

(ii) “Preferred Stock” means any and all series of preferred stock of the
Corporation, including the Designated Preferred Stock.

(jj) “Previously Acquired Preferred Shares” means None.

(kk) “Previously Acquired Preferred Stock” means None.

(ll) “Private Capital” means, if the Corporation is Matching Private Investment
Supported, the equity capital received by the Corporation or the applicable
Affiliate of the Corporation from one or more non-governmental investors in
accordance with Section 1.3(m) of the Definitive Agreement.

 

SBLF Participant No. 0307   A-4  

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(Bank/Thrift)

[Execution Copy]

 

(mm) “Publicly-traded” means a company that (i) has a class of securities that
is traded on a national securities exchange and (ii) is required to file
periodic reports with either the Securities and Exchange Commission or its
primary federal bank regulator.

(nn) “Qualified Small Business Lending” or “QSBL” means, with respect to any
particular Dividend Period, the “Quarter-End Adjusted Qualified Small Business
Lending” for such Dividend Period set forth in the applicable Supplemental
Report.

(oo) “Qualifying Portion Percentage” means, with respect to any particular
Dividend Period, the percentage obtained by dividing (i) the Increase in QSBL
for such Dividend Period by (ii) the aggregate Liquidation Amount of
then-outstanding Designated Preferred Stock.

(pp) “Quarterly Supplemental Report” means, concurrently with the submission of
Call Reports by the Corporation or the IDI Subsidiary(ies) (as the case may be)
for each quarter ending after the Closing Date, the Corporation shall deliver to
Treasury a certificate in substantially the form provided by Treasury setting
forth a complete and accurate statement of loans held by the Corporation in each
of the categories described therein, for the time periods specified therein,
(A) including a signed certification of the Chief Executive Officer, the Chief
Financial Officer and all directors or trustees of the Corporation or the IDI
Subsidiary(ies) who attested to the Call Report for the quarter covered by such
certificate, that such certificate (x) has been prepared in conformance with the
instructions issued by Treasury and (y) is true and correct to the best of their
knowledge and belief; (B) completed for such quarter.

(qq) “Savings and Loan Holding Company” means a company registered as such with
the Office of Thrift Supervision pursuant to 12 U.S.C. §1467a(b) and the
regulations of the Office of Thrift Supervision promulgated thereunder.

(rr) “Share Dilution Amount” means the increase in the number of diluted shares
outstanding (determined in accordance with GAAP applied on a consistent basis,
and as measured from the date of the Corporation’s most recent consolidated
financial statements prior to the Signing 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.

(ss) “Signing Date Tier 1 Capital Amount” means $49,337,000.00.

(tt) “Standard Provisions” mean these Standard Provisions that form a part of
the Articles of Amendment relating to the Designated Preferred Stock.

(uu) “Supplemental Report” means a Supplemental Report delivered by the
Corporation to Treasury pursuant to the Definitive Agreement.

 

SBLF Participant No. 0307   A-5  

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(Bank/Thrift)

[Execution Copy]

 

(vv) “Tier 1 Dividend Threshold” means, as of any particular date, the result of
the following formula:

( ( A + B – C ) * 0.9 ) – D

where:

 

  A = Signing Date Tier 1 Capital Amount;

 

  B = the aggregate Liquidation Amount of the Designated Preferred Stock issued
to Treasury;

 

  C = the aggregate amount of Charge-Offs since the Signing Date; and

 

  D = (i) beginning on the first day of the eleventh (11th) Dividend Period, the
amount equal to ten percent (10%) of the aggregate Liquidation Amount of the
Designated Preferred Stock issued to Treasury as of the Effective Date (without
regard to any redemptions of Designated Preferred Stock that may have occurred
thereafter) for every one percent (1%) of positive Percentage Change in
Qualified Small Business Lending between the ninth (9th) Dividend Period and the
Baseline; and

(ii) zero (0) at all other times.

(ww) “Voting Parity Stock” means, with regard to any matter as to which the
holders of Designated Preferred Stock are entitled to vote as specified in
Section 7(d) of these Standard Provisions, any and all series of Parity Stock
upon which like voting rights have been conferred and are exercisable with
respect to such matter.

Section 3. Dividends.

(a) Rate.

(i) The “Applicable Dividend Rate” shall be determined as follows:

 

  (1)

With respect to the Initial Dividend Period, the Applicable Dividend Rate shall
be one percent (1%).1

 

  (2) With respect to each of the second (2nd) through the tenth (10th) Dividend
Periods, inclusive (in each case, the “Current Period”), the Applicable Dividend
Rate shall be:

(A) (x) the applicable rate set forth in column “A” of the table in
Section 3(a)(iii), based on the Percentage Change in QSBL between the Dividend
Period that was two Dividend Periods prior to the Current Period (the “Dividend
Reference Period”) and the Baseline, multiplied by (y) the Qualifying Portion
Percentage; plus

(B) (x) five percent (5%) multiplied by (y) the Non-Qualifying Portion
Percentage.

 

1 

To be completed at Closing using Column “A” of the table in Section 3(a)(iii),
based on the Percentage Change in QSBL between the Baseline and the second
calendar quarter preceding the Closing Date as reported in the Initial
Supplemental Report.

 

SBLF Participant No. 0307   A-6  

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(Bank/Thrift)

[Execution Copy]

 

In each such case, the Applicable Dividend Rate shall be determined at the time
the Corporation delivers a complete and accurate Supplemental Report to Treasury
with respect to the Dividend Reference Period.

 

  (3)

With respect to the eleventh (11th) through the eighteenth (18th) Dividend
Periods, inclusive, and that portion of the nineteenth (19th) Dividend Period
prior to, but not including, the four and one half (4 1/2) year anniversary of
the Original Issue Date, the Applicable Dividend Rate shall be:

(A) (x) the applicable rate set forth in column “B” of the table in
Section 3(a)(iii), based on the Percentage Change in QSBL between the ninth
(9th) Dividend Period and the Baseline, multiplied by (y) the Qualifying Portion
Percentage, calculated as of the last day of the ninth (9th) Dividend Period;
plus

(B) (x) five percent (5%) multiplied by (y) the Non-Qualifying Portion
Percentage, calculated as of the last day of the ninth (9th) Dividend Period.

In such case, the Applicable Dividend Rate shall be determined at the time the
Corporation delivers a complete and accurate Supplemental Report to Treasury
with respect to the ninth (9th) Dividend Period.

 

  (4)

With respect to (A) that portion of the nineteenth (19th) Dividend Period
beginning on the four and one half (4 1/2) year anniversary of the Original
Issue Date and (B) all Dividend Periods thereafter, the Applicable Dividend Rate
shall be nine percent (9%).

 

  (5) Notwithstanding anything herein to the contrary, if the Corporation fails
to submit a Supplemental Report that is due during any of the second
(2nd) through tenth (10th) Dividend Periods on or before the sixtieth (60th) day
of such Dividend Period, the Corporation’s QSBL for the Dividend Period that
would have been covered by such Supplemental Report shall be zero (0) for
purposes hereof.

