ex10-1.htm


    EXHIBIT
10.1

     

     

    
      	
               

              UST
      Seq. No.: 747

               

            


    

    
       

    

    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extent supplemented or superseded by the terms set forth herein or in the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.

     

    * *
*

     

     

    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    
       

      
        	
                 

                UST
      Seq. No.: 747

                 

              


      

       

    

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

     

    
      
        
          	 	
                  UNITED
      STATES DEPARTMENT OF THE TREASURY

                	 
	 	 	 	 
	
                   

                	
                  By:
      

                	/s/Neel
      Kashkari  	 
	 	 	Name: 
      Neel Kashkari	 
	 	 	Title: 
      Interim Assistant Secretary	 
	 	 	For
      Financial Stability	 
	 	 	 	 


        

      

    

    
      
        
          
            	 	COMPANY:	 
	 	 	 
	 	
                    NORTHERN
      STATES FINANCIAL CORPORATION

                  	 
	 	 	 	 
	
                     

                  	
                    By:
      

                  	/s/Fred
      Abdula 	 
	 	 	Name: 
      Fred Abdula	 
	 	 	Title: 
      Chairman of the Board and President	 
	 
      

                    Date: 
      February 20, 2009

                  	 	 	 


          

        

      

    

     

     

    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

     

    EXHIBIT A

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
       

       

       

      ____________________________________________________________________________________________________________________________________________

       

      SECURITIES
PURCHASE AGREEMENT

      
STANDARD
TERMS

    

    
      ____________________________________________________________________________________________________________________________________________

       

    

     

    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

     

    TABLE OF CONTENTS

     

    
      
        	 	
                Page

                 

              
	
                ARTICLE I  PURCHASE;
      CLOSING

              	
                1

              
	
                1.1  Purchase

              	
                1

              
	
                1.2  Closing

              	
                2

              
	
                1.3  Interpretation

              	
                4

              
	
                ARTICLE II  REPRESENTATIONS
      AND WARRANTIES

              	
                4

              
	
                2.1  Disclosure

              	
                4

              
	
                2.2  Representations
      and Warranties of the Company

              	
                5

              
	
                ARTICLE III  COVENANTS

              	
                13

              
	
                3.1  Commercially
      Reasonable Efforts

              	
                13

              
	
                3.2  Expenses

              	
                14

              
	
                3.3  Sufficiency
      of Authorized Common Stock; Exchange Listing

              	
                14

              
	
                3.4  Certain
      Notifications Until Closing

              	
                15

              
	
                3.5  Access,
      Information and Confidentiality

              	
                15

              
	
                ARTICLE IV  ADDITIONAL
      AGREEMENTS

              	
                16

              
	
                4.1  Purchase
      for Investment

              	
                16

              
	
                4.2  Legends

              	
                16

              
	
                4.3  Certain
      Transactions

              	
                18

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

              	
                18

              
	
                4.5  Registration
      Rights

              	
                18

              
	
                4.6  Voting
      of Warrant Shares

              	
                30

              
	
                4.7  Depositary
      Shares

              	
                30

              
	
                4.8  Restriction
      on Dividends and Repurchases

              	
                30

              
	
                4.9  Repurchase
      of Investor Securities

              	
                31

              
	
                4.10  Executive
      Compensation

              	
                32

              
	
                4.11  Bank
      and Thrift Holding Company Status

              	
                33

              
	
                4.12  Predominantly
      Financial

              	
                33

              
	
                ARTICLE V  MISCELLANEOUS

              	
                33

              
	
                5.1  Termination

              	
                33

              
	
                5.2  Survival
      of Representations and Warranties

              	
                34

              
	
                5.3  Amendment

              	
                34

              
	
                5.4  Waiver
      of Conditions

              	
                34

              
	
                5.5  Governing
      Law:  Submission to Jurisdiction, Etc.

              	
                34

              
	
                5.6  Notices

              	
                34

              
	
                5.7  Definitions

              	
                35

              
	
                5.8  Assignment

              	
                35

              
	
