Exhibit 10.3


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
of shares of a series of its preferred stock set forth on Schedule A hereto
(the “Preferred Shares”) and a
warrant to purchase the number of shares of its common stock set forth on
Schedule A hereto (the “Warrant”
and, together with the Preferred Shares, the “Purchased
Securities”) and the United States Department of the Treasury (the “Investor”) intends to purchase from the
Company the Purchased Securities. 


          The
purpose of this letter agreement is to confirm the terms and conditions of the
purchase by the Investor of the 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supplemented or superseded by the terms set forth herein or in the Schedules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”)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 of this letter agreement shall
govern. 


          Each
of the Company and the Investor hereby confirms its agreement with the other
party with respect to the issuance by the Company of the Purchased Securities
and the purchase by the Investor of the Purchased Securities pursuant to this
letter agreement and the Securities Purchase Agreement on the terms specified
on Schedule A hereto. 


          This
letter agreement (including the Schedules hereto) and the Securities Purchase
Agreement (including the Annexes thereto) 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 of separate counterparts, each
such counterpart being deemed to be an original instrument, and all such
counterparts will together constitute the same agreement. Executed signature
pages to this letter agreement may be delivered by facsimile and such
facsimiles will be deemed as sufficient as if actual signature pages had been
delivered. 


* * *






          In
witness whereof, this letter agreement has been duly executed and delivered by
the duly authorized representatives of the parties hereto as of the date
written below. 


	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
UNITED
 STATES DEPARTMENT OF THE TREASURY
	
 

	
 
	
 
	
 
	
 

	
 
	
By:
	
/s/ Neel
 Kashkari
	
 

	
 
	
 
	

	
 

	
 
	
 
	
Name:
	Neel Kashkari	
 

	
 
	
 
	
Title:
	
Interim
 Assistant Secretary for 

 Financial Stability
	
 

	
 
	
 
	
 
	
 

	
 
	
COMPANY:
	
FIRST HORIZON
 NATIONAL CORPORATION
	
 

	
 
	
 
	

	
 

	
 
	
 
	
 
	
 

	
 
	
By:
	
/s/ D. Bryan
 Jordan
	
 

	
 
	
 
	

	
 

	
 
	
 
	
Name:
	D. Bryan Jordan	
 

	
 
	
 
	
Title:
	Chief Executive Officer	
 

	
 
	
 
	
 
	
 

	
Date:
	
November 14, 2008 
	
 
	
 
	
 











EXHIBIT A 


	
 


	



	
 


	
SECURITIES PURCHASE AGREEMENT


	
 


	
STANDARD TERMS


	
 


	











TABLE OF CONTENTS


	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
Page


	
 

	
 

	
 

	
 

	
 


	
 

	
Article I

	
 

	
 

	
 


	
 

	
 

	
 

	
 

	
 


	
 

	
Purchase; Closing

	
 

	
 

	
 


	
 

	
 

	
 

	
 

	
 


	
1.1

	
Purchase

	
 

	
1

	
 


	
1.2

	
Closing

	
 

	
2

	
 


	
1.3

	
Interpretation

	
 

	
4

	
 


	
 

	
 

	
 

	
 

	
 


	
 

	
Article II

	
 

	
 

	
 


	
 

	
 

	
 

	
 

	
 


	
 

	
Representations and Warranties

	
 

	
 

	
 


	
 

	
 

	
 

	
 

	
 


	
2.1

	
Disclosure

	
 

	
4

	
 


	
2.2

	
Representations
 and Warranties of the Company

	
 

	
5

	
 


	
 

	
 

	
 

	
 

	
 


	
 

	
Article III

	
 

	
 

	
 


	
 

	
 

	
 

	
 

	
 


	
 

	
Covenants

	
 

	
 

	
 


	
 

	
 

	
 

	
 

	
 


	
3.1

	
Commercially
 Reasonable Efforts

	
 

	
13

	
 


	
3.2

	
Expenses

	
 

	
14

	
 


	
3.3

	
Sufficiency
 of Authorized Common Stock; Exchange Listing

	
 

	
15

	
 


	
3.4

	
Certain
 Notifications Until Closing

	
 

	
15

	
 


	
3.5

	
Access,
 Information and Confidentiality

	
 

	
15

	
 


	
 

	
 

	
 

	
 

	
 


	
 

	
Article IV

	
 

	
 

	
 


	
 

	
 

	
 

	
 

	
 


	
 

	
Additional Agreements

	
 

	
 

	
 


	
 

	
 

	
 

	
 

	
 


	
4.1

	
Purchase for
 Investment

	
 

	
16

	
 


	
4.2

	
Legends

	
 

	
16

	
 


	
4.3

	
Certain
 Transactions

	
 

	
18

	
 


	
4.4

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

	
 

	
18

	
 


	
4.5

	
Registration
 Rights

	
 

	
19

	
 


	
4.6

	
Voting of
 Warrant Shares

	
 

	
30

	
 


	
4.7

	
Depositary
 Shares

	
 

	
31

	
 


	
4.8

	
Restriction
 on Dividends and Repurchases

	
 

	
31

	
 


	
4.9

	
Repurchase
 of Investor Securities

	
 

	
32

	
 


	
4.10

	
Executive
 Compensation

	
 

	
33

	
 





-i-







	
 

	
 

	
 

	
 

	
 


	
 

	
Article V

	
 

	
 

	
 


	
 

	
 

	
 

	
 

	
 


	
 

	
Miscellaneous

	
 

	
 

	
 


	
 

	
 

	
 

	
 

	
 


	
5.1

	
Termination

	
 

	
34

	
 


	
5.2

	
Survival of
 Representations and Warranties

	
 

	
34

	
 


	
5.3

	
Amendment

	
 

	
34

	
 


	
5.4

	
Waiver of
 Conditions

	
 

	
34

	
 


	
5.5

	
Governing Law: Submission to Jurisdiction, Etc.

	
 

	
35

	
 


	
5.6

	
Notices

	
 

	
35

	
 


	
5.7

	
Definitions

	
 

	
35

	
 


	
5.8

	
Assignment

	
 

	
36

	
 


	
5.9

	
Severability

	
 

	
36

	
 


	
5.10

	
No Third Party
 Beneficiaries

	
 

	
36

	
 





-ii-






LIST OF ANNEXES


	
 

	
 


	
ANNEX A:

	
FORM OF
 CERTIFICATE OF DESIGNATIONS FOR PREFERRED STOCK


	
 

	
 


	
ANNEX B:

	
FORM OF
 WAIVER


	
 

	
 


	
ANNEX C:

	
FORM OF
 OPINION


	
 

	
 


	
ANNEX D:

	
FORM OF
 WARRANT





-iii-









INDEX OF DEFINED TERMS 


	
 

	
 

	
 


	
Term

	
 

	
Location of 

 Definition


	


	
 

	



	
Affiliate

	
 

	
5.7(b)


	
Agreement

	
 

	
Recitals


	
Appraisal
 Procedure

	
 

	
4.9(c)(i)


	
Appropriate
 Federal Banking Agency

	
 

	
2.2(s)


	
Bankruptcy
 Exceptions

	
 

	
2.2(d)


	
Benefit
 Plans

	
 

	
1.2(d)(iv)


	
Board of
 Directors

	
 

	
2.2(f)


	
Business
 Combination

	
 

	
4.4


	
business day

	
 

	
1.3


	
Capitalization
 Date

	
 

	
2.2(b)


	
Certificate
 of Designations

	
 

	
1.2(d)(iii)


	
Charter

	
 

	
1.2(d)(iii)


	
Closing

	
 

	
1.2(a)


	
Closing Date

	
 

	
1.2(a)


	
Code

	
 

	
2.2(n)


	
Common Stock

	
 

	
Recitals


	
Company

	
 

	
Recitals


	
Company Financial
 Statements

	
 

	
2.2(h)


	
Company
 Material Adverse Effect

	
 

	
2.1(a)


	
Company
 Reports

	
 

	
2.2(i)(i)


	
Company
 Subsidiary; Company Subsidiaries

	
 

	
2.2(i)(i)


	
control;
 controlled by; under common control with

	
 

	
5.7(b)


	
Controlled
 Group

	
 

	
2.2(n)


	
CPP

	
 

	
Recitals


	
EESA

	
 

	
1.2(d)(iv)


	
ERISA

	
 

	
2.2(n)


	
Exchange Act

	
 

	
2.1(b)


	
Fair Market
 Value

	
 

	
4.9(c)(ii)


	
GAAP

	
 

	
2.1(a)


	
Governmental
 Entities

	
 

	
1.2(c)


	
Holder

	
 

	
4.5(k)(i)


	
Holders’
 Counsel

	
 

	
4.5(k)(ii)


	
Indemnitee

	
 

	
4.5(g)(i)


	
Information

	
 

	
3.5(b)


	
Initial
 Warrant Shares

	
 

	
Recitals


	
Investor

	
 

	
Recitals


	
Junior Stock

	
 

	
4.8(c)


	
knowledge of
 the Company; Company’s knowledge

	
 

	
5.7(c)


	
Last Fiscal
 Year

	
 

	
2.1(b)


	
Letter
 Agreement

	
 

	
Recitals


	
officers

	
 

	
5.7(c)





-iv-






	
 

	
 

	
 


	
 

	
 

	
 


	
Term

	
 

	
Location of

 Definition


	


	
 

	



	
Parity Stock

	
 

	
4.8(c)


	
Pending
 Underwritten Offering

	
 

	
4.5(l)


	
Permitted
 Repurchases

	
 

	
4.8(a)(ii)


	
Piggyback
 Registration

	
 

	
4.5(a)(iv)


	
Plan

	
 

	
2.2(n)


	
Preferred
 Shares

	
 

	
Recitals


	
Preferred
 Stock

	
 

	
Recitals


	
Previously
 Disclosed

	
 

	
2.1(b)


	
Proprietary
 Rights

	
 

	
2.2(u)


	
Purchase

	
 

	
Recitals


	
Purchase
 Price

	
 

	
1.1


	
Purchased
 Securities

	
 

	
Recitals


	
Qualified
 Equity Offering

	
 

	
4.4


	
register;
 registered; registration

	
 

	
4.5(k)(iii)


	
Registrable
 Securities

	
 

	
4.5(k)(iv)


	
Registration
 Expenses

	
 

	
4.5(k)(v)


	
Regulatory
 Agreement

	
 

	
2.2(s)


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

	
 

	
4.5(k)(vi)


	
Schedules

	
 

	
Recitals


	
SEC

	
 

	
2.1(b)


	
Securities
 Act

	
 

	
2.2(a)


	
Selling
 Expenses

	
 

	
4.5(k)(vii)


	
Senior
 Executive Officers

	
 

	
4.10


	
Share
 Dilution Amount

	
 

	
4.8(a)(ii)


	
Shelf
 Registration Statement

	
 

	
4.5(a)(ii)


	
Signing Date

	
 

	
2.1(a)


	
Special Registration

	
 

	
4.5(i)


	
Stockholder
 Proposals

	
 

	
3.1(b)


	
subsidiary

	
 

	
5.8(a)


	
Tax; Taxes

	
 

	
2.2(o)


	
Transfer

	
 

	
4.4


	
Warrant

	
 

	
Recitals


	
Warrant
 Shares

	
 

	
2.2(d)





-v-






SECURITIES PURCHASE AGREEMENT – STANDARD
TERMS


Recitals:


          WHEREAS,
the United States Department of the 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 (“CPP”); 


          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 Terms; 


          WHEREAS,
the Company agrees to expand the flow of credit to U.S. consumers and
businesses on competitive terms to promote the sustained growth and vitality of
the U.S. economy; 


          WHEREAS,
the Company agrees to work diligently, under existing programs, to modify the
terms of residential mortgages as appropriate to strengthen the health of the
U.S. housing market; 


          WHEREAS,
the Company intends to issue in a private placement the number of shares of the
series of its Preferred Stock (“Preferred
Stock”) set forth on Schedule A to the Letter Agreement (the
“Preferred Shares”) and a warrant
to purchase the number of shares of its Common Stock (“Common Stock”) set forth on Schedule A
to the Letter Agreement (the “Initial
Warrant Shares”) (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
of the 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 of the
premises, and of the representations, warranties, covenants and agreements set
forth herein, the parties agree as follows: 


Article I

Purchase; Closing


          1.1
Purchase. On the terms and subject to the conditions set forth in this
Agreement, the Company agrees to sell to the Investor, and the Investor agrees
to purchase from the Company, at the Closing (as hereinafter defined), the
Purchased Securities for the price set forth on Schedule A (the “Purchase Price”). 






          1.2
Closing. 


          (a)
On the terms and subject to the conditions set forth in this Agreement, the
closing of the Purchase (the “Closing”)
will take place at the location specified in 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 of the 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 for, in
exchange for payment in full of the 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 of the 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 of the conditions
that (i) any approvals or authorizations of all United States and other
governmental, regulatory or judicial authorities (collectively, “Governmental Entities”) required for the
consummation of the Purchase shall have been obtained or made in form and
substance reasonably satisfactory to each party and shall be in full force and
effect and all waiting periods required by United States and other applicable
law, if any, shall have expired and (ii) no provision of any applicable United
States or other law and no judgment, injunction, order or decree of any
Governmental Entity shall prohibit the purchase and sale of the Purchased
Securities as contemplated by this Agreement. 


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


	
 

	
 


	
 

	
          (i)
 (A) the representations and warranties of the Company set forth in (x)
 Section 2.2(g) of this Agreement shall be true and correct in all respects as
 though made on and as of the Closing Date, (y) Sections 2.2(a) through (f)
 shall be true and correct in all material respects as though made on and as
 of the Closing Date (other than representations and warranties that by their
 terms speak as of another date, which representations and warranties shall be
 true and correct in all material respects as of such other date) and (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 of similar import) shall be true
 and correct as though made on and as of the Closing Date (other than
 representations and warranties that by their terms speak as of another date, which
 representations and warranties shall be true and correct as of such other
 date), except to the extent that the failure of such representations and
 warranties referred to in this Section 1.2(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 (B) the
 Company shall have 





-2-






	
 

	
 


	
 

	
performed 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 of the
 Company by a senior executive officer certifying to the effect that the
 conditions set forth in Section 1.2(d)(i) have been satisfied;


	
 

	
 


	
 

	
          (iii)
 the Company shall have duly adopted and filed with the Secretary of State of
 its jurisdiction of organization or other applicable Governmental Entity the
 amendment to its certificate or articles of incorporation, articles of
 association, or similar organizational document (“Charter”) in substantially the form attached hereto as Annex
 A (the “Certificate of Designations”)
 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 of the Company acquired
 pursuant to this Agreement or the Warrant, in order to comply with Section
 111(b) of the Emergency Economic Stabilization Act of 2008 (“EESA”) as implemented by guidance or
 regulation thereunder that has been issued and is in effect as of the Closing
 Date, and (B) the Investor shall have received a certificate signed on behalf
 of the Company by a senior executive officer certifying to the effect that
 the condition set forth in Section 1.2(d)(iv)(A) has been satisfied;


	
 

	
 


	
 

	
          (v)
 each of the Company’s Senior Executive Officers shall have delivered to the
 Investor a written waiver in the form attached hereto as Annex B
 releasing the Investor from any claims that such Senior Executive Officers
 may otherwise have as a result of the issuance, on or prior to the Closing
 Date, of any regulations which require the modification of, and the agreement
 of the Company hereunder to modify, the terms of any Benefit Plans with
 respect to its Senior Executive Officers to eliminate any provisions of such
 Benefit Plans that would not be in compliance with the requirements of
 Section 111(b) of the EESA as implemented by guidance or regulation
 thereunder that has been issued and is in effect as of the 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 of the Closing Date, in substantially the form attached
 hereto as Annex C;


	
 

	
 


	
 

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





-3-






	
 

	
 


	
 

	
          (viii)
 the Company shall have duly executed the Warrant in substantially the form
 attached hereto as Annex D 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 “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 of this Agreement, as this
Agreement is the product of negotiation between sophisticated parties advised by
counsel. All references to “$” or “dollars” mean the lawful currency of the
United States of America. Except as expressly stated in this Agreement, all
references to any statute, rule or regulation are to the statute, rule or
regulation as amended, modified, supplemented or replaced from time to time
(and, in the case of statutes, include any rules and regulations promulgated
under the statute) and to any section of any statute, rule or regulation
include any successor to the section. References to a “business day” shall mean any day except
Saturday, Sunday and any day on which banking institutions in the State of New
York generally are authorized or required by law or other governmental actions
to close. 