 

  (6)

Notwithstanding anything herein to the contrary, but subject to
Section 3(a)(i)(5) above, if the Corporation fails to submit the Supplemental
Report that is due during the tenth (10th) Dividend Period, the Corporation’s
QSBL shall be zero (0) for purposes of calculating the Applicable Dividend Rate
pursuant to Section 3(a)(i)(3) and (4). The

 

SBLF Participant No. 0307   A-7  

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(Bank/Thrift)

[Execution Copy]

 

  Applicable Dividend Rate shall be re-determined effective as of the first day
of the calendar quarter following the date such failure is remedied, provided it
is remedied prior to the four and one half (4 1/2) anniversary of the Original
Issue Date.

 

  (7) Notwithstanding anything herein to the contrary, if the Corporation fails
to submit any of the certificates required by Sections 3.1(d)(ii) or 3.1(d)(iii)
of the Definitive Agreement when and as required thereby, the Corporation’s QSBL
shall be zero (0) for purposes of calculating the Applicable Dividend Rate
pursuant to Section 3(a)(i)(2) or (3) above until such failure is remedied.

(ii) The “Percentage Change in Qualified Lending” between any given Dividend
Period and the Baseline shall be the result of the following formula, expressed
as a percentage:

 

(  

( QSBL for the Dividend Period – Baseline )

  )   x     100   Baseline    

(iii) The following table shall be used for determining the Applicable Dividend
Rate:

 

     The Applicable Dividend Rate shall be:  

If the Percentage Change in

Qualified Lending is:

   Column “A”
(each of the
2nd – 10th
Dividend Periods)     Column “B”
(11th – 18th, and
the first part of the
19th, Dividend
Periods)  

0% or less

     5 %      7 % 

More than 0%, but less than 2.5%

     5 %      5 % 

2.5% or more, but less than 5%

     4 %      4 % 

5% or more, but less than 7.5%

     3 %      3 % 

7.5% or more, but less than 10%

     2 %      2 % 

10% or more

     1 %      1 % 

(iv) If the Corporation consummates a Business Combination, a purchase of loans
or a purchase of participations in loans and the Designated Preferred Stock
remains outstanding thereafter, then the Baseline shall thereafter be the
“Quarter-End Adjusted Small Business Lending Baseline” set forth on the
Quarterly Supplemental Report.

 

SBLF Participant No. 0307   A-8  

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(Bank/Thrift)

[Execution Copy]

 

(b) Payment. Holders of Designated Preferred Stock shall be entitled to receive,
on each share of Designated Preferred Stock if, as and when declared by the
Board of Directors or any duly authorized committee of the Board of Directors,
but only out of assets legally available therefor, non-cumulative cash dividends
with respect to:

(i) each Dividend Period (other than the Initial Dividend Period) at a rate
equal to one-fourth ( 1/4) of the Applicable Dividend Rate with respect to each
Dividend Period on the Liquidation Amount per share of Designated Preferred
Stock, and no more, payable quarterly in arrears on each Dividend Payment Date;
and

(ii) the Initial Dividend Period, on the first such Dividend Payment Date to
occur at least twenty (20) calendar days after the Original Issue Date, an
amount equal to (A) the Applicable Dividend Rate with respect to the Initial
Dividend Period multiplied by (B) the number of days from the Original Issue
Date to the last day of the Initial Dividend Period (inclusive) divided by 360.

In the event that any Dividend Payment Date would otherwise fall on a day that
is not a Business Day, the dividend payment due on that date will be postponed
to the next day that is a Business Day and no additional dividends will accrue
as a result of that postponement. For avoidance of doubt, “payable quarterly in
arrears” means that, with respect to any particular Dividend Period, dividends
begin accruing on the first day of such Dividend Period and are payable on the
first day of the next Dividend Period.

The amount of dividends payable on Designated Preferred Stock on any date prior
to the end of a Dividend Period, and for the initial Dividend Period, shall be
computed on the basis of a 360-day year consisting of four 90-day quarters, and
actual days elapsed over a 90-day quarter.

Dividends that are payable on Designated Preferred Stock on any Dividend Payment
Date will be payable to holders of record of Designated Preferred Stock as they
appear on the stock register of the Corporation on the applicable record date,
which shall be the 15th calendar day immediately preceding such Dividend Payment
Date or such other record date fixed by the Board of Directors or any duly
authorized committee of the Board of Directors that is not more than 60 nor less
than 10 days prior to such Dividend Payment Date (each, a “Dividend Record
Date”). Any such day that is a Dividend Record Date shall be a Dividend Record
Date whether or not such day is a Business Day.

Holders of Designated Preferred Stock shall not be entitled to any dividends,
whether payable in cash, securities or other property, other than dividends (if
any) declared and payable on Designated Preferred Stock as specified in this
Section 3 (subject to the other provisions of the Articles of Amendment).

(c) Non-Cumulative. Dividends on shares of Designated Preferred Stock shall be
non-cumulative. If the Board of Directors or any duly authorized committee of
the Board of Directors does not declare a dividend on the Designated Preferred
Stock in respect of any Dividend Period:

(i) the holders of Designated Preferred Stock shall have no right to receive any
dividend for such Dividend Period, and the Corporation shall have no obligation
to pay a dividend for such Dividend Period, whether or not dividends are
declared for any subsequent Dividend Period with respect to the Designated
Preferred Stock; and

 

SBLF Participant No. 0307   A-9  

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

(Bank/Thrift)

[Execution Copy]

 

(ii) the Corporation shall, within five (5) calendar days, deliver to the
holders of the Designated Preferred Stock a written notice executed by the Chief
Executive Officer and the Chief Financial Officer of the Corporation stating the
Board of Directors’ rationale for not declaring dividends.

(d) Priority of Dividends; Restrictions on Dividends.

(i) Subject to Sections 3(d)(ii), (iii) and (v) and any restrictions imposed by
the Appropriate Federal Banking Agency or, if applicable, the Corporation’s
state bank supervisor (as defined in Section 3(r) of the Federal Deposit
Insurance Act (12 U.S.C. § 1813(q)), so long as any share of Designated
Preferred Stock remains outstanding, the Corporation may declare and pay
dividends on the Common Stock, any other shares of Junior Stock, or Parity
Stock, in each case only if (A) after giving effect to such dividend the
Corporation’s Tier 1 capital would be at least equal to the Tier 1 Dividend
Threshold, and (B) full dividends on all outstanding shares of Designated
Preferred Stock for the most recently completed Dividend Period have been or are
contemporaneously declared and paid.

(ii) If a dividend is not declared and paid in full on the Designated Preferred
Stock in respect of any Dividend Period, then from the last day of such Dividend
Period until the last day of the third (3rd) Dividend Period immediately
following it, no dividend or distribution shall be declared or paid on the
Common Stock or any other shares of Junior Stock (other than dividends payable
solely in shares of Common Stock) or Parity Stock; provided, however, that in
any such Dividend Period in which a dividend is declared and paid on the
Designated Preferred Stock, dividends may be paid on Parity Stock to the extent
necessary to avoid any material breach of a covenant by which the Corporation is
bound.

