Filed by Bowne Pure Compliance





Exhibit 10.1




United States Department of the Treasury

1500 Pennsylvania Avenue, NW

Washington, D.C. 20220




Dear Ladies and Gentlemen:



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



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 Except to the extent supplemented or superseded by the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



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



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



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



* * *





UST Sequence No. 9



 


 









 




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



	 	 	 	 	 
	 	UNITED STATES DEPARTMENT OF THE TREASURY

 	 
	 	By:  	/s/ Neel Kashkari 	 
	 	 	Name:  	Neel Kashkari 	 
	 	 	Title:  	Interim Assistant Secretary for Financial Stability	 
	 
	 	FIRST NIAGARA FINANCIAL GROUP, INC.

 	 
	 	By:  	/s/ John R. Koelmel
 	 
	 	 	John R. Koelmel 	 
	 	 	President and Chief Executive Officer 	 




Date: November 21, 2008



UST Sequence No. 9



 


 









 





EXHIBIT A




 





SECURITIES PURCHASE AGREEMENT




STANDARD TERMS




 





UST Sequence No. 9




 


 









 







TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	Article I
	 
	 
	 	 	 	 
	Purchase; Closing
	 
	 
	 	 	 	 
	1.1 Purchase
	 	 	l	 
	1.2 Closing
	 	 	2	 
	1.3 Interpretation 
	 	 	4	 
	 
	 	 	 	 
	Article II
	 
	 
	 	 	 	 
	Representations and Warranties
	 
	 
	 	 	 	 
	2.1 Disclosure
	 	 	4	 
	2.2 Representations and Warranties of the Company
	 	 	5	 
	 
	 	 	 	 
	Article III
	 
	 
	 	 	 	 
	Covenants
	 
	 
	 	 	 	 
	3.1 Commercially Reasonable Efforts
	 	 	13	 
	3.2 Expenses
	 	 	14	 
	3.3 Sufficiency of Authorized Common Stock; Exchange Listing
	 	 	15	 
	3.4 Certain Notifications Until Closing
	 	 	15	 
	3.5 Access, Information and Confidentiality
	 	 	15	 
	 
	 	 	 	 
	Article IV
	 
	 
	 	 	 	 
	Additional Agreements
	 
	 
	 	 	 	 
	4.1 Purchase for Investment
	 	 	16	 
	4.2 Legends
	 	 	16	 
	4.3 Certain Transactions
	 	 	18	 
	4.4 Transfer of Purchased Securities and Warrant Shares; Restrictions on Exercise of
the Warrant
	 	 	18	 
	4.5 Registration Rights
	 	 	19	 
	4.6 Voting of Warrant Shares
	 	 	30	 
	4.7 Depositary Shares
	 	 	31	 
	4.8 Restriction on Dividends and Repurchases
	 	 	31	 
	4.9 Repurchase of Investor Securities
	 	 	32	 
	4.10 Executive Compensation
	 	 	33	 





UST Sequence No. 9



 


-i-









 





	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	Article V
	 
	 
	 	 	 	 
	Miscellaneous
	 
	 
	 	 	 	 
	5.1 Termination
	 	 	34	 
	5.2 Survival of Representations and Warranties
	 	 	34	 
	5.3 Amendment
	 	 	34	 
	5.4 Waiver of Conditions
	 	 	34	 
	5.5
Governing Law: Submission to Jurisdiction, Etc.
	 	 	35	 
	5.6 Notices
	 	 	35	 
	5.7 Definitions
	 	 	35	 
	5.8 Assignment
	 	 	36	 
	5.9 Severability
	 	 	36	 
	5.10 No Third Party Beneficiaries
	 	 	36	 








UST Sequence No. 9




 


-ii-









 







LIST OF ANNEXES




	 	 	 
	ANNEX A:

	 	FORM OF CERTIFICATE OF DESIGNATIONS FOR PREFERRED STOCK
	 
	 	 
	ANNEX B:

	 	FORM OF WAIVER
	 
	 	 
	ANNEX C:

	 	FORM OF OPINION
	 
	 	 
	ANNEX D:

	 	FORM OF WARRANT






UST Sequence No. 9




 


-iii-









 







INDEX OF DEFINED TERMS




	 	 	 
	 	 	Location of
	Term	 	Definition
	Affiliate
	 	5.7(b)
	Agreement
	 	Recitals
	Appraisal Procedure
	 	4.9(c)(i)
	Appropriate Federal Banking Agency
	 	2.2(s)
	Bankruptcy Exceptions
	 	2.2(d)
	Benefit Plans
	 	1.2(d)(iv)
	Board of Directors
	 	2.2(f)
	Business Combination
	 	4.4
	business day
	 	1.3
	Capitalization Date
	 	2.2(b)
	Certificate of Designations
	 	1.2(d)(iii)
	Charter
	 	1.2(d)(iii)
	Closing
	 	1.2(a)
	Closing Date
	 	1.2(a)
	Code
	 	2.2(n)
	Common Stock
	 	Recitals
	Company
	 	Recitals
	Company Financial Statements
	 	2.2(h)
	Company Material Adverse Effect
	 	2.1(a)
	Company Reports
	 	2.2(i)(i)
	Company Subsidiary; Company Subsidiaries
	 	2.2(i)(i)
	control; controlled by; under common control with
	 	5.7(b)
	Controlled Group
	 	2.2(n)
	CPP
	 	Recitals
	EESA
	 	1.2(d)(iv)
	ERISA
	 	2.2(n)
	Exchange Act
	 	2.1(b)
	Fair Market Value
	 	4.9(c)(ii)
	GAAP
	 	2.1(a)
	Governmental Entities
	 	1.2(c)
	Holder
	 	4.5(k)(i)
	Holders’ Counsel
	 	4.5(k)(ii)
	Indemnitee
	 	4.5(g)(i)
	Information
	 	3.5(b)
	Initial Warrant Shares
	 	Recitals
	Investor
	 	Recitals
	Junior Stock
	 	4.8(c)
	knowledge of the Company; Company’s knowledge
	 	5.7(c)
	Last Fiscal Year
	 	2.1(b)
	Letter Agreement
	 	Recitals
	officers
	 	5.7(c)






UST Sequence No. 9





 


-iv-









 







	 	 	 
	 	 	Location of
	Term	 	Definition
	Parity Stock
	 	4.8(c)
	Pending Underwritten Offering
	 	4.5(1)
	Permitted Repurchases
	 	4.8(a)(ii)
	Piggyback Registration
	 	4.5(a)(iv)
	Plan
	 	2.2(n)
	Preferred Shares
	 	Recitals
	Preferred Stock
	 	Recitals
	Previously Disclosed
	 	2.1(b)
	Proprietary Rights
	 	2.2(u)
	Purchase
	 	Recitals
	Purchase Price
	 	1.1
	Purchased Securities
	 	Recitals
	Qualified Equity Offering
	 	4.4
	register; registered; registration
	 	4.5(k)(iii)
	Registrable Securities
	 	4.5(k)(iv)
	Registration Expenses
	 	4.5(k)(v)
	Regulatory Agreement
	 	2.2(s)
	Rule 144; Rule 144A; Rule 159A; Rule 405; Rule 415
	 	4.5(k)(vi)
	Schedules
	 	Recitals
	SEC
	 	2.1(b)
	Securities Act
	 	2.2(a)
	Selling Expenses
	 	4.5(k)(vii)
	Senior Executive Officers
	 	4.10
	Share Dilution Amount
	 	4.8(a)(ii)
	Shelf Registration Statement
	 	4.5(a)(ii)
	Signing Date
	 	2.1(a)
	Special Registration
	 	4.5(i)
	Stockholder Proposals
	 	3.1(b)
	subsidiary
	 	5.8(a)
	Tax; Taxes
	 	2.2(o)
	Transfer
	 	4.4
	Warrant
	 	Recitals
	Warrant Shares
	 	2.2(d)






