Exhibit 10.1


 


UNITED
STATES DEPARTMENT OF THE TREASURY

1500 PENNSYLVANIA AVENUE, NW

WASHINGTON, D.C. 20220




Dear
Ladies and Gentlemen:


 


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


 


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  Except to the extent supplemented or superseded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


 


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


 


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


 


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


 


***


 

















 


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


 


 


	
   

  	
  UNITED
  STATES DEPARTMENT OF THE 

  TREASURY

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Neel Kashkari

  
	
   

  	
   

  	
  Name:  Neel
  Kashkari

  
	
   

  	
   

  	
  Title: 
  Interim Assistant Secretary for 

  Financial Stability

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  COMPANY: CITY NATIONAL 

  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael B. Cahill

  
	
   

  	
  Name:    Michael B. Cahill

  
	
   

  	
  Title:  EVP, General
  Counsel & Corporate 

  Secretary

  
					



 


 


Date:  November 21,
2008


 


2

















 


EXHIBIT A


 










 


SECURITIES PURCHASE AGREEMENT


STANDARD TERMS


 










 





















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Article I

  	
   

  
	
   

  	
   

  	
   

  
	
  Purchase; Closing

  	
   

  
	
   

  	
   

  	
   

  
	
  1.1

  	
  Purchase

  	
  2

  
	
   

  	
   

  	
   

  
	
  1.2

  	
  Closing

  	
  2

  
	
   

  	
   

  	
   

  
	
  1.3

  	
  Interpretation

  	
  4

  
	
   

  	
   

  	
   

  
	
  Article II

  	
   

  
	
   

  	
   

  	
   

  
	
  Representations And Warranties

  	
   

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  Disclosure

  	
  5

  
	
   

  	
   

  	
   

  
	
  2.2

  	
  Representations and Warranties of the Company

  	
  5

  
	
   

  	
   

  	
   

  
	
  Article III

  	
   

  
	
   

  	
   

  	
   

  
	
  Covenants

  	
   

  
	
   

  	
   

  	
   

  
	
  3.1

  	
  Commercially Reasonable Efforts

  	
  14

  
	
   

  	
   

  	
   

  
	
  3.2

  	
  Expenses

  	
  16

  
	
   

  	
   

  	
   

  
	
  3.3

  	
  Sufficiency of Authorized Common Stock; Exchange
  Listing

  	
  16

  
	
   

  	
   

  	
   

  
	
  3.4

  	
  Certain Notifications Until Closing

  	
  16

  
	
   

  	
   

  	
   

  
	
  3.5

  	
  Access, Information and Confidentiality

  	
  17

  
	
   

  	
   

  	
   

  
	
  Article IV

  	
   

  
	
   

  	
   

  	
   

  
	
  Additional Agreements

  	
   

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  Purchase for Investment

  	
  17

  
	
   

  	
   

  	
   

  
	
  4.2

  	
  Legends

  	
  18

  
	
   

  	
   

  	
   

  
	
  4.3

  	
  Certain Transactions

  	
  20

  
				



 


i





















 


	
  4.4

  	
  Transfer of Purchased Securities and Warrant Shares;
  Restrictions on Exercise of the Warrant

  	
  20

  
	
   

  	
   

  	
   

  
	
  4.5

  	
  Registration Rights

  	
  20

  
	
   

  	
   

  	
   

  
	
  4.6

  	
  Voting of Warrant Shares

  	
  33

  
	
   

  	
   

  	
   

  
	
  4.7

  	
  Depositary Shares

  	
  33

  
	
   

  	
   

  	
   

  
	
  4.8

  	
  Restriction on Dividends and Repurchases

  	
  33

  
	
   

  	
   

  	
   

  
	
  4.9

  	
  Repurchase of Investor Securities

  	
  34

  
	
   

  	
   

  	
   

  
	
  4.10

  	
  Executive Compensation

  	
  35

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
   

  
	
   

  	
   

  	
   

  
	
  Miscellaneous

  	
   

  
	
   

  	
   

  	
   

  
	
  5.1

  	
  Termination

  	
  36

  
	
   

  	
   

  	
   

  
	
  5.2

  	
  Survival of Representations and Warranties

  	
  36

  
	
   

  	
   

  	
   

  
	
  5.3

  	
  Amendment

  	
  37

  
	
   

  	
   

  	
   

  
	
  5.4

  	
  Waiver of Conditions

  	
  37

  
	
   

  	
   

  	
   

  
	
  5.5

  	
  Governing Law: Submission to Jurisdiction, Etc.