(iii) When dividends have not been declared and paid in full for an aggregate of
four (4) Dividend Periods or more, and during such time the Corporation was not
subject to a regulatory determination that prohibits the declaration and payment
of dividends, the Corporation shall, within five (5) calendar days of each
missed payment, deliver to the holders of the Designated Preferred Stock a
certificate executed by at least a majority of the Board of Directors stating
that the Board of Directors used its best efforts to declare and pay such
dividends in a manner consistent with (A) safe and sound banking practices and
(B) the directors’ fiduciary obligations.

(iv) Subject to the foregoing and Section 3(e) below and not otherwise, such
dividends (payable in cash, securities or other property) as may be determined
by the Board of Directors or any duly authorized committee of the Board of
Directors may be declared and paid on any securities, including Common Stock and
other Junior Stock, from time to time out of any funds legally available for
such payment, and holders of Designated Preferred Stock shall not be entitled to
participate in any such dividends.

 

SBLF Participant No. 0307   A-10  

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(Bank/Thrift)

[Execution Copy]

 

(v) If the Corporation is not Publicly-Traded, then after the tenth
(10th) anniversary of the Signing Date, so long as any share of Designated
Preferred Stock remains outstanding, no dividend or distribution shall be
declared or paid on the Common Stock or any other shares of Junior Stock (other
than dividends payable solely in shares of Common Stock) or Parity Stock.

(e) Special Lending Incentive Fee Related to CPP. If Treasury held Previously
Acquired Preferred Shares immediately prior to the Original Issue Date and the
Corporation did not apply to Treasury to redeem such Previously Acquired
Preferred Shares prior to December 16, 2010, and if the Corporation’s
Supplemental Report with respect to the ninth (9th) Dividend Period reflects an
amount of Qualified Small Business Lending that is less than or equal to the
Baseline (or if the Corporation fails to timely file a Supplemental Report with
respect to the ninth (9th) Dividend Period), then beginning on [Not Applicable]
and on all Dividend Payment Dates thereafter ending on [Not Applicable], the
Corporation shall pay to the Holders of Designated Preferred Stock, on each
share of Designated Preferred Stock, but only out of assets legally available
therefor, a fee equal to 0.5% of the Liquidation Amount per share of Designated
Preferred Stock (“CPP Lending Incentive Fee”). All references in Section 3(d) to
“dividends” on the Designated Preferred Stock shall be deemed to include the CPP
Lending Incentive Fee.

Section 4. Liquidation Rights.

(a) Voluntary or Involuntary Liquidation. In the event of any liquidation,
dissolution or winding up of the affairs of the Corporation, whether voluntary
or involuntary, holders of Designated Preferred Stock shall be entitled to
receive for each share of Designated Preferred Stock, out of the assets of the
Corporation or proceeds thereof (whether capital or surplus) available for
distribution to shareholders of the Corporation, subject to the rights of any
creditors of the Corporation, before any distribution of such assets or proceeds
is made to or set aside for the holders of Common Stock and any other stock of
the Corporation ranking junior to Designated Preferred Stock as to such
distribution, payment in full in an amount equal to the sum of (i) the
Liquidation Amount per share and (ii) the amount of any accrued and unpaid
dividends on each such share (such amounts collectively, the “Liquidation
Preference”).

(b) Partial Payment. If in any distribution described in Section 4(a) above the
assets of the Corporation or proceeds thereof are not sufficient to pay in full
the amounts payable with respect to all outstanding shares of Designated
Preferred Stock and the corresponding amounts payable with respect of any other
stock of the Corporation ranking equally with Designated Preferred Stock as to
such distribution, holders of Designated Preferred Stock and the holders of such
other stock shall share ratably in any such distribution in proportion to the
full respective distributions to which they are entitled.

(c) Residual Distributions. If the Liquidation Preference has been paid in full
to all holders of Designated Preferred Stock and the corresponding amounts
payable with respect of any other stock of the Corporation ranking equally with
Designated Preferred Stock as to such distribution has been paid in full, the
holders of other stock of the Corporation shall be entitled to receive all
remaining assets of the Corporation (or proceeds thereof) according to their
respective rights and preferences.

 

SBLF Participant No. 0307   A-11  

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

(Bank/Thrift)

[Execution Copy]

 

(d) Merger, Consolidation and Sale of Assets Is Not Liquidation. For purposes of
this Section 4, the merger or consolidation of the Corporation with any other
corporation or other entity, including a merger or consolidation in which the
holders of Designated Preferred Stock receive cash, securities or other property
for their shares, or the sale, lease or exchange (for cash, securities or other
property) of all or substantially all of the assets of the Corporation, shall
not constitute a liquidation, dissolution or winding up of the Corporation.

Section 5. Redemption.

(a) Optional Redemption.

(i) Subject to the other provisions of this Section 5:

 

  (1) The Corporation, at its option, subject to the approval of the Appropriate
Federal Banking Agency, may redeem, in whole or in part, at any time and from
time to time, out of funds legally available therefor, the shares of Designated
Preferred Stock at the time outstanding; and

 

  (2) If, after the Signing Date, there is a change in law that modifies the
terms of Treasury’s investment in the Designated Preferred Stock or the terms of
Treasury’s Small Business Lending Fund program in a materially adverse respect
for the Corporation, the Corporation may, after consultation with the
Appropriate Federal Banking Agency, redeem all of the shares of Designated
Preferred Stock at the time outstanding.

(ii) The per-share redemption price for shares of Designated Preferred Stock
shall be equal to the sum of:

 

  (1) the Liquidation Amount per share,

 

  (2) the per-share amount of any unpaid dividends for the then current Dividend
Period at the Applicable Dividend Rate to, but excluding, the date fixed for
redemption (regardless of whether any dividends are actually declared for that
Dividend Period); and

 

  (3) the pro rata amount of CPP Lending Incentive Fees for the current Dividend
Period.

The redemption price for any shares of Designated Preferred Stock shall be
payable on the redemption date to the holder of such shares against surrender of
the certificate(s) evidencing such shares to the Corporation or its agent. Any
declared but unpaid dividends for the then current Dividend Period payable on a
redemption date that occurs subsequent to the Dividend Record Date for a
Dividend Period shall not be paid to the holder entitled to receive the
redemption price on the redemption date, but rather shall be paid to the holder
of record of the redeemed shares on such Dividend Record Date relating to the
Dividend Payment Date as provided in Section 3 above.

 

SBLF Participant No. 0307   A-12  

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

(Bank/Thrift)

[Execution Copy]

 

(b) No Sinking Fund. The Designated Preferred Stock will not be subject to any
mandatory redemption, sinking fund or other similar provisions. Holders of
Designated Preferred Stock will have no right to require redemption or
repurchase of any shares of Designated Preferred Stock.