UST Sequence No. 9




 


-v-









 







SECURITIES PURCHASE AGREEMENT — STANDARD TERMS




Recitals:




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



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



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



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



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



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



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





Article I

Purchase; Closing




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




UST Sequence No. 9





 


 









 







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



UST Sequence No. 9






 


-2-









 








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




(iii) the Company shall have duly adopted and filed with the Secretary of State of its
jurisdiction of organization or other applicable Governmental Entity the amendment to its
certificate or articles of incorporation, articles of association, or similar organizational
document (“Charter”) in substantially the form attached hereto as Annex A (the “Certificate
of Designations”) and such filing shall have been accepted;




(iv) (A) the Company shall have effected such changes to its compensation, bonus,
incentive and other benefit plans, arrangements and agreements (including golden parachute,
severance and employment agreements) (collectively, “Benefit Plans”) with respect to its
Senior Executive Officers (and to the extent necessary for such changes to be legally
enforceable, each of its Senior Executive Officers shall have duly consented in writing to
such changes), as may be necessary, during the period that the Investor owns any debt or
equity securities of the Company acquired pursuant to this Agreement or the Warrant, in
order to comply with Section 111(b) of the Emergency Economic Stabilization Act of 2008
(“EESA”) as implemented by guidance or regulation thereunder that has been issued and is in
effect as of the Closing Date, and (B) the Investor shall have received a certificate signed
on behalf of the Company by a senior executive officer certifying to the effect that the
condition set forth in Section 1.2(d)(iv)(A) has been satisfied;




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




(vi) the Company shall have delivered to the Investor a written opinion from counsel to
the Company (which may be internal counsel), addressed to the Investor and dated as of the
Closing Date, in substantially the form attached hereto as Annex C;




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




(viii) the Company shall have duly executed the Warrant in substantially the form
attached hereto as Annex D and delivered such executed Warrant to the Investor or its
designee(s).



UST Sequence No. 9




 


-3-









 







1.3 Interpretation. When a reference is made in this Agreement to “Recitals,”
“Articles,” “Sections,” or “Annexes” such reference shall be to a Recital, Article or Section of,
or Annex to, this Securities Purchase Agreement — Standard Terms, and a reference to “Schedules”
shall be to a Schedule to the Letter Agreement, in each case, unless otherwise indicated. The terms
defined in the singular have a comparable meaning when used in the plural, and vice versa.
References to “herein”, “hereof’, “hereunder” and the like refer to this Agreement as a whole and
not to any particular section or provision, unless the context requires otherwise. The table of
contents and headings contained in this Agreement are for reference purposes only and are not part
of this Agreement. Whenever the words “include,” “includes” or “including” are used in this
Agreement, they shall be deemed followed by the words “without limitation.” No rule of construction
against the draftsperson shall be applied in connection with the interpretation or enforcement of
this Agreement, as this Agreement is the product of negotiation between sophisticated parties
advised by counsel. All references to “$” or “dollars” mean the lawful currency of the United
States of America. Except as expressly stated in this Agreement, all references to any statute,
rule or regulation are to the statute, rule or regulation as amended, modified, supplemented or
replaced from time to time (and, in the case of statutes, include any rules and regulations
promulgated under the statute) and to any section of any statute, rule or regulation include any
successor to the section. References to a “business day” shall mean any day except Saturday, Sunday
and any day on which banking institutions in the State of New York generally are authorized or
required by law or other governmental actions to close.



Article II

Representations and Warranties





2.1 Disclosure.



(a) “Company Material Adverse Effect” means a material adverse effect on (i) the business,
results of operation or financial condition of the Company and its consolidated subsidiaries taken
as a whole; provided, however, that Company Material Adverse Effect shall not be deemed to include
the effects of (A) changes after the date of the Letter Agreement (the “Signing Date”) in general
business, economic or market conditions (including changes generally in prevailing interest rates,
credit availability and liquidity, currency exchange rates and price levels or trading volumes in
the United States or foreign securities or credit markets), or any outbreak or escalation of
hostilities, declared or undeclared acts of war or terrorism, in each case generally affecting the
industries in which the Company and its subsidiaries operate, (B) changes or proposed changes after
the Signing Date in generally accepted accounting principles in the United States (“GAAP”) or
regulatory accounting requirements, or authoritative interpretations thereof, (C) changes or
proposed changes after the Signing Date in securities, banking and other laws of general
applicability or related policies or interpretations of Governmental Entities (in the case of each
of these clauses (A), (B) and (C), other than changes
or occurrences to the extent that such changes or occurrences have or would reasonably be
expected to have a materially disproportionate adverse effect on the Company and its consolidated
subsidiaries taken as a whole relative to comparable U.S. banking or financial services
organizations), or (D) changes in the market price or trading volume of the Common Stock or any
other equity, equity-related or debt securities of the Company or its consolidated subsidiaries (it
being understood and agreed that the exception set forth in this clause (D) does not apply to the
underlying reason giving rise to or contributing to any such change); or (ii) the ability of the
Company to consummate the Purchase and the other transactions contemplated by this Agreement and
the Warrant and perform its obligations hereunder or thereunder on a timely basis.



UST Sequence No. 9




 


-4-









 







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



2.2 Representations and Warranties of the Company. Except as Previously Disclosed, the
Company represents and warrants to the Investor that as of the Signing Date and as of the Closing
Date (or such other date specified herein):



(a) Organization, Authority and Significant Subsidiaries. The Company has been duly
incorporated and is validly existing and in good standing under the laws of its jurisdiction of
organization, with the necessary power and authority to own its properties and conduct its business
in all material respects as currently conducted, and except as has not, individually or in the
aggregate, had and would not reasonably be expected to have a Company Material Adverse Effect, has
been duly qualified as a foreign corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it owns or leases properties or
conducts any business so as to require such qualification; each subsidiary of the Company that is a
“significant subsidiary” within the meaning of Rule 1-02(w) of Regulation S-X under the Securities
Act of 1933 (the “Securities Act”) has been duly organized and is validly existing in good standing
under the laws of its jurisdiction of organization. The Charter and bylaws of the Company, copies
of which have been provided to the Investor prior to the Signing Date, are true, complete and
correct copies of such documents as in full force and effect as of the Signing Date.



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



UST Sequence No. 9




 


-5-









 







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



(d) The Warrant and Warrant Shares. The Warrant has been duly authorized and, when
executed and delivered as contemplated hereby, will constitute a valid and legally binding
obligation of the Company enforceable against the Company in accordance with its terms, except as
the same may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the enforcement of creditors’ rights generally and general equitable principles,
regardless of whether such enforceability is considered in a proceeding at law or in equity
(“Bankruptcy Exceptions”). The shares of Common Stock issuable upon exercise of the Warrant (the
“Warrant Shares”) have been duly authorized and reserved for issuance upon exercise of the Warrant
and when so issued in accordance with the terms of the Warrant will be validly issued, fully paid
and non-assessable, subject, if applicable, to the approvals of its stockholders set forth on
Schedule C.



