EX-10.1






Exhibit 10.1




UST Sequence Number: 30




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 Except to the extent supplemented or superseded by the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.



     The Company shall include in its proxy statement for its 2009 Annual Meeting of Shareholders a
proposal (the “Preferred Stock Proposal”) to amend and restate its Amended and Restated Articles of
Incorporation and the Certificate of Designations in order for such Certificate of Designations to
thereafter be in the form set forth on Exhibit B. The Board of Directors shall recommend to
the Company’s shareholders that such shareholders vote in favor of the Preferred Stock Proposal.
In connection with such meeting, the Company shall use its reasonable best efforts to solicit
proxies for such shareholder approval of the Preferred Stock Proposal. The Company shall notify
the Investor promptly of the receipt of any comments from the SEC or its staff with respect to the
Preferred Stock Proposal and of any request by the SEC or its staff for amendments or supplements
to such proxy statement with respect to the Preferred Stock Proposal 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
Preferred Stock Proposal. If at any time prior to such shareholders’ 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 shareholders 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 shareholders 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 with respect to the Preferred Stock Proposal, or any amendment
or supplement thereto, and provide the Investor with a reasonable opportunity to



 









 







comment thereon.
In the event that the approval of the Preferred Stock Proposal is not obtained at such annual
shareholders meeting, the Company shall include a proposal to approve (and the Board of Directors
shall recommend approval of) the Preferred Stock Proposal at each subsequent annual meeting of its
shareholders until such approval is obtained or made.



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



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



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



* * *




 









 








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



	 	 	 	 	 
	 	UNITED STATES DEPARTMENT OF THE TREASURY

 	 
	 	By:  	/s/
Neel Kashkari	 
	 	 	Name:  	Neel Kashkari	 
	 	 	Title:  	Interim Assistant Secretary for Financial
Stability	 
	 
	 	COMPANY: KEYCORP

 	 
	 	By:  	/s/ Daniel R. Stolzer
 	 
	 	 	Name:  	Daniel R. Stolzer 	 
	 	 	Title:  	Vice President, Deputy General Counsel
and Assistant Secretary 	 
	 



Date: November 14, 2008





 











 





EXHIBIT A




 

 




SECURITIES PURCHASE AGREEMENT




STANDARD TERMS




 

 




 









 





TABLE OF CONTENTS




	 	 	 	 	 
	 	 	 	 	Page
	 
	 	Article I	 	 
	 
	 	 	 	 
	 
	 	Purchase; Closing	 	 
	 
	 	 	 	 
	1.1
	 	Purchase	 	1
	1.2
	 	Closing	 	2
	1.3
	 	Interpretation	 	4
	 
	 	 	 	 
	 
	 	Article II	 	 
	 
	 	 	 	 
	 
	 	Representations and Warranties	 	 
	 
	 	 	 	 
	2.1
	 	Disclosure	 	4
	2.2
	 	Representations and Warranties of the Company	 	5
	 
	 	 	 	 
	 
	 	Article III	 	 
	 
	 	 	 	 
	 
	 	Covenants	 	 
	 
	 	 	 	 
	3.1
	 	Commercially Reasonable Efforts	 	13
	3.2
	 	Expenses	 	14
	3.3
	 	Sufficiency of Authorized Common Stock; Exchange Listing	 	14
	3.4
	 	Certain Notifications Until Closing	 	15
	3.5
	 	Access, Information and Confidentiality	 	15
	 
	 	 	 	 
	 
	 	Article IV	 	 
	 
	 	 	 	 
	 
	 	Additional Agreements	 	 
	 
	 	 	 	 
	4.1
	 	Purchase for Investment	 	16
	4.2
	 	Legends	 	16
	4.3
	 	Certain Transactions	 	18
	4.4
	 	Transfer of Purchased Securities and Warrant Shares;	 	 
	 
	 	Restrictions on Exercise of the Warrant	 	18
	4.5
	 	Registration Rights	 	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






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	 	 	 	 	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






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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






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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)






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







-v-











 





