Exhibit 10.1


 


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supplemented or superseded by the terms set forth herein or in the Schedules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

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  OLD
  SECOND BANCORP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  J. Douglas Cheatham

  
	
   

  	
   

  	
   Name:
  J. Douglas Cheatham

  
	
   

  	
   

  	
   Title:
  Executive Vice President and Chief Financial Officer

  
	
   

  	
   

  
	
  Date:
  January 16, 2009

  	
   

  



 
















 


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

  
	
  4.11

  	
  Bank and Thrift Holding Company Status

  	
  33

  



 


i

















 


	
  4.12

  	
  Predominantly Financial

  	
  34

  
	
   

  	
   

  	
   

  
	
   

  	
  Article V

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Miscellaneous

  	
   

  
	
   

  	
   

  	
   

  
	
  5.1

  	
  Termination

  	
  34

  
	
  5.2

  	
  Survival of Representations and Warranties

  	
  35

  
	
  5.3

  	
  Amendment

  	
  35

  
	
  5.4

  	
  Waiver of Conditions

  	
  35

  
	
  5.5

  	
  Governing Law: Submission to
  Jurisdiction, Etc.

  	
  35

  
	
  5.6

  	
  Notices

  	
  35

  
	
  5.7

  	
  Definitions

  	
  36

  
	
  5.8

  	
  Assignment

  	
  36

  
	
  5.9

  	
  Severability

  	
  36

  
	
  5.10

  	
  No Third Party Beneficiaries

  	
  37

  



 


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)

  
	
  Bank Holding Company

  	
   

  	
  4.11

  
	
  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)

  
	
  Federal Reserve

  	
   

  	
  4.11

  
	
  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)

  



 


iv

















 


	
  Term

  	
   

  	
  Location of

  Definition

  
	
  Letter Agreement

  	
   

  	
  Recitals

  
	
  officers

  	
   

  	
  5.7(c)

  
	
  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)

  
	
  Savings and Loan Holding Company

  	
   

  	
  4.11

  
	
  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.


 


14
















 


3.3           Sufficiency of Authorized
Common Stock; Exchange Listing.


 


(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.


 


4.11                           Bank
and Thrift Holding Company Status. 
If the Company is a Bank Holding Company or a Savings and Loan Holding
Company on the Signing Date, then the Company shall 


 


33

















 


maintain its status as a Bank
Holding Company or Savings and Loan Holding Company, as the case may be, for as
long as the Investor owns any Purchased Securities or Warrant Shares.  The Company shall redeem all Purchased
Securities and Warrant Shares held by the Investor prior to terminating its
status as a Bank Holding Company or Savings and Loan Holding Company, as
applicable.  “Bank Holding Company” means a company registered as such
with the Board of Governors of the Federal Reserve System (the “Federal Reserve”) pursuant to 12 U.S.C.
§1842 and the regulations of the Federal Reserve promulgated thereunder.  “Savings
and Loan Holding Company” means a company registered as such with
the Office of Thrift Supervision pursuant to 12 U.S.C. §1467(a) and the
regulations of the Office of Thrift Supervision promulgated thereunder.


 


4.12                           Predominantly
Financial. For as long as the Investor owns any Purchased Securities or
Warrant Shares, the Company, to the extent it is not itself an insured
depository institution, agrees to remain predominantly engaged in financial
activities.  A company is predominantly
engaged in financial activities if the annual gross revenues derived by the
company and all subsidiaries of the company (excluding revenues derived from
subsidiary depository institutions), on a consolidated basis, from engaging in
activities that are financial in nature or are incidental to a financial
activity under subsection (k) of Section 4 of the Bank Holding
Company Act of 1956 (12 U.S.C. 1843(k)) represent at least 85 percent of the
consolidated annual gross revenues of the company.


 


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.


 


34

















 


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 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 


 


35

















 


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.


 


(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 


 


36

















 


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.