(e) Authorization, Enforceability.




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



UST Sequence No. 9




 


-6-









 








(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 Company Subsidiary under any of the terms, conditions or
provisions of (i) subject, if applicable, to the approvals of the Company’s stockholders set
forth on Schedule C, its organizational documents or (ii) any note, bond, mortgage,
indenture, deed of trust, license, lease, agreement or other instrument or obligation to
which the Company or any Company Subsidiary is a party or by which it or any Company
Subsidiary may be bound, or to which the Company or any Company Subsidiary or any of the
properties or assets of the Company or any Company Subsidiary may be subject, or (B) subject
to compliance with the statutes and regulations referred to in the next paragraph, violate
any statute, rule or regulation or any judgment, ruling, order, writ, injunction or decree
applicable to the Company or any Company Subsidiary or any of their respective properties or
assets except, in the case of clauses (A)(ii) and (B), for those occurrences that,
individually or in the aggregate, have not had and would not reasonably be expected to have
a Company Material Adverse Effect.




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




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



UST Sequence No. 9





 


-7-









 







(g) No Company Material Adverse Effect. Since the last day of the last completed
fiscal period for which the Company has filed a Quarterly Report on Form 10-Q or an Annual
Report on Form 10-K with the SEC prior to the Signing Date, no fact, circumstance, event, change,
occurrence, condition or development has occurred that, individually or in the aggregate, has had
or would reasonably be expected to have a Company Material Adverse Effect.



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



(i) Reports.




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



UST Sequence No. 9




 


-8-









 








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



(j) No Undisclosed Liabilities. Neither the Company nor any of the Company Subsidiaries
has any liabilities or obligations of any nature (absolute, accrued, contingent or otherwise) which
are not properly reflected or reserved against in the Company Financial Statements to the extent
required to be so reflected or reserved against in accordance with GAAP, except for (A) liabilities
that have arisen since the last fiscal year end in the ordinary and usual course of business and
consistent with past practice and (B) liabilities that, individually or in the aggregate, have not
had and would not reasonably be expected to have a Company Material Adverse Effect.



(k) Offering of Securities. Neither the Company nor any person acting on its behalf
has taken any action (including any offering of any securities of the Company under circumstances
which would require the integration of such offering with the offering of any of the Purchased
Securities under the Securities Act, and the rules and regulations of the SEC promulgated
thereunder), which might subject the offering, issuance or sale of any of the Purchased Securities
to Investor pursuant to this Agreement to the registration requirements of the Securities Act.



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



UST Sequence No. 9




 


-9-









 







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



(n) Employee Benefit Matters. Except as would not reasonably be expected to have,
either individually or in the aggregate, a Company Material Adverse Effect: (A) each “employee
benefit plan” (within the meaning of Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended (“ERISA”)) providing benefits to any current or former employee, officer or
director of the Company or any member of its “Controlled Group” (defined as any organization which
is a member of a controlled group of corporations within the meaning of Section 414 of the Internal
Revenue Code of 1986, as amended (the “Code”)) that is sponsored, maintained or contributed to by
the Company or any member of its Controlled Group and for which the Company or any member of its
Controlled Group would have any liability, whether actual or contingent (each, a “Plan”) has been
maintained in compliance with its terms and with the requirements of all applicable statutes, rules
and regulations, including ERISA and the Code; (B) with respect to each Plan subject to Title IV of
ERISA (including, for purposes of this clause (B), any plan subject to Title IV of ERISA that the
Company or any member of its Controlled Group previously maintained or contributed to in the six
years prior to the Signing Date), (1) no “reportable event” (within the meaning of Section 4043(c)
of ERISA), other than a reportable event for which the notice period referred to in Section 4043(c)
of ERISA has been waived, has occurred in the three years prior to the Signing Date or is
reasonably expected to occur, (2) no “accumulated funding deficiency” (within the meaning of
Section 302 of ERISA or Section 412 of the Code), whether or not waived, has occurred in the three
years prior to the Signing Date or is reasonably expected to occur, (3) the fair market value of the
assets under each Plan exceeds the present value of all benefits accrued under such Plan
(determined based on the assumptions used to fund such Plan) and (4) neither the Company nor any
member of its Controlled Group has incurred in the six years prior to the Signing Date, or
reasonably expects to incur, any liability under Title IV of ERISA (other than contributions to the
Plan or premiums to the PBGC in the ordinary course and without default) in respect of a Plan
(including any Plan that is a “multiemployer plan”, within the meaning of Section 4001(c)(3) of
ERISA); and (C) each Plan that is intended to be qualified under Section 40 I(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.



UST Sequence No. 9




 


-10-









 







(o) Taxes. Except as would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect, (i) the Company and the Company Subsidiaries
have filed all federal, state, local and foreign income and franchise Tax returns required to be
filed through the Signing Date, subject to permitted extensions, and have paid all Taxes due
thereon, and (ii) no Tax deficiency has been determined adversely to the Company or any of the
Company Subsidiaries, nor does the Company have any knowledge of any Tax deficiencies. “Tax” or
“Taxes” means any federal, state, local or foreign income, gross receipts, property, sales, use,
license, excise, franchise, employment, payroll, withholding, alternative or add on minimum, ad
valorem, transfer or excise tax, or any other tax, custom, duty, governmental fee or other like
assessment or charge of any kind whatsoever, together with any interest or penalty, imposed by any
Governmental Entity.



(p) Properties and Leases. Except as would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect, the Company and the Company
Subsidiaries have good and marketable title to all real properties and all other properties and
assets owned by them, in each case free from liens, encumbrances, claims and defects that would
affect the value thereof or interfere with the use made or to be made thereof by them. Except as
would not, individually or in the aggregate, reasonably be expected to have a Company Material
Adverse Effect, the Company and the Company Subsidiaries hold all leased real or personal property
under valid and enforceable leases with no exceptions that would interfere with the use made or to
be made thereof by them.



(q) Environmental Liability. Except as would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect:




(i) there is no legal, administrative, or other proceeding, claim or action of any
nature seeking to impose, or that would reasonably be expected to result in the imposition
of, on the Company or any Company Subsidiary, any liability relating to the release of
hazardous substances as defined under any local, state or federal environmental statute,
regulation or ordinance, including the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, pending or, to the Company’s knowledge, threatened against the
Company or any Company Subsidiary;



(ii) to the Company’s knowledge, there is no reasonable basis for any such
proceeding, claim or action; and




(iii) neither the Company nor any Company Subsidiary is subject to any agreement,
order, judgment or decree by or with any court, Governmental Entity or third party imposing
any such environmental liability.



