exv10w1






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 a series of its
preferred 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 Except to the extent supplemented or superseded by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), the Securities Purchase Agreement
(including the Annexes thereto), the Disclosure Schedules and the Warrant constitute the entire
agreement, and supersede all other prior agreements, understandings, representations and
warranties, both written and oral, between the parties, with respect to the subject matter hereof.
This letter agreement constitutes the “Letter Agreement” referred to in the Securities Purchase
Agreement.



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



***




 









 





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



	 	 	 	 	 	 	 
	 	 	UNITED STATES DEPARTMENT OF THE TREASURY	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Herbert M. Allison, Jr.	 	 
	 

	 	Name:
	 	 

Herbert M. Allison, Jr.
	 	 
	 

	 	Title:
	 	Assistant Secretary for Financial Stability	 	 






	 	 	 	 	 	 	 
	 	 	COMPANY: BIRMINGHAM BLOOMFIELD BANCSHARES, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Robert E. Farr	 	 
	 

	 	Name:
	 	 

Robert E. Farr
	 	 
	 

	 	Title:
	 	President and CEO	 	 






Date: December 18, 2009



UST NO.
450 – Letter Agreement


 









 





SCHEDULE A




ADDITIONAL TERMS AND CONDITIONS




	 	 	 
	Company Information:
	 	 
	 
	 	 
	Name of the Company:

	 	Birmingham Bloomfield Bancshares, Inc.
	 
	 	 
	Corporate or other organizational form:

	 	Corporation
	 
	 	 
	Jurisdiction of Organization:

	 	Michigan
	 
	 	 
	Appropriate Federal Banking Agency:

	 	Board of Governors of the Federal Reserve System
	 
	 	 
	Notice Information:

	 	Birmingham Bloomfield Bancshares, Inc.
	 

	 	33583 Woodward Avenue
	 

	 	Birmingham, Michigan 48009
	 

	 	Phone: (248) 723-7000
	 

	 	Facsimile: 248-436-9071
	 
	 	 
	Terms of the Purchase:
	 	 
	 
	 	 
	Series of Preferred Stock Purchased:

	 	Fixed Rate Cumulative Perpetual Preferred Stock, Series C
	 	 	 
	Per Share Liquidation Preference of Preferred Stock:

	 	$ 1,000.00
	 
	 	 
	Number of Shares of Preferred Stock Purchased:
	 	1,744
	 	 	 
	Dividend Payment Dates on the Preferred Stock:

	 	February 15, May 15, August 15 and November 15 of each year
	 
	 	 
	Series of Warrant Preferred Stock:

	 	NA
	 
	 	 
	Number of Warrant Shares:

	 	NA
	 	 	 
	Number of Net Warrant Shares (after net settlement):

	 	NA
	 	 	 
	Exercise Price of the Warrant:
	 	NA

	 
	 	 
	Purchase Price:
	 	$ 1,744,000.00






Closing:




	 	 	 
	Location of Closing:

	 	Hughes Hubbard & Reed LLP, One Battery Park Plaza, New York, NY 10004
	 
	 	 
	Time of Closing:

	 	9:00 a.m.
	 
	 	 
	Date of Closing:

	 	December 18, 2009






Wire Information for Closing:




Contact for Confirmation of Wire Information:





UST NO.
450 – Letter Agreement


 









 





SCHEDULE B




CAPITALIZATION




	 	 	 
	Capitalization Date:

	 	November 30, 2009






	 	 	 	 	 
	Common Stock
	 	 	 	 
	 
	 	 	 	 
	Par value:
	 	No par value

	 
	 	 	 	 
	Total Authorized:
	 	4,500,000
	 
	 	 	 	 
	Outstanding:
	 	1,800,000
	 
	 	 	 	 
	Subject to warrants, options, convertible securities, etc:

	 	266,500
	 
	 	 	 	 
	Reserved for benefit plans and other issuances:

	 	0
	 
	 	 	 	 
	Remaining authorized but unissued:

	 	2,433,500
	 
	 	 	 	 
	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:
	 	500,000
	 
	 	 	 	 
	Outstanding (by series):

	 	1,7171

	 
	 	 	 	 
	Reserved for issuance:

	 	1,7442

	 
	 	 	 	 
	Remaining authorized but unissued:

	 	496,539






	 	 	 
	Holders of 5% or more of any class of capital stock	 	Primary Address
	Resource America: 9.9% of common stock

	 	185 Walnut Street
	 

	 	10th Floor
	 

	 	Philadelphia, PA 19103
	 
	 	 
	The United States Department of Treasury

	 	United States Department of the Treasury
	owns 100% of the Series A and Series B

	 	1500 Pennsylvania Ave., NW,
	Preferred Stock identified in footnote 1 below.

	 	Washington, DC 20220








 




			
	1	 	Reflects 1,635 shares of Fixed Rate
Cumulative Perpetual Preferred Stock, Series A and 82 shares of Fixed Rate
Cumulative Perpetual Preferred Stock, Series B.
	 
	2	 	Reflects 1,744 shares of Fixed Rate
Cumulative Perpetual Preferred Stock, Series C, reserved December 14, 2009 for
issuance to the Investor.




 









 










SCHEDULE C




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: þ




 









 








SCHEDULE D




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: þ




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: þ




 









 





     SCHEDULE E



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: þ






 









 








EXHIBIT A

(Non-Exchange-Traded QFIs, excluding S Corps

and Mutual Organizations)




 





SECURITIES PURCHASE AGREEMENT


STANDARD TERMS




 







 









 








TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	Article I
	 	 	 	 
	 
	 	 	 	 
	Purchase; Closing
	 	 	 	 
	 
	 	 	 	 
	1.1 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
	 	 	13	 
	3.3 Sufficiency of Authorized Warrant Preferred Stock; Exchange Listing
	 	 	13	 
	3.4 Certain Notifications Until Closing
	 	 	13	 
	3.5 Access, Information and Confidentiality
	 	 	14	 
	 
	 	 	 	 
	Article IV
	 	 	 	 
	 
	 	 	 	 
	Additional Agreements
	 	 	 	 
	 
	 	 	 	 
	4.1 Purchase for Investment
	 	 	15	 
	4.2 Legends
	 	 	15	 
	4.3 Certain Transactions
	 	 	17	 
	4.4 Transfer of Purchased Securities and Warrant Shares; Restrictions on Exercise
of the Warrant
	 	 	17	 
	4.5 Registration Rights
	 	 	18	 
	4.6 Depositary Shares
	 	 	29	 
	4.7 Restriction on Dividends and Repurchases
	 	 	29	 
	4.8 Executive Compensation
	 	 	32	 
	4.9 Related Party Transactions
	 	 	32	 
	4.10 Bank and Thrift Holding Company Status
	 	 	32	 
	4.11 Predominantly Financial
	 	 	32	 






-i-









 






	 	 	 	 	 
	 	 	Page	 
	Article V
	 	 	 	 
	 
	 	 	 	 
	Miscellaneous
	 	 	 	 
	 
	 	 	 	 
	5.1 Termination 
	 	 	32	 
	5.2 Survival of Representations and Warranties 
	 	 	33	 
	5.3 Amendment 
	 	 	33	 
	5.4 Waiver of Conditions 
	 	 	33	 
	5.5 Governing Law: Submission to Jurisdiction, Etc.
	 	 	33	 
	5.6 Notices 
	 	 	34	 
	5.7 Definitions 
	 	 	34	 
	5.8 Assignment 
	 	 	35	 
	5.9 Severability 
	 	 	35	 
	5.10 No Third Party Beneficiaries 
	 	 	35	 








-ii-









 








LIST OF ANNEXES




	 	 	 
	ANNEX A:

	 	FORM OF CERTIFICATE OF DESIGNATIONS FOR PREFERRED STOCK
	 
	 	 
	ANNEX B:

	 	FORM OF CERTIFICATE OF DESIGNATIONS FOR WARRANT PREFERRED STOCK
	 
	 	 
	ANNEX C:

	 	FORM OF WAIVER
	 
	 	 
	ANNEX D:

	 	FORM OF OPINION
	 
	 	 
	ANNEX E:

	 	FORM OF WARRANT








-iii-









 








