EXHIBIT 10.1


 


UNITED STATES DEPARTMENT OF THE TREASURY 1500
PENNSYLVANIA AVENUE, NW

WASHINGTON, D.C. 20220


 


Dear Ladies
and Gentlemen:


 


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


 


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superseded by the terms set forth herein or in the Schedules hereto, the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


 


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


 


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


 


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


 


* * *


 

















 


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


 


 


	
   

  	
  UNITED STATES DEPARTMENT OF THE TREASURY

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Neel
  Kashkari

  
	
   

  	
   

  	
  Name: Neel
  Kashkari

  
	
   

  	
   

  	
  Title:
  Interim Assistant Secretary for Financial Stability

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  COMPANY: TENNESSEE
  COMMERCE BANCORP, INC.

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Frank
  Perez

  
	
   

  	
   

  	
  Name: Frank
  Perez

  
	
   

  	
   

  	
  Title: Chief
  Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
  Date:
  December 19, 2008

  	
   

  



 


 

















 


SCHEDULE A


 


ADDITIONAL TERMS AND CONDITIONS


 


	
  Company Information:

  
	
   

  	
   

  
	
  Name of the Company:

  	
  Tennessee Commerce
  Bancorp, Inc.

  
	
   

  	
   

  
	
  Corporate or other organizational form:

  	
  Corporation

  
	
   

  	
   

  
	
  Jurisdiction of Organization:

  	
  Tennessee

  
	
   

  	
   

  
	
  Appropriate Federal Banking Agency:

  	
  Federal Reserve

  
	
   

  	
   

  
	
  Notice Information:

  	
  Tennessee Commerce
  Bancorp, Inc.

  
	
   

  	
  381
  Mallory Station Road, Suite 207

  
	
   

  	
  Franklin,
  TN 37067

  
	
   

  	
  Attn: Frank Perez

  
	
   

  	
   

  
	
  Terms of the Purchase:

  
	
   

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

  
	
   

  	
   

  
	
  Per Share Liquidation Preference of Preferred Stock:  

  	
  $1,000

  
	
   

  	
   

  
	
  Number of Shares of Preferred Stock Purchased:

  	
  30,000

  
	
   

  	
   

  
	
  Dividend Payment Dates on the Preferred Stock:

  	
  February 15,
  May 15, August 15 and November 15 of each year

  
	
   

  	
   

  
	
  Number of Initial Warrant Shares:

  	
  461,538

  
	
   

  	
   

  
	
  Exercise Price of the Warrant:

  	
  $9.75

  
	
   

  	
   

  
	
  Purchase Price:

  	
  $30,000,000

  
	
   

  	
   

  
	
  Closing:

  
	
   

  
	
  Location of Closing:

  	
  Hughes Hubbard &
  Reed LLP

  
	
   

  	
  One Battery Park Plaza

  
	
   

  	
  New York, New York 10004

  
	
   

  	
   

  
	
  Time of Closing:

  	
  9:00 a.m. Eastern
  Standard Time

  
	
   

  	
   

  
	
  Date of Closing:

  	
  December 19, 2008

  
	
   

  
	
  Wire Information for Closing:

  	
  ABA
  Number:

  	
  061003415

  
	
   

  	
  Bank:

  	
  Silverton Bank

  
	
   

  	
  Account
  Name:

  	
  Tennessee Commerce Bank

  
	
   

  	
  Account
  Number:

  	
  1006410854

  
	
   

  	
  Beneficiary:

  	
  Tennessee Commerce Bank

  
						



 

















 


SCHEDULE B


 


CAPITALIZATION


 


	
  Capitalization Date:  November 30, 2008

  
	
   

  
	
  Common Stock

  
	
  Par value:

  	
  $0.50

  
	
  Total Authorized:

  	
  10,000,000

  
	
  Outstanding:

  	
  4,731,696

  
	
  Subject to warrants, options, convertible securities, etc.:

  	
  852,025

  
	
