UNITED STATES DEPARTMENT OF THE TREASURY

1500 PENNSYLVANIA AVENUE, NW

WASHINGTON, D.C. 20220

Dear Ladies and Gentlemen:

The company set forth on the signature page hereto (the "Company") intends to issue in

a private placement the number ofshares of a series ofits preferred stock set forth on Schedule A

hereto (the "Preferred Shares "J and a warrant to purchase the number ofshares of a series ofits

preferred stock set forth on Schedule A hereto (the itWarrant H and, together with the Preferred

Shares, the "Purchased Securities "J and the United States Department ofthe Treasury (the

''Investor ") intends to purchase from the Company the Purchased Securities.

The purpose ofthis letter agreement is to confirm the terms and conditions ofthe

purchase by the Investor ofthe Purchased Securities. Except to the extent supplemented or

superseded by the terms set forth herein or in the Schedules hereto, the provisions contained in

the Securities Purchase Agreement - Standard Terms attached hereto as Exhibit A (the

"Securities Purchase Agreement 'J are incorporated by reference herein. Terms that are defined

in the Securities Purchase Agreement are used in this letter agreement as so defined. In the event

of any inconsistency between this letter agreement and the Securities Purchase Agreement, the

terms ofthis letter agreement shall govern.

Each ofthe Company and the Investor hereby confinns its agreement with the other party

with respect to the issuance by the Company ofthe Purchased Securities and the purchase by the

Investor ofthe Purchased Securities pursuant to this letter agreement and the Securities Purchase

Agreement on the tenns specified on Schedule A hereto.

This letter agreement (including the Schedules hereto), the Securities Purchase

Agreement (including the Annexes thereto), the Disclosure Schedules and the Warrant constitute

the entire agreement, and supersede all other prior agreements, understandings, representations

and warranties, both written and oral, between the parties, with respect to the subject matter

hereof. This letter agreement constitutes the "Letter Agreement" referred to in the Securities

Purchase Agreement.

This letter agreement may be executed in any number ofseparate 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 as sufficient as if actual signature

pages had been delivered.

* * *

UST Seq. No. 986
In witness whereof, this letter agreement has been duly executed and delivered by the

duly authorized representatives ofthe parties hereto as of the date written below.

UNITED STATES DEPARTMENT OF THE TREASURY

By: . _

Name:

Title:

CO~~THINGTON FINANCIAL HOLDINGS,

A~~--- Name: William L. Worthington, Jr.

Title: Chairman and Chief Executive Officer

UST Seq. No. 986

INC.
In witness whereof, this letter agreement has been duly executed and delivered by the

duly authorized representatives ofthe parties hereto as ofthe date written below.

UNITED STATES DEPARTMENT OF THE

TREASURY

By: Name: t~tfJ~--- Duane Morse

Title: ChiefRisk and Compliance Officer

WORTHINGTON FINANCIAL HOLDINGS, INC.

By: _

Name: William L. Worthington, Jr.

Title: Chairman and Chief Executive Officer

MAY 15 2009

Date: _
SCHEDULE A

ADDITIONAL TERMS AND CONDITIONS

Company Infonnation:

Name ofthe Company: Worthington Financial Holdings, Inc.

Corporate or other organizational fonn: Corporation

Jurisdiction of Organization: Alabama

Appropriate Federal Banking Agency: Office of Thrift Supervision

Notice lnfonnation: Worthington Financial Holdings, Inc.

4040 Balmoral Drive

Huntsville, Alabama 35802

ATTN: William L. Worthington, Jr.,

Chainnan and Chief Executive Officer

Telephone:

Facsimile:

With a copy to (which shall not constitute notice):

Larry C. Tomlin, Esq.

Krieg DeVault LLP

2800 One Indiana Square

lndianapolis, Indiana 46204-2079

Telephone: (317) 636-4341

Facsimile: (317) 636-1507

Tenns ofthe Purchase:

Series of Preferred Stock Purchased: Fixed Rate Cumulative Perpetual Preferred Stock,

Series A

Per Share Liquidation Preference of Preferred Stock: $1,000

Number of Shares of Preferred Stock Purchased: 2,720

Dividend Payment Dates on the Preferred Stock: February 15, May 15,

August 15 and November 15 of each year

Series ofWarrant Preferred Stock: Fixed Rate Cumulative Perpetual Preferred Stock,

Series B

Number ofWarrant Shares: 136.00136

UST Seq. No. 986
Number of Net Warrant Shares (after net settlement): 136

Exercise Price of the Warrant: $0.01

Purchase Price: $2~720,000

Closing:

Location ofClosing: Hughes Hubbard & Reed LLP

One Battery Park Plaza

New York, NY 10004

Time of Closing: 9:00 a.m. EST

Date ofClosing: May 15, 2009

UST Seq. No. 986
Wire Information for Closing:

Contact for Confirmation of Wire Information:

Sarita S. Grace, Executive Vice President, COO, CFO

Office:

Cell:

UST Seq. No. 986
SCHEDULE B

CAPITALIZATION

Capitalization Date: April 30, 2009

Common Stock

Par value: .01 per share

Total Authorized: 50,000,000

Outstanding: 1,600,000

,

Subject to warrants, options, convertible securities, etc.: 805,800

Reserved for benefit plans and other issuances: 160,000

Remaining authorized but unissued: 47,434,200

Shares issued after Capitalization Date (other than pursuant to warrants, options,

convertible securities, etc. as set forth above): None

Preferred Stock

Par value: No par value

Total Authorized: 10,000,000

Outstanding (by series): -0-

Reserved for issuance: -0-

Remaining authorized but unissued: 10,000,000

Holders of 50/0 or more of any class of capital stock Primary Address

UST Seq. No. 986
SCHEDULE C

LITIGATION

List any exceptions to the representation and warranty in Section 2.2(1) ofthe Securities

Purchase Agreement - Standard Terms.

Worthington Financial Holdings, Inc. ("WorthingtonIf) is a named defendant in a lawsuit

filed in the United States District Court, Southern District of Mississippi, by Robert Guillot,

Edith Young, and RCG Enterprises, Inc. (collectively the "Plaintiffs") against Phillip Martin,

Crossgate Crossing, LLC, Gulf Capital Holdings, LLC, Bancorp South, Inc., Bankfirst Financial

Services, and Worthington (collectively the "Defendants").

If none, please so indicate by checking the box: D

UST Seq. No. 986
SCHEDULED

COMPLIANCE WITH LAWS

List any exceptions to the representation and warranty in the second sentence of Section 2.2(m)

of the Securities Purchase Agreement - Standard Terms.

If none, please so indicate by checking the box: l8J

List any exceptions to the representation and warranty in the la.'it sentence of Section 2.2(m) of

the Securities Purchase Agreement - Standard Terms.

lfnone, please so indicate by checking the box:

UST Seq. No. 986
SCHEDULEE

REGULATORY AGREEMENTS

List any exceptions to the representation and warranty in Section 2.2(s) ofthe Securities

Purchase Agreement - Standard Tenns.

If none, please so indicate by checking the box: [gJ.

KD_2055032_1.IX>C

UST Seq. No. 986
09513 1-OOO2·100J3·NY01.2690&47.9

EXHmIT A

(Non~Exchange-Traded QFIs, excluding S Corps

and Mutual Organizations)

SECURITIES PURCHASE AGREEMENT

STANDARD TERMS
TABLE OF CONTENTS

Page

Article I

Purchase; Closing

1.I Purchase 3

1.2 Closing 3

1.3 Interpretation 8

Article II

Representations and Warranties

2.1 Disclosure 9

2.2 Representations and Warranties ofthe Company 11

Article III

Covenants

3.1 CommerciaHy Reasonable Efforts 29

3.2 Expenses 30

3.3 Sufficiency of Authorized Warrant Preferred Stock; Exchange Listing 30

3.4 Certain Notifications Until Closing .30

3.5 Access, Information and Confidentiality .31

Article IV

Additional Agreements

4. I Purchase for Investment. 34

4.2 Legends 35

4.3 Certain Transactions 39

4.4 Transfer of Purchased Securities and Warrant Shares; Restrictions on Exercise

ofthe Warrant 39

4.5 Registration Rights 40

4.6 Depositary Shares 68

4.7 Restriction on Dividends and Repurchases 68

4.8 Executive Compensation 73

4.9 Related Party Transactions 74

4.10 Bank and Thrift Holding Company Status 74

4. I I Predominantly Financial 75

-i09s:n!-0002·IOO33·NY02.2690847 9
Article V

Miscellaneous

5.1 Termination 75

5.2 Survival ofRepresentations and Warranties 77

5.3 Amendment 77

5.4 Waiver ofConditions 77

5.5 Governing Law: Submission to Jurisdiction, Etc 78

5.6 Notices 78

5.7 Definitions 79

5.8 Assignment 80

5.9 Severability 81

5.10 No Third Party Beneficiaries 81

-ii09SH 1-OOO2·IOOJ3·NY02.269Otl47.9
LIST OF ANNEXES

ANNEX A: FORM OF CERTIFICATE OF DESIGNATIONS FOR PREFERRED STOCK

ANNEX B: FORM OF CERTIFICATE OF DESIGNATIONS FOR WARRANT

PREFERRED STOCK

ANNEX C: FORM OF WAIVER

ANNEX 0: FORM OF OPINION

ANNEX E: FORM OF WARRANT

-iii09531 f-0002-10031-NY02.2690&47.9
INDEX OF DEFINED TERMS

Term

Affiliate

Agreement

Appropriate Federal Banking Agency

Bank Holding Company

Bankruptcy Exceptions

Benefit Plans

Board ofDirectors

Business Combination

business day

Capitalization Date

Certificates of Designations

Charter

Closing

Closing Date

Code

Common Stock

Company

Company Financial Statements

Company tvlaterial Adverse Effect

Company Reports

Company Subsidiary; Company Subsidiaries

control; controlled by; under common control with

Controlled Group

CPP

Disclosure Schedule

EESA

ERlSA

Exchange Act

Federal Reserve

GAAP

Governmental Entities

Holder

Holders' Counsel

Indemnitee

Information

Investor

Junior Stock

knowledge ofthe Company; Company~s knowledge

Letter Agreement

officers

Parity Stock

~iv095331-OO<>2·10033-NY02.26908479

Location of

Definition

5.7(b)

Recitals

2.2(s)

4.10

2.2(d)

1.2(d)(iv)

2.2(f)

5.8

1.3

2.2(b)

1.2(d)(iii)

1.2(d)(iii)

l.2(a}

1.2(a)

2.2(n)

2.2(b)

Recitals

2.2(h)

2.1 (b)

2.2(i)(i)

2.2(e)(ii)

5.7(b)

2.2(n)

Recitals

2.1 (a)

1.2(d)(iv)

2.2(n)

4.4

4.10

2.1(b)

1.2(c)

4.5(1)(i)

4.5(1)(ii)

4.5(h)(i)

3.5(c)

Recitals

4.7(f)

5.7(c)

Recitals

5.7{c)

4.7(f)
Term

Pending Underwritten Offering

Permitted Repurchases

Piggyback Registration

Plan

Preferred Shares

Preferred Stock

Previously Disclosed

Proprietary Rights

Purchase

Purchase Price

Purchased Securities

register; registered; registration

Registrable Securities

Registration Expenses

Regulatory Agreement

Rule 144; Rule 144A; Rule 159A; Rule 405; Rule 415

Savings and Loan Holding Company

Schedules

SEC

Securities Act

Selling Expenses

Senior Executive Officers

Shelf Registration Statement

Signing Date

Special Registration

subsidiary

Tax; Taxes

Transfer

Warrant

Warrant Preferred Stock

\Varrant Shares

-v095331-oo<l2-100n-NY02.2690S47.9

Location of

Definition

4.5(m)

4.7(c)

4.5(b)(iv)

2.2(n)

Recitals

Recitals

2. ](c)

2.2(u)

Recitals

1.1

Recitals

4.5(1)(iii)

4.5(l)(iv)

4.5(1)(v)

2.2(5)

4.5(l)(vi)

4.10

Recitals

2.2(k)

2.2(a)

4.5(l)(vii)

4.8

4.5(b)(ii)

2.1 (b)

4.50)

5.7(a)

2.2(0)

4.4

Recitals

Recitals

2.2(d)
SECURITIES PURCHASE AGREEMENT - STANDARD TERMS

Recitals:

WHEREAS, the United States Department ofthe Treasury (the "Investor") may from

time to time agree to purchase shares of preferred stock and warrants from eligible financial

institutions which elect to participate in the Troubled Asset Relief Program Capital Purchase

Program (HCPP");

WHEREAS, an eligible financial institution electing to participate in the CPP and issue

securities to the Investor (referred to herein as the "Company") shall enter into a letter agreement

(the "Letter Agreement") with the Investor which incorporates this Securities Purchase

Agreement - Standard Tenns;

WHEREAS, the Company agrees to expand the flow of credit to U.S. consumers and

businesses on competitive tenns to promote the sustained growth and vitality ofthe U.S.

economy;

WHEREAS, the Company agrees to work diligently, under existing programs, to modify

the tenns ofresidential mortgages as appropriate to strengthen the health ofthe U.S. housing

market;

WHEREAS, the Company intends to issue in a private placement the number ofshares of

the series of its Preferred Stock ("Preferred Stoc!f') set forth on Schedule A to the Letter

Agreement (the "Preferred Shares") and a warrant to purchase the number ofshares ofthe series

of its Preferred Stock (H Warrant Preferred Stock") set forth on Schedule A to the Letter

Agreement (the"Warrant" and, together with the Preferred Shares, the "Purchased Securities")

and the Investor intends to purchase (the "Purchase") from the Company the Purchased

Securities; and

WHEREAS, the Purchase will be governed by this Securities Purchase Agreement -

Standard Terms and the Letter Agreement, including the schedules thereto (the "Schedules"),

specifying additional terms ofthe Purchase. This Securities Purchase Agreement - Standard

Terms (including the Annexes hereto) and the Letter Agreement (including the Schedules

thereto) are together referred to as this "Agreement". All references in this Securities Purchase

Agreement - Standard Terms to "Schedules" are to the Schedules attached to the Letter

Agreement.

NOW, THEREFORE, in consideration ofthe premises, and ofthe representations,

warranties, covenants and agreements set forth herein, the parties agree as follows:

Article I

Purchase; Closing

1.1 Purchase. On the tenns and subject to the conditions set forth in this Agreement,

the Company agrees to sell to the Investor, and the Investor agrees to purcha~ from the

Company, at the Closing (as hereinafter defined), the Purchased Securities for the price set forth

on Schedule A (the "Purchase Price").

095J3I-0002·IOO33·NY02.2690847.9
1.2 Closing.

(a) On the terms and subject to the conditions set forth in this Agreement, the closing

ofthe Purchase (the "ClosingH

) will take place at the location specified in Schedule A, at the

time and on the date set forth in Schedule A or as soon as practicable thereafter, or at such other

place, time and date as shall be agreed between the Company and the Investor. The time and date

on which the Closing occurs is referred to in this Agreement as the "Closing Date".

(b) Subject to the fulfillment or waiver ofthe conditions to the Closing in this Section

1.2, at the Closing the Company will deliver the Preferred Shares and the Warrant, in each case

as evidenced by one or more certificates dated the Closing Date and bearing appropriate legends

as hereinafter provided fOf, in exchange for payment in full ofthe Purchase Price by wire

transfer of immediately available United States funds to a bank account designated by the

Company on Schedule A.

(c) The respective obligations of each ofthe Investor and the Company to

consummate the Purchase are subject to the fulfillment (or waiver by the Investor and the

Company, as applicable) prior to the Closing ofthe conditions that (i) any approvals or

authorizations of all United States and other governmental, regulatory or judicial authorities

(collectively, "Governmental Entities") required for the consummation ofthe Purchase shall

have been obtained or made in fonn 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 ofthe Purchased Securities as contemplated by this Agreement.