Article II 

Representations and Warranties


          2.1
Disclosure. 


          (a)
“Company Material Adverse Effect”
means a material adverse effect on (i) the business, results of operation or
financial condition of the Company and its consolidated subsidiaries taken as a
whole; provided, however, that Company Material Adverse
Effect shall not be deemed to include the effects of (A) changes after the date
of the 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 of war or terrorism, in each case
generally affecting the industries in which the Company and its subsidiaries
operate, (B) changes or proposed changes after the Signing Date in generally
accepted accounting principles in the United States (“GAAP”) or regulatory accounting requirements,
or authoritative interpretations thereof, (C) changes or proposed changes after
the Signing Date in securities, banking and other laws of general applicability
or related policies or interpretations of Governmental Entities (in the case of
each of these clauses (A), (B) and (C), other than changes 


-4-






or occurrences
to the extent that such changes or occurrences have or would reasonably be
expected to have a materially disproportionate adverse effect on the Company
and its consolidated subsidiaries taken as a whole relative to comparable U.S.
banking or financial services organizations), or (D) changes in the market
price or trading volume of the Common Stock or any other equity, equity-related
or debt securities of the Company or its consolidated subsidiaries (it being
understood and agreed that the exception set forth in this clause (D) does not
apply to the underlying reason giving rise to or contributing to any such
change); or (ii) the ability of the Company to consummate the Purchase and the
other transactions contemplated by this Agreement and the Warrant and perform
its obligations hereunder or thereunder on a timely basis. 


          (b)
“Previously Disclosed” means
information set forth or incorporated in the Company’s Annual Report on Form
10-K for the most recently completed fiscal year of the Company filed with the
Securities and Exchange Commission (the “SEC”)
prior to the Signing Date (the “Last Fiscal
Year”) or in its other reports and forms filed with or furnished to
the SEC under Sections 13(a), 14(a) or 15(d) of the Securities Exchange Act of
1934 (the “Exchange Act”) on or
after the last day of the Last Fiscal Year and prior to the Signing Date. 


          2.2
Representations and Warranties of the Company. Except as Previously Disclosed,
the Company represents and warrants to the Investor that as of the Signing Date
and as of the 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 of its 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
aggregate, had and would not reasonably be expected to have a Company Material
Adverse Effect, has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts any business so
as to require such qualification; each subsidiary of the Company that is a
“significant subsidiary” within the meaning of Rule 1-02(w) of Regulation S-X
under the Securities Act of 1933 (the “Securities
Act”) has been duly organized and is validly existing in good
standing under the laws of its jurisdiction of organization. The Charter and
bylaws of the Company, copies of which have been provided to the Investor prior
to the Signing Date, are true, complete and correct copies of such documents as
in full force and effect as of the Signing Date. 


          (b)
Capitalization. The authorized capital stock of the Company, and the
outstanding capital stock of the Company (including securities convertible
into, or exercisable or exchangeable for, capital stock of the Company) as of
the most recent fiscal month-end preceding the Signing Date (the “Capitalization Date”) is set forth on Schedule
B. The outstanding shares of capital stock of the Company have been duly
authorized and are validly issued and outstanding, fully paid and
nonassessable, and subject to no preemptive rights (and were not issued in
violation of any preemptive rights). Except as provided in the Warrant, as of
the Signing Date, the Company does not have outstanding any securities or other
obligations providing the holder the right to acquire Common Stock that is not
reserved for issuance as 


-5-






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 of stock options or delivered under other equity-based awards or other
convertible securities or warrants which were issued and outstanding on the
Capitalization Date and disclosed on Schedule B and (ii) shares
disclosed 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 rights, 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 of the
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 of the 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 Common Stock issuable upon exercise of the Warrant (the “Warrant Shares”) have been duly authorized
and reserved for issuance upon exercise of the Warrant and when so issued in
accordance with the terms of the Warrant will be validly issued, fully paid and
non-assessable, subject, if applicable, to the approvals of its stockholders
set forth on Schedule C. 


          (e)
Authorization, Enforceability. 


	
 

	
 


	
 

	
          (i)
 The Company has the corporate power and authority to execute and deliver this
 Agreement and the Warrant and, subject, if applicable, to the approvals of
 its stockholders set forth on Schedule C, to carry out its obligations
 hereunder and thereunder (which includes the issuance of the Preferred
 Shares, Warrant and Warrant Shares). The execution, delivery and performance
 by the Company of this Agreement and the Warrant and the consummation of the
 transactions contemplated hereby and thereby have been duly authorized by all
 necessary corporate action on the part of the Company and its stockholders,
 and no further approval or authorization is required on the part of the
 Company, subject, in each case, if applicable, to the approvals of its
 stockholders set forth on Schedule C. This Agreement is a valid and
 binding obligation of the Company enforceable against the Company in
 accordance with its terms, subject to the Bankruptcy Exceptions. 


	
 

	
 


	
 

	
          (ii)
 The execution, delivery and performance by the Company of this Agreement and
 the Warrant and the consummation of the transactions contemplated hereby and
 thereby and compliance by the Company with the provisions hereof and 





-6-






	
 

	
 


	
 

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


	
 

	
 


	
 

	
          (iii)
 Other than the filing of the Certificate of Designations with the Secretary
 of State of its jurisdiction of organization or other applicable Governmental
 Entity, any current report on Form 8-K required to be filed with the SEC,
 such filings and approvals as are required to be made or obtained under any
 state “blue sky” laws, the filing of any
 proxy statement contemplated by Section 3.1 and such as have been made or
 obtained, no notice to, filing with, exemption or review by, or
 authorization, consent or approval of, any Governmental Entity is required to
 be made or obtained by the Company in connection with the consummation by the
 Company of the Purchase except for any such notices, filings, exemptions,
 reviews, authorizations, consents and approvals the failure of which to make
 or obtain would not, individually or in the aggregate, reasonably be expected
 to have a Company Material Adverse Effect.


	
 

	
 





          (f)
Anti-takeover Provisions and Rights Plan. The Board of Directors of the
Company (the “Board of Directors”)
has taken all necessary action to ensure that the transactions contemplated by
this Agreement and the Warrant and the consummation of the transactions
contemplated hereby and thereby, including the exercise of the Warrant in
accordance with its terms, will be exempt from any anti-takeover or similar provisions
of the Company’s Charter and bylaws, and any other provisions of any applicable
“moratorium”, “control share”, “fair price”, “interested stockholder” or other
anti-takeover laws and regulations of any jurisdiction. The Company has taken
all actions necessary to render any stockholders’ rights plan of the Company
inapplicable to this Agreement and the Warrant and the consummation of the
transactions contemplated hereby and thereby, including the exercise of the
Warrant by the Investor in accordance with its terms. 


          (g)
No Company Material Adverse Effect. Since the last day of the last
completed fiscal period for which the Company has filed a Quarterly Report on
Form 10-Q or an Annual 


-7-






Report on Form
10-K with the SEC prior to the Signing Date, no fact, circumstance, event,
change, occurrence, condition or development has occurred that, individually or
in the aggregate, has had or would reasonably be expected to have a Company
Material Adverse Effect. 


          (h)
Company Financial Statements. Each of the consolidated financial
statements of the Company and its consolidated subsidiaries (collectively the “Company Financial Statements”)
included or
incorporated by reference in the Company Reports filed with the SEC since
December 31, 2006, present fairly in all material respects the consolidated
financial position of the Company and its consolidated subsidiaries as of the
dates indicated therein (or if amended prior to the Signing Date, as of the
date of such amendment) and the consolidated results of their operations for
the periods specified therein; and except as stated therein, such financial
statements (A) were prepared in conformity with GAAP applied on a consistent
basis (except as may be noted therein), (B) have been prepared from, and are in
accordance with, the books and records of the Company and the Company
Subsidiaries and (C) complied as to form, as of their respective dates of
filing with the SEC, in all material respects with the applicable accounting
requirements and with the published rules and regulations of the SEC with
respect thereto. 


	
 

	
 


	
 

	
(i) Reports.
 


	
 

	
 


	
 

	
          (i)
 Since December 31, 2006, the Company and each subsidiary of the Company (each
 a “Company Subsidiary” and,
 collectively, the “Company Subsidiaries”)
 has timely filed all reports, registrations, documents, filings, statements
 and submissions, together with any amendments thereto, that it was required
 to file with any Governmental Entity (the foregoing, collectively, the “Company Reports”) and has paid all fees
 and assessments due and payable in connection therewith, except, in each
 case, as would not, individually or in the aggregate, reasonably be expected
 to have a Company Material Adverse Effect. As of their respective dates of
 filing, the Company Reports complied in all material respects with all
 statutes and applicable rules and regulations of the applicable Governmental
 Entities. In the case of each such Company Report filed with or furnished to
 the SEC, such Company Report (A) did not, as of its date or if amended prior
 to the Signing Date, as of the date of such amendment, contain an untrue
 statement of a material fact or omit to state a material fact necessary in
 order to make the statements made therein, in light of the circumstances
 under which they were made, not misleading, and (B) complied as to form in
 all material respects with the applicable requirements of the Securities Act
 and the Exchange Act. With respect to all other Company Reports, the Company
 Reports were complete and accurate in all material respects as of their
 respective dates. No executive officer of the Company or any Company
 Subsidiary has failed in any respect to make the certifications required of
 him or her under Section 302 or 906 of the Sarbanes-Oxley Act of 2002.


	
 

	
 


	
 

	
          (ii)
 The records, systems, controls, data and information of the Company and the
 Company Subsidiaries are recorded, stored, maintained and operated under
 means (including any electronic, mechanical or photographic process, whether
 computerized or not) that are under the exclusive ownership and direct
 control of the Company or the





-8-






	
 

	
 


	
 

	
Company
 Subsidiaries or their accountants (including all means of access thereto and
 therefrom), except for any non-exclusive ownership and non-direct control that
 would not reasonably be expected to have a material adverse effect on the
 system of internal accounting controls described below in this Section
 2.2(i)(ii). The Company (A) has implemented and maintains disclosure controls
 and procedures (as defined in Rule 13a-15(e) of the Exchange Act) to ensure
 that material information relating to the Company, including the consolidated
 Company Subsidiaries, is made known to the chief executive officer and the
 chief financial officer of the Company by others within those entities, and
 (B) has disclosed, based on its most recent evaluation prior to the Signing
 Date, to the Company’s outside auditors and the audit committee of the Board
 of Directors (x) any significant deficiencies and material weaknesses in the
 design or operation of internal controls over financial reporting (as defined
 in Rule 13a-15(f) of the Exchange Act) that are reasonably likely to
 adversely affect the Company’s ability to record, process, summarize and
 report financial information and (y) any fraud, whether or not material, that
 involves management or other employees who have a significant role in the
 Company’s internal controls over financial reporting.





          (j)
No Undisclosed Liabilities. Neither the Company nor any of the Company
Subsidiaries has any liabilities or obligations of any nature (absolute,
accrued, contingent or otherwise) which are not properly reflected 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 of the
Company under circumstances which would require the integration of such
offering with the offering of any of the Purchased Securities under the
Securities Act, and the rules and regulations of the SEC promulgated
thereunder), which might subject the offering, issuance or sale of any of the
Purchased Securities to Investor pursuant to this Agreement to the registration
requirements of the Securities Act. 


          (l)
Litigation and Other Proceedings. Except (i) as set forth on Schedule
D or (ii) as would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect, there is no (A) pending or,
to the knowledge of the Company, threatened, claim, action, suit, investigation
or proceeding, against the Company or any Company Subsidiary or to which any of
their assets are subject nor is the Company or any Company Subsidiary subject
to any order, judgment or decree or (B) unresolved violation, criticism or
exception by any Governmental Entity with respect to any report or relating to
any examinations or inspections of the Company or any Company Subsidiaries. 


          (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 


-9-






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


          (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) of
the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)) providing benefits to any current
or former employee, officer or director of the Company or any member of its “Controlled Group” (defined as any
organization which is a member of a controlled group of corporations within the
meaning of Section 414 of the Internal Revenue Code of 1986, as amended (the “Code”)) that is sponsored, maintained
or
contributed to by the Company or any member of its Controlled Group and for
which the Company or any member of its Controlled Group would have any
liability, whether actual or contingent (each, a “Plan”) has been maintained in compliance with its terms and
with the requirements of all applicable statutes, rules and regulations,
including ERISA and the Code; (B) with respect to each Plan subject to Title IV
of ERISA (including, for purposes of this clause (B), any plan subject to Title
IV of ERISA that the Company or any member of its Controlled Group previously
maintained or contributed to in the six years prior to the Signing Date), (1)
no “reportable event” (within the meaning of Section 4043(c) of ERISA), other
than a reportable event for which the notice period referred to in Section
4043(c) of ERISA has been waived, has occurred in the three years prior to the
Signing Date or is reasonably expected to occur, (2) no “accumulated funding
deficiency” (within the meaning of Section 302 of ERISA or Section 412 of the
Code), whether or not waived, has occurred in the three years prior to the
Signing Date or is reasonably expected to occur, (3) the fair market value of
the assets under each Plan exceeds the present value of all benefits accrued
under such Plan (determined based on the assumptions used to fund such Plan)
and (4) neither the Company nor any member of its Controlled Group has incurred
in the six years prior to the Signing Date, or reasonably expects to incur, any
liability under Title IV of ERISA (other than contributions to the Plan or
premiums to the 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) of ERISA); and (C) each Plan that is intended to be
qualified under Section 401(a) of the Code has received a favorable 


-10-








determination
letter from the Internal Revenue Service with respect to its qualified status
that has not been revoked, or such a determination letter has been timely
applied for but not received by the Signing Date, and nothing has occurred,
whether by action or by failure to act, which could reasonably be expected to
cause the loss, revocation or denial of such qualified status or favorable
determination letter. 


