Exhibit 10.1


 


UNITED STATES DEPARTMENT OF THE TREASURY


1500 PENNSYLVANIA AVENUE, NW


WASHINGTON, D.C. 20220


 






 


Dear
Ladies and Gentlemen:


 


MAINSOURCE FINANCIAL GROUP, INC., an
Indiana corporation (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to the extent supplemented or superseded by the terms set forth herein or in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.


 


* * * * * * * * * * *


 


UST SEQ.
NO. 423


 

















 


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:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MAINSOURCE FINANCIAL GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/  Archie
  M. Brown, Jr.

  
	
   

  	
   

  	
  Name:
  Archie M. Brown, Jr.

  
	
   

  	
   

  	
  Title:  President and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
  Date:

  	
   January 16,
  2009

  	
   

  
					



 


 

















 


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

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MAINSOURCE FINANCIAL GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:
  

  	
  Archie
  M. Brown, Jr.

  
	
   

  	
   

  	
  Title:
  

  	
  President
  and Chief Executive 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,
2008).


 


18

















 


“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]


 

















 


CERTIFICATE OF DESIGNATIONS


 


OF


 


FIXED RATE CUMULATIVE PERPETUAL PREFERRED
STOCK, SERIES [·]


 


OF


 


[·]


 


[Insert
name of Corporation], a [corporation]
organized and existing under the laws of the [Insert jurisdiction of organization] (the
“Corporation”), in accordance with the provisions of Section[s] [·] of the [Insert applicable
statute] thereof, does hereby certify:


 


The board of directors of the Corporation (the “Board of Directors”)
or an applicable committee of the Board of Directors, in accordance with the
[certificate of incorporation and bylaws] of the Corporation and applicable
law, adopted the following resolution on [·] creating a series
of [·] shares of
Preferred Stock of the Corporation designated as “Fixed Rate Cumulative
Perpetual Preferred Stock, Series [·]”.


 


RESOLVED, that
pursuant to the provisions of the [certificate of incorporation and the bylaws]
of the Corporation and applicable law, a series of Preferred Stock, par value
$[·] per share, of the
Corporation be and hereby is created, and that the designation and number of
shares of such series, and the voting and other powers, preferences and
relative, participating, optional or other rights, and the qualifications,
limitations and restrictions thereof, of the shares of such series, are as
follows:


 


Part 1.     Designation
and Number of Shares. There is hereby created out of the authorized and
unissued shares of preferred stock of the Corporation a series of preferred
stock designated as the “Fixed Rate Cumulative Perpetual Preferred Stock, Series [·]” (the “Designated
Preferred Stock”). The authorized number of shares of Designated Preferred
Stock shall be [·].


 


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


 


Part. 3.    Definitions. The
following terms are used in this Certificate of Designations (including the
Standard Provisions in Annex A hereto) as defined below:


 


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


 


(b)           “Dividend
Payment Date” means [February 15, May 15, August 15 and November 15]
of each year.


 


(c)           “Junior
Stock” means the Common Stock, [Insert titles of any existing Junior Stock]
and any other class or series of stock of the Corporation the terms of which
expressly


 


1

















 


provide that it ranks junior to Designated Preferred Stock as to
dividend rights and/or as to rights on liquidation, dissolution or winding up
of the Corporation.


 


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


 


(e)          “Minimum Amount”
means $ [Insert $ amount equal to 25% of the aggregate value
of the Designated Preferred Stock issued on the Original Issue Date].


 


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


 


(g)         “Signing Date” means
[Insert date of applicable securities purchase
agreement].


 


Part. 4.    Certain Voting Matters. [To be inserted if the Charter provides for voting in
proportion to liquidation preferences: Whether the vote or consent of the holders
of a plurality, majority or other portion of the shares of Designated Preferred
Stock and any Voting Parity Stock has been cast or given on any matter on which
the holders of shares of Designated Preferred Stock are entitled to vote shall
be determined by the Corporation by reference to the specified liquidation
amount of the shares voted or covered by the consent as if the Corporation were
liquidated on the record date for such vote or consent, if any, or, in the
absence of a record date, on the date for such vote or consent. For purposes of
determining the voting rights of the holders of Designated Preferred Stock
under Section 7 of the Standard Provisions forming part of this Certificate
of Designations, each holder will be entitled to one vote for each $1,000 of
liquidation preference to which such holder’s shares are entitled.] [To be inserted if the Charter does not provide for
voting in proportion to liquidation preferences: Holders of
shares of Designated Preferred Stock will be entitled to one vote for each such
share on any matter on which holders of Designated Preferred Stock are entitled
to vote, including any action by written consent.]


 


[Remainder
of Page Intentionally Left Blank]


 






(1) If issuer desires to issue shares with a higher dollar amount
liquidation preference, liquidation preference references will be modified
accordingly. In such case (in accordance with Section 4.7 of the
Securities Purchase Agreement), the issuer will be required to enter into a
deposit agreement.


 


2

















 


IN WITNESS WHEREOF, [Insert name of Corporation] has caused this
Certificate of Designations to be signed by [·],
its [·], this [·] day of [·].