  	
  37

  
	
   

  	
   

  	
   

  
	
  5.6

  	
  Notices

  	
  37

  
	
   

  	
   

  	
   

  
	
  5.7

  	
  Definitions

  	
  38

  
	
   

  	
   

  	
   

  
	
  5.8

  	
  Assignment

  	
  38

  
	
   

  	
   

  	
   

  
	
  5.9

  	
  Severability

  	
  38

  
	
   

  	
   

  	
   

  
	
  5.10

  	
  No Third Party Beneficiaries

  	
  39

  



 


ii





















 


LIST OF ANNEXES


 


	
  ANNEX A:

  	
  FORM OF CERTIFICATE OF DESIGNATIONS

  
	
   

  	
   

  
	
  ANNEX B:

  	
  FORM OF WAIVER

  
	
   

  	
   

  
	
  ANNEX C:

  	
  FORM OF OPINION

  
	
   

  	
   

  
	
  ANNEX D:

  	
  FORM OF WARRANT

  



 


iii





















 


INDEX OF DEFINED TERMS


 


	
  Term

  	
   

  	
  Location of

  Definitions

  
	
  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

  



 


iv





















 


	
  Term

  	
   

  	
  Location of

  Definitions

  
	
  officers

  	
   

  	
  5.7(c)

  
	
  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 


 


2





















 


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


 


(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 


 


3





















 


of
Section 111(b) of the EESA as implemented by guidance or regulation
thereunder that has been issued and is in effect as of the Closing Date;


 


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


 


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


 


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


 


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.


 


4




















 


ARTICLE II

REPRESENTATIONS AND WARRANTIES


 


2.1.          Disclosure.


 


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


 


(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


 


5

















 


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


 


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


 


(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


 


6

















 


creditors’
rights generally and general equitable principles, regardless of whether such
enforceability is considered in a proceeding at law or in equity (“Bankruptcy
Exceptions”).  The shares of Common
Stock issuable upon exercise of the Warrant (the “Warrant Shares”) have
been duly authorized and reserved for issuance upon exercise of the Warrant and
when so issued in accordance with the terms of the Warrant will be validly
issued, fully paid and non-assessable, subject, if applicable, to the approvals
of its stockholders set forth on Schedule C.


 


(e)           Authorization,
Enforceability.


 


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


 


(ii)           The
execution, delivery and performance by the Company of this Agreement and the
Warrant and the consummation of the transactions contemplated hereby and
thereby and compliance by the Company with the provisions hereof and thereof,
will not (A) violate, conflict with, or result in a breach of any
provision of, or constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) 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.


 


7

















 


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


 


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


 


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


 


(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


 


8

















 


accounting
requirements and with the published rules and regulations of the SEC with
respect thereto.


 


(i)            Reports.


 


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


 


(ii)           The
records, systems, controls, data and information of the Company and the Company
Subsidiaries are recorded, stored, maintained and operated under means (including
any electronic, mechanical or photographic process, whether computerized or
not) that are under the exclusive ownership and direct control of the Company
or the Company Subsidiaries or their accountants (including all means of access
thereto and therefrom), except for any non-exclusive ownership and non-direct
control that would not reasonably be expected to have a material adverse effect
on the system of internal accounting controls described below in this Section 2.2(i)(ii).  The Company (A) has implemented and
maintains disclosure controls and procedures (as defined in Rule 13a-15(e) of
the Exchange Act) to ensure that material information relating to the Company,
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,


 


9

















 


whether
or not material, that involves management or other employees who have a
significant role in the Company’s internal controls over financial reporting.


