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 Except to the extent supplemented or superseded by the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.


 


* * *


 


1

















 


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:
  EAST WEST BANCORP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas
  J. Tolda

  
	
   

  	
   

  	
  Name: Thomas
  J. Tolda

  
	
   

  	
   

  	
  Title: Executive
  Vice President and Chief

  
	
   

  	
   

  	
  Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:
  December 5, 2008

  	
   

  	
   

  



 


2

















 


EXHIBIT
A


 


	
   

  
	
  SECURITIES
  PURCHASE AGREEMENT

  
	
   

  
	
  STANDARD TERMS

  
	
   

  



 

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
  PURCHASE; CLOSING

  	
  1

  
	
   

  	
   

  	
   

  
	
  1.1

  	
  Purchase

  	
  1

  
	
   

  	
   

  	
   

  
	
  1.2

  	
  Closing

  	
  2

  
	
   

  	
   

  	
   

  
	
  1.3

  	
  Interpretation

  	
  4

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  REPRESENTATIONS AND WARRANTIES

  	
  4

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  Disclosure

  	
  4

  
	
   

  	
   

  	
   

  
	
  2.2

  	
  Representations and Warranties of the Company

  	
  5

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  COVENANTS

  	
  13

  
	
   

  	
   

  	
   

  
	
  3.1

  	
  Commercially Reasonable Efforts

  	
  13

  
	
   

  	
   

  	
   

  
	
  3.2

  	
  Expenses

  	
  14

  
	
   

  	
   

  	
   

  
	
  3.3

  	
  Sufficiency of Authorized Common Stock; Exchange Listing

  	
  14

  
	
   

  	
   

  	
   

  
	
  3.4

  	
  Certain Notifications Until Closing

  	
  14

  
	
   

  	
   

  	
   

  
	
  3.5

  	
  Access, Information and Confidentiality

  	
  15

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  ADDITIONAL AGREEMENTS

  	
  15

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  Purchase for Investment

  	
  15

  
	
   

  	
   

  	
   

  
	
  4.2

  	
  Legends

  	
  16

  
	
   

  	
   

  	
   

  
	
  4.3

  	
  Certain Transactions

  	
  17

  
	
   

  	
   

  	
   

  
	
  4.4

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

  	
  18

  
	
   

  	
   

  	
   

  
	
  4.5

  	
  Registration Rights

  	
  18

  
	
   

  	
   

  	
   

  
	
  4.6

  	
  Voting of Warrant Shares

  	
  29

  
	
   

  	
   

  	
   

  
	
  4.7

  	
  Depositary Shares

  	
  29

  
	
   

  	
   

  	
   

  
	
  4.8

  	
  Restriction on Dividends and Repurchases

  	
  29

  
	
   

  	
   

  	
   

  
	
  4.9

  	
  Repurchase of Investor Securities

  	
  30

  
	
   

  	
   

  	
   

  
	
  4.10

  	
  Executive Compensation

  	
  31

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  MISCELLANEOUS

  	
  32

  
	
   

  	
   

  	
   

  
	
  5.1

  	
  Termination

  	
  32

  
	
   

  	
   

  	
   

  
	
  5.2

  	
  Survival of Representations and Warranties

  	
  32

  
	
   

  	
   

  	
   

  
	
  5.3

  	
  Amendment

  	
  32

  
	
   

  	
   

  	
   

  
	
  5.4

  	
  Waiver of Conditions

  	
  33

  



 


i

















 


TABLE OF CONTENTS


(continued)


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  5.5

  	
  Governing Law: Submission to Jurisdiction, Etc.