 


	
   

  	
  [Insert name of
  Corporation]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 


3
















 


ANNEX A


 


STANDARD PROVISIONS


 


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


 


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


 


(a)           “Applicable
Dividend Rate” means (i) during the period from the Original Issue Date
to, but excluding, the first day of the first Dividend Period commencing on or
after the fifth anniversary of the Original Issue Date, 5% per annum and (ii) from
and after the first day of the first Dividend Period commencing on or after the
fifth anniversary of the Original Issue Date, 9% per annum.


 


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


 


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


 


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


 


(e)           “Bylaws”
means the bylaws of the Corporation, as they may be amended from time to time.


 


(f)            “Certificate
of Designations” means the Certificate of Designations or comparable instrument
relating to the Designated Preferred Stock, of which these Standard Provisions
form a part, as it may be amended from time to time.


 


(g)           “Charter”
means the Corporation’s certificate or articles of incorporation, articles of
association, or similar organizational document.


 


(h)           “Dividend
Period” has the meaning set forth in Section 3(a).


 


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


 


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


 


A-1

















 


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


 


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


 


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


 


(n)           “Qualified
Equity Offering” means the sale and issuance for cash by the Corporation to
persons other than the Corporation or any of its subsidiaries after the
Original Issue Date of shares of perpetual Preferred Stock, Common Stock or any
combination of such stock, that, in each case, qualify as and may be included
in Tier 1 capital of the Corporation at the time of issuance under the
applicable risk-based capital guidelines of the Corporation’s Appropriate
Federal Banking Agency (other than any such sales and issuances made pursuant
to agreements or arrangements entered into, or pursuant to financing plans
which were publicly announced, on or prior to October 13, 2008).


 


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


 


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


 


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


 


(r)            “Voting
Parity Stock” means, with regard to any matter as to which the holders of
Designated Preferred Stock are entitled to vote as specified in Sections 7(a) and
7(b) of these Standard Provisions that form a part of the Certificate of
Designations, any and all series of Parity Stock upon which like voting rights
have been conferred and are exercisable with respect to such matter.


 


Section 3. Dividends.


 


(a)           Rate. Holders of Designated Preferred
Stock shall be entitled to receive, on each share of Designated Preferred Stock
if, as and when declared by the Board of Directors or any duly authorized committee
of the Board of Directors, but only out of assets legally available therefor,
cumulative cash dividends with respect to each Dividend Period (as defined
below) at a rate per annum equal to the Applicable Dividend Rate on (i) the
Liquidation Amount per share of Designated Preferred Stock and (ii) the
amount of accrued and unpaid dividends for any prior Dividend Period on such
share of Designated Preferred Stock, if any. Such dividends shall begin to
accrue and be cumulative from the Original Issue Date, shall compound on each
subsequent Dividend Payment Date (i.e.,
no dividends shall accrue on other dividends unless and until the first
Dividend Payment Date for such other dividends has passed without such other
dividends having been paid on such date) and shall be payable quarterly in
arrears on each Dividend Payment Date, commencing with the first such Dividend
Payment Date to occur at least 20 calendar days after the Original Issue Date.
In the event that any Dividend Payment Date would otherwise fall on a day that
is not a Business Day, the dividend payment due on that date will be postponed
to the next day that is a Business Day and no additional dividends will accrue
as a result of that postponement. The period from and including any Dividend Payment
Date to, but


 


A-2

















 


excluding, the next Dividend Payment Date is a “Dividend Period”,
provided that the initial Dividend Period shall be the period from and
including the Original Issue Date to, but excluding, the next Dividend Payment
Date.


 


Dividends that are payable on Designated
Preferred Stock in respect of any Dividend Period shall be computed on the
basis of a 360-day year consisting of twelve 30-day months. The amount of
dividends payable on Designated Preferred Stock on any date prior to the end of
a Dividend Period, and for the initial Dividend Period, shall be computed on
the basis of a 360-day year consisting of twelve 30-day months, and actual days
elapsed over a 30-day month.


 


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


 


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


 


(b)           Priority of Dividends. So long as any
share of Designated Preferred Stock remains outstanding, no dividend or
distribution shall be declared or paid on the Common Stock or any other shares
of Junior Stock (other than dividends payable solely in shares of Common Stock)
or Parity Stock, subject to the immediately following paragraph in the case of
Parity Stock, and no Common Stock, Junior Stock or Parity Stock shall be,
directly or indirectly, purchased, redeemed or otherwise acquired for
consideration by the Corporation or any of its subsidiaries unless all accrued
and unpaid dividends for all past Dividend Periods, including the latest
completed Dividend Period (including, if applicable as provided in Section 3(a) above,
dividends on such amount), on all outstanding shares of Designated Preferred Stock
have been or are contemporaneously declared and paid in full (or have been
declared and a sum sufficient for the payment thereof has been set aside for
the benefit of the holders of shares of Designated Preferred Stock on the
applicable record date). The foregoing limitation shall not apply to (i) redemptions,
purchases or other acquisitions of shares of Common Stock or other Junior Stock
in connection with the administration of any employee benefit plan in the
ordinary course of business (including purchases to offset the Share Dilution
Amount (as defined below) pursuant to a publicly announced repurchase plan) and
consistent with past practice, provided that
any purchases to offset the Share Dilution Amount shall in no event exceed the
Share Dilution Amount; (ii) purchases or other acquisitions by a
broker-dealer subsidiary of the Corporation solely for the purpose of
market-making, stabilization or customer facilitation transactions in Junior
Stock or Parity Stock in the ordinary course of its business; (iii) purchases
by a broker-dealer subsidiary of the Corporation of capital stock of the
Corporation for resale pursuant to an offering by the Corporation of such
capital stock underwritten by such broker-dealer subsidiary; (iv) any
dividends or distributions of rights or Junior Stock in connection with a
stockholders’