SECURITIES PURCHASE AGREEMENT — STANDARD TERMS




Recitals:




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



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



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



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



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



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



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



Article I

Purchase; Closing




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



 









 





     1.2
Closing.



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



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



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



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




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



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




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




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




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




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




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




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



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



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



Article II

Representations and Warranties




     2.1 Disclosure.



     (a) “Company Material Adverse Effect” means a material adverse effect on (i) the business,
results of operation or financial condition of the Company and its consolidated subsidiaries taken
as a whole; provided, however, that Company Material Adverse Effect shall not be deemed to include
the effects of (A) changes after the date of the Letter Agreement (the “Signing Date”) in general
business, economic or market conditions (including changes generally in prevailing interest rates,
credit availability and liquidity, currency exchange rates and price levels or trading volumes in
the United States or foreign securities or credit markets), or any outbreak or escalation of
hostilities, declared or undeclared acts of war or terrorism, in each case generally affecting the
industries in which the Company and its subsidiaries operate, (B) changes or proposed changes after
the Signing Date in generally accepted accounting principles in the United States (“GAAP”) or
regulatory accounting requirements, or authoritative interpretations thereof, (C) changes or
proposed changes after the Signing Date in securities, banking and other laws of general
applicability or related policies or interpretations of Governmental Entities (in the case of each
of these clauses (A), (B) and (C), other than changes



-4-









 




or occurrences to the extent that such changes or occurrences have or would reasonably be expected
to have a materially disproportionate adverse effect on the Company and its consolidated
subsidiaries taken as a whole relative to comparable U.S. banking or financial services
organizations), or (D) changes in the market price or trading volume of the Common Stock or any
other equity, equity-related or debt securities of the Company or its consolidated subsidiaries (it
being understood and agreed that the exception set forth in this clause (D) does not apply to the
underlying reason giving rise to or contributing to any such change); or (ii) the ability of the
Company to consummate the Purchase and the other transactions contemplated by this Agreement and
the Warrant and perform its obligations hereunder or thereunder on a timely basis.




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



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



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



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



-5-









 







specified on Schedule B, and the Company has not made any other commitment to authorize, issue or
sell any Common Stock. Since the Capitalization Date, the Company has not issued any shares of
Common Stock, other than (i) shares issued upon the exercise of stock options or delivered under
other equity-based awards or other convertible securities or warrants which were issued and
outstanding on the Capitalization Date and disclosed on Schedule B and (ii) shares disclosed on
Schedule B.



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



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



     (e) Authorization, Enforceability.




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




     (ii) The execution, delivery and performance by the Company of this Agreement and the
Warrant and the consummation of the transactions contemplated hereby and thereby and
compliance by the Company with the provisions hereof and



-6-









 







thereof, will not (A) violate, conflict with, or result in a breach of any provision of, or
constitute a default (or an event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination of, or accelerate the performance
required by, or result in a right of termination or acceleration of, or result in the
creation of, any lien, security interest, charge or encumbrance upon any of the properties or
assets of the Company or any Company Subsidiary under any of the terms, conditions or
provisions of (i) subject, if applicable, to the approvals of the Company’s stockholders set
forth on Schedule C, its organizational documents or (ii) any note, bond, mortgage,
indenture, deed of trust, license, lease, agreement or other instrument or obligation to
which the Company or any Company Subsidiary is a party or by which it or any Company
Subsidiary may be bound, or to which the Company or any Company Subsidiary or any of the
properties or assets of the Company or any Company Subsidiary may be subject, or (B) subject
to compliance with the statutes and regulations referred to in the next paragraph, violate
any statute, rule or regulation or any judgment, ruling, order, writ, injunction or decree
applicable to the Company or any Company Subsidiary or any of their respective properties or
assets except, in the case of clauses (A)(ii) and (B), for those occurrences that,
individually or in the aggregate, have not had and would not reasonably be expected to have a
Company Material Adverse Effect.