  	
  33

  
	
   

  	
   

  	
   

  
	
  5.6

  	
  Notices

  	
  33

  
	
   

  	
   

  	
   

  
	
  5.7

  	
  Definitions

  	
  33

  
	
   

  	
   

  	
   

  
	
  5.8

  	
  Assignment

  	
  34

  
	
   

  	
   

  	
   

  
	
  5.9

  	
  Severability

  	
  34

  
	
   

  	
   

  	
   

  
	
  5.10

  	
  No Third Party Beneficiaries

  	
  34

  



 


ii

















 


LIST
OF ANNEXES


 


ANNEX A:  FORM OF CERTIFICATE OF DESIGNATIONS FOR
PREFERRED STOCK


 


ANNEX B:  FORM OF WAIVER


 


ANNEX C:  FORM OF OPINION


 


ANNEX D:  FORM OF WARRANT


 


iii

















 


INDEX OF DEFINED TERMS


 


	
  Term

  	
   

  	
  Location of Definition

  
	
  Affiliate

  	
   

  	
  5.7(b)

  
	
  Agreement

  	
   

  	
  Recitals

  
	
  Appraisal
  Procedure

  	
   

  	
  4.9(c)(i)

  
	
  Appropriate
  Federal Banking Agency

  	
   

  	
  2.2(s)

  
	
  Bankruptcy
  Exceptions

  	
   

  	
  2.2(d)

  
	
  Benefit
  Plans

  	
   

  	
  1.2(d)(iv)

  
	
  Board
  of Directors

  	
   

  	
  2.2(f)

  
	
  Business
  Combination

  	
   

  	
  4.4

  
	
  business
  day

  	
   

  	
  1.3

  
	
  Capitalization
  Date

  	
   

  	
  2.2(b)

  
	
  Certificate
  of Designations

  	
   

  	
  1.2(d)(iii)

  
	
  Charter

  	
   

  	
  1.2(d)(iii)

  
	
  Closing

  	
   

  	
  1.2(a)

  
	
  Closing
  Date

  	
   

  	
  1.2(a)

  
	
  Code

  	
   

  	
  2.2(n)

  
	
  Common
  Stock

  	
   

  	
  Recitals

  
	
  Company

  	
   

  	
  Recitals

  
	
  Company
  Financial Statements

  	
   

  	
  2.2(h)

  
	
  Company
  Material Adverse Effect

  	
   

  	
  2.1(a)

  
	
  Company
  Reports

  	
   

  	
  2.2(i)(i)

  
	
  Company
  Subsidiary; Company Subsidiaries

  	
   

  	
  2.2(i)(i)

  
	
  control;
  controlled by; under common control with

  	
   

  	
  5.7(b)

  
	
  Controlled
  Group

  	
   

  	
  2.2(n)

  
	
  CPP

  	
   

  	
  Recitals

  
	
  EESA

  	
   

  	
  1.2(d)(iv)

  
	
  ERISA

  	
   

  	
  2.2(n)

  
	
  Exchange
  Act

  	
   

  	
  2.1(b)

  
	
  Fair
  Market Value

  	
   

  	
  4.9(c)(ii)

  
	
  GAAP

  	
   

  	
  2.1(a)

  
	
  Governmental
  Entities

  	
   

  	
  1.2(c)

  
	
  Holder

  	
   

  	
  4.5(k)(i)

  
	
  Holders’
  Counsel

  	
   

  	
  4.5(k)(ii)

  
	
  Indemnitee

  	
   

  	
  4.5(g)(i)

  
	
  Information

  	
   

  	
  3.5(b)

  
	
  Initial
  Warrant Shares

  	
   

  	
  Recitals

  
	
  Investor

  	
   

  	
  Recitals

  
	
  Junior
  Stock

  	
   

  	
  4.8(c)

  
	
  knowledge
  of the Company; Company’s knowledge

  	
   

  	
  5.7(c)

  
	
  Last
  Fiscal Year

  	
   

  	
  2.1(b)

  
	
  Letter
  Agreement

  	
   

  	
  Recitals

  



 


iv

















 


	
  Term

  	
   

  	
  Location of Definition

  
	
  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 


 


1

















 