(d) The obligation ofthe Investor to consummate the Purchase is also subject to the

fulfillment (or waiver by the Investor) at or prior to the Closing of each ofthe following

conditions:

(i) (A) the representations and warranties ofthe Company set forth in (x)

Section 2.2(g) ofthis Agreement shall be true and correct in all respects as though made

on and as ofthe Closing Date, (y) Sections 2.2(a) through (t) shall be true and correct in

all material respects as though made on and as ofthe 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 ofsuch

other date) and (z) Sections 2.2(h) through (v) (disregarding all qualifications or

limitations set forth in such representations and warranties as to "materiality", "Company

Material Adverse Effect" and words ofsimilar import) shall be true and correct as though

made on and as ofthe Closing Date (other than representations and warranties that by

their terms speak as ofanother date, which representations and warranties shall be true

and correct as ofsuch other date), except to the extent that the failure ofsuch

representations and warranties referred to in this Section I.2(d)(i)(A)(z) 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 (8) the Company shall have

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095331.(l()()2-I0033-NY01.26908479
perfonned in all material respects all obligations required to be performed by it under this

Agreement at or prior to the Closing;

(ii) the Investor shall have received a certificate signed on behalf ofthe

Company by a senior executive officer certifYing to the effect that the conditions set forth

in Section 1.2(d)(i) have been satisfied;

(iii) the Company shall have duly adopted and filed with the Secretary of State

of its jurisdiction of organization or other applicable Governmental Entity the

amendments to its certificate or articles of incorporation, articles of association, or similar

organizational document ("Charter") in substantially the forms attached hereto as Annex

A and Annex B (the "Certificates ofDesignations") and such filing shall have been

accepted;

(iv) (A) the Company shall have effected such changes to its compensation,

bonus, incentive and other benefit plans~ arrangements and agreements (including golden

parachute, severance and employment agreements) (collectively, "Benefit Plans") with

respect to its Senior Executive Officers (and to the extent necessary for such changes to

be legally enforceable, each of its Senior Executive Officers shall have duly consented in

writing to such changes), as may be necessary, during the period that the Investor owns

any debt or equity securities ofthe Company acquired pursuant to this Agreement or the

Warrant, in order to comply with Section 11 I(b) ofthe Emergency Economic

Stabilization Act 0[2008 ("EESA") as implemented by guidance or regulation thereunder

that has been issued and is in effect as ofthe Closing Date, and (B) the Investor shall

have received a certificate signed on behalf ofthe Company by a senior executive officer

certifying to the effect that the condition set forth in Section I.2(d)(iv)(A) has been

satisfied;

(v) each ofthe Company's Senior Executive Officers shall have delivered to

the Investor a written waiver in the form attached hereto as Annex C releasing the

Investor from any claims that such Senior Executive Officers may otherwise have as a

result ofthe issuance, on or prior to the Closing Date, of any regulations which require

the modification of, and the agreement ofthe Company hereunder to modify, the terms of

any Benefit Plans with respect to its Senior Executive Officers to eliminate any

provisions ofsuch Benefit Plans that would not be in compliance with the requirements

of Section 111(b) ofthe EESA as implemented by guidance or regulation thereunder that

has been issued and is in effect as ofthe Closing Date;

(vi) the Company shall have delivered to the Investor a written opinion from

counsel to the Company (which may be internal counsel), addressed to the Investor and

dated as ofthe Closing Date, in substantially the form attached hereto as Annex 0;

(vii) the Company shall have delivered certificates in proper form or, with the

prior consent ofthe Investor, evidence ofshares in book~entry fonn, evidencing the

Preferred Shares to Investor or its designee(s); and

~3-

0953lI.oooZ-100J3-NYO:U69QM79
(viii) the Company shall have duly executed the Warrant in substantially the

form attached hereto as Annex E and delivered such executed Warrant to the Investor or

its designee(s).

1.3 Interpretation. When a reference is made in this Agreement to "Recitals,"

"Articles/' "Sections," or H Annexes" such reference shall be to a Recital, Article or Section of,

or Annex to, this Securities Purchase Agreement - Standard Terms, and a reference to

"Schedules" shall be to a Schedule to the Letter Agreement, in each case, unless otherwise

indicated. The terms defined in the singular have a comparable meaning when used in the plural,

and vice versa. References to "herein'\ "hereof" "'hereunder" and the like refer to this

Agreement as a whole and not to any particular section or provision, unless the context requires

otherwise. The table of contents and headings contained in this Agreement are for reference

purposes only and are not part of this Agreement. Whenever the words "'include," "includes" or

"'including" are used in this Agreement, they shall be deemed followed by the words "without

limitation." No rule of construction against the draftsperson shall be applied in connection with

the interpretation or enforcement ofthis Agreement, as this Agreement is the product of

negotiation between sophisticated parties advised by counsel. All references to "$H or "dollars"

mean the lawful currency ofthe 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 ofstatutes,

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 ofNew York generally are authorized or required by law or other governmental actions to

close.

Article II

Representations and Warranties

2.1 Disclosure.

(a) On or prior to the Signing Date, the Company delivered to the Investor a schedule

("Disclosure Schedule") setting forth, among other things, items the disclosure of which is

necessary or appropriate either in response to an express disclosure requirement contained in a

provision hereof or as an exception to one or more representations or warranties contained in

Section 2.2.

(b) "'Company Material Adverse Effect' means a material adverse effect on 0) the

business, results of operation or financial condition ofthe Company and its consolidated

subsidiaries taken as a Whole; provided, however, that Company Material Adverse Effect shaH

not be deemed to include the effects of(A) changes after the date ofthe Letter Agreement (the

"Signing Date") in general business, economic or market conditions (including changes

generally in prevailing interest rates, credit availability and liquidity, currency exchange rates

and price levels or trading volumes in the United States or foreign securities or credit markets),

or any outbreak or escalation of hostilities, declared or undeclared acts ofwar or terrorism, in

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095331-OOO2·IOO33·NY02,269O&-t7,9
each case generally affecting the industries in which the Company and its subsidiaries operate,

(B) changes or proposed changes after the Signing Date in generally accepted accounting

principles in the United States ("GAAP") or regulatory accounting requirements, 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 ofthese 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 ofthe Company to consummate the Purchase and other

transactions contemplated by this Agreement and the Warrant and perform its obligations

hereunder or thereunder on a timely basis.

(c) "Previously Disclosed' means information set forth on the Disclosure Schedule,

provided, however, that disclosure in any section ofsuch Disclosure Schedule shall apply only to

the indicated section ofthis Agreement except to the extent that it is reasonably apparent from

the face ofsuch disclosure that such disclosure is relevant to another section ofthis Agreement.

2.2 Representations and Warranties orthe Company. Except as Previously Disclosed,

the Company represents and warrants to the Investor that as ofthe Signing Date and as ofthe

Closing Date (or such other date specified herein):

(a) Organization, Authority and Significant Subsidiaries. The Company has been

duly incorporated and is validly existing and in good standing under the laws ofits jurisdiction of

organization, with the necessary power and authority to own its properties and conduct its

business in all material respects as currently conducted, and except as has not, individually or in

the aggregatel 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 ofthe Company that

would be considered a "significant subsidiary" within the meaning ofRule 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 ofits jurisdiction of organization. The

Charter and bylaws ofthe Company, copies ofwhich have been provided to the Investor prior to

the Signing Date, are true, complete and correct copies ofsuch documents as in full force and

effect as ofthe Signing Date.

(b) Capitalization. The authorized capital stock ofthe Company, and the outstanding

capital stock ofthe Company (including securities convertible into, or exercisable or

exchangeable for, capital stock ofthe Company) as ofthe most recent fiscal month-end

preceding the Signing Date (the "Capitalization Date") is set forth on Schedule B. The

outstanding shares of capital stock ofthe Company have been duly authorized and are validly

issued and outstanding, fully paid and nonassessable, and subject to no preemptive rights (and

were not issued in violation of any preemptive rights). As ofthe Signing Date, the Company

does not have outstanding any securities or other obligations providing the holder the right to

-5-

09533I-OO<>2-IOOJ3·NY02.2690S47.9
acquire its Common Stock ("Common Stock") that is not reserved for issuance as specified on

Schedule B, and the Company has not made any other commitment to authorize, issue or sell any

Common Stock. Since the Capitalization Date, the Company has not issued any shares of

Common Stock, other than (i) shares issued upon the exercise ofstock options or delivered under

other equity-based awards or other convertible securities or warrants which were issued and

outstanding on the Capitalization Date and disclosed on Schedule B and Oi) shares disclosed on

Schedule B. Each holder of5% or more of any class of capital stock ofthe Company and such

holder's primary address are set forth on Schedule B.

(c) 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 right'), and will rank pari pa'1su with or senior to all other series or classes of

Preferred Stoc~ whether or not 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 ofthe

Company.

(d) The Warrant and Warrant Shares. The Warrant has been duly authorized and,

when executed and delivered as contemplated hereby, will constitute a valid and legally binding

obligation ofthe Company enforceable against the Company 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 ("Bankruptcy Exceptions"). The shares of Warrant Preferred Stock issuable upon exercise

ofthe Warrant (the "Warrant Shares") have been duly authorized and reserved for issuance upon

exercise ofthe Warrant and when so issued in accordance with the terms ofthe Warrant will be

validly issued, fully paid and non-assessable, and will rank pari passu with or senior to all other

series or classes of Preferred Stock, whether or not issued or outstanding, with respect to the

payment of dividends and the dbiribution of assets in the event of any dissolution, liquidation or

winding up ofthe Company.

(e) Authorization, Enforceability.

(i) The Company has the corporate power and authority to execute and

deliver this Agreement and the Warrant and to carry out its obligations hereunder and

thereunder (which includes the issuance ofthe Preferred Shares, Warrant and Warrant

Shares). The execution, delivery and performance by the Company ofthis Agreement and

the Warrant and the consummation ofthe transactions contemplated hereby and thereby

have been duly authorized by all necessary corporate action on the part ofthe 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 ofthe Company

enforceable against the Company in accordance with its terms, subject to the Bankruptcy

Exceptions.

-6-
(ii) The execution, delivery and performance by the Company ofthis

Agreement and the Warrant and the consummation ofthe transactions contemplated

hereby and thereby and compliance by the Company with the provisions hereof and

thereof, will not (A) violate, conflict with, or result in a breach of any provision of, or

constitute a default (or an event which, with notice or lapse oftime or both, would

constitute a default) under, or result in the termination of, or accelerate the performance

required by, or result in a right oftermination or acceleration of, or result in the creation

of, any lien, security interest, charge or encumbrance upon any ofthe properties or assets

ofthe Company or any subsidiary ofthe Company (each a "Company Subsidiary" and,

collectively, the "Company Subsidiaries") under any ofthe terms, conditions or

provisions of(i) its organizational documents or (ii) any note, bond, mortgage, indenture,

deed oftrust, 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

ofthe properties or assets ofthe Company or any Company Subsidiary may be subject, or

(B) subject to compliance with the statutes and regulations referred to in the next

paragraph, violate any statute, rule or regulation or any judgment, ruling, order, writ,

injunction or decree applicable to the Company or any Company Subsidiary or any of

their respective properties or assets except, in the case of clauses (A)(ii) and (B), for

those occurrences that, individually or in the aggregate, have not had and would not

reasonably be expected to have a Company Material Adverse Effect.

(iii) Other than the filing ofthe Certificates of Designations with the Secretary

of State ofits 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 ofthe Purchase except for any such notices, filings, exemptions, reviews,

authorizations, consents and approvals the failure ofwhich to make or obtain would not,

individually or in the aggregate, reasonably be expected to have a Company Material

Adverse Effect.

(f) Anti-takeover Provisions and Rights Plan. The Board of Directors ofthe

Company (the "Board ofDirectors") has taken all necessary action to ensure that the transactions

contemplated by this Agreement and the Warrant and the consummation ofthe transactions

contemplated hereby and thereby, including the exercise ofthe Warrant in accordance with its

terms, will be exempt from any anti-takeover or similar provisions ofthe 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 ofany jurisdiction.

(g) No Company Material Adverse Effect Since the last day ofthe last completed

fiscal period for which financial statements are included in the Company Financial Statements

(as defined below), no fact, circumstance, event, change, occurrence~ condition or development

-7-

095331'{}oo2·IOO33-NY02.2690t!41.9
has occurred that, individually or in the aggregate~ has had or would reasonably be expected to

have a Company Material Adverse Effect.

(h) Company Financial Statements. The Company has Previously Disclosed each of

the consolidated financial statements ofthe Company and its consolidated subsidiaries for each

ofthe last three completed fiscal years ofthe Company (which shall be audited to the extent

audited financial statements are available prior to the Signing Date) and each completed

quarterly period since the last completed fiscal year (collectively the "Company Financial

Statements"). The Company Financial Statements present fairly in all material respects the

consolidated financial position ofthe Company and its consolidated subsidiaries as ofthe dates

indicated therein and the consolidated results oftheir 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 ofthe Company and the Company

Subsidiaries.

(i) Reports.

0) Since December 31,2006, 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 oftheir respective dates of filing, the Company Reports complied in

all material respects with all statutes and applicable rules and regulations ofthe

applicable Governmental Entities.

(ii) The records, systems, controls, data and information ofthe 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 ofthe 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 ofinternal

accounting controls described below in this Section 2.2(i)(ii). The Company (A) 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 chieffinancial officer

ofthe Company by others within those entities, and (B) has disclosed, based on its most

recent evaluation prior to the Signing Date, to the Company's outside auditors and the

audit committee ofthe Board of Directors (x) any significant deficiencies and material

weaknesses in the design or operation ofinternal controls that are reasonably likely to

adversely affect the Company's ability to record, process, summarize and report financial

information and (y) any fraud, whether or not material, that involves management or

-8-

095331-0002· t0033-NY0216~7.9
other employees who have a significant role in the Company's internal controls over

financial reporting.

0) No Undisclosed Liabilities. Neither the Company nor any ofthe Company

Subsidiaries has any liabilities or obligations of any nature (absolute, accrued, contingent or

othenvise) which are not properly reflected or reserved against in the Company Financial

Statements to the extent required to be so reflected or reserved against in accordance with

GAAP, 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.

(k) Offering of Securities. Neither the Company nor any person acting on its behalf

has taken any action (including any offering of any securities ofthe Company under

circumstances which would require the integration ofsuch offering with the offering of any of

the Purchased Securities under the Securities Act, and the rules and regulations ofthe Securities

and Exchange Commission (the "SEC') promulgated thereunder}, which might subject the

offering, issuance or sale of any ofthe Purchased Securities to Investor pursuant to this

Agreement to the registration requirements ofthe Securities Act.

(I) Litigation and Other Proceedings. Except (i) as set forth on Schedule C or Oi) as

would not, individually or in the aggregate, rea'ionably be expected to have a Company Material

Adverse Effect, there is no (A) pending Of, to the knowledge ofthe Company, threatened, claim,

action, suit, investigation or proceeding, against the Company or any Company Subsidiary or to

which any oftheir assets are subject nor is the Company or any Company Subsidiary su~ject 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.

(m) 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 ofthe Company or such

Company Subsidiary. Except as set forth on Schedule D, the Company and the Company

Subsidiaries have complied in all respects and are not in default or violation of, and none ofthem

is, to the knowledge ofthe 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 or as set forth on

Schedule D, no Governmental Entity has placed any restriction on the business or properties of

-9-

095331-0002· lOO33-NY02.269Ot479
the Company or any Company Subsidiary that would, individually or in the aggregate,

reasonably be expected to have a Company Material Adverse Effect.

(n) 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) ofthe Employee Retirement Income Security

Act of 1974, as amended ("ERiSA"» providing benefits to any current or fanner employee,

officer or director ofthe Company or any member ofits "Controlled Group" (defined as any

organization which is a member of a controlled group of corpordtions within the meaning of

Section 414 ofthe 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 tenns 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 ofthis 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

ofthe 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 ofthe assets under each Plan exceeds

the present value of all benefits accrued under such Plan (detennined based on the assumptions

used to fund such Plan) and (4) neither the Company nor any member of its ControJled 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 PBGC

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) ofERISA); and (C) each Plan

that is intended to be qualified under Section 401 (a) ofthe Code has received a favorable

detennination letter from the Internal Revenue Service with respect to its qualified status that has

not been revoked, or such a detennination 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 ofsuch qualified status or

favorable detennination letter.

(0) Taxes. Except as would not, individually or in the aggregate, reasonably be

expected to have a Company Material Adverse Effect, (i) the Company and the Company

Subsidiaries have filed all federal, state, local and foreign income and franchise Tax returns

required to be filed through the Signing Date, subject to pennitted extensions, and have paid all

Taxes due thereon, and (ii) no Tax deficiency has been determined adversely to the Company or

any ofthe Company Subsidiaries, nor does the Company have any knowledge of any Tax

deficiencies. "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 custom, duty,

-10-

095331-ooG2-10033-NYOI.2690S4?9
governmental fee or other like assessment or charge of any kind whatsoever, together with any

interest or penalty, imposed by any Governmental Entity.

(p) 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 from liens, 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.

(q) Environmental Liability. Except as would not, individually or in the aggregate,

reasonably be expected to have a Company Material Adverse Effect:

(i) 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 Of ordinance, including the Comprehensive Environmental Response,

Compensation and Liability Act of 1980, pending Of, to the Company's knowledge,

threatened against the Company or any Company Subsidiary;

(ii) to the Company's knowledge, there is no reasonable basis for any such

proceeding, claim or action; and

(iii) 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.

(r) 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 ofthe 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 ofsuch instruments constitutes the valid and legally binding obligation ofthe Company

or one ofthe 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 ofthe Company, any other party thereto, is in breach of any ofits 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.

-1 1-
(5) Agreements with Regulatory Agencies. Except as set forth on Schedule E, neither

the Company nor any Company Subsidiary is subject to any material cease-and-desist or other

similar order or enforcement action issued by, or is a party to any material 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, 2006,

has adopted any board resolutions at the request of, any Governmental Entity (other than the

Appropriate Federal Banking Agencies with jurisdiction over the Company and the Company

Subsidiaries) that currently restricts in any material respect the conduct ofits business or that in

any material manner relates to its capital adequacy, its liquidity and funding policies and

practices, its ability to pay dividends, its credit, risk management or compliance policies 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, 2006 by any such Governmental Entity that it is considering issuing,

initiating, ordering, or requesting any such Regulatory Agreement. The Company and each

Company Subsidiary are in compliance in all material respects 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 in all material respects with any such Regulatory

Agreement. "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) ofthe Federal Deposit Insurance Act (12 U.S.C. Section 18 I3(q).