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



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



     (g) No Company Material Adverse Effect. Since the last day of the last completed fiscal period
for which the Company has filed a Quarterly Report on Form 10-Q or an Annual



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Report on Form 10-K with the SEC prior to the Signing Date, no fact, circumstance, event, change,
occurrence, condition or development has occurred that, individually or in the aggregate, has had
or would reasonably be expected to have a Company Material Adverse Effect.



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



     (i) Reports.




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




     (ii) The records, systems, controls, data and information of the Company and the Company
Subsidiaries are recorded, stored, maintained and operated under means (including any
electronic, mechanical or photographic process, whether computerized or not) that are under
the exclusive ownership and direct control of the Company or the



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



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



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



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



     (m) Compliance with Laws. Except as would not, individually or in the aggregate, reasonably
be expected to have a Company Material Adverse Effect, the Company and the



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



     (n) Employee Benefit Matters. Except as would not reasonably be expected to have, either
individually or in the aggregate, a Company Material Adverse Effect: (A) each “employee benefit
plan” (within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended (“ERISA”)) providing benefits to any current or former employee, officer or director of
the Company or any member of its “Controlled Group” (defined as any organization which is a member
of a controlled group of corporations within the meaning of Section 414 of the Internal Revenue
Code of 1986, as amended (the “Code”)) that is sponsored, maintained or contributed to by the
Company or any member of its Controlled Group and for which the Company or any member of its
Controlled Group would have any liability, whether actual or contingent (each, a “Plan”) has been
maintained in compliance with its terms and with the requirements of all applicable statutes, rules
and regulations, including ERISA and the Code; (B) with respect to each Plan subject to Title IV of
ERISA (including, for purposes of this clause (B), any plan subject to Title IV of ERISA that the
Company or any member of its Controlled Group previously maintained or contributed to in the six
years prior to the Signing Date), (1) no “reportable event” (within the meaning of Section 4043(c)
of ERISA), other than a reportable event for which the notice period referred to in Section
4043(c) of ERISA has been waived, has occurred in the three years prior to the Signing Date or is
reasonably expected to occur, (2) no “accumulated funding deficiency” (within the meaning of
Section 302 of ERISA or Section 412 of the Code), whether or not waived, has occurred in the three
years prior to the Signing Date or is reasonably expected to occur, (3) the fair market value of
the assets under each Plan exceeds the present value of all benefits accrued under such Plan
(determined based on the assumptions used to fund such Plan) and (4) neither the Company nor any
member of its Controlled Group has incurred in the six years prior to the Signing Date, or
reasonably expects to incur, any liability under Title IV of ERISA (other than contributions to the
Plan or premiums to the PBGC in the ordinary course and without default) in respect of a Plan
(including any Plan that is a “multiemployer plan”, within the meaning of Section 4001(c)(3) of
ERISA); and (C) each Plan that is intended to be qualified under Section 401(a) of the Code has
received a favorable



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determination letter from the Internal Revenue Service with respect to its qualified status that
has not been revoked, or such a determination letter has been timely applied for but not received
by the Signing Date, and nothing has occurred, whether by action or by failure to act, which could
reasonably be expected to cause the loss, revocation or denial of such qualified status or
favorable determination letter.



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



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



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




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



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



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



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     (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.





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



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



Article III

Covenants




     3.1 Commercially Reasonable Efforts.



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



     (b) If the Company is required to obtain any stockholder approvals set forth on Schedule
C, then the Company shall comply with this Section 3.1(b) and Section 3.1(c). The Company shall
call a special meeting of its stockholders, as promptly as practicable following the Closing, to
vote on proposals (collectively, the “Stockholder Proposals”) to (i) approve the exercise of the
Warrant for Common Stock for purposes of the rules of the national security exchange on which the
Common Stock is listed and/or (ii) amend the Company’s Charter to increase the number of authorized
shares of Common Stock to at least such number as shall be sufficient to permit the full exercise
of the Warrant for Common Stock and comply with the



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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.