 


A-3

















 


rights plan or any redemption or repurchase of rights pursuant to any
stockholders’ rights plan; (v) the acquisition by the Corporation or any
of its subsidiaries of record ownership in Junior Stock or Parity Stock for the
beneficial ownership of any other persons (other than the Corporation or any of
its subsidiaries), including as trustees or custodians; and (vi) the
exchange or conversion of Junior Stock for or into other Junior Stock or of
Parity Stock for or into other Parity Stock (with the same or lesser aggregate
liquidation amount) or Junior Stock, in each case, solely to the extent
required pursuant to binding contractual agreements entered into prior to the
Signing Date or any subsequent agreement for the accelerated exercise,
settlement or exchange thereof for Common Stock. “Share Dilution Amount”
means the increase in the number of diluted shares outstanding (determined in
accordance with generally accepted accounting principles in the United States,
and as measured from the date of the Corporation’s consolidated financial
statements most recently filed with the Securities and Exchange Commission
prior to the Original Issue Date) resulting from the grant, vesting or exercise
of equity-based compensation to employees and equitably adjusted for any stock
split, stock dividend, reverse stock split, reclassification or similar
transaction.


 


When dividends are not paid (or declared and
a sum sufficient for payment thereof set aside for the benefit of the holders
thereof on the applicable record date) on any Dividend Payment Date (or, in the
case of Parity Stock having dividend payment dates different from the Dividend
Payment Dates, on a dividend payment date falling within a Dividend Period
related to such Dividend Payment Date) in full upon Designated Preferred Stock
and any shares of Parity Stock, all dividends declared on Designated Preferred
Stock and all such Parity Stock and payable on such Dividend Payment Date (or,
in the case of Parity Stock having dividend payment dates different from the
Dividend Payment Dates, on a dividend payment date falling within the Dividend
Period related to such Dividend Payment Date) shall be declared pro rata so that the respective amounts of
such dividends declared shall bear the same ratio to each other as all accrued
and unpaid dividends per share on the shares of Designated Preferred Stock
(including, if applicable as provided in Section 3(a) above,
dividends on such amount) and all Parity Stock payable on such Dividend Payment
Date (or, in the case of Parity Stock having dividend payment dates different
from the Dividend Payment Dates, on a dividend payment date falling within the
Dividend Period related to such Dividend Payment Date) (subject to their having
been declared by the Board of Directors or a duly authorized committee of the
Board of Directors out of legally available funds and including, in the case of
Parity Stock that bears cumulative dividends, all accrued but unpaid dividends)
bear to each other. If the Board of Directors or a duly authorized committee of
the Board of Directors determines not to pay any dividend or a full dividend on
a Dividend Payment Date, the Corporation will provide written notice to the
holders of Designated Preferred Stock prior to such Dividend Payment Date.


 


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


 


A-4

















 


Section 4. Liquidation Rights.


 


(a)           Voluntary
or Involuntary Liquidation. In the event of any liquidation, dissolution or
winding up of the affairs of the Corporation, whether voluntary or involuntary,
holders of Designated Preferred Stock shall be entitled to receive for each
share of Designated Preferred Stock, out of the assets of the Corporation or
proceeds thereof (whether capital or surplus) available for distribution to
stockholders of the Corporation, subject to the rights of any creditors of the
Corporation, before any distribution of such assets or proceeds is made to or
set aside for the holders of Common Stock and any other stock of the
Corporation ranking junior to Designated Preferred Stock as to such
distribution, payment in full in an amount equal to the sum of (i) the
Liquidation Amount per share and (ii) the amount of any accrued and unpaid
dividends (including, if applicable as provided in Section 3(a) above,
dividends on such amount), whether or not declared, to the date of payment
(such amounts collectively, the “Liquidation Preference”).


 


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


 


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


 


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


 


Section 5. Redemption.


 


(a)           Optional Redemption. Except as
provided below, the Designated Preferred Stock may not be redeemed prior to the
first Dividend Payment Date falling on or after the third anniversary of the
Original Issue Date. On or after the first Dividend Payment Date falling on or
after the third anniversary of the Original Issue Date, the Corporation, at its
option, subject to the approval of the Appropriate Federal Banking Agency, may
redeem, in whole or in part, at any time and from time to time, out of funds
legally available therefor, the shares of Designated Preferred Stock at the
time outstanding, upon notice given as provided in Section 5(c) below, at a
redemption price equal to the sum of (i) the Liquidation Amount per share
and (ii) except as otherwise provided below, any accrued and unpaid
dividends (including, if applicable as


 


A-5

















 


provided in Section 3(a) above, dividends on such amount)
(regardless of whether any dividends are actually declared) to, but excluding,
the date fixed for redemption.