INDEX OF DEFINED TERMS




	 	 	 	 	 
	 	 	Location of	 
	Term	 	Definition	 
	Affiliate
	 	5.7(b)
	Agreement
	 	Recitals
	Appropriate Federal Banking Agency
	 	2.2(s)
	Bank Holding Company
	 	4.10
	Bankruptcy Exceptions
	 	2.2(d)
	Benefit Plans
	 	1.2(d)(iv)
	Board of Directors
	 	2.2(f)
	Business Combination
	 	5.8
	business day
	 	1.3
	Capitalization Date
	 	2.2(b)
	Certificates 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
	 	2.2(b)
	Company
	 	Recitals
	Company Financial Statements
	 	2.2(h)
	Company Material Adverse Effect
	 	2.1(b)
	Company Reports
	 	2.2(i)(i)
	Company Subsidiary; Company Subsidiaries
	 	2.2(e)(ii)
	control; controlled by; under common control with
	 	5.7(b)
	Controlled Group
	 	2.2(n)
	CPP
	 	Recitals
	Disclosure Schedule
	 	2.1(a)
	EESA
	 	1.2(d)(iv)
	ERISA
	 	2.2(n)
	Exchange Act
	 	4.4
	Federal Reserve
	 	4.10
	GAAP
	 	2.1(b)
	Governmental Entities
	 	1.2(c)
	Holder
	 	4.5(l)(i)
	Holders’ Counsel
	 	4.5(l)(ii)
	Indemnitee
	 	4.5(h)(i)
	Information
	 	3.5(c)
	Investor
	 	Recitals
	Junior Stock
	 	4.7(f)
	knowledge of the Company; Company’s knowledge
	 	5.7(c)
	Letter Agreement
	 	Recitals
	officers
	 	5.7(c)
	Parity Stock
	 	4.7(f)






-iv-









 





	 	 	 	 	 
	 	 	 	Location of
	Term	 	 	Definition
	Pending Underwritten Offering
	 	 	4.5(m)
	Permitted Repurchases
	 	 	4.7(c)
	Piggyback Registration
	 	 	4.5(b)(iv)
	Plan
	 	 	2.2(n)
	Preferred Shares
	 	 	Recitals
	Preferred Stock
	 	 	Recitals
	Previously Disclosed
	 	 	2.1(c)
	Proprietary Rights
	 	 	2.2(u)
	Purchase
	 	 	Recitals
	Purchase Price
	 	 	1.1	 
	Purchased Securities
	 	 	Recitals
	register; registered; registration
	 	 	4.5(l)(iii)
	Registrable Securities
	 	 	4.5(l)(iv)
	Registration Expenses
	 	 	4.5(l)(v)
	Regulatory Agreement
	 	 	2.2(s)
	Rule 144; Rule 144A; Rule 159A; Rule 405; Rule 415
	 	 	4.5(l)(vi)
	Savings and Loan Holding Company
	 	 	4.10	 
	Schedules
	 	 	Recitals
	SEC
	 	 	2.2(k)
	Securities Act
	 	 	2.2(a)
	Selling Expenses
	 	 	4.5(l)(vii)
	Senior Executive Officers
	 	 	4.8	 
	Shelf Registration Statement
	 	 	4.5(b)(ii)
	Signing Date
	 	 	2.1(b)
	Special Registration
	 	 	4.5(j)
	subsidiary
	 	 	5.7(a)
	Tax; Taxes
	 	 	2.2(o)
	Transfer
	 	 	4.4	 
	Warrant
	 	 	Recitals
	Warrant Preferred Stock
	 	 	Recitals
	Warrant Shares
	 	 	2.2(d)








-v-









 








SECURITIES PURCHASE AGREEMENT — STANDARD TERMS




Recitals:




     WHEREAS, the United States Department of the Treasury (the “Investor”) may from time to
time agree to purchase shares of preferred stock and warrants from eligible financial
institutions which elect to participate in the Troubled Asset Relief Program Capital Purchase
Program (“CPP”);



     WHEREAS, an eligible financial institution electing to participate in the CPP and issue
securities to the Investor (referred to herein as the “Company”) shall enter into a letter
agreement (the “Letter Agreement”) with the Investor which incorporates this Securities Purchase
Agreement — Standard Terms;



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



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



     WHEREAS, the Company intends to issue in a private placement the number of shares of the
series of its Preferred Stock (“Preferred Stock”) set forth on Schedule A to the
Letter Agreement (the “Preferred Shares”) and a warrant to purchase the number of shares of the
series of its Preferred Stock (“Warrant Preferred Stock”) set forth on Schedule A
 to the Letter Agreement (the “Warrant” and, together with the Preferred Shares, the
“Purchased Securities”) and the Investor intends to purchase (the “Purchase”) from the Company the
Purchased Securities; and



     WHEREAS, the Purchase will be governed by this Securities Purchase Agreement — Standard
Terms and the Letter Agreement, including the schedules thereto (the “Schedules”), specifying
additional terms of the Purchase. This Securities Purchase Agreement — Standard Terms
(including the Annexes hereto) and the Letter Agreement (including
the Schedules thereto) are together referred to as this “Agreement”. All references in this Securities
Purchase Agreement — Standard Terms to “Schedules” are to the Schedules attached to the Letter
Agreement.




     NOW, THEREFORE, in consideration of the premises, and of the representations,
warranties, covenants and agreements set forth herein, the parties agree as follows:



Article I

Purchase; Closing




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



 









 





     1.2
Closing.



     (a) On the terms and subject to the conditions set forth in this Agreement, the closing of the
Purchase (the “Closing”) will take place at the location specified in Schedule A,
 at the time and on the date set forth in Schedule A or as soon as practicable
thereafter, or at such other place, time and date as shall be agreed between the Company and the
Investor. The time and date on which the Closing occurs is referred to in this Agreement as the
“Closing Date”.



     (b) Subject to the fulfillment or waiver of the conditions to the Closing in this Section
1.2, at the Closing the Company will deliver the Preferred Shares and the Warrant, in each case as
evidenced by one or more certificates dated the Closing Date and bearing appropriate legends as
hereinafter provided for, in exchange for payment in full of the Purchase Price by wire transfer of
immediately available United States funds to a bank account designated by the Company on
Schedule A.



     (c) The respective obligations of each of the Investor and the Company to consummate the
Purchase are subject to the fulfillment (or waiver by the Investor and the Company, as applicable)
prior to the Closing of the conditions that (i) any approvals or authorizations of all United
States and other governmental, regulatory or judicial authorities (collectively, “Governmental
Entities”) required for the consummation of the Purchase shall have been obtained or made in
form and substance reasonably satisfactory to each party and shall be in full force and effect and
all waiting periods required by United States and other applicable law, if any, shall have expired
and (ii) no provision of any applicable United States or other law and no judgment, injunction,
order or decree of any Governmental Entity shall prohibit the purchase and sale of the Purchased
Securities as contemplated by this Agreement.



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




     (i) (A) the representations and warranties of the Company set forth in (x) Section
2.2(g) of this Agreement shall be true and correct in all respects as though made on and as
of the Closing Date, (y) Sections 2.2(a) through (f) shall be true and correct in all
material respects as though made on and as of the Closing Date (other than representations
and warranties that by their terms speak as of another date, which representations and
warranties shall be true and correct in all material respects as of such other date) and (z)
Sections 2.2(h) through (v) (disregarding all qualifications or limitations set forth in
such representations and warranties as to “materiality”, “Company Material Adverse Effect”
and words of similar import) shall be true and correct as though made on and as of the
Closing Date (other than representations and warranties that by their terms speak as of
another date, which representations and warranties shall be true and correct as of such
other date), except to the extent that the failure of such representations and warranties
referred to in this Section 1.2(d)(i)(A)(z) to be so true and correct, individually or in
the aggregate, does not have and would not reasonably be expected to have a Company Material
Adverse Effect and (B) the Company shall have



-2-









 






performed in all material respects all obligations required to be performed by it under this
Agreement at or prior to the Closing;




     (ii) the Investor shall have received a certificate signed on behalf of the Company by a
senior executive officer certifying to the effect that the conditions set forth in Section
1.2(d)(i) have been satisfied;




     (iii) the Company shall have duly adopted and filed with the Secretary of State of its
jurisdiction of organization or other applicable Governmental Entity the amendments to its
certificate or articles of incorporation, articles of association, or similar organizational
document (“Charter”) in substantially the forms attached hereto as Annex A
and Annex B (the “Certificates 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 C 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 D;




     (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 E and delivered such executed Warrant to the
Investor or its designee(s).