          (o)
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 permitted extensions, and have paid all Taxes due thereon, and (ii)
no Tax deficiency has been determined adversely to the Company or any of the
Company Subsidiaries, nor does the Company have any knowledge of any Tax
deficiencies. “Tax” or “Taxes” means any federal, state, local or
foreign income, gross receipts, property, sales, use, license, excise,
franchise, employment, payroll, withholding, alternative or add on minimum, ad
valorem, transfer or excise tax, or any other tax, custom, duty, governmental
fee or other like assessment or charge of any kind whatsoever, together with
any interest 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 or ordinance, including
 the Comprehensive Environmental Response, Compensation and Liability Act of
 1980, pending or, to the Company’s knowledge, threatened against the Company
 or any Company Subsidiary; 


	
 

	
 


	
 

	
          (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. 





-11-






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


          (s)
Agreements with Regulatory Agencies. Except as set forth on Schedule F, 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 of its business or that in any material manner
relates to its capital adequacy, its liquidity and funding policies and practices,
its ability to pay dividends, its credit, risk management or compliance
policies 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) of the Federal Deposit Insurance Act (12 U.S.C. Section
1813(q)).  


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


-12-






          (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 of their existing businesses and all rights relating to the plans,
design and specifications of any of its branch facilities (“Proprietary Rights”) free and clear of all
liens and any claims of ownership by current or former employees, contractors,
designers or others and (ii) neither the Company nor any of the Company
Subsidiaries is materially infringing, diluting, misappropriating or violating,
nor has the Company or any or the Company Subsidiaries received any written
(or, to the knowledge of the Company, oral) communications alleging that any of
them has materially infringed, diluted, misappropriated or violated, any of the
Proprietary Rights owned by any other person. Except as would not, individually
or in the aggregate, reasonably be expected to have a Company Material Adverse
Effect, to the Company’s knowledge, no other person is infringing, diluting,
misappropriating or violating, nor has the Company or any or the Company
Subsidiaries sent any written communications since January 1, 2006 alleging
that any person has infringed, diluted, misappropriated or violated, any of the
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, finder’s 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 of the Company
or any Company Subsidiary for which the Investor could have any liability. 


Article III

Covenants


          3.1
Commercially Reasonable Efforts. 


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


          (b)
If the Company is required to obtain any stockholder approvals set forth on Schedule
C, then the Company shall comply with this Section 3.1(b) and Section
3.1(c). The Company shall call a special meeting of its stockholders, as
promptly as practicable following the Closing, to vote on proposals
(collectively, the “Stockholder Proposals”)
to (i) approve the exercise of the Warrant for Common Stock for purposes of the
rules of the national security exchange on which the Common Stock is listed
and/or (ii) amend the Company’s Charter to
increase the number of authorized shares of Common Stock to at least such
number as shall be sufficient to permit the full exercise of the Warrant for
Common Stock and comply with the 


-13-






other
provisions of this Section 3.1(b) and Section 3.1(c). The Board of Directors
shall recommend to the Company’s stockholders that such stockholders vote in
favor of the Stockholder Proposals. In connection with such meeting, the
Company shall prepare (and the Investor will reasonably cooperate with the
Company to prepare) and file with the SEC as promptly as practicable (but in no
event more than ten business days after the Closing) a preliminary proxy
statement, shall use its reasonable best efforts to respond to any comments of
the SEC or its staff thereon and to cause a definitive proxy statement related
to such stockholders’ meeting to be mailed to the Company’s stockholders not
more than five business days after clearance thereof by the SEC, and shall use
its reasonable best efforts to solicit proxies for such stockholder approval of
the Stockholder Proposals. The Company shall notify the Investor promptly of
the receipt of any comments from the SEC or its staff with respect to the proxy
statement and of any request by the SEC or its staff for amendments or
supplements to such proxy statement or for additional information and will
supply the Investor with copies of all correspondence between the Company or
any of its representatives, on the one hand, and the SEC or its staff, on the
other hand, with respect to such proxy statement. If at any time prior to such
stockholders’ meeting there shall occur any event that is required to be set
forth in an amendment or supplement to the proxy statement, the Company shall
as promptly as practicable prepare and mail to its stockholders such an
amendment or supplement. Each of the Investor and the Company agrees promptly
to correct any information provided by it or on its behalf for use in the proxy
statement if and to the extent that such information shall have become false or
misleading in any material respect, and the Company shall as promptly as
practicable prepare and mail to its stockholders an amendment or supplement to
correct such information to the extent required by applicable laws and
regulations. The Company shall consult with the Investor prior to filing any
proxy statement, or any amendment or supplement thereto, and provide the
Investor with a reasonable opportunity to comment thereon. In the event that
the approval of any of the Stockholder Proposals is not obtained at such
special stockholders meeting, the Company shall include a proposal to approve
(and the Board of Directors shall recommend approval of) each such proposal at
a meeting of its stockholders no less than once in each subsequent six-month
period beginning on January 1, 2009 until all such approvals are obtained or
made. 


          (c)
None of the information supplied by the Company or any of the Company
Subsidiaries for inclusion in any proxy statement in connection with any such
stockholders meeting of the Company will, at the date it is filed with the SEC,
when first mailed to the Company’s stockholders and at the time of any
stockholders meeting, and at the time of any amendment or supplement thereof,
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. 


          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 of its own financial
or other consultants, investment bankers, accountants and counsel.

         3.3 Sufficiency
    of Authorized Common Stock; Exchange Listing.

     

-14-






          (a)
During the period from the Closing Date (or, if the approval of the Stockholder
Proposals is required, the date of such approval)until the date on which the
    Warrant has been fully exercised, the Company shall 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. Nothing
    in this Section 3.3 shall preclude the Company from satisfying its obligations
    in respect of the exercise of the Warrant by delivery of shares of Common
    Stock which are held in the treasury of the Company. As soon as reasonably
    practicable following the Closing, the Company shall, at its expense, cause
    the Warrant Shares to be listed on the same national securities exchange
    on which the Common Stock is listed, subject to official notice of issuance,
    and shall maintain such listing for so long as any Common Stock is listed
on such exchange. 


          (b)
If requested by the Investor, the Company shall promptly use its reasonable
best efforts to cause the Preferred 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 of the Company contained in this Agreement
to be untrue or inaccurate in any material respect or to cause any covenant or
agreement of the Company contained in this Agreement not to be complied with or
satisfied in any material respect and (ii) except as Previously Disclosed, any
fact, circumstance, event, change, occurrence, condition or development of
which the Company is aware and which, individually or in the aggregate, has had
or would reasonably be expected to have a Company Material Adverse Effect; provided, however,
that delivery of any notice pursuant to this Section 3.4 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 of
this Agreement or the failure of any condition set forth in Section 1.2 to be
satisfied unless the underlying Company Material Adverse Effect or material
breach would independently result in the failure of a condition set forth in
Section 1.2 to be satisfied. 


          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 10% of the
Purchase Price, the Company will permit the Investor and its agents,
consultants, contractors and advisors (x) acting through the Appropriate
Federal Banking Agency, to examine the corporate books and make copies thereof
and to discuss the affairs, finances and accounts of the Company and the
Company Subsidiaries with the principal officers of the Company, all upon
reasonable notice and at such reasonable times and as often as the Investor may
reasonably request and (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 normal business hours and in such manner as not to interfere
unreasonably with the conduct of the business of the 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 


-15-






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


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 laws. 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 of the Securities Act or any applicable U.S.
state securities laws, (b) will not sell or otherwise dispose of any of the
Purchased Securities or the Warrant Shares, except in compliance with the
registration requirements or exemption provisions of the Securities Act and any
applicable U.S. state securities laws, and (c) has such knowledge and
experience in financial and business matters and in investments of this type
that it is capable of evaluating the merits and risks of the Purchase and of
making an informed investment decision. 


          4.2
Legends. 


          (a)
The Investor agrees that all certificates or other instruments representing the
Warrant and the Warrant Shares will bear a legend substantially to the
following effect: 


	
 

	
 


	
 

	
“THE
 SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE
 SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND
 MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A
 REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND
 APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM
 REGISTRATION UNDER SUCH ACT OR SUCH LAWS.” 





-16-






          (b)
The Investor agrees that all certificates or other instruments representing the
Warrant will also bear a legend substantially to the following effect: 


	
 

	
 


	
 

	
“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.” 





          (c)
In addition, the Investor agrees that all certificates or other instruments
representing the Preferred Shares will bear a legend substantially to the
following effect: 


	
 

	
 


	
 

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


	
 

	
 


	
 

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





-17-






	
 

	
 


	
 

	
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.” 





          (d)
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 144A), 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 (c) above; provided
that the Investor surrenders to the Company the previously issued certificates
or other instruments. Upon Transfer of all or a portion of the Warrant in
compliance with Section 4.4, the Company shall issue new certificates or other
instruments representing the Warrant, which shall not contain the applicable
legend in Section 4.2(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 of its property or assets to,
any other party unless the successor, transferee or lessee party (or its
ultimate parent entity), as the case may be (if not the Company), expressly
assumes the due and punctual performance and observance of each and every
covenant, agreement and condition of this Agreement to be performed and
observed by the Company. 


          4.4
Transfer of Purchased Securities and Warrant Shares; Restrictions on
Exercise of the Warrant. Subject to compliance with applicable securities
laws, the Investor shall be permitted to transfer, sell, assign or otherwise
dispose of (“Transfer”) all or a
portion of the 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 of the Purchased Securities and the Warrant Shares; provided that the Investor shall not
Transfer a portion or portions of the Warrant with respect to, and/or exercise
the Warrant for, more than one-half of the Initial Warrant Shares (as such
number may be adjusted from time to time pursuant to Section 13 thereof) in the
aggregate until the earlier of (a) the date on which the Company (or any
successor by Business Combination) has received aggregate gross proceeds of not
less than the Purchase Price (and the purchase price paid by the Investor to
any such successor for securities of such successor purchased under the CPP)
from one or more Qualified Equity Offerings (including Qualified Equity
Offerings of such successor) and (b) December 31, 2009. “Qualified Equity Offering” means the sale
and issuance for cash by the Company to
persons other than the Company or any of the Company Subsidiaries after the
Closing 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 Company at the time of issuance under the applicable
risk-based capital guidelines of the Company’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 October 13, 


-18-






2008). “Business Combination” means a merger,
consolidation, statutory share exchange or similar transaction that requires
the approval of the Company’s stockholders. 


          4.5
Registration Rights. 


          (a)
Registration. 


	
 

	
 


	
 

	
          (i)
 Subject to the terms and conditions of this Agreement, the Company covenants
 and agrees that as promptly as practicable after the Closing Date (and in any
 event no later than 30 days after the Closing Date), 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 Shelf Registration Statement has not theretofore been declared
 effective or is not automatically effective upon such filing, the Company
 shall use reasonable best efforts to cause such Shelf Registration Statement
 to be declared or become effective and to keep such Shelf Registration
 Statement continuously effective and in compliance with the Securities Act
 and usable for resale of such Registrable Securities for a period from the
 date of its initial effectiveness until such time as there are no Registrable
 Securities remaining (including by refiling such Shelf Registration Statement
 (or a new Shelf Registration Statement) if the initial Shelf Registration
 Statement expires). So long as the Company is a well-known seasoned issuer
 (as defined in Rule 405 under the Securities Act) at the time of filing of
 the Shelf Registration Statement with the SEC, such Shelf Registration
 Statement shall be designated by the Company as an automatic Shelf Registration
 Statement. Notwithstanding the foregoing, if on the Signing Date the Company
 is not eligible to file a registration statement on Form S-3, then the
 Company shall not be obligated to file a Shelf Registration Statement unless
 and until requested to do so in writing by the Investor. 


	
 

	
 


	
 

	
          (ii)
 Any registration pursuant to Section 4.5(a)(i) shall be effected by means of
 a shelf registration on an appropriate form under Rule 415 under the
 Securities Act (a “Shelf Registration
 Statement”). If the 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(c); provided
 that the Company shall not be required to facilitate an underwritten offering
 of Registrable Securities unless the expected gross proceeds from such
 offering exceed (i) 2% of the initial aggregate liquidation preference of the
 Preferred Shares if such initial aggregate liquidation preference is less
 than $2 billion and (ii) $200 million if the initial aggregate liquidation
 preference of the Preferred Shares is equal to or greater than $2 billion.
 The lead underwriters in any such distribution shall be selected by the
 Holders of a majority of the 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 of the Company in selecting the
 lead underwriters in any such distribution. 





-19-






	
 

	
 


	
 

	
          (iii)
 The Company shall not be required to effect a registration (including a
 resale of Registrable Securities from an effective Shelf Registration
 Statement) or an underwritten offering pursuant to Section 4.5(a): (A) with
 respect to securities that are not Registrable Securities; or (B) if the
 Company has notified the Investor and all other Holders that in the good
 faith judgment of the Board of Directors, it would be materially detrimental
 to the Company or its securityholders for such registration or underwritten
 offering to be effected at such time, in which event the Company shall have
 the right to defer such registration for a period of not more than 45 days
 after receipt of the request of the Investor or any other Holder; provided that such right to delay a
 registration or underwritten offering shall be exercised by the Company (1)
 only if the Company has generally exercised (or is concurrently exercising)
 similar black-out rights against holders of similar securities that have
 registration rights and (2) not more than three times in any 12-month period
 and not more than 90 days in the aggregate in any 12-month period. 


	
 

	
 


	
 

	
          (iv)
 If during any period when an effective Shelf Registration Statement is not
 available, the Company proposes to register any of its equity securities,
 other than a registration pursuant to Section 4.5(a)(i) or a Special
 Registration, and the registration form to be filed may be used for the
 registration or qualification for distribution of Registrable Securities, the
 Company will give prompt written notice to 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 of the Company’s notice (a “Piggyback
 Registration”). Any such person that has made such a written
 request may withdraw its Registrable Securities from such Piggyback
 Registration by giving written notice to the Company and the managing
 underwriter, if any, on or before the fifth business day prior to the planned
 effective date of such Piggyback Registration. The Company may terminate or
 withdraw any registration under this Section 4.5(a)(iv) prior to the
 effectiveness of such registration, whether or not Investor or any other
 Holders have elected to include Registrable Securities in such registration. 


