Exhibit 10.1


 


UNITED STATES DEPARTMENT OF THE TREASURY


1500 PENNSYLVANIA AVENUE, NW


WASHINGTON, D.C. 20220


 


Dear Ladies and Gentlemen:


 


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


 


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superseded by the terms set forth herein or in the Schedules hereto, the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


 


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


 


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


 


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


 


* * *


 

















 


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


 


 


	
   

  	
  UNITED
  STATES DEPARTMENT OF THE

  
	
   

  	
  TREASURY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Neel Kashkari

  
	
   

  	
   

  	
  Name:

  	
   Neel
  Kashkari

  
	
   

  	
   

  	
  Title:

  	
  Interim
  Asst. Secretary for Financial

  
	
   

  	
   

  	
   

  	
  Stability

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  COMPANY:
  MANHATTAN BANCORP

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Jeffrey M. Watson

  
	
   

  	
   

  	
  Name: Jeffrey
  M. Watson

  
	
   

  	
   

  	
  Title:  President
  and Chief Executive Officer

  



 


 


Date:  December 5, 2008


 

















 


SCHEDULE A


 


ADDITIONAL TERMS AND CONDITIONS


 


Company
Information:


 


	
  Name of the
  Company:

  	
   

  	
  Manhattan
  Bancorp

  
	
   

  	
   

  	
   

  
	
  Corporate or
  other organizational form:

  	
   

  	
  Corporation

  
	
   

  	
   

  	
   

  
	
  Jurisdiction
  of Organization:

  	
   

  	
  California

  
	
   

  	
   

  	
   

  
	
  Appropriate
  Federal Banking Agency:

  	
   

  	
  Federal
  Reserve Board

  
	
   

  	
   

  	
   

  
	
  Notice
  Information:

  	
   

  	
  Dean
  Fletcher

  Executive Vice President; Chief Financial Officer

  Manhattan Bancorp

  2141 Rosecrans Avenue, Suite 1160

  El Segundo, CA 90245

  (310) 606-8000

  dfletcher@thebankofmanhattan.com

  



 


Terms of the
Purchase:


 


	
  Series of
  Preferred Stock Purchased:

  	
   

  	
  Fixed Rate
  Cumulative Perpetual Preferred Stock, Series A

  
	
   

  	
   

  	
   

  
	
  Per Share
  Liquidation Preference of Preferred Stock:

  	
   

  	
  $1,000

  
	
   

  	
   

  	
   

  
	
  Number of
  Shares of Preferred Stock Purchased:

  	
   

  	
  1,700

  
	
   

  	
   

  	
   

  
	
  Dividend
  Payment Dates on the Preferred Stock:

  	
   

  	
  February 15,
  May 15, August 15, and November 15

  
	
   

  	
   

  	
   

  
	
  Number of
  Initial Warrant Shares:

  	
   

  	
  29,480

  
	
   

  	
   

  	
   

  
	
  Exercise
  Price of the Warrant:

  	
   

  	
  $8.65

  
	
   

  	
   

  	
   

  
	
  Purchase
  Price:

  	
   

  	
  $1,700,000

  



 


Closing:


 


	
  Location of Closing:

  	
  Telephonic

  	
   

  
	
   

  	
   

  	
   

  
	
  Time of Closing:

  	
  9:00 AM Eastern Time

  	
   

  
	
   

  	
   

  	
   

  
	
  Date of Closing:

  	
  December 5, 2008

  	
   

  
	
   

  	
   

  	
   

  
	
  Wire Information for Closing:

  	
  ABA Number:

  	
  122244702

  
	
   

  	
  Bank:

  	
  Bank of Manhattan, N.A.