     1.3 Interpretation. When a reference is made in this Agreement to “Recitals,”
“Articles,” “Sections,” or “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) On or prior to the Signing Date, the Company delivered to the Investor a schedule
(“Disclosure Schedule”) setting forth, among other things, items the disclosure of which is
necessary or appropriate either in response to an express disclosure requirement contained in a
provision hereof or as an exception to one or more representations or warranties contained in
Section 2.2.



     (b) “Company Material Adverse Effect” means a material adverse effect on (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





-4-









 








each case generally affecting the industries in which the Company and its subsidiaries
operate, (B) changes or proposed changes after the Signing Date in generally accepted accounting
principles in the United States (“GAAP”) or regulatory accounting requirements, or authoritative
interpretations thereof, or (C) changes or proposed changes after the Signing Date in securities,
banking and other laws of general applicability or related policies or interpretations of
Governmental Entities (in the case of each of these clauses (A), (B) and (C), other than changes
or occurrences to the extent that such changes or occurrences have or would reasonably be expected
to have a materially disproportionate adverse effect on the Company and its consolidated
subsidiaries taken as a whole relative to comparable U.S. banking or financial services
organizations); or (ii) the ability of the Company to consummate the Purchase and other
transactions contemplated by this Agreement and the Warrant and perform its obligations hereunder
or thereunder on a timely basis.




     (c) “Previously Disclosed” means information set forth on the Disclosure Schedule, provided,
however, that disclosure in any section of such Disclosure Schedule shall apply only to the
indicated section of this Agreement except to the extent that it is reasonably apparent from the
face of such disclosure that such disclosure is relevant to another section of this Agreement.



     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
would be considered 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). As of the Signing Date, the Company does
not have outstanding any securities or other obligations providing the holder the right to



-5-









 





acquire its Common Stock (“Common Stock”) that is not reserved for issuance as specified on
Schedule B, and the Company has not made any other commitment to authorize, issue or sell
any Common Stock. Since the Capitalization Date, the Company has not issued any shares of Common
Stock, other than (i) shares issued upon the exercise 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. Each holder of 5% or more of any class of capital stock of the Company and
such holder’s primary address are set forth on Schedule B.




     (c) Preferred Shares. The Preferred Shares have been duly and validly authorized,
and, when issued and delivered pursuant to this Agreement, such Preferred Shares will be duly
and validly issued and fully paid and non-assessable, will not be issued in violation of any
preemptive 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 Warrant Preferred 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, 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.



     (e) Authorization, Enforceability.




     (i) The Company has the corporate power and authority to execute and deliver this
Agreement and the Warrant and to carry out its obligations hereunder and thereunder (which
includes the issuance 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. 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.



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     (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) 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
subsidiary of the Company (each a “Company Subsidiary” and, collectively, the “Company
Subsidiaries”) under any of the terms, conditions or provisions of (i) 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 Certificates of Designations with the Secretary of
State of its jurisdiction of organization or other applicable Governmental Entity, such
filings and approvals as are required to be made or obtained under any state “blue sky”
laws and such as have been made or obtained, no notice to, filing with, exemption or review
by, or authorization, consent or approval of, any Governmental Entity is required to be
made or obtained by the Company in connection with the consummation by the Company 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.



     (g) No Company Material Adverse Effect. Since the last day of the last completed
fiscal period for which financial statements are included in the Company Financial Statements
(as defined below), no fact, circumstance, event, change, occurrence, condition or development





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has occurred that, individually or in the aggregate, has had or would reasonably be
expected to have a Company Material Adverse Effect.




     (h) Company Financial Statements. The Company has Previously Disclosed each of the
consolidated financial statements of the Company and its consolidated subsidiaries for each of the
last three completed fiscal years of the Company (which shall be audited to the extent audited
financial statements are available prior to the Signing Date) and each completed quarterly period
since the last completed fiscal year (collectively the “Company Financial Statements”).
The Company Financial Statements present fairly in all material respects the consolidated
financial position of the Company and its consolidated subsidiaries as of the dates indicated
therein 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) and (B) have been prepared from, and
are in accordance with, the books and records of the Company and the Company Subsidiaries.



     (i) Reports.




     (i) Since December 31, 2006, the Company and each Company Subsidiary has filed all
reports, registrations, documents, filings, statements and submissions, together with any
amendments thereto, that it was required to file with any Governmental Entity (the
foregoing, collectively, the “Company Reports”) and has paid all fees and assessments due
and payable in connection therewith, except, in each case, as would not, individually or in
the aggregate, reasonably be expected to have a Company Material Adverse Effect. As 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.




     (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 adequate disclosure
controls and procedures to ensure that material information relating to the Company,
including the consolidated Company Subsidiaries, is made known to the chief executive
officer and the 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 that are reasonably likely to adversely affect the Company’s ability to record,
process, summarize and report financial information and (y) any fraud, whether or not
material, that involves management or



-8-









 






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 Securities and Exchange
Commission (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 C
 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 D, the Company and the Company Subsidiaries
have complied in all respects and are not in default or violation of, and none of them is, to the
knowledge of the Company, under investigation with respect to or, to the knowledge of the Company,
have been threatened to be charged with or given notice of any violation of, any applicable
domestic (federal, state or local) or foreign law, statute, ordinance, license, rule, regulation,
policy or guideline, order, demand, writ, injunction, decree or judgment of any Governmental
Entity, other than such noncompliance, defaults or violations that would not, individually or in
the aggregate, reasonably be expected to have a Company Material Adverse Effect. Except for
statutory or regulatory restrictions of general application or as set forth on Schedule D,
 no Governmental Entity has placed any restriction on the business or properties of





-9-









 








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
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,





-10-









 








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 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.





-11-









 








     (s) Agreements with Regulatory Agencies. Except as set forth on Schedule E,
 neither the Company nor any Company Subsidiary is subject to any material cease-and-desist or
other similar order or enforcement action issued by, or is a party to any material written
agreement, consent agreement or memorandum of understanding with, or is a party to any commitment
letter or similar undertaking to, or is subject to any capital directive by, or since December 31,
2006, has adopted any board resolutions at the request of, any Governmental Entity (other than the
Appropriate Federal Banking Agencies with jurisdiction over the Company and the Company
Subsidiaries) that currently restricts in any material respect the conduct 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) 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



-12-









 





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. 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.



     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 Warrant Preferred Stock; Exchange Listing.



     (a) During the period from the Closing Date until the date on which the Warrant has been
fully exercised, the Company 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.



     (b) If the Company lists its Common Stock on any national securities exchange, the Company
shall, if requested by the Investor, promptly use its reasonable best efforts to cause the
Preferred Shares and Warrant Shares to be approved for listing on a national securities exchange as
promptly as practicable following such request.



     3.4 Certain Notifications Until Closing. From the Signing Date until the Closing, the
Company shall promptly notify the Investor of (i) any fact, event or circumstance of which it is
aware and which would reasonably be expected to cause any representation or warranty of the Company
contained in this Agreement to be untrue or inaccurate in any material respect or to




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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, or otherwise to the extent necessary to evaluate, manage,
or transfer its investment in the Company, to examine the corporate books and make copies thereof
and to discuss the affairs, finances and accounts 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) From the Signing Date until the date on which all of the Preferred Shares and
Warrant Shares have been redeemed in whole, the Company will deliver, or will cause to be
delivered, to the Investor:




     (i) as soon as available after the end of each fiscal year of the Company, and in any
event within 90 days thereafter, a consolidated balance sheet of the Company as of the end
of such fiscal year, and consolidated statements of income, retained earnings and cash flows
of the Company for such year, in each case prepared in accordance with GAAP and setting
forth in each case in comparative form the figures for the previous fiscal year of the
Company, and which shall be audited to the extent audited financial statements are
available; and



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     (ii) as soon as available after the end of the first, second and third
quarterly periods in each fiscal year of the Company, a copy of any quarterly reports
provided to other stockholders of the Company or Company management.