 


*  *  *


 


37

















 


ANNEX A


 


FORM OF CERTIFICATE OF DESIGNATIONS


 


[SEE ATTACHED]


 

















 


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


 


[SEE ATTACHED]


 
















 


SCHEDULE A


 


ADDITIONAL TERMS AND CONDITIONS


 


Company
Information:


 


	
  Name of the Company:

  	
  Old
  Second Bancorp, Inc.

  
	
   

  	
   

  
	
  Corporate or other organizational form:

  	
  Corporation

  
	
   

  	
   

  
	
  Jurisdiction of Organization:

  	
  Delaware

  
	
   

  	
   

  
	
  Appropriate Federal Banking Agency:

  	
  Board
  of Governors of the Federal Reserve System (Federal Reserve 

  
	
   

  	
  Bank
  of Chicago)

  
	
   

  	
   

  
	
  Notice Information:

  	
  J. Douglas Cheatham

  Executive VP and Chief Financial Officer

  37 South River Street

  Aurora, Illinois 
  60506

  (630) 906-5484

  dcheatham@oldsecond.com

  



 


Terms of the Purchase:


 


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


 


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


 


Number of Shares of Preferred Stock Purchased:  73,000


 


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


 


Number of Initial Warrant Shares: 
815,339


 


Exercise Price of the Warrant:  $13.43


 


Purchase Price:  $73,000,000


 


Closing:


 


Location of Closing:  Telephonic


 


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


 


Date of Closing:  January 16, 2009


 

















 


Wire Information for Closing:                                                 ABA Number:  [Redacted]


Bank:  [Redacted]


Account Name:  [Redacted]


Account Number:  [Redacted]


Beneficiary:  [Redacted]


 


Contact
for Confirmation of Wire Information:


 


J. Douglas Cheatham


Executive VP and Chief Financial Officer


37 South River Street


Aurora, Illinois  60506


(630) 906-5484


dcheatham@oldsecond.com


 


Contact
for Preferred Stock Dividends:


 


Robin Hodgson


First Vice President and Corporate Secretary


37 South River Street


Aurora, Illinois  60506


(630) 906-5480


rhodgson@oldsecond.com


 

















 


SCHEDULE B


 


CAPITALIZATION


 


Capitalization
Date:  December 31,
2008


 


Common
Stock


 


Par value:  $1.00


 


Total Authorized:  20,000,000


 


Outstanding:  13,755,884


 


Subject to warrants, options, convertible securities, etc.:  722,132


 


Reserved for benefit plans and other issuances:  664,297


 


Remaining authorized but unissued: 
4,857,687


 


Shares issued after Capitalization Date (other than pursuant to
warrants, options, convertible securities, etc. as set forth above):


None


 


Preferred
Stock


 


Par value:  $1.00


 


Total Authorized:  300,000


 


Outstanding (by series):  None


 


Reserved for issuance:  10,000


 


Remaining authorized but unissued: 
290,000


 

















 


SCHEDULE C


 


REQUIRED STOCKHOLDERS APPROVALS


 


	
   

  	
   

  	
  Required

  	
   

  	
  % Vote Required

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Warrants –
  Common Stock Issuance

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Charter
  Amendment

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Stock Exchange
  Rules

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


If
no stockholder approvals are required, please so indicate by checking the box: x.


 

















 


SCHEDULE D


 


LITIGATION


 


List
any exceptions to the representation and warranty in Section 2.2(l) of
the Securities Purchase Agreement – Standard Terms.


 


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


 

















 


SCHEDULE E


 


COMPLIANCE WITH LAWS


 


List
any exceptions to the representation and warranty in the second sentence of Section 2.2(m) of
the Securities Purchase Agreement – Standard Terms.


 


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


 


List
any exceptions to the representation and warranty in the last sentence of Section 2.2(m) of
the Securities Purchase Agreement – Standard Terms.


 


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


 

















 


SCHEDULE F


 


REGULATORY AGREEMENTS


 


List
any exceptions to the representation and warranty in Section 2.2(s) of
the Securities Purchase Agreement – Standard Terms.


 


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