ex10_1.htm


    
      

    

    Exhibit
10.1

    


    UNITED STATES DEPARTMENT OF THE TREASURY

    1500
PENNSYLVANIA AVENUE, NW

    WASHINGTON, D.C.
20220

    


    Dear
Ladies and Gentlemen:

    


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

    


    The
purpose of this letter agreement is to confirm the terms and conditions of the
purchase by the Investor of the Purchased Securities. Except to the extent
supplemented or superseded by the terms set forth herein or in the Schedules
hereto, the provisions contained in the Securities Purchase Agreement – Standard
Terms attached hereto as Exhibit A (the “Securities Purchase
Agreement”) are incorporated by reference herein. Terms that are defined
in the Securities Purchase Agreement are used in this letter agreement as so
defined. In the event of any inconsistency between this letter agreement and the
Securities Purchase Agreement, the terms of this letter agreement shall
govern.

    


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

    


    This
letter agreement (including the Schedules hereto) and the Securities Purchase
Agreement (including the Annexes thereto) and the Warrant constitute the entire
agreement, and supersede all other prior agreements, understandings,
representations and warranties, both written and oral, between the parties, with
respect to the subject matter hereof. This letter agreement constitutes the
“Letter Agreement” referred to in the Securities Purchase
Agreement.

    


    This
letter agreement may be executed in any number of separate counterparts, each
such counterpart being deemed to be an original instrument, and all such
counterparts will together constitute the same agreement. Executed signature
pages to this letter agreement may be delivered by facsimile and such facsimiles
will be deemed as sufficient as if actual signature pages had been
delivered.

    


    


    * *
*


    
      
        
        

      

      
         


        
          

        

      

      
        
        

      

    


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

    


    


    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	 	 
      	 	
                                    UNITED
      STATES DEPARTMENT OF THE TREASURY

                                  
	 	 
      	 	 
      	 
      	 
      
	 	 
      	 	 
      	 
      	 
      
	 	 
      	 	
                                    By:

                                  	
                                     

                                  
	 	 
      	 	 
      	
                                    Name:

                                  	 
      
	 	 
      	 	 
      	
                                    Title:

                                  	 
      
	 	 
      	 	 
      	 
      	 
      
	 	 
      	 	 
      	 
      	 
      
	 	 
      	 	
                                    COMPANY:
      Somerset Hills Bancorp

                                  
	 	 
      	 	 
      	 
      	 
      
	 	 
      	 	 
      	/s/
      Stewart E. McClure, Jr.
	 	 
      	 	
                                    By:

                                  	
                                     

                                  
	 	 
      	 	 
      	
                                    Name:

                                  	
                                    Stewart
      E. McClure, Jr.

                                  
	 	 
      	 	 
      	
                                    Title:

                                  	
                                    President,
      Chief Executive Officer and Chief Operating Officer

                                  
	 	 	 	 	 	 
	 	 	 	 	 	 
	Date:	 	 	 	 	 


                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    

      
        
          
          

        

        
           


          
            

          

        

        
          
          

        

      

    

     

    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

                      	
                        14

                      
	
                        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

                      	
                        18

                      
	
                        4.6
      Voting of Warrant Shares

                      	
                        30

                      
	
                        4.7
      Depositary Shares

                      	
                        30

                      
	
                        4.8
      Restriction on Dividends and Repurchases

                      	
                        30

                      
	
                        4.9
      Repurchase of Investor Securities

                      	
                        31

                      
	
                        4.10
      Executive Compensation

                      	
                        33

                      
	
                        4.11
      Bank and Thrift Holding Company Status 

                      	
                        33

                      


              

            

          

        

      

    

     

    
      
        
        

      

      
         


        
          

        

      

      
        
        

      

    


    
      
        
          	
                  4.12  Predominantly
      Financial 

                	
                  33

                
	 
      	 
      
	
                  Article
      V

                	 
      
	 
      	 
      
	
                  Miscellaneous

                	 
      
	 
      	 
      
	
                  5.1
      Termination

                	
                  33

                
	
                  5.2
      Survival of Representations and Warranties

                	
                  34

                
	
                  5.3
      Amendment

                	
                  34

                
	