 


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


 


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


 


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


 


(m)          Compliance
with Laws.  Except as would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect, the Company and the Company Subsidiaries have all
permits, licenses, franchises, authorizations, orders and approvals of, and
have made all filings, applications and registrations with, Governmental
Entities that are required in order to permit them to own or lease their
properties and assets and to carry on their business as presently conducted and
that are material to the business of the Company or such Company
Subsidiary.  Except as set forth on Schedule
E, the Company and the Company Subsidiaries have complied in all respects
and are not in default or violation of, and none of them is, to the knowledge
of the Company, under investigation with respect to or, to the knowledge of the
Company, have been threatened to be charged with or given notice of any
violation of, any 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


 


10

















 


violations
that would not, individually or in the aggregate, reasonably be expected to
have a Company Material Adverse Effect. 
Except for statutory or regulatory restrictions of general application
or as set forth on Schedule E, no Governmental Entity has placed any
restriction on the business or properties of the Company or any Company
Subsidiary that would, individually or in the aggregate, reasonably be expected
to have a Company Material Adverse Effect.


 


(n)           Employee
Benefit Matters.  Except as would not
reasonably be expected to have, either individually or in the aggregate, a
Company Material Adverse Effect: (A) each “employee benefit plan” (within
the meaning of Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”)) providing benefits to any
current or former employee, officer or director of the Company or any member of
its “Controlled Group” (defined as any organization which is a member of
a controlled group of corporations within the meaning of Section 414 of
the Internal Revenue Code of 1986, as amended (the “Code”)) that is
sponsored, maintained or contributed to by the Company or any member of its
Controlled Group and for which the Company or any member of its Controlled
Group would have any liability, whether actual or contingent (each, a “Plan”)
has been maintained in compliance with its terms and with the requirements of
all applicable statutes, rules and regulations, including ERISA and the
Code; (B) with respect to each Plan subject to Title IV of ERISA
(including, for purposes of this clause (B), any plan subject to Title IV of
ERISA that the Company or any member of its Controlled Group previously
maintained or contributed to in the six years prior to the Signing Date), (1) no
“reportable event” (within the meaning of Section 4043(c) of ERISA),
other than a reportable event for which the notice period referred to in Section 4043(c) of
ERISA has been waived, has occurred in the three years prior to the Signing
Date or is reasonably expected to occur, (2) no “accumulated funding
deficiency” (within the meaning of Section 302 of ERISA or Section 412
of the Code), whether or not waived, has occurred in the three years prior to
the Signing Date or is reasonably expected to occur, (3) the fair market
value of the assets under each Plan exceeds the present value of all benefits accrued
under such Plan (determined based on the assumptions used to fund such Plan)
and (4) neither the Company nor any member of its Controlled Group has
incurred in the six years prior to the Signing Date, or reasonably expects to
incur, any liability under Title IV of ERISA (other than contributions to the
Plan or premiums to the PBGC in the ordinary course and without default) in
respect of a Plan (including any Plan that is a “multiemployer plan”, within
the meaning of Section 4001(c)(3) of ERISA); and (C) each Plan
that is intended to be qualified under Section 401(a) of the Code has
received a favorable determination letter from the Internal Revenue Service
with respect to its qualified status that has not been revoked, or such a
determination letter has been timely applied for but not received by the
Signing Date, and nothing has occurred, whether by action or by failure to act,
which could reasonably be expected to cause the loss, revocation or denial of
such qualified status or favorable determination letter.


 


11

















 


(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.


 


(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


 


12

















 


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


 


13

















 


thereunder
have been filed in due and timely fashion, except, in each case, as would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect.