	
 

	
 


	
 

	
          (v)
 If the registration referred to in Section 4.5(a)(iv) is proposed to be
 underwritten, the Company will so advise Investor and all other Holders as a
 part of the written notice given pursuant to Section 4.5(a)(iv). In such
 event, the right of Investor and all other Holders to registration pursuant
 to Section 4.5(a) will be conditioned upon such persons’ participation in
 such underwriting and the inclusion of such person’s Registrable Securities
 in the underwriting if such securities are of the same class of securities as
 the securities to be offered in the underwritten offering, and each such
 person will (together with the Company and the other persons distributing
 their securities through such underwriting) enter into an underwriting
 agreement in customary form with the underwriter or underwriters selected for
 such underwriting by the Company; provided
 that 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 of the terms of the underwriting, such
 person may elect to withdraw therefrom by written notice 





-20-






	
 

	
 


	
 

	
to the Company,
 the managing underwriters and the Investor (if the 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(a)(ii) or (y)
 a Piggyback Registration under Section 4.5(a)(iv) relates to an underwritten
 offering on behalf of the Company, and in either case the managing
 underwriters advise the Company that in their reasonable opinion the number
 of securities requested to be included in such offering exceeds the number
 which can be sold without adversely affecting the marketability of such
 offering (including an adverse effect on the per share offering price), the
 Company will include in such offering only such number of securities that in
 the reasonable opinion of such managing underwriters can be sold without
 adversely affecting the marketability of the offering (including an adverse effect
 on the per share offering price), which securities will be so included in the
 following order of priority: (A) first, in the case of a Piggyback
 Registration under Section 4.5(a)(iv), the securities the Company proposes to
 sell, (B) then the Registrable Securities of the Investor and all other
 Holders who have requested inclusion of Registrable Securities pursuant to
 Section 4.5(a)(ii) or Section 4.5(a)(iv), as applicable, pro rata on the basis of the aggregate
 number of such securities or shares owned by each such person and (C) lastly,
 any other securities of the Company that have been requested to be so
 included, subject to the terms of this Agreement; provided, however, that if the Company has, prior to the
 Signing Date, entered into an agreement with respect to its securities that
 is inconsistent with the order of priority contemplated hereby then it shall
 apply the order of priority in such conflicting agreement to the extent that
 it would otherwise result in a breach under such agreement. 





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


          (c)
Obligations of the Company. The Company shall use its reasonable best
efforts, for so long as there are Registrable Securities outstanding, to take
such actions as are under its control to not become an ineligible issuer (as
defined in Rule 405 under the Securities Act) and to remain a well-known
seasoned issuer (as defined in Rule 405 under the Securities Act) if it has
such status on the Signing Date or becomes eligible for such status in the
future. In addition, whenever required to effect the registration of any
Registrable Securities or facilitate the distribution of Registrable Securities
pursuant to an effective Shelf Registration Statement, the Company shall, as
expeditiously as reasonably practicable: 


	
 

	
 


	
 

	
          (i)
 Prepare and file with the SEC a prospectus supplement with respect to a
 proposed offering of Registrable Securities pursuant to an effective
 registration statement, subject to Section 4.5(d), keep such registration
 statement effective and keep 





-21-






	
 

	
 


	
 

	
such
 prospectus supplement current until the securities described therein are no
 longer Registrable Securities. 


	
 

	
 


	
 

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


	
 

	
 


	
 

	
          (iii)
 Furnish to the Holders and any underwriters such number of copies of the
 applicable registration statement and each such amendment and supplement
 thereto (including in each case all exhibits) and of a prospectus, including
 a preliminary prospectus, in conformity with the requirements of the
 Securities Act, and such other documents as they may reasonably request in order
 to facilitate the disposition of Registrable Securities owned or to be
 distributed by them. 


	
 

	
 


	
 

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


	
 

	
 


	
 

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


	
 

	
 


	
 

	
          (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; 





-22-






	
 

	
 

	
 


	
 

	
 

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


	
 

	
 

	
 


	
 

	
 

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


	
 

	
 

	
 


	
 

	
 

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


	
 

	
 

	
 


	
 

	
 

	
          (F)
 if at any time the representations and warranties of the Company contained in
 any underwriting agreement contemplated by Section 4.5(c)(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(c)(vi)(C) at the earliest practicable
 time. 


	
 

	
 

	
 


	
 

	
          (viii)
 Upon the occurrence of any event contemplated by Section 4.5(c)(v) or
 4.5(c)(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 of the circumstances under which they were made,
 not misleading. If the Company notifies the Holders in accordance with
 Section 4.5(c)(vi)(E) to suspend the use of the prospectus until the
 requisite changes to the prospectus have been made, then the Holders and any
 underwriters shall suspend use of such prospectus and use their reasonable
 best efforts to return to the Company all copies of such prospectus (at the
 Company’s expense) other than permanent file copies then in such Holders’ or
 underwriters’ possession. The total number of days that any such suspension
 may be in effect in any 12-month period shall not exceed 90 days. 


	
 

	
 

	
 


	
 

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


	
 

	
 

	
 


	
 

	
          (x)
 If an underwritten offering is requested pursuant to Section 4.5(a)(ii),
 enter into an underwriting agreement in customary form, scope and substance
 and take all such 





-23-








	
 

	
 


	
 

	
other
 actions reasonably requested by the Holders of a majority of the Registrable
 Securities being sold in connection therewith or by the managing
 underwriter(s), if any, to expedite or facilitate the underwritten
 disposition of such Registrable Securities, and in connection therewith in
 any underwritten offering (including making members of management and
 executives of the Company available to participate in “road shows”, similar
 sales events and other marketing activities), (A) make such representations
 and warranties to the Holders that are selling stockholders and the managing
 underwriter(s), if any, with respect to the business of the Company and its
 subsidiaries, and the Shelf Registration Statement, prospectus and documents,
 if any, incorporated or deemed to be incorporated by reference therein, in
 each case, in customary form, substance and scope, and, if true, confirm the
 same if and when requested, (B) use its reasonable best efforts to furnish
 the underwriters with opinions of counsel to the Company, addressed to the
 managing underwriter(s), if any, covering the matters customarily covered in
 such opinions requested in underwritten offerings, (C) use its reasonable
 best efforts to obtain “cold comfort” letters from the independent certified
 public accountants of the Company (and, if necessary, any other independent
 certified public accountants of any business acquired by the Company for
 which financial statements and financial data are included in the Shelf
 Registration Statement) who have certified the financial statements included
 in such Shelf Registration Statement, addressed to each of the managing
 underwriter(s), if any, such letters to be in customary form and covering
 matters of the type customarily covered in “cold comfort” letters, (D) if an
 underwriting agreement is entered into, the same shall contain
 indemnification provisions and procedures customary in underwritten offerings
 (provided that 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 of the 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 reasonable business hours, financial and
 other records, pertinent corporate documents and properties of the Company,
 and cause the officers, directors and employees of the Company to supply all
 information in each case reasonably requested (and of the type customarily
 provided in connection with due diligence conducted in connection with a
 registered public offering of securities) by any such representative,
 managing underwriter(s), attorney or accountant in connection with such Shelf
 Registration Statement. 


	
 

	
 


	
 

	
          (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 





-24-






	
 

	
 


	
 

	
Registrable
 Securities to be listed on such securities exchange as the Investor may
 designate. 


	
 

	
 


	
 

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


	
 

	
 


	
 

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





          (d)
Suspension of Sales. Upon receipt of written notice from the Company
that a registration statement, prospectus or prospectus supplement contains or
may contain an untrue statement of a material fact or omits or may omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading or that circumstances exist that make
inadvisable use of such registration statement, prospectus or prospectus
supplement, 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 of the prospectus and, if applicable,
prospectus supplement may be resumed, and, if so 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, of the prospectus and, if applicable,
prospectus supplement covering such Registrable Securities current at the time
of receipt of such notice. The total number of days that any such suspension
may be in effect in any 12-month period shall not exceed 90 days.


          (e)
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.


          (f)
Furnishing Information.


	
 

	
 


	
 

	
      (i)
 Neither the Investor nor any Holder shall use any free writing prospectus (as
 defined in Rule 405) in connection with the sale of Registrable Securities
 without the prior written consent of the Company. 


	
 

	
 


	
 

	
      (ii)
 It shall be a condition precedent to the obligations of the Company to take
 any action pursuant to Section 4.5(c) 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 





-25-






	
 

	
 


	
 

	
disposition
 of such securities as shall be required to effect the registered offering of
 their Registrable Securities. 


	
 

	
 


	
 

	
(g) 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, if any, that
 controls a Holder within the meaning of the Securities Act (each, an “Indemnitee”), against any and all
 losses, claims, damages, actions, liabilities, costs and expenses (including
 reasonable fees, expenses and disbursements of attorneys and other
 professionals incurred in connection with investigating, defending, settling,
 compromising or paying any such losses, claims, damages, actions,
 liabilities, costs and expenses), joint or several, arising out of or based
 upon any untrue statement or alleged untrue statement of material fact
 contained in any registration statement, including any preliminary prospectus
 or final prospectus contained therein or any amendments or supplements
 thereto or any documents incorporated therein by reference or contained in
 any free writing prospectus (as such term is defined in Rule 405) prepared by
 the Company or authorized by it in writing for use by such Holder (or any
 amendment or supplement thereto); or any omission to state therein a material
 fact required to be stated therein or necessary to make the statements
 therein, in light of the circumstances under which they were made, not
 misleading; provided, that the
 Company shall not be liable to such Indemnitee in any such case to the extent
 that any such loss, claim, damage, liability (or action or proceeding in
 respect thereof) or expense arises out of or is based upon (A) an untrue
 statement or omission made in such registration statement, including any such
 preliminary prospectus or final prospectus contained therein or any such
 amendments or supplements thereto or contained in any free writing prospectus
 (as such term is defined in Rule 405) prepared by the Company or authorized
 by it in writing for use by such Holder (or any amendment or supplement thereto),
 in reliance upon and in conformity with information regarding such Indemnitee
 or its plan of distribution or ownership interests which was furnished in
 writing to the Company by such Indemnitee for use in connection with such
 registration statement, including any such preliminary prospectus or final
 prospectus contained therein or any such amendments or supplements thereto,
 or (B) offers or sales effected by or on behalf of such Indemnitee “by means
 of” (as defined in Rule 159A) a “free writing prospectus” (as defined in Rule
 405) that was not authorized in writing by the Company. 


	
 

	
 


	
 

	
          (ii)
 If the indemnification provided for in Section 4.5(g)(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 harmless as contemplated therein, then the Company, in lieu of
 indemnifying such Indemnitee, shall contribute to the amount paid or payable
 by such Indemnitee as a result of such losses, claims, damages, actions,
 liabilities, costs or expenses in such proportion as is appropriate to
 reflect the relative fault of the Indemnitee, on the one hand, and the
 Company, on the other hand, in connection with the statements or omissions
 which resulted in such losses, claims, damages, actions, liabilities, costs
 or expenses as well as any other relevant 





-26-






	
 

	
 


	
 

	
equitable
 considerations. The relative fault of the Company, on the one hand, and of
 the Indemnitee, on the other hand, shall be determined by reference to, among
 other factors, whether the untrue statement of a material fact or omission to
 state a material fact relates to information supplied by the Company or by
 the Indemnitee and the parties’ relative intent, knowledge, access to
 information and opportunity to correct or prevent such statement or omission;
 the Company and each Holder agree that it would not be just and equitable if
 contribution pursuant to this Section 4.5(g)(ii) were determined by pro rata allocation or by any other
 method of allocation that does not take account of the equitable
 considerations referred to in Section 4.5(g)(i). No Indemnitee guilty of
 fraudulent misrepresentation (within the meaning of Section 11(f) of the
 Securities Act) shall be entitled to contribution from the Company if the
 Company was not guilty of such fraudulent misrepresentation. 





          (h)
Assignment of Registration Rights. The rights of the Investor to
registration of Registrable Securities pursuant to Section 4.5(a) may be assigned
by the Investor to a transferee or assignee of Registrable Securities with a
liquidation preference or, in the case of Registrable Securities other than
Preferred Shares, a market value, no less than an amount equal to (i) 2% of the
initial aggregate liquidation preference of the Preferred Shares if such
initial aggregate liquidation preference is less than $2 billion and (ii) $200
million if the initial aggregate liquidation preference of the 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 of
the name and address of such transferee or assignee and the number and type of
Registrable Securities that are being assigned. For purposes of this Section
4.5(h), “market value” per share of Common Stock shall be the last reported
sale price of the Common Stock on the national securities exchange on which the
Common Stock is listed or admitted to trading on the last trading day prior to the
proposed transfer, and the “market value” for the Warrant (or any portion
thereof) shall be the market value per share of Common Stock into which the
Warrant (or such portion) is exercisable less the exercise price per share. 


          (i)
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, in the case of an underwritten offering of Common Stock
or Warrants, any of its equity securities or, in the case of an underwritten
offering of Preferred Shares, any Preferred Stock of the Company, or, in each
case, any securities convertible into or exchangeable or exercisable for such
securities, during the period not to exceed ten days prior and 60 days
following the effective date of such offering or such longer period up to 90
days as may be requested by the managing underwriter for such underwritten
offering. The Company also agrees to cause such of its directors and senior
executive officers to execute and deliver customary lock-up agreements in such
form and for such time period up to 90 days as may be requested by the managing
underwriter. “Special Registration” means the registration of (A) equity
securities and/or options or other rights in respect thereof solely registered
on Form S-4 or Form S-8 (or successor form) or (B) shares of equity securities
and/or options or other rights in respect thereof to be offered to directors,
members of management, employees, consultants, 


-27-






customers,
lenders or vendors of the Company or Company Subsidiaries or in connection with
dividend reinvestment plans. 


          (j)
Rule 144; Rule 144A. With a view to making available to the Investor and
Holders the benefits of certain rules and regulations of the SEC which may
permit the sale of the Registrable Securities to the public without
registration, the Company agrees to use its reasonable best efforts to: 


	
 

	
 


	
 

	
          (i)
 make and keep public information available, as those terms are understood and
 defined in Rule 144(c)(1) or any similar or analogous rule promulgated under
 the Securities Act, at all times after the Signing Date; 


	
 

	
 


	
 

	
          (ii)
 (A) file with the SEC, in a timely manner, all reports and other documents
 required of the Company under the Exchange Act, and (B) if at any time the
 Company is not required to file such reports, make available, upon the
 request of any Holder, such information necessary to permit sales pursuant to
 Rule 144A (including the information required by Rule 144A(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 of the Exchange Act; a copy of the 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 of the 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. 





          (k)
As used in this Section 4.5, the following terms shall have the following
respective meanings: 


	
 

	
 


	
 

	
          (i)
 “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’ Counsel” 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” shall refer to a
 registration effected by preparing and (A) filing a registration statement in
 compliance with the Securities Act and applicable rules and regulations
 thereunder, and the declaration or ordering of effectiveness of such
 registration statement or (B) filing a prospectus and/or 





-28-






	
 

	
 


	
 

	
prospectus
 supplement in respect of an appropriate effective registration statement on
 Form S-3. 


	
 

	
 


	
 

	
          (iv)
 “Registrable Securities”means (A) all Preferred Shares, (B) the
 Warrant (subject to Section 4.5(p)) 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 of shares, recapitalization, reclassification,
 merger, amalgamation, arrangement, consolidation or other reorganization, provided
 that, once issued, such securities will not be Registrable Securities when
 (1) they are sold pursuant to an effective registration statement under the
 Securities Act, (2) except as provided below in Section 4.5(o), 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 of the securities. No Registrable
 Securities may be registered under more than one registration statement at
 any one 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 show”, the
 reasonable fees and disbursements of Holders’ Counsel,and expenses of the Company’s
 independent accountants in connection with any regular or special reviews or
 audits incident to or required by any such registration, but shall not
 include Selling Expenses. 