                  5.4
      Waiver of Conditions

                	
                  34

                
	
                  5.5
      Governing Law: Submission to Jurisdiction, Etc.

                	
                  35

                
	
                  5.6
      Notices

                	
                  35

                
	
                  5.7
      Definitions

                	
                  35

                
	
                  5.8
      Assignment

                	
                  36

                
	
                  5.9
      Severability

                	
                  36

                
	
                  5.10
      No Third Party Beneficiaries

                	
                  36

                


        

      

    


    
      
        
        

      

      
         


        
          

        

      

      
        
        

      

    


    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

    

      
        
          
          

        

        
           


          
            

          

        

        
          
          

        

      

    

     

    INDEX
OF DEFINED TERMS

    


    
      
        
          
            
              	 
      	 	
                      Location
      of

                    
	
                      Term

                    	 	
                      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(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

                    	 	
                      .7(c)

                    
	
                      Last
      Fiscal Year

                    	 	
                      2.1(b)

                    
	
                      Letter
      Agreement

                    	 	
                      Recitals

                    
	
                      officers

                    	 	
                      5.7(c)

                    


            

          

        

      

    


    
      
        
        

      

      
         


        
          

        

      

      
        
        

      

    

    


    
      
        
          
            
              	
                      Term

                    	 	
                      Location
      of

                      Definition

                    
	
                       

                    	 	
                       

                    
	
                      Parity
      Stock

                    	 	
                      4.8(c)

                    
	
                      Pending
      Underwritten Offering

                    	 	
                      4.5(l)

                    
	
                      Permitted
      Repurchases

                    	 	
                      4.8(a)(ii)

                    
	
                      Piggyback
      Registration

                    	 	
                      4.5(a)(iv)

                    
	
                      Plan

                    	 	
                      2.2(n)

                    
	
                      Preferred
      Shares

                    	 	
                      Recitals

                    
	
                      Preferred
      Stock

                    	 	
                      Recitals

                    
	
                      Previously
      Disclosed

                    	 	
                      2.1(b)

                    
	
                      Proprietary
      Rights

                    	 	
                      2.2(u)

                    
	
                      Purchase

                    	 	
                      Recitals

                    
	
                      Purchase
      Price

                    	 	
                      1.1

                    
	
                      Purchased
      Securities

                    	 	
                      Recitals

                    
	
                      Qualified
      Equity Offering

                    	 	
                      4.4

                    
	
                      register;
      registered; registration

                    	 	
                      4.5(k)(iii)

                    
	
                      Registrable
      Securities

                    	 	
                      4.5(k)(iv)

                    
	
                      Registration
      Expenses

                    	 	
                      4.5(k)(v)

                    
	
                      Regulatory
      Agreement

                    	 	
                      2.2(s)

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

                    	 	
                      4.5(k)(vi)

                    
	
                      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)

                    


            

          

        

      

    


    
      
        
        

      

      
         


        
          

        

      

      
        
        

      

    


    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 “InitialWarrant 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


    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    


    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


    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    


    expected
to have a Company Material Adverse Effect and (B) the Company shall have
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 specified on Schedule B, and the Company has not made
any other commitment to authorize,


    
      
        
        

      

      
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    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 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)


    
      
        
        

      

      
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    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 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.


    
      
        
        

      

      
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    (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 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,


    
      
        
        

      

      
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    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 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


    
      
        
        

      

      
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    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  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


    
      
        
        

      

      
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    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.

              


      

    

     

    (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


    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    


    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.

    


    (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)


    
      
        
        

      

      
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    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 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


    
      
        
        

      