  
	
   

  	
  Account Name:

  	
  Manhattan Bancorp

  
	
   

  	
  Account Number:

  	
  2210000036

  
	
   

  	
  Beneficiary:

  	
  Manhattan Bancorp

  
	
   

  	
  Contact Person:

  	
  Same as Notice Person

  



 

















 


EXHIBIT A


 


SECURITIES PURCHASE AGREEMENT


STANDARD TERMS


 

















 


INDEX OF
DEFINED TERMS


 


	
   

  	
   

  	
  Location of

  
	
  Term

  	
   

  	
  Definition

  
	
   

  	
   

  	
   

  
	
  Affiliate
  5.7(b)

  	
   

  	
   

  
	
  Agreement

  	
   

  	
  Recitals

  
	
  Appraisal
  Procedure

  	
   

  	
  4.9(c)(i)

  
	
  Appropriate
  Federal Banking Agency

  	
   

  	
  2.2(s)

  
	
  Bankruptcy
  Exceptions

  	
   

  	
  2.2(d)

  
	
  Benefit
  Plans

  	
   

  	
  1.2(d)(iv)

  
	
  Board of
  Directors

  	
   

  	
  2.2(f)

  
	
  Business
  Combination

  	
   

  	
  4.4

  
	
  business day

  	
   

  	
  1.3

  
	
  Capitalization
  Date

  	
   

  	
  2.2(b)

  
	
  Certificate
  of Designations

  	
   

  	
  1.2(d)(iii)

  
	
  Charter

  	
   

  	
  1.2(d)(iii)

  
	
  Closing

  	
   

  	
  1.2(a)

  
	
  Closing Date

  	
   

  	
  1.2(a)

  
	
  Code

  	
   

  	
  2.2(n)

  
	
  Common Stock

  	
   

  	
  Recitals

  
	
  Company

  	
   

  	
  Recitals

  
	
  Company
  Financial Statements

  	
   

  	
  2.2(h)

  
	
  Company
  Material Adverse Effect

  	
   

  	
  2.1(a)

  
	
  Company
  Reports

  	
   

  	
  2.2(i)(i)

  
	
  Company
  Subsidiary; Company Subsidiaries

  	
   

  	
  2.2(i)(i)

  
	
  control; controlled
  by; under common control with

  	
   

  	
  5.7(b)

  
	
  Controlled
  Group

  	
   

  	
  2.2(n)

  
	
  CPP

  	
   

  	
  Recitals

  
	
  EESA

  	
   

  	
  1.2(d)(iv)

  
	
  ERISA

  	
   

  	
  2.2(n)

  
	
  Exchange Act

  	
   

  	
  2.1(b)

  
	
  Fair Market
  Value

  	
   

  	
  4.9(c)(ii)

  
	
  GAAP

  	
   

  	
  2.1(a)

  
	
  Governmental
  Entities

  	
   

  	
  1.2(c)

  
	
  Holder

  	
   

  	
  4.5(k)(i)

  
	
  Holders’
  Counsel

  	
   

  	
  4.5(k)(ii)

  
	
  Indemnitee

  	
   

  	
  4.5(g)(i)

  
	
  Information

  	
   

  	
  3.5(b)

  
	
  Initial
  Warrant Shares

  	
   

  	
  Recitals

  
	
  Investor

  	
   

  	
  Recitals

  
	
  Junior Stock

  	
   

  	
  4.8(c)

  
	
  knowledge of
  the Company; Company’s knowledge

  	
   

  	
  5.7(c)

  
	
  Last Fiscal
  Year

  	
   

  	
  2.1(b)

  
	
  Letter
  Agreement Recitals officers

  	
   

  	
  5.7(c)

  
	
  Term
  Location of Definition Parity Stock

  	
   

  	
  4.8(c)

  
	
  Pending
  Underwritten Offering

  	
   

  	
  4.5(l)

  
	
  Permitted
  Repurchases

  	
   

  	
  4.8(a)(ii)

  
	
  Piggyback
  Registration

  	
   

  	
  4.5(a)(iv)

  
	
  Plan

  	
   

  	
  2.2(n)

  



 

















 


INDEX OF
DEFINED TERMS


 


	
   

  	
   

  	
  Location of

  
	
  Term

  	
   

  	
  Definition

  
	
   

  	
   

  	
   

  
	
  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)

  



 
















 


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


 


1

















 


the Company,
at the Closing (as hereinafter defined), the Purchased Securities for the price
set forth on Schedule A (the “Purchase Price”).