(t) Insurance. The Company and the Company Subsidiaries are insured with

reputable insurers against such risks and in such amounts as the management ofthe 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 defau It under any ofthe material tenns 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.

(u) 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 oftheir existing businesses and all rights relating to the plans, design and

specifications of any of its branch facilities ("Proprietary Rights") free and clear of ail liens and

any claims of ownership by current or former employees, contractors, designers or others and (ii)

neither the Company nor any ofthe Company Subsidiaries is materially infringing, diluting,

misappropriating or violating, nor has the Company or any or the Company Subsidiaries received

any written (Of, to the knowledge ofthe Company, oral) communications alleging that any of

them has materially infring~ diluted, misappropriated or violated, any ofthe Proprietary Rights

owned by any other person. Except as would not, individually or in the aggregate, reasonably be

-12-

09533I'(KlO1-IOO~3-NY02.2690847.9
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 January 1, 2006 alleging that any

person has infringed, diluted, misappropriated or violated, any ofthe Proprietary Rights owned

by the Company and the Company Subsidiaries.

(v) Brokers and Finders. No broker, finder or investment banker is entitled to any

financial advisory, brokerage, finderts or other fee or commission in connection with this

Agreement or the Warrant or the transactions contemplated hereby or thereby based upon

arrangements made by or on behalf ofthe Company or any Company Subsidiary for which the

Investor could have any liability.

Article III

Covenants

3.1 Commercially Reasonable Efforts. Subject to the terms and conditions ofthis

Agreement, each ofthe parties will use its commercially reasonable efforts in good faith to take,

or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or

desirable, or advisable under applicable laws, so as to pennit consummation ofthe Purchase as

promptly as practicable and otherwise to enable consummation ofthe transactions contemplated

hereby and shall use commercially reasonable efforts to cooperate with the other party to that

end.

3.2 Expenses. Unless otherwise provided in this Agreement or the Warrant, 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 and the Warrant, including

fees and expenses ofits own financial or other consultants, investment bankers, accountants and

counsel.

3.3 Sufficiency of Authorized Warrant Preferred Stock; Exchange Listing.

(a) During the period from the Closing Date until the date on which the Warrant has

been fully exercised, the Company shaH at all times have reserved for issuance, free of

preemptive or similar rights, a sufficient number of authorized and unissued Warrant Shares to

effectuate such exercise.

(b) Ifthe Company lists its Common Stock on any national securities exchange, the

Company shall, ifrequested by the Investor, promptly use its reasonable best efforts to cause the

Preferred Shares and Warrant Shares to be approved for listing on a national securities exchange

as promptly as practicable following such request

3.4 Certain Notifications Until Closing. From the Signing Date until the Closing, the

Company shall promptly notifY the Investor of(i) any fact, event or circumstance of which it is

aware and which would reasonably be expected to cause any representation or warranty ofthe

Company contained in this Agreement to be untrue or inaccurate in any material respect or to

-13-

09533 !.{)OO2·10033·NYOZ.2690&47 9
cause any covenant or agreement ofthe Company contained in this Agreement not to be

complied with or satisfied in any material respect and Oi) 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 3.4 shall not limit or affect any rights of or remedies available to the

Investor; provided,further, that a failure to comply with this Section 3.4 shall not constitute a

breach ofthis Agreement or the failure of any condition set forth in Section 1.2 to be satisfied

unless the underlying Company Material Adverse Effect or material breach would independently

result in the failure of a condition set forth in Section 1.2 to be satisfied.

3.5 Access, Information and Confidentiality.

(a) From the Signing Date until the date when the Investor holds an amount of

Preferred Shares having an aggregate liquidation value of less than 100/0 ofthe Purchase Price,

the Company will permit the Investor and its agents, consultants, contractors and advisors (x)

acting through the Appropriate Federal Banking Agency, or otherwise to the extent necessary to

evaluate, manage, or transfer its investment in the Company, to examine the corporate books and

make copies thereof and to discuss the affairs, finances and accounts ofthe Company and the

Company Subsidiaries with the principal officers ofthe Company, all upon reasonable notice and

at such reasonable times and as often as the Investor may reasonably request and (y) to review

any information material to the Investor's investment in the Company provided by the Company

to its Appropriate Federal Banking Agency. Any investigation pursuant to this Section 3.5 shall

be conducted during nonnal business hours and in such manner as not to interfere unreasonably

with the conduct ofthe business ofthe Company, and nothing herein shall require the Company

or any Company Subsidiary to disclose any information to the Investor to the extent (i)

prohibited by applicable law or regulation~ or (ii) 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 (ii) apply).

(b) From the Signing Date until the date on which all ofthe Preferred Shares and

Warrant Shares have been redeemed in whole, the Company will deliver, or will cause to be

delivered, to the Investor:

0) as soon as available after the end of each fiscal year ofthe Company, and

in any event within 90 days thereafter, a consolidated balance sheet ofthe Company as of

the end ofsuch fiscal year, and consolidated statements ofincome, retained earnings and

cash flows ofthe Company for such year, in each case prepared in accordance with

GAAP and setting forth in each case in comparative fonn the figures for the previous

fiscal year ofthe Company, and which shall be audited to the exrtent audited financial

statements are available; and

-14-

09S331-OOO2-IOO:n-NY02.2690a47.9
(ii) as soon as available after the end ofthe first, second and third quarterly

periods in each fiscal year ofthe Company, a copy of any quarterly reports provided to

other stockholders ofthe Company or Company management.

(c) The Investor will use rea.;;;onable best efforts to hold, and will use reasonable best

efforts to cause its agents, consultants, contractors and advisors to hold, in confidence aJl nonpublic records, books, contracts, instruments, computer data and other data and information

(collectively, "'Information") concerning the Company furnished or made available to it by the

Company or its representatives pursuant to this Agreement (except to the extent that such

information can be shown to have been (i) previously known by such party on a non-confidential

basis, (ij) in the public domain through no fault ofsuch party or (iii) later lawfully acquired from

other sources by the party to which it was furnished (and without violation of any other

confidentiality obligation»; provided that nothing herein shall prevent the Investor from

disclosing any Information to the extent required by applicable laws or regulations or by any

subpoena or similar legal process.

(d) The Investor's information rights pursuant to Section 3.5(b) may be assigned by

the Investor to a transferee or assignee ofthe Purchased Securities or the Warrant Shares or with

a liquidation preference or, in the case ofthe Warrant, the liquidation preference ofthe

underlying shares of Warrant Preferred Stock, no less than an amount equal to 2% ofthe initial

aggregate liquidation preference ofthe Preferred Shares.

Article IV

Additional Agreements

4.1 Purchase for Investment. The Investor acknowledges that the Purchased Securities

and the Warrant Shares have not been registered under the Securities Act or under any state

securities lav,!s. The Investor (a) is acquiring the Purchased Securities pursuant to an exemption

from registration under the Securities Act solely for investment with no present intention to

distribute them to any person in violation ofthe Securities Act or any applicable U.S. state

securities laws, (b) will not seJi or otherwise dispose of any ofthe Purchased Securities or the

Warrant Shares, except in compliance with the registration requirements or exemption provisions

ofthe 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 ofthis type that it is capable

of evaluating the merits and risks ofthe Purchase and of making an informed investment

decision.

4.2 Legends.

(a) The Investor agrees that all certificates or other instruments representing the

Warrant will bear a legend substantially to the following effect:

"THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN

REGISTERED UNDER THE SECURlTIES ACT OF 1933, AS AMENDED, OR THE

SECURlTIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD

-15-

09533I..ooo2-IOO33·NY022690&4i9
OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION

STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND

APPLICABLE 51'ATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION

FROM REGISTRATJON UNDER SUCH ACT OR SUCH LAWS.

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 THE

INVESTOR REFERRED TO THEREIN, 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 addition, the Investor agrees that all certificates or other instruments

representing the Preferred Shares and the Warrant 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

"SECURlTIES ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY

NOT BE TRANSFERRED, SOLD OR OTHERWlSE DISPOSED OF EXCEPT WHILE

A REGISTRATJON STATEMENT RELATING THERETO IS IN EFFECT UNDER

SUCH ACT AND APPLICABLE STATE SECURl11ES 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 MAYBE RELYING ON THE

EXEMPTION FROM SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE

I44A THEREUNDER. ANY TRANSFEREE OF THE SECURITIES REPRESENTED

BY TIllS INSTRUMENT BY ITS ACCEPTANCE HEREOF (l) REPRESENTS THAT

IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED [N RULE 144A

UNDER THE SECURITIES ACT), (2) AGREES THAT IT WILL NOT OFFER SELL

OR OTIIERWlSE 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

I44A UNDER THE SECURITIES ACf THAT PURCHASES FOR ITS OWN

ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER

-16-

09533I-0002·IOOJ3-NY02.26908479
TO \VHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN

RELIANCE ON RULE 144A, (C) TO THE ISSUER OR (D) PURSUANT TO ANY

OTHER A VAILABLE 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 SECURlTIES PURCHASE

AGREEMENT BETWEEN THE ISSUER OF THESE SECURITIES AND THE

INVESTOR REFERRED TO THEREIN, 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

wrrn SAID AGREEMENT WILL BE YOID."

(c) In the event that any Purchased Securities or Warrant 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

I44A), the Company shall issue new certificates or other instruments representing such

Purchased Securities or Warrant Shares, which shall not contain the applicable legends in

Sections 4.2(a) and (b) above; provided that the Investor surrenders to the Company the

previously issued certificates or other instruments.

4.3 Certain Transactions. The Company will not merge or consolidate with, or sell,

transfer or lease all or substantially all ofits 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 ofthis Agreement to be performed and observed by the

Company.

4.4 Transfer ofPurchased Securities and Warrant Shares; Restrictions on Exercise of

the Warrant. Subject to compliance with applicable securities laws, the Investor shaH be

permitted to transfer, sel!, assign or otherwise dispose of("Transjer") all or a portion ofthe

Purchased Securities or Warrant Shares at any time, and the Company shall take all steps as may

be reasonably requested by the Investor to facilitate the Transfer ofthe Purchased Securities and

the Warrant Shares; provided that the Investor shall not Transfer any Purchased Securities or

Warrant Shares ifsuch transfer would require the Company to be subject to the periodic

reporting requirements of Section 13 or 15(d) ofthe Securities Exchange Act of 1934 (the

"Exchange Act"). In furtherance ofthe foregoing, the Company shaH provide reasonable

cooperation to facilitate any Transfers ofthe Purchased Securities or Warrant 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 (including such

information as is required by Section 4.5(k) and making management ofthe Company

-I 7-
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.

4.5 Registration Rights.

(a) Unless and until the Company becomes subject to the reporting requirements of

Section 13 or 15(d) ofthe Exchange Act, the Company shall have no obligation to comply with

the provisions ofthis Section 4.5 (other than Section 4.5(b)(iv)-(vi»;providedthat the Company

covenants and agrees that it shall comply with this Section 4.5 as soon as practicable after the

date that it becomes subject to such reporting requirements.

(b) Registration.

(i) Subject to the terms and conditions ofthis Agreement, 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) ofthe 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 Statement filed with the SEC to cover

the Registrable Securities), and, to the extent the ShelfRegistration 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 ShelfRegistration Statement

continuously effective and in compliance with the Securities Act and usable for resale of

such Registrable Securities for a period from the date ofits initial effectiveness until such

time as there are no Registrable Securities remaining (including by refiling such Shelf

Registration Statement (or a new ShelfRegistration Statement) ifthe initial Shelf

Registration Statement expires). Notwithstanding the foregoing, ifthe Company is not

eligible to file a registration statement on Fonn 5-3, then the Company shall not be

obligated to file a ShelfRegistration Statement unless and until requested to do so in

writing by the Investor.

(ii) Any registration pursuant to Section 4.5(b)(i) shall be effected by means

of a sheff registration on an appropriate form under Rule 415 under the Securities Act (a

"ShelfRegistration Statement"). Ifthe Investor or any other 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 4.5(d);providedthat the

Company shall not be required to facilitate an underwritten offering ofRegistrable

Securities unless the expected gross proceeds from such offering exceed (i) 2°;0 ofthe

initial aggregate liquidation preference ofthe Preferred Shares ifsuch initial aggregate

liquidation preference is less than $2 billion and (ii) $200 million ifthe initial aggregate

liquidation preference ofthe Preferred Shares is equal to or greater than $2 billion. The

lead underwriters in any such distribution shall be selected by the Holders ofa majority

·18-

095JJ l-0002-1003J·N Y02_2690847 9
ofthe Registrable Securities to be distributed; provided that to the extent appropriate and

permitted under applicable law. such Holders shall consider the qualifications of any

broker-dealer Affiliate ofthe Company in selecting the lead underwriters in any such

distribution.

(iii) The Company shall not be required to effect a registration (including a

resale of Registrable Securities from an effective ShelfRegistration Statement) or an

undenvritten offering pursuant to Section 4.5(b): (A) with respect to securities that are

not Registrable Securities; or (B) ifthe Company has notified the Investor and all other

Holders that in the good faith judgment ofthe Board ofDirectors, it would be materially

detrimental to the Company or its securityholders for such registration or undenvritten

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 ofthe request of

the Investor or any other Holder; provided that such right to delay a registration or

undenvritten offering shaH be exercised by the Company (1) only ifthe Company has

generally exercised (or is concurrently exercising) similar black-out rights against holders

ofsimilar 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.

(iv) If during any period when an effective ShelfRegistration Statement is not

available, the Company proposes to register any ofits equity securities, other than a

registration pursuant to Section 4.5(b)(i) or a Special Registration, and the registration

form to be tiled may be used for the registration or qualification for distribution of

Registrable Securities, the Company will give prompt written notice to the Investor and

all other 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 ofthe 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 ofsuch Piggyback Registration. The

Company may terminate or withdraw any registration under this Section 4.5(b)(iv) prior

to the effectiveness ofsuch registration, whether or not Investor or any other Holders

have elected to include Registrable Securities in such registration.

(v) Ifthe registration referred to in Section 4.5(b)(iv) is proposed to be

undernTitten, the Company will so advise Investor and all other Holders as a part ofthe

written notice given pursuant to Section 4.5(b)(iv). In such event, the right ofInvestor

and all other Holders to registration pursuant to Section 4.5(b) will be conditioned upon

such persons' participation in such underwriting and the inclusion ofsuch person's

Registrable Securities in the underwriting ifsuch securities are ofthe 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

-19-

09533I-0002-10033·NY02.2690847.9
the underwriter or underwriters selected for such underwriting by the Company; prOVided

that the Investor (as opposed to other Holders) shall not be required to indemnifY any

person in connection with any registration. If any participating person disapproves ofthe

tenns ofthe underwriting, such person may elect to withdraw therefrom by written notice

to the Company, the managing underwriters and the Investor (ifthe Investor is

participating in the underwriting).

(vi) 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 4.5(b)(ii) or (y) a Piggyback Registration

under Section 4.5(b)(iv) relates to an underwritten offering on behalf ofthe Company,

and in either case the managing underwriters advise the Company that in their reasonable

opinion the number ofsecurities requested to be included in such offering exceeds the

number which can be sold without adversely affecting the marketability ofsuch offering

(including an adverse effect on the per share offering price), the Company wiJI include in

such offering only such number ofsecurities that in the reasonable opinion ofsuch

managing underwriters can be sold without adversely affecting the marketability ofthe

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 4.5(b)(iv), the securities the Company proposes to sell, (B)

then the Registrable Securities ofthe Investor and all other Holders who have requested

inclusion ofRegistrable Securities pursuant to Section 4.5(b)(ii) or Section 4.5(b)(iv), as

applicable, pro rata on the basis ofthe aggregate number ofsuch securities or shares

owned by each such person and (C) lastly, any other securities ofthe Company that have

been requested to be so included, subject to the terms ofthis Agreement; provided,

however, that ifthe 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.

(c) Expenses ofRegistration. All Registration Expenses incurred in connection with

any registration, qualification or compliance hereunder shaH be borne by the Company. All

SeIling Expenses incurred in connection with any registrations hereunder shall be borne by the

holders ofthe securities so registered pro rata on the basis ofthe aggregate offering or sale price

ofthe securities so registered.

(d) Obligations ofthe Company. Whenever required to effect the registration of any

Registrable Securities or facilitate the distribution ofRegistrable Securities pursuant to an

effective ShelfRegistration Statement, the Company shaH, as expeditiously as reasonably

practicable:

0) 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 4.5(d), keep such registration

-20-

09533I..ooo2-100J3-NY02.2690347 9
statement effective and keep such prospectus supplement current until the securities

described therein are no longer Registrable Securities.

(ij) 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 ofthe Securities Act with respect to the disposition of all securities covered by

such registration statement.