  Reserved for benefit plans and other issuances:

  	
  0

  
	
  Remaining authorized but unissued:

  	
  4,416,279

  
	
  Shares issued after Capitalization Date (other than pursuant to
  warrants, options, convertible securities, etc. as set forth above):

  	
  0

  
	
   

  	
   

  
	
  Preferred Stock

  
	
  Par value:

  	
  $0.50

  
	
  Total Authorized:

  	
  1,000,000

  
	
  Outstanding (by series):

  	
  0

  
	
  Reserved for issuance:

  	
  0

  
	
  Remaining authorized but unissued:

  	
  1,000,000

  



 

















 


SCHEDULE C


 


REQUIRED STOCKHOLDER APPROVALS


 


	
   

  	
   

  	
  Required(1)

  	
   

  	
  % Vote Required

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Warrants — Common Stock Issuance

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Charter Amendment

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Stock Exchange Rules

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


If no stockholder approvals
are required, please so indicate by checking the box: x.


 






(1)   If stockholder approval is required, indicate
applicable class/series of capital stock that are required to vote.


 

















 


SCHEDULE D


 


LITIGATION


 


List any exceptions to the
representation and warranty in Section 2.2(l) of the Securities
Purchase Agreement – Standard Terms.


 


The Company is party to
proceedings arising from the May 6, 2008 termination of its former Chief Financial
Officer, George Fort. Those proceedings include a whistleblower complaint under
the Sarbanes-Oxley Act of 2002 (“SOX”) filed by Mr. Fort with the United
States Department of Labor (the “SOX Complaint”) and a lawsuit styled George Fort v. Tennessee Commerce Bancorp, Inc.
and Tennessee Commerce Bank (Case No. 3:08-cv-0668), filed on July 9,
2008 in the United States District Court for the Middle District of Tennessee
(the “federal court litigation”).


 


In the SOX Complaint, Mr. Fort
alleges that his March 7, 2008 placement on administrative leave and his
subsequent termination on May 6, 2008 were in retaliation for his raising
various alleged weaknesses in the Company’s internal controls. In the federal
court litigation, Mr. Fort alleges that his termination constituted a
breach of his Employment Agreement with the Company and he brings certain
whistleblower claims and a claim for libel.


 


The
Company denies any liability to Mr. Fort or violation of any law, contract
or otherwise and intends to contest all matters brought by Mr. Fort
vigorously.


 


If none, please so indicate
by checking the box:  ̈.


 

















 


SCHEDULE E


 


COMPLIANCE WITH LAWS


 


List
any exceptions to the representation and warranty in the second sentence of Section 2.2(m) 
of the Securities Purchase Agreement – Standard Terms.


 


If none, please so indicate
by checking the box: x.


 


List
any exceptions to the representation and warranty in the last sentence of Section 2.2(m) of
the Securities Purchase Agreement – Standard Terms.


 


If none, please so indicate
by checking the box: x.


 

















 


SCHEDULE F


 


REGULATORY AGREEMENTS


 


List
any exceptions to the representation and warranty in Section 2.2(s) of
the Securities Purchase Agreement – Standard Terms.


 


If none, please so indicate
by checking the box: x.


 
















 


EXHIBIT A


 




 


SECURITIES PURCHASE AGREEMENT







STANDARD TERMS


 





 

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
  Page

  
	
  Article I

  
	
   

  	
   

  	
   

  
	
  Purchase; Closing

  
	
   

  	
   

  	
   

  
	
  1.1

  	
  Purchase 

  	
  1

  
	
   

  	
   

  	
   

  
	
  1.2

  	
  Closing 

  	
  1

  
	
   

  	
   

  	
   

  
	
  1.3

  	
  Interpretation

  	
  3

  
	
   

  	
   

  	
   

  
	
  Article II

  
	
   

  	
   

  	
   

  
	
  Representations and Warranties

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  Disclosure 

  	
  4

  
	
   

  	
   

  	
   

  
	