 


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


 


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


 


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


 


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


 


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


 


2

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


3

















 


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


 


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


 


Article II


 


Representations and Warranties


 


2.1                                 Disclosure.


 


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


 


4

















 


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


 


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


 


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


 


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


 


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


 


5

















 


delivered
under other equity-based awards or other convertible securities or warrants
which were issued and outstanding on the Capitalization Date and disclosed on Schedule
B and (ii) shares disclosed on Schedule B.


 


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


 


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


 


(e)                                  Authorization,
Enforceability.


 


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


 


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


 


6

















 


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


 


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


 


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


 


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


 


(h)                                 Company
Financial Statements.  Each of the
consolidated financial statements of the Company and its consolidated
subsidiaries (collectively the “Company
Financial Statements”) included or incorporated by reference in the
Company Reports filed with the SEC since December 31, 2006, present fairly
in all material respects the consolidated financial position of the Company and
its consolidated subsidiaries as of the dates indicated therein (or if amended
prior to the Signing Date, as of the date of such amendment) and the
consolidated


 


7

















 


results of
their operations for the periods specified therein; and except as stated
therein, such financial statements (A) were prepared in conformity with
GAAP applied on a consistent basis (except as may be noted therein), (B) have
been prepared from, and are in accordance with, the books and records of the
Company and the Company Subsidiaries and (C) complied as to form, as of
their respective dates of filing with the SEC, in all material respects with
the applicable accounting requirements and with the published rules and
regulations of the SEC with respect thereto.


 


(i)                                     Reports.


 


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


 


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


 


8

















 


are reasonably
likely to adversely affect the Company’s ability to record, process, summarize
and report financial information and (y) any fraud, whether or not
material, that involves management or other employees who have a significant
role in the Company’s internal controls over financial reporting.


 


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


 


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


 


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


 


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


 


9

















 


the Company or
any Company Subsidiary that would, individually or in the aggregate, reasonably
be expected to have a Company Material Adverse Effect.


 


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


 


(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.


 


10
















 


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


 


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


 


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


 


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


 


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


 


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


 


(s)                                  Agreements
with Regulatory Agencies.  Except as
set forth on Schedule F, neither the Company nor any Company Subsidiary
is subject to any material cease-and-desist or other similar order or
enforcement action issued by, or is a party to any material written agreement,
consent agreement or memorandum of understanding with, or is a party to any
commitment letter or similar undertaking to, or is subject to any capital
directive by, or since December 31, 2006,


 


11

















 


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


 


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


 


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


 


12

















 


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


 


Article III


 


Covenants


 


3.1                                 Commercially
Reasonable Efforts.


 


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


 


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


 


13

















 


misleading in
any material respect, and the Company shall as promptly as practicable prepare
and mail to its stockholders an amendment or supplement to correct such
information to the extent required by applicable laws and regulations.  The Company shall consult with the Investor
prior to filing any proxy statement, or any amendment or supplement thereto,
and provide the Investor with a reasonable opportunity to comment thereon. In
the event that the approval of any of the Stockholder Proposals is not obtained
at such special stockholders meeting, the Company shall include a proposal to
approve (and the Board of Directors shall recommend approval of) each such
proposal at a meeting of its stockholders no less than once in each subsequent
six-month period beginning on January 1, 2009 until all such approvals are
obtained or made.


 


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


 


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


 


3.3                                 Sufficiency
of Authorized Common Stock; Exchange Listing.


 


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


 


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


 


3.4                                 Certain
Notifications Until Closing.  From
the Signing Date until the Closing, the Company shall promptly notify the
Investor of (i) any fact, event or circumstance of which it is aware and
which would reasonably be expected to cause any representation or warranty of
the Company contained in this Agreement to be untrue or inaccurate in any
material respect or to cause any covenant or agreement of the Company contained
in this Agreement not to be complied with or satisfied in any material respect
and (ii) except as Previously Disclosed, any


 


14

















 


fact,
circumstance, event, change, occurrence, condition or development of which the
Company is aware and which, individually or in the aggregate, has had or would
reasonably be expected to have a Company Material Adverse Effect; provided, however, that delivery of any
notice pursuant to this Section 3.4 shall not limit or affect any rights
of or remedies available to the Investor; provided, further, that a failure to
comply with this Section 3.4 shall not constitute a breach of this
Agreement or the failure of any condition set forth in Section 1.2 to be
satisfied unless the underlying Company Material Adverse Effect or material
breach would independently result in the failure of a condition set forth in Section 1.2
to be satisfied.