UST Sequence No. 9




 


-11-









 







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



(s) Agreements with Regulatory Agencies. Except as set forth on Schedule F, neither
the Company nor any Company Subsidiary is subject to any material cease-and-desist or other similar
order or enforcement action issued by, or is a party to any material written agreement, consent
agreement or memorandum of understanding with, or is a party to any commitment letter or similar
undertaking to, or is subject to any capital directive by, or since December 31,2006, has adopted
any board resolutions at the request of, any Governmental Entity (other than the Appropriate
Federal Banking Agencies with jurisdiction over the Company and the Company Subsidiaries) that
currently restricts in any material respect the conduct of its business or that in any material
manner relates to its capital adequacy, its liquidity and funding policies and practices, its
ability to pay dividends, its credit, risk management or compliance policies or procedures, its
internal controls, its management or its operations or business (each item in this sentence, a
“Regulatory Agreement”), nor has the Company or any Company Subsidiary been advised since December
31, 2006 by any such Governmental Entity that it is considering issuing, initiating, ordering, or
requesting any such Regulatory Agreement. The Company and each Company Subsidiary are in compliance
in all material respects with each Regulatory Agreement to which it is party or subject, and
neither the Company nor any Company Subsidiary has received any notice from any Governmental Entity
indicating that either the Company or any Company Subsidiary is not in compliance in all material
respects with any such Regulatory Agreement. “Appropriate Federal Banking Agency” means the
“appropriate Federal banking agency” with respect to the Company or such Company Subsidiaries, as
applicable, as defined in Section 3(q) of the Federal Deposit Insurance Act (12 U.S.c. Section
1813(q)).



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



UST Sequence No. 9




 


-12-









 







(u) Intellectual Property. Except as would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect, (i) the Company and each Company
Subsidiary owns or otherwise has the right to use, all intellectual property rights, including all
trademarks, trade dress, trade names, service marks, domain names, patents, inventions, trade
secrets, know-how, works of authorship and copyrights therein, that are used in the conduct of
their existing businesses and all rights relating to the plans, design and specifications of any of
its branch facilities (“Proprietary Rights”) free and clear of all liens and any claims of
ownership by current or former employees, contractors, designers or others and (ii) neither the
Company nor any of the Company Subsidiaries is materially infringing, diluting, misappropriating or
violating, nor has the Company or any or the Company Subsidiaries received any written (or, to the
knowledge of the Company, oral) communications alleging that any of them has materially infringed,
diluted, misappropriated or violated, any of the Proprietary Rights owned by any other person.
Except as would not, individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect, to the Company’s knowledge, no other person is infringing, diluting,
misappropriating or violating, nor has the Company or any or the Company Subsidiaries sent any
written communications since January 1, 2006 alleging that any person has infringed, diluted,
misappropriated or violated, any of the Proprietary Rights owned by the Company and the Company
Subsidiaries.



(v) Brokers and Finders. No broker, finder or investment banker is entitled to any
financial advisory, brokerage, finder’s or other fee or commission in connection with this
Agreement or the Warrant or the transactions contemplated hereby or thereby based upon
arrangements made by or on behalf of the Company or any Company Subsidiary for which the Investor
could have any liability.



Article III

Covenants





3.1 Commercially Reasonable Efforts.



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



UST Sequence No. 9




 


-13-









 







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



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



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



UST Sequence No. 9




 


-14-









 








3.3 Sufficiency of Authorized Common Stock; Exchange Listing.



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



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



3.4 Certain Notifications Until Closing. From the Signing Date until the Closing, the
Company shall promptly notify the Investor of (i) any fact, event or circumstance of which it is
aware and which would reasonably be expected to cause any representation or warranty of the Company
contained in this Agreement to be untrue or inaccurate in any material respect or to cause any
covenant or agreement of the Company contained in this Agreement not to be complied with or
satisfied in any material respect and (ii) except as Previously Disclosed, any fact, circumstance,
event, change, occurrence, condition or development of which the Company is aware and which,
individually or in the aggregate, has had or would reasonably be expected to have a Company
Material Adverse Effect; provided, however, that delivery of any notice pursuant to this Section
3.4 shall not limit or affect any rights of or remedies available to the Investor;
provided, further, that a failure to comply with this Section 3.4 shall not constitute a breach of
this Agreement or the failure of any condition set forth in Section 1.2 to be satisfied unless the
underlying Company Material Adverse Effect or material breach would independently result in the
failure of a condition set forth in Section 1.2 to be satisfied.




3.5 Access, Information and Confidentiality.



(a) From the Signing Date until the date when the Investor holds an amount of Preferred Shares
having an aggregate liquidation value of less than 10% of the Purchase Price, the Company will
permit the Investor and its agents, consultants, contractors and advisors (x) acting through the
Appropriate Federal Banking Agency, to examine the corporate books and make copies thereof and to
discuss the affairs, finances and accounts of the Company and the Company Subsidiaries with the
principal officers of the Company, all upon reasonable notice and at such reasonable times and as
often as the Investor may reasonably request and (y) to review any information material to the
Investor’s investment in the Company provided by the Company to its Appropriate Federal Banking
Agency. Any investigation pursuant to this Section 3.5 shall be conducted during normal business
hours and in such manner as not to interfere unreasonably with the conduct of the business of the
Company, and nothing herein shall require the Company or any Company Subsidiary to disclose any
information to the Investor to the extent (i) prohibited by applicable law or regulation, or (ii)
that such disclosure would reasonably be
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).



UST Sequence No. 9




 


-15-









 







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



Article IV

Additional Agreements




4.1 Purchase for Investment. The Investor acknowledges that the Purchased Securities
and the Warrant Shares have not been registered under the Securities Act or under any state
securities laws. The Investor (a) is acquiring the Purchased Securities pursuant to an exemption
from registration under the Securities Act solely for investment with no present intention to
distribute them to any person in violation of the Securities Act or any applicable U.S. state
securities laws, (b) will not sell or otherwise dispose of any of the Purchased Securities or the
Warrant Shares, except in compliance with the registration requirements or exemption provisions of
the Securities Act and any applicable U.S. state securities laws, and (c) has such knowledge and
experience in financial and business matters and in investments of this type that it is capable of
evaluating the merits and risks of the Purchase and of making an informed investment decision.




4.2 Legends.



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




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



UST Sequence No. 9




 


-16-









 







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




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



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




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




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



UST Sequence No. 9




 


-17-









 







(d) In the event that any Purchased Securities or Warrant Shares (i) become registered under
the Securities Act or (ii) are eligible to be transferred without restriction in accordance with
Rule 144 or another exemption from registration under the Securities Act (other than Rule 144A),
the Company shall issue new certificates or other instruments representing such Purchased
Securities or Warrant Shares, which shall not contain the applicable legends in Sections 4.2(a) and
(c) above; provided that the Investor surrenders to the Company the previously issued certificates
or other instruments. Upon Transfer of all or a portion of the Warrant in compliance with Section
4.4, the Company shall issue new certificates or other instruments representing the Warrant, which
shall not contain the applicable legend in Section 4.2(b) above; provided that the Investor
surrenders to the Company the previously issued certificates or other instruments.