  2.2

  	
  Representations
  and Warranties of the Company

  	
  5

  
	
   

  	
   

  	
   

  
	
  Article III

  
	
   

  	
   

  	
   

  
	
  Covenants

  
	
   

  	
   

  	
   

  
	
  3.1

  	
  Commercially
  Reasonable Efforts 

  	
  13

  
	
   

  	
   

  	
   

  
	
  3.2

  	
  Expenses 

  	
  14

  
	
   

  	
   

  	
   

  
	
  3.3

  	
  Sufficiency
  of Authorized Common Stock; Exchange Listing

  	
  14

  
	
   

  	
   

  	
   

  
	
  3.4

  	
  Certain
  Notifications Until Closing 

  	
  14

  
	
   

  	
   

  	
   

  
	
  3.5

  	
  Access,
  Information and Confidentiality 

  	
  15

  
	
   

  	
   

  	
   

  
	
  Article IV

  
	
   

  	
   

  	
   

  
	
  Additional Agreements

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  Purchase for
  Investment

  	
  15

  
	
   

  	
   

  	
   

  
	
  4.2

  	
  Legends

  	
  16

  
	
   

  	
   

  	
   

  
	
  4.3

  	
  Certain
  Transactions 

  	
  17

  
	
   

  	
   

  	
   

  
	
  4.4

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

  	
  17

  



 

















 


	
  4.5

  	
  Registration
  Rights

  	
  18

  
	
   

  	
   

  	
   

  
	
  4.6

  	
  Voting of
  Warrant Shares 

  	
  29

  
	
   

  	
   

  	
   

  
	
  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

  
	
   

  	
   

  	
   

  
	
  Article V

  
	
   

  	
   

  	
   

  
	
  Miscellaneous

  
	
   

  	
   

  	
   

  
	
  5.1

  	
  Termination

  	
  32

  
	
   

  	
   

  	
   

  
	
  5.2

  	
  Survival of Representations and Warranties

  	
  33

  
	
   

  	
   

  	
   

  
	
  5.3

  	
  Amendment

  	
  33

  
	
   

  	
   

  	
   

  
	
  5.4

  	
  Waiver of Conditions

  	
  33

  
	
   

  	
   

  	
   

  
	
  5.5

  	
  Governing Law: Submission to Jurisdiction,
  Etc.

  	
  33

  
	
   

  	
   

  	
   

  
	
  5.6

  	
  Notices

  	
  34

  
	
   

  	
   

  	
   

  
	
  5.7

  	
  Definitions

  	
  34

  
	
   

  	
   

  	
   

  
	
  5.8

  	
  Assignment

  	
  35

  
	
   

  	
   

  	
   

  
	
  5.9

  	
  Severability

  	
  35

  
	
   

  	
   

  	
   

  
	
  5.10

  	
  No Third Party Beneficiaries

  	
  35

  



 

















 


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

  



 

















 


INDEX OF DEFINED TERMS


 


	
  Term

  	
   

  	
  Location of

  Definition

  	
   

  
	
  Affiliate

  	
   

  	
  5.7(b)

  	
   

  
	
  Agreement

  	
   

  	
  Recitals

  	
   

  
	
  Appraisal
  Procedure

  	
   

  	
  4.9(c)(i)

  	
   

  
	
  Appropriate
  Federal Banking Agency

  	
   

  	
  2.2(s)

  	
   

  
	
  Bankruptcy
  Exceptions

  	
   

  	
  2.2(d)

  	
   

  
	
  Benefit
  Plans

  	
   

  	
  1.2(d)(iv)

  	
   

  
	
  Board of
  Directors

  	
   

  	
  2.2(f)

  	
   

  
	
  Business
  Combination

  	
   

  	
  4.4

  	
   

  
	
  business day

  	
   

  	
  1.3

  	
   

  
	
  Capitalization
  Date

  	
   

  	
  2.2(b)

  	
   

  
	
  Certificate
  of Designations

  	
   