     (c) 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
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.



     (d) The Investor’s information rights pursuant to Section 3.5(b) may be assigned by the
Investor to a transferee or assignee of the Purchased Securities or the Warrant Shares or with a
liquidation preference or, in the case of the Warrant, the liquidation preference of the
underlying shares of Warrant Preferred Stock, no less than an amount equal to 2% of the initial
aggregate liquidation preference of the Preferred Shares.



Article IV

Additional Agreements




     4.1 Purchase for Investment. The Investor acknowledges that the Purchased Securities
and the Warrant Shares have not been registered under the Securities Act or under any state
securities 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 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



-15-









 






OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS
IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS.




THIS INSTRUMENT IS ISSUED SUBJECT TO THE RESTRICTIONS ON TRANSFER AND OTHER PROVISIONS OF
A SECURITIES PURCHASE AGREEMENT BETWEEN THE ISSUER OF THESE SECURITIES AND THE INVESTOR
REFERRED TO THEREIN, A COPY OF WHICH IS ON FILE WITH THE ISSUER. THE SECURITIES
REPRESENTED BY THIS INSTRUMENT MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT IN
COMPLIANCE WITH SAID AGREEMENT. ANY SALE OR OTHER TRANSFER NOT IN COMPLIANCE WITH SAID
AGREEMENT WILL BE VOID.”



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




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




THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “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



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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.




THIS INSTRUMENT IS ISSUED SUBJECT TO THE RESTRICTIONS ON TRANSFER AND OTHER PROVISIONS OF A
SECURITIES PURCHASE AGREEMENT BETWEEN THE ISSUER OF THESE SECURITIES AND THE INVESTOR
REFERRED TO THEREIN, A COPY OF WHICH IS ON FILE WITH THE ISSUER. THE SECURITIES REPRESENTED
BY THIS INSTRUMENT MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH SAID
AGREEMENT. ANY SALE OR OTHER TRANSFER NOT IN COMPLIANCE WITH SAID AGREEMENT WILL BE VOID.”



     (c) In 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
(b) above; provided that the Investor surrenders to the Company the previously issued
certificates or other instruments.



     4.3 Certain Transactions. The Company will not merge or consolidate with, or sell,
transfer or lease all or substantially all of its property or assets to, any other party unless
the successor, transferee or lessee party (or its ultimate parent entity), as the case may be (if
not the Company), expressly assumes the due and punctual performance and observance of each and
every covenant, agreement and condition of this Agreement to be performed and observed by the
Company.



     4.4 Transfer of Purchased Securities and Warrant Shares; Restrictions on Exercise of the
Warrant. Subject to compliance with applicable securities laws, the Investor shall be
permitted to transfer, sell, assign or otherwise dispose of (“Transfer”) all
or a portion of the Purchased Securities or Warrant Shares at any time, and the Company shall take
all steps as may be reasonably requested by the Investor to facilitate the Transfer of the
Purchased Securities and the Warrant Shares; provided that the Investor shall not
Transfer any Purchased Securities or Warrant Shares if such transfer would require the Company to
be subject to the periodic reporting requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934 (the “Exchange Act”). In furtherance of the foregoing, the Company
shall provide reasonable cooperation to facilitate any Transfers of the Purchased Securities or
Warrant Shares, including, as is reasonable under the circumstances, by furnishing such
information concerning the Company and its business as a proposed transferee may reasonably
request (including such information as is required by Section 4.5(k)) and making management of the
Company



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reasonably available to respond to questions of a proposed transferee in accordance with
customary practice, subject in all cases to the proposed transferee agreeing to a customary
confidentiality agreement.




     4.5 Registration Rights.



     (a) Unless and until the Company becomes subject to the reporting requirements of Section 13
or 15(d) of the Exchange Act, the Company shall have no obligation to comply with the provisions
of this Section 4.5 (other than Section 4.5(b)(iv)-(vi)); provided that the Company covenants and
agrees that it shall comply with this Section 4.5 as soon as practicable after the date that it
becomes subject to such reporting requirements.



     (b) Registration.




     (i) Subject to the terms and conditions of this Agreement, the Company covenants and
agrees that as promptly as practicable after the date that the Company becomes subject to
the reporting requirements of Section 13 or 15(d) of the Exchange Act (and in any event no
later than 30 days thereafter), the Company shall prepare and file with the SEC a Shelf
Registration Statement covering all Registrable Securities (or otherwise designate an
existing Shelf Registration Statement filed with the SEC to cover the Registrable
Securities), and, to the extent the Shelf Registration Statement has not theretofore been
declared effective or is not automatically effective upon such filing, the Company shall use
reasonable best efforts to cause such Shelf Registration Statement to be declared or become
effective and to keep such Shelf Registration Statement continuously effective and in
compliance with the Securities Act and usable for resale of such Registrable Securities for
a period from the date of its initial effectiveness until such time as there are no
Registrable Securities remaining (including by refiling such Shelf Registration Statement
(or a new Shelf Registration Statement) if the initial Shelf Registration Statement
expires). Notwithstanding the foregoing, if 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(b)(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(d);
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





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




     (iv) If during any period when an effective Shelf Registration Statement is not available, the
Company proposes to register any of its equity securities, other than a registration pursuant to
Section 4.5(b)(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(b)(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(b)(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(b)(iv). In such event, the right of Investor and all other Holders to
registration pursuant to Section 4.5(b) will be conditioned upon such persons’ participation in
such underwriting and the inclusion 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



-19-









 






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(b)(ii) or (y) a Piggyback Registration under
Section 4.5(b)(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(b)(iv), the securities the Company proposes to sell, (B) then the Registrable
Securities of the Investor and all other Holders who have requested inclusion of Registrable
Securities pursuant to Section 4.5(b)(ii) or Section 4.5(b)(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.



     (c) 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.



     (d) Obligations of the Company. 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 or post-effective
amendment with respect to a proposed offering of Registrable Securities pursuant to an
effective registration statement, subject to Section 4.5(d), keep such registration



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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 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;



-21-









 






     (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 applicable Registrable Securities 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(d)(x) cease to be true and correct.




     (vii) Use its reasonable best efforts to prevent the issuance or obtain the
withdrawal of any order suspending the effectiveness of any registration statement
referred to in Section 4.5(d)(vi)(C) at the earliest practicable time.




     (viii) Upon the occurrence of any event contemplated by Section 4.5(d)(v) or 4.5(d)(vi)(E),
promptly prepare a post-effective amendment to such registration statement or a supplement to the
related prospectus or file any other required document so that, as thereafter delivered to the
Holders and any underwriters, the prospectus will not contain an untrue statement of a material
fact or omit to state any material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. If the Company notifies the Holders in
accordance with Section 4.5(d)(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(b)(ii), enter into an
underwriting agreement in customary form, scope and substance and take all





-22-









 









such other actions reasonably requested by the Holders of a majority of the Registrable
Securities being sold in connection therewith or by the managing underwriter(s), if any, to
expedite or facilitate the underwritten disposition of such Registrable Securities, and in
connection therewith in any underwritten offering (including making members of management and
executives of the Company available to participate in “road shows”, similar sales events and other
marketing activities), (A) make such representations and warranties to the Holders that are selling
stockholders and the managing underwriter(s), if any, with respect to the business of the Company
and its subsidiaries, and the Shelf Registration Statement, prospectus and documents, if any,
incorporated or deemed to be incorporated by reference therein, in each case, in customary form,
substance and scope, and, if true, confirm the same if and when requested, (B) use its reasonable
best efforts to furnish the underwriters with opinions of counsel to the Company, addressed to the
managing underwriter(s), if any, covering the matters customarily covered in such opinions
requested in underwritten offerings, (C) use its reasonable best efforts to obtain “cold comfort”
letters from the independent certified public accountants of the Company (and, if necessary, any
other independent certified public accountants of any business acquired by the Company for which
financial statements and financial data are included in the Shelf Registration Statement) who have
certified the financial statements included in such Shelf Registration Statement, addressed to each
of the managing underwriter(s), if any, such letters to be in customary form and covering matters
of the type customarily covered in “cold comfort” letters, (D) if an underwriting agreement is
entered into, the same shall contain indemnification provisions and procedures customary in
underwritten offerings (provided that the Investor shall not be obligated to provide any
indemnity), and (E) deliver such documents and certificates as may be reasonably requested by the
Holders of a majority of the Registrable Securities being sold in connection therewith, their
counsel and the managing underwriter(s), if any, to evidence the continued validity of the
representations and warranties made pursuant to clause (i) above and to evidence compliance with
any customary conditions contained in the underwriting agreement or other agreement entered into by
the Company.