(c) Notice of Redemption. Notice of every redemption of shares of Designated
Preferred Stock shall be given by first class mail, postage prepaid, addressed
to the holders of record of the shares to be redeemed at their respective last
addresses appearing on the books of the Corporation. Such mailing shall be at
least 30 days and not more than 60 days before the date fixed for redemption.
Any notice mailed as provided in this Subsection shall be conclusively presumed
to have been duly given, whether or not the holder receives such notice, but
failure duly to give such notice by mail, or any defect in such notice or in the
mailing thereof, to any holder of shares of Designated Preferred Stock
designated for redemption shall not affect the validity of the proceedings for
the redemption of any other shares of Designated Preferred Stock.
Notwithstanding the foregoing, if shares of Designated Preferred Stock are
issued in book-entry form through The Depository Trust Company or any other
similar facility, notice of redemption may be given to the holders of Designated
Preferred Stock at such time and in any manner permitted by such facility. Each
notice of redemption given to a holder shall state: (1) the redemption date;
(2) the number of shares of Designated Preferred Stock to be redeemed and, if
less than all the shares held by such holder are to be redeemed, the number of
such shares to be redeemed from such holder; (3) the redemption price; and
(4) the place or places where certificates for such shares are to be surrendered
for payment of the redemption price.

(d) Partial Redemption. In case of any redemption of part of the shares of
Designated Preferred Stock at the time outstanding, the shares to be redeemed
shall be selected either pro rata or in such other manner as the Board of
Directors or a duly authorized committee thereof may determine to be fair and
equitable, but in any event the shares to be redeemed shall not be less than the
Minimum Amount. Subject to the provisions hereof, the Board of Directors or a
duly authorized committee thereof shall have full power and authority to
prescribe the terms and conditions upon which shares of Designated Preferred
Stock shall be redeemed from time to time, subject to the approval of the
Appropriate Federal Banking Agency. If fewer than all the shares represented by
any certificate are redeemed, a new certificate shall be issued representing the
unredeemed shares without charge to the holder thereof.

(e) Effectiveness of Redemption. If notice of redemption has been duly given and
if on or before the redemption date specified in the notice all funds necessary
for the redemption have been deposited by the Corporation, in trust for the pro
rata benefit of the holders of the shares called for redemption, with a bank or
trust company doing business in the Borough of Manhattan, The City of New York,
and having a capital and surplus of at least $500 million and selected by the
Board of Directors, so as to be and continue to be available solely therefor,
then, notwithstanding that any certificate for any share so called for
redemption has not been surrendered for cancellation, on and after the
redemption date dividends shall cease to accrue on all shares so called for
redemption, all shares so called for redemption shall no longer be deemed
outstanding and all rights with respect to such shares shall forthwith on such

 

SBLF Participant No. 0307   A-13  

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

(Bank/Thrift)

[Execution Copy]

 

redemption date cease and terminate, except only the right of the holders
thereof to receive the amount payable on such redemption from such bank or trust
company, without interest. Any funds unclaimed at the end of three years from
the redemption date shall, to the extent permitted by law, be released to the
Corporation, after which time the holders of the shares so called for redemption
shall look only to the Corporation for payment of the redemption price of such
shares.

(f) Status of Redeemed Shares. Shares of Designated Preferred Stock that are
redeemed, repurchased or otherwise acquired by the Corporation shall revert to
authorized but unissued shares of Preferred Stock (provided that any such
cancelled shares of Designated Preferred Stock may be reissued only as shares of
any series of Preferred Stock other than Designated Preferred Stock).

Section 6. Conversion. Holders of Designated Preferred Stock shares shall have
no right to exchange or convert such shares into any other securities.

Section 7. Voting Rights.

(a) General. The holders of Designated Preferred Stock shall not have any voting
rights except as set forth below or as otherwise from time to time required by
law.

(b) Board Observation Rights. Whenever, at any time or times, dividends on the
shares of Designated Preferred Stock have not been declared and paid in full
within five (5) Business Days after each Dividend Payment Date for an aggregate
of five (5) Dividend Periods or more, whether or not consecutive, the
Corporation shall invite a representative selected by the holders of a majority
of the outstanding shares of Designated Preferred Stock, voting as a single
class, to attend all meetings of its Board of Directors in a nonvoting observer
capacity and, in this respect, shall give such representative copies of all
notices, minutes, consents, and other materials that it provides to its
directors in connection with such meetings; provided, that the holders of the
Designated Preferred Stock shall not be obligated to select such a
representative, nor shall such representative, if selected, be obligated to
attend any meeting to which he/she is invited. The rights of the holders of the
Designated Preferred Stock set forth in this Section 7(b) shall terminate when
full dividends have been timely paid on the Designated Preferred Stock for at
least four consecutive Dividend Periods, subject to revesting in the event of
each and every subsequent default of the character above mentioned.

(c) Preferred Stock Directors. Whenever, at any time or times, (i) dividends on
the shares of Designated Preferred Stock have not been declared and paid in full
within five (5) Business Days after each Dividend Payment Date for an aggregate
of six (6) Dividend Periods or more, whether or not consecutive, and (ii) the
aggregate liquidation preference of the then-outstanding shares of Designated
Preferred Stock is greater than or equal to $25,000,000, the Board of Directors
shall adopt a resolution increasing the authorized number of directors of the
Corporation by two and the holders of the Designated Preferred Stock, voting as
a single class, shall have the right, but not the obligation, to elect two
directors (hereinafter the “Preferred Directors” and each a “Preferred
Director”) to fill such newly created directorships at the Corporation’s next
annual meeting of shareholders (or, if the next annual meeting is not yet
scheduled or is scheduled to occur more than thirty (30) days later, the
President of the Company

 

SBLF Participant No. 0307   A-14  

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

(Bank/Thrift)

[Execution Copy]

 

shall promptly call a special meeting for that purpose) and at each subsequent
annual meeting of shareholders until full dividends have been timely paid on the
Designated Preferred Stock for at least four consecutive Dividend Periods, at
which time such right shall terminate with respect to the Designated Preferred
Stock, except as herein or by law expressly provided, subject to revesting in
the event of each and every subsequent default of the character above mentioned;
provided that it shall be a qualification for election for any Preferred
Director that the election of such Preferred Director shall not cause the
Corporation to violate any corporate governance requirements of any securities
exchange or other trading facility on which securities of the Corporation may
then be listed or traded that listed or traded companies must have a majority of
independent directors. Upon any termination of the right of the holders of
shares of Designated Preferred Stock to vote for directors as provided above,
the Preferred Directors shall cease to be qualified as directors, the term of
office of all Preferred Directors then in office shall terminate immediately and
the Board of Directors shall adopt a resolution decreasing the authorized number
of directors by the number of Preferred Directors elected pursuant hereto. Any
Preferred Director may be removed at any time, with or without cause, and any
vacancy created thereby may be filled, only by the affirmative vote of the
holders a majority of the shares of Designated Preferred Stock at the time
outstanding voting separately as a class. If the office of any Preferred
Director becomes vacant for any reason other than removal from office as
aforesaid, the holders of a majority of the outstanding shares of Designated
Preferred Stock, voting as a single class, may choose a successor who shall hold
office for the unexpired term in respect of which such vacancy occurred.