  	
  1.2(d)(iii)

  	
   

  
	
  Charter

  	
   

  	
  1.2(d)(iii)

  	
   

  
	
  Closing

  	
   

  	
  1.2(a)

  	
   

  
	
  Closing Date

  	
   

  	
  1.2(a)

  	
   

  
	
  Code

  	
   

  	
  2.2(n)

  	
   

  
	
  Common Stock

  	
   

  	
  Recitals

  	
   

  
	
  Company

  	
   

  	
  Recitals

  	
   

  
	
  Company
  Financial Statements

  	
   

  	
  2.2(h)

  	
   

  
	
  Company
  Material Adverse Effect

  	
   

  	
  2.1(a)

  	
   

  
	
  Company
  Reports

  	
   

  	
  2.2(i)(i)

  	
   

  
	
  Company
  Subsidiary; Company Subsidiaries

  	
   

  	
  2.2(i)(i)

  	
   

  
	
  control;
  controlled by; under common control with

  	
   

  	
  5.7(b)

  	
   

  
	
  Controlled
  Group

  	
   

  	
  2.2(n)

  	
   

  
	
  CPP

  	
   

  	
  Recitals

  	
   

  
	
  EESA

  	
   

  	
  1.2(d)(iv)

  	
   

  
	
  ERISA

  	
   

  	
  2.2(n)

  	
   

  
	
  Exchange Act

  	
   

  	
  2.1(b)

  	
   

  
	
  Fair Market
  Value

  	
   

  	
  4.9(c)(ii)

  	
   

  
	
  GAAP

  	
   

  	
  2.1(a)

  	
   

  
	
  Governmental
  Entities

  	
   

  	
  1.2(c)

  	
   

  
	
  Holder

  	
   

  	
  4.5(k)(i)

  	
   

  
	
  Holders’
  Counsel

  	
   

  	
  4.5(k)(ii)

  	
   

  
	
  Indemnitee

  	
   

  	
  4.5(g)(i)

  	
   

  
	
  Information

  	
   

  	
  3.5(b)

  	
   

  
	
  Initial
  Warrant Shares

  	
   

  	
  Recitals

  	
   

  
	
  Investor

  	
   

  	
  Recitals

  	
   

  
	
  Junior Stock

  	
   

  	
  4.8(c)

  	
   

  
	
  knowledge of
  the Company; Company’s knowledge

  	
   

  	
  5.7(c)

  	
   

  
	
  Last Fiscal
  Year

  	
   

  	
  2.1(b)

  	
   

  
	
  Letter
  Agreement

  	
   

  	
  Recitals

  	
   

  
	
  officers

  	
   

  	
  5.7(c)

  	
   

  



 

















 


	
  Term

  	
   

  	
  Location of

  Definition

  	
   

  
	
  Parity Stock

  	
   

  	
  4.8(c)

  	
   

  
	
  Pending
  Underwritten Offering

  	
   

  	
  4.5(l)

  	
   

  
	
  Permitted
  Repurchases

  	
   

  	
  4.8(a)(ii)

  	
   

  
	
  Piggyback
  Registration

  	
   

  	
  4.5(a)(iv)

  	
   

  
	
  Plan

  	
   

  	
  2.2(n)

  	
   

  
	
  Preferred
  Shares

  	
   

  	
  Recitals

  	
   

  
	
  Preferred
  Stock

  	
   

  	
  Recitals

  	
   

  
	
  Previously Disclosed

  	
   

  	
  2.1(b)

  	
   

  
	
  Proprietary
  Rights

  	
   

  	
  2.2(u)

  	
   

  
	
  Purchase

  	
   

  	
  Recitals

  	
   

  
	
  Purchase
  Price

  	
   

  	
  1.1

  	
   

  
	
  Purchased
  Securities

  	
   

  	
  Recitals

  	
   

  
	
  Qualified
  Equity Offering

  	
   

  	
  4.4

  	
   

  
	
  register;
  registered; registration

  	
   