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
Section1.2, 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)Section2.2(g) of
this Agreement shall be true and correct in all respects as though made on and
as of the Closing Date, (y)Sections 2.2(a) through (f)shall be true and
correct in all material respects as though made on and as of the Closing Date
(other than representations and warranties that by their terms speak as of
another date, which representations and warranties shall be true and correct in
all material respects as of such other date) and (z)Sections 2.2(h) through
(v)(disregarding all qualifications or limitations set forth in such representations
and warranties as to “materiality”, “Company Material Adverse Effect” and words
of similar import) shall be true and correct as though made on and as of the
Closing Date (other than representations and warranties that by their terms
speak as of another date, which representations and warranties shall be true
and correct as of such other date), except to the extent that the failure of
such representations and warranties referred to in this Section1.2(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 


 


2

















 


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 Section1.2(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 Section111(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 Section1.2(d)(iv)(A) has been satisfied;


 


(v)                                 each
of the Company’s Senior Executive Officers shall have delivered to the Investor
a written waiver in the form attached hereto as Annex B releasing the
Investor from any claims that such Senior Executive Officers may otherwise have
as a result of the issuance, on or prior to the Closing Date, of any
regulations which require the modification of, and the agreement of the Company
hereunder to modify, the terms of any Benefit Plans with respect to its Senior
Executive Officers to eliminate any provisions of such Benefit Plans that would
not be in compliance with the requirements of Section111(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).


 


3

















 


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


 


ARTICLE II


 


Representations and Warranties


 


2.1                                 Disclosure.


 


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



 


4

















 


subsidiaries (it being
understood and agreed that the exception set forth in this clause (D)does not
apply to the underlying reason giving rise to or contributing to any such
change); or (ii)the ability of the Company to consummate the Purchase and the
other transactions contemplated by this Agreement and the Warrant and perform
its obligations hereunder or thereunder on a timely basis.


 


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


 


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


 


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


 


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


 


5

















 


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


 


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


 


(e)                                  Authorization,
Enforceability.


 


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


 


(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 


 


6

















 


properties or assets of the
Company or any Company Subsidiary may be subject, or (B)subject to compliance
with the statutes and regulations referred to in the next paragraph, violate
any statute, rule or regulation or any judgment, ruling, order, writ,
injunction or decree applicable to the Company or any Company Subsidiary or any
of their respective properties or assets except, in the case of clauses (A)(ii) and
(B), for those occurrences that, individually or in the aggregate, have not had
and would not reasonably be expected to have a Company Material Adverse Effect.


 


(iii)                               Other than the filing of
the Certificate of Designations with the Secretary of State of its jurisdiction
of organization or other applicable Governmental Entity, any current report on Form 8-K
required to be filed with the SEC, such filings and approvals as are required
to be made or obtained under any state “blue sky” laws, the filing of any proxy
statement contemplated by Section3.1 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 December31, 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 


 


7

















 


(C)complied as to form, as of
their respective dates of filing with the SEC, in all material respects with
the applicable accounting requirements and with the published rules and
regulations of the SEC with respect thereto.


 


(i)                                     Reports.


 


(i)                                     Since
December31, 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 Section302 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 Section2.2(i)(ii).  The Company
(A)has implemented and maintains disclosure controls and procedures (as defined
in Rule13a-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 Rule13a-15(f) of the
Exchange Act) that are reasonably likely to adversely affect the Company’s
ability to record, process, summarize and report financial information and
(y)any fraud, whether or not material, that involves management or other
employees who have a significant role in the Company’s internal controls over
financial reporting.


 


8
















 


(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 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



 


9

















 


“employee
benefit plan” (within the meaning of Section3(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 Section414 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 Section4043(c) of ERISA), other than a reportable
event for which the notice period referred to in Section4043(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 Section302 of ERISA or Section412 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 Section4001(c)(3) of
ERISA); and (C)each Plan that is intended to be qualified under Section401(a) of
the Code has received a favorable determination letter from the Internal
Revenue Service with respect to its qualified status that has not been revoked,
or such a determination letter has been timely applied for but not received by
the Signing Date, and nothing has occurred, whether by action or by failure to
act, which could reasonably be expected to cause the loss, revocation or denial
of such qualified status or favorable determination letter.