(iii) Furnish to the Holders and any underwriters such number of copies ofthe

applicable registration statement and each such amendment and supplement thereto

(including in each case all exhibits) and of a prospectus, including a preliminary

prospectus, in conformity with the requirements ofthe 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.

(iv) Use its reasonable best efforts to register and qualify the securities covered

by such registration statement under such other securities or Blue Sky laws ofsuch

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 ofthe 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.

(v) Notify each Holder of Registrable Securities at any time when a

prospectus relating thereto is required to be delivered under the Securities Act ofthe

happening of any event as a result ofwhich 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.

(vi) Give written notice to the Holders:

(A) when any registration statement filed pursuant to Section 4.5(a) 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;

(B) of any request by the SEC for amendments or supplements to any

registration statement or the prospectus included therein or for additional

information;

-21-
(C) ofthe issuance by the SEC of any stop order suspending the

effectiveness of any registration statement or the initiation of any proceedings for

that purpose~

(D) ofthe receipt by the Company or its legal counsel of any

notification with respect to the suspension ofthe qualification ofthe applicable

Registrable Securities for sale in any jurisdiction or the initiation or threatening of

any proceeding for such purpose~

(E) ofthe 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 ofthe

prospectus until the requisite changes have been made); and

(F) if at any time the representations and warranties ofthe Company

contained in any underwriting agreement contemplated by Section 4.5(d)(x) cease

to be true and correct.

(vii) 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 4.5(d)(vi)(C) at the earliest practicable time.

(viii) Upon the occurrence of any event contemplated by Section 4.5(d)(v) or

4.5(d)(vi)(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 ofthe circumstances under which they were made, not

misleading. lfthe Company notifies the Holders in accordance with Section 4.5(d)(vi)(E)

to suspend the use ofthe prospectus until the requisite changes to the prospectus have

been made, then the Holders and any underwriters shaH suspend use ofsuch prospectus

and use their reasonable best efforts to return to the Company all copies ofsuch

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.

(ix) Use reasonable best efforts to procure the cooperation ofthe Companis

transfer agent in settling any offering or sale ofRegistrable 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).

(x) If an underwritten offering is requested pursuant to Section 4.5(b)(ii),

enter into an underwriting agreement in customary form, scope and substance and take all

-22-

095331.{)OO2·100D·NY02.2690S47.9
such other actions reasonably requested by the Holders of a m~jority ofthe Registrable

Securities being sold in connection therewith or by the managing underwriter(s), if any,

to expedite or facilitate the underwritten disposition ofsuch Registrable Securities, and in

connection therewith in any underwritten offering (including making members of

management and executives ofthe 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 ofthe 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, iftrue, confinn 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 ofthe 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 ShelfRegistration Statement) who have certified the financial statements included

in such Shelf Registration Statement, addressed to each ofthe managing underwriter(s), if

any, such letters to be in customary fonn and covering matters ofthe 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 the Investor 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 ofthe Registrable Securities being sold in 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 (i) above and to evidence

compliance with any customary conditions contained in the underwriting agreement or

other agreement entered into by the Company.

(xi) 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 reasonab Ie business hours, financial and other records, pertinent

corporate documents and properties ofthe Company, and cause the officers, directors and

employees ofthe Company to supply all information in each case reasonably requested

(and ofthe type customarily provided in connection with due diligence conducted in

connection with a registered public offering ofsecurities) by any such representative,

managing underwriter(s), attorney or accountant in connection with such Shelf

Registration Statement.

(xii) 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

-23-

095J3I-0002·IOO3J·NY01.269<l847 9
Registrable Securities to be listed on such securities exchange as the Investor may

designate.

(xiii) If requested by Holders of a majority ofthe 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 ofthe 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 ofsuch securities and make all required

filings ofsuch prospectus supplement or such amendment as soon as practicable after the

Company has received such request.

(xiv) Timely provide to its security holders earning statements satisfying the

provisions of Section II(a) ofthe Securities Act and Rule 158 thereunder.

(e) 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 ofsuch registration statement, prospectus or prospectus supplement,

the Investor and each Holder of Registrable Securities shall forthwith discontinue disposition of

Registrable Securities until the Investor and/or Holder has received copies of a supplemented or

amended prospectus or prospectus supplement, or until the Investor and/or such Holder is

advised in writing by the Company that the use ofthe prospectus and, if applicable~ prospectus

supplement may be resumed, and, ifso directed by the Company, the Investor and/or such

Holder shall deliver to the Company (at the Company's expense) all copies~ other than

permanent file copies then in the Investor and/or such Holder's possession, ofthe prospectus

and, if applicable, prospectus supplement covering such Registrable Securities current at the time

of receipt ofsuch notice. The total number of days that any such suspension may be in effect in

any 12-month period shall not exceed 90 days.

(f) 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.

(g) Furnishing Information.

0) Neither the Investor nor any Holder shall use any free writing prospectus

(as defined in Rule 405) in connection with the sale ofRegistrable Securities without the

prior written consent ofthe Company.

(ii) It shaH be a condition precedent to the obligations ofthe Company to take

any action pursuant to Section 4.5(d) that Investor and/or the selling Holders and the

underwriters, if any, shall furnish to the Company such information regarding

themselves, the Registrable Securities held by them and the intended method of

-24~

095331..QOO2·1003J-NY02 2690&47 9
disposition ofsuch securities as shall be required to effect the registered offering oftheir

Registrable Securities.

(h) Indemnification.

(i) 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 each Person, ifany, that controls a Holder within the

meaning ofthe 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 severat 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 tenn 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 statements therein~ in light ofthe

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 .tree 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.

(ii) If the indemnification provided for in Section 4.5(h)(i) 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 hannless 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 ofsuch losses,

claims, damages, actions, liabilities, costs or expenses in such proportion as is appropriate

to reflect the relative fault ofthe 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, cost') or expenses as well as any other relevant

-25-

09533I-{)ooZ-lO033-NY02.2690M7.9
equitable considerations. The relative fault ofthe Company, on the one hand, and ofthe

Indemnitee, on the other hand, shaH 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 4.5(h)(ii) were determined by pro rata

allocation or by any other method of allocation that does not take account ofthe equitable

considerations referred to in Section 4.5(h)(i). No Indemnitee guilty offraudulent

misrepresentation (within the meaning of Section 11 (f) ofthe Securities Act) shall be

entitled to contribution from the Company ifthe Company was not guilty ofsuch

fraudulent misrepresentation.

(i) Assignment of Registration Rights. The rights ofthe Investor to registration of

Registrable Securities pursuant to Section 4.5(b) may be assigned by the Investor to a transferee

or assignee of Registrable Securities with a liquidation preference Of, in the case ofthe Warran~

the liquidation preference ofthe underlying shares of Warrant Preferred Stock, no less than an

amount equal to (i) 2% ofthe initial aggregate liquidation preference ofthe Preferred Shares if

such initial aggregate liquidation preference is less than $2 billion and Oi) $200 million if the

initial aggregate liquidation preference ofthe Preferred Shares is equal to or greater than $2

billion; provided, however, the transferor shall, within ten days after such transfer, furnish to the

Company written notice ofthe name and address ofsuch transferee or assignee and the number

and type of Registrable Securities that are being assigned.

(j) Clear Market. With respect to any underwritten offering of Registrable Securities

by the Investor or other Holders pursuant to this Section 4.5, 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 any preferred stock ofthe Company or any securities convertible into or

exchangeable or exercisable for preferred stock ofthe Company, during the period not to exceed

ten days prior and 60 days following the effective date ofsuch 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. '"Special Registration" means the registration of

(A) equity securities and/or options or other rights in respect thereofsolely registered on Form S4 or Form S-8 (or successor form) or (B) shares of equity securities and/or options or other rights

in respect thereofto be offered to directors, members ofmanagement, employees, consultants,

customers, lenders or vendors ofthe Company or Company Subsidiaries or in connection with

dividend reinvestment plans.

(k) Rule 144: Rule 144A. With a view to making available to the Investor and

Holders the benefits of certain rules and regulations ofthe SEC which may permit the sale ofthe

Registrable Securities to the public without registration, the Company agrees to use its

reasonable best efforts to:

-26-

09533I-0002-10033-NY02.2690841.9
(i) make and keep public infonnation available, as those terms are understood

and defined in Rule 144(c)( 1) or any similar or analogous rule promulgated under the

Securities Act, at all times after the Signing Date;

(ii) (A) file with the SEC, in a timely manner, all reports and other documents

required ofthe Company under the Exchange Act, and (B) if at any time the Company is

not required to file such reports, make available, upon the request of any Holder, such

information necessary to permit sales pursuant to Rule 144A (including the information

required by Rule I44A(d)(4) under the Securities Act);

(iii) so long as the Investor or a Holder owns any Registrable Securities,

furnish to the Investor or such Holder forthwith upon request: a written statement by the

Company as to its compliance with the reporting requirements of Rule 144 under the

Securities Act, and ofthe Exchange Act; a copy ofthe most recent annual or quarterly

report of the Company; and such other reports and documents as the Investor or Holder

may reasonably request in availing itself of any rule or regulation ofthe SEC allowing it

to sell any such securities to the public without registration; and

(iv) take such further action as any Holder may reasonably request, all to the

extent required from time to time to enable such Holder to sell Registrable Securities

without registration under the Securities Act.

(1) As used in this Section 4.5, the following terms shall have the following

respective meanings:

0) "Holder" means the Investor and any other holder of Registrable

Securities to whom the registration rights conferred by this Agreement have been

transferred in compliance with Section 4.5(h) hereof.

(ii) "Holders' Counser means one counsel for the selling Holders chosen by

Holders holding a majority interest in the Registrable Securities being registered.

(iii) "Register," "registered/' and "registration" shaH 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 ofsuch registration statement or amendment

thereto or (B) filing a prospectus and/or prospectus supplement in respect of an

appropriate effective registration statement on Form 5-3.

(iv) "Registrable Securities" means (A) all Preferred Shares, (B) the Warrant

(subject to Section 4.5(q» and (C) any equity securities issued or issuable directly or

indirectly with respect to the securities referred to in the foregoing clauses (A) or (B) by

way of conversion~ exercise or exchange thereof, including the Warrant Shares, or share

dividend or share split or in connection with a combination ofshares, recapitalization,

reclassification, merger, amalgamation, arrangement, consolidation or other

-27-

09533 !..()OO2·I0033·NY01.26-908479
reorganization~ provided that, once issued~ such securities will not be Registrable

Securities when (I) they are sold pursuant to an effective registration statement under the

Securities Act, (2) except as provided below in Section 4.5(p), they may be sold pursuant

to Rule 144 without limitation thereunder on volume or manner of sale~ (3) they shall

have ceased to be outstanding or (4) they have been sold in a private transaction in which

the transferor's rights under this Agreement are not assigned to the transferee ofthe

securities. No Registrable Securities may be registered under more than one registration

statement at anyone time.

(v) "Registration Expenses" mean all expenses incurred by the Company in

effecting any registration pursuant to this Agreement (whether or not any registration or

prospectus becomes effective or final) or otherwise complying with its obligations under

this Section 4.5, 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 showH

, the reasonable fees and disbursements of

Holders' Counsel, and expenses ofthe 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 SeIling Expenses.

(vi) "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.

(vii) "Selling Expenses" mean all discounts, selling commissions and stock

transfer taxes applicable to the sale ofRegistrable Securities and fees and disbursements

of counsel for any Holder (other than the fees and disbursements of Holders' Counsel

included in Registration Expenses).

(m) At any time, any holder of Securities (including any Holder) may elect to forfeit

its rights set forth in this Section 4.5 from that date forward; provided, that a Holder forfeiting

such rights shall nonetheless be entitled to participate under Section 4.5(b)(iv) - (vi) in any

Pending Underwritten Offering to the same extent that such Holder would have been entitled to

ifthe holder had not withdrawn; and provided,further, that no such forfeiture shall terminate a

Holder's rights Of obligations under Section 4.5(g) with respect to any prior registration or

Pending Underwritten Offering. "Pending Underwritten Offering" means, with respect to any

Holder forfeiting its rights pursuant to this Section 4.5(m), any underwritten offering of

Registrable Securities in which such Holder has advised the Company ofits intent to register its

Registrable Securities either pursuant to Section 4.5(b)(ii) or 4.5(b)(iv) prior to the date ofsuch

Holder's forfeiture.

(n) Specific Performance. The parties hereto acknowledge that there would be no

adequate remedy at law ifthe Company fails to perform any ofits obligations under this Section

4.5 and that the Investor and the Holders from time to time may be irreparably harmed by any

such failure, and accordingly agree that the Investor and 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

-28-

09533 l-0002-10033-NY0'2.2690S47.9
enforceable under applicable law shall be entitled to compel specific performance ofthe

obligations ofthe Company under this Section 4.5 in accordance with the terms and conditions

ofthis Section 4.5.

(0) 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

the Investor and the Holders under this Section 4.5 or that otherwise conflicts with the provisions

hereof in any manner that may impair the rights granted to the Investor and the Holders under

this Section 4.5. 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 the Investor

and the Holders under this Section 4.5 (including agreements that are inconsistent with the order

of priority contemplated by Section 4.5(b)(vi» 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 ofthis Section 4.5.

(p) Certain Offerings by the Investor. In the case of any securities held by the

Investor that cease to be Registrable Securities solely by reason of clause (2) in the definition of

"Registrable Securities," the provisions of Sections 4.5(b)(ii), clauses (iv), (ix) and (x)-(xii) of

Section 4.5(d), Section 4.5(h) and Section 4.5(;) shall continue to apply until such securities

otherwise cease to be Registrable Securities. In any such case, an "underwrittenH

offering or

other disposition shall include any distribution ofsuch securities on behalfofthe Investor 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.

(q) RegisteredSales ofthe Warrant. The Holders agree to sell the Warrant or any

portion thereof under the Shelf Registration Statement only beginning 30 days after notifying the

Company of any such sale, during which 30-day period the Investor and all Holders ofthe

Warrant shall take reasonable steps to agree to revisions to the Warrant to permit a public

distribution ofthe Warrant, including entering into a warrant agreement and appointing a warrant

agent.

4.6 Depositary Shares. Upon request by the Investor at any time following the

Closing Date, the Company shall promptly enter into a depositary arrangement, pursuant to

customary agreements reasonably satisfactory to the Investor and with a depositary reasonably

acceptable to the Investor, pursuant to which the Preferred Shares or the Warrant Shares may be

deposited and depositary shares, each representing a fraction of a Preferred Share or Warrant

Share, as applicable, as specified by the Investor~ may be issued. From and after the execution of

any such depositary arrangement, and the deposit of any Preferred Shares or Warrant Shares, as

applicable, pursuant thereto, the depositary shares issued pursuant thereto shall be deemed

"Preferred Shares'\ "Warrant Shares" and, as applicable, "Registrable Securities" for purposes of

this Agreement.

4.7 Restriction on Dividends and Repurchases.

-29-

t}9533I-0002-10033-~'Y02<2690847<9
(a) Prior to the earlier of(x) the third anniversary ofthe Closing Date and (y) the date

on which all ofthe Preferred Shares and Warrant Shares have been redeemed in whole or the

Investor has transferred all ofthe Preferred Shares and Warrant Shares to third parties which are

not Affiliates ofthe Investor, neither the Company nor any Company Subsidiary shall, without

the consent ofthe Investor, declare or pay any dividend or make any distribution on capital stock

or other equity securities of any kind ofthe Company or any Company Subsidiary (other than 0)

regular quarterly cash dividends of not more than the amount ofthe last quarterly cash dividend

per share declared or, if lower, announced to its holders ofCommon Stock an intention to

declare, on the Common Stock prior to November] 7, 2008, as adjusted for any stock split, stock

dividend, reverse stock split, reclassification or similar transaction, (ii) dividends payable solely

in shares ofCommon Stock, (iii) regular dividends on shares of preferred stock in accordance

with the terms thereof and which are permitted under the terms ofthe Preferred Shares and the

Warrant Shares, (iv) dividends or distributions by any wholly-owned Company Subsidiary or (v)

dividends or distributions by any Company Subsidiary required pursuant to binding contractual

agreements entered into prior to November 17, 2008).

(b) During the period beginning on the third anniversary ofthe Closing Date and

ending on the earlier of(i) the tenth anniversary ofthe Closing Date and (ii) the date on which all

ofthe Preferred Shares and Warrant Shares have been redeemed in whole or the Investor has

transferred all ofthe Preferred Shares and Warrant Shares to third parties which are not Affiliates

ofthe Investor, neither the Company nor any Company Subsidiary shall, without the consent of

the Investor, (A) pay any per share dividend or distribution on capital stock or other equity

securities of any kind ofthe Company at a per annum rate that is in excess of 1030/0 ofthe

aggregate per share dividends and distributions for the immediately prior fiscal year (other than

regular dividends on shares of preferred stock in accordance with the terms thereof and which

are permitted under the terms ofthe Preferred Shares and the Warrant Shares); provided that no

increase in the aggregate amount of dividends or distributions on Common Stock shall be

permitted as a result of any dividends or distributions paid in shares ofCommon Stock, any stock

split or any similar transaction or (B) pay aggregate dividends or distributions on capital stock or

other equity securities of any kind of any Company Subsidiary that is in excess of 1030/0 ofthe

aggregate dividends and distributions paid for the immediately prior fiscal year (other than in the

case ofthis clause (B), (1) regular dividends on shares of preferred stock in accordance with the

terms thereof and which are permitted under the terms ofthe Preferred Shares and the Warrant

Shares, (2) dividends or distributions by any wholly-owned Company Subsidiary, (3) dividends

or distributions by any Company Subsidiary required pursuant to binding contractual agreements

entered into prior to November 17,2008) or (4) dividends or distributions on newly issued shares

of capital stock for cash or other property.