 


Notwithstanding the foregoing, prior to the
first Dividend Payment Date falling on or after the third anniversary of the
Original Issue Date, the Corporation, at its option, subject to the approval of
the Appropriate Federal Banking Agency, may redeem, in whole or in part, at any
time and from time to time, the shares of Designated Preferred Stock at the
time outstanding, upon notice given as provided in Section 5(c) below,
at a redemption price equal to the sum of (i) the Liquidation Amount per
share and (ii) except as otherwise provided below, any accrued and unpaid
dividends (including, if applicable as provided in Section 3(a) above,
dividends on such amount) (regardless of whether any dividends are actually
declared) to, but excluding, the date fixed for redemption; provided that (x) the Corporation (or
any successor by Business Combination) has received aggregate gross proceeds of
not less than the Minimum Amount (plus the “Minimum Amount” as defined in the
relevant certificate of designations for each other outstanding series of
preferred stock of such successor that was originally issued to the United
States Department of the Treasury (the “Successor Preferred Stock”) in
connection with the Troubled Asset Relief Program Capital Purchase Program)
from one or more Qualified Equity Offerings (including Qualified Equity
Offerings of such successor), and (y) the aggregate redemption price of the
Designated Preferred Stock (and any Successor Preferred Stock) redeemed
pursuant to this paragraph may not exceed the aggregate net cash proceeds
received by the Corporation (or any successor by Business Combination) from
such Qualified Equity Offerings (including Qualified Equity Offerings of such
successor).


 


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


 


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


 


(c)           Notice
of Redemption. Notice of every redemption of shares of Designated Preferred
Stock shall be given by first class mail, postage prepaid, addressed to the
holders of record of the shares to be redeemed at their respective last
addresses appearing on the books of the Corporation. Such mailing shall be at
least 30 days and not more than 60 days before the date fixed for redemption.
Any notice mailed as provided in this Subsection shall be conclusively presumed
to have been duly given, whether or not the holder receives such notice, but
failure duly to give such notice by mail, or any defect in such notice or in
the mailing thereof, to any holder of shares of Designated Preferred Stock
designated for redemption shall not affect the validity of the proceedings for
the redemption of any other shares of Designated Preferred Stock.
Notwithstanding the foregoing, if shares of Designated Preferred Stock are
issued in book-entry form through The Depository Trust Corporation or any other
similar facility, notice of


 


A-6

















 


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


 


(d)           Partial
Redemption. In case of any redemption of part of the shares of Designated
Preferred Stock at the time outstanding, the shares to be redeemed shall be
selected either pro rata or in such
other manner as the Board of Directors or a duly authorized committee thereof
may determine to be fair and equitable. Subject to the provisions hereof, the
Board of Directors or a duly authorized committee thereof shall have full power
and authority to prescribe the terms and conditions upon which shares of
Designated Preferred Stock shall be redeemed from time to time. If fewer than
all the shares represented by any certificate are redeemed, a new certificate
shall be issued representing the unredeemed shares without charge to the holder
thereof.


 


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


 


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


 


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


 


Section 7. Voting Rights.


 


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


 


A-7

















 


(b)           Preferred
Stock Directors. Whenever, at any time or times, dividends payable on the
shares of Designated Preferred Stock have not been paid for an aggregate of six
quarterly Dividend Periods or more, whether or not consecutive, the authorized
number of directors of the Corporation shall automatically be increased by two
and the holders of the Designated Preferred Stock shall have the right, with
holders of shares of any one or more other classes or series of Voting Parity
Stock outstanding at the time, voting together as a class, to elect two
directors (hereinafter the “Preferred
Directors” and each a “Preferred Director”) to fill such newly created
directorships at the Corporation’s next annual meeting of stockholders (or at a
special meeting called for that purpose prior to such next annual meeting) and
at each subsequent annual meeting of stockholders until all accrued and unpaid
dividends for all past Dividend Periods, including the latest completed
Dividend Period (including, if applicable as provided in Section 3(a) above,
dividends on such amount), on all outstanding shares of Designated Preferred
Stock have been declared and paid in full at which time such right shall
terminate with respect to the Designated Preferred Stock, except as herein or
by law expressly provided, subject to revesting in the event of each and every
subsequent default of the character above mentioned; provided that it shall be a qualification for election for
any Preferred Director that the election of such Preferred Director shall not
cause the Corporation to violate any corporate governance requirements of any
securities exchange or other trading facility on which securities of the
Corporation may then be listed or traded that listed or traded companies must
have a majority of independent directors. Upon any termination of the right of
the holders of shares of Designated Preferred Stock and Voting Parity Stock as
a class to vote for directors as provided above, the Preferred Directors shall
cease to be qualified as directors, the term of office of all Preferred
Directors then in office shall terminate immediately and the authorized number
of directors shall be reduced by the number of Preferred Directors elected
pursuant hereto. Any Preferred Director may be removed at any time, with or
without cause, and any vacancy created thereby may be filled, only by the
affirmative vote of the holders a majority of the shares of Designated
Preferred Stock at the time outstanding voting separately as a class together
with the holders of shares of Voting Parity Stock, to the extent the voting
rights of such holders described above are then exercisable. If the office of
any Preferred Director becomes vacant for any reason other than removal from
office as aforesaid, the remaining Preferred Director may choose a successor
who shall hold office for the unexpired term in respect of which such vacancy
occurred.