     (xi) Make available for inspection by a representative of Holders that are selling
stockholders, the managing underwriter(s), if any, and any attorneys or accountants retained by
such Holders or managing underwriter(s), at the offices where normally kept, during reasonable
business hours, financial and other records, pertinent corporate documents and properties of the
Company, and cause the officers, directors and employees of the Company to supply all information
in each case reasonably requested (and of the type customarily provided in connection with due
diligence conducted in connection with a registered public offering of securities) by any such
representative, managing underwriter(s), attorney or accountant in connection with such Shelf
Registration Statement.




     (xii) Use reasonable best efforts to cause all such Registrable Securities to be listed on
each national securities exchange on which similar securities issued by the Company are then
listed or, if no similar securities issued by the Company are then listed on any national
securities exchange, use its reasonable best efforts to cause all such



-23-









 






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.



     (e) Suspension of Sales. Upon receipt of written notice from the Company that a
registration statement, prospectus or prospectus supplement contains or may contain an untrue
statement of a material fact or omits or may omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or that circumstances exist that
make inadvisable use of such registration statement, prospectus or prospectus supplement, the
Investor and each Holder of Registrable Securities shall forthwith discontinue disposition of
Registrable Securities until the Investor and/or Holder has received copies of a supplemented or
amended prospectus or prospectus supplement, or until the Investor and/or such Holder is advised in
writing by the Company that the use of the prospectus and, if applicable, prospectus supplement may
be resumed, and, if so directed by the Company, the Investor and/or such Holder shall deliver to
the Company (at the Company’s expense) all copies, other than permanent file copies then in the
Investor and/or such Holder’s possession, of the prospectus and, if applicable, prospectus
supplement covering such Registrable Securities current at the time of receipt of such notice. The
total number of days that any such suspension may be in effect in any 12-month period shall not
exceed 90 days.



     (f) Termination of Registration Rights. A Holder’s registration rights as to any
securities held by such Holder (and its Affiliates, partners, members and former members) shall
not be available unless such securities are Registrable Securities.



     (g) Furnishing Information.




     (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(d) that Investor and/or the selling Holders and the
underwriters, if any, shall furnish to the Company such information regarding themselves,
the Registrable Securities held by them and the intended method of





-24-









 













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



     (h) Indemnification.




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




     (ii) If the indemnification provided for in Section 4.5(h)(i) is unavailable to an Indemnitee
with respect to any losses, claims, damages, actions, liabilities, costs or expenses referred to
therein or is insufficient to hold the Indemnitee 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



-25-









 






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(h)(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(h)(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.



     (i) Assignment of Registration Rights. The rights of the Investor to registration of
Registrable Securities pursuant to Section 4.5(b) may be assigned by the Investor to a transferee
or assignee of Registrable Securities with a liquidation preference or, in the case of the
Warrant, the liquidation preference of the underlying shares of Warrant Preferred Stock, 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.



     (j) Clear Market. With respect to any underwritten offering of Registrable Securities
by the Investor or other Holders pursuant to this Section 4.5, the Company agrees not to effect
(other than pursuant to such registration or pursuant to a Special Registration) any public sale or
distribution, or to file any Shelf Registration Statement (other than such registration or a
Special Registration) covering any preferred stock of the Company or any securities convertible
into or exchangeable or exercisable for preferred stock of the Company, 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 S4 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.



     (k) 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:



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




     (ii) (A) file with the SEC, in a timely manner, all reports and other documents
required of the Company under the Exchange Act, and (B) if at any time the Company is not
required to file such reports, make available, upon the request of any Holder, such
information necessary to permit sales pursuant to Rule 144A (including the information
required by Rule 144A(d)(4) under the Securities Act);




     (iii) so long as the Investor or a Holder owns any Registrable Securities, furnish to
the Investor or such Holder forthwith upon request: a written statement by the Company as
to its compliance with the reporting requirements of Rule 144 under the Securities Act,
and of the Exchange Act; a copy of the most recent annual or quarterly report of the
Company; and such other reports and documents as the Investor or Holder may reasonably
request in availing itself of any rule or regulation of the SEC allowing it to sell any
such securities to the public without registration; and




     (iv) take such further action as any Holder may reasonably request, all to the
extent required from time to time to enable such Holder to sell Registrable Securities
without registration under the Securities Act.



     (l) 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 or amendment thereto in
compliance with the Securities Act and applicable rules and regulations thereunder, and
the declaration or ordering of effectiveness of such registration statement or amendment
thereto 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(q)) and (C) any equity securities issued or issuable directly or
indirectly with respect to the securities referred to in the foregoing clauses (A) or (B)
by way of conversion, exercise or exchange thereof, including the Warrant Shares, or share
dividend or share split or in connection with a combination of shares, recapitalization,
reclassification, merger, amalgamation, arrangement, consolidation or other






-27-









 









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(p), they may be sold pursuant to
Rule 144 without limitation thereunder on volume or manner of sale, (3) they shall have
ceased to be outstanding or (4) they have been sold in a private transaction in which the
transferor’s rights under this Agreement are not assigned to the transferee of the
securities. No Registrable Securities may be registered under more than one registration
statement at any one time.




     (v) “Registration Expenses” mean all expenses incurred by the Company in effecting any
registration pursuant to this Agreement (whether or not any registration or prospectus
becomes effective or final) or otherwise complying with its obligations under this Section
4.5, including all registration, filing and listing fees, printing expenses, fees and
disbursements of counsel for the Company, blue sky fees and expenses, expenses incurred in
connection with any “road show”, the reasonable fees and disbursements of Holders’ Counsel,
and expenses of the Company’s independent accountants in connection with any regular or
special reviews or audits incident to or required by any such registration, but shall not
include Selling Expenses.




     (vi) “Rule 144”, “Rule 144A”, “Rule 159A”, “Rule 405” and
“Rule 41 5” 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).



     (m) At any time, any holder of Securities (including any Holder) may elect to forfeit its
rights set forth in this Section 4.5 from that date forward; provided, that a Holder forfeiting
such rights shall nonetheless be entitled to participate under Section 4.5(b)(iv) — (vi) in any
Pending Underwritten Offering to the same extent that such Holder would have been entitled to 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(g) with respect to any prior registration or
Pending Underwritten Offering. “Pending Underwritten Offering” means, with respect to any Holder
forfeiting its rights pursuant to this Section 4.5(m), any underwritten offering of Registrable
Securities in which such Holder has advised the Company of its intent to register its Registrable
Securities either pursuant to Section 4.5(b)(ii) or 4.5(b)(iv) prior to the date of such Holder’s
forfeiture.



     (n) 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



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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.




     (o) No Inconsistent Agreements. The Company shall not, on or after the Signing Date,
enter into any agreement with respect to its securities that may impair the rights granted to the
Investor and the Holders under this Section 4.5 or that otherwise conflicts with the provisions
hereof in any manner that may impair the rights granted to the Investor and the Holders under this
Section 4.5. In the event the Company has, prior to the Signing Date, entered into any agreement
with respect to its securities that is inconsistent with the rights granted to the Investor and
the Holders under this Section 4.5 (including agreements that are inconsistent with the order of
priority contemplated by Section 4.5(b)(vi)) or that may otherwise conflict with the provisions
hereof, the Company shall use its reasonable best efforts to amend such agreements to ensure they
are consistent with the provisions of this Section 4.5.