  	
  4.5(k)(iii)

  	
   

  
	
  Registrable
  Securities

  	
   

  	
  4.5(k)(iv)

  	
   

  
	
  Registration
  Expenses

  	
   

  	
  4.5(k)(v)

  	
   

  
	
  Regulatory
  Agreement

  	
   

  	
  2.2(s)

  	
   

  
	
  Rule 144;
  Rule 144A; Rule 159A; Rule 405; Rule 415

  	
   

  	
  4.5(k)(vi)

  	
   

  
	
  Schedules

  	
   

  	
  Recitals

  	
   

  
	
  SEC

  	
   

  	
  2.1(b)

  	
   

  
	
  Securities
  Act

  	
   

  	
  2.2(a)

  	
   

  
	
  Selling
  Expenses

  	
   

  	
  4.5(k)(vii)

  	
   

  
	
  Senior
  Executive Officers

  	
   

  	
  4.10

  	
   

  
	
  Share Dilution
  Amount

  	
   

  	
  4.8(a)(ii)

  	
   

  
	
  Shelf
  Registration Statement

  	
   

  	
  4.5(a)(ii)

  	
   

  
	
  Signing Date

  	
   

  	
  2.1(a)

  	
   

  
	
  Special
  Registration

  	
   

  	
  4.5(i)

  	
   

  
	
  Stockholder
  Proposals

  	
   

  	
  3.1(b)

  	
   

  
	
  subsidiary

  	
   

  	
  5.8(a)

  	
   

  
	
  Tax; Taxes

  	
   

  	
  2.2(o)

  	
   

  
	
  Transfer

  	
   

  	
  4.4

  	
   

  
	
  Warrant
  Recitals Warrant Shares

  	
   

  	
  2.2(d)

  	
   

  



 

















 


SECURITIES PURCHASE AGREEMENT – STANDARD
TERMS


 


Recitals:


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


Article I


Purchase; Closing


 


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


 


1

















 


place, time
and date as shall be agreed between the Company and the Investor. The time and
date on which the Closing occurs is referred to in this Agreement as the “Closing Date”.


 


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


 


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


 


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


 


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


 


2
















 


(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


 


(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 


 


3

















 


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


 


Article II


Representations and Warranties


 


2.1           Disclosure.


 


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


 


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


 


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


 


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


 


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


 


(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 


 


5

















 


Preferred
Stock, whether or not issued or outstanding, with respect to the payment of
dividends and the distribution of assets in the event of any dissolution,
liquidation or winding up of the Company.


 


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


 


(e)           Authorization,
Enforceability.


 


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


 


(ii)           The execution, delivery and performance by
the Company of this Agreement and the Warrant and the consummation of the
transactions contemplated hereby and thereby and compliance by the Company with
the provisions hereof and thereof, will not (A) violate, conflict with, or
result in a breach of any provision of, or constitute a default (or an event
which, with notice or lapse of time or both, would constitute a default) under,
or result in the termination of, or accelerate the performance required by, or
result in a right of termination or acceleration of, or result in the creation
of, any lien, security interest, charge or encumbrance upon any of the
properties or assets of the Company or any Company Subsidiary under any of the
terms, conditions or provisions of (i) subject, if applicable, to the
approvals of the Company’s stockholders set forth on Schedule C, its
organizational documents or (ii) any note, bond, mortgage, indenture, deed
of trust, license, lease, agreement or other instrument or obligation to which
the Company or any Company Subsidiary is a party or by which it or any Company
Subsidiary may be bound, or to which the Company or any Company Subsidiary or
any of the properties or assets of the Company or any Company Subsidiary 


 


6

















 


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


 


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


 


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


 


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


 


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


 


7

















 


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


 


(i)            Reports.


 


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


 


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


 


8

















 


that involves management or other employees who have a significant role
in the Company’s internal controls over financial reporting.


 


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


 


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


 


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


 


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


 


9

















 


reasonably be
expected to have a Company Material Adverse Effect.