 


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


 


10

















 


defects
that would affect the value thereof or interfere with the use made or to be
made thereof by them.  Except as would
not, individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect, the Company and the Company Subsidiaries hold all
leased real or personal property under valid and enforceable leases with no
exceptions that would interfere with the use made or to be made thereof by
them.


 


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


 


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


 


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


 


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


 


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


 


(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 December31, 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 


 


11

















 


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 December31, 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 Section3(q) of the
Federal Deposit Insurance Act (12 U.S.C. 
Section1813(q)).


 


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


 


(u)           Intellectual
Property.  Except as would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect, (i)the Company and each Company Subsidiary owns or
otherwise has the right to use, all intellectual property rights, including all
trademarks, trade dress, trade names, service marks, domain names, patents,
inventions, trade secrets, know-how, works of authorship and copyrights
therein, that are used in the conduct of their existing businesses and all
rights relating to the plans, design and specifications of any of its branch
facilities (“Proprietary Rights”)
free and clear of all liens and any claims of ownership by current or former
employees, contractors, designers or others and (ii)neither the Company nor any
of the Company Subsidiaries is materially infringing, diluting,
misappropriating or violating, nor has the Company or any or the Company
Subsidiaries received any written (or, to the knowledge of the Company, oral)
communications alleging that any of them has materially infringed, diluted,
misappropriated or violated, any of the Proprietary Rights owned by any other
person.  Except as would not,
individually or in the aggregate, reasonably be 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 January1,
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 


 


12

















 


arrangements
made by or on behalf of the Company or any Company Subsidiary for which the
Investor could have any liability.


 


ARTICLE III


 


Covenants


 


3.1           Commercially
Reasonable Efforts.


 


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


 


(b)           If
the Company is required to obtain any stockholder approvals set forth on Schedule
C, then the Company shall comply with this Section3.1(b) and
Section3.1(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
Section3.1(b) and Section3.1(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 


 


13

















 


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 January1, 2009
until all such approvals are obtained or made.


 


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


 


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


 


3.3           Sufficiency
of Authorized Common Stock; Exchange Listing.


 


(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 Section3.3 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 


 


14

















 


have a
Company Material Adverse Effect; provided,
however, that delivery of any
notice pursuant to this Section3.4 shall not limit or affect any rights of or
remedies available to the Investor; provided,
further, that a failure to comply
with this Section3.4 shall not constitute a breach of this Agreement or the
failure of any condition set forth in Section1.2 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 Section1.2 to
be satisfied.


 


3.5           Access,
Information and Confidentiality.


 


(a)           From
the Signing Date until the date when the Investor holds an amount of Preferred
Shares having an aggregate liquidation value of less than 10% of the Purchase
Price, the Company will permit the Investor and its agents, consultants,
contractors and advisors (x)acting through the Appropriate Federal Banking
Agency, to examine the corporate books and make copies thereof and to discuss
the affairs, finances and accounts of the Company and the Company Subsidiaries
with the principal officers of the Company, all upon reasonable notice and at
such reasonable times and as often as the Investor may reasonably request and
(y)to review any information material to the Investor’s investment in the
Company provided by the Company to its Appropriate Federal Banking Agency.  Any investigation pursuant to this Section3.5
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 


 


15

















 


intention
to distribute them to any person in violation of the Securities Act or any
applicable U.S.  state securities laws,
(b)will not sell or otherwise dispose of any of the Purchased Securities or the
Warrant Shares, except in compliance with the registration requirements or
exemption provisions of the Securities Act and any applicable U.S.  state securities laws, and (c)has such
knowledge and experience in financial and business matters and in investments
of this type that it is capable of evaluating the merits and risks of the
Purchase and of making an informed investment decision.