(d) Class Voting Rights as to Particular Matters. So long as any shares of
Designated Preferred Stock are outstanding, in addition to any other vote or
consent of shareholders required by law or by the Articles of Incorporation, the
written consent of (x) Treasury, if Treasury holds any shares of Designated
Preferred Stock, or (y) the holders of a majority of the outstanding shares of
Designated Preferred Stock, voting as a single class, if Treasury does not hold
any shares of Designated Preferred Stock, shall be necessary for effecting or
validating:

(i) Authorization of Senior Stock. Any amendment or alteration of the Articles
of Amendment for the Designated Preferred Stock or the Articles of Incorporation
to authorize or create or increase the authorized amount of, or any issuance of,
any shares of, or any securities convertible into or exchangeable or exercisable
for shares of, any class or series of capital stock of the Corporation ranking
senior to Designated Preferred Stock with respect to either or both the payment
of dividends and/or the distribution of assets on any liquidation, dissolution
or winding up of the Corporation;

(ii) Amendment of Designated Preferred Stock. Any amendment, alteration or
repeal of any provision of the Articles of Amendment for the Designated
Preferred Stock or the Articles of Incorporation (including, unless no vote on
such merger or consolidation is required by Section 7(d)(iii) below, any
amendment, alteration or repeal by means of a merger, consolidation or
otherwise) so as to adversely affect the rights, preferences, privileges or
voting powers of the Designated Preferred Stock;

(iii) Share Exchanges, Reclassifications, Mergers and Consolidations. Subject to
Section 7(d)(v) below, any consummation of a binding share exchange or

 

SBLF Participant No. 0307   A-15  

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(Bank/Thrift)

[Execution Copy]

 

reclassification involving the Designated Preferred Stock, or of a merger or
consolidation of the Corporation with another corporation or other entity,
unless in each case (x) the shares of Designated Preferred Stock remain
outstanding or, in the case of any such merger or consolidation with respect to
which the Corporation is not the surviving or resulting entity, are converted
into or exchanged for preference securities of the surviving or resulting entity
or its ultimate parent, and (y) such shares remaining outstanding or such
preference securities, as the case may be, have such rights, preferences,
privileges and voting powers, and limitations and restrictions thereof that are
the same as the rights, preferences, privileges and voting powers, and
limitations and restrictions thereof, of Designated Preferred Stock immediately
prior to such consummation, taken as a whole; provided, that in all cases, the
obligations of the Corporation are assumed (by operation of law or by express
written assumption) by the resulting entity or its ultimate parent;

(iv) Certain Asset Sales. Any sale of all, substantially all, or any material
portion of, the assets of the Company, if the Designated Preferred Stock will
not be redeemed in full contemporaneously with the consummation of such sale;
and

(v) Holding Company Transactions. Any consummation of a Holding Company
Transaction, unless as a result of the Holding Company Transaction each share of
Designated Preferred Stock shall be converted into or exchanged for one share
with an equal liquidation preference of preference securities of the Corporation
or the Acquiror (the “Holding Company Preferred Stock”). Any such Holding
Company Preferred Stock shall entitle holders thereof to dividends from the date
of issuance of such Holding Company Preferred Stock on terms that are equivalent
to the terms set forth herein, and shall have such other rights, preferences,
privileges and voting powers, and limitations and restrictions thereof that are
the same as the rights, preferences, privileges and voting powers, and
limitations and restrictions thereof, of Designated Preferred Stock immediately
prior to such conversion or exchange, taken as a whole;

provided, however, that for all purposes of this Section 7(d), any increase in
the amount of the authorized Preferred Stock, including any increase in the
authorized amount of Designated Preferred Stock necessary to satisfy preemptive
or similar rights granted by the Corporation to other persons prior to the
Signing Date, or the creation and issuance, or an increase in the authorized or
issued amount, whether pursuant to preemptive or similar rights or otherwise, of
any other series of Preferred Stock, or any securities convertible into or
exchangeable or exercisable for any other series of Preferred Stock, ranking
equally with and/or junior to Designated Preferred Stock with respect to the
payment of dividends (whether such dividends are cumulative or non-cumulative)
and the distribution of assets upon liquidation, dissolution or winding up of
the Corporation will not be deemed to adversely affect the rights, preferences,
privileges or voting powers, and shall not require the affirmative vote or
consent of, the holders of outstanding shares of the Designated Preferred Stock.

(e) Changes after Provision for Redemption. No vote or consent of the holders of
Designated Preferred Stock shall be required pursuant to Section 7(d) above if,
at or prior to the time when any such vote or consent would otherwise be
required pursuant to such Section, all outstanding shares of the Designated
Preferred Stock shall have been redeemed, or shall have been called for
redemption upon proper notice and sufficient funds shall have been deposited in
trust for such redemption, in each case pursuant to Section 5 above.

 

SBLF Participant No. 0307   A-16  

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(Bank/Thrift)

[Execution Copy]

 

(f) Procedures for Voting and Consents. The rules and procedures for calling and
conducting any meeting of the holders of Designated Preferred Stock (including,
without limitation, the fixing of a record date in connection therewith), the
solicitation and use of proxies at such a meeting, the obtaining of written
consents and any other aspect or matter with regard to such a meeting or such
consents shall be governed by any rules of the Board of Directors or any duly
authorized committee of the Board of Directors, in its discretion, may adopt
from time to time, which rules and procedures shall conform to the requirements
of the Articles of Incorporation, the Bylaws, and applicable law and the rules
of any national securities exchange or other trading facility on which
Designated Preferred Stock is listed or traded at the time.

Section 8. Restriction on Redemptions and Repurchases.

(a) Subject to Sections 8(b) and (c), so long as any share of Designated
Preferred Stock remains outstanding, the Corporation may repurchase or redeem
any shares of Capital Stock (as defined below), in each case only if (i) after
giving effect to such dividend, repurchase or redemption, the Corporation’s Tier
1 capital would be at least equal to the Tier 1 Dividend Threshold and
(ii) dividends on all outstanding shares of Designated Preferred Stock for the
most recently completed Dividend Period have been or are contemporaneously
declared and paid (or have been declared and a sum sufficient for the payment
thereof has been set aside for the benefit of the holders of shares of
Designated Preferred Stock on the applicable record date).