(c) Prior to the earlier of (x) the tenth anniversary ofthe Closing Date and (y) the date

on which all ofthe Preferred Shares and Warrant Shares have been redeemed in whole or the

Investor has transferred all ofthe Preferred Shares and Warrant Shares to third parties which are

not Affiliates ofthe Investor, neither the Company nor any Company Subsidiary shaH, without

the consent ofthe Investor~ redeem, purchase or acquire any shares ofCommon Stock or other

capital stock or other equity securities of any kind ofthe Company or any Company Subsidiary,

or any trust preferred securities issued by the Company or any Affiliate ofthe Company, other

-30-

09533I-0002·lOo:n·NY02.26908479
than (i) redemptions, purchases or other acquisitions ofthe Preferred Shares and Warrant Shares;

(ii) in connection with the administration of any employee benefit plan in the ordinary course of

business and consistent with past practice, (iii) the acquisition by the Company or any ofthe

Company Subsidiaries ofrecord ownership in Junior Stock or Parity Stock for the beneficial

ownership of any other persons (other than the Company or any other Company Subsidiary),

including as trustees or custodians, (iv) the exchange or conversion ofJunior 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 (clauses (ii) and (iii), collectively, the

"Permitted Repurchases"); (v) redemptions ofsecurities held by the Company or any whoHyowned Company Subsidiary or (vi) redemptions, purchases or other acquisitions of capital stock

or other equity securities of any kind of any Company Subsidiary required pursuant to binding

contractual agreements entered into prior to November 17, 2008.

(d) Until such time as the Investor ceases to own any Preferred Shares or Warrant

Shares, the Company shall not repurchase any Preferred Shares or Warrant Shares from any

holder thereof, whether by means of open market purchase, negotiated transaction, or otherwise;

other than Permitted Repurchases, unless it offers to repurchase a ratable portion ofthe Preferred

Shares or Warrant Shares, as the case may be, then held by the Investor on the same terms and

conditions.

(e) During the period beginning on the tenth anniversary ofthe Closing and ending

on the date on which all ofthe Preferred Shares and Warrant Shares have been redeemed in

whole or the Investor has transferred all ofthe Preferred Shares and Warrant Shares to third

parties which are not Affiliates ofthe Investor, neither the Company nor any Company

Subsidiary shall, without the consent ofthe Investor, (i) declare or pay any dividend or make any

distribution on capital stock or other equity securities of any kind ofthe Company or any

Company Subsidiary; or Oi) redeem, purchase or acquire any shares ofCommon Stock or other

capital stock or other equity securities of any kind ofthe Company or any Company Subsidiary;

or any trust preferred securities issued by the Company or any Affiliate ofthe Company, other

than (A) redemptions, purchases or other acquisitions ofthe Preferred Shares and Warrant

Shares, (B) regular dividends on shares of preferred stock in accordance with the terms thereof

and which are permitted under the terms ofthe Preferred Shares and the Warrant Shares, or (C)

dividends or distributions by any wholly*owned Company Subsidiary.

(t) "Junior Stock" means Common Stock and any other class or series ofstock ofthe

Company the terms of which expressly provide that it ranks junior to the Preferred Shares as to

dividend rights and/or as to rights on liquidation, dissolution or winding up ofthe Company.

H Parity Stock" means any class or series ofstock ofthe Company the terms ofwhich 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 ofthe Company (in

each case without regard to whether dividends accrue cumulatively or non-cumulativeIy).

-31-

0953J 1..QOO2-IOQJJ-NY02.2690847.9
4.8 Executive Compensation. Until such time as the Investor ceases to own any debt

or equity securities ofthe Company acquired pursuant to this Agreement or the Warrant, the

Company shall take all necessary action to ensure that its Benefit Plans with respect to its Senior

Executive Officers comply in all respects with Section 111(b) ofthe EESA as implemented by

any guidance or regulation thereunder that has been issued and is in effect as ofthe Closing Date,

and shall not adopt any new Benefit Plan with respect to its Senior Executive Officers that does

not comply therewith. "Senior Executive Officers" means the Companis "senior executive

officerslt

as defined in subsection III(b)(3) of the EESA and regulations issued thereunderI

including the rules set forth in 31 C.F.R. Part 30.

4.9 Related Party Transactions. Until such time as the Investor ceases to own any

Purchased Securities or Warrant Shares, the Company and the Company Subsidiaries shall not

enter into transactions with Affiliates or related persons (within the meaning ofItem 404 under

the SEC's Regulation S-K) unless 0) 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 (ii) have been approved by the audit committee ofthe Board of Directors or comparable

body ofindependent directors ofthe Company.

4.10 Bank and Thrift Holding Company Status. Ifthe Company is a Bank Holding

Company or a Savings and Loan Holding Company on the Signing Date, then the Company shall

maintain its status as a Bank Holding Company or Savings and Loan Holding Company, as the

case may be, for as long as the Investor owns any Purchased Securities or Warrant Shares. The

Company shall redeem all Purchased Securities and Warrant Shares held by the Investor prior to

terminating its status as a Bank Holding Company or Savings and Loan Holding Company, as

applicable. "Bank Holding Company" means a company registered as such with the Board of

Governors ofthe Federal Reserve System (the "Federal Reserve") pursuant to 12 U.S.C. §1842

and the regulations ofthe Federal Reserve promulgated thereunder. "Savings and Loan Holding

Company" means a company registered as such with the Office ofThrift Supervision pursuant to

12 U.S.C. §1467(a) and the regulations ofthe Office ofThrift Supervision promulgated

thereunder.

4.11 Predominantly Financial. For as long as the Investor owns any Purchased

Securities or Warrant Shares, the Company, to the extent it is not itself an insured depository

institution~ agrees to remain predominantly engaged in financial activities. A company is

predominantly engaged in financial activities ifthe annual gross revenues derived by the

company and all subsidiaries ofthe 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 ofthe Bank

Holding Company Act of 1956 (12 U.S.C. 1843(k» represent at least 85 percent ofthe

consolidated annual gross revenues ofthe company.

Article V

Miscellaneous

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

-32-

095331..0002· 10033·NY02.2690847.9
(a) by either the Investor or the Company ifthe Closing shall not have occurred by

the 30th calendar day following the Signing Date; provided, however, that in the event the

Closing has not occurred by such 30th calendar day, the parties will consult in good faith to

determine whether to extend the term ofthis Agreement, it being understood that the parties shaH

be required to consult only until the fifth day after such 30th calendar day and not be under any

obligation to extend the term ofthis Agreement thereafter; provided, further, that the right to

terminate this Agreement under this Section 5.1 (a) shall not be available to any party whose

breach of any representation or warranty or failure to perform any obligation under this

Agreement shall have caused or resulted in the failure ofthe Closing to occur on or prior to such

date; or

(b) by either the Investor or the Company in the event that any Governmental Entity

shaH have issued an order, decree or ruling or taken any other action restraining, enjoining or

otherwise prohibiting the transactions contemplated by this Agreement and such order, decree,

ruling or other action shall have become final and nonappealable; or

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

In the event oftermination ofthis 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 ofthis

Agreement.

5.2 Survival of Representations and Warranties. All covenants and agreements, other

than those which by their terms apply in whole or in part after the Closing, shall terminate as of

the Closing. The representations and warranties ofthe Company made herein or in any

certificates delivered in connection with the Closing shall survive the Closing without limitation.

5.3 Amendment. No amendment of any provision ofthis Agreement wiJI be effective

unless made in writing and signed by an officer or a duly authorized representative of each party;

provided that the Investor may unilaterally amend any provision ofthis Agreement to the extent

required to comply with any changes after the Signing Date in applicable federal statutes. No

failure or delay by any party in exercising any right, power or privilege hereunder shall operate

as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further

exercise of any other right, power or privilege. The rights and remedies herein provided shall be

cumulative of any rights or remedies provided by law.

5.4 Waiver ofConditions. The conditions to each party's obligation to consummate

the Purchase are for the sale benefit ofsuch party and may be waived by such party in whole or

in part to the extent permitted by applicable law. No waiver wilJ be effective unless it is in a

writing signed by a duly authorized officer ofthe 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 will be

governed by and construed in accordance witb the federal law of tbe United States if and to

-33-

095331-0002- fOOJ3-NY02.26908479
tbe extent sucb law is applicable, and otberwise in accordance witb the laws of tbe State of

New York applicable to contracts made and to be performed entirely within such State.

Each of the parties bereto agrees (a) to submit to tbe exclusive jurisdiction and venue oftbe

United States District Court for tbe 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 tbis Agreement or the Warrant or the transactions contemplated hereby or thereby, and

(b) that notice may be served upon (i) the Company at tbe address and in tbe manner set

forth for notices to the Company in Section 5.6 and (ii) the Investor in accordance with

federal law. To the extent permitted by applicable law, each ofthe parties hereto hereby

unconditionally waives trial by jury in any civil legal action or proceeding relating to this

Agreement or the Warrant or the transactions contemplated hereby or thereby.

5.6 Notices. Any notice, request, instruction or other document to be given hereunder

by any party to the other will be in writing and will be deemed to have been duly given (a) on the

date of delivery if delivered personally, or by facsimile, upon confirmation ofreceipt, 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 in Schedule A, or

pursuant to such other instruction as may be designated in writing by the Company to the

Investor. All notices to the Investor shaH be delivered as set forth below, or pursuant to such

other instructions as may be designated in writing by the Investor to the Company.

Ifto the Investor:

United States Department ofthe Treasury

1500 Pennsylvania Avenue, NW, Room 2312

Washington, D.C. 20220

Attention: Assistant General Counsel (Banking and Finance)

Facsimile: (202) 622-1974

5.7 Definitions

(a) When a reference is made in this Agreement to a subsidiary of a person, the term

"'subsidiary" means any corporation, partnership, joint venture, limited liability company or other

entity (x) of which such person or a subsidiary ofsuch person is a general partner or (y) ofwhich

a majority ofthe voting securities or other voting interests, or a majority ofthe securities or other

interests of which having by their terms ordinary voting power to elect a majority ofthe board of

directors or persons performing similar functions with respect to such entity, is directly or

indirectly owned by such person and/or one or more subsidiaries thereof.

(b) The term "Affiliate" means, with respect to any person, any person directly or

indirectly controlling, controlled by or under common control with, such other person. For

purposes ofthis definition, "controf' (including, with correlative meanings, the tenns "cOnlrolled

by" and "under common control with") when used with respect to any person, means the

possession, directly or indirectly, ofthe power to cause the direction ofmanagement and/or

-34-
policies ofsuch person, whether through the ownership of voting securities by contract or

otherwise.

(c) The terms "knowledge ofthe CompanyH or "Company's knowledge" mean the

actual knowledge after reasonable and due inquiry ofthe '''officers'\ (as such term is defined in

Rule 3b-2 under the Exchange Act, but excluding any Vice President or Secretary) ofthe

Company.

5.8 Assignment. Neither this Agreement nor any right, remedy, obligation nor

liability arising hereunder or by reason hereofshall be assignable by any party hereto without the

prior written consent ofthe 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

ofthe Companis stockholders (a "Business Combination") where such party is not the surviving

entity, or a sale ofsubstantially all of it') assets, to the entity which is the survivor ofsuch

Business Combination or the purchaser in such sale and (b) as provided in Sections 3.5 and 4.5.

5.9 Severability. If any provision ofthis Agreement or the Warrant, 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 ofsuch

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 ofthe 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 ofthe parties.

5,10 No Third Party Beneficiaries. Nothing contained in this Agreement, expressed or

implied, is intended 10 confer upon any person or entity other than the Company and the Investor

any benefit, right or remedies, except that the provisions of Section 4.5 shall inure to the benefit

ofthe persons referred to in that Section.

* * *

-35-

09S331..ooo2.10033-NY02.2690847,9
ANNEXA

FORM OF CERTIFICATE OF DESIGNATIONS FOR PREFERRED STOCK

[SEE AITACHED}

09533I..ooo2·10033·NY02.2b90S479
ARTICLES OF AMENDMENT

OF THE

ARTICLES OF INCORPORATION

OF

WORTHINGTON FINANCIAL HOLDINGS, INC.

These Articles of Amendment are made and entered into by the undersigned as of this 11 th

day of May, 2009 in accordance with §lO-2B-6.02 and lO-2B-IO.02, Code of Ala. (1975).

ARTICLE]

The name of corporation is Worthington Financial Holdings, Inc.

ARTICLE I]

Article VI of the Articles of Incorporation of the corporation is hereby amended to create

two (2) series of preferred stock and to fix the designation and number of shares ofsuch 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, by adding a new

subsections C and D as follows:

C. Fixed Rate Cumulative Perpetual Preferred Stock, Series A

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 "Fixed Rate Cumulative Perpetual Preferred Stock, Series A" (the "Designated Preferred

Stock"). The authorized number ofshares of Designated Preferred Stock shall be 2,720.

Part 2. Standard Provisions. The Standard Provisions contained in Annex A attached hereto

are incorporated herein by reference in their entirety and shall be deemed to be a part of this

Certificate of Designations to the same extent as ifsuch provisions had been set forth in full herein.

Part. 3. Definitions. The following terms are used in this Certificate of Designations

(including the Standard Provisions in Annex A hereto) as defined below:

(a) "Common Stock" means the common stock, without par value, ofthe Corporation.

(b) '''Dividend Payment Date" means February 15, May 15, August 15 and November 15

of each year.

(c) "Junior Stock" means the Common Stock and any other class or series of stock of

the Corporation the tenns of which expressly provide that it ranks junior to Designated Preferred

Stock as to dividend rights and/or as to rights on liquidation, dissolution or winding up of the

Corporation.

- I -
(d) "Liquidation Amount" means $1,000 per share of Designated Preferred Stock.

(e) "Minimum Amoune means $680,000.

Cf) "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).

(g) "Signing Date" means the Original Issue Date.

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.

D. Fixed Rate Cumulative Perpetual Preferred Stock, Series B

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 "Fixed Rate Cumulative Perpetual Preferred Stock, Series B" (the "Designated Preferred

Stock"). The authorized nunlber ofshares of Designated Preferred Stock shall be 136.00136.

Part 2. Standard Provisions. The Standard Provisions contained in Annex B attached hereto

are incorporated herein by reference in their entirety and shall be deemed to be a part of this

Certificate of Designations to the same extent as ifsuch provisions had been set forth in full herein.

Part. 3. Definitions. The following terms are used in this Certificate of Designations

(including the Standard Provisions in Annex B hereto) as defined below:

(a) "Common Stock" means the common stock, without par value, ofthe Corporation.

(b) "Dividend Payment Date" means February 15, May 15, August 15 and November 15

of each year.

(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 rights and/or as to rights on liquidation, dissolution or \\rinding up of the

Corporation.

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

(e) "Minimum Amounf' means $34,000.

(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

2 -
will rank senior or junior to Designated Preferred Stock as to dividend rights and/or a<; 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 UST Preferred Stock.

(g) "Signing Date" means the Original Issue Date.

(h) "UST Preferred Stock" means the Issuee s Fixed Rate Cumulative Perpetual

Preferred Stock, Series A.

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.

ARTICLE III

The foregoing amendment was duly adopted by the board of directors of the corporation on May 13,

2009 pursuant to Section 6.02(d) ofthe Alabama Business Corporation Act and otherwise in the

manner prescribed by law.

Date: _

This Instrument was prepared by:

Larry C. Tomlin

Krieg DeVault LLP

One Indiana Square, Suite 2800

Indianapolis, IN 46204

William L. Worthington, Chairman and

Chief Executive Officer

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ANNEXA

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 that form a part of

the Certificate of Designations. 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 ofthe Issuer.

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

(a) "Applicable Dividend Rate" means (i) during the period from the Original Issue Date

to, but excluding, the first day of the first Dividend Period commencing on or after the fifth

anniversary ofthe Original Issue Date, 5% per annum and (ii) from and after the first day ofthe first

Dividend Period commencing on or after the fifth anniversary of the Original Issue Date, 9% per

annum.

(b) "Appropriate Federal Banking Agency" means the "appropriate Federal banking

agency" with respect to the Issuer as defined in Section 3(q) of the Federal Deposit Insurance Act

(12 U.S.C. Section 1813(q)), or any successor provision.

(c) "Business Combination'~ means a merger, consolidation, statutory share exchange or

similar transaction that requires the approval ofthe Issuer's stockholders.