     3.3 Sufficiency of Authorized Common Stock; Exchange Listing.



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     (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



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expected to cause a violation of any agreement to which the Company or any Company
Subsidiary is a party or would cause a risk of a loss of privilege to the Company or any Company
Subsidiary (provided that the Company shall use commercially reasonable efforts to make appropriate
substitute disclosure arrangements under circumstances where the restrictions in this clause (ii)
apply).



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



Article IV

Additional Agreements




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



     4.2 Legends.



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




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



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     (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



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REQUIREMENTS OF THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM
THE SECURITIES REPRESENTED BY THIS INSTRUMENT ARE TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND.”



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



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



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



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2008). “Business Combination” means a merger, consolidation, statutory share exchange or similar
transaction that requires the approval of the Company’s stockholders.



     4.5 Registration Rights.



     (a) Registration.




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




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




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     (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



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to the Company, the managing underwriters and the Investor (if the Investor is
participating in the underwriting).




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



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



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




     (i) Prepare and file with the SEC a prospectus supplement with respect to a proposed
offering of Registrable Securities pursuant to an effective registration statement, subject
to Section 4.5(d), keep such registration statement effective and keep



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such prospectus supplement current until the securities described therein are no longer
Registrable Securities.




     (ii) Prepare and file with the SEC such amendments and supplements to the applicable
registration statement and the prospectus or prospectus supplement used in connection with such
registration statement as may be necessary to comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such registration statement.




     (iii) Furnish to the Holders and any underwriters such number of copies of the applicable
registration statement and each such amendment and supplement thereto (including in each case all
exhibits) and of a prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may reasonably request in
order to facilitate the disposition of Registrable Securities owned or to be distributed by them.




     (iv) Use its reasonable best efforts to register and qualify the securities covered by such
registration statement under such other securities or Blue Sky laws of such jurisdictions as shall
be reasonably requested by the Holders or any managing underwriter(s), to keep such registration or
qualification in effect for so long as such registration statement remains in effect, and to take
any other action which may be reasonably necessary to enable such seller to consummate the
disposition in such jurisdictions of the securities owned by such Holder; provided that the Company
shall not be required in connection therewith or as a condition thereto to qualify to do business
or to file a general consent to service of process in any such states or jurisdictions.




     (v) Notify each Holder of Registrable Securities at any time when a prospectus relating
thereto is required to be delivered under the Securities Act of the happening of any event as a
result of which the applicable prospectus, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or necessary to make
the statements therein not misleading in light of the circumstances then existing.




     (vi) Give written notice to the Holders:




     (A) when any registration statement filed pursuant to Section 4.5(a) or any amendment
thereto has been filed with the SEC (except for any amendment effected by the filing of a
document with the SEC pursuant to the Exchange Act) and when such registration statement or
any post-effective amendment thereto has become effective;




     (B) of any request by the SEC for amendments or supplements to any registration
statement or the prospectus included therein or for additional information;



-22-









 






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




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




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




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




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




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




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




     (x) If an underwritten offering is requested pursuant to Section 4.5(a)(ii), enter into an
underwriting agreement in customary form, scope and substance and take all such



-23-









 







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




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




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



-24-









 







Registrable Securities to be listed on such securities exchange as the Investor may
designate.




     (xiii) If requested by Holders of a majority of the Registrable Securities being
registered and/or sold in connection therewith, or the managing underwriter(s), if any,
promptly include in a prospectus supplement or amendment such information as the Holders of a
majority of the Registrable Securities being registered and/or sold in connection therewith
or managing underwriter(s), if any, may reasonably request in order to permit the intended
method of distribution of such securities and make all required filings of such prospectus
supplement or such amendment as soon as practicable after the Company has received such
request.




     (xiv) Timely provide to its security holders earning statements satisfying the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder.



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



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



     (f) Furnishing
Information.




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




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



-25-









 







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



     (g) Indemnification.