                5.9  Severability

              	
                35

              
	
                5.10  No
      Third Party Beneficiaries

              	
                36

              


      

    

    
 

    
      
        
           


        

        
          i

          
            

          

        

        
           


        

      

    

     

    LIST
OF ANNEXES

     

    
      	
              ANNEX
      A:

            	
              FORM
      OF CERTIFICATE OF DESIGNATIONS FOR PREFERRED STOCK

            
	
              ANNEX
      B:

            	
              FORM
      OF WAIVER

            
	
              ANNEX
      C:

            	
              FORM
      OF OPINION

            
	
              ANNEX
      D:

            	
              FORM
      OF WARRANT

            


    

     

     

    
      
        
           


        

        
          ii

          
            

          

        

        
           


        

      

    

     

    INDEX
OF DEFINED TERMS

     

    
      	
              
                Term

              

            	 	
              
                Location
      of Definition

              

            
	
              Affiliate

            	 	
              5.7(b)

            
	
              Agreement

            	 	
              Recitals

            
	
              Appraisal
      Procedure

            	 	
              4.9(c)(i)

            
	
              Appropriate
      Federal Banking Agency

            	 	
              2.2(s)

            
	
              Bank
      Holding Company

            	 	
              4.11

            
	
              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)

            
	
              Federal
      Reserve

            	 	
              4.11

            
	
              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)

            


       

       

      
        
          
          

        

        
          iii

          
            

          

        

        
          
          

        

      

       

      
        
          
            
              	
                      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)

                    
	
                      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)

                    
	
                      Savings
      and Loan Holding Company

                    	 	
                      4.11

                    
	
                      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)

                    


            

          

        

      

    

     

     

    
      
        
           


        

        
          iv

          
            

          

        

        
           


        

      

    

     

    SECURITIES
PURCHASE AGREEMENT – STANDARD TERMS

     

    RECITALS:

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    ARTICLE I



     

    PURCHASE;
CLOSING

     

    1.1           Purchase.  On
the terms and subject to the conditions set forth in this Agreement, the Company
agrees to sell to the Investor, and the Investor agrees to purchase from
the

     

     

    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

     

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

     

    1.2           Closing.

     

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

     

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

     

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

     

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

     

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

     

     

    
      
        
           


        

        
          2

          
            

          

        

        
           


        

      

    

     

    expected
to have a Company Material Adverse Effect and (B) the Company shall have
performed in all material respects all obligations required to be performed by
it under this Agreement at or prior to the Closing;

     

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

     

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

     

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

     

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

     

     

    
      
        
           


        

        
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    shares of
Common Stock, other than (i) shares issued upon the exercise of stock
options or delivered under other equity-based awards or other convertible
securities or warrants which were issued and outstanding on the Capitalization
Date and disclosed on Schedule B
and (ii) shares disclosed on Schedule B.

     

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

     

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

     

    (e)           Authorization,
Enforceability.

     

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

     

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

     

     

    
      
        
           


        

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

     

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

     

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

     

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

     

     

    
      
        
           


        

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

     

    (i)           Reports.

     

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

     

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

     

     

    
      
        
           


        

        
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    others
within those entities, and (B) has disclosed, based on its most recent
evaluation prior to the Signing Date, to the Company’s outside auditors and the
audit committee of the Board of Directors (x) any significant deficiencies
and material weaknesses in the design or operation of internal controls over
financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that are
reasonably likely to adversely affect the Company’s ability to record, process,
summarize and report financial information and (y) any fraud, whether or
not material, that involves management or other employees who have a significant
role in the Company’s internal controls over financial reporting.

     

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

     

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

     

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

     

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

     

     

    
      
        
           


        

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

     

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

     

     

    
      
        
           


        

        
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    property,
sales, use, license, excise, franchise, employment, payroll, withholding,
alternative or add on minimum, ad valorem, transfer or excise tax, or any other
tax, custom, duty, governmental fee or other like assessment or charge of any
kind whatsoever, together with any interest or penalty, imposed by any
Governmental Entity.