 


(c)           Class Voting
Rights as to Particular Matters. So long as any shares of Designated
Preferred Stock are outstanding, in addition to any other vote or consent of
stockholders required by law or by the Charter, the vote or consent of the
holders of at least 66 2/3% of the shares of Designated Preferred Stock at the
time outstanding, voting as a separate class, given in person or by proxy,
either in writing without a meeting or by vote at any meeting called for the
purpose, shall be necessary for effecting or validating:


 


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


 


A-8

















 


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


 


(iii)          Share
Exchanges, Reclassifications, Mergers and Consolidations. Any consummation
of a binding share exchange or reclassification involving the Designated
Preferred Stock, or of a merger or consolidation of the Corporation with
another corporation or other entity, unless in each case (x) the shares of
Designated Preferred Stock remain outstanding or, in the case of any such
merger or consolidation with respect to which the Corporation is not the
surviving or resulting entity, are converted into or exchanged for preference
securities of the surviving or resulting entity or its ultimate parent, and (y)
such shares remaining outstanding or such preference securities, as the case
may be, have such rights, preferences, privileges and voting powers, and
limitations and restrictions thereof, taken as a whole, as are not materially
less favorable to the holders thereof than the rights, preferences, privileges
and voting powers, and limitations and restrictions thereof, of Designated
Preferred Stock immediately prior to such consummation, taken as a whole;


 


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


 


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


 


(e)           Procedures
for Voting and Consents. The rules and procedures for calling and
conducting any meeting of the holders of Designated Preferred Stock (including,
without limitation, the fixing of a record date in connection therewith), the
solicitation and use of proxies at such a meeting, the obtaining of written
consents and any other aspect or matter with regard to such a meeting or such
consents shall be governed by any rules of the Board of Directors or any
duly authorized committee of the Board of Directors, in its discretion, may
adopt from time to


 


A-9

















 


time, which rules and procedures shall conform to the requirements
of the Charter, the Bylaws, and applicable law and the rules of any
national securities exchange or other trading facility on which Designated
Preferred Stock is listed or traded at the time.


 


Section 8. Record Holders. To the
fullest extent permitted by applicable law, the Corporation and the transfer
agent for Designated Preferred Stock may deem and treat the record holder of
any share of Designated Preferred Stock as the true and lawful owner thereof
for all purposes, and neither the Corporation nor such transfer agent shall be
affected by any notice to the contrary.


 


Section 9. Notices. All notices or communications in
respect of Designated Preferred Stock shall be sufficiently given if given in
writing and delivered in person or by first class mail, postage prepaid, or if
given in such other manner as may be permitted in this Certificate of
Designations, in the Charter or Bylaws or by applicable law. Notwithstanding
the foregoing, if shares of Designated Preferred Stock are issued in book-entry
form through The Depository Trust Corporation or any similar facility, such
notices may be given to the holders of Designated Preferred Stock in any manner
permitted by such facility.


 


Section 10. No Preemptive Rights. No share of Designated
Preferred Stock shall have any rights of preemption whatsoever as to any
securities of the Corporation, or any warrants, rights or options issued or
granted with respect thereto, regardless of how such securities, or such
warrants, rights or options, may be designated, issued or granted.


 


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


 


Section 12. Other Rights. The shares of Designated
Preferred Stock shall not have any rights, preferences, privileges or voting
powers or relative, participating, optional or other special rights, or
qualifications, limitations or restrictions thereof, other than as set forth
herein or in the Charter or as provided by applicable law.


 


A-10
















 


ANNEX B


 


FORM OF WAIVER


 


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


 


I acknowledge that this regulation may require modification of the
compensation, bonus, incentive and other benefit plans, arrangements, policies
and agreements (including so-called “golden parachute” agreements) that I have
with my employer or in which I participate as they relate to the period the
United States holds any equity or debt securities of my employer acquired
through the TARP Capital Purchase Program.


 


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


 

















 


ANNEX C


 


FORM OF OPINION


 


(a)           The Company
has been duly incorporated and is validly existing as a corporation in good
standing under the laws of the state of its incorporation.


 


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


 


(c)           The Warrant
has been duly authorized and, when executed and delivered as contemplated by
the Agreement, will constitute a valid and legally binding obligation of the
Company enforceable against the Company in accordance with its terms, except as
the same may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors’ rights
generally and general equitable principles, regardless of whether such
enforceability is considered in a proceeding at law or in equity.