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



4.4 Transfer of Purchased Securities and Warrant Shares; Restrictions on Exercise of the
Warrant. Subject to compliance with applicable securities laws, the Investor shall be permitted
to transfer, sell, assign or otherwise dispose of (“Transfer”) all or a portion of the Purchased
Securities or Warrant Shares at any time, and the Company shall take all steps as may be reasonably
requested by the Investor to facilitate the Transfer of the Purchased Securities and the Warrant
Shares; provided that the Investor shall not Transfer a portion or portions of the Warrant with
respect to, and/or exercise the Warrant for, more than one-half of the Initial Warrant Shares (as
such number may be adjusted from time to time pursuant to Section 13 thereof) in the aggregate
until the earlier of (a) the date on which the Company (or any successor by Business Combination)
has received aggregate gross proceeds of not less than the Purchase Price (and the purchase price
paid by the Investor to any such successor for securities of such successor purchased under the
CPP) from one or more Qualified Equity Offerings (including Qualified Equity Offerings of such
successor) and (b) December 31, 2009. “Qualified Equity Offering” means the sale and issuance for
cash by the Company to persons other than the Company or any of the Company Subsidiaries after the
Closing Date of shares of perpetual Preferred Stock, Common Stock or any combination of such stock,
that, in each case, qualify as and may be included in Tier 1 capital of the Company at the time of
issuance under the applicable risk-based capital guidelines of the Company’s Appropriate Federal
Banking Agency (other than any such sales and issuances made pursuant to agreements or arrangements
entered into, or pursuant to financing plans which were publicly announced, on or prior to October
13, 2008). “Business Combination” means a merger, consolidation, statutory share exchange or
similar transaction that requires the approval of the Company’s stockholders.



UST Sequence No. 9




 


-18-









 








4.5 Registration Rights.



(a) Registration.




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




(ii) Any registration pursuant to Section 4.5(a)(i) shall be effected by means of a
shelf registration on an appropriate form under Rule 415 under the Securities Act (a
“Shelf Registration Statement”). If the Investor or any other Holder intends to distribute
any Registrable Securities by means of an underwritten offering it shall promptly so advise
the Company and the Company shall take all reasonable steps to facilitate such distribution,
including the actions required pursuant to Section 4.5(c); provided that the Company shall
not be required to facilitate an underwritten offering of Registrable Securities unless the
expected gross proceeds from such offering exceed (i) 2% of the initial aggregate
liquidation preference of the Preferred Shares if such initial aggregate liquidation
preference is less than $2 billion and (ii) $200 million if the initial aggregate
liquidation preference of the Preferred Shares is equal to or greater than $2 billion. The
lead underwriters in any such distribution shall be selected by the Holders of a majority of
the Registrable Securities to be distributed; provided that to the extent appropriate and
permitted under applicable law, such Holders shall consider the qualifications of any
broker-dealer Affiliate of the Company in selecting the lead underwriters in any such
distribution.



UST Sequence No. 9





 


-19-









 








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




(iv) If during any period when an effective Shelf Registration Statement is not
available, the Company proposes to register any of its equity securities, other than a
registration pursuant to Section 4.5(a)(i) or a Special Registration, and the registration
form to be filed may be used for the registration or qualification for distribution of
Registrable Securities, the Company will give prompt written notice to the Investor and all
other Holders of its intention to effect such a registration (but in no event less than ten
days prior to the anticipated filing date) and will include in such registration all
Registrable Securities with respect to which the Company has received written requests for
inclusion therein within ten business days after the date of the Company’s notice (a
“Piggyback Registration”). Any such person that has made such a written request may withdraw
its Registrable Securities from such Piggyback Registration by giving written notice to the
Company and the managing underwriter, if any, on or before the fifth business day prior to
the planned effective date of such Piggyback Registration. The Company may terminate or
withdraw any registration under this Section 4.5(a)(iv) prior to the effectiveness of such
registration, whether or not Investor or any other Holders have elected to include
Registrable Securities in such registration.




(v) If the registration referred to in Section 4.5(a)(iv) is proposed to be
underwritten, the Company will so advise Investor and all other Holders as a part of the
written notice given pursuant to Section 4.5(a)(iv). In such event, the right of Investor and
all other Holders to registration pursuant to Section 4.5(a) will be conditioned upon such
persons’ participation in such underwriting and the inclusion of such person’s Registrable
Securities in the underwriting if such securities are of the same class of securities as the
securities to be offered in the underwritten offering, and each such person will (together
with the Company and the other persons distributing their securities through such
underwriting) enter into an underwriting agreement in customary form with the underwriter or
underwriters selected for such underwriting by the Company; provided that the Investor (as
opposed to other Holders) shall not be required to indemnify any person in connection with
any registration. If any participating person disapproves of the terms of the underwriting,
such person may elect to withdraw therefrom by written notice to the
Company, the managing underwriters and the Investor (if the Investor
is participating in the underwriting).



UST Sequence No. 9





 


-20-











 





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



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



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




(i) Prepare and file with the SEC a prospectus supplement with respect to a proposed
offering of Registrable Securities pursuant to an effective registration statement, subject
to Section 4.5(d), keep such registration statement effective and keep
such prospectus supplement current until the securities described therein are no
longer Registrable Securities.



UST Sequence No. 9





 


-21-









 








(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;



UST Sequence No. 9




 


-22-









 








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




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




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




(F) if at any time the representations and warranties of the Company contained in
any underwriting agreement contemplated by Section 4.5(c)(x) cease to be true and
correct.




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




(viii) Upon the occurrence of any event contemplated by Section 4.5(c)(v) or
4.5(c)(vi)(E), promptly prepare a post-effective amendment to such registration statement or
a supplement to the related prospectus or file any other required document so that, as
thereafter delivered to the Holders and any underwriters, the prospectus will not contain an
untrue statement of a material fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made, not misleading.
If the Company notifies the Holders in accordance with Section 4.5(c)(vi)(E) to suspend the
use of the prospectus until the requisite changes to the prospectus have been made, then the
Holders and any underwriters shall suspend use of such prospectus and use their reasonable
best efforts to return to the Company all copies of such prospectus (at the Company’s
expense) other than permanent file copies then in such Holders’ or underwriters’ possession.
The total number of days that any such suspension may be in effect in any 12-month period
shall not exceed 90 days.




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



UST Sequence No. 9



 


-23-









 






(x) If an underwritten offering is requested pursuant to Section 4.5(a)(ii), enter into
an underwriting agreement in customary form, scope and substance and take all such
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
Registrable Securities to be listed on such securities exchange as the Investor
may designate.



UST Sequence No. 9




 


-24-









 






(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 ll(a) of the Securities Act and Rule 158 thereunder.



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



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



(f) Furnishing Information.




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




(ii) It shall be a condition precedent to the obligations of the Company to take any
action pursuant to Section 4.5(c) that Investor and/or the selling Holders and the
underwriters, if any, shall furnish to the Company such information regarding themselves,
the Registrable Securities held by them and the intended method of
disposition of such securities as shall be required to effect the registered offering of
their Registrable Securities.



UST Sequence No. 9




 


-25-









 







(g) Indemnification.




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




(ii) If the indemnification provided for in Section 4.5(g)(i) is unavailable to an
Indemnitee with respect to any losses, claims, damages, actions, liabilities, costs or
expenses referred to therein or is insufficient to hold the Indemnitee harmless as
contemplated therein, then the Company, in lieu of indemnifying such Indemnitee, shall
contribute to the amount paid or payable by such Indemnitee as a result of such losses,
claims, damages, actions, liabilities, costs or expenses in such proportion as is appropriate
to reflect the relative fault of the Indemnitee, on the one hand, and the Company, on the
other hand, in connection with the statements or omissions which resulted in such losses,
claims, damages, actions, liabilities, costs or expenses as well as
any other relevant equitable considerations. The relative fault of the Company, on the one hand, and of
the
Indemnitee, on the other hand, shall be determined by reference to, among other
factors, whether the untrue statement of a material fact or omission to state a material
fact relates to information supplied by the Company or by the Indemnitee and the parties’
relative intent, knowledge, access to information and opportunity to correct or prevent such
statement or omission; the Company and each Holder agree that it would not be just and
equitable if contribution pursuant to this Section 4.5(g)(ii) were determined by pro rata
allocation or by any other method of allocation that does not take account of the equitable
considerations referred to in Section 4.5(g)(i). No Indemnitee guilty of fraudulent
misrepresentation (within the meaning of Section ll(f) of the Securities Act) shall be
entitled to contribution from the Company if the Company was not guilty of such fraudulent
misrepresentation.