 


3.5                                 Access,
Information and Confidentiality.


 


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


 


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


 


15

















 


Article IV


 


Additional Agreements


 


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


 


4.2                                 Legends.


 


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


 


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


 


(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.


 


16
















 


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


 


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


 


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


 


17

















 


every covenant,
agreement and condition of this Agreement to be performed and observed by the
Company.


 


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


 


4.5                                 Registration Rights.


 


(a)                                  Registration.


 


(i)                                     Subject to the terms and conditions of
this Agreement, the Company covenants and agrees that as promptly as
practicable after the Closing Date (and in any event no later than 30 days
after the Closing Date), the Company shall prepare and file with the SEC a
Shelf Registration Statement covering all Registrable Securities (or otherwise
designate an existing Shelf Registration Statement filed with the 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.


 


18

















 


Notwithstanding the
foregoing, if on the Signing Date the Company is not eligible to file a
registration statement on Form S-3, then the Company shall not be
obligated to file a Shelf Registration Statement unless and until requested to
do so in writing by the Investor.


 


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


 


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


 


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


 


19

















 


notice to the Company and
the managing underwriter, if any, on or before the fifth business day prior to
the planned effective date of such Piggyback Registration. The Company may
terminate or withdraw any registration under this Section 4.5(a)(iv) prior to
the effectiveness of such registration, whether or not Investor or any other
Holders have elected to include Registrable Securities in such registration.


 


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


 


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


 


(b)                                 Expenses of Registration. 
All Registration Expenses incurred in connection with any registration,
qualification or compliance hereunder shall be borne by the Company. All


 


20

















 


Selling Expenses
incurred in connection with any registrations hereunder shall be borne by the
holders of the securities so registered pro rata on the basis of the aggregate
offering or sale price of the securities so registered.


 


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


 


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


 


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


 


(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


 


21

















 


be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing.


 


(vi)                              Give written notice to the Holders:


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


22

















 


prospectus (at the
Company’s expense) other than permanent file copies then in such Holders’ or
underwriters’ possession. The total number of days that any such suspension may
be in effect in any 12-month period shall not exceed 90 days.


 


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


 


(x)                                   If an underwritten offering is requested
pursuant to Section 4.5(a)(ii), enter into an underwriting agreement in
customary form, scope and substance and take all such other actions reasonably
requested by the Holders of a majority of the Registrable Securities being sold
in connection therewith or by the managing underwriter(s), if any, to expedite
or facilitate the underwritten disposition of such Registrable Securities, and
in connection therewith in any underwritten offering (including making members
of management and executives of the Company available to participate in “road
shows”, similar sales events and other marketing activities), (A) make
such representations and warranties to the Holders that are selling
stockholders and the managing underwriter(s), if any, with respect to the
business of the Company and its 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


 


23

















 


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 of distribution of such securities and
make all required filings of such prospectus supplement or such amendment as
soon as practicable after the Company has received such request.


 


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


 


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


 


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


 


24

















 


(f)                                    Furnishing Information.


 


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


 


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


 


(g)                                 Indemnification.


 


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


 


(ii)                                  If the indemnification provided for in Section 4.5(g)(i) is
unavailable to an Indemnitee with respect to any losses, claims, damages,
actions, liabilities, costs or expenses referred to therein or is insufficient
to hold the Indemnitee harmless as


 


25

















 


contemplated therein,
then the Company, in lieu of indemnifying such Indemnitee, shall contribute to
the amount paid or payable by such Indemnitee as a result of such losses,
claims, damages, actions, liabilities, costs or expenses in such proportion as
is appropriate to reflect the relative fault of the Indemnitee, on the one
hand, and the Company, on the other hand, in connection with the statements or
omissions which resulted in such losses, claims, damages, actions, liabilities,
costs or expenses as well as any other relevant equitable considerations. The
relative fault of the Company, on the one hand, and of the Indemnitee, on the
other hand, shall be determined by reference to, among other factors, whether
the untrue statement of a material fact or omission to state a material fact
relates to information supplied by the Company or by the Indemnitee and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission; the Company and each Holder
agree that it would not be just and equitable if contribution pursuant to this Section 4.5(g)(ii)
were determined by pro rata allocation or by any other method of allocation
that does not take account of the equitable considerations referred to in Section 4.5(g)(i).
No Indemnitee guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from the Company if the
Company was not guilty of such fraudulent misrepresentation.