     (p) Certain Offerings by the Investor. In the case of any securities held by the
Investor that cease to be Registrable Securities solely by reason of clause (2) in the definition
of “Registrable Securities,” the provisions of Sections 4.5(b)(ii), clauses (iv), (ix) and
(x)-(xii) of Section 4.5(d), Section 4.5(h) and Section 4.5(j) shall continue to apply until such
securities otherwise cease to be Registrable Securities. In any such case, an “underwritten”
offering or other disposition shall include any distribution of such securities on behalf of the
Investor by one or more broker-dealers, an “underwriting agreement” shall include any purchase
agreement entered into by such broker-dealers, and any “registration statement” or “prospectus”
shall include any offering document approved by the Company and used in connection with such
distribution.



     (q) 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 Depositary Shares. Upon request by the Investor at any time following the Closing
Date, the Company shall promptly enter into a depositary arrangement, pursuant to customary
agreements reasonably satisfactory to the Investor and with a depositary reasonably acceptable to
the Investor, pursuant to which the Preferred Shares or the Warrant Shares may be deposited and
depositary shares, each representing a fraction of a Preferred Share or Warrant Share, as
applicable, as specified by the Investor, may be issued. From and after the execution of any such
depositary arrangement, and the deposit of any Preferred Shares or Warrant Shares, as applicable,
pursuant thereto, the depositary shares issued pursuant thereto shall be deemed “Preferred Shares”,
“Warrant Shares” and, as applicable, “Registrable Securities” for purposes of this Agreement.



     4.7 Restriction on Dividends and Repurchases.






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     (a) Prior to the earlier of (x) the third anniversary of the Closing Date and (y) the date on
which all of the Preferred Shares and Warrant Shares have been redeemed in whole or the Investor
has transferred all of the Preferred Shares and Warrant 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, declare or pay any dividend or make any distribution on capital stock or
other equity securities of any kind of the Company or any Company Subsidiary (other than (i)
regular quarterly cash dividends of not more than the amount of the last quarterly cash dividend
per share declared or, if lower, announced to its holders of Common Stock an intention to declare,
on the Common Stock prior to November 17, 2008, as adjusted for any stock split, stock dividend,
reverse stock split, reclassification or similar transaction, (ii) dividends payable solely in
shares of Common Stock, (iii) regular dividends on shares of preferred stock in accordance with the
terms thereof and which are permitted under the terms of the Preferred Shares and the Warrant
Shares, (iv) dividends or distributions by any wholly-owned Company Subsidiary or (v) dividends or
distributions by any Company Subsidiary required pursuant to binding contractual agreements entered
into prior to November 17, 2008).



     (b) During the period beginning on the third anniversary of the Closing Date and ending on the
earlier of (i) the tenth anniversary of the Closing Date and (ii) the date on which all of the
Preferred Shares and Warrant Shares have been redeemed in whole or the Investor has transferred all
of the Preferred Shares and Warrant 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, (A) pay any per share dividend or distribution on capital stock or other equity
securities of any kind of the Company at a per annum rate that is in excess of 103% of the
aggregate per share dividends and distributions for the immediately prior fiscal year (other than
regular dividends on shares of preferred stock in accordance with the terms thereof and which are
permitted under the terms of the Preferred Shares and the Warrant Shares); provided that
no increase in the aggregate amount of dividends or distributions on Common Stock shall be
permitted as a result of any dividends or distributions paid in shares of Common Stock, any stock
split or any similar transaction or (B) pay aggregate dividends or distributions on capital stock
or other equity securities of any kind of any Company Subsidiary that is in excess of 103% of the
aggregate dividends and distributions paid for the immediately prior fiscal year (other than in the
case of this clause (B), (1) regular dividends on shares of preferred stock in accordance with the
terms thereof and which are permitted under the terms of the Preferred Shares and the Warrant
Shares, (2) dividends or distributions by any wholly-owned Company Subsidiary, (3) dividends or
distributions by any Company Subsidiary required pursuant to binding contractual agreements entered
into prior to November 17, 2008) or (4) dividends or distributions on newly issued shares of
capital stock for cash or other property.



     (c) Prior to the earlier of (x) the tenth anniversary of the Closing Date and (y) the date on
which all of the Preferred Shares and Warrant Shares have been redeemed in whole or the Investor
has transferred all of the Preferred Shares and Warrant 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, 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 Company Subsidiary, or any trust
preferred securities issued by the Company or any Affiliate of the Company, other



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than (i) redemptions, purchases or other acquisitions of the Preferred Shares and Warrant Shares,
(ii) in connection with the administration of any employee benefit plan in the ordinary course of
business and consistent with past practice, (iii) the acquisition by the Company or any 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, (iv) 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
(iv), solely to the extent required pursuant to binding contractual agreements entered into prior
to the Signing Date or any subsequent agreement for the accelerated exercise, settlement or
exchange thereof for Common Stock (clauses (ii) and (iii), collectively, the “Permitted
Repurchases”), (v) redemptions of securities held by the Company or any wholly-owned Company
Subsidiary or (vi) redemptions, purchases or other acquisitions of capital stock or other equity
securities of any kind of any Company Subsidiary required pursuant to binding contractual
agreements entered into prior to November 17, 2008.




     (d) Until such time as the Investor ceases to own any Preferred Shares or Warrant Shares, the
Company shall not repurchase any Preferred Shares or Warrant Shares from any holder thereof,
whether by means of open market purchase, negotiated transaction, or otherwise, other than
Permitted Repurchases, unless it offers to repurchase a ratable portion of the Preferred Shares or
Warrant Shares, as the case may be, then held by the Investor on the same terms and conditions.



     (e) During the period beginning on the tenth anniversary of the Closing and ending on the date
on which all of the Preferred Shares and Warrant Shares have been redeemed in whole or the Investor
has transferred all of the Preferred Shares and Warrant 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 capital stock
or other equity securities of any kind of the Company or any Company Subsidiary; 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 Company Subsidiary, 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 and Warrant Shares, (B) regular dividends on shares of
preferred stock in accordance with the terms thereof and which are permitted under the terms of the
Preferred Shares and the Warrant Shares, or (C) dividends or distributions by any wholly-owned
Company Subsidiary.



     (f) “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).



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     4.8 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.



     4.9 Related Party Transactions. Until such time as the Investor ceases to own any
Purchased Securities or Warrant Shares, the Company and the Company Subsidiaries shall not enter
into transactions with Affiliates or related persons (within the meaning of Item 404 under the
SEC’s Regulation S-K) unless (i) such transactions are on terms no less favorable to the Company
and the Company Subsidiaries than could be obtained from an unaffiliated third party, and (ii)
have been approved by the audit committee of the Board of Directors or comparable body of
independent directors of the Company.



     4.10 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.



     4.11 Predominantly Financial. For as long as the Investor owns any Purchased
Securities or Warrant Shares, the Company, to the extent it is not itself an insured depository
institution, agrees to remain predominantly engaged in financial activities. A company is
predominantly engaged in financial activities 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:






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     (a) by either the Investor or the Company if the Closing shall not have occurred by the
30th calendar day following the Signing Date; provided, however, that in the event the
Closing has not occurred by such 30th calendar day, the parties will consult in good faith to
determine whether to extend the term of this Agreement, it being understood that the parties shall
be required to consult only until the fifth day after such 30th calendar day and not be under any
obligation to extend the term of this Agreement thereafter; provided, further, that the
right to terminate this Agreement under this Section 5.1(a) shall not be available to any party
whose breach of any representation or warranty or failure to perform any obligation under this
Agreement shall have caused or resulted in the failure of the Closing to occur on or prior to such
date; or



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



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



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




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



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



     5.4 Waiver of Conditions. The conditions to each party’s obligation to consummate
the Purchase are for the sole benefit of such party and may be waived by such party in whole or
in part to the extent permitted by applicable law. No waiver will be effective unless it is in a
writing signed by a duly authorized officer of the waiving party that makes express reference to
the provision or provisions subject to such waiver.