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




     (ii) If the indemnification provided for in Section 4.5(g)(i) is unavailable to an Indemnitee
with respect to any losses, claims, damages, actions, liabilities, costs or expenses referred to
therein or is insufficient to hold the Indemnitee harmless as contemplated therein, then the
Company, in lieu of indemnifying such Indemnitee, shall contribute to the amount paid or payable by
such Indemnitee as a result of such losses, claims, damages, actions, liabilities, costs or
expenses in such proportion as is appropriate to reflect the relative fault of the Indemnitee, on
the one hand, and the Company, on the other hand, in connection with the statements or omissions
which resulted in such losses, claims, damages, actions, liabilities, costs or expenses as well as
any other relevant



-26-









 







equitable considerations. The relative fault of the Company, on the one hand, and of the
Indemnitee, on the other hand, shall be determined by reference to, among other factors,
whether the untrue statement of a material fact or omission to state a material fact relates
to information supplied by the Company or by the Indemnitee and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such statement or
omission; the Company and each Holder agree that it would not be just and equitable if
contribution pursuant to this Section 4.5(g)(ii) were determined by pro rata allocation or by
any other method of allocation that does not take account of the equitable considerations
referred to in Section 4.5(g)(i). No Indemnitee guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution
from the Company if the Company was not guilty of such fraudulent misrepresentation.



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



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



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customers, lenders or vendors of the Company or Company Subsidiaries or in connection with dividend
reinvestment plans.



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




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




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




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




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



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




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




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




     (iii) “Register,” “registered,” and “registration” shall refer to a registration
effected by preparing and (A) filing a registration statement in compliance with the
Securities Act and applicable rules and regulations thereunder, and the declaration or
ordering of effectiveness of such registration statement or (B) filing a prospectus and/or




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prospectus supplement in respect of an appropriate effective registration statement on Form
S-3.




     (iv) “Registrable Securities” means (A) all Preferred Shares, (B) the Warrant (subject
to Section 4.5(p)) and (C) any equity securities issued or issuable directly or indirectly
with respect to the securities referred to in the foregoing clauses (A) or (B) by way of
conversion, exercise or exchange thereof, including the Warrant Shares, or share dividend or
share split or in connection with a combination of shares, recapitalization,
reclassification, merger, amalgamation, arrangement, consolidation or other reorganization,
provided that, once issued, such securities will not be Registrable Securities when (1) they
are sold pursuant to an effective registration statement under the Securities Act, (2) except
as provided below in Section 4.5(o), they may be sold pursuant to Rule 144 without limitation
thereunder on volume or manner of sale, (3) they shall have ceased to be outstanding or (4)
they have been sold in a private transaction in which the transferor’s rights under this
Agreement are not assigned to the transferee of the securities. No Registrable Securities
may be registered under more than one registration statement at any one time.




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




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




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



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



-29-









 







Registrable Securities in which such Holder has advised the Company of its intent to register its
Registrable Securities either pursuant to Section 4.5(a)(ii) or 4.5(a)(iv) prior to the date of
such Holder’s forfeiture.



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



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



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



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



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



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



     4.8 Restriction on Dividends and Repurchases.



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




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




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



-31-









 







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



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



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



     4.9 Repurchase of Investor Securities.



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



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



-32-









 





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




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




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



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



-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



-34-









 







writing signed by a duly authorized officer of the waiving party that makes express reference to
the provision or provisions subject to such waiver.



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



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



-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.



* * *





-36-









 








ANNEX A




FORM OF CERTIFICATE OF DESIGNATIONS




[SEE ATTACHED]




 









 





ANNEX B




FORM OF WAIVER 



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



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



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




 









 





ANNEX C




FORM OF OPINION 




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



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



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



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



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



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



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



 









 





ANNEX D




FORM OF WARRANT




[SEE ATTACHED]





 











 





EXHIBIT B




AMENDED AND RESTATED CERTIFICATE OF DESIGNATIONS




 









 






[Explanatory Note: Form of Express
Terms of 
Fixed Rate Cumulative Perpetual

Preferred Stock, Series B to be proposed as the 

Preferred Stock
Proposal at the 2009
Annual Meeting of Shareholders]


ATTACHMENT TO CERTIFICATE OF AMENDMENT

TO THE AMENDED AND RESTATED ARTICLES OF INCORPORATION

OF KEYCORP




     RESOLVED, that Part E of Article IV of the Corporation’s Amended and Restated Articles of
Incorporation be, and the same hereby is, deleted in its entirety and there is substituted therefor
the following:



PART E




EXPRESS TERMS OF FIXED RATE

CUMULATIVE PERPETUAL PREFERRED STOCK, SERIES B




     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 B” (the “Designated
Preferred Stock”). The authorized number of shares of Designated Preferred Stock shall be
25,000.