      
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    for such
stockholder approval of the Stockholder Proposals. The Company shall notify the
Investor promptly of the receipt of any comments from the SEC or its staff with
respect to the proxy statement and of any request by the SEC or its staff for
amendments or supplements to such proxy statement or for additional information
and will supply the Investor with copies of all correspondence between the
Company or any of its representatives, on the one hand, and the SEC or its
staff, on the other hand, with respect to such proxy statement. If at any time
prior to such stockholders’ meeting there shall occur any event that is required
to be set forth in an amendment or supplement to the proxy statement, the
Company shall as promptly as practicable prepare and mail to its stockholders
such an amendment or supplement. Each of the Investor and the Company agrees
promptly to correct any information provided by it or on its behalf for use in
the proxy statement if and to the extent that such information shall have become
false or misleading in any material respect, and the Company shall as promptly
as practicable prepare and mail to its stockholders an amendment or supplement
to correct such information to the extent required by applicable laws and
regulations. The Company shall consult with the Investor prior to filing any
proxy statement, or any amendment or supplement thereto, and provide the
Investor with a reasonable opportunity to comment thereon. In the event that the
approval of any of the Stockholder Proposals is not obtained at such special
stockholders meeting, the Company shall include a proposal to approve (and the
Board of Directors shall recommend approval of) each such proposal at a meeting
of its stockholders no less than once in each subsequent six month period
beginning on January 1, 2009 until all such approvals are obtained or
made.

    


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

    


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

    


    3.3          
 Sufficiency of
Authorized Common Stock; Exchange Listing.

    


    (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.


    
      
        
        

      

      
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    (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 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 nonpublic records, books, contracts, instruments, computer data
and other data and information (collectively, “Information”) concerning the
Company furnished or made available to it by the  Company or its
representatives pursuant to this Agreement (except to the extent that
such  information can be shown to have been (i) previously known by
such party on a non-confidential


    
      
        
        

      

      
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    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.”

    


    (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.”


    
      
        
        

      

      
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    (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 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) 

     

    
      
         

      

      
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    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). “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


    
      
        
        

      

      
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    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.

    


    (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.


    
      
        
        

      

      
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    (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 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)


    
      
        
        

      

      
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    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 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


    
      
        
        

      

      
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    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;

    


    (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.


    
      
        
        

      

      
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    (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  ccurrence 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 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


    
      
        
        

      

      
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    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 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


    
      
        
        

      

      
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    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 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 he 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


    
      
        
        

      

      
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    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 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


    
      
        
        

      

      
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    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, 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


    
      
        
        

      

      
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    (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 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.


    
      
        
        

      

      
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    (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 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


    
      
        
        

      

      
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    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.

    


    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


    
      
        
        

      

      
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    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 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


    
      
        
        

      

      
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    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.

    


    (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.


    
      
        
        

      

      
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    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 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


    
      
        
        

      

      
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    (b) by
either the Investor or the Company in the event that any Governmental Entity
shall have issued an order, decree or ruling or taken any other action
restraining, enjoining or otherwise prohibiting the transactions contemplated by
this Agreement and such order, decree, ruling or other action shall have become
final and nonappealable; or

    


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

    


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

    


    5.2           Survival of Representations
and Warranties. All covenants and agreements, other than those which by
their terms apply in whole or in part after the Closing, shall terminate as of
the Closing. The representations and warranties of the Company made herein or in
any certificates delivered in connection with the Closing shall survive the
Closing without limitation.

    


    5.3           Amendment. No
amendment of any provision of this Agreement will be effective unless made in
writing and signed by an officer or a duly authorized representative of each
party; provided that
the Investor may unilaterally amend any provision of this Agreement to the
extent required to comply with any changes after the Signing Date in applicable
federal statutes. No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise of any
other right, power or privilege. The rights and remedies herein provided shall
be cumulative of any rights or remedies provided by law.

    


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


    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    


    federal
law. To the extent permitted by applicable law, each of the parties hereto
hereby unconditionally waives trial by jury in any civil legal action or
proceeding relating to this Agreement or the Warrant or the transactions
contemplated hereby or thereby.

    


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

    


    If to the
Investor:

    


    United
States Department of the Treasury

    1500
Pennsylvania Avenue, NW, Room 2312

    Washington,
D.C. 20220

    Attention:
Assistant General Counsel (Banking and Finance)

    Facsimile:
(202) 622-1974

    


    5.7           Definitions

    


    (a)           When
a reference is made in this Agreement to a subsidiary of a person, the term
“subsidiary” means any
corporation, partnership, joint venture, limited liability company or other
entity (x) of which such person or a subsidiary of such person is a general
partner or (y) of which a majority of the voting securities or other voting
interests, or a majority of the securities or other interests of which having by
their terms ordinary voting power to elect a majority of the board of directors
or persons performing similar functions with respect to such entity, is directly
or indirectly owned by such person and/or one or more subsidiaries
thereof.