     

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

     

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

     

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

     

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

     

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

     

    (r)           Risk
Management Instruments.  Except as would not, individually or
in the aggregate, reasonably be expected to have a Company Material Adverse
Effect, all derivative instruments, including, swaps, caps, floors and option
agreements, whether 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.

     

     

    
      
        
           


        

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

     

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

     

    (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

     

     

    
      
        
           


        

        
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    person is
infringing, diluting, misappropriating or violating, nor has the Company or any
or the Company Subsidiaries sent any written communications since
January 1, 2006 alleging that any person has infringed, diluted,
misappropriated or violated, any of the Proprietary Rights owned by the Company
and the Company Subsidiaries.

     

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

     

    ARTICLE III

     

    COVENANTS

     

    3.1           Commercially
Reasonable Efforts.

     

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

     

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

     

     

    
      
        
           


        

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

     

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

     

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

     

    3.3           Sufficiency
of Authorized Common Stock; Exchange Listing.

     

    (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.

     

     

    
      
        
           


        

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

     

    3.5           Access,
Information and Confidentiality.

     

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

     

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

     

     

    
      
        
           


        

        
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    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

     

     

    
      
        
           


        

        
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    AND ARE
NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY.

     

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

     

     

    
      
        
           


        

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

     

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

     

    4.5           Registration
Rights.

     

    (a)           Registration.

     

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

     

     

    
      
        
           


        

        
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    the
initial Shelf Registration Statement expires).  So long as the Company
is a well-known seasoned issuer (as defined in Rule 405 under the Securities
Act) at the time of filing of the Shelf Registration Statement with the SEC,
such Shelf Registration Statement shall be designated by the Company as an
automatic Shelf Registration Statement.  Notwithstanding the
foregoing, if on the Signing Date the Company is not eligible to file a
registration statement on Form S-3, then the Company shall not be obligated to
file a Shelf Registration Statement unless and until requested to do so in
writing by the Investor.

     

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

     

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

     

     

    
      
        
           


        

        
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    less than
ten days prior to the anticipated filing date) and will include in such
registration all Registrable Securities with respect to which the Company has
received written requests for inclusion therein within ten business days after
the date of the Company’s notice (a “Piggyback
Registration”).  Any such person that has made such a written
request may withdraw its Registrable Securities from such Piggyback Registration
by giving written notice to the Company and the managing underwriter, if any, on
or before the fifth business day prior to the planned effective date of such
Piggyback Registration.  The Company may terminate or withdraw any
registration under this Section 4.5(a)(iv) prior to the effectiveness of
such registration, whether or not Investor or any other Holders have elected to
include Registrable Securities in such registration.

     

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

     

    (vi)           If
either (x) the Company grants “piggyback” registration rights to one or
more third parties to include their securities in an underwritten offering under
the Shelf Registration Statement pursuant to Section 4.5(a)(ii) or
(y) a Piggyback Registration under Section 4.5(a)(iv) relates to an
underwritten offering on behalf of the Company, and in either case the managing
underwriters advise the Company that in their reasonable opinion the number of
securities requested to be included in such offering 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

     

     

    
      
        
           


        

        
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    of
priority contemplated hereby then it shall apply the order of priority in such
conflicting agreement to the extent that it would otherwise result in a breach
under such agreement.

     

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

     

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

     

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

     

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

     

    (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.

     

     

    
      
        
           


        

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

     

    (vi)           Give
written notice to the Holders:

     

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

     

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

     

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

     

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

     

    (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 

     

     

    
      
        
           


        

        
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    which
they were made, not misleading.  If the Company notifies the Holders
in accordance with Section 4.5(c)(vi)(E) to suspend the use of the
prospectus until the requisite changes to the prospectus have been made, then
the Holders and any underwriters shall suspend use of such prospectus and use
their reasonable best efforts to return to the Company all copies of such
prospectus (at the Company’s expense) other than permanent file copies then in
such Holders’ or underwriters’ possession.  The total number of days
that any such suspension may be in effect in any 12-month period shall not
exceed 90 days.