 


4.2           Legends.


 


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


 


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


 


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


 


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


 


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


 


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


 


THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE
SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE
DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT 


 


16

















 


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 Section4.4, the Company
shall issue new certificates or other instruments representing the Warrant,
which shall not contain the applicable legend in Section4.2(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.


 


17

















 


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 Section13 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)December31, 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 October13, 2008). 
“Business Combination”
means a merger, consolidation, statutory share exchange or similar transaction
that requires the approval of the Company’s stockholders.


 


4.5           Registration
Rights.


 


(a)           Registration.


 


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


 


18
















 


(ii)           Any
registration pursuant to Section4.5(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 Section4.5(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 Section4.5(a):  (A)with respect to securities that are not
Registrable Securities; or (B)if the Company has notified the Investor and all
other Holders that in the good faith judgment of the Board of Directors, it would
be materially detrimental to the Company or its securityholders for such
registration or underwritten offering to be effected at such time, in which
event the Company shall have the right to defer such registration for a period
of not more than 45 days after receipt of the request of the Investor or any
other Holder; provided that such
right to delay a registration or underwritten offering shall be exercised by
the Company (1)only if the Company has generally exercised (or is concurrently
exercising) similar black-out rights against holders of similar securities that
have registration rights and (2)not more than three times in any 12-month
period and not more than 90 days in the aggregate in any 12-month period.


 


(iv)          If
during any period when an effective Shelf Registration Statement is not available,
the Company proposes to register any of its equity securities, other than a
registration pursuant to Section4.5(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
Section4.5(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.


 


19

















 


(v)           If
the registration referred to in Section4.5(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 Section4.5(a)(iv).  In such event, the right of Investor and all
other Holders to registration pursuant to Section4.5(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 Section4.5(a)(ii) or (y)a
Piggyback Registration under Section4.5(a)(iv) relates to an underwritten
offering on behalf of the Company, and in either case the managing underwriters
advise the Company that in their reasonable opinion the number of securities
requested to be included in such offering exceeds the number which can be sold
without adversely affecting the marketability of such offering (including an
adverse effect on the per share offering price), the Company will include in
such offering only such number of securities that in the reasonable opinion of
such managing underwriters can be sold without adversely affecting the
marketability of the offering (including an adverse effect on the per share
offering price), which securities will be so included in the following order of
priority:  (A)first, in the case of a
Piggyback Registration under Section4.5(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 Section4.5(a)(ii) or Section4.5(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 


 


20

















 


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 Section4.5(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.


 


(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 Section4.5(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;


 


21

















 


(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;


 


(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 Section4.5(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 Section4.5(c)(vi)(C) at the
earliest practicable time.


 


(viii)        Upon the occurrence of any event contemplated
by Section4.5(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 Section4.5(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 Section4.5(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 


 


22

















 


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


 


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


 


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


 


(xiii)         If requested by Holders of a majority of the
Registrable Securities being registered and/or sold in connection therewith, or
the managing underwriter(s), if any, promptly include in a prospectus
supplement or amendment such information as the Holders of a majority of the
Registrable Securities being registered and/or sold in connection therewith or
managing underwriter(s), if any, may reasonably request in order to permit the
intended method 


 


23

















 


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 Section11(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 Section4.5(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.


 


(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 


 


24

















 


statement
of material fact contained in any registration statement, including any
preliminary prospectus or final prospectus contained therein or any amendments
or supplements thereto or any documents incorporated therein by reference or
contained in any free writing prospectus (as such term is defined in Rule 405)
prepared by the Company or authorized by it in writing for use by such Holder
(or any amendment or supplement thereto); or any omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; provided, that the
Company shall not be liable to such Indemnitee in any such case to the extent
that any such loss, claim, damage, liability (or action or proceeding in
respect thereof) or expense arises out of or is based upon (A)an untrue
statement or omission made in such registration statement, including any such
preliminary prospectus or final prospectus contained therein or any such
amendments or supplements thereto or contained in any free writing prospectus
(as such term is defined in Rule 405) prepared by the Company or
authorized by it in writing for use by such Holder (or any amendment or
supplement thereto), in reliance upon and in conformity with information
regarding such Indemnitee or its plan of distribution or ownership interests
which was furnished in writing to the Company by such Indemnitee for use in
connection with such registration statement, including any such preliminary
prospectus or final prospectus contained therein or any such amendments or
supplements thereto, or (B)offers or sales effected by or on behalf of such
Indemnitee “by means of” (as defined in Rule 159A) a “free writing
prospectus” (as defined in Rule 405) that was not authorized in writing by
the Company.