     5.5 Governing Law: Submission to Jurisdiction, Etc. This Agreement will be governed
by and construed in accordance with the federal law of the United States if and to




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the extent such law is applicable, and otherwise in accordance with the laws of the State of
New York applicable to contracts made and to be performed entirely within such State. Each of the
parties hereto agrees (a) to submit to the exclusive jurisdiction and venue of the United States
District Court for the District of Columbia and the United States Court of Federal Claims for any
and all civil actions, suits or proceedings arising out of or relating to this Agreement or the
Warrant or the transactions contemplated hereby or thereby, and (b) that notice may be served upon
(i) the Company at the address and in the manner set forth for notices to the Company in Section
5.6 and (ii) the Investor in accordance with federal law. To the extent permitted by applicable
law, each of the parties hereto hereby unconditionally waives trial by jury in any civil legal
action or proceeding relating to this Agreement or the Warrant or the transactions contemplated
hereby or thereby.




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



If to the Investor:




United States Department of the Treasury

1500 Pennsylvania Avenue, NW, Room 2312

Washington, D.C. 20220

Attention: Assistant General Counsel (Banking

and Finance) Facsimile: (202) 622-1974




     5.7 Definitions



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



     (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





-34-









 








policies of such person, whether through the ownership of voting securities by
contract or otherwise.




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



     5.8 Assignment. Neither this Agreement nor any right, remedy, obligation nor
liability arising hereunder or by reason hereof shall be assignable by any party hereto without the
prior written consent of the other party, and any attempt to assign any right, remedy, obligation
or liability hereunder without such consent shall be void, except (a) an assignment, in the case of
a merger, consolidation, statutory share exchange or similar transaction that requires the approval
of the Company’s stockholders (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 Sections 3.5 and 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.



***







-35-









 








ANNEX A




FORM OF CERTIFICATE OF DESIGNATIONS FOR PREFERRED STOCK

[SEE ATTACHED]




 









 





ANNEX A




CERTIFICATE OF DESIGNATIONS




OF




FIXED RATE CUMULATIVE PERPETUAL PREFERRED STOCK, SERIES C




OF




BIRMINGHAM BLOOMFIELD BANCSHARES, INC.




     Birmingham Bloomfield Bancshares, Inc., a corporation organized and existing under the laws
of the State of Michigan (the “Issuer”), in accordance with the provisions of Section 302
of the Michigan Business Corporation Act, does hereby certify:



     The board of directors of the Issuer (the “Board of Directors”), in accordance with
the articles of incorporation and bylaws of the Issuer and applicable law, adopted the following
resolution on December 14, 2009 creating a series of 1,744 shares of Preferred Stock of the Issuer
designated as “Fixed Rate Cumulative Perpetual Preferred Stock, Series C”.



     RESOLVED, that pursuant to the provisions of the articles of incorporation and the bylaws of
the Issuer and applicable law, a series of Preferred Stock, no par value per share, of the Issuer
be and hereby is created, and that the designation and number of shares of such series, and the
voting and other powers, preferences and relative, participating, optional or other rights, and
the qualifications, limitations and restrictions thereof, of the shares of such series, are as
follows:



     Part 1. Designation and Number of Shares. There is hereby created out of the
authorized and unissued shares of preferred stock of the Issuer a series of preferred stock
designated as the “Fixed Rate Cumulative Perpetual Preferred Stock, Series C” (the “Designated
Preferred Stock”). The authorized number of shares of Designated Preferred Stock shall be
1,744.



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



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



     (a) “Common Stock” means the common stock, no par value per share, of the Issuer.



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





1









 








     (c) “Junior Stock” means the Common Stock, and any other class or series of
stock of the Issuer the terms of which expressly provide that it ranks junior to Designated
Preferred Stock as to dividend rights and/or as to rights on liquidation, dissolution or
winding up of the Issuer.



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



     (e) “Minimum Amount” means $436,000.



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



     (g) “Signing Date” means the Original Issue Date.



     Part 4. Certain Voting Matters. Holders of shares of Designated Preferred Stock will
be entitled to one vote for each such share on any matter on which holders of Designated Preferred
Stock are entitled to vote, including any action by written consent.



[Remainder of Page Intentionally Left Blank]




2









 





     IN WITNESS WHEREOF, Birmingham Bloomfield Bancshares, Inc. has caused this
Certificate of Designations to be signed by Robert E. Farr, its President and Chief Executive
Officer, this 15th day of December, 2009.



	 	 	 	 	 	 	 
	 

	 	BIRMINGHAM BLOOMFIELD BANCSHARES, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

Robert E. Farr
	 	 
	 

	 	Title:
	 	President and Chief Executive Officer	 	 







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Schedule A




STANDARD PROVISIONS




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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



     (n) “Qualified Equity Offering” means the sale and issuance for cash by the Issuer to
persons other than the Issuer or any of its subsidiaries after the Original Issue Date of shares
of perpetual Preferred Stock, Common Stock or any combination of such stock, that, in each case,
qualify as and may be included in Tier 1 capital of the Issuer at the time of issuance under the
applicable risk-based capital guidelines of the Issuer’s Appropriate Federal Banking Agency (other
than any such sales and issuances made pursuant to agreements or arrangements entered into, or
pursuant to financing plans which were publicly announced, on or prior to November 17, 2008).



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



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



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



     Section 3. Dividends.



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



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Dividend Period shall be the period from and including the Original Issue Date to, but
excluding, the next Dividend Payment Date.




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



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



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



     (b) Priority of Dividends. So long as any share of Designated
Preferred Stock remains outstanding, no dividend or distribution shall be declared or paid on the
Common Stock or any other shares of Junior Stock (other than dividends payable solely in shares of
Common Stock) or Parity Stock, subject to the immediately following paragraph in the case of Parity
Stock, and no Common Stock, Junior Stock or Parity Stock shall be, directly or indirectly,
purchased, redeemed or otherwise acquired for consideration by the Issuer or any of its
subsidiaries unless all accrued and unpaid dividends for all past Dividend Periods, including the
latest completed Dividend Period (including, if applicable as provided in Section 3(a) above,
dividends on such amount), on all outstanding shares of Designated Preferred Stock have been or are
contemporaneously declared and paid in full (or have been declared and a sum sufficient for the
payment thereof has been set aside for the benefit of the holders of shares of Designated Preferred
Stock on the applicable record date). The foregoing limitation shall not apply to (i) redemptions,
purchases or other acquisitions of shares of Common Stock or other Junior Stock in connection with
the administration of any employee benefit plan in the ordinary course of business and consistent
with past practice; (ii) the acquisition by the Issuer or any of its subsidiaries of record
ownership in Junior Stock or Parity Stock for the beneficial ownership of any other persons (other
than the Issuer or any of its subsidiaries), including as trustees or custodians; and (iii) the
exchange or conversion of Junior Stock for or into other Junior Stock or of Parity Stock for or
into other Parity Stock (with the same or lesser aggregate liquidation amount) or Junior Stock, in
each case, solely to the extent required pursuant to binding contractual agreements entered into
prior to the Signing Date or any subsequent agreement for the accelerated exercise, settlement or
exchange thereof for Common Stock.



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



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



     Section 4. Liquidation Rights.



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



     (b) Partial Payment. If in any distribution described in Section 4(a) above the assets
of the Issuer or proceeds thereof are not sufficient to pay in full the amounts payable with
respect to all outstanding shares of Designated Preferred Stock and the corresponding amounts
payable with respect of any other stock of the Issuer ranking equally with Designated Preferred
Stock as



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to such distribution, holders of Designated Preferred Stock and the holders of such other
stock shall share ratably in any such distribution in proportion to the full respective
distributions to which they are entitled.




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



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



     Section 5. Redemption.



     (a) Optional Redemption. Except as provided below, the Designated Preferred Stock may
not be redeemed prior to the first Dividend Payment Date falling on or after the third anniversary
of the Original Issue Date. On or after the first Dividend Payment Date falling on or after the
third anniversary of the Original Issue Date, the Issuer, at its option, subject to the approval of
the Appropriate Federal Banking Agency, may redeem, in whole or in part, at any time and from time
to time, out of funds legally available therefor, the shares of Designated Preferred Stock at the
time outstanding, upon notice given as provided in Section 5(c) below, at a redemption price equal
to the sum of (i) the Liquidation Amount per share and (ii) except as otherwise provided below, any
accrued and unpaid dividends (including, if applicable as provided in Section 3(a) above, dividends
on such amount) (regardless of whether any dividends are actually declared) to, but excluding, the
date fixed for redemption.