 


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


 


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


 


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


 


(g)           The
Agreement is a valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, except as the same may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors’ rights generally and general equitable
principles, regardless of whether such enforceability is considered in a
proceeding at law or in equity; provided,
however, such counsel need
express no opinion with respect to Section 4.5(g) or the severability
provisions of the Agreement insofar as Section 4.5(g) is concerned.


 

















 


ANNEX D


 


FORM OF WARRANT




[SEE ATTACHED]


 

















 


FORM OF WARRANT TO PURCHASE COMMON STOCK


 


THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE
AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A
REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER SUCH ACT OR SUCH LAWS. THIS INSTRUMENT IS ISSUED SUBJECT TO THE
RESTRICTIONS ON TRANSFER AND OTHER PROVISIONS OF A SECURITIES PURCHASE
AGREEMENT BETWEEN THE ISSUER OF THESE SECURITIES AND THE INVESTOR REFERRED TO
THEREIN, A COPY OF WHICH IS ON FILE WITH THE ISSUER. THE SECURITIES REPRESENTED
BY THIS INSTRUMENT MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT IN
COMPLIANCE WITH SAID AGREEMENT. ANY SALE OR OTHER TRANSFER NOT IN COMPLIANCE
WITH SAID AGREEMENT WILL BE VOID.


 


WARRANT

to purchase


	
   

  	
   

  	
   

  
	
  Shares of Common Stock

  



 


	
  of  

  	
   

  	
   

  



 


	
  Issue Date: 

  	
   

  	
   

  



 


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


 


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


 


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


 

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


“Exchange Act” means the
Securities Exchange Act of 1934, as amended, or any successor statute, and the rules and
regulations promulgated thereunder.


 


“Exercise
Price” means the amount set forth in Item 2 of Schedule A hereto.


 


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


 


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


 


2

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


3

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


“Regulatory
Approvals” with respect to the Warrantholder, means, to the extent
applicable and required to permit the Warrantholder to exercise this Warrant
for shares of Common Stock and to own such Common Stock without the
Warrantholder being in violation of applicable law, rule or regulation,
the receipt of any necessary approvals and authorizations of, filings and
registrations with, notifications to, or expiration or termination of any
applicable waiting period under, the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, and the rules and regulations thereunder.


 


“SEC”
means the U.S. Securities and Exchange Commission.


 


“Securities
Act” means the Securities Act of 1933, as amended, or any successor
statute, and the rules and regulations promulgated thereunder.


 


“Shares”
has the meaning set forth in Section 2.


 


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


 


4

















 


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


 


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


 


“Warrantholder”
has the meaning set forth in Section 2.


 


“Warrant”
means this Warrant, issued pursuant to the Purchase Agreement.


 


2.             Number
of Shares; Exercise Price. This certifies that, for value received, the United
States Department of the Treasury or its permitted assigns (the “Warrantholder”) is entitled, upon the
terms and subject to the conditions hereinafter set forth, to acquire from the
Company, in whole or in part, after the receipt of all applicable Regulatory
Approvals, if any, up to an aggregate of the number of fully paid and
nonassessable shares of Common Stock set forth in Item 6 of Schedule A hereto,
at a purchase price per share of Common Stock equal to the Exercise Price. The
number of shares of Common Stock (the “Shares”)
and the Exercise Price are subject to adjustment as provided herein, and all
references to “Common Stock,” “Shares” and “Exercise Price” herein shall be
deemed to include any such adjustment or series of adjustments.


 


3.             Exercise
of Warrant; Term. Subject to Section 2, to the extent permitted by applicable
laws and regulations, the right to purchase the Shares represented by this
Warrant is exercisable, in whole or in part by the Warrantholder, at any time
or from time to time after the execution and delivery of this Warrant by the
Company on the date hereof, but in no event later than 5:00 p.m., New York
City time on the tenth anniversary of the Issue Date (the “Expiration Time”), by (A) the
surrender of this Warrant and Notice of Exercise annexed hereto, duly completed
and executed on behalf of the Warrantholder, at the principal executive office
of the Company located at the address set forth in Item 7 of Schedule A hereto
(or such other office or agency of the Company in the United States as it may
designate by notice in writing to the Warrantholder at the address of the
Warrantholder appearing on the books of the Company), and (B) payment of the
Exercise Price for the Shares thereby purchased:


 


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


 


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


 


5

















 


If the Warrantholder does not exercise this Warrant in its entirety,
the Warrantholder will be entitled to receive from the Company within a
reasonable time, and in any event not exceeding three business days, a new
warrant in substantially identical form for the purchase of that number of
Shares equal to the difference between the number of Shares subject to this
Warrant and the number of Shares as to which this Warrant is so exercised. Notwithstanding
anything in this Warrant to the contrary, the Warrantholder hereby acknowledges
and agrees that its exercise of this Warrant for Shares is subject to the
condition that the Warrantholder will have first received any applicable
Regulatory Approvals.


 


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


 


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


 


6.             No
Rights as Stockholders; Transfer Books. This Warrant does not entitle the
Warrantholder to any voting rights or other rights as a stockholder of the
Company prior to the date of exercise hereof. The Company will at no time close
its transfer books against transfer of this Warrant in any manner which
interferes with the timely exercise of this Warrant.