(b) If a dividend is not declared and paid on the Designated Preferred Stock in
respect of any Dividend Period, then from the last day of such Dividend Period
until the last day of the third (3rd) Dividend Period immediately following it,
neither the Corporation nor any Corporation Subsidiary shall, redeem, purchase
or acquire any shares of Common Stock, Junior Stock, Parity Stock or other
capital stock or other equity securities of any kind of the Corporation or any
Corporation Subsidiary, or any trust preferred securities issued by the
Corporation or any Affiliate of the Corporation (“Capital Stock”), (other than
(i) redemptions, purchases, repurchases or other acquisitions of the Designated
Preferred Stock, (ii) repurchases of Junior Stock or Common Stock in connection
with the administration of any employee benefit plan in the ordinary course of
business (including purchases to offset any Share Dilution Amount 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, (iii) the acquisition by the Corporation or any of
the Corporation Subsidiaries of record ownership in Junior Stock or Parity Stock
for the beneficial ownership of any other persons (other than the Corporation or
any other Corporation Subsidiary), including as trustees or custodians, (iv) the
exchange or conversion of Junior Stock for or into other Junior Stock or of
Parity Stock or trust preferred securities 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 (iv), solely to the extent required pursuant to binding
contractual agreements entered into prior to the Signing Date or any subsequent
agreement for the accelerated exercise, settlement or exchange thereof for
Common Stock, (v) redemptions of securities held by the Corporation or any
wholly-owned Corporation Subsidiary or (vi) redemptions, purchases or other
acquisitions of capital stock or

 

SBLF Participant No. 0307   A-17  

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(Bank/Thrift)

[Execution Copy]

 

other equity securities of any kind of any Corporation Subsidiary required
pursuant to binding contractual agreements entered into prior to (x) if Treasury
held Previously Acquired Preferred Shares immediately prior to the Original
Issue Date, the original issue date of such Previously Acquired Preferred
Shares, or (y) otherwise, the Signing Date).

(c) If the Corporation is not Publicly-Traded, then after the tenth
(10th) anniversary of the Signing Date, so long as any share of Designated
Preferred Stock remains outstanding, no Common Stock, Junior Stock or Parity
Stock shall be, directly or indirectly, purchased, redeemed or otherwise
acquired for consideration by the Corporation or any of its subsidiaries.

Section 9. No Preemptive Rights. No share of Designated Preferred Stock shall
have any rights of preemption whatsoever as to any securities of the
Corporation, or any warrants, rights or options issued or granted with respect
thereto, regardless of how such securities, or such warrants, rights or options,
may be designated, issued or granted.

Section 10. References to Line Items of Supplemental Reports. If Treasury
modifies the form of Supplemental Report, pursuant to its rights under the
Definitive Agreement, and any such modification includes a change to the caption
or number of any line item on the Supplemental Report, then any reference herein
to such line item shall thereafter be a reference to such re-captioned or
re-numbered line item.

Section 11. Record Holders. To the fullest extent permitted by applicable law,
the Corporation and the transfer agent for Designated Preferred Stock may deem
and treat the record holder of any share of Designated Preferred Stock as the
true and lawful owner thereof for all purposes, and neither the Corporation nor
such transfer agent shall be affected by any notice to the contrary.

Section 12. Notices. All notices or communications in respect of Designated
Preferred Stock shall be sufficiently given if given in writing and delivered in
person or by first class mail, postage prepaid, or if given in such other manner
as may be permitted in these Articles of Amendment, in the Articles of
Incorporation or Bylaws or by applicable law. Notwithstanding the foregoing, if
shares of Designated Preferred Stock are issued in book-entry form through The
Depository Trust Company or any similar facility, such notices may be given to
the holders of Designated Preferred Stock in any manner permitted by such
facility.

Section 13. Replacement Certificates. The Corporation shall replace any
mutilated certificate at the holder’s expense upon surrender of that certificate
to the Corporation. The Corporation shall replace certificates that become
destroyed, stolen or lost at the holder’s expense upon delivery to the
Corporation of reasonably satisfactory evidence that the certificate has been
destroyed, stolen or lost, together with any indemnity that may be reasonably
required by the Corporation.

Section 14. Other Rights. The shares of Designated Preferred Stock shall not
have any rights, preferences, privileges or voting powers or relative,
participating, optional or other special rights, or qualifications, limitations
or restrictions thereof, other than as set forth herein or in the Articles of
Incorporation or as provided by applicable law.

 

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(Bank/Thrift)

[Execution Copy]

 

III.

The foregoing amendment was duly adopted by the Corporation’s Board of Directors
on September 8, 2011. In accordance with the provisions of Section 13.1-639 of
the VSCA and the authority conferred on the Corporation’s Board of Directors by
the Articles of Incorporation, no shareholder approval of the amendment was
required.

[Remainder of Page Intentionally Left Blank]

 

SBLF Participant No. 0307

-2-

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(Bank/Thrift)

[Execution Copy]

 

IN WITNESS WHEREOF, Xenith Bankshares, Inc. has caused these Articles of
Amendment to be signed by Thomas W. Osgood, its Executive Vice President and
Chief Financial Officer, this          day of September 2011.

 

XENITH BANKSHARES, INC. By:  

 

  Name: Thomas W. Osgood   Title: Executive Vice President and Chief Financial
Officer

 

SBLF Participant No. 0307

-1-

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(Bank/Thrift)

[Execution Copy]

 

ANNEX G

FORM OF OFFICER’S CERTIFICATE

 

OFFICER’S CERTIFICATE

OF

XENITH BANKSHARES, INC.

In connection with that certain Securities Purchase Agreement, dated
September 21, 2011 (the “Agreement”) by and between Xenith Bankshares, Inc. (the
“Corporation”) and the Secretary of the Treasury, the undersigned does hereby
certify as follows:

1. I am the duly elected/appointed and acting Executive Vice President and Chief
Financial Officer of the Corporation.

2. Attached as Exhibit A hereto is a true, complete and correct copy of the
Amended and Restated Articles of Incorporation of the Corporation and any
amendments thereto as presently on file with the Clerk of the State Corporation
Commission of the Commonwealth of Virginia.

3. Attached as Exhibit B hereto is a true, complete and correct copy of the
Amended and Restated Bylaws of the Corporation as presently in effect.

4. Attached as Exhibit C hereto is a true, complete and correct copy of
resolutions adopted by unanimous written consent of the Board of Directors of
the Corporation (the “Board”) effective as of September 8, 2011. Such
resolutions are now in full force and effect and have not been modified, amended
or revoked and are the only resolutions of the Board relating to the Agreement.

5. Shareholder consent is not required in connection with the execution,
delivery and performance of the Agreement by the Corporation.

6. Attached as Exhibit D is a true, complete and correct copy of the Articles of
Amendment, which have been filed with, and accepted by, the Clerk of the State
Corporation Commission of the Commonwealth of Virginia.

7. The representations and warranties of the Corporation set forth in Article II
of Annex C of the Agreement are true and correct in all respects as though as of
the date hereof (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 the Corporation has performed
in all material respects all obligations required to be performed by it under
the Agreement.

The foregoing certifications are made and delivered as of September 21, 2011
pursuant to Section 1.3 of Annex C of the Agreement.