     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
hereof 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 Part E (including the
Standard Provisions in Annex A hereto) as defined below:



     (a) “Common Stock” means the common stock, par value $1.00 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.



     (d) “Liquidation Amount” means $100,000 per share of Designated Preferred Stock.



     (e) “Minimum Amount” means $625,000,000.



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



 









 







Parity Stock shall include the Corporation’s 7.750% Non-Cumulative Perpetual Convertible
Preferred Stock, Series A.



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



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



[Remainder of Page Intentionally Left Blank]





 









 








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) “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.



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



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



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



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



 









 





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



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



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



     (m) “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).



     (n) “Regulations” means the amended and restated regulations of the Corporation, as
they may be amended from time to time.



     (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.



     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 brokerdealer subsidiary of the Corporation of capital stock of the
Corporation for resale pursuant to an offering by the Corporation of such capital stock
underwritten by such broker-dealer subsidiary; (iv) any dividends or distributions of rights or
Junior Stock in connection with a
stockholders’ 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.



     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.



     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.



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



     (e) Effectiveness of Redemption. If notice of redemption has been duly given and if
on or before the redemption date specified in the notice all funds necessary for the redemption
have been deposited by the Corporation, in trust for the pro rata benefit of the holders of the
shares called for redemption, with a bank or trust company doing business in the Borough of
Manhattan, The City of New York, and having a capital and surplus of at least $500 million and
selected by the Board of Directors, so as to be and continue to be available solely therefor, then,
notwithstanding that any certificate for any share so called for redemption has not been
surrendered for cancellation, on and after the redemption date dividends shall cease to accrue on
all shares so called for redemption, all



 









 







shares so called for redemption shall no longer be deemed
outstanding and all rights with respect to such shares shall forthwith on such redemption date
cease and terminate, except only the right of the holders thereof to receive the amount payable on
such redemption from such bank or trust company, without interest. Any funds unclaimed at the end
of three years from the redemption date shall, to the extent permitted by law, be released to the
Corporation, after which time the holders of the shares so called for redemption shall look only to
the Corporation for payment of the redemption price of such shares.



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



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



     Section 7. Voting Rights.



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



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



 









 







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



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




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




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




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



 









 







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


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




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



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



 









 





SCHEDULE A




ADDITIONAL TERMS AND CONDITIONS




	 	 	 
	Company Information:
	 	 
	 
	 	 
	Name of the Company:
	 	KeyCorp
	 
	 	 
	Corporate or other organizational form:
	 	Corporation
	 
	 	 
	Jurisdiction of Organization:
	 	Ohio
	 
	 	 
	Appropriate Federal Banking Agency:
	 	Board of Governors of the Federal Reserve System
	 
	 	 
	Notice Information:
	 	KeyCorp
	 
	 	127 Public Square
	 
	 	Cleveland, OH  44114
	 
	 	Attention: Thomas C. Stevens
	 
	 	Telephone: (216) 689-3196
	 
	 	Facsimile:  (216) 689-7827
	 
	 	Attention: Paul N. Harris
	 
	 	Telephone: (216) 689-0350
	 
	 	Facsimile:  (216) 689-0848
	 
	 	 
	 
	 	with a copy to:
	 
	 	 
	 
	 	Sullivan & Cromwell LLP
	 
	 	125 Broad Street
	 
	 	New York, NY 10004
	 
	 	Attention:  Mitchell S. Eitel
	 
	 	Andrew R. Gladin

	 
	 	Facsimile:  (212) 558-3588
	 
	 	 
	Terms of the Purchase:
	 