 


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


 


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


 


26

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


27

















 


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


 


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


 


(v)                                 “Registration Expenses”
mean all expenses incurred by the Company in effecting any registration
pursuant to this Agreement (whether or not any registration or prospectus
becomes effective or final) or otherwise complying with its obligations under
this Section 4.5, including all registration, filing and listing fees,
printing expenses, fees and disbursements of counsel for the Company, blue sky
fees and expenses, expenses incurred in connection with any “road show”, the
reasonable fees and disbursements of Holders’ Counsel, and expenses of the
Company’s independent accountants in connection with any regular or special
reviews or audits incident to or required by any such registration, but shall
not include Selling Expenses. (vi) “Rule 144”, “Rule 144A”, “Rule 159A”,
“Rule 405” and “Rule 415” mean, in each case, such rule promulgated
under the Securities Act (or any successor provision), as the same shall be
amended from time to time.


 


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


 


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


 


28
















 


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


 


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


 


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


 


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


 


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


 


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


 


29

















 


of any Preferred
Shares pursuant thereto, the depositary shares issued pursuant thereto shall be
deemed “Preferred Shares” and, as applicable, “Registrable Securities” for
purposes of this Agreement.


 


4.8                                 Restriction on Dividends and Repurchases.


 


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


 


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


 


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


 


30

















 


filed Company Financial
Statements prior to the Closing Date) resulting from the grant, vesting or
exercise of equity-based compensation to employees and equitably adjusted for
any stock split, stock dividend, reverse stock split, reclassification or
similar transaction.


 


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


 


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


 


4.9                                 Repurchase of Investor Securities.


 


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


 


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


 


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


 


(i)                                     “Appraisal Procedure”
means a procedure whereby two independent appraisers, one chosen by the Company
and one by the Investor, shall mutually agree upon the Fair Market Value. Each
party shall deliver a notice to the other appointing its appraiser within 10
days after the Appraisal Procedure is invoked. 
If within 30 days after appointment of the two appraisers they are
unable to agree upon the Fair Market Value, a third independent appraiser shall
be chosen within 10 days thereafter by the mutual consent of such first two
appraisers.  The decision of the third
appraiser so appointed and chosen shall be given within 30 days after the
selection of such third appraiser.  If
three


 


31

















 


appraisers shall be appointed
and the determination of one appraiser is disparate from the middle
determination by more than twice the amount by which the other determination is
disparate from the middle determination, then the determination of such
appraiser shall be excluded, the remaining two determinations shall be averaged
and such average shall be binding and conclusive upon the Company and the
Investor; otherwise, the average of all three determinations shall be binding
upon the Company and the Investor.  The
costs of conducting any Appraisal Procedure shall be borne by the Company.


 


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


 


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


 


Article V


 


Miscellaneous


 


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


 


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


 


32

















 


Agreement shall
have caused or resulted in the failure of the Closing to occur on or prior to
such date; or


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


33

















 


legal action or
proceeding relating to this Agreement or the Warrant or the transactions
contemplated hereby or thereby.


 


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


 


If to the Investor:


 


United States Department
of the Treasury

1500 Pennsylvania Avenue, NW, Room 2312

Washington, D.C. 20220

Attention: Assistant General Counsel (Banking and Finance)

Facsimile: (202) 622-1974


 


5.7                                 Definitions.


 


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


 


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


 


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


 


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


 


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of its assets, to
the entity which is the survivor of such Business Combination or the purchaser
in such sale and (b) as provided in Section 4.5.


 


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


 


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


 


* * *


 


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