(d) "Business Day" means any day except Saturday, Sunday and any day on which

banking institutions in the' State of New York generally are authorized or required by law or other

governmental actions to close.

(e) "Bylaws" means the bylaws of the Issuer, as they may be amended from time to

time.

(f) "Certificate of Designations" means the Certificate of Designations or comparable

instrument relating to the Designated Preferred Stock, of which these Standard Provisions form a

part, as it may be amended from time to time.

(g) "Charter" means the Issuer's certificate or articles of incorporation, articles of

association, or similar organizational document.

(h) "Dividend Period" has the meaning set forth in Section 3(a).

(i) "Dividend Record Date" ha~ the meaning set forth in Section 3(a).

(j) "Liquidation Preference" has the meaning set forth in Section 4(a).

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(k) "Original Issue DateH

means the date on which shares of Designated Preferred Stock

are first issued.

(1) "Preferred Director" has the meaning set forth in Section 7(b).

(m) "Preferred Stock" means any and all series of preferred stock of the Issuer, including

the Designated Preferred Stock.

(n) "Qualified Equity Offering" means the sale and issuance for cash by the Issuer to

persons other than the Issuer or any of its subsidiaries after the Original Issue Date of shares of

perpetual Preferred Stock, Common Stock or any combination of such stock, that, in each case,

qualifY as and may be included in Tier 1 capital of the Issuer at the time of issuance under the

applicable risk-based capital guidelines of the Issuer's Appropriate Federal Banking Agency (other

than any such sales and issuances made pursuant to agreements or arrangements entered into, or

pursuant to financing plans which were publicly announced, on or prior to November 17, 2008).

(0) "Standard Provisions" mean these Standard Provisions that fonn a part of the

Certificate of Designations relating to the Designated Preferred Stock.

(p) "Successor Preferred Stock" has the meaning set forth in Section 5(a).

(q) '"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 Sections 7(a) and 7(b) of these

Standard Provisions that form a part of the Certificate of Designations, 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. 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,

cumulative cash dividends with respect to each Dividend Period (as defmed below') at a rate per

annum equal to the Applicable Dividend Rate on (i) the Liquidation Amount per share of

Designated Preferred Stock and (Ii) the amount of accrued and unpaid dividends for any prior

Dividend Period on such share of Designated Preferred Stock, if any. Such dividends shall begin to

accrue and be cumulative from the Original Issue Date, shall compound on each subsequent

Dividend Payment Date (i. e., no dividends shall accrue on other dividends unless and until the first

Dividend Payment Date for such other dividends has passed without such other dividends having

been paid on such date) and shall be payable quarterly in arrears on each Dividend Payment Date,

commencing \vith the first such Dividend Payment Date to occur at least 20 calendar days after the

Original Issue Date. In the event that any Dividend Payment Date would otherwise fallon 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. The

period from and induding any Dividend Payment Date to, but excluding, the next Dividend

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Payment Date is a "Dividend Period", provided that the initial Dividend Period shall be the period

from and including the Original Issue Date to, but excluding, the next Dividend Payment Date.

Dividends that are payable on Designated Preferred Stock in respect of any Dividend Period shall

be computed on the basis of a 360-day year consisting of twelve 30-day months. 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

twelve 30-day months, and actual days elapsed over a 30-day month.

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 Issuer 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 1 (subject to the other provisions of the Certificate of

Designations).

(b) Priority of Dividends. 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, subject to the immediately following paragraph in the case of Parity Stock, and no Common

Stock, Junior Stock or Parity Stock shall be, directly or indirectly, purchased, redeemed or

otherwise acquired for consideration by the Issuer or any of its subsidiaries unless all accrued and

unpaid dividends for all past Dividend Periods, including the latest completed Dividend Period

(including, if applicable as provided in Section 3(a) above, dividends on such amount), on all

outstanding shares of Designated Preferred Stock have been or are contemporaneously declared and

paid in full (or have been declared and a sunl sufficient for the payment thereof has been set aside

for the benefit ofthe holders of shares ofDesignated Preferred Stock on the applicable record date).

The foregoing limitation shall not apply to (i) redemptions, purchases or other acquisitions ofshares

of Common Stock or other Junior Stock in connection with the administration of any employee

benefit plan in the ordinary course of business and consistent with past practice; (ii) the acquisition

by the Issuer or any of its subsidiaries of record ownership in Junior Stock or Parity Stock for the

beneficial ownership of any other persons (other than the Issuer or any of its subsidiaries), including

as trustees or custodians; and (iii) the exchange or conversion of Junior Stock for or into other

Junior Stock or of Parity Stock for or into other Parity Stock (with the same or lesser aggregate

Liquidation amount) or Junior Stock, in each case, 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, settlenlent or exchange thereof for Common Stock.

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\\'hen dividends are not paid (or declared and a sum sufficient for payment thereof set aside for the

benefit of the holders thereof on the applicable record date) on any Dividend Payment Date (Of, in

the case of Parity Stock having dividend payment dates different from the Dividend Payment Dates,

on a dividend payment date falling within a Dividend Period related to such Dividend Payment

Date) in full upon Designated Preferred Stock and any shares of Parity Stock, all dividends declared

on Designated Preferred Stock and all such Parity Stock and payable on such Dividend Payment

Date (or, in the case of Parity Stock having dividend payment dates different from the Dividend

Payment Dates, on a dividend payment date falling within the Dividend Period related to such

Dividend Payment Date) shall be declared pro rata so that the respective amounts ofsuch dividends

declared shall bear the same ratio to each other as all accrued and Wlpaid dividends per share on the

shares of Designated Preferred Stock (including, if applicable as provided in Section 3(a) above,

dividends on such amount) and all Parity Stock payable on such Dividend Payment Date (or, in the

case of Parity Stock having dividend payment dates different from the Dividend Payment Dates, on

a dividend payment date falling within the Dividend Period related to such Dividend Payment Date)

(subject to their having been declared by the Board of Directors or a duly authorized committee of

the Board of Directors out of legally available funds and including, in the case of Parity Stock that

bears cumulative dividends~ all accrued but unpaid dividends) bear to each other. If the Board of

Directors or a duly authorized committee of the Board of Directors determines not to pay any

dividend or a full dividend on a Dividend Payment Date, the Issuer will provide written notice to

the holders of Designated Preferred Stock prior to such Dividend Payment Date.

Subject to the foregoing, 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.

Section 4. Liquidation Rights.

(a) Voluntary or Involuntary Liquidation. In the event of any liquidation, dissolution or

winding up of the affairs of the Issuer, 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 Issuer or proceeds thereof (whether capital or surplus) available for distribution to

stockholders of the Issuer, subject to the rights of any creditors ofthe Issuer, 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 Issuer 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 (including, if applicable as provided in Section 3(a) above, dividends

on such amount), whether or not declared, to the date of payment (such amounts collectively, the

'''Liquidation Preference").

(b) Partial Payment. If in any distribution described in Section 4(a) above the assets of

the Issuer 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 Issuer ranking equally with Designated Preferred Stock as to such

distribution, holders of Designated Preferred Stock and the holders of such other stock shall share

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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 Issuer ranking equally with Designated Preferred Stock as to such distribution has

been paid in full, the holders of other stock of the Issuer shall be entitled to receive all remaining

assets ofthe Issuer (or proceeds thereof) according to their respective rights and preferences.

(d) Merger, Consolidation and Sale of Assets Not Liquidation. For purposes of this

Section 4, the merger or consolidation of the Issuer 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 saJe, lease or exchange (for cash, securities

or other property) of all or substantially all of the assets of the Issuer, shall not constitute a

liquidation, dissolution or winding up ofthe Issuer.

Section 5. Redemption.

(a) Optional Redemption. Except as provided below, the Designated Preferred Stock

may not be redeemed prior to the first Dividend Payment Date falling on or after the third

anniversary of the Original Issue Date. On or after the first Dividend Payment Date falling on or

after the third anniversary of the Original Issue Date. the Issuer, 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, upon notice given as provided in Section S(c) below, at a redemption price equal

to the sum of (i) the Liquidation Amount per share and (ii) except as otherwise provided below, any

accrued and unpaid dividends (including, if applicable as provided in Section 3(a) above, dividends

on such amount) (regardless of whether any dividends are actually declared) to, but excluding, the

date fixed for redemption.

Notwithstanding the foregoing, prior to the first Dividend Payment Date falling on or after the third

anniversary of the Original Issue Date, the Issuer, 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, the shares of Designated Preferred Stock at the time outstanding, upon notice given as

provided in Section S(c) below, at a redemption price equal to the sum of (i) the Liquidation

Amount per share and (ii) except as otherwise provided below, any accrued and unpaid dividends

(including, if applicable as provided in Section 3(a) above, dividends on such amount) (regardless

of whether any dividends are actually declared) to, but excluding, the date fixed for redemption;

provided that (x) the Issuer (or any successor by Business Combination) has received aggregate

gross proceeds of not less than the Minimum Amount (plus the "'Minimum Amount" as defined in

the relevant certificate of designations for each other outstanding series of preferred stock of such

successor that was originally issued to the United States Department of the Trea<;ury (the

"Successor Preferred Stock") in connection with the Troubled Asset Relief Program Capital

Purchase Program) from one or more Qualified Equity Offerings (including Qualified Equity

Offerings of such successor), and (y) the aggregate redemption price of the Designated Preferred

Stock (and any Successor Preferred Stock) redeemed pursuant to this paragraph may not exceed the

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aggregate net cash proceeds received by the Issuer (or any successor by Business Combination)

from such Qualified Equity Offerings (including Qualified Equity Offerings ofsuch successor).

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 Issuer or its agent. Any declared but unpaid dividends 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.

(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

Issuer. 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: (l) 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 ofthe 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. 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. If

fewer than aU 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 Issuer~ in trust for the pro rata benefit of the holders of the shares called for

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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 redemption date cease and terminate, except only the right ofthe

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 Issuer, after which time the holders of the shares so

called for redemption shall look only to the Issuer for payment of the redemption price of such

shares.

Cf) Status of Redeemed Shares. Shares of Designated Preferred Stock that are

redeemed, repurchased or otherwise acquired by the Issuer 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) Preferred Stock Directors. Whenever, at any time or times, dividends payable on the

shares of Designated Preferred Stock have not been paid for an aggregate of six quarterly Dividend

Periods or more, \vhether or not consecutive, the authorized number of directors of the Issuer shall

automatically be increased by two and the holders of the Designated Preferred Stock shall have the

right, with holders of shares of anyone or more other classes or series of Voting Parity Stock

outstanding at the time, voting together as a class, to elect two directors (hereinafter the "Preferred

Directors" and each a "Preferred Director") to fill such newly created directorships at the Issuer's

next annual meeting of stockholders (or at a special meeting called for that purpose prior to such

next annual meeting) and at each subsequent annual meeting of stockholders until all accrued and

unpaid dividends for all past Dividend Periods, including the latest completed Dividend Period

(including, if applicable as provided in Section 3(a) above, dividends on such amount), on all

outstanding shares of Designated Preferred Stock have been declared and paid in full 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 Issuer to violate any

corporate governance requirements of any securities exchange or other trading facility on which

securities of the Issuer 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

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Designated Preferred Stock and Voting Parity Stock as a class 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 tenninate immediately and the authorized number of

directors shall be reduced 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 together with the

holders of shares of Voting Parity Stock, to the extent the voting rights of such holders described

above are then I;xercisable. If the office of any Preferred Director becomes vacant for any reason

other than removal from office as aforesaid, the remaining Preferred Director may choose a

successor who shall hold office for the unexpired term in respect of which such vacancy occurred.

(c) 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 ofstockholders required by

law or by the Charter, the vote or consent of the holders of at least 66 2/3% of the shares of

Designated Preferred Stock at the time outstanding, voting as a separate class, given in person or by

proxy, either in writing without a meeting or by vote at any meeting called for the purpose, shall be

necessary for effecting or validating:

(i) Authorization of Senior Stock. Any amendment or alteration ofthe Certificate of

Designations for the Designated Preferred Stock or the Charter 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 Issuer

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

Issuer;

(ii) Amendment of Designated Preferred Stock. Any amendment, alteration or

repeal of any provision of the Certificate of Designations for the Designated Preferred Stock or

the Charter (including, unless no vote on such merger or consolidation is required by Section

7(c)(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; or

(iii) Share Exchanges, Reclassifications, Mergers and Consolidations. Any

consummation of a binding share exchange or reclassification involving the Designated

Preferred Stock, or of a merger or consolidation of the Issuer with another corporation or other

entity, unless in each case (x) the shares of Designated Preferred Stock remain outstanding Of, in

the case of any such nlerger or consolidation with respect to which the Issuer 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, taken as a whole, as are not materially

less favorable to the holders thereof than 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, however, that for all purposes of this Section 7(c),

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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 Issuer 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

andlor 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 Issuer 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.

(d) Changes after Provision for Redemption. No vote or consent of the holders of

Designated Preferred Stock shall be required pursuant to Section 7(c) above if, at or prior to the

time when any such vote or consent would othervvise 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.

(e) Procedures for Voting and Consents. The rules and procedures for calling and

conducting any meeting ofthe 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 Charter, 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. Record Holders. To the fullest extent permitted by applicable law, the Issuer 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

Issuer nor such transfer agent shall be affected by any notice to the contrary.

Section 9. 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 this Certificate of Designations, in the

Charter or Bylaws or by applicable law. Notwithstanding the foregoing, if shares of Designated

Preferred Stock are issued in book-entry fonn through The Depository Trust Company or any

similar facility~ such notices may be given to the holders of Designated Preferred Stock in any

manner pennitted by such facility.

Section 10. No Preemptive Rights. No share- of Designated Preferred Stock shaH have any rights of

preemption whatsoever as to any securities of the Issuer, 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.

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Section 11. Replacement Certificates. The Issuer shall replace any mutilated certificate at the

holder~s expense upon surrender of that certificate to the Issuer. The Issuer shall replace certificates

that become destroyed, stolen or lost at the holder~s expense upon delivery to the Issuer of

reasonably satisfactory evidence that the certificate has been destroyed, stolen or lost, together with

any indenmity that may be reasonably required by the Issuer.

Section 12. 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 Charter or as

provided by applicable law.

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ANNEXB

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 that fonn a part of

the Certificate of Designations. 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 ac:;sets in the event of any dissolution, liquidation or winding up ofthe Issuer.

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

(a) "Appropriate Federal Banking Agencv" means the "appropriate Federal banking

agency" with respect to the Issuer as defined in Section 3(q) of the Federal Deposit Insurance Act

(12 U.S.C. Section 1813(q), or any successor provision.

(b) "Business Combination" means a merger, consolidation, statutory share exchange or

similar transaction that requires the approval ofthe Issuer's stockholders.

(c) ~'Business Day" means any day except Saturday, Sunday and any day on which

banking institutions in the State of New York generally are authorized or required by law or other

governmental actions to close.

(d) "Bylaws" means the bylaws of the Issuer, as they may be amended from time to

time.

(e) "Certificate of Designations" means the Certificate of Designations or comparable

instrument relating to the Designated Preferred Stock, of which these Standard Provisions form a

part, as it may be amended from time to time.

(f) '''Charter'' means the Issuer's certificate or articles of incorporation, articles of

association, or similar organizational document.

(g) "Dividend Period" has the meaning set forth in Section 3(a).

(h) "'Dividend Record Date" has the meaning set forth in Section 3(a).

(i) "Liquidation Preference" has the meaning set forth in Section 4(a).

0) "Original Issue Date" means the date on which shares of Designated Preferred Stock

are first issued.

(k) "Preferred Director" ha<; the meaning set forth in Section 7(b).

(1) "Preferred Stock~' means any and all series of preferred stock of the Issuer, including

the Designated Preferred Stock.

- 14-
(m) "Qualified Equity Offering" means the sale and issuance for cash by the Issuer to

persons other than the Issuer or any of its subsidiaries after the Original Issue Date of shares of

perpetual Preferred Stock, Common Stock or any combination of such stock, that, in each case,

qualify as and may be included in Tier 1 capital of the Issuer at the time of issuance under the

applicable risk-based capital guidelines of the Issuer's Appropriate Federal Banking Agency (other

than any such sales and issuances made pursuant to agreements or arrangements entered into, or

pursuant to financing plans which were publicly announced, on or prior to November 17, 2008).

(n) "Standard Provisions" mean these Standard Provisions that form a part of the

Certificate of Designations relating to the Designated Preferred Stock.

(0) "Successor Preferred Stock" has the meaning set forth in Section 5(a).

