Exhibit 10.1


 


UST
Sequence Number: 10


 


UNITED STATES DEPARTMENT OF THE TREASURY

1500 PENNSYLVANIA AVENUE, NW

WASHINGTON, D.C. 20220


 


Dear
Ladies and Gentlemen:


 


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


 


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 Except to the extent supplemented or superseded by the terms set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


 


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


 


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


 


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


 


* * *


 

















 


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


 


 


	
   

  	
  UNITED
  STATES DEPARTMENT OF THE

  
	
   

  	
  TREASURY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Neel Kashkari

  
	
   

  	
   

  	
  Name:

  	
  Neel
  Kashkari

  
	
   

  	
   

  	
  Title:

  	
  Interim
  Assistant Secretary for Financial Stability

  
	
   

  	
   

  	
   

  
	
   

  	
  COMPANY: HF Financial Corp.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Curtis L. Hage

  
	
   

  	
   

  	
  Name:

  	
  Curtis L.
  Hage

  
	
   

  	
   

  	
  Title:

  	
  Chairman and
  Chief Executive Officer

  



 


 


Date:
November 21, 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

  



 


i

















 


	
   

  	
   

  	
  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

  



 


ii

















 


LIST OF ANNEXES


 


	
  ANNEX A:

  	
  FORM OF
  CERTIFICATE OF DESIGNATIONS FOR PREFERRED STOCK

  
	
   

  	
   

  
	
  ANNEX B:

  	
  FORM OF
  WAIVER

  
	
   

  	
   

  
	
  ANNEX C:

  	
  FORM OF
  OPINION

  
	
   

  	
   

  
	
  ANNEX D:

  	
  FORM OF
  WARRANT

  



 


 


iii

















 


INDEX
OF DEFINED TERMS


 


	
   

  	
   

  	
  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)

  



 


iv

















 


	
   

  	
   

  	
  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


 


2

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


3

















 


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


 


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


 


Article II

Representations and Warranties


 


2.1                                       Disclosure.


 


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


 


4

















 


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


 


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


 


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


 


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


 


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


 


5

















 


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


 


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


 


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


 


(e)                           Authorization, Enforceability.


 


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


 


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


 


6

















 


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


 


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


 


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


 


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


 


7

















 


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


 


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


 


(i)                                     Reports.


 


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


 


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


 


8

















 


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


 


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


 


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


 


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


 


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


 


9

















 


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


 


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


 


10

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


11
















 


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


 


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


 


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


 


12

















 


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


 


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


 


Article III

Covenants


 


3.1                                 Commercially Reasonable Efforts.


 


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


 


(b)                            If the Company is required to obtain any
stockholder approvals set forth on

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


 


13

















 


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


 


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


 


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


 


14

















 


3.3                            Sufficiency of Authorized Common Stock;
Exchange Listing.


 


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


 


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


 


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


 


3.5                                 Access, Information and Confidentiality.


 


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


 


15

















 


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


 


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


 


Article IV

Additional Agreements


 


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


 


4.2                                 Legends.


 


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


 


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


 


16

















 


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


 


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


 


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


 


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


 


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


 


17

















 


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


 


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


 


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


 


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


 


18

















 


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.


 


19
















 


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


 


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


 


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


 


20

















 


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


 


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


 


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


 


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


 


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


 


21

















 


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


 


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


 


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


 


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


 


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


 


(vi)          Give
written notice to the Holders:


 


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


 


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


 


22

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


23

















 


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


 


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


 


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


 


24

















 


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


 


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


 


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


 


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


 


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


 


(f)          Furnishing
Information.


 


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


 


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


 


25

















 


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


 


(g)         Indemnification.


 


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


 


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


 


26

















 


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


 


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


 


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


 


27

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


28

















 


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


 


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


 


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


 


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


 


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


 


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


 


29
















 


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


 


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


 


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


 


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


 


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


 


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


 


30

















 


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


 


4.8                                 Restriction on Dividends and Repurchases.


 


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


 


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


 


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


 


31

















 


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


 


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


 


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


 


4.9                                 Repurchase of Investor Securities.


 


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


 


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


 


32

















 


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


 


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


 


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


 


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


 


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.


 


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(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.


 


* * *


 


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