 


(ii)           If
the indemnification provided for in Section4.5(g)(i)is unavailable to an
Indemnitee with respect to any losses, claims, damages, actions, liabilities,
costs or expenses referred to therein or is insufficient to hold the Indemnitee
harmless as contemplated therein, then the Company, in lieu of indemnifying
such Indemnitee, shall contribute to the amount paid or payable by such
Indemnitee as a result of such losses, claims, damages, actions, liabilities,
costs or expenses in such proportion as is appropriate to reflect the relative
fault of the Indemnitee, on the one hand, and the Company, on the other hand,
in connection with the statements or omissions which resulted in such losses, claims,
damages, actions, liabilities, costs or expenses as well as any other relevant
equitable considerations.  The relative
fault of the Company, on the one hand, and of the Indemnitee, on the other
hand, shall be determined by reference to, among other factors, whether the
untrue statement of a material fact or omission to state a material fact
relates to information supplied by the Company or by the Indemnitee and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission; the Company and each Holder
agree that it would not be just and equitable if contribution pursuant to this
Section4.5(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 Section4.5(g)(i).  No Indemnitee guilty of fraudulent
misrepresentation (within the meaning of Section11(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
Section4.5(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 


 


25

















 


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 Section4.5(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 Section4.5, the Company agrees not to effect (other
than pursuant to such registration or pursuant to a Special Registration) any
public sale or distribution, or to file any Shelf Registration Statement (other
than such registration or a Special Registration) covering, in the case of an
underwritten offering of Common Stock or Warrants, any of its equity securities
or, in the case of an underwritten offering of Preferred Shares, any Preferred
Stock of the Company, or, in each case, any securities convertible into or
exchangeable or exercisable for such securities, during the period not to
exceed ten days prior and 60 days following the effective date of such offering
or such longer period up to 90 days as may be requested by the managing
underwriter for such underwritten offering. 
The Company also agrees to cause such of its directors and senior
executive officers to execute and deliver customary lock-up agreements in such
form and for such time period up to 90 days as may be requested by the managing
underwriter.  “Special Registration” means the registration of (A)equity
securities and/or options or other rights in respect thereof solely registered
on Form S-4 or Form S-8 (or successor form) or (B)shares of equity
securities and/or options or other rights in respect thereof to be offered to
directors, members of management, employees, consultants, customers, lenders or
vendors of the Company or Company Subsidiaries or in connection with dividend
reinvestment plans.


 


(j)            Rule144;
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 Rule144(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


 


26
















 


the Company as to its compliance with the reporting
requirements of Rule144 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 Section4.5, 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 Section4.5(h) hereof.


 


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


 


(iii)          “Register,”
“registered,” and “registration” shall refer to a
registration effected by preparing and (A)filing a registration statement in
compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of effectiveness of such
registration statement or (B)filing a prospectus and/or 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 Section4.5(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 Section4.5(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 Section4.5,
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 


 


27

















 


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 Section4.5 from that date forward; provided, that a Holder forfeiting such
rights shall nonetheless be entitled to participate under Section4.5(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
Section4.5(f) with respect to any prior registration or Pending
Underwritten Offering.  “Pending Underwritten Offering” means, with respect to any Holder forfeiting
its rights pursuant to this Section4.5(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 Section4.5(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 Section4.5 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
Section4.5 in accordance with the terms and conditions of this Section4.5.