(p) "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 Sections 7(a) and 7(b) of these

Standard Provisions that form a part of the Certificate of Designations, 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. 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,

cumulative cash dividends with respect to each Dividend Period (as defined below) at a per annum

rate of 9.0% on (i) the Liquidation Amount per share of Designated Preferred Stock and (ii) the

amount of accrued and unpaid dividends for any prior Dividend Period on such share of Designated

Preferred Stock, if any. Such dividends shall begin to accrue and be cumulative from the Original

Issue Date, shall cOInpound on each subsequent Dividend Payment Date (i.e., no dividends shall

accrue on other dividends unless and until the first Dividend Payment Date for such other dividends

has passed without such other dividends having been paid on such date) and shall be payable

quarterly in arrears on each Dividend Paym.ent Date, commencing with the first such Dividend

Payment Date to occur at least 20 calendar days after the Original Issue Date. In the event that any

Dividend Payment Date would othenvise 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 ofthat postponement. The period from and including any Dividend

Payment Date to, but excluding, the next Dividend Payment Date is a "Dividend Period", provided

that the initial Dividend Period shall be the period from and including the Original Issue Date to,

but excluding, the next Dividend Payment Date.

Dividends that are payable on Designated Preferred Stock in respect of any Dividend Period shall

be computed on the basis of a 360-day year consisting of twelve 30-day months. 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

rntelve 30-day months, and actual days elapsed over a 30-day month.

- 15 -
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 Issuer 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 Desigriated 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 Certificate of

Designations).

(b) Priority of Dividends. 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, subject to the immediately following paragraph in the case of Parity Stock, and no Common

Stock, Junior Stock or Parity Stock shall be, directly or indirectly) purchased, redeemed or

othenvise acquired for consideration by the Issuer or any of its subsidiaries unless all accrued and

unpaid dividends for all past Dividend Periods, including the latest completed Dividend Period

(including, if applicable as provided in Section 3(a) above, dividends on such amount), on all

outstanding shares of Designated Preferred Stock have been or are contemporaneously declared and

paid in full (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).

The foregoing limitation shall not apply to (i) redemptions, purchases or other acquisitions ofshares

of Common Stock or other Junior Stock in connection with the administration of any employee

benefit plan in the ordinary course of business and consistent with past practice; (ii) the acquisition

by the Issuer or any of its subsidiaries of record ownership in Junior Stock or Parity Stock for the

beneficial ownership of any other persons (other than the Issuer or any of its subsidiaries), including

as trustees or custodians; and (iii) the exchange or conversion of Junior Stock for or into other

Junior Stock or of Parity Stock for or into other Parity Stock (with the same or lesser aggregate

liquidation amount) or Junior Stock, in each case, 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.

When dividends are not paid (or declared and a sum sufficient for payment thereof set aside for the

benefit of the holders thereof on the applicable record date) on any Dividend Payment Date (Of, in

the case of Parity Stock having dividend payment dates different from the Dividend Payment Dates,

on a dividend payment date falling within a Dividend Period related to such Dividend Payment

Date) in full upon Designated Preferred Stock and any shares of Parity Stock, all dividends declared

on Designated Preferred Stock and all such Parity Stock and payable on such Dividend Payment

Date (or, in the case of Parity Stock having dividend payment dates different from the Dividend

Payment Dates, on a dividend payment date falling within the Dividend Period related to such

Dividend Payment Date) shall be declared pro rata so that the respective amounts ofsuch dividends

declared shall bear the same ratio to each other as an accrued and unpaid dividends per share on the

shares of Designated Preferred Stock (including, if applicable as provided in Section 3(a) above,

- 16 -
dividends on such amount) and all Parity Stock payable on such Dividend Payment Date (or, in the

case of Parity Stock having dividend payment dates different from the Dividend Payment Dates, on

a dividend payment date falling within the Dividend Period related to such Dividend Payment Date)

(subject to their having been declared by the Board of Directors or a duly authorized committee of

the Board of Directors out of legally available funds and including, in the case of Parity Stock that

bears cumulative dividends, all accrued but unpaid dividends) bear to each other. If the Board of

Directors or a duly authorized committee of the Board of Directors detennines not to pay any

dividend or a full dividend on a Dividend Payment Date, the Issuer will provide written notice to

the holders of Designated Preferred Stock prior to such Dividend Payment Date.

Subject to the foregoing, and not otherwise, such dividends (payable in cash, securities or other

property) as may be detennined 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.

Section 4. Liquidation Rights.

(a) Voluntary or Involuntary Liquidation. In the event of any liquidation, dissolution or

winding up of the affairs of the Issuer, 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 Issuer or proceeds thereof (whether capital or surplus) available for distribution to

stockholders ofthe Issuer, subject to the rights of any creditors ofthe Issuer, 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 Issuer ranking junior to Designated Preferred Stock as to such distribution, payment in

full in an amount equal to the sum of 0) the Liquidation Amount per share and (ii) the amount of

any accrued and unpaid dividends (includitlg, if applicable as provided in Section 3(a) above,

dividends on such amount), whether or not declared, to the date of payment (such amounts

collectively, the "Liquidation Preference").

(b) Partial Payment. If in any distribution described in Section 4(a) above the assets of

the Issuer 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 Issuer ranking equally with Designated Preferred Stock as to such

distribution, halders 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 cOiTesponding amounts payable with respect of any

other stock of the Issuer ranking equally with Designated Preferred Stock as to such distribution has

been paid in full, the holders of other stock of the Issuer shall be entitled to receive all remaining

assets ofthe Issuer (or proceeds thereof) according to their respective rights and preferences.

'- 17 -
(d) Merger, Consolidation and Sale of Assets Not Liquidation. For purposes of this

Section 4, the merger or consolidation of the Issuer 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 Issuer, shall not constitute a

liquidation, dissolution or winding up ofthe Issuer.

Section 5. Redemption.

(a) Optional Redernption. Except as provided below, the Designated Preferred Stock

may not be redeemed prior to the later of (i) first Dividend Payment Date falling on or after the third

anniversary of the Original Issue Date; and (ii) the date on which all outstanding shares of UST

Preferred Stock have been redeemed, repurchased or otherwise acquired by the Issuer. On or after

the first Dividend Payment Date falling on or after the third anniversary of the Original Issue Date,

the Issuer, 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, upon notice given as

provided in Section 5(c) below, at a redemption price equal to the sum of (i) the Liquidation

Amount per share and (ii) except as otherwise provided below, any accrued and unpaid dividends

(including, if applicable as provided in Section 3(a) above, dividends on such amount) (regardless

of whether any dividends are actually declared) to, but excluding, the date fixed for redemption.

Notwithstanding the foregoing, prior to the first Dividend Payment Date falling on or after the third

anniversary of the Original Issue Date, the Issuer, at its option, subject to the approval of the

Appropriate Federal Banking Agency and subject to the requirement that all outstanding shares of

UST Preferred Stock shall previously have been redeemed, repurchased or otherwise acquired by

the Issuer, may redeem, in whole or in part, at any time and from time to time, the shares of

Designated Preferred Stock at the time outstanding, upon notice given as provided in Section 5(c)

below, at a redemption price equal to the sum of (i) the Liquidation Amount per share and (ii)

except as otherwise provided belo\v, any accrued and unpaid dividends (including, if applicable as

provided in Section 3(a) above, dividends on such amount) (regardless of whether any dividends are

actually declared) to, but excluding, the date fiXed for redemption; provided that (x) the Issuer (or

any successor by Business Combination) has received aggregate gross proceeds of not less than the

Minimum Amount (plus the "Minimum Amount" as defined in the relevant certificate of

designations for each other outstanding series of preferred stock of such successor that was

originally issued to the United States Department ofthe Treasury (the "Successor Preferred Stock")

in connection with the Troubled Asset Relief Program Capital Purchase Program) from one or more

Qualified Equity Offerings (including Qualified Equity Offerings of such successor), and (y) the

aggregate redemption price of the Designated Preferred Stock (and any Successor Preferred Stock)

redeemed pursuant to this paragraph may not exceed the aggregate net cash proceeds received by

the Issuer (or any successor by Business Combination) from such Qualified Equity Offerings

(including Qualified Equity Offerings ofsuch successor).

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 Issuer or its agent. Any declared but unpaid dividends payable on a redemption date

- 18 -
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.

(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

Issuer. 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: (l) 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 10 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. Subject to the provisions hereof, the Board of Directors or a duly

authorized cOffilnittee 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. 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 Issuer~ 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 redemptio~ all

shares so called for redemption shan no longer be deemed outstanding and all rights with respect to

- 19 -
such shares shall forthwith on such redemption date cease and terminate, except only the right ofthe

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 pennitted by law, be released to the Issuer, after which time the holders of the shares so

called for redemption shall look only to the Issuer 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 Issuer 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) Preferred Stock Directors. Whenever, at any time or times, dividends payable on the

shares of Designated Prefened Stock have not been paid for an aggregate of six quarterly Dividend

Periods or more, whether or not consecutive, the authorized number of directors of the Issuer shall

automatically be increased by two and the holders of the Designated Preferred Stock shall have the

right, with holders of shares of anyone or more other classes or series of Voting Parity Stock

outstanding at the time, voting together as a class, to elect two directors (hereinafter the "Preferred

Directors" and each a "Preferred Director") to fill such newly created directorships at the Issuer's

next annual meeting of stockholders (or at a special meeting called for that purpose prior to such

next annual meeting) and at each subsequent annual meeting of stockholders until all accrued and

unpaid dividends for all past Dividend Periods, including the latest completed Dividend Period

(including, if applicable as provided in Section 3(a) above, dividends on such amount), on all

outstanding shares of Designated Preferred Stock have been declared and paid in full 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 Issuer to violate any

corporate governance requirements of any securities exchange or other trading facility on which

securities of the Issuer 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 and Voting Parity Stock as a class 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 authorized number of

directors shall be reduced 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 dass together with the

- 20-
holders of shares of Voting Parity Stock, to the extent the voting rights of such holders described

above are then exercisable. If the office of any Preferred Director becomes vacant for any reason

other than removal from office as aforesaid, the remaining Preferred Director may choose a

successor who shall hold office for the unexpired term in respect of which such vacancy occurred.

(c) 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 ofstockholders required by

law or by the Charter, the vote or consent of the holders of at least 66 2/30/0 of the shares of

Designated Preferred Stock at the time outstanding, voting as a separate class, given in person or by

proxy, either in writing without a meeting or by vote at any meeting called for the purpose, shall be

necessary for effecting or validating:

(i) Authorization of Senior Stock Any amendment or alteration of the Certificate of

Designations for the Designated Preferred Stock or the Charter 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 Issuer

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

Issuer;

(ii) Amendment of Designated Preferred Stock. Any amendment, alteration or

repeal of any provision of the Certificate of Designations for the Designated Preferred Stock or

the Charter (including, unless no vote on such merger or consolidation is required by Section

7(c)(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; or

(iii) Share Exchanges, Reclassifications. Mergers and Consolidations. Any

consrunmation of a binding share exchange or reclassification involving the Designated

Preferred Stock, or of a merger or consolidation of the Issuer with another corporation or other

entity, unless in each case (x) the shares of Designated Preferred Stock remain outstanding Of, in

the case of any such merger or consolidation with respect to which the Issuer 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, taken as a whole, a~ are not materially

less favorable to the holders thereof than 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, however, that for all purposes of this Section 7(c), 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 Issuer 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 otheIWise, of any other series of

Preferred Stock, or any securities convertible into or exchangeable or exercisable for any other

- 21 -
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 Issuer 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.

(d) Changes after Provision for Redemption. No vote or consent of the holders of

Designated Preferred Stock shaH be required pursuant to Section 7(c) 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.

(e) 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 Mitten 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 Charter, 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. Record Holders. To the fullest extent permitted by applicable law, the Issuer 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

Issuer nor such transfer agent shall be affected by any notice to the contrary.

Section 9. Notices. All notices or communications in respect of Designated Preferred Stock shall be

sufficiently given if given in \\Titing and delivered in person or by first class mail, postage prepaid,

or if given in such other manner as may be permitted in this Certificate of Designations, in the

Charter 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 10. Preemptive Rights. No share of Designated Preferred Stock shall have any rights of

preemption whatsoever as to any securities ofthe Issuer, 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 11. Replacement Certificates. The Issuer shall replace any mutilated certificate at the

holder~s expense upon surrender ofthat certificate to the Issuer. The Issuer shall replace certificates

that become destroyed, stolen or lost at the holder's expense upon delivery to the Issuer of
reasonably satisfactory evidence that the certificate has been destroyed, stolen or lost, together with

any indemnity that may be reasonably required by the Issuer.

Section 12. 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 Charter or as

provided by applicable law.

- 23 -
FORM OF CERTIFICATE OF DESIGNATIONS

FOR WARRANT PREFERRED STOCK

[SEE ATIACHED]

0953J 1.ooo2·IOO33-NY022690&4/.'J

ANNEXB
ANNEXC

FORM OF \VAIVER

In consideration for the benefits I \\111 receive as a result of my employer's participation in the

United States Department ofthe Treasury's TARP Capital Purchase Program, I hereby

voluntarily \\"aive any claim against the United States or any state or territory thereof or my

employer or any of its directors. officers, employees and agents for any changes to my

compensation or benefits that are required in order to comply with Section 111 ofthe Emergency

Economic Stabili7..ation Act of2008, as amended C"EESA"), and rules, regulations. guidance or

other requirements issued thereunder (collectively, the '"EESA Restrictions"').

I acknowledge that the EESA Restrictions may require modification ofthe employment,

compensation, bonus; incentive, severance, retention and other benefit plans, arrangements,

policies and agreements (including so-called "golden parachute" agreements). whether or not in

writing, that I have with my employer or in which I participate as they relate to the period the

United States holds any equity or debt securities of my employer acquired through the TARP

Capital Purchase Program and I hereby consent to all such modifications. I further acknowledge

and agree that if my employer notifies me in writing that I have received payments in violation

ofthe EESA Restrictions, I shall repay the aggregate amount ofsuch payments to my employer

no later than fifteen business days following my receipt ofsuch notice.

This waiver includes all claims I may have under the laws ofthe United States or any other

jurisdiction related to the requirements imposed by the EESA Restrictions (including without

limitation, any claim for any compensation or other payments or benefits I would otherwise

receive absent the EESA Restrictions, any challenge to the process by which the EESA

Restrictions were adopted and any tort or constitutional claim about the effect ofthe foregoing

on my employment relationship) and I hereby agree that I will not at any time initiate, or cause

or permit to be initiated on my behalf, any such claim against the United States, my employer or

its directors, officers, employees or agents in or before any local, state, federal or other agency,

court or body.

In witness whereof, I execute this waiver on my own behalf, thereby communicating my

acceptance and acknowledgement to the provisions herein.

Respectfully,

Name:

Title:

Date:

095J3I000J-IOOJ3-NYO;,' 2690847 9
ANNEX D

FOR". OF OPINION

(a) The Company has been duly incorporated and is validly existing as a corporation

in good standing under the laws of the state of its incorporation.

(b) 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 \vith or senior to all other series or classes of Preferred Stock issued 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 Company.

(c) The Warrant has been duly authorized and, when executed and delivered as

contemplated by the Agreement, will constitute a valid and legally binding obligation ofthe

Company enforceable against the Company 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 ofwhether such enforceability is considered in a proceeding at law or in equity.

(d) The shares of Warrant Preferred Stock issuable upon exercise ofthe Warrant have

been duly authorized and reserved for issuance upon exercise ofthe Warrant and when so issued

in accordance with the terms of the Warrant will be validly issued, fully paid and non-assessable,

and will rank pari passu with or senior to all other series or classes of Preferred Stock, whether

or not 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 ofthe Company.

(e) The Company has the corporate power and authority to execute and deliver the

Agreement and the Warrant and to carry out its obligations thereunder (which includes the

issuance ofthe Preferred Shares, Warrant and Warrant Shares).

(f) The execution, delivery and perfonnance by the Company ofthe Agreement and

the Warrant and the consummation ofthe transactions contemplated thereby have been duly

authorized by all necessary corporate action on the part ofthe Company and its stockholders, and

no further approval or authorization is required on the part ofthe Company.

(g) The Agreement is a valid and binding obligation ofthe Company enforceable

against the Company 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: proldded, however. such

counsel need express no opinion with respect to Section 4.5(h) or the severability provisions of

the Agreement insofar as Section 4.5(h) is concerned.

09533 !Axx/210033-;'-JY02 2690847 9
\J95331-00(j~-t()O:B·NY02 26'/08479

FORJ\1 OF WARRANT

[SEE AITACHED]

A~NEXE
ANNEXE

FORJ\f OF WARRANT TO PURCHASE PREFERRED STOCK

THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN

REGISTERED UNDER THE SECURITIES ACT OF 1933~ AS AMENDED, OR THE

SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR

OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEtv1ENT

RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE

SECURlTIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION

tINDER SUCH ACT OR SUCH LAWS. 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 THE

INVESTOR REFERRED TO THEREIN, A COpy OF WHICH IS ON FILE WITH THE

ISSUER. THE SECURITIES REPRESENTED BY THIS INSTRUMENT MAY NOT BE

SOLD OR OTHERWISE TRANSFERRED EXCEPT fN COMPLIANCE WITH SAID

AGREEMENT. ANY SALE OR OTHER TRANSFER NOT IN COMPLIANCE WITH SAID

AGREEMENT WILL BE VOID.

WARRANT

to purchase

136.00136

Shares of Preferred Stock

of Worthington Financial Holdings, Inc.

Issue Date: May 15, 2009

1. Definitions. Unless the context otherwise requires, when used herein the

following terms shall have the meanings indicated.