	
 

	
 


	
 

	
          (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 of Registrable Securities and fees and disbursements of counsel for any
 Holder (other than the fees and disbursements of Holders’ Counsel included in
 Registration Expenses). 





          (l)
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(a)(iv) –
(vi) in any Pending Underwritten Offering to the same extent that such Holder
would have been entitled to if the holder had not withdrawn; and provided, further,
that no such forfeiture shall terminate a Holder’s rights or obligations under
Section 4.5(f) 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(l), any underwritten
offering of 


-29-






Registrable
Securities in which such Holder has advised the Company of its intent to
register its Registrable Securities either pursuant to Section 4.5(a)(ii) or
4.5(a)(iv) prior to the date of such Holder’s forfeiture. 


          (m)
Specific Performance. The parties hereto acknowledge that there would be
no adequate remedy at law if the Company fails to perform any of its
obligations under this 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 enforceable under applicable law shall be entitled to compel specific
performance of the obligations of the Company under this Section 4.5 in
accordance with the terms and conditions of this Section 4.5. 


          (n)
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(a)(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 of this
Section 4.5. 


          (o)
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(a)(ii), clauses (iv), (ix) and (x)-(xii) of Section 4.5(c), Section 4.5(g)
and Section 4.5(i) shall continue to apply until such securities otherwise
cease to be Registrable Securities. In any such case, an “underwritten”
offering or other disposition shall include any distribution of such securities
on behalf of the 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. 


          (p)
Registered Sales of the 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 of the Warrant shall take reasonable steps to
agree to revisions to the Warrant to permit a public distribution of the
Warrant, including entering into a warrant agreement and appointing a warrant
agent. 


          4.6
Voting of Warrant Shares. Notwithstanding anything in this Agreement to
the contrary, the Investor shall not exercise any voting rights with respect to
the Warrant Shares.


-30-






          4.7
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 may be deposited and depositary shares, each
representing a fraction of a Preferred Share 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 pursuant thereto, the depositary shares
issued pursuant thereto shall be deemed “Preferred Shares” and, as applicable,
“Registrable Securities” for purposes of this Agreement. 


          4.8
Restriction on Dividends and Repurchases. 


          (a)
Prior to the earlier of (x) the third anniversary of the Closing Date and (y)
the date on which the Preferred Shares have been redeemed in whole or the
Investor has transferred all of the Preferred Shares to third parties which are
not Affiliates of the Investor, neither the Company nor any Company Subsidiary
shall, without the consent of the Investor: 


	
 

	
 


	
 

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


	
 

	
 


	
 

	
          (ii)
 redeem, purchase or acquire any shares of Common Stock or other capital stock
 or other equity securities of any kind of the Company, or any trust preferred
 securities issued by the Company or any Affiliate of the Company, other than
 (A) redemptions, purchases or other acquisitions of the Preferred Shares, (B)
 redemptions, purchases or other acquisitions of shares of Common Stock or
 other Junior Stock, in each case in this clause (B) in connection with the
 administration of any employee benefit plan in the ordinary course of business
 (including purchases to offset the Share Dilution Amount (as defined below)
 pursuant to a publicly announced repurchase plan) and consistent with past
 practice; provided that any
 purchases to offset the Share Dilution Amount shall in no event exceed the Share
 Dilution Amount, (C) purchases or other acquisitions by a broker-dealer
 subsidiary of the Company solely for the purpose of market-making,
 stabilization or customer facilitation transactions in Junior Stock or Parity
 Stock in the ordinary course of its business, (D) purchases by a
 broker-dealer subsidiary of the Company of capital stock of the Company for
 resale pursuant to an offering by the Company of such capital stock
 underwritten by such broker-dealer subsidiary, (E) any redemption or
 repurchase of rights pursuant to any stockholders’ rights plan, (F) the
 acquisition by the Company or any of the Company Subsidiaries of record
 ownership in Junior Stock 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, and (G) the exchange or conversion of
 Junior Stock for or into 





-31-






	
 

	
 


	
 

	
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 (G), 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 (C) and (F),
 collectively, the “Permitted Repurchases”).
 “Share Dilution Amount” means
 the increase in the number of diluted shares outstanding (determined in
 accordance with GAAP, and as measured from the date of the Company’s most
 recently filed Company Financial Statements prior to the Closing Date)
 resulting from the grant, vesting or exercise of equity-based compensation to
 employees and equitably adjusted for any stock split, stock dividend, reverse
 stock split, reclassification or similar transaction. 





          (b)
Until such time as the Investor ceases to own any Preferred Shares, the Company
shall not repurchase any Preferred 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 of the
Preferred Shares then held by the Investor on the same terms and conditions. 


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


          4.9
Repurchase of Investor Securities. 


          (a)
Following the redemption in whole of the Preferred Shares held by the Investor
or the Transfer by the Investor of all of the Preferred Shares to one or more
third parties not affiliated with the Investor, the Company may repurchase, in
whole or in part, at any time any other equity securities of the Company
purchased by the Investor pursuant to this Agreement or the Warrant and then
held by the Investor, upon notice given as provided in clause (b) below, at the
Fair Market Value of the equity security. 


          (b)
Notice of every repurchase of equity securities of the Company held by the
Investor shall be given at the address and in the manner set forth for such
party in Section 5.6. Each notice of repurchase given to the Investor shall
state: (i) the number and type of securities to be repurchased, (ii) the Board
of Director’s determination of Fair Market Value of such securities and (iii)
the place or places where certificates representing such securities are to be
surrendered for payment of the repurchase price. The repurchase of the
securities specified in the notice shall occur as soon as practicable following
the determination of the Fair Market Value of the securities. 


-32-






          (c)
As used in this Section 4.9, the following terms shall have the following
respective meanings: 


	
 

	
 


	
 

	
          (i)
 “Appraisal Procedure” means a
 procedure whereby two independent appraisers, one chosen by the Company and
 one by the Investor, shall mutually agree upon the Fair Market Value. Each
 party shall deliver a notice to the other appointing its appraiser within 10
 days after the Appraisal Procedure is invoked. If within 30 days after
 appointment of the two appraisers they are unable to agree upon the Fair
 Market Value, a third independent appraiser shall be chosen within 10 days
 thereafter by the mutual consent of such first two appraisers. The decision
 of the third appraiser so appointed and chosen shall be given within 30 days
 after the selection of such third appraiser. If three appraisers shall be
 appointed and the determination of one appraiser is disparate from the middle
 determination by more than twice the amount by which the other determination
 is disparate from the middle determination, then the determination of such
 appraiser shall be excluded, the remaining two determinations shall be
 averaged and such average shall be binding and conclusive upon the Company
 and the Investor; otherwise, the average of all three determinations shall be
 binding upon the Company and the Investor. The costs of conducting any
 Appraisal Procedure shall be borne by the Company. 


	
 

	
 


	
 

	
          (ii)
 “Fair Market Value” means, with
 respect to any security, the fair market value of such security as determined
 by the Board of Directors, acting in good faith in reliance on an opinion of
 a nationally recognized independent investment banking firm retained by the
 Company for this purpose and certified in a resolution to the Investor. If
 the Investor does not agree with the Board of Director’s determination, it
 may object in writing within 10 days of receipt of the Board of Director’s
 determination. In the event of such an objection, an authorized
 representative of the Investor and the chief executive officer of the Company
 shall promptly meet to resolve the objection and to agree upon the Fair
 Market Value. If the chief executive officer and the authorized representative
 are unable to agree on the Fair Market Value during the 10-day period
 following the delivery of the Investor’s objection, the Appraisal Procedure
 may be invoked by either party to determine the Fair Market Value by delivery
 of a written notification thereof not later than the 30th day
 after delivery of the Investor’s objection. 





          4.10
Executive Compensation. Until such time as the Investor ceases to own
any debt or equity securities of the 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) of the EESA as implemented by any guidance or
regulation thereunder that has been issued and is in effect as of the 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 Company’s “senior
executive officers” as defined in subsection 111(b)(3) of the EESA and
regulations issued thereunder, including the rules set forth in 31 C.F.R. Part
30.


-33-








Article V

Miscellaneous


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


          (a)
by either the Investor or the Company if the Closing shall not have occurred by
the 30th calendar day following the 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 of this Agreement, it being understood that the parties shall be required
to consult only until the fifth day after such 30th calendar day and
not be under any obligation to extend the term of this Agreement thereafter; provided, further,
that the right to terminate this Agreement under this Section 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 of the 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
shall have issued an order, decree or ruling or taken any other action
restraining, enjoining or otherwise prohibiting the transactions contemplated
by this Agreement and such order, decree, ruling or other action shall have
become final and nonappealable; or 


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


In the event
of termination of this Agreement as provided in this Section 5.1, this
Agreement shall forthwith become void and there shall be no liability on the
part of either party hereto except that nothing herein shall relieve either
party from liability for any breach of this Agreement. 


          5.2
Survival 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
of the 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 of this Agreement will 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 of this 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 of Conditions. The conditions to each party’s obligation to
consummate the Purchase are for the sole benefit of such party and may be
waived by such party in whole or in part to the extent permitted by applicable
law. No waiver will be effective unless it is in a 


-34-






writing signed
by a duly authorized officer of the waiving party that makes express reference
to the provision or provisions subject to such waiver. 


          5.5
Governing Law: Submission to Jurisdiction,
Etc. This Agreement will be governed by and construed in accordance
with the federal law of the United States if and to the extent such law is
applicable, and otherwise in accordance with the laws of the State of New York
applicable to contracts made and to be performed entirely within such State.
Each of the parties hereto agrees (a) to submit to the exclusive jurisdiction
and venue of the United States District Court for the District of Columbia and
the United States Court of Federal Claims for any and all civil actions, suits
or proceedings arising out of or relating to this Agreement or the Warrant or
the transactions contemplated hereby or thereby, and (b) that notice may be
served upon (i) the Company at the address and in the manner set forth for
notices to the Company in Section 5.6 and (ii) the Investor in accordance with
federal law. To the extent permitted by applicable law, each of the parties
hereto hereby unconditionally waives trial by jury in any civil legal action or
proceeding relating to this Agreement or the 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 of receipt, or (b) on the second business day
following the date of dispatch if delivered by a recognized next day courier
service. All notices to the Company shall be delivered as set forth 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 shall be delivered as set
forth below, or pursuant to such other instructions as may be designated in
writing by the Investor to the Company.  


	
 

	
 

	
 


	
 

	
If to the
 Investor:


	
 


	
 

	
 

	
United
 States Department of the 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 of such person is a general
partner or (y) of which a majority of the voting securities or other voting
interests, or a majority of the securities or other interests of which having
by their terms ordinary voting power to elect a majority of the board of
directors or persons performing similar functions with respect to such entity,
is directly or indirectly owned by such person and/or one or more subsidiaries
thereof. 


-35-






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


          (c)
The terms “knowledge of the Company”
or “Company’s knowledge” mean the
actual knowledge after reasonable and due inquiry of the “officers” (as such term is defined in Rule
3b-2 under the Exchange Act, but excluding any Vice President or Secretary) of
the Company. 


          5.8
Assignment. Neither this Agreement nor any right, remedy, obligation nor
liability arising hereunder or by reason hereof shall be assignable by any
party hereto without the prior written consent of the other party, and any
attempt to assign any right, remedy, obligation or liability hereunder without
such consent shall be void, except (a) an assignment, in the case of a Business
Combination where such party is not the surviving entity, or a sale of
substantially all of its assets, to the entity which is the survivor of such
Business Combination or the purchaser in such sale and (b) as provided in
Section 4.5. 


          5.9
Severability. If any provision of this 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 of such provision to persons or
circumstances other than those as to which it has been held invalid or
unenforceable, will remain in full force and effect and shall in no way be
affected, impaired or invalidated thereby, so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination, the parties shall
negotiate in good faith in an effort to agree upon a suitable and equitable
substitute provision to effect the original intent of the parties. 


          5.10
No Third Party Beneficiaries. Nothing contained in this Agreement,
expressed or implied, is intended to 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 of the persons
referred to in that Section. 


* * *


-36-






ANNEX A


ARTICLES OF AMENDMENT 


OF THE


AMENDED AND RESTATED CHARTER


OF


FIRST HORIZON NATIONAL CORPORATION


Under Sections 48-16-102 and 48-20-106 of the
Tennessee Business Corporation Act


          The
undersigned, being a duly authorized officer of First Horizon National
Corporation (the “Corporation”), acting pursuant to Sections 48-16-102 and
48-20-106 of the Tennessee Business Corporation Act, hereby certifies as
follows: 


          1.
The name of the Corporation is FIRST HORIZON NATIONAL CORPORATION. 


          2.
The Amended and Restated Charter, as amended, is hereby amended by the addition
of a new section to Article 10 stating the number, designation, relative
rights, preferences and limitations of a new series of preferred stock as fixed
by the board of directors, which section shall read in its entirety as follows:



          Fixed
Rate Cumulative Perpetual Preferred Stock, Series CPP


          A.
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 CPP” (the “Designated Preferred Stock”). The authorized number of
shares of Designated Preferred Stock shall be 866,540.  


          B.
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 Article 10 to the same extent as if such
provisions had been set forth in full at this place. 


          C.
Definitions. The following terms are used in this Article 10 (including
the Standard Provisions in Annex A hereto) as defined below: 


          (a)
“Common Stock” means the common stock, par value $0.625 per share, of
the 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 winding up
of the Corporation. 


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


          (e)
“Minimum Amount” means $216,635,000. 


          (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 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. 


          D.
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. 


          3.
The foregoing amendment to the Amended and Restated Charter was authorized by
the board of directors (at a meeting duly convened and held on November 11,
2008) without shareholder approval, as such was not required. 


          4.
The foregoing amendment will be effective upon filing of the Articles of
Amendment with the Secretary of State of the State of Tennessee. 


[Remainder
of Page Intentionally Left Blank]


2






	
 

	
 

	
 


	
 

	
FIRST
 HORIZON NATIONAL CORPORATION


	
 

	
 

	
 


	
Date:
 November ___, 2008

	
By:


	
 

	
 

	



	
 

	
 

	
Clyde
 A. Billings, Jr., Corporate Secretary





3






ANNEX A


STANDARD PROVISIONS


          Section
1. General Matters. Each share of Designated Preferred Stock shall be
identical in all respects to every other share of Designated Preferred Stock.
The Designated Preferred Stock shall be perpetual, subject to the provisions of
Section 5 of these Standard Provisions 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 of the Corporation.


          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 of the Original Issue Date, 5% per
annum and (ii) from and after the first day of the 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 Corporation 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 of the Corporation’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 Corporation, 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 Corporation’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” has the meaning set forth in Section 3(a).


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


A-1






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


          (l)
“Preferred Director” has the meaning set forth in Section 7(b).


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


          (n)
“Qualified Equity Offering” means the sale and issuance for cash by the
Corporation to persons other than the Corporation 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 Corporation at the time of issuance under
the applicable risk-based capital guidelines of the Corporation’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 October 13, 2008). 


          (o)
“Share Dilution Amount” has the meaning set forth in Section 3(b).


          (p)
“Standard Provisions” mean these Standard Provisions that form a part of the
Certificate of Designations relating to the Designated Preferred Stock. 