 


(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 Section4.5 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 Section4.5.  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 Section4.5 (including agreements that
are inconsistent with the order of priority contemplated by Section4.5(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 Section4.5.


 


(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 


 


28

















 


Section4.5(c), Section4.5(g) and Section4.5(i) shall
continue to apply until such securities otherwise cease to be Registrable
Securities.  In any such case, an “underwritten”
offering or other disposition shall include any distribution of such securities
on behalf of the Investor by one or more broker-dealers, an “underwriting
agreement” shall include any purchase agreement entered into by such
broker-dealers, and any “registration statement” or “prospectus” shall include
any offering document approved by the Company and used in connection with such
distribution.


 


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


 


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


 


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 October14, 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 


 


29

















 


acquisitions of shares of Common Stock or other Junior
Stock, in each case in this clause (B)in connection with the administration of
any employee benefit plan in the ordinary course of business (including
purchases to offset the Share Dilution Amount (as defined below) pursuant to a
publicly announced repurchase plan) and consistent with past practice; provided that any purchases to offset the
Share Dilution Amount shall in no event exceed the Share Dilution Amount,
(C)purchases or other acquisitions by a broker-dealer subsidiary of the Company
solely for the purpose of market-making, stabilization or customer facilitation
transactions in Junior Stock or Parity Stock in the ordinary course of its
business, (D)purchases by a broker-dealer subsidiary of the Company of capital
stock of the Company for resale pursuant to an offering by the Company of such
capital stock underwritten by such broker-dealer subsidiary, (E)any redemption
or repurchase of rights pursuant to any stockholders’ rights plan, (F)the
acquisition by the Company or any of the Company Subsidiaries of record
ownership in Junior Stock or Parity Stock for the beneficial ownership of any
other persons (other than the Company or any other Company Subsidiary),
including as trustees or custodians, and (G)the exchange or conversion of
Junior Stock for or into other Junior Stock or of Parity Stock or trust
preferred securities for or into other Parity Stock (with the same or lesser
aggregate liquidation amount) or Junior Stock, in each case set forth in this
clause (G), solely to the extent required pursuant to binding contractual
agreements entered into prior to the Signing Date or any subsequent agreement
for the accelerated exercise, settlement or exchange thereof for Common Stock
(clauses (C)and (F), collectively, the “Permitted
Repurchases”).  “Share Dilution Amount” means the increase
in the number of diluted shares outstanding (determined in accordance with
GAAP, and as measured from the date of the Company’s most recently filed
Company Financial Statements prior to the Closing Date) resulting from the
grant, vesting or exercise of equity-based compensation to employees and
equitably adjusted for any stock split, stock dividend, reverse stock split,
reclassification or similar transaction.


 


(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 


 


30

















 


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
Section5.6.  Each notice of repurchase
given to the Investor shall state: 
(i)the number and type of securities to be repurchased, (ii)the Board of
Director’s determination of Fair Market Value of such securities and (iii)the
place or places where certificates representing such securities are to be
surrendered for payment of the repurchase price.  The repurchase of the securities specified in
the notice shall occur as soon as practicable following the determination of
the Fair Market Value of the securities.


 


(c)           As
used in this Section4.9, the following terms shall have the following
respective meanings:


 


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


 


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


 


4.10         Executive
Compensation.  Until such time as the
Investor ceases to own any debt or equity securities of the Company acquired
pursuant to this Agreement or the Warrant, the Company shall take all necessary
action to ensure that its Benefit Plans with respect to its Senior 


 


31

















 


Executive Officers comply in all respects with
Section111(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 Section5.1(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 Section5.1, this Agreement shall forthwith
become void and there shall be no liability on the part of either party hereto
except that nothing herein shall relieve either party from liability for any
breach of this Agreement.


 


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


 


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


 


32

















 


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.


 


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 


 


33

















 


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
Rule3b-2 under the Exchange Act, but excluding any Vice President or Secretary)
of the Company.


 


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


 


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


 


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


 


* * *


 


34