    


    (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.


    
      
        
        

      

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

    


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

    


    5.10           No Third Party
Beneficiaries. Nothing contained in this Agreement, expressed or implied,
is intended to confer upon any person or entity other than the Company and the
Investor any benefit, right or remedies, except that the provisions of Section
4.5 shall inure to the benefit of the persons referred to in that
Section.


    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    


    ANNEX A

    


    FORM
OF CERTIFICATE OF DESIGNATIONS

    


    


    [SEE
EXHIBIT 3.1]


    
      
        
        

      

      
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    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.


    
      
        
        

      

      
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    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.


    
      
        
        

      

      
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    ANNEX
D

    


    FORM
OF WARRANT

    


    


    [SEE
EXHIBIT 4.1]


    
      
        
        

      

      
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    SCHEDULE
A

    


    ADDITIONAL
TERMS AND CONDITIONS

    


    Company
Information:

     

    Name of
the Company:  Somerset Hills Bancorp

     

    Corporate
or other organizational form:  Corporation

     

    Jurisdiction
of Organization:  New Jersey

     

    Appropriate
Federal Banking Agency:  Federal Reserve

     

    
      	
               
      

            	
              Notice
      Information:

            	
              Somerset
      Hills Bancorp

            


    

    155
Morristown Road

    Bernardsville,
NJ 07924

    (908)
221-0100

    


    


    Terms of the
Purchase:

     

    Series of
Preferred Stock Purchased:  Series A

     

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

     

    Number of
Shares of Preferred Stock Purchased:  7,414

     

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

    

    


    Number of
Initial Warrant Shares:  163,065

     

    Exercise
Price of the Warrant:  $6.82

     

    Purchase
Price:  $7,414,000

    


    
      Closing:

    

    
      Location
of Closing: Squire
Sanders & Dempsey, LLP, 221 E. Fourth St., Suite 2900 Cincinnati, Ohio
45202

    

    


    Time of
Closing: 9:00 a.m. E.S.T.

     

    Date of
Closing:  January 16, 2009

     

    
      	
               
      

            	
              Wire Information for
      Closing:

            	
              ABA
    Number:

            


    

    Bank:

    Account
Name:

    Account
Number:

    Beneficiary:


    
      
        
        

      

      
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    SCHEDULE
B

    


    CAPITALIZATION

    


    Capitalization
Date:  December 31, 2008

    


    Common
Stock

    
      	
               
      

            	
              Par
      value:  No Par Value

            


    

     

    
      	
               
      

            	
              Total
      Authorized: 9,000,000

            


    

     

    
      	
               
      

            	
              Outstanding:  5,180,012

            


    

     

    
      	
               
      

            	
              Subject
      to warrants, options, convertible securities,
      etc.:  445,558

            


    

     

    
      	
               
      

            	
              Reserved
      for benefit plans and other
  issuances:  125,000

            


    

     

    
      	
               
      

            	
              Remaining
      authorized but
unissued:  3,249,430

            


    

     

    
      	
               
      

            	
              Shares
      issued after Capitalization Date (other than pursuant to warrants,
      options, convertible securities, etc. as set forth
      above):  0

            


    

    


    


    Preferred
Stock

    Par
value:  No Par Value

     

    Total
Authorized:  1,000,000

     

    Outstanding
(by series): 0

     

    Reserved
for issuance: 0

     

    Remaining authorized but unissued:
1,000,000


    
      
        
        

      

      
        42

        
          

        

      

      
        
        

      

    


    SCHEDULE
C

    


     

    REQUIRED
STOCKHOLDER APPROVALS

     

    


    
      
        
          
            	 
      	
                    Required1

                  	
                    % 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.


    
      
        
        

      

      
        43

        
          

        

      

      
        
        

      

    


    SCHEDULE
D

    


    LITIGATION

    


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

    


    


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


    
      
        
        

      

      
        44

        
          

        

      

      
        
        

      

    


    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


    
      
        
        

      

      
        45

        
          

        

      

      
        
        

      

    


    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

     

     

    46