          (q)
“Successor Preferred Stock” has the meaning set forth in Section 5(a). 


          (r)
“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 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 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 otherwise fall on a day that is not a Business Day, the
dividend payment due on that date will be postponed to the next day that is a
Business Day and no additional dividends will accrue as a result of that
postponement. The period from and including any Dividend Payment Date to, but 


A-2






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


          Holders
of Designated Preferred Stock shall not be entitled to any dividends, whether
payable in cash, securities or other property, other than dividends (if any)
declared and payable on Designated Preferred Stock as specified in this Section
3 (subject to the other provisions of the 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 Corporation
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 of shares of Common Stock or other Junior Stock in connection with
the administration of any employee benefit plan in the ordinary course of
business (including purchases to offset the Share Dilution Amount (as defined
below) pursuant to a publicly announced repurchase plan) and consistent with
past practice, provided that any
purchases to offset the Share Dilution Amount shall in no event exceed the
Share Dilution Amount; (ii) purchases or other acquisitions by a broker-dealer
subsidiary of the Corporation solely for the purpose of market-making,
stabilization or customer facilitation transactions in Junior Stock or Parity
Stock in the ordinary course of its business; (iii) purchases by a
broker-dealer subsidiary of the Corporation of capital stock of the Corporation
for resale pursuant to an offering by the Corporation of such capital stock
underwritten by such broker-dealer subsidiary; (iv) any dividends or
distributions of rights or Junior Stock in connection with a stockholders’ 


A-3






rights plan or
any redemption or repurchase of rights pursuant to any stockholders’ rights
plan; (v) the acquisition by the Corporation 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 Corporation or any of its subsidiaries),
including as trustees or custodians; and (vi) 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. “Share Dilution Amount” means the increase in the number
of diluted shares outstanding (determined in accordance with generally accepted
accounting principles in the United States, and as measured from the date of
the Corporation’s consolidated financial statements most recently filed with
the Securities and Exchange Commission prior to the Original Issue Date)
resulting from the grant, vesting or exercise of equity-based compensation to
employees and equitably adjusted for any stock split, stock dividend, reverse
stock split, reclassification or similar transaction.


          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 (or, 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 of such dividends declared shall bear the same
ratio to each other as all accrued and unpaid 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 Corporation 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-4






          (a) Voluntary or Involuntary Liquidation.
    In the event of any liquidation, dissolution or winding up of the affairs
    of the Corporation, whether voluntary or involuntary, holders of Designated
    Preferred Stock shall be entitled to receive for each share of Designated
    Preferred Stock, out of the assets of the Corporation or proceeds thereof
    (whether capital or surplus) available for distribution to stockholders of
    the Corporation, subject to the rights of any creditors of the Corporation,
    before any distribution of such assets or proceeds is made to or set aside
    for the holders of Common Stock and any other stock of the Corporation ranking
    junior to Designated Preferred Stock as to such distribution, payment in
    full in an amount equal to the sum of (i) the Liquidation Amount per share
    and (ii) the amount of any accrued and unpaid dividends (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 Corporation or proceeds thereof are not sufficient to pay in
full the amounts payable with respect to all outstanding shares of Designated
Preferred Stock and the corresponding amounts payable with respect of any other
stock of the Corporation ranking equally with Designated Preferred Stock as to
such distribution, holders of Designated Preferred Stock and the holders of
such other stock shall share ratably in any such distribution in proportion to
the full respective distributions to which they are entitled.


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


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


          Section
5. Redemption.


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


A-5








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 Corporation, at its option,
subject to the approval of the Appropriate Federal Banking Agency, may redeem,
in whole or in part, at any time and from time to time, 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; provided that (x) the Corporation (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 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 Corporation (or any successor by Business Combination) from
such Qualified Equity Offerings (including Qualified Equity Offerings of such
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 Corporation 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 Corporation. Such mailing shall be at
least 30 days and not more than 60 days before the date fixed for redemption.
Any notice mailed as provided in this Subsection shall be conclusively presumed
to have been duly given, whether or not the holder receives such notice, but
failure duly to give such notice by mail, or any defect in such notice or in
the mailing thereof, to any holder of shares of Designated Preferred Stock
designated for redemption shall not affect the validity of the proceedings for
the redemption of any other shares of Designated Preferred Stock.
Notwithstanding the foregoing, if shares of Designated Preferred Stock are
issued in book-entry form through The Depository Trust Corporation or any other
similar facility, notice of 


A-6






redemption may
be given to the holders of Designated Preferred Stock at such time and in any
manner permitted by such facility. Each notice of redemption given to a holder
shall state: (1) the redemption date; (2) the number of shares of Designated
Preferred Stock to be redeemed and, if less than all the shares held by such
holder are to be redeemed, the number of such shares to be redeemed from such
holder; (3) the redemption price; and (4) the place or places where
certificates for such shares are to be surrendered for payment of the
redemption price. 


          (d)
Partial Redemption. In case of any redemption of part of the shares of
Designated Preferred Stock at the time outstanding, the shares to be redeemed
shall be selected either pro rata
or in such other manner as the Board of Directors or a duly authorized
committee thereof may determine to be fair and equitable. 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 all the shares represented by any certificate
are redeemed, a new certificate shall be issued representing the unredeemed
shares without charge to the holder thereof. 


          (e)
Effectiveness of Redemption. If notice of redemption has been duly given
and if on or before the redemption date specified in the notice all funds
necessary for the redemption have been deposited by the Corporation, in trust
for the pro rata benefit of the
holders of the shares called for redemption, with a bank or trust company doing
business in the Borough of Manhattan, The City of New York, and having a
capital and surplus of at least $500 million and selected by the Board of
Directors, so as to be and continue to be available solely therefor, then,
notwithstanding that any certificate for any share so called for redemption has
not been surrendered for cancellation, on and after the redemption date
dividends shall cease to accrue on all shares so called for redemption, all
shares so called for redemption shall no longer be deemed outstanding and all
rights with respect to such shares shall forthwith on such redemption date
cease and terminate, except only the right of the holders thereof to receive
the amount payable on such redemption from such bank or trust company, without
interest. Any funds unclaimed at the end of three years from the redemption
date shall, to the extent permitted by law, be released to the Corporation,
after which time the holders of the shares so called for redemption shall look
only to the Corporation for payment of the redemption price of such shares. 


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


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


          Section
7. Voting Rights. 


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


A-7






          (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, whether or not
consecutive, the authorized number of directors of the Corporation shall
automatically be increased by two and the holders of the Designated Preferred
Stock shall have the right, with holders of shares of any one 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 Corporation’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 Corporation to violate
any corporate governance requirements of any securities exchange or other
trading facility on which securities of the Corporation may then be listed or
traded that listed or traded companies must have a majority of independent
directors. Upon any termination of the right of the holders of shares of
Designated Preferred Stock 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 class together with the 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 of stockholders 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 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
 Corporation ranking senior to Designated Preferred Stock with respect to
 either or both the payment of dividends and/or the distribution of assets on
 any liquidation, dissolution or winding up of the Corporation; 





A-8







	
 

	
 


	
 

	
          (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
 Corporation with another corporation or other entity, unless in each case (x)
 the shares of Designated Preferred Stock remain outstanding or, in the case
 of any such merger or consolidation with respect to which the Corporation is
 not the surviving or resulting entity, are converted into or exchanged for
 preference securities of the surviving or resulting entity or its ultimate
 parent, and (y) such shares remaining outstanding or such preference
 securities, as the case may be, have such rights, preferences, privileges and
 voting powers, and limitations and restrictions thereof, 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), any increase in the amount of the authorized Preferred
Stock, including any increase in the authorized amount of Designated Preferred
Stock necessary to satisfy preemptive or similar rights granted by the
Corporation to other persons prior to the Signing Date, or the creation and
issuance, or an increase in the authorized or issued amount, whether pursuant
to preemptive or similar rights or otherwise, of any other series of Preferred
Stock, or any securities convertible into or exchangeable or exercisable for
any other series of Preferred Stock, ranking equally with and/or junior to
Designated Preferred Stock with respect to the payment of dividends (whether
such dividends are cumulative or non-cumulative) and the distribution of assets
upon liquidation, dissolution or winding up of the Corporation will not be
deemed to adversely affect the rights, preferences, privileges or voting
powers, and shall not require the affirmative vote or consent of, the holders
of outstanding shares of the Designated Preferred Stock. 


          (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
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 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 


A-9






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 Corporation and the transfer agent for Designated Preferred Stock may deem
and treat the record holder of any share of Designated Preferred Stock as the
true and lawful owner thereof for all purposes, and neither the Corporation nor
such transfer agent shall be affected by any notice to the contrary. 


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


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


          Section
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. 


A-10






ANNEX B 


FORM OF WAIVER


In
consideration for the benefits I will receive as a result of my employer’s
participation in the United States Department of the Treasury’s TARP Capital
Purchase Program, I hereby voluntarily waive any claim against the United
States or my employer for any changes to my compensation or benefits that are
required to comply with the regulation issued by the Department of the Treasury
as published in the Federal Register on October 20, 2008. 


I acknowledge
that this regulation may require modification of the compensation, bonus,
incentive and other benefit plans, arrangements, policies and agreements
(including so-called “golden parachute” agreements) 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. 


This waiver
includes all claims I may have under the laws of the United States or any state
related to the requirements imposed by the aforementioned regulation, including
without limitation a claim for any compensation or other payments I would
otherwise receive, any challenge to the process by which this regulation was
adopted and any tort or constitutional claim about the effect of these
regulations on my employment relationship. 






ANNEX C 


FORM 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 with 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 of the 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. 


          (d)
The shares of Common Stock issuable upon exercise of the Warrant have been duly
authorized and reserved for issuance upon exercise of the Warrant and when so
issued in accordance with the terms of the Warrant will be validly issued,
fully paid and non-assessable [insert, if applicable:, subject
to the approvals of the Company’s stockholders set forth on Schedule C]. 


          (e)
The Company has the corporate power and authority to execute and deliver the
Agreement and the Warrant and [insert, if applicable:, subject
to the approvals of the Company’s stockholders set forth on Schedule C,] to carry out its obligations thereunder
(which includes the issuance of the Preferred Shares, Warrant and Warrant
Shares). 


          (f)
The execution, delivery and performance by the Company of the Agreement and the
Warrant and the consummation of the transactions contemplated thereby have been
duly authorized by all necessary corporate action on the part of the Company
and its stockholders, and no further approval or authorization is required on
the part of the Company [insert, if applicable:, subject,
in each case, to the approvals of the Company’s stockholders set forth on Schedule
C]. 


          (g)
The Agreement is a valid and binding obligation of the 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; provided, however,
such counsel need express no opinion with respect to Section 4.5(g) or the
severability provisions of the Agreement insofar as Section 4.5(g) is
concerned. 






ANNEX D 


FORM OF WARRANT TO PURCHASE COMMON 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
STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR
SUCH LAWS. 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. 


	
 


	
WARRANT 

 to purchase


	
12,743,235

	




	
Shares of Common Stock


	
 


	
of First
 Horizon National Corporation


	
 


	
Issue Date: November
 14, 2008





          1.
Definitions. Unless the context otherwise requires, when used herein the
following terms shall have the meanings indicated. 


          “Affiliate” has the meaning ascribed to
it
in the Purchase Agreement. 


          “Appraisal Procedure” means a procedure
whereby two independent appraisers, one chosen by the Company and one by the
Original Warrantholder, shall mutually agree upon the determinations then the
subject of appraisal. Each party shall deliver a notice to the other appointing
its appraiser within 15 days after the Appraisal Procedure is invoked. If
within 30 days after appointment of the two appraisers they are unable to agree
upon the amount in question, a third independent appraiser shall be chosen
within 10 days thereafter by the mutual consent of such first two appraisers.
The decision of the third appraiser so appointed and chosen shall be given
within 30 days after the selection of such third appraiser. If three appraisers
shall be appointed and the determination of one appraiser is disparate from the
middle determination by more than twice the amount by which the other
determination is disparate from the middle determination, then the
determination of such appraiser shall be excluded, the remaining two
determinations shall be averaged and such average shall be binding and
conclusive upon the 






Company and
the Original Warrantholder; otherwise, the average of all three determinations
shall be binding upon the Company and the Original Warrantholder. The costs of
conducting any Appraisal Procedure shall be borne by the Company. 


          “Board of Directors” means the board of
directors of the Company, including any duly authorized committee thereof. 


          “Business Combination” means a merger,
consolidation, statutory share exchange or similar transaction that requires
the approval of the Company’s stockholders. 


          “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. 


          “Capital Stock” means (A) with respect to
any Person that is a corporation or company, any and all shares, interests,
participations or other equivalents (however designated) of capital or capital
stock of such Person and (B) with respect to any Person that is not a
corporation or company, any and all partnership or other equity interests of
such Person. 


          “Charter” means, with respect to any
Person, its certificate or articles of incorporation, articles of association,
or similar organizational document. 


          “Common Stock” has the meaning ascribed
to
it in the Purchase Agreement. 


          “Company” means the Person whose name,
corporate or other organizational form and jurisdiction of organization is set
forth in Item 1 of Schedule A hereto. 


          “conversion” has the meaning set forth in
Section 13(B). 


          “convertible securities” has the meaning
set forth in Section 13(B). 


          “CPP” has the meaning ascribed to it in
the
Purchase Agreement. 


          “Exchange 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. 


          “Expiration Time” has the meaning set
forth
in Section 3. 


          “Fair Market Value” means, with respect
to
any security or other property, the fair market value of such security or other
property as determined by the Board of Directors, acting in good faith or, with
respect to Section 14, as determined by the Original Warrantholder acting in
good faith. For so long as the Original Warrantholder holds this Warrant or any
portion thereof, it may object in writing to the Board of Director’s calculation
of fair market value within 10 days of receipt of written notice thereof. If
the Original Warrantholder and the Company are unable to agree on fair market
value during the 10-day period following the delivery of the Original
Warrantholder’s objection, the Appraisal Procedure may be invoked by either
party to 


2






determine Fair
Market Value by delivering written notification thereof not later than the 30th
day after delivery of the Original Warrantholder’s objection. 


          “Governmental Entities” has the meaning
ascribed to it in the Purchase Agreement. 


          “Initial Number” has the meaning set
forth
in Section 13(B). 


         “Issue Date” means the date set forth in
Item 3 of Schedule A hereto. 