     

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

     

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

     

     

    
      
        
           


        

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

     

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

     

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

     

     

    
      
        
           


        

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

     

    (f)           Furnishing
Information.

     

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

     

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

     

    (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

     

     

    
      
        
           


        

        
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    such
Indemnitee “by means of” (as defined in Rule 159A) a “free writing prospectus”
(as defined in Rule 405) that was not authorized in writing by the
Company.

     

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

     

     

    
      
        
           


        

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

     

    (j)           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.



    
      
        
           


        

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

     

    (iii)           “Register,” “registered,” and “registration” shall refer to
a registration effected by preparing and (A) filing a registration
statement in compliance with the Securities Act and applicable rules and
regulations thereunder, and the declaration or ordering of effectiveness of such
registration statement or (B) filing a prospectus and/or prospectus supplement
in respect of an appropriate effective registration statement on Form
S-3.

     

    (iv)           “Registrable Securities” means
(A) all Preferred Shares, (B) the Warrant (subject to
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” means
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


    
 

    
      
        
           


        

        
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    forfeiting
such rights shall nonetheless be entitled to participate under
Section 4.5(a)(iv) – (vi) in any Pending Underwritten Offering to the same
extent that such Holder would have been entitled to if the holder had not
withdrawn; and provided, further, that no such
forfeiture shall terminate a Holder’s rights or obligations under
Section 4.5(f) with respect to any prior registration or Pending
Underwritten Offering.  “Pending Underwritten
Offering” means, with respect to any Holder forfeiting its rights
pursuant to this Section 4.5(1), any underwritten offering of Registrable
Securities in which such Holder has advised the Company of its intent to
register its Registrable Securities either pursuant to Section 4.5(a)(ii)
or 4.5(a)(iv) prior to the date of such Holder’s forfeiture.

     

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

     

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

     

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

     

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

    
 

    
      
        
           


        

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

     

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

     

    4.8           Restriction
on Dividends and Repurchases.

     

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

     

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

     

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

     

     

    
      
        
           


        

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

     

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

     

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

     

    4.9           Repurchase
of Investor Securities.

     

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

     

    (b)           Notice
of every repurchase of equity securities of the Company held by the Investor
shall be given at the address and in the manner set forth for such party in
Section 5.6.  Each notice of repurchase given to the Investor
shall state:  (i) the number and type of securities to be
repurchased, (ii) the Board of Directors’ 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.


     

    
      
        
           


        

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

     

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

     

    (ii)           “Fair Market Value” means,
with respect to any security, the fair market value of such security as
determined by the Board of Directors, acting in good faith in reliance on an
opinion of a nationally recognized independent investment banking firm retained
by the Company for this purpose and certified in a resolution to the
Investor.  If the Investor does not agree with the Board of Directors’
determination, it may object in writing within 10 days of receipt of the Board
of Directors’ 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.

     

    4.11           Bank and
Thrift Holding Company Status.  If the Company is a Bank
Holding Company or a Savings and Loan Holding Company on the Signing Date, then
the Company shall maintain its status as a Bank Holding Company or Savings and
Loan Holding Company, as the 

    
 

    
      
        
           


        

        
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    case may
be, for as long as the Investor owns any Purchased Securities or Warrant
Shares.  The Company shall redeem all Purchased Securities and Warrant
Shares held by the Investor prior to terminating its status as a Bank Holding
Company or Savings and Loan Holding Company, as applicable.  “Bank Holding Company” means a
company registered as such with the Board of Governors of the Federal Reserve
System (the “Federal
Reserve”) pursuant to 12 U.S.C. §1842 and the regulations of the Federal
Reserve promulgated thereunder.  “Savings and Loan Holding
Company” means a company registered as such with the Office of Thrift
Supervision pursuant to 12 U.S.C. §1467(a) and the regulations of the Office of
Thrift Supervision promulgated thereunder.