 


(u)           Intellectual
Property.  Except as would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect, (i) the Company and each Company Subsidiary owns
or otherwise has the right to use, all intellectual property rights, including
all trademarks, trade dress, trade names, service marks, domain names, patents,
inventions, trade secrets, know-how, works of authorship and copyrights
therein, that are used in the conduct of their existing businesses and all
rights relating to the plans, design and specifications of any of its branch
facilities (“Proprietary Rights”) free and clear of all liens and any
claims of ownership by current or former employees, contractors, designers or
others and (ii) neither the Company nor any of the Company Subsidiaries is
materially infringing, diluting, misappropriating or violating, nor has the
Company or any or the Company Subsidiaries received any written (or, to the
knowledge of the Company, oral) communications alleging that any of them has
materially infringed, diluted, misappropriated or violated, any of the
Proprietary Rights owned by any other person. 
Except as would not, individually or in the aggregate, reasonably be
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.


 


14
















 


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


 


(c)           None
of the information supplied by the Company or any of the Company Subsidiaries
for inclusion in any proxy statement in connection with any such stockholders
meeting of the Company will, at the date it is filed with the SEC, when first 


 


15

















 


mailed
to the Company’s stockholders and at the time of any stockholders meeting, and
at the time of any amendment or supplement thereof, contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading.


 


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


 


3.3.          Sufficiency
of Authorized Common Stock; Exchange Listing.


 


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


 


(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.


 


16

















 


3.5.          Access,
Information and Confidentiality.


 


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


 


(b)           The
Investor will use reasonable best efforts to hold, and will use reasonable best
efforts to cause its agents, consultants, contractors and advisors to hold, in
confidence all 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 


 


17

















 


any
of the Purchased Securities or the Warrant Shares, except in compliance with
the registration requirements or exemption provisions of the Securities Act and
any applicable U.S. state securities laws, and (c) has such knowledge and
experience in financial and business matters and in investments of this type
that it is capable of evaluating the merits and risks of the Purchase and of
making an informed investment decision.


 


4.2.          Legends.


 


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


 


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


 


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


 


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


 


(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.


 


18

















 


“THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE
SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE
DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT
UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS. 
EACH PURCHASER OF THE SECURITIES REPRESENTED BY THIS INSTRUMENT IS
NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM SECTION 5
OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.  ANY TRANSFEREE OF THE SECURITIES REPRESENTED
BY THIS INSTRUMENT BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT IT IS A “QUALIFIED
INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (2) AGREES
THAT IT WILL NOT OFFER, SELL OR OTHERWISE TRANSFER THE SECURITIES REPRESENTED
BY THIS INSTRUMENT EXCEPT (A) PURSUANT TO A REGISTRATION STATEMENT WHICH
IS THEN EFFECTIVE UNDER THE SECURITIES ACT, (B) FOR SO LONG AS THE
SECURITIES REPRESENTED BY THIS INSTRUMENT ARE ELIGIBLE FOR RESALE PURSUANT TO
RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL
BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM
NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) TO
THE ISSUER OR (D) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (3) AGREES THAT IT
WILL GIVE TO EACH PERSON TO WHOM THE SECURITIES REPRESENTED BY THIS INSTRUMENT
ARE TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.”


 


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


 


19

















 


shall
issue new certificates or other instruments representing the Warrant, which
shall not contain the applicable legend in Section 4.2(b) above; provided that the Investor surrenders to the Company the
previously issued certificates or other instruments.


 


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


 


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


 


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



 


20

















 


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.


 


(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 


 


21

















 


(1) only
if the Company has generally exercised (or is concurrently exercising) similar
black-out rights against holders of similar securities that have registration
rights and (2) not more than three times in any 12-month period and not
more than 90 days in the aggregate in any 12-month period.


 


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


 


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


 


(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 


 


22

















 


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


 


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


 


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


 


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


 


(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.


 


23

















 


(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;


 


(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;


 


24

















 


(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 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


 


25

















 


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


 


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


 


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


 


(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 


 


26

















 


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


 


27
















 


(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 1 59A) a
“free writing prospectus” (as defined in Rule 405) that was not authorized
in writing by the Company.


 


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


 


28

















 


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


 


29

















 


and/or
options or other rights in respect thereof to be offered to directors, members
of management, employees, consultants, customers, lenders or vendors of the
Company or Company Subsidiaries or in connection with dividend reinvestment
plans.