	 	 
	Series of Preferred Stock Purchased:
	 	Fixed Rate Cumulative Perpetual Preferred Stock, Series B
	 
	 	 
	Per Share Liquidation Preference of Preferred
Stock:
	 	$100,000
	 
	 	 
	Number of Shares of Preferred Stock Purchased:
	 	25,000
	 
	 	 
	Dividend Payment Dates on the Preferred Stock:
	 	February 15, May 15, August 15, November 15
	 
	 	 
	Number of Initial Warrant Shares:
	 	35,244,361
	 
	 	 
	Exercise Price of the Warrant:
	 	$10.64
	 
	 	 
	Purchase Price:
	 	$2,500,000,000






 









 






	 	 	 
	Closing:
	 
	 	 
	Location of Closing:
	 	Simpson Thacher & Bartlett LLP
	 
	 	425 Lexington Avenue
	 
	 	New York, NY 10017
	 
	 	 
	Time of Closing:
	 	9:00 a.m., New York time
	 
	 	 
	Date of Closing:
	 	November 14, 2008
	 
	 	 
	Wire Information for Closing:
	 	[OMITTED]
	 
	 	
	 
	 	
	 
	 	
	 
	 	






 









 






SCHEDULE B




CAPITALIZATION




	 	 	 
	Capitalization Date:
	 	September 30, 2008
	 
	 	 
	Common Stock
	 	 
	 
	 	 
	Par value:
	 	$1.00
	 
	 	 
	Total Authorized:
	 	1,400,000,000
	 
	 	 
	Outstanding:
	 	494,765,492
	 
	 	 
	Subject to warrants, options, convertible
securities, etc.:
	 	46,631,215 (convertible only)
	 
	 	 
	Reserved for benefit plans and other issuances:
	 	89,295,6281
	 
	 	 
	Remaining authorized but unissued:
	 	769,307,6652
	 
	 	 
	Shares issued after Capitalization Date (other
than pursuant to warrants, options,
convertible securities, etc. as set forth
above):
	 	0
	 
	 	 
	Preferred Stock
	 	 
	 
	 	 
	Par value:
	 	$1.00
	 
	 	 
	Total Authorized:
	 	25,000,000
	 
	 	 
	Outstanding (by series):
	 	 
	 
	 	 
	7.750% Non-Cumulative Perpetual
Convertible Preferred Stock, Series A
	 	6,575,000
	 
	 	 
	Reserved for issuance:
	 	900,000 (for Series A)3
	 
	 	 
	Remaining authorized but unissued:
	 	17,525,0004








 




			
	1	 	Includes all stock held in treasury, whether or not
formally segregated for particular issuances. 46,631,215 of this number has
been designated for settlement of conversion of Class A Preferred Stock.
	 
	2	 	Assumes all conversion of Class A Preferred Stock would
be settled by new issuance of authorized and unissued stock (i.e. assumes no
settlement using treasury stock).
	 
	3	 	The board has approved issuance of up to 7,475,000
shares of Class A Preferred Stock, 6,575,000 of which have been issued.
	 
	4	 	Does not account for the 25,000 shares of Class B
Preferred Stock to be acquired by the U.S. Department of the Treasury on
November 14, 2008




 









 










SCHEDULE C




REQUIRED STOCKHOLDER APPROVALS




	 	 	 	 	 
	 	 	Required5	 	% Vote Required
	 
	 	 	 	 
	Warrants — Common Stock Issuance
	 	 	 	 
	 
	 	 	 	 
	Charter Amendment
	 	 	 	 
	 
	 	 	 	 
	Stock Exchange Rules
	 	 	 	 





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






 




			
	5	 	If stockholder approval is required, indicate
applicable class/series of capital stock that are required to vote.




 









 










SCHEDULE D




LITIGATION



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



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




 









 








SCHEDULE E




COMPLIANCE WITH LAWS



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



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



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



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




 









 








SCHEDULE F




REGULATORY AGREEMENTS



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



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