          “Market Price” means, with respect to a
particular security, on any given day, the last reported sale price regular way
or, in case no such reported sale takes place on such day, the average of the
last closing bid and ask prices regular way, in either case on the principal
national securities exchange on which the applicable securities are listed or
admitted to trading, or if not listed or admitted to trading on any national
securities exchange, the average of the closing bid and ask prices as furnished
by two members of the Financial Industry Regulatory Authority, Inc. selected
from time to time by the Company for that purpose. “Market Price” shall be
determined without reference to after hours or extended hours trading. If such
security is not listed and traded in a manner that the quotations referred to
above are available for the period required hereunder, the Market Price per
share of Common Stock shall be deemed to be (i) in the event that any portion
of the Warrant is held by the Original Warrantholder, the fair market value per
share of such security as determined in good faith by the Original
Warrantholder or (ii) in all other circumstances, the fair market value per
share of such security as determined in good faith by the Board of Directors in
reliance on an opinion of a nationally recognized independent investment
banking corporation retained by the Company for this purpose and certified in a
resolution to the Warrantholder. For the purposes of determining the Market
Price of the Common Stock on the “trading day” preceding, on or following the
occurrence of an event, (i) that trading day shall be deemed to commence
immediately after the regular scheduled closing time of trading on the New York
Stock Exchange or, if trading is closed at an earlier time, such earlier time
and (ii) that trading day shall end at the next regular scheduled closing time,
or if trading is closed at an earlier time, such earlier time (for the
avoidance of doubt, and as an example, if the Market Price is to be determined
as of the last trading day preceding a specified event and the closing time of
trading on a particular day is 4:00 p.m. and the specified event occurs at 5:00
p.m. on that day, the Market Price would be determined by reference to such
4:00 p.m. closing price). 


          “Ordinary Cash Dividends” means a regular
quarterly cash dividend on shares of Common Stock out of surplus or net profits
legally available therefor (determined in accordance with generally accepted
accounting principles in effect from time to time), provided that Ordinary Cash Dividends shall not include any
cash dividends paid subsequent to the Issue Date to the extent the aggregate
per share dividends paid on the outstanding Common Stock in any quarter exceed
the amount set forth in Item 4 of Schedule A hereto, as adjusted for any stock
split, stock dividend, reverse stock split, reclassification or similar
transaction. 


          “Original Warrantholder” means the United
States Department of the Treasury. Any actions specified to be taken by the
Original Warrantholder hereunder may only be taken by such Person and not by
any other Warrantholder. 


3








          “Permitted Transactions” has the meaning
set forth in Section 13(B).


          “Person” has the meaning given to it in
Section 3(a)(9) of the Exchange Act and as used in Sections 13(d)(3) and
14(d)(2) of the Exchange Act. 


          “Per Share Fair Market Value” has the
meaning set forth in Section 13(C). 


          “Preferred
Shares” means the perpetual preferred stock issued to
the Original Warrantholder on the Issue Date pursuant to the Purchase
Agreement. 


          “Pro Rata Repurchases” means any purchase
of shares of Common Stock by the Company or any Affiliate thereof pursuant to
(A) any tender offer or exchange offer subject to Section 13(e) or 14(e) of the
Exchange Act or Regulation 14E promulgated thereunder or (B) any other offer
available to substantially all holders of Common Stock, in the case of both (A)
or (B), whether for cash, shares of Capital Stock of the Company, other
securities of the Company, evidences of indebtedness of the Company or any
other Person or any other property (including, without limitation, shares of
Capital Stock, other securities or evidences of indebtedness of a subsidiary),
or any combination thereof, effected while this Warrant is outstanding. The “Effective Date” of a Pro Rata Repurchase
shall mean the date of acceptance of shares for purchase or exchange by the
Company under any tender or exchange offer which is a Pro Rata Repurchase or
the date of purchase with respect to any Pro Rata Repurchase that is not a
tender or exchange offer. 


          “Purchase Agreement” means the Securities
Purchase Agreement – Standard Terms incorporated into the Letter Agreement,
dated as of the date set forth in Item 5 of Schedule A hereto, as amended from
time to time, between the Company and the United States Department of the
Treasury (the “Letter Agreement”),
including all annexes and schedules thereto. 


          “Qualified Equity Offering” has the
meaning
ascribed to it in the Purchase Agreement. 


          “Regulatory Approvals” with respect to
the
Warrantholder, means, to the extent applicable and required to permit the
Warrantholder to exercise this Warrant for shares of Common Stock and to own
such Common 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. 


          “trading
day” means (A) if the shares of Common Stock are not
traded on any national or regional securities exchange or association or
over-the-counter market, a business day or (B) if the shares of Common Stock
are traded on any national or regional securities exchange or 


4






association
or over-the-counter market, a business day on which such relevant exchange or
quotation system is scheduled to be open for business and on which the shares of
Common Stock (i) are not suspended from trading on any national or regional
securities exchange or association or over-the-counter market for any period or
periods aggregating one half hour or longer; and (ii) have traded at least once
on the national or regional securities exchange or association or
over-the-counter market that is the primary market for the trading of the
shares of Common Stock. 


          “U.S. GAAP” means United States generally
accepted accounting principles. 


          “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 of the Treasury or its permitted assigns
(the “Warrantholder”) is
entitled, upon the terms 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 of the number of
fully paid and nonassessable shares of Common Stock set forth in Item 6 of
Schedule A hereto, at a purchase price per share of Common Stock equal to the
Exercise Price. The number of shares of Common Stock (the “Shares”) and the Exercise Price are
subject to adjustment as provided herein, and all references to “Common Stock,”
“Shares” and “Exercise Price” herein shall be deemed to include any such
adjustment or series of adjustments. 


          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
Warrantholder, at any time or from time to time after the execution and delivery
of this 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 of the 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 Warrantholder, at the principal executive office of the
Company located at the address set forth in Item 7 of Schedule A hereto(or such other office or agency of the
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 of the
Company), and (B) payment of the Exercise Price for the Shares thereby
purchased: 


                    (i)
by having the Company withhold, from the shares of Common Stock that would
otherwise be delivered to the Warrantholder upon such exercise, shares of
Common stock issuable upon exercise of the Warrant equal in value to the
aggregate Exercise Price as to which this Warrant is so exercised based on the
Market Price of the Common Stock on the trading day on which this Warrant is
exercised and the Notice of Exercise is delivered to the Company pursuant to
this Section 3, or 


                    (ii)
with the consent of both the Company and the Warrantholder, by tendering in
cash, by certified or cashier’s check payable to the order of the Company, or
by wire transfer of immediately available funds to an account designated by the
Company. 


5






                    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 form for the purchase of that number of Shares equal to
the difference between the number 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 of this Warrant for Shares is subject to the
condition that the Warrantholder will have first received any applicable
Regulatory Approvals. 


          4.
Issuance of Shares; Authorization; Listing. 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 of this Warrant in accordance with the provisions of
Section 3 will be duly and validly authorized and issued, fully paid and
nonassessable and free from all taxes, liens and charges (other than liens or
charges created by the Warrantholder, income and franchise taxes incurred in
connection with the exercise of the 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 of the close
of business on the date on which this Warrant and payment of the Exercise Price
are delivered to the Company in accordance with the terms of this Warrant,
notwithstanding that the stock transfer books of the Company may then be closed
or certificates representing such Shares may not be actually delivered on such
date. The Company will at all times reserve and keep available, out of its
authorized but unissued Common Stock, solely for the purpose of providing for
the exercise of this Warrant, the aggregate number of shares of Common Stock
then issuable upon exercise of this Warrant at any time. The Company will (A)
procure, at its sole expense, the listing of the Shares issuable upon exercise
of this Warrant at any time, subject to issuance or notice of issuance, on all
principal stock exchanges on which the Common Stock is then listed or traded
and (B) maintain such listings of such Shares at all times after issuance. The
Company will use reasonable best efforts to ensure that the Shares may be
issued without violation of any applicable law or regulation or of any
requirement of any securities exchange on which the Shares are listed or
traded. 


          5.
No Fractional Shares or Scrip. No fractional Shares or scrip
representing fractional Shares shall be issued upon any exercise of this
Warrant. In lieu of any fractional Share to which the Warrantholder would otherwise
be entitled, the Warrantholder shall be entitled to receive a cash payment
equal to the Market Price of the Common Stock on the last trading day preceding
the date of exercise less the pro-rated Exercise Price for such fractional
share. 


          6.
No Rights as Stockholders; Transfer Books. This Warrant does not entitle
the Warrantholder to any voting rights or other rights as a stockholder of the
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






          7. 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 of the issuance of such certificates, all of which taxes and expenses
shall be paid by the Company. 


          8. Transfer/Assignment.



          (A)
Subject to compliance with clause (B) of this Section 8, this Warrant and all
rights hereunder are transferable, in whole or in part, upon the books of the
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, of the
same tenor and date as this Warrant but registered in the name of one or more
transferees, upon surrender of this Warrant, duly endorsed, to the office or
agency of the 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 8 shall be
paid by the Company. 


          (B)
The transfer of the Warrant and the Shares issued upon exercise of the Warrant
are subject to the restrictions set forth in Section 4.4 of the Purchase
Agreement. If and for so long as required by the Purchase Agreement, this
Warrant shall contain the legends as set forth in Sections 4.2(a) and 4.2(b) of
the Purchase Agreement. 


          9.
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 of the 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 of the Company, and the Company shall be entitled to rely
in all respects, prior to written notice to the contrary, upon such registry. 


          10.
Loss, Theft, Destruction or Mutilation of Warrant. Upon receipt by the
Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this 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 of this Warrant, the Company shall make and deliver,
in lieu of such 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. 


          11.
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. 


          12.
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, if the Company is not
required to file such reports, it will, upon the request of any 


7






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
permitted by the terms of this Warrant and the Purchase Agreement, sell this
Warrant without registration under the Securities Act within 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. 


          13.
Adjustments and Other Rights. The Exercise Price and the number of
Shares issuable upon exercise of this Warrant shall be subject to adjustment
from time to time as follows; provided,
that if more than one subsection of this Section 13 is applicable to a single
event, the subsection shall be applied that produces the largest adjustment and
no single event shall cause an adjustment under more than one subsection of
this Section 13 so as to result in duplication: 


          (A)
Stock Splits, Subdivisions, Reclassifications or Combinations. If the
Company shall (i) declare and pay a dividend or make a distribution on its
Common Stock in shares of Common Stock, (ii) subdivide or reclassify the
outstanding shares of Common Stock into a greater number of shares, or (iii)
combine or reclassify the outstanding shares of Common Stock into a smaller
number of shares, the number of Shares issuable upon exercise of this Warrant
at the time of the record date for such dividend or distribution or the
effective date of such subdivision, combination or reclassification shall be
proportionately adjusted so that the Warrantholder after such date shall be
entitled to purchase the number of shares of Common Stock which such holder
would have owned or been entitled to receive in respect of the shares of Common
Stock subject to this Warrant after such date had this Warrant been exercised
immediately prior to such date. In such event, the Exercise Price in effect at
the time of the record date for such dividend or distribution or the effective
date of such subdivision, combination or reclassification shall be adjusted to
the number obtained by dividing (x) the product of (1) the number of Shares
issuable upon the exercise of this Warrant before such adjustment and (2) the
Exercise Price in effect immediately prior to the record or effective date, as
the case may be, for the dividend, distribution, subdivision, combination or
reclassification giving rise to this adjustment by (y) the new number of Shares
issuable upon exercise of the Warrant determined pursuant to the immediately
preceding sentence. 


          (B)
Certain Issuances of Common Shares or Convertible Securities. Until the
earlier of (i) the date on which the Original Warrantholder no longer holds
this Warrant or any portion thereof and (ii) the third anniversary of the Issue
Date, if the Company shall issue shares of Common Stock (or rights or warrants
or other securities exercisable or convertible into or exchangeable
(collectively, a “conversion”)
for shares of Common Stock) (collectively, “convertible
securities”) (other than in Permitted Transactions (as defined
below) or a transaction to which subsection (A) of this Section 13 is
applicable) without consideration or at a consideration per share (or having a
conversion price per share) that is less than 90% of the Market Price on the
last trading day preceding the date of the agreement on pricing such shares (or
such convertible securities) then, in such event: 


8






	
 

	
 


	
 

	
(A) the
 number of Shares issuable upon the exercise of this Warrant immediately prior
 to the date of the agreement on pricing of such shares (or of such
 convertible securities) (the “Initial
 Number”) shall be increased to the number obtained by multiplying
 the Initial Number by a fraction (A) the numerator of which shall be the sum
 of (x) the number of shares of Common Stock of the Company outstanding on
 such date and (y) the number of additional shares of Common Stock issued (or
 into which convertible securities may be exercised or convert) and (B) the
 denominator of which shall be the sum of (I) the number of shares of Common
 Stock outstanding on such date and (II) the number of shares of Common Stock
 which the aggregate consideration receivable by the Company for the total
 number of shares of Common Stock so issued (or into which convertible
 securities may be exercised or convert) would purchase at the Market Price on
 the last trading day preceding the date of the agreement on pricing such
 shares (or such convertible securities); and 


	
 

	
 


	
 

	
(B) the
 Exercise Price payable upon exercise of the Warrant shall be adjusted by
 multiplying such Exercise Price in effect immediately prior to the date of
 the agreement on pricing of such shares (or of such convertible securities)
 by a fraction, the numerator of which shall be the number of shares of Common
 Stock issuable upon exercise of this Warrant prior to such date and the
 denominator of which shall be the number of shares of Common Stock issuable
 upon exercise of this Warrant immediately after the adjustment described in
 clause (A) above. 





          For
purposes of the foregoing, the aggregate consideration receivable by the
Company in connection with the issuance of such shares of Common Stock or
convertible securities shall be deemed to be equal to the sum of the net
offering price (including the Fair Market Value of any non-cash consideration
and after deduction of any related expenses payable to third parties) of all
such securities plus the minimum aggregate amount, if any, payable upon
exercise or conversion of any such convertible securities into shares of Common
Stock; and “Permitted Transactions”
shall mean issuances (i) as consideration for or to fund the acquisition of
businesses and/or related assets, (ii) in connection with employee benefit
plans and compensation related arrangements in the ordinary course and
consistent with past practice approved by the Board of Directors, (iii) in
connection with a public or broadly marketed offering and sale of Common Stock
or convertible securities for cash conducted by the Company or its affiliates
pursuant to registration under the Securities Act or Rule 144A thereunder on a
basis consistent with capital raising transactions by comparable financial
institutions and (iv) in connection with the exercise of preemptive rights on
terms existing as of the Issue Date. Any adjustment made pursuant to this
Section 13(B) shall become effective immediately upon the date of such
issuance. 


          (C)
Other Distributions. In case the Company shall fix a record date for the
making of a distribution to all holders of shares of its Common Stock of
securities, evidences of indebtedness, assets, cash, rights or warrants
(excluding Ordinary Cash Dividends, dividends of its Common Stock and other
dividends or distributions referred to in Section 13(A)), in each such case,
the Exercise Price in effect prior to such record date shall be reduced
immediately thereafter to the price determined by multiplying the Exercise
Price in effect immediately prior to the reduction by the quotient of (x) the
Market Price of the Common Stock on the last trading day preceding the first
date on which the Common Stock trades regular way on the principal 


9






national
securities exchange on which the Common Stock is listed or admitted to trading
without the right to receive such distribution, minus the amount of cash and/or
the Fair Market Value of the securities, evidences of indebtedness, assets,
rights or warrants to be so distributed in respect of one share of Common Stock
(such amount and/or Fair Market Value, the “Per
Share Fair Market Value”) divided by (y) such Market Price on such
date specified in clause (x); such adjustment shall be made successively
whenever such a record date is fixed. In such event, the number of Shares
issuable upon the exercise of this Warrant shall be increased to the number
obtained by dividing (x) the product of (1) the number of Shares issuable upon
the exercise of this Warrant before such adjustment, and (2) the Exercise Price
in effect immediately prior to the distribution giving rise to this adjustment
by (y) the new Exercise Price determined in accordance with the immediately
preceding sentence. In the case of adjustment for a cash dividend that is, or
is coincident with, a regular quarterly cash dividend, the Per Share Fair
Market Value would be reduced by the per share amount of the portion of the
cash dividend that would constitute an Ordinary Cash Dividend. In the event
that such distribution is not so made, the Exercise Price and the number of
Shares issuable upon exercise of this Warrant then in effect shall be
readjusted, effective as of the date when the Board of Directors determines not
to distribute such shares, evidences of indebtedness, assets, rights, cash or
warrants, as the case may be, to the Exercise Price that would then be in
effect and the number of Shares that would then be issuable upon exercise of
this Warrant if such record date had not been fixed. 