 

Annex H (Form of Supplemental Reports)   Page 1

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(Bank/Thrift)

[Execution Copy]

 

Capitalized terms used and not otherwise defined herein shall have the meanings
assigned to them in the Agreement.

[SIGNATURE PAGE FOLLOWS]

 

Annex H (Form of Supplemental Reports)   Page 2

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(Bank/Thrift)

[Execution Copy]

 

IN WITNESS WHEREOF, this Officer’s Certificate has been duly executed and
delivered as of the 21st day of September, 2011.

 

XENITH BANKSHARES, INC. By:  

 

  Name: Thomas W. Osgood   Title: Executive Vice President and Chief Financial
Officer

 

Annex H (Form of Supplemental Reports)   Page 3

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(Bank/Thrift)

[Execution Copy]

 

ANNEX H

FORM OF SUPPLEMENTAL REPORTS

 

 

 

Annex H (Form of Supplemental Reports)   Page 4

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(Bank/Thrift)

[Execution Copy]

 

 

Annex H (Form of Supplemental Reports)   Page 5

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(Bank/Thrift)

[Execution Copy]

 

ANNEX I

FORM OF ANNUAL CERTIFICATION

 

ANNUAL CERTIFICATION

OF

XENITH BANKSHARES, INC.

In connection with that certain Securities Purchase Agreement, dated
September 21, 2011 (the “Agreement”) by and between Xenith Bankshares, Inc. (the
“Company”) and the Secretary of the Treasury (“Treasury”), the undersigned does
hereby certify as follows:

1. I am the duly elected/appointed [                    ] of the Company.

2. For each loan originated by the Company or any of its Affiliates that was
funded in whole or in part using funds from the Purchase Price, the Company has
obtained from the business to which it made such loan a written certification
that no principal of such business has been convicted of a sex offense against a
minor (as such terms are defined in section 111 of the Sex Offender Registration
and Notification Act, 42 U.S.C. §16911). The Company shall retain all such
certifications in accordance with standard recordkeeping practices established
by the Appropriate Federal Banking Agency.

3. The Company is in compliance with the requirements of Section 1020.220 of
title 31, Code of Federal Regulations.

The foregoing certifications are made and delivered as of [                    ]
pursuant to Section 3.1(d)(iii) of Annex C of the Agreement.

Capitalized terms used and not otherwise defined herein shall have the meanings
assigned to them in the Agreement.

[SIGNATURE PAGE FOLLOWS]

 

Annex I (Form of Annual Certification)   Page 1

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(Bank/Thrift)

[Execution Copy]

 

IN WITNESS WHEREOF, this Certificate has been duly executed and delivered as of
the [    ] day of [            ], 20[    ].

 

XENITH BANKSHARES, INC. By:  

 

  Name:   Title:

 

Annex I (Form of Annual Certification)   Page 2

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(Bank/Thrift)

[Execution Copy]

 

ANNEX J

FORM OF OPINION

 

1. The Corporation has been duly formed and is validly existing as a Virginia
corporation and is in good standing under the laws of the jurisdiction of its
organization. The Corporation has all corporate power and authority to own,
operate and lease its properties and to carry on its business as it is currently
being conducted.

2. The Corporation has not been qualified as a foreign entity for the
transaction of business in any jurisdiction and is not required to be so
qualified.

3. The Preferred Shares have been duly and validly authorized, and, when issued
and delivered pursuant to the Agreement, the Preferred Shares will be duly and
validly issued and fully paid and non-assessable, will not be issued in
violation of any preemptive rights, and will rank pari passu with or senior to
all other series or classes of the Corporation’s preferred stock issued and
outstanding on the Closing Date with respect to the payment of dividends and the
distribution of assets in the event of any dissolution, liquidation or winding
up of the Corporation.

 

Annex J (Form of Opinion)   Page 1

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(Bank/Thrift)

[Execution Copy]

 

4. The Corporation has the corporate power and authority to execute and deliver
the Agreement and to carry out its obligations thereunder (which includes the
issuance of the Preferred Shares).

5. The execution, delivery and performance by the Corporation of the Agreement
and the consummation of the transactions contemplated thereby have been duly
authorized by all necessary corporate action on the part of the Corporation and
by its shareholders, and no further approval or authorization is required on the
part of the Corporation, including, without limitation, by any rule or
requirement of any national stock exchange.

6. The Agreement is a valid and binding obligation of the Corporation
enforceable against the Corporation 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 execution and delivery by the Corporation of the Agreement and the
performance by the Corporation of its obligations thereunder (i) do not require
any approval by any Governmental Entity, except those that have been obtained,
(ii) do not violate or conflict with any provision of the Charter, (iii) do not
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 Corporation or any Corporation
Subsidiary under any of the terms, conditions or provisions of its
organizational documents or under any agreement, contract, indenture, lease,
mortgage, power of attorney, evidence of indebtedness, letter of credit,
license, instrument, obligation, purchase or sales order, or other commitment,
whether oral or written, to which it is a party or by which it or any of its
properties is bound or (iv) do not conflict with, breach or result in a
violation of, or default under any judgment, decree or order known to us that is
applicable to the Corporation and, pursuant to any applicable laws, is issued by
any Governmental Entity having jurisdiction over the Corporation.

8. Other than the filing of the Articles of Amendment with the SCC or other
applicable Governmental Entity and the filing of a Current Report on Form 8-K
with the Securities and Exchange Commission, 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 Corporation in
connection with the consummation by the Corporation of the Purchase.

9 The Corporation is not and, after giving effect to the issuance of the
Preferred Shares pursuant to the Agreement, would not be on the date hereof
required to register as 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.

 

Annex J (Form of Opinion)   Page 2

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(Bank/Thrift)

[Execution Copy]

 

ANNEX K

FORM OF REPAYMENT DOCUMENT

 

UNITED STATES DEPARTMENT OF THE TREASURY

1500 PENNSYLVANIA AVENUE, NW

WASHINGTON, D.C. 20220

Dear Ladies and Gentlemen:

Reference is made to that certain Letter Agreement incorporating the Securities
Purchase Agreement – Standard Terms (the “Securities Purchase Agreement”), dated
as of the date set forth on Schedule A hereto, between the United States
Department of the Treasury (the “Investor”) and the company set forth on
Schedule A hereto (the “Company”). Capitalized terms used but not defined herein
shall have the meanings assigned to them in the Securities Purchase Agreement.
Pursuant to the Securities Purchase Agreement, at the Closing, the Company
issued to the Investor the number of shares of the series of its preferred stock
set forth on Schedule A hereto (the “Preferred Shares”) and a warrant (the
“Warrant”) to purchase the number of shares of [To be included for private
issuers: the series of its preferred stock set forth on Schedule A hereto (such
shares, the “Warrant Shares”), which was exercised by the Investor at Closing.]
[To be included for public issuers: its common stock set forth on Schedule A
hereto.]