UST Sequence No. 9



 


-26-









 






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



(i) Clear Market. With respect to any underwritten offering of Registrable Securities by the
Investor or other Holders pursuant to this Section 4.5, the Company agrees not to effect (other
than pursuant to such registration or pursuant to a Special Registration) any public sale or
distribution, or to file any Shelf Registration Statement (other than such registration or a
Special Registration) covering, in the case of an underwritten offering of Common Stock or
Warrants, any of its equity securities or, in the case of an underwritten offering of Preferred
Shares, any Preferred Stock of the Company, or, in each case, any securities convertible into or
exchangeable or exercisable for such securities, during the period not to exceed ten days prior and
60 days following the effective date of such offering or such longer period up to 90 days as may be
requested by the managing underwriter for such underwritten offering. The Company also agrees to
cause such of its directors and senior executive officers to execute and deliver customary lock-up
agreements in such form and for such time period up to 90 days as may be requested by the managing
underwriter. “Special Registration” means the registration of (A) equity securities and/or options
or other rights in respect thereof solely registered on Form S-4 or Form S-8 (or successor form) or
(B) shares of equity securities and/or options or other rights in respect thereof to be offered to
directors, members of management, employees, consultants, customers, lenders or vendors of the Company or Company Subsidiaries or in connection with
dividend reinvestment plans.



UST Sequence No. 9




 


-27-









 







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




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




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




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




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



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




(i) “Holder” means the Investor and any other holder of Registrable Securities
to whom the registration rights conferred by this Agreement have been transferred in
compliance with Section 4.5(h) hereof.




(ii) “Holders’ Counsef’ means one counsel for the selling Holders chosen by Holders
holding a majority interest in the Registrable Securities being registered.




(iii) “Register,” “registered,” and “registration” shall refer to a registration
effected by preparing and (A) filing a registration statement in compliance with the
Securities Act and applicable rules and regulations thereunder, and the declaration or
ordering of effectiveness of such registration statement or (B) filing a prospectus and/or
prospectus supplement in respect of an appropriate effective registration statement on
Form S-3.



UST Sequence No. 9




 


-28-









 








(iv) “Registrable Securities” means (A) all Preferred Shares, (B) the Warrant (subject
to Section 4.5(p)) and (C) any equity securities issued or issuable directly or indirectly
with respect to the securities referred to in the foregoing clauses (A) or (B) by way of
conversion, exercise or exchange thereof, including the Warrant Shares, or share dividend or
share split or in connection with a combination of shares, recapitalization,
reclassification, merger, amalgamation, arrangement, consolidation or other reorganization,
provided that, once issued, such securities will not be Registrable Securities when (1) they
are sold pursuant to an effective registration statement under the Securities Act, (2)
except as provided below in Section 4.5(0), 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
anyone time.




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




(vi) “Rule 144”, “Rule 144A”, “Rule 159A”, “Rule 405” and “Rule 415” mean, in each
case, such rule promulgated under the Securities Act (or any successor provision), as the
same shall be amended from time to time.




(vii) “Selling Expenses” mean all discounts, selling commissions and stock transfer
taxes applicable to the sale of Registrable Securities and fees and disbursements of counsel
for any Holder (other than the fees and disbursements of Holders’ Counsel included in
Registration Expenses).



(l) At any time, any holder of Securities (including any Holder) may elect to forfeit its
rights set forth in this Section 4.5 from that date forward; provided, that a Holder forfeiting
such rights shall nonetheless be entitled to participate under Section 4.5(a)(iv) — (vi) in any
Pending Underwritten Offering to the same extent that such Holder would have been entitled to if
the holder had not withdrawn; and provided,further, that no such forfeiture shall terminate a
Holder’s rights or obligations under Section 4.5(f) with respect to any prior registration or
Pending Underwritten Offering. “Pending Underwritten Offering” means, with respect to any Holder
forfeiting its rights pursuant to this Section 4.5(1), any underwritten offering of
Registrable Securities in which such Holder has advised the Company of its intent to register
its Registrable Securities either pursuant to Section 4.5(a)(ii) or 4.5(a)(iv) prior to the date of
such Holder’s forfeiture.



UST Sequence No. 9





 


-29-









 







(m) Specific
Performance. The parties hereto acknowledge that there would be no adequate
remedy at law if the Company fails to perform any of its obligations under this Section 4.5 and
that the Investor and the Holders from time to time may be
irreparably harmed by any such failure,
and accordingly agree that the Investor and such Holders, in addition to any other remedy to which
they may be entitled at law or in equity, to the fullest extent permitted and enforceable under
applicable law shall be entitled to compel specific performance of the obligations of the Company
under this Section 4.5 in accordance with the terms and conditions of this Section 4.5.



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



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



(p) Registered Sales of the Warrant. The Holders agree to sell the Warrant or any portion
thereof under the Shelf Registration Statement only beginning 30 days after notifying the Company
of any such sale, during which 30-day period the Investor and all Holders of the Warrant shall take
reasonable steps to agree to revisions to the Warrant to permit a public distribution of the
Warrant, including entering into a warrant agreement and appointing a warrant agent.



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



UST Sequence No. 9





 


-30-









 







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




4.8 Restriction on Dividends and Repurchases.



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




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




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


other Junior Stock or of Parity Stock or trust preferred securities for or into other
Parity Stock (with the same or lesser aggregate liquidation amount) or Junior Stock, in each
case set forth in this clause (G), solely to the extent required pursuant to binding
contractual agreements entered into prior to the Signing Date or any subsequent agreement
for the accelerated exercise, settlement or exchange thereof for Common Stock (clauses (C)
and (F), collectively, the “Permitted Repurchases”). “Share Dilution Amount” means the
increase in the number
of diluted shares outstanding (determined in accordance with GAAP, and as measured from
the date of the Company’s most recently filed Company Financial Statements prior to the
Closing Date) resulting from the grant, vesting or exercise of equity-based compensation to
employees and equitably adjusted for any stock split, stock dividend, reverse stock split,
reclassification or similar transaction.




UST Sequence No. 9





 


-31-









 








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



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



4.9 Repurchase of Investor Securities.



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



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



UST Sequence No. 9





 


-32-









 







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




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




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



4.10 Executive Compensation. Until such time as the Investor ceases to own any debt or equity
securities of the Company acquired pursuant to this Agreement or the Warrant, the Company shall
take all necessary action to ensure that its Benefit Plans with respect to its Senior Executive
Officers comply in all respects with Section 111(b) of the EESA as implemented by any guidance or
regulation thereunder that has been issued and is in effect as of the Closing Date, and shall not
adopt any new Benefit Plan with respect to its Senior Executive Officers that does not comply
therewith. “Senior Executive Officers” means the Company’s “senior executive officers” as defined
in subsection 111(b)(3) of the EESA and regulations issued thereunder, including the rules set forth
in 31 C.F.R. Part 30.