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



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Stock (and any Successor Preferred Stock) redeemed pursuant to this paragraph may not exceed
the aggregate net cash proceeds received by the Issuer (or any successor by Business Combination)
from such Qualified Equity Offerings (including Qualified Equity Offerings of such successor).




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



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



     (c) Notice of Redemption. Notice of every redemption of shares of Designated Preferred
Stock shall be given by first class mail, postage prepaid, addressed to the holders of record of
the shares to be redeemed at their respective last addresses appearing on the books of the Issuer.
Such mailing shall be at least 30 days and not more than 60 days before the date fixed for
redemption. Any notice mailed as provided in this Subsection shall be conclusively presumed to have
been duly given, whether or not the holder receives such notice, but failure duly to give such
notice by mail, or any defect in such notice or in the mailing thereof, to any holder of shares of
Designated Preferred Stock designated for redemption shall not affect the validity of the
proceedings for the redemption of any other shares of Designated Preferred Stock. Notwithstanding
the foregoing, if shares of Designated Preferred Stock are issued in book-entry form through The
Depository Trust Company or any other similar facility, notice of redemption may be given to the
holders of Designated Preferred Stock at such time and in any manner permitted by such facility.
Each notice of redemption given to a holder shall state: (1) the redemption date; (2) the number of
shares of Designated Preferred Stock to be redeemed and, if less than all the shares held by such
holder are to be redeemed, the number of such shares to be redeemed from such holder; (3) the
redemption price; and (4) the place or places where certificates for such shares are to be
surrendered for payment of the redemption price.



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



     (e) Effectiveness of Redemption. If notice of redemption has been duly given and if
on or before the redemption date specified in the notice all funds necessary for the redemption



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




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



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



     Section 7. Voting Rights.



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



     (b) Preferred Stock Directors. Whenever, at any time or times, dividends payable on
the shares of Designated Preferred Stock have not been paid for an aggregate of six quarterly
Dividend Periods or more, whether or not consecutive, the authorized number of directors of the
Issuer shall automatically be increased by two and the holders of the Designated Preferred Stock
shall have the right, with holders of shares of any one or more other classes or series of Voting
Parity Stock outstanding at the time, voting together as a class, to elect two directors
(hereinafter the “Preferred Directors” and each a “Preferred Director”)
to fill such newly created directorships at the Issuer’s next annual meeting of stockholders
(or at a special meeting called for that purpose prior to such next annual meeting) and at each
subsequent annual meeting of stockholders until all accrued and unpaid dividends for all past
Dividend Periods, including the latest completed Dividend Period (including, if applicable as
provided in Section 3(a) above, dividends on such amount), on all outstanding shares of Designated
Preferred Stock have been declared and paid in full at which time such right shall terminate with
respect to the Designated Preferred Stock, except as herein or by law expressly provided, subject
to revesting in the event of each and every subsequent default of the character above mentioned;
provided that it shall be a qualification for election for any Preferred Director that
the election of such Preferred Director shall not cause the Issuer to violate any corporate
governance requirements of any securities exchange or other trading facility on which securities
of the Issuer may then be listed or traded that listed or traded companies must have a majority of
independent directors. Upon any



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termination of the right of the holders of shares of Designated Preferred Stock and Voting
Parity Stock as a class to vote for directors as provided above, the Preferred Directors shall
cease to be qualified as directors, the term of office of all Preferred Directors then in office
shall terminate immediately and the authorized number of directors shall be reduced by the number
of Preferred Directors elected pursuant hereto. Any Preferred Director may be removed at any time,
with or without cause, and any vacancy created thereby may be filled, only by the affirmative vote
of the holders a majority of the shares of Designated Preferred Stock at the time outstanding
voting separately as a class together with the holders of shares of Voting Parity Stock, to the
extent the voting rights of such holders described above are then exercisable. If the office of any
Preferred Director becomes vacant for any reason other than removal from office as aforesaid, the
remaining Preferred Director may choose a successor who shall hold office for the unexpired term in
respect of which such vacancy occurred.




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




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




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




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



A-8









 






     thereof, of Designated Preferred Stock immediately prior to such consummation, taken as
a whole;



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




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



     (e) Procedures for Voting and Consents. The rules and procedures for calling and
conducting any meeting of the holders of Designated Preferred Stock (including, without limitation,
the fixing of a record date in connection therewith), the solicitation and use of proxies at such a
meeting, the obtaining of written consents and any other aspect or matter with regard to such a
meeting or such consents shall be governed by any rules of the Board of Directors or any duly
authorized committee of the Board of Directors, in its discretion, may adopt from time to time,
which rules and procedures shall conform to the requirements of the Charter, the Bylaws, and
applicable law and the rules of any national securities exchange or other trading facility on which
Designated Preferred Stock is listed or traded at the time.



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



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



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



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



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



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ANNEX B




FORM OF CERTIFICATE OF DESIGNATIONS FOR 

WARRANT PREFERRED STOCK

[SEE ATTACHED]





 









 








ANNEX C




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 any state or territory thereof or my employer or any
of its directors, officers, employees and agents for any changes to my compensation or benefits
that are required in order to comply with Section 111 of the Emergency Economic Stabilization Act
of 2008, as amended (“EESA”), and rules, regulations, guidance or other requirements issued
thereunder (collectively, the “EESA Restrictions”).




I acknowledge that the EESA Restrictions may require modification of the employment, compensation,
bonus, incentive, severance, retention and other benefit plans, arrangements, policies and
agreements (including so-called “golden parachute” agreements), whether or not in writing, that I
have with my employer or in which I participate as they relate to the period the United States
holds any equity or debt securities of my employer acquired through the TARP Capital Purchase
Program and I hereby consent to all such modifications. I further acknowledge and agree that if my
employer notifies me in writing that I have received payments in violation of the EESA
Restrictions, I shall repay the aggregate amount of such payments to my employer no later than
fifteen business days following my receipt of such notice.




This waiver includes all claims I may have under the laws of the United States or any other
jurisdiction related to the requirements imposed by the EESA Restrictions (including without
limitation, any claim for any compensation or other payments or benefits I would otherwise receive
absent the EESA Restrictions, any challenge to the process by which the EESA Restrictions were
adopted and any tort or constitutional claim about the effect of the foregoing on my employment
relationship) and I hereby agree that I will not at any time initiate, or cause or permit to be
initiated on my behalf, any such claim against the United States, my employer or its directors,
officers, employees or agents in or before any local, state, federal or other agency, court or
body.




In witness whereof, I execute this waiver on my own behalf, thereby communicating my acceptance and
acknowledgement to the provisions herein.







 









 








ANNEX D




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 Warrant Preferred 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,
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.



     (e) The Company has the corporate power and authority to execute and deliver the Agreement
and the Warrant and to carry out its obligations thereunder (which includes the issuance 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.



     (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(h) or the severability provisions of the Agreement
insofar as Section 4.5(h) is concerned.



 









 





[Form of Notice of Exercise]

Date:                     




     TO: Birmingham Bloomfield Bancshares, Inc.



     RE: Election to Purchase Preferred Stock



     The undersigned, pursuant to the provisions set forth in the attached Warrant, hereby agrees
to subscribe for and purchase such number of shares of Preferred Stock covered by the Warrant such
that after giving effect to an exercise pursuant to Section 3(B) of the Warrant, the undersigned
will receive the net number of shares of Preferred Stock set forth below. The undersigned, in
accordance with Section 3 of the Warrant, hereby agrees to pay the aggregate Exercise Price for
such shares of Preferred Stock in the manner set forth in Section 3(B) of the Warrant.



Number of Shares of Preferred Stock: 1                                          




     The undersigned agrees that it is exercising the attached Warrant in full and that, upon
receipt by the undersigned of the number of shares of Preferred Stock set forth above, such
Warrant shall be deemed to be cancelled and surrendered to the Company.



	 	 	 	 	 	 	 
	 

	 	Holder:	 	 	 	 
	 

	 	By:
	 	 

	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 








 




			
	1.	 	Number of shares to be received by the undersigned upon exercise of the attached
Warrant pursuant to Section 3(B) thereof.




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