 


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


 


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


 


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


 


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


 


(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


 


30

















 


declaration
or ordering of effectiveness of such registration statement or (B) filing
a prospectus and/or prospectus supplement in respect of an appropriate
effective registration statement on Form S-3.


 


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


 


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


 


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


 


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


 


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


 


31

















 


“Pending
Underwritten Offering” means, with respect to any Holder forfeiting its
rights pursuant to this Section 4.5(l), any underwritten offering of
Registrable Securities in which such Holder has advised the Company of its
intent to register its Registrable Securities either pursuant to Section 4.5(a)(ii) or
4.5(a)(iv) prior to the date of such Holder’s forfeiture.


 


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


 


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


 


(o)                                 Certain
Offerings by the Investor.  In the
case of any securities held by the Investor that cease to be Registrable
Securities solely by reason of clause (2) in the definition of “Registrable
Securities,” the provisions of Sections 4.5(a)(ii), clauses (iv), (ix) and
(x)-(xii) of Section 4.5(c), Section 4.5(g) and Section 4.5(i) shall
continue to apply until such securities otherwise cease to be Registrable
Securities.  In any such case, an “underwritten”
offering or 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.


 


32

















 


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


 


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


 


4.8.                              Restriction
on Dividends and Repurchases.


 


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


 


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


 


(ii)                                  redeem,
purchase or acquire any shares of Common Stock or other capital stock or other
equity securities of any kind of the Company, or any trust preferred securities
issued by the Company or any Affiliate of the Company, other than (A) redemptions,
purchases or other acquisitions of the Preferred Shares, (B) redemptions,
purchases or other acquisitions of shares of Common Stock or other Junior
Stock, in each 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


 


33

















 


an
offering by the Company of such capital stock underwritten by such
broker-dealer subsidiary, (E) any redemption or repurchase of rights
pursuant to any stockholders’ rights plan, (F) the acquisition by the Company
or any of the Company Subsidiaries of record ownership in Junior Stock or
Parity Stock for the beneficial ownership of any other persons (other than the
Company or any other Company Subsidiary), including as trustees or custodians,
and (G) the exchange or conversion of Junior Stock for or into other
Junior Stock or of Parity Stock or trust preferred securities for or into other
Parity Stock (with the same or lesser aggregate liquidation amount) or Junior
Stock, in each case set forth in this clause (G), solely to the extent required
pursuant to binding contractual agreements entered into prior to the Signing
Date or any subsequent agreement for the accelerated exercise, settlement or
exchange thereof for Common Stock (clauses (C) and (F), collectively, the “Permitted
Repurchases”).  “Share Dilution
Amount” means the increase in the number of diluted shares outstanding
(determined in accordance with GAAP, and as measured from the date of the
Company’s most recently filed Company Financial Statements prior to the Closing
Date) resulting from the grant, vesting or exercise of equity-based
compensation to employees and equitably adjusted for any stock split, stock
dividend, reverse stock split, reclassification or similar transaction.


 


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


 


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


 


4.9.                              Repurchase
of Investor Securities.


 


(a)                                  Following
the redemption in whole of the Preferred Shares held by the Investor or the
Transfer by the Investor of all of the Preferred Shares to one or more third
parties not affiliated with the Investor, the Company may repurchase, in whole
or in part, at any time any 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


 


34

















 


number
and type of securities to be repurchased, (ii) the Board of Director’s
determination of Fair Market Value of such securities and (iii) the place
or places where certificates representing such securities are to be surrendered
for payment of the repurchase price.  The
repurchase of the securities specified in the notice shall occur as soon as
practicable following the determination of the Fair Market Value of the
securities.


 


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


 


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


 


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


 


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


 


35

















 


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.


 


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.