          (D)
Certain Repurchases of Common Stock. In case the Company effects a Pro
Rata Repurchase of Common Stock, then the Exercise Price shall be reduced to
the price determined by multiplying the Exercise Price in effect immediately
prior to the Effective Date of such Pro Rata Repurchase by a fraction of which
the numerator shall be (i) the product of (x) the number of shares of Common
Stock outstanding immediately before such Pro Rata Repurchase and (y) the
Market Price of a share of Common Stock on the trading day immediately
preceding the first public announcement by the Company or any of its Affiliates
of the intent to effect such Pro Rata Repurchase, minus (ii) the aggregate
purchase price of the Pro Rata Repurchase, and of which the denominator shall
be the product of (i) the number of shares of Common Stock outstanding
immediately prior to such Pro Rata Repurchase minus the number of shares of
Common Stock so repurchased and (ii) the Market Price per share of Common Stock
on the trading day immediately preceding the first public announcement by the
Company or any of its Affiliates of the intent to effect such Pro Rata
Repurchase. In such event, the number of shares of Common Stock issuable upon
the exercise of this Warrant shall be increased to the number obtained by dividing
(x) the product of (1) the number of Shares issuable upon the exercise of this
Warrant before such adjustment, and (2) the Exercise Price in effect
immediately prior to the Pro Rata Repurchase giving rise to this adjustment by
(y) the new Exercise Price determined in accordance with the immediately
preceding sentence. For the avoidance of doubt, no increase to the Exercise
Price or decrease in the number of Shares issuable upon exercise of this
Warrant shall be made pursuant to this Section 13(D). 


          (E)
Business Combinations. In case of any Business Combination or
reclassification of Common Stock (other than a reclassification of Common Stock
referred to in Section 13(A)), the Warrantholder’s right to receive Shares upon
exercise of this Warrant shall be converted into the right to exercise this
Warrant to acquire the number of shares of stock or other securities or
property (including cash) which the Common Stock issuable (at the time of such
Business Combination or reclassification) upon exercise of this Warrant
immediately prior to such 


10






Business
Combination or reclassification would have been entitled to receive upon
consummation of such Business Combination or reclassification; and in any such
case, if necessary, the provisions set forth herein with respect to the rights
and interests thereafter of the Warrantholder shall be appropriately adjusted
so as to be applicable, as nearly as may reasonably be, to the Warrantholder’s
right to exercise this Warrant in exchange for any shares of stock or other
securities or property pursuant to this paragraph. In determining the kind and
amount of stock, securities or the property receivable upon exercise of this
Warrant following the consummation of such Business Combination, if the holders
of Common Stock have the right to elect the kind or amount of consideration
receivable upon consummation of such Business Combination, then the
consideration that the Warrantholder shall be entitled to receive upon exercise
shall be deemed to be the types and amounts of consideration received by the
majority of all holders of the shares of common stock that affirmatively make
an election (or of all such holders if none make an election). 


          (F)
Rounding of Calculations; Minimum Adjustments. All calculations under
this Section 13 shall be made to the nearest one-tenth (1/10th) of a cent or to
the nearest one-hundredth (1/100th) of a share, as the case may be. Any
provision of this Section 13 to the contrary notwithstanding, no adjustment in
the Exercise Price or the number of Shares into which this Warrant is
exercisable shall be made if the amount of such adjustment would be less than
$0.01 or one-tenth (1/10th) of a share of Common Stock, but any such amount
shall be carried forward and an adjustment with respect thereto shall be made
at the time of and together with any subsequent adjustment which, together with
such amount and any other amount or amounts so carried forward, shall aggregate
$0.01 or 1/10th of a share of Common Stock, or more. 


          (G)
Timing of Issuance of Additional Common Stock Upon Certain Adjustments.
In any case in which the provisions of this Section 13 shall require that an
adjustment shall become effective immediately after a record date for an event,
the Company may defer until the occurrence of such event (i) issuing to the
Warrantholder of this Warrant exercised after such record date and before the
occurrence of such event the additional shares of Common Stock issuable upon
such exercise by reason of the adjustment required by such event over and above
the shares of Common Stock issuable upon such exercise before giving effect to
such adjustment and (ii) paying to such Warrantholder any amount of cash in
lieu of a fractional share of Common Stock; provided,
however, that the Company upon
request shall deliver to such Warrantholder a due bill or other appropriate
instrument evidencing such Warrantholder’s right to receive such additional
shares, and such cash, upon the occurrence of the event requiring such
adjustment. 


          (H)
Completion of Qualified Equity Offering. In the event the Company (or
any successor by Business Combination) completes one or more Qualified Equity
Offerings on or prior to December 31, 2009 that result in the Company (or any
such successor ) receiving aggregate gross proceeds of not less than 100% of
the aggregate liquidation preference of the Preferred Shares (and any preferred
stock issued by any such successor to the Original Warrantholder under the
CPP), the number of shares of Common Stock underlying the portion of this
Warrant then held by the Original Warrantholder shall be thereafter reduced by
a number of shares of Common Stock equal to the product of (i) 0.5 and (ii) the
number of shares underlying 


11






the Warrant on
the Issue Date (adjusted to take into account all other theretofore made
adjustments pursuant to this Section 13). 


          (I)
Other Events. For so long as the Original Warrantholder holds this
Warrant or any portion thereof, if any event occurs as to which the provisions of
this Section 13 are not strictly applicable or, if strictly applicable, would
not, in the good faith judgment of the Board of Directors of the Company,
fairly and adequately protect the purchase rights of the Warrants in accordance
with the essential intent and principles of such provisions, 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. The Exercise Price or the number of Shares into
which this Warrant is exercisable shall not be adjusted in the event of a
change in the par value of the Common Stock or a change in the jurisdiction of
incorporation of the Company. 


          (J)
Statement Regarding Adjustments. Whenever the Exercise Price or the
number of Shares into which this Warrant is exercisable shall be adjusted as
provided in Section 13, the Company shall forthwith file at the principal
office of the 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 of such statement to be
sent by mail, first class postage prepaid, to each Warrantholder at the address
appearing in the Company’s records. 


          (K)
Notice of Adjustment Event. In the event that the Company shall propose
to take any action of the type described in this Section 13 (but only if the
action of the type described in this Section 13 would result in an adjustment
in the Exercise Price or the number of Shares into which this Warrant is
exercisable or a change in the type of securities or property to be delivered
upon exercise of this Warrant), the Company shall give notice to the
Warrantholder, in the manner set forth in Section 13(J), which notice shall
specify the record date, if any, with respect to any such action and the
approximate date on which such action is to take place. Such notice shall also
set forth the facts with respect thereto as shall be reasonably necessary to
indicate the effect on the Exercise Price and the number, kind or class of
shares or other securities or property which shall be deliverable upon exercise
of this Warrant. In the case of any action which would require the fixing of a
record date, such notice shall be given at least 10 days prior to the date so
fixed, and in case of all other action, such notice shall be given at least 15
days prior to the taking of such proposed action. Failure to give such notice,
or any defect therein, shall not affect the legality or validity of any such
action. 


          (L)
Proceedings Prior to Any Action Requiring Adjustment. As a condition
precedent to the taking of any action which would require an adjustment
pursuant to this Section 13, the Company shall take any action which may be
necessary, including obtaining regulatory, New York Stock Exchange, NASDAQ
Stock Market or other applicable national securities exchange or stockholder
approvals or exemptions, in order that the Company may thereafter validly and
legally issue as fully paid and nonassessable all shares of Common Stock that the
Warrantholder is entitled to receive upon exercise of this Warrant pursuant to
this Section 13. 


12






          (M)
Adjustment Rules. Any adjustments pursuant to this Section 13 shall be
made successively whenever an event referred to herein shall occur. If an
adjustment in Exercise Price made hereunder would reduce the Exercise Price to
an amount below par value of the Common Stock, then such adjustment in Exercise
Price made hereunder shall reduce the Exercise Price to the par value of the
Common Stock. 


          14.
Exchange. At any time following the date on which the shares of Common
Stock of the Company are no longer listed or admitted to trading on a national
securities exchange (other than in connection with any Business Combination),
the Original Warrantholder may cause the Company to exchange all or a portion
of this Warrant for an economic interest (to be determined by the Original
Warrantholder after consultation with the Company) of the Company classified as
permanent equity under U.S. GAAP having a value equal to the Fair Market Value
of the portion of the Warrant so exchanged. The Original Warrantholder shall
calculate any Fair Market Value required to be calculated pursuant to this
Section 14, which shall not be subject to the Appraisal Procedure. 


          15.
No Impairment. The Company will not, by amendment of its 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 of the 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 of this Warrant and in
taking of all such action as may be necessary or appropriate in order to
protect the rights of the Warrantholder. 


          16.
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 within such State. Each of the Company and the Warrantholder
agrees (a) to submit to the exclusive jurisdiction and venue of the United States
District Court for the District of Columbia 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 20 below and upon the Warrantholder at the address for the
Warrantholder set forth in the registry maintained by the Company pursuant to
Section 9 hereof. To the extent permitted by applicable law, each of the
Company and the Warrantholder hereby unconditionally waives trial by jury in
any civil legal action or proceeding relating to the Warrant or the
transactions contemplated hereby or thereby. 


          17.
Binding Effect. This Warrant shall be binding upon any successors or
assigns of the Company. 


          18.
Amendments. This Warrant may be amended and the observance of any term
of this Warrant may be waived only with the written consent of the Company and
the Warrantholder. 


          19.
Prohibited Actions. The Company agrees that it will not take any action
which would entitle the Warrantholder to an adjustment of the Exercise Price if
the total number of shares of Common Stock issuable after such action upon
exercise of this Warrant, together with 


13






all shares of
Common Stock then outstanding and all shares of Common Stock then issuable upon
the exercise of all outstanding options, warrants, conversion and other rights,
would exceed the total number of shares of Common Stock then authorized by its
Charter. 


          20.
Notices. Any notice, request, instruction or other document to be given
hereunder by any party to the other will be in writing and will be deemed to
have been duly given (a) on the date of delivery if delivered personally, or by
facsimile, upon confirmation of receipt, or (b) on the second business day
following the date of dispatch if delivered by a recognized next day courier
service. All notices hereunder shall be delivered as set forth in Item 8 of
Schedule A hereto, or pursuant to such other instructions as may be designated
in writing by the party to receive such notice. 


          21.
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 of page intentionally left blank]


14






	
 


	
[Form of Notice of Exercise]


	
Date: _________








	
 

	
 


	
TO:

	
First
 Horizon National Corporation 


	
 

	
 


	
RE:

	
Election to
 Purchase Common Stock 





          The
undersigned, pursuant to the provisions set forth in the attached Warrant,
hereby agrees to subscribe for and purchase the number of shares of the Common
Stock set forth below covered by such Warrant. The undersigned, in accordance
with Section 3 of the Warrant, hereby agrees to pay the aggregate Exercise
Price for such shares of Common Stock in the manner set forth below. A new
warrant evidencing the remaining shares of Common Stock covered by such
Warrant, but not yet subscribed for and purchased, if any, should be issued in
the name set forth below. 


Number of
Shares of Common Stock _______________________



Method of
 Payment of Exercise Price (note if cashless exercise pursuant to Section 3(i)
 of the Warrant or cash exercise pursuant to Section 3(ii) of the Warrant,
 with consent of the Company and the Warrantholder) _____________________


Aggregate Exercise Price:             
    _______________________



	
 

	
 

	
 

	
 


	
 

	
Holder:

	
 

	
 


	
 

	
 

	
 

	



	
 

	
By:

	
 

	
 


	
 

	
 

	
 

	



	
 

	
Name:

	
 

	
 


	
 

	
 

	
 

	



	
 

	
Title:

	
 

	
 


	
 

	
 

	
 

	






15






          IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by a
duly authorized officer. 


	
 

	
 


	
Dated:

	
   November
14, 2008  







	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
COMPANY: FIRST HORIZON NATIONAL CORPORATION


	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
By:

	
 

	
 


	
 

	
 

	
 

	
 

	



	
 

	
 

	
 

	
 

	
Name:  D.
 Bryan Jordan


	
 

	
 

	
 

	
 

	
Title:  Chief
 Executive Officer


	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
Attest:

	
 


	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
By:

	
 

	
 


	
 

	
 

	
 

	
 

	



	
 

	
 

	
 

	
 

	
Name:  Clyde
 A. Billings, Jr.


	
 

	
 

	
 

	
 

	
Title:  Corporate
 Secretary


	
 

	
 

	
 

	
 

	
 


	
 

	
[Signature Page to Warrant]





16






	
 


	
SCHEDULE A


	
 


	
Item 1


	
 


	
Name: First
 Horizon National Corporation


	
Corporate or
 other organizational form: Corporation


	
Jurisdiction
 of organization: Tennessee


	
 


	
Item 2


	
 


	
Exercise
 Price:1
 $10.20


	
 


	
Item 3


	
 


	
Issue Date:
    November 14, 2008


	
 


	
Item 4


	
 


	
Amount of
 last dividend declared prior to the Issue Date: last cash dividend declared in April 2008,
 payable July 1, 2008, was $0.20 per share. Since then, the cash dividend rate
 has been zero.


	
 


	
Item 5


	
 


	
Date of
 Letter Agreement between the Company and the United States Department of the
 Treasury: November 14, 2008


	
 


	
Item 6


	
 


	
Number of
 shares of Common Stock: 12,743,235


	
 


	
Item 7


	
 


	
Company’s
 address: 165 Madison Avenue


	
                                 Memphis,
 TN 38103


	
 


	
Item 8


	
 


	
Notice
 information:








	
 
	
 

	
 
	
Charles T.
 Tuggle, Jr.

	
 
	
Executive
 Vice President and General Counsel

	
 
	
First
 Horizon National Corporation

	
 
	
165 Madison
 Avenue, 8th Floor

	
 
	
Memphis, TN
 38103

	
 
	
Telephone:
 (901) 523-4989

	
 
	
Fax: (901)
 523-4556

	
 
	
 

	



	
1
	
Initial
 exercise price to be calculated based on the average of closing prices of the
 Common Stock on the 20 trading days ending on the last trading day prior to
 the date the Company’s application for participation in the Capital Purchase
 Program was approved by the United States Department of the Treasury.