 


6

















 


7.             Charges, Taxes and Expenses. Issuance
of certificates for Shares to the Warrantholder upon the exercise of this
Warrant shall be made without charge to the Warrantholder for any issue or
transfer tax or other incidental expense in respect of the issuance of such
certificates, all of which taxes and expenses shall be paid by the Company.


 


8.             Transfer/Assignment.


 


(A)          Subject to
compliance with clause (B) of this Section 8, this Warrant and all
rights hereunder are transferable, in whole or in part, upon the books of the
Company by the registered holder hereof in person or by duly authorized
attorney, and a new warrant shall be made and delivered by the Company, of the
same tenor and date as this Warrant but registered in the name of one or more
transferees, upon surrender of this Warrant, duly endorsed, to the office or
agency of the Company described in Section 3. All expenses (other than
stock transfer taxes) and other charges payable in connection with the
preparation, execution and delivery of the new warrants pursuant to this Section 8
shall be paid by the Company.


 


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


 


9.             Exchange and Registry of Warrant. This
Warrant is exchangeable, upon the surrender hereof by the Warrantholder to the
Company, for a new warrant or warrants of like tenor and representing the right
to purchase the same aggregate number of Shares. The Company shall maintain a
registry showing the name and address of the Warrantholder as the registered
holder of this Warrant. This Warrant may be surrendered for exchange or
exercise in accordance with its terms, at the office of the Company, and the
Company shall be entitled to rely in all respects, prior to written notice to
the contrary, upon such registry.


 


10.           Loss, Theft, Destruction or Mutilation of
Warrant. Upon receipt by the Company of evidence reasonably satisfactory to
it of the loss, theft, destruction or mutilation of this Warrant, and in the
case of any such loss, theft or destruction, upon receipt of a bond, indemnity
or security reasonably satisfactory to the Company, or, in the case of any such
mutilation, upon surrender and cancellation of this Warrant, the Company shall
make and deliver, in lieu of such lost, stolen, destroyed or mutilated Warrant,
a new Warrant of like tenor and representing the right to purchase the same
aggregate number of Shares as provided for in such lost, stolen, destroyed or
mutilated Warrant.


 


11.           Saturdays, Sundays, Holidays, etc. If
the last or appointed day for the taking of any action or the expiration of any
right required or granted herein shall not be a business day, then such action
may be taken or such right may be exercised on the next succeeding day that is
a business day.


 


12.           Rule 144 Information. The
Company covenants that it will use its reasonable best efforts to timely file
all reports and other documents required to be filed by it under the Securities
Act and the Exchange Act and the rules and regulations promulgated by the
SEC thereunder (or, if the Company is not required to file such reports, it
will, upon the request of any


 


7

















 


Warrantholder, make publicly available such information as necessary to
permit sales pursuant to Rule 144 under the Securities Act), and it will
use reasonable best efforts to take such further action as any Warrantholder
may reasonably request, in each case to the extent required from time to time
to enable such holder to, if permitted by the terms of this Warrant and the
Purchase Agreement, sell this Warrant without registration under the Securities
Act within the limitation of the exemptions provided by (A) Rule 144
under the Securities Act, as such rule may be amended from time to time,
or (B) any successor rule or regulation hereafter adopted by the


SEC. Upon the written request of any Warrantholder, the Company will
deliver to such Warrantholder a written statement that it has complied with
such requirements.


 


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


 


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


 


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


 


8
















 


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


 


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


 


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


 


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


 


9

















 


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


 


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


 


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


 


10

















 


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


 


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


 


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


 


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


 


11

















 


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


 


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


 


(J)                                   Statement
Regarding Adjustments. Whenever the Exercise Price or the number of Shares
into which this Warrant is exercisable shall be adjusted as provided in Section 13,
the Company shall forthwith file at the principal office of the Company a
statement showing in reasonable detail the facts requiring such adjustment and
the Exercise Price that shall be in effect and the number of Shares into which
this Warrant shall be exercisable after such adjustment, and the Company shall
also cause a copy of such statement to be sent by mail, first class postage
prepaid, to each Warrantholder at the address appearing in the Company’s
records.


 


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


 


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


 


12

















 


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


 


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


 


15.                                 No
Impairment. The Company will not, by amendment of its Charter or through
any reorganization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms to be observed or
performed hereunder by the Company, but will at all times in good faith assist
in the carrying out of all the provisions of this Warrant and in taking of all
such action as may be necessary or appropriate in order to protect the rights
of the Warrantholder.


 


16.                                 Governing
Law. This Warrant will be governed by and
construed in accordance with the federal law of the United States if and to the
extent such law is applicable, and otherwise in accordance with the laws of the
State of New York applicable to contracts made and to be performed entirely
within such State. Each of the Company and the Warrantholder agrees (a) to
submit to the exclusive jurisdiction and venue of the United States District
Court for the District of Columbia for any civil action, suit or proceeding
arising out of or relating to this Warrant or the transactions contemplated
hereby, and (b) that notice may be served upon the Company at the address
in Section 20 below and upon the Warrantholder at the address for the
Warrantholder set forth in the registry maintained by the Company pursuant to Section 9
hereof. To the extent permitted by applicable law, each of the Company and the
Warrantholder hereby unconditionally waives trial by jury in any civil legal
action or proceeding relating to the Warrant or the transactions contemplated
hereby or thereby.