 


36

















 


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


 


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


 


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


 


37

















 


If to the
Investor:


 


United States
Department of the Treasury


1500 Pennsylvania
Avenue, NW, Room 2312


Washington,
D.C.  20220


Attention:    Assistant
General Counsel (Banking and Finance)


Facsimile:    (202)
622-1974


 


5.7.                              Definitions.


 


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


 


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


 


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


 


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


 


38

















 


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.


 


*       *       *


 


39
















 


ANNEX
A


 


FORM OF CERTIFICATE OF DESIGNATIONS


 


[SEE ATTACHED]


 





















 


ANNEX
B


 


FORM OF WAIVER


 


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


 


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


 


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


 





















 


ANNEX
C


 


FORM OF OPINION


 


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


 


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


 


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


 


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


 


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


 


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


 


(g)           The Agreement is a valid and binding
obligation of the Company enforceable against the Company in accordance with
its terms, except as the same may be


 





















 


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


 


2





















 


ANNEX
D


 


FORM OF WARRANT


 


[SEE ATTACHED]


 





















 


SCHEDULE A


 


ADDITIONAL TERMS AND CONDITIONS


 


Company Information:


 


	
  Name of the Company:  City National Corporation

  
	
   

  
	
  Corporate or other
  organizational form:  corporation

  
	
   

  
	
  Jurisdiction of
  Organization:  Delaware

  
	
   

  
	
  Appropriate Federal
  Banking Agency:  Federal Reserve Bank

  
	
   

  
	
  Notice Information:

  	
  City National Corporation

  
	
   

  	
  City National Plaza

  
	
   

  	
  555 S. Flower Street, 18th
  Floor

  
	
   

  	
  Los Angeles, California
  90071

  
	
   

  	
  Attention: 

  	
  Michael B. Cahill

  
	
   

  	
   

  	
  Executive Vice President,
  General Counsel & Corporate Secretary

  
	
   

  	
  Facsimile: 

  	
    213-673-9518

  
	
   

  	
   

  	
   

  



Terms of the Purchase:


 


	
  Series of Preferred
  Stock Purchased:  Fixed Rate Cumulative Perpetual Preferred Stock,
  Series B

  
	
   

  
	
  Per Share Liquidation
  Preference of Preferred Stock:  $1000

  
	
   

  
	
  Number of Shares of
  Preferred Stock Purchased:        400,000

  
	
   

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

  
	
   

  
	
  Number of Initial Warrant
  Shares:  1,128,668

  
	
   

  
	
  Exercise Price of the
  Warrant:  $53.16

  
	
   

  
	
  Purchase Price:  $400,000,000

  
	
   

  



Closing:


 


	
  Location of Closing:

  	
  Offices of Hughes
  Hubbard & Reed LLP

  
	
   

  	
   

  
	
   

  	
  One Battery Park Plaza

  
	
   

  	
   

  
	
   

  	
  New York, NY 1004

  
	
   

  	
   

  
	
  Time of Closing:

  	
   

  
	
   

  	
   

  
	
  Date of Closing:

  	
   

  
	
   

  	
   

  
	
  Wire
  Information for Closing:

  	
  ABA Number

  
	
   

  	
  Bank

  
	
   

  	
  Account Name

  
	
   

  	
  Account
  Number

  
	
   

  	
  Beneficiary

  
			



 





















 


SCHEDULE B


 


CAPITALIZATION


 


Capitalization
Date:   October 31, 2008


 


Common Stock


 


Par
value:  $1.00


 


Total
Authorized:  75,000,000


 


Outstanding:  48,549,764


 


Subject to
warrants, options, convertible securities, etc.:  2,816,688


 


Reserved for
benefit plans and other issuances:  
4,133,283


 


Remaining
authorized but unissued:   26,832,623


 


Shares issued
after Capitalization Date (other than pursuant to warrants, options, convertible
securities, etc. as set forth above):  
none


 


Preferred
Stock


 


Par
value:  $1.00


 


Total
Authorized:  5,000,000


 


Outstanding
(by series):  none


 


Reserved for
issuance:  Series A Junior
Participating Cumulative Preferred Stock


 


Remaining
authorized but unissued:  750,000


 


2