UST Sequence No. 9




 


-33-









 







Article V



Miscellaneous




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



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



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



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



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



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



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



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




UST Sequence No. 9




 


-34-









 







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



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




If to the Investor:




United States Department of the Treasury

1500 Pennsylvania Avenue, NW, Room 2312

Washington, D.C. 20220

Attention: Assistant General Counsel (Banking and Finance)

Facsimile: (202) 622-1974



5.7 Definitions



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



UST Sequence No. 9




 


-35-









 







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



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



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



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



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



* * *




UST Sequence No. 9




 


-36-









 







ANNEX A




CERTIFICATE OF DESIGNATIONS OF




FIXED RATE CUMULATIVE PERPETUAL PREFERRED STOCK, SERIES A




OF




FIRST NIAGARA FINANCIAL GROUP, INC.




FIRST NIAGARA FINANCIAL GROUP, INC., a corporation organized and existing under the laws of
the State of Delaware (the “Corporation”), in accordance with the provisions of Section 151 (g) of
the General Corporation Law of the State of Delaware thereof, does hereby certify:



The board of directors of the Corporation (the “Board of Directors”), in accordance with the
certificate of incorporation and bylaws of the Corporation and applicable law, adopted the
following resolution on November 17, 2008 creating a series of 184,011 shares of Preferred Stock of
the Corporation designated as “Fixed Rate Cumulative Perpetual Preferred Stock, Series A”.



RESOLVED, that pursuant to the provisions of the certificate of incorporation and the bylaws
of the Corporation and applicable law, a series of Preferred Stock, par value $0.01 per
share, of the Corporation be and hereby is created, and that the designation and number of
shares of such series, and the voting and other powers, preferences and relative, participating,
optional or other rights, and the qualifications, limitations and restrictions thereof, of the
shares of such series, are as follows:



Part 1. Designation and Number of Shares. There is hereby created out of the authorized and
unissued shares of preferred stock of the Corporation a series of preferred stock designated as the
“Fixed Rate Cumulative Perpetual Preferred Stock, Series A” (the “Designated Preferred Stock”). The
authorized number of shares of Designated Preferred Stock shall be
184,011.



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



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



(a) “Common Stock” means the common stock, par value $0.01 per share, of the Corporation.



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



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



UST
Sequence No. 9



 


 1 









 





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



(e) “Minimum
Amount” means $46,002,750.



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



(g) “Signing Date” means November 21, 2008.



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]




UST
Sequence No. 9




 


 2 









 







IN WITNESS WHEREOF, First Niagara Financial Group, Inc. has caused this Certificate of
Designations to be signed by John R. Koelmel, its President and Chief Executive Officer, this
19th day of November, 2008.



	 	 	 	 	 
	 	FIRST NIAGARA FINANCIAL GROUP, INC.

 	 
	 	By: 	/s/ John R. Koelmel
 	 
	 	 	Name: 	John R. Koelmel 	 
	 	 	Title: 	President and Chief Executive Officer 	 
	 



UST
Sequence No. 9





 


 3 









 







ANNEX A




STANDARD PROVISIONS





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



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



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



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



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



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



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



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



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



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



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



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



UST
Sequence No. 9



 


A-1 









 





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



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



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



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



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



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



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



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



Section 3. Dividends.



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



UST Sequence No. 9




 


A-2 









 







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



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



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



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



UST Sequence No. 9





 


A-3 









 







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



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



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



UST Sequence No. 9





 


A-4 









 








Section 4. Liquidation Rights.



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



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



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



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




Section 5. Redemption.



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



UST Sequence No. 9






 


A-5 









 







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



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



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



(c) Notice of Redemption. Notice of every redemption of shares of Designated Preferred Stock
shall be given by first class mail, postage prepaid, addressed to the holders of record of the
shares to be redeemed at their respective last addresses appearing on the books of the Corporation.
Such mailing shall be at least 30 days and not more than 60 days before the date fixed for
redemption. Any notice mailed as provided in this Subsection shall be conclusively presumed to have
been duly given, whether or not the holder receives such notice, but failure duly to give such
notice by mail, or any defect in such notice or in the


 mailing thereof, to any holder of shares of Designated Preferred Stock designated for redemption
shall not affect the validity of the proceedings for the redemption of any other shares of
Designated Preferred Stock. Notwithstanding the foregoing, if shares of Designated Preferred Stock
are issued in book-entry form through The Depository Trust Corporation or any other similar
facility, notice of 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.




UST Sequence No. 9





 


A-6 









 






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



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



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



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



UST Sequence No. 9





 


A-7 









 








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



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



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




UST Sequence No. 9



 


A-8









 







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




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



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



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



UST Sequence No. 9





 


A-9









 







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




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



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



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



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



UST Sequence No. 9





 


A-10









 







ANNEX B




WAIVER




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



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



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



	 	 	 
	/s/ John R. Koelmel
 

John R. Koelmel

	 	 
	President and Chief Executive Officer 
	 	 
	First Niagara Financial Group, Inc.
	 	 






November 21, 2008



UST
Sequence No. 9





 


 









 







ANNEX B




WAIVER




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



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



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



	 	 	 
	/s/ Frank J. Polino
 

Frank J. Polino

	 	 
	Executive Vice President, Operations
	 	 
	First Niagara Financial Group, Inc.
	 	 






November 21, 2008




UST
Sequence No. 9





 


 









 







ANNEX B




WAIVER




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



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



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



	 	 	 
	/s/
J. Lanier Little
 

J. Lanier Little

	 	 
	Executive Vice President, Consumer Banking 
	 	 
	First Niagara Financial Group, Inc.
	 	 






November 21, 2008



UST
Sequence No. 9





 


 









 







ANNEX B




WAIVER




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



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



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



	 	 	 
	/s/ Daniel E. Cantara, III
 

Daniel E. Cantara, III

	 	 
	Executive Vice President, Commercial Business,
	 	 
	   Regional President, Western New York 
	 	 
	First Niagara Financial Group, Inc.
	 	 






November 21, 2008



UST
Sequence No. 9





 


 









 







ANNEX C




LUSE
GORMAN POMERENK & SCHICK




A PROFESSIONAL CORPORATION



ATTORNEYS AT LAW




5335 WISCONSIN AVENUE, N.W., SUITE 400



WASHINGTON, D.C. 20015




TELEPHONE (202) 274-2000



FACSIMILE (202) 362-2902



www.luselaw.com




WRITER’S DIRECT DIAL NUMBER




(202) 274-2000



November 21,
2008



United States Department of the Treasury

1500 Pennsylvania Ave., NW

Washington, DC 20220





				
	 	Re:	 	First Niagara Financial Group, Inc.

Private Placement of 184,011 Shares of Preferred Stock 
and a Warrant to Purchase 1,906,191 Shares of Common Stock





Ladies and Gentlemen:



We have acted as counsel for First Niagara Financial Group, Inc. (the “Company”) in connection
with the private placement of 184,011 shares of Fixed Rate Cumulative Perpetual Preferred Stock,
Series A (the “Preferred Shares”) and a warrant to purchase 1,906,191 shares of its common stock
(the “Warrant” and, together with the Preferred Shares, the “Purchased Securities”), pursuant to
the terms of the Securities Purchase Agreement- Standard Terms (the “Securities Purchase
Agreement”) and the Letter Agreement (the “Letter Agreement”), dated as of November 21, 2008
(together referred to as the “Agreement”), between the Company and you. This opinion is furnished
to you pursuant to Section 1.2(d)(vi) of the Securities Purchase Agreement. Capitalized terms have
the respective meanings given them in the Agreement unless otherwise defined herein.