"Board afDirectors" means the board of directors ofthe Company, including any duly

authorized committee thereof.

"business day" means any day except Saturday, Sunday and any day on which banking

institutions in the State of New York generally are authorized or required by law or other

governmental actions to dose.

"Charter" means, with respect to any Person, its certificate or articles ofincorporation,

articles of association, or similar organizational document.

"Company" means the Person whose name, corporate or other organizational fonn and

jurisdiction of organization is set forth in Item 1 of Schedule A hereto.

"Er:change Act" means the Securities Exchange Act of 1934, as amended, or any

successor statute, and the rules and regulations promulgated thereunder.

"Exercise Price" means the amount set forth in Item 2 of Schedule A hereto.

UST Seq. No. 986
"Expiration Time" has the meaning set forth in Section 3.

''Issue Dale" means the date set forth in Item 3 of Schedule A hereto.

"Liquidation Amount" means the amount set forth in Item 4 of Schedule A hereto.

"Original Warrantholder" means the United States Department ofthe Treasury. Any

actions specitied to be taken by the Original Warrantholder hereunder may only be taken by such

Person and not by any other Warrantholder.

"Person II has the meaning given to it in Section 3(a)(9) ofthe Exchange Act and as used

in Sections 13(d)(3) and 14(d)(2) ofthe Exchange Act.

"Preferred Stock" means the series ofperpetuaI preferred stock set forth in Item 5 of

Schedule A hereto.

"Purchase Agreement II means the Securities Purchase Agreement Standard Terms

incorporated into the Letter Agreement, dated as ofthe date set forth in Item 6 of Schedule A

hereto, as amended from time to time, between the Company and the United States Department

ofthe Treasury (the "Letter Agreement"J, including all annexes and schedules thereto.

"Regulatory Approvals ,t with respect to the Warrantholder, means, to the extent applicable

and required to permit the Warrantholder to exercise this Warrant for shares of Preferred Stock

and to own such Preferred Stock without the Warrantholder being in violation of applicable law,

rule or regulation, the receipt of any necessary approvals and authorizations of; filings and

registrations with, notifications to, or expiration or termination of any applicable waiting period

under, the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules

and regulations thereunder.

"SEC" means the U.S. Securities and Exchange Commission.

"Securities Act" means the Securities Act of 1933, as amended, or any successor statute,

and the rules and regulations promulgated thereunder.

"Shares" has the meaning set forth in Section 2.

"Warrantholder" has the meaning set forth in Section 2.

"Warrant" means this Warrant, issued pursuant to the Purchase Agreement.

2. Number of Shares; Exercise Price. This certifies that, for value received, the

United States Department ofthe Treasury or its pennitted assigns (the "'Warrantholder") is

entitled, upon the tenus and subject to the conditions hereinafter set forth, to acquire from the

Company, in whole or in part, after the receipt of all applicable Regulatory Approvals, if any, up

to an aggregate ofthe number offully paid and nonassessable shares ofPreferred Stock set forth

in Item 7 ofSchedule A hereto (the "Shares"), at a purchase price per share of Preferred Stock

equal to the Exercise Price.

UST Seq. No, 986 2
3. Exercise of Warrant; Term. Subject to Section 2, to the extent permitted by

applicable laws and regulations, the right to purchase the Shares represented by this Warrant is

exercisable~ in whole or in part by the \Varrantholder~ at any time or from time to time after the

execution and delivery ofthis Warrant by the Company on the date hereof but in no event later

than 5:00 p.m., New York City time on the tenth anniversary ofthe Issue Date (the "Expiration

Time"), by (A) the surrender of this Warrant and Notice of Exercise annexed hereto, duly

completed and executed on behalf of the WarranthoIder, at the principal executive office ofthe

Company located at the address set forth in Item 8 of Schedule A hereto (or such other office or

agency ofthe Company in the United States as it may designate by notice in writing to the

Warrantholder at the address of the Warrantholder appearing on the books ofthe Company), and

(B) payment ofthe Exercise Price for the Shares thereby purchased, by having the Company

withhold, from the shares of Preferred Stock that would otherwise be delivered to the

Warrantholder upon such exercise, shares of Preferred Stock issuable upon exercise ofthe

Warrant with an aggregate Liquidation Amount equal in value to the aggregate Exercise Price as

to which this Warrant is so exercised.

If the Warrantholder does not exercise this Warrant in its entirety, the Warrantholder will

be entitled to receive from the Company within a reasonable time, and in any event not

exceeding three business days, a new warrant in substantially identical fonn for the purchase of

that number of Shares equal to the difference between the nwnber of Shares subject to this

Warrant and the number of Shares as to which this Warrant is so exercised. Notwithstanding

anything in this Warrant to the contrary, the Warrantholder hereby acknowledges and agrees that

its exercise ofthis Warrant for Shares is subject to the condition that the Warrantholder will have

first received any applicable Regulatory Approvals.

4. Issuance of Shares; Authorization. Certificates for Shares issued upon exercise of

this Warrant will be issued in such name or names as the Warrantholder may designate and will

be delivered to such named Person or Persons within a reasonable time, not to exceed three

business days after the date on which this Warrant has been duly exercised in accordance with

the terms of this Warrant. The Company hereby represents and warrants that any Shares issued

upon the exercise ofthis Warrant in accordance with the provisions of Section 3 will be duly and

validly authorized and issued, fulIy paid and nonassessable and free from all taxes, liens and

charges (other than liens or charges created by the WarranthoJder, income and franchise taxes

incurred in connection with the exercise ofthe Warrant or taxes in respect of any transfer

occurring contemporaneously therewith). The Company agrees that the Shares so issued will be

deemed to have been issued to the Warrantholder as ofthe close of business on the date on which

this Warrant and payment ofthe Exercise Price are delivered to the Company in accordance with

the tenns ofthis Warrant, notwithstanding that the stock transfer books ofthe Company may

then be closed or certificates representing such Shares may not be actuaHy delivered on such

date. The Company will at aU times reserve and keep available, out of its authorized but unissued

preferred stock, solely for the pUrpDse of providing for the exercise of this Warrant, the

aggregate number ofshares of Preferred Stock then issuable upon exercise ofthis Warrant at any

time. The Company will use reasonable best efforts to ensure that the Shares may be issued

without violation of any applicable Jawor regulation or of any requirement of any securities

exchange on which the Shares are listed or traded.

UST Seq. No. 986 3
5. No Rights as Stockholders; Transfer Books. This Warrant does not entitle the

Warrantholder to any voting rights or other rights as a stockholder ofthe Company prior to the

date of exercise hereof, The Company will at no time close its transfer books against transfer of

this Warrant in any manner which interferes with the timely exercise of this Warrant.

6. Charges, Taxes and Expenses. Issuance of certificates for Shares to the

Warrantholder upon the exercise of this Warrant shall be made without charge to the

Warrantholder for any issue or transfer tax or other incidental expense in respect ofthe issuance

ofsuch certificates, all of which taxes and expenses shall be paid by the Company.

7. Transfer!Assignment.

(A) Subject to compliance with clause (B) of this Section 7, this Warrant and all rights

hereunder are transferable, in whole or in part, upon the books ofthe Company by the registered

holder hereof in person or by duly authorized attorney, and a new warrant shall be made and

delivered by the Company, ofthe same tenor and date as this Warrant but registered in the name

of one or more transferees, upon surrender ofthis Warrant, duly endorsed, to the office or agency

ofthe Company described in Section 3. All expenses (other than stock transfer taxes) and other

charges payable in connection with the preparation, execution and delivery of the new warrants

pursuant to this Section 7 shall be paid by the Company.

(B) The transfer ofthe Warrant and the Shares issued upon exercise ofthe Warrant

are subject to the restrictions set forth in Section 4.4 ofthe Purchase Agreement. If and for so

long as required by the Purchase Agreement, this Warrant shall contain the legends as set forth in

Section 4.2(a) ofthe Purchase Agreement.

8. Exchange and Registry of Warrant. This Warrant is exchangeable, upon the

surrender hereof by the Warrantholder to the Company, for a new warrant or warrants of like

tenor and representing the right to purchase the same aggregate number of Shares. The Company

shall maintain a registry showing the name and address ofthe Warrantholder as the registered

holder of this Warrant. This Warrant may be surrendered for exchange or exercise in accordance

with its terms, at the office ofthe Company, and the Company shall be entitled to rely in all

respects, prior to written notice to the contrary, upon such registry.

9. Loss, Theft, Destruction or Mutilation of Warrant. Upon receipt by the Company

of evidence reasonably satisfactory to it ofthe loss, theft, destruction or mutilation ofthis

Warrant, and in the case of any such loss, theft or destruction, upon receipt of a bond, indemnity

or security reasonably satisfactory to the Company, or, in the case of any such mutilation, upon

surrender and cancellation ofthis Warrant, the Company shall make and deliver, in lieu ofsuch

lost, stolen, destroyed or mutilated Warrant, a new Warrant of like tenor and representing the

right to purchase the same aggregate number of Shares as provided for in such lost, stolen,

destroyed or mutilated Warrant.

10. Saturdays. Sundays. Holidays, etc. If the last or appointed day for the taking of

any action or the expiration of any right required or granted herein shall not be a business day,

then such action may be taken or such right may be exercised on the next succeeding day that is

a business day.

UST Seq. No. 986 4
11. Rule 144 Information. The Company covenants that it will use its reasonable best

efforts to timely file all reports and other documents required to be filed by it under the

Securities Act and the Exchange Act and the rules and regulations promulgated by the SEC

thereunder (or, jfthe Company is not required to file such reports, it will, upon the request of any

Warrantholder, make publicly available such information as necessary to permit sales pursuant to

Rule 144 under the Securities Act), and it will use reasonable best efforts to take such further

action as any Warrantholder may reasonably request, in each case to the extent required from

time to time to enable such holder to, if pennitted by the tenus ofthis Warrant and the Purchase

Agreement, sell this Warrant without registration under the Securities Act \\ithin the limitation

of the exemptions provided by (A) Rule 144 under the Securities Act, as such rule may be

amended from time to time, or (B) any successor rule or regulation hereafter adopted by the

SEC. Upon the written request of any Warrantholder, the Company will deliver to such

Warrantholder a written statement that it has complied with such requirements.

12. Adjustments and Other Rights. For so long as the Original Warrantholder holds

this Warrant or any portion thereof, if any event occurs that) in the good faith judgment ofthe

Board ofDirectors ofthe Company, would require adjustment of the Exercise Price or number of

Shares into which this Warrant is exercisable in order to fairly and adequately protect the

purchase rights ofthe Warrants in accordance with the essential intent and principles ofthe

Purchase Agreement and this Warrant, then the Board of Directors shall make such adjustments

in the application of such provisions, in accordance with such essential intent and principles, as

shall be reasonably necessary, in the good faith opinion of the Board of Directors, to protect such

purchase rights as aforesaid.

Whenever the Exercise Price or the number of Shares into which this Warrant is

exercisable shall be adjusted as provided in this Section 12, the Company shall forthwith file at

the principal office ofthe Company a statement showing in reasonable detail the facts requiring

such adjustment and the Exercise Price that shall be in effect and the number of Shares into

which this Warrant shall be exercisable after such adjustment, and the Company shall also cause

a copy ofsuch statement to be sent by mail, first class postage prepaid, to each Warrantholder at

the address appearing in the Company's records.

13. No Impainnent. The Company will not, by amendment ofits Charter or through

any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of

securities or any other voluntary action, avoid or seek to avoid the observance or performance of

any ofthe terms to be observed or performed hereunder by the Company, but will at all times in

good faith assist in the carrying out of all the provisions ofthis Warrant and in taking of all such

action as may be necessary or appropriate in order to protect the rights of the Warrantholder.

14. Governing Law. This Warrant 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 \vithin such State. Each ofthe Company and the WarranthoJder agrees

(a) to submit to the exclusive jurisdiction and venue ofthe United States District Court for the

District ofColumbia for any civil action, suit or proceeding arising out of or relating to this

Warrant or the transactions contemplated hereby, and (b) that notice may be served upon the

Company at the address in Section I7 below and upon the Warrantholder at the address for the

UST Seq. No. 986 5
\Varrantholder set forth in the registry maintained by the Company pursuant to Section 8 hereof.

To the extent permitted by applicable law, each ofthe Company and the Warrantholder hereby

unconditionally waives trial by jury in any civil legal action or proceeding relating to the

Viarrant or the transactions contemplated hereby or thereby.

15. Binding Effect. This Warrant shaH be binding upon any successors or assigns of

the Company.

16. Amendments. This Warrant may be amended and the observance of any term of

this \Varrant may be waived only with the written consent ofthe Company and the

Warrantholder.

17. Notices. Any notice, request, instruction or other document to be given hereunder

by any party to the other \\-ill be in '-"Titing and will be deemed to have been duly given (a) on the

date of delivery if delivered personally, or by facsimile, upon confinnation ofreceipt, or (b) on

the second business day following the date of dispatch if delivered by a recognized next day

courier service. All notices hereunder shall be delivered as set forth in Item 9 of Schedule A

hereto, or pursuant to such other instructions as may be designated in writing by the party to

receive such notice.

18. Entire Agreement. This Warrant, the forms attached hereto and Schedule A

hereto (the terms of which are incorporated by reference herein), and the Letter Agreement

(including all documents incorporated therein), contain the entire agreement between the parties

with respect to the subject matter hereof and supersede all prior and contemporaneous

arrangements or undertakings with respect thereto.

[Remainder ofpage intentionally left blank]

UST Seq. No. 986 6
[Form of Notice of Exercise)

Date: ----------

TO: [Company]

RE: Election to Purchase Preferred Stock

The undersigned, pursuant to the provisions set forth in the attached \\'arrant, hereby

agrees to subscribe for and purchase such number ofshares of Preferred Stock covered by the

Warrant such that after giving effect to an exercise pursuant to Section 3(B) ofthe Warrant, the

undersigned will receive the net number ofshares of Preferred Stock set forth below. The

undersigned, in accordance with Section 3 ofthe Warrant, hereby agrees to pay the aggregate

Exercise Price for such shares ofPreferred Stock in the manner set forth in Section 3(B) ofthe

Warrant.

Number of Shares of Preferred Stock: 1

The undersigned agrees that it is exercising the attached Warrant in full and that, upon

receipt by the undersigned ofthe number ofshares of Preferred Stock set forth above, such

Warrant shall be deemed to be cancelled and surrendered to the Company.

Holder: _

By: _

Name: _

Title: _

Number ofshares to be received by the undersigned upon exercise of the attached Warrant pursuant to Section

3(B) thereof.

UST Seq. No. 986 7
IN \VITNESS \VHEREOF, the Company has caused this Warrant to be duly executed by

a duly authorized officer.

Dated: rvlay 15,2009

CO!\tIPANY:

WORTHINGTON FINANCIAL HOLDINGS, INC.

By: _

Name:

Title:

Attest:

William L. Worthington, Jr.

Chainnan and Chief Executive Officer

By: _

Name:

Title:

Sarita S. Grace

Secretary

UST Seq. No. 986

[Signature Page to Warrant]

8
SCHEDULE A

Item 1

Name: Worthington Financial Holdings, Inc.

Corporate or other organizational form: Corporation

Jurisdiction of organization: Alabama

Item 2

Exercise Price: 2 $0.01 per share

Item 3

Issue Date: ~1ay 15, 2009

Item 4

Liquidation Amount $1,000.00 per share

Item 5

Series of Perpetual Preferred Stock: Fixed Rate Cumulative Perpetual Preferred Stock, Series B

Item 6

Date of Letter Agreement between the Company and the United States Department of the

Treasury: May 15,2009

Item 7

Number ofshares of Preferred Stock: 3 136.00136

Item 8

Company's address: 4040 Balmoral Drive

Huntsville, Alabama 35801

Item 9

Notice information: William L. Worthingto~ Jr.

Chairman and Chief Executive Officer

Worthington Financial Holdings, Inc.

4040 Balmoral Drive

Huntsville, Alabama 35801

Telephone:

Facsimile:

$0.0 I per share or such greater amount as the Charter may require as the par value ofthe Preferred Stock.

The initial number of shares of Preferred Stock for which this Warrant is exercisable shall inclooe the number ofshares

required to effect the cashless exercise pursuant to Section J(B) of this Warrant (e.g., such number ofshares of Preferred

Stock having an aggregate Liquidation Amount equal in value to the aggregate Exercise Price) such that, follOWing exercise

of this Warrant and payment of the Exercise Price in accordance with such Section 3(B), the net number ofshares of

Preferred Stock delivered to the Warrantholder (and rounded to the nearest whole share) would have an aggregate

Liquidation Amount equal to 5% ofthe aggregate amount invested by the United States Department ofthe Treasury on the

investment date.

UST Seq. No. 986
With a copy to (which shall not constitute notice):

Larry C. Tomlin~ Esq.

Krieg DeVault LLP

2800 One Indiana Square

Indianapolis, Indiana 46204-2079

Telephone: (317) 636-4341

Facsimile: (317) 636-1507

UST Seq. No. 986