 


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


 


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


 


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


 


13

















 


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


 


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


 


21.                                 Entire
Agreement. This Warrant, the forms attached hereto and Schedule A hereto
(the terms of which are incorporated by reference herein), and the Letter
Agreement (including all documents incorporated therein), contain the entire
agreement between the parties with respect to the subject matter hereof and
supersede all prior and contemporaneous arrangements or undertakings with
respect thereto.


 


[Remainder of page intentionally left
blank]


 


14

















 


[Form of Notice of Exercise]


 


	
  Date: 

  	
   

  	
   

  



 


TO:                            [Company]


 


RE:                              Election
to Purchase Common Stock


 


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


 


	
  Number of Shares of Common Stock

  	
   

  	
   

  



 


 


	
  Method of Payment of Exercise Price (note if cashless exercise
  pursuant to Section 3(i) of the Warrant or cash exercise pursuant
  to 

  
	
  Section 3(ii) of the Warrant, with consent of the Company
  and the Warrantholder)

  	
   

  



 


	
  Aggregate Exercise Price:

  	
   

  	
   

  



 


	
   

  	
  Holder:

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 


15

















 


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


 


	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  COMPANY:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attest:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
						



 


[Signature Page to Warrant]


 


16
















 


SCHEDULE A


 


Item 1


Name:


Corporate or other organizational form:


Jurisdiction of organization:


 


Item 2


Exercise Price: (1)


 


Item 3


Issue Date:


 


Item 4


Amount of last dividend declared prior to the Issue Date:


 


Item 5


Date of Letter Agreement between the Company and the United States
Department of the Treasury:


 


Item 6


Number of shares of Common Stock:


 


Item 7


Company’s address:


 


Item 8


Notice information:


 






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


 

















 


ADDITIONAL TERMS AND CONDITIONS


 


Company
Information:


 


Name of the Company: MainSource Financial Group, Inc.


 


Corporate or other organizational form: Corporation


 


Jurisdiction of Organization: Indiana


 


Appropriate Federal Banking Agency: Federal Deposit Insurance
Corporation


 


Notice Information:


 


MainSource
Financial Group, Inc.


2105
North State Road 3 Bypass


Greensburg,
Indiana 47240


Attention:
Archie M. Brown, Jr., President and Chief Executive Officer


Tel:
(812) 663-6734


Fax:
(812) 663-3221


 


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


 


Karen
Ball Woods, Esq.


Krieg
DeVault LLP


One
Indiana Square, Suite 2800


Indianapolis,
Indiana 46204


Tel:
(317) 636-4341


Fax:
(317) 636-1507


 


Terms
of the Purchase:


 


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


 


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


 


Number of Shares of Preferred Stock Purchased: 57,000


 


Dividend Payment Dates on the Preferred Stock: February 15, May 15,
August 15, and November 15 of each year


 


Number of Initial Warrant Shares: 571,906


 


Exercise Price of the Warrant: $14.95


 

















 


Purchase Price: $57,000,000


 


Closing:


 


Location of Closing: TBD by the parties


 


Time of Closing: TBD by the parties


 


Date of Closing: January 16, 2009


 


	
  Wire Information for Closing:

  	
  ABA Number: 074903308

  
	
   

  	
  Bank: MainSource Bank

  
	
   

  	
  Account Name: MSFG Operating Account 

  
	
   

  	
  Account Number: 16007

  
	
   

  	
  Beneficiary: MainSource Financial Group 

  
	
   

  	
  (Attn: Jamie Anderson, CFO)

  



 


Wire
and Dividend Contact Information:


 


James
M. Anderson


Senior
Vice President and Chief Financial Officer


MainSource
Financial Group, Inc.


812-663-MSFG
(office phone)


812-498-2607
(cell phone)


812-663-3220
(fax)


janderson@mainsourcefinancial.com


 

















 


SCHEDULE B


 


CAPITALIZATION


 


Capitalization Date:                 December 31,
2008


 


Common
Stock


 


Par value: None


 


Total
Authorized:  25,000,000


 


Outstanding: 20,136,362


 


Subject to warrants, options, convertible
securities, etc.: 273,568


 


Reserved for benefit plans and other issuances: 621,000


 


Remaining
authorized but unissued: 3,969,070


 


Shares issued after Capitalization Date


(other
than pursuant to warrants, options, convertible securities, etc. as set forth
above): None


 


Preferred
Stock


 


Par value: None


 


Total Authorized: 400,000


 


Outstanding (by series): None


 


Reserved for issuance: 57,000


 


Remaining authorized but unissued: 343,000


 

















 


SCHEDULE
C


 


REQUIRED STOCKHOLDER APPROVALS


 


	
   

  	
   

  	
  Required(1)

  	
   

  	
  % 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


 






(1) If
stockholder approval is required. indicate applicable class/series of capital
stock that are required to vote.


 


 

















 


SCHEDULE
D


 


LITIGATION


 


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