     

    4.12           Predominantly
Financial.  For as long as the Investor owns any Purchased
Securities or Warrant Shares, the Company, to the extent it is not itself an
insured depository institution, agrees to remain predominantly engaged in
financial activities.  A company is predominantly engaged in financial
activities if the annual gross revenues derived by the company and all
subsidiaries of the company (excluding revenues derived from subsidiary
depository institutions), on a consolidated basis, from engaging in activities
that are financial in nature or are incidental to a financial activity under
subsection (k) of Section 4 of the Bank Holding Company Act of 1956 (12
U.S.C. 1843(k)) represent at least 85 percent of the consolidated annual gross
revenues of the company.

     

    ARTICLE V



    MISCELLANEOUS

     

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

     

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

     

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

     

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

     

    
      In the
event of termination of this Agreement as provided in this Section 5.1,
this Agreement shall forthwith become void and there shall be no liability on
the part of either party hereto 



       

    

    
      
        
           


        

        
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    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 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.

     

     

    
      
        
           


        

        
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              If
      to the Investor:

            


    

     

    
      	
               
      

            	
              United
      States Department of the Treasury

            


    

    
      	
               
      

            	
              1500
      Pennsylvania Avenue, NW, Room 2312

            


    

    
      	
               
      

            	
              Washington,
      D.C. 20220

            


    

    
      	
               
      

            	
              Attention:  Assistant
      General Counsel (Banking and
Finance)

            


    

    
      	
               
      

            	
              Facsimile:  (202)
      622-1974

            


    

     

    5.7           Definitions.

     

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

     

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

     

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

     

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

     

    5.9           Severability.  If
any provision of this Agreement or the Warrant, or the application thereof to
any person or circumstance, is determined by a court of competent jurisdiction
to be invalid, void or unenforceable, the remaining provisions hereof, or the
application of such provision to persons or circumstances other than those as to
which it has been held invalid or unenforceable, will remain in full force and
effect and shall in no 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


     

    
      
        
           


        

        
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    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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      SCHEDULE
A

       

      ADDITIONAL
TERMS AND CONDITIONS

       

      
        	
                
                  Company
      Information:

                

              	
                 

              


      

       

      Name of
the Company:  Northern States Financial Corporation

       

      Corporate
or other organizational form: Corporation

       

      Jurisdiction
of Organization:  State of Delaware

       

      Appropriate
Federal Banking Agency:  Board of Governors of the Federal Reserve
System

       

      Notice
Information:  Fred Abdula, Chairman of the Board and President,
Northern States Financial Corporation, 1601 N. Lewis Avenue, Waukegan, Illinois
60085

       

      
        	
                Terms
      of the Purchase:

              	
                 

              


      

       

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

       

      Per Share
Liquidation Preference of Preferred Stock:  $1,000.00

       

      Number of
Shares of Preferred Stock Purchased:  17,211

       

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

       

      Number of
Initial Warrant Shares:  584,084

       

      Exercise
Price of the Warrant:  $4.42

       

      Purchase
Price:  $17,211,000.00

       

      
        	
                Closing:

              	
                 

              


      

       

      Location
of Closing:  Squire, Sanders & Dempsey, L.L.P., 221 East Fourth
Street, Suite 2900, Cincinnati, Ohio  45202

       

      Time of
Closing:  9:00 a.m. EST/8:00 a.m. CST

       

      Date of
Closing:  February 20, 2009

       

    

     

    
      
        
           


        

        
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      ANNEX
A

       

      FORM OF
CERTIFICATE OF DESIGNATIONS

       

      [SEE
ATTACHED]

    

     

     

    
      
        
           


        

        
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    ANNEX
B

     

    FORM OF
WAIVER

     

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

     

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

     

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

     

     

    
      
        
           


        

        
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    ANNEX
C

     

    FORM OF
OPINION

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

     

    
      
        
           


        

        
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    ANNEX
D

     

    FORM OF
WARRANT

     

    [SEE
ATTACHED]

     

     

    
      
        
           


        

        
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