In connection with the consummation of the repurchase (the “Repurchase”) by the
Company from the Investor, on the date hereof, of the number of Preferred Shares
listed on Schedule A hereto (the “Repurchased Preferred Shares”) [To be included
for private issuers who are repurchasing some or all of the Warrant Shares: and
the number of Warrant Shares listed on Schedule A hereto (the “Repurchased
Warrant Shares”)], as permitted by the Emergency Economic Stabilization Act of
2008, as amended by the American Recovery and Reinvestment Act of 2009:

(a) The Company hereby acknowledges receipt from the Investor of the share
certificate(s) set forth on Schedule A hereto representing the Preferred Shares;
[and]

(b) The Investor hereby acknowledges receipt from the Company of a wire transfer
for the account of the Investor in immediately available funds of the aggregate
purchase price set forth on Schedule A hereto, representing payment in full for
the Repurchased Preferred Shares at a price per share equal to the Liquidation
Amount per share, together with any accrued and unpaid dividends to, but
excluding, the date hereof;

[Paragraphs (c) and (d) to be included for private issuers who are repurchasing
some or all of the Warrant Shares: (c) The Company hereby acknowledges receipt
from the Investor of the share certificate(s) set forth on Schedule A hereto
representing the Warrant Shares; [and]

(d) The Investor hereby acknowledges receipt from the Company of a wire transfer
for the account of the Investor in immediately available funds of the aggregate
purchase price set forth on Schedule A hereto, representing payment in full for
the Repurchased Warrant Shares at a price per share equal to the Liquidation
Amount per share, together with any accrued and unpaid dividends to, but
excluding, the date hereof [; and]]

 

Annex K (Form of Repurchase Document)   Page 1

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[Execution Copy]

 

[Paragraph (e) to be included for private issuers who are repurchasing less than
all of the Warrant Shares: (e) The Investor hereby acknowledges receipt from the
Company of a share certificate for the number of Warrant Shares set forth on
Schedule A hereto, equal to the difference between the Warrant Shares
represented by the certificate referenced in clause (c) above and the
Repurchased Warrant Shares.]

[To be included for public issuers: The Investor and the Company hereby agree
that, notwithstanding Section 4.4 of the Securities Purchase Agreement,
immediately following consummation of the Repurchase, but subject to compliance
with applicable securities laws, the Investor shall be permitted to Transfer all
or a portion of the Warrant with respect to, and/or exercise the Warrant for,
all or a portion of the number of shares of Common Stock issuable thereunder, at
any time and without limitation, and Section 4.4 of the Securities Purchase
Agreement shall be deemed to be amended in order to permit the foregoing. The
Company shall take all steps as may be reasonably requested by the Investor to
facilitate any such Transfer.

In addition, the Company agrees that in the event it elects to repurchase the
Warrant, it shall deliver to the Investor within 15 calendar days of the date
hereof a notice of intent to repurchase the Warrant, which notice shall be in
accordance with Section 4.9(b) of the Securities Purchase Agreement (the
“Warrant Repurchase Notice”). In the event the Company does not deliver the
Warrant Repurchase Notice to the Investor within 15 calendar days of the date
hereof, the Investor hereby provides notice, pursuant to Section 4.5(p) of the
Securities Purchase Agreement, of its intention to sell the Warrant, such notice
to be effective as of the first day following the end of such 15-day period.

In the event that the Company delivers a Warrant Repurchase Notice and the
Company and the Investor fail to agree on the Fair Market Value of the Warrant
pursuant to the procedures (including the Appraisal Procedure), and in
accordance with the time periods, set forth in Section 4.9(c) of the Securities
Purchase Agreement or the Company revokes the delivery of such Warrant
Repurchase Notice, then the Investor hereby provides notice of its intention to
sell the Warrant.]

This letter agreement will be governed by and construed 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.

This letter 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 letter agreement may be delivered by facsimile and such facsimiles
will be deemed sufficient as if actual signature pages had been delivered

[Remainder of this page intentionally left blank]

 

Annex K (Form of Repurchase Document)   Page 2

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(Bank/Thrift)

[Execution Copy]

 

In witness whereof, the parties have duly executed this letter agreement as of
the date first written above.

 

UNITED STATES DEPARTMENT OF THE TREASURY

By:  

 

  Name:   Title:

COMPANY:  

 

By:  

 

  Name:   Title:

 

Annex K (Form of Repurchase Document)   Page 3

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(Bank/Thrift)

[Execution Copy]

 

SCHEDULE A

[Version to be used by public issuers]

 

General Information:   

Date of Letter Agreement incorporating the Securities Purchase Agreement:

  

Name of the Company:

  

Corporate or other organizational form of the Company:

  

Jurisdiction of organization of the Company:

  

Number and series of preferred stock issued to the Investor at the Closing:

  

Number of Initial Warrant Shares:

   Terms of the Repurchase:   

Number of Preferred Shares repurchased by the Company:

  

Share certificate number (representing the Preferred Shares previously issued to
the Investor at the Closing):

  

Per share Liquidation Amount of Preferred Shares:

  

Accrued and unpaid dividends on Preferred Shares:

  

Aggregate purchase price for Repurchased Preferred Shares:

   Investor wire information for payment of purchase price:    ABA Number:   
Bank:    Account Name:    Account Number:

 

Annex K (Form of Repurchase Document)   Page 4

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(Bank/Thrift)

[Execution Copy]

 

SCHEDULE A

[Version to be used by private issuers]

 

General Information:

 

Date of Letter Agreement incorporating the Securities Purchase Agreement:

 

Name of the Company:

 

Corporate or other organizational form of the Company:

 

Jurisdiction of organization of the Company:

 

Number and series of preferred stock issued to the Investor at the Closing
(Preferred Shares):

 

Number and series of preferred stock underlying the Warrant issued to the
Investor at the Closing (Warrant Shares):

 

Terms of the Repurchase of Preferred Shares:

 

Number of Preferred Shares purchased by the Company:

 

Share certificate number (representing the Preferred Shares previously issued to
the Investor at the Closing):

 

Per share Liquidation Amount of Preferred Shares:

 

Accrued and unpaid dividends on Preferred Shares:

 

Aggregate purchase price for Repurchased Preferred Shares:

  

[To be included for private issuers who are repurchasing some or all of the
Warrant Shares: Terms of the Repurchase of the Warrant Shares:

 

Number of Warrant Shares purchased by the Company:

  

 

Annex K (Form of Repurchase Document)   Page 5

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

(Bank/Thrift)

[Execution Copy]

 

Share certificate (representing the Warrant Shares previously issued to the
Investor at the Closing):

 

Per share Liquidation Amount of Warrant Shares:

 

Accrued and unpaid dividends on Warrant Shares;

 

Aggregate purchase price for Repurchased Warrant Shares:

 

[To be included for issuers who are repurchasing less than all of the Warrant
Shares: Difference between the Warrant Shares and the Repurchased Warrant
Shares:] ]

 

   Investor wire information for payment of purchase price:   

ABA Number:

Bank:

Account Name:

Account Number:

Beneficiary:

 

Annex K (Form of Repurchase Document)   Page 6