For purposes of the opinions expressed in this letter, we have examined copies of the
following documents (the “Documents”):




	 	(1)	 	an executed copy of the Agreement;
	 
	 	(2)	 	an executed copy of the Warrant;
	 
	 	(3)	 	a copy of the specimen certificate for the Preferred Shares;
	 
	 	(4)	 	the Company’s Certificate of Incorporation; 
	 
	 	(5)	 	the Company’s Bylaws;





UST Sequence No. 9





 


 









 







United States Department of the Treasury

November 21, 2008

Page 2





	 	(6)	 	a certificate of the Company regarding certain facts relating to the Company;
	 
	 	(7)	 	a certificate of the Company regarding compliance with Section 111 (b) of the Emergency
Economic Stabilization Act of 2008 (“EESA”);
	 
	 	(8)	 	a certificate of the Company regarding no modification of documents;
	 
	 	(9)	 	the Certificate of Designation as filed with the State of Delaware on November 20,
2008;
	 
	 	(10)	 	waivers executed by the CEO, CFO and top three senior executive officers of the
Company regarding changes to compensation and benefits to comply with Section 111 (b) of
EESA;
	 
	 	(11)	 	a certificate of the State of Delaware dated November 18, 2008, as to the valid
existence of the Company;
	 
	 	(12)	 	certain resolutions of the Board of Directors of the Company adopted at meetings held
on November 17, 2008, certified by the Secretary of the Company as being complete, accurate
and in effect, relating to, among other things, authorization of the Agreement and matters
related thereto.





We
have reviewed such other documents as deemed necessary for rendering
our opinions. The
opinions are qualified in all respects by the scope of such document examination. As to facts
material to the opinions, statements and assumptions expressed herein, we have relied upon oral or
written statements and representations of officers and other representatives of the Company,
including the representations and warranties of the Company in the Agreement. We have not
independently verified such factual matters.



In our examination of the Documents, we have assumed but not verified (i) the genuineness of
all signatures, (ii) the authenticity of all documents submitted to us as originals, (iii) the
conformity with the originals of all documents supplied to us as copies, (iv) the accuracy and
completeness of all corporate records and documents, certificates and statements of fact, in each
case given or made available to us by the Company and (v) that the Agreement has been duly and
validly executed and delivered by, and constitutes the legal, valid, binding and enforceable
agreement of, the United States Department of the Treasury.



We are opining herein as to the effects on the subject transactions only of the federal
securities and banking laws of the United States of America, the laws of the State of Delaware and,
as to paragraphs (c) and (g) below, the laws of the State of New York. We express no opinion with
respect to the applicability thereto, or the effect thereon, of the laws of any state or other
jurisdiction or as to any matters of municipal law or the laws of any local agencies within any
state. Our opinions and confirmations herein are based upon our consideration of only those
statutes, rules and regulations that, in our experience, are normally applicable to sales of common
equity securities by a Delaware chartered stock




UST Sequence No. 9



 


 









 






LUSE GORMAN POMERENK & SCHICK

     A PROFESSIONAL CORPORATION




United States Department of the Treasury

November 21, 2008

Page 2





	 	(7)	 	a certificate of the Company regarding compliance with Section 111 (b) of the Emergency
Economic Stabilization Act of 2008 (“EESA”);
	 
	 	(8)	 	a certificate of the Company regarding no modification of documents;
	 
	 	(9)	 	the Certificate of Designation as filed with the State of Delaware on November 21,2008;
	 
	 	(10)	 	waivers executed by the CEO, CFO and top three senior executive officers of the
Company regarding changes to compensation and benefits to comply with Section 111 (b) of
EESA;
	 
	 	(11)	 	a certificate of the State of Delaware dated November 18,2008, as to the valid
existence of the Company;
	 
	 	(12)	 	certain resolutions of the Board of Directors of the Company adopted at meetings held
on November 17, 2008, certified by the Secretary of the Company as being complete, accurate
and in effect, relating to, among other things, authorization of the Agreement and matters
related thereto.





We
have reviewed such other documents as deemed necessary for rendering
our opinions. The
opinions are qualified in all respects by the scope of such document examination. As to facts
material to the opinions, statements and assumptions expressed herein, we have relied upon oral or
written statements and representations of officers and other representatives of the Company,
including the representations and warranties of the Company in the Agreement. We have not
independently verified such factual matters.



In our examination of the Documents, we have assumed but not verified (i) the genuineness of
all signatures, (ii) the authenticity of all documents submitted to us as originals, (iii) the
conformity with the originals of all documents supplied to us as copies, (iv) the accuracy and
completeness of all corporate records and documents, certificates and statements of fact, in each
case given or made available to us by the Company and (v) that the Agreement has been duly and
validly executed and delivered by, and constitutes the legal, valid, binding and enforceable
agreement of, the United States Department of the Treasury.



We
are opining herein as to the effects on the subject transactions only of the federal
securities and banking laws of the United States of America, the laws of the State of Delaware and,
as to paragraphs (c) and (g) below, the laws of the State of New York. We express no opinion with
respect to the applicability thereto, or the effect thereon, of the laws of any state or other
jurisdiction or as to any matters of municipal law or the laws of any local
agencies within any state. Our opinions and confirmations herein are based upon our
consideration of only those statutes, rules and regulations that, in our experience, are normally
applicable to sales of common equity securities by a Delaware chartered stock holding company.



UST Sequence No. 9





 


 









 







LUSE GORMAN POMERENK & SCHICK

      A PROFESSIONAL CORPORATION




United States Department of the Treasury

November 21, 2008

Page 3




On the basis of the foregoing and the other matters set forth herein, we hereby are of the
opinion that:




(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 November 21, 2008 with respect to the payment of dividends and
the distribution of assets in the event of any dissolution, liquidation or winding up of
the Company.




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




(d) The shares of Common Stock issuable upon exercise of the Warrant have been duly
authorized and reserved for issuance upon exercise of the Warrant and when so issued in
accordance with the terms of the Warrant will be validly issued, fully paid and
non-assessable.




(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.





UST Sequence No. 9





 


 









 







LUSE GORMAN POMERENK & SCHICK

      A PROFESSIONAL CORPORATION




United States Department of the Treasury

November 21, 2008

Page 4





(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, we express no opinion with respect to Section 4.5(g) or the
severability provisions of the Agreement insofar as Section 4.5(g) is concerned.



We assume no obligation to advise you of any events that occur subsequent to the date of this
opinion. This opinion is being furnished to you solely for your benefit and may not be relied upon
by any other person without our prior express written consent.



	 	 	 	 	 
	 

	 	Very truly yours,	 	 
	 
	 	 	 	 
	 

	 	/s/ Luse Gorman Pomerenk & Schick
 

LUSE GORMAN POMERENK & SCHICK,
	 	 
	 

	 	A Professional Corporation	 	 






UST Sequence No. 9