 


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


 


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


 


10
















 


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


 


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


 


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


 


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


 


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


 


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


 


(s)           Agreements with Regulatory
Agencies. Except as set forth on Schedule F, neither
the Company nor any Company Subsidiary is subject to any material
cease-and-desist or other similar order or enforcement action issued by, or is
a party to any material written agreement,


 


11

















 


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 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


 


12

















 


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 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


 


13

















 


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.


 


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


 


14

















 


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.


 


Article IV


Additional Agreements


 


4.1           Purchase for Investment. The Investor
acknowledges that the Purchased Securities


 


15

















 


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


 


4.2           Legends.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


16

















 


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


 


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


 


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


 


17

















 


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


 


4.5           Registration Rights.


 


(a)           Registration.


 


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


 


18
















 


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


 


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


 


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


 


19

















 


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


 


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


 


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


 


20

















 


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


 


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


 


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


 


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


 


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


 


(v)           Notify
each Holder of Registrable Securities at any time when a prospectus relating
thereto is required to be delivered under the Securities Act of the happening
of any event as a result of which the applicable prospectus, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to 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:


 


21

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


22

















 


may be in effect in any 12-month period shall not exceed 90 days.


 


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


 


(x)            If
an underwritten offering is requested pursuant to Section 4.5(a)(ii),
enter into an underwriting agreement in customary form, scope and substance and
take all such other actions reasonably requested by the Holders of a majority
of the Registrable Securities being sold in connection therewith or by the
managing underwriter(s), if any, to expedite or facilitate the underwritten
disposition of such Registrable Securities, and in connection therewith in any
underwritten offering (including making members of management and executives of
the Company available to participate in “road shows”, similar sales events and
other marketing activities), (A) make such representations and warranties
to the Holders that are selling stockholders and the managing underwriter(s),
if any, with respect to the business of the Company and its subsidiaries, and
the Shelf Registration Statement, prospectus and documents, if any,
incorporated or deemed to be incorporated by reference therein, in each case,
in customary form, substance and scope, and, if true, confirm the same if and
when requested, (B) use its reasonable best efforts to furnish the
underwriters with opinions of counsel to the Company, addressed to the managing
underwriter(s), if any, covering the matters customarily covered in such
opinions requested in underwritten offerings, (C) use its reasonable best
efforts to obtain “cold comfort” letters from the independent certified public
accountants of the Company (and, if necessary, any other independent certified
public accountants of any business acquired by the Company for which financial
statements and financial data are included in the Shelf Registration Statement)
who have certified the financial statements included in such Shelf Registration
Statement, addressed to each of the managing underwriter(s), if any, such
letters to be in customary form and covering matters of the type customarily
covered in “cold comfort” letters, (D) if an underwriting agreement is
entered into, the same shall contain indemnification provisions and procedures
customary in underwritten offerings (provided that the Investor shall not be
obligated to provide any indemnity), and (E)   deliver
such documents and certificates as may be reasonably requested by the Holders
of a majority of the Registrable Securities being sold in connection therewith,
their counsel and the managing underwriter(s), if any, to evidence the
continued validity of the representations and warranties made pursuant to
clause (i) above and to evidence compliance with any customary conditions
contained in the underwriting agreement or other agreement entered into by the
Company.


 


(xi)           Make
available for inspection by a representative of Holders that are selling
stockholders, the managing underwriter(s), if any, and any attorneys or
accountants retained by such Holders or managing underwriter(s), at the offices
where normally kept, during reasonable business hours, financial and other
records, pertinent corporate documents and properties of the Company, and cause
the officers, directors and employees of the Company to supply all information
in each case reasonably requested


 


23

















 


(and of the type customarily provided in connection with due diligence
conducted in connection with a registered public offering of securities) by any
such representative, managing underwriter(s), attorney or accountant in
connection with such Shelf Registration Statement.


 


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


 


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


 


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


 


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


 


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


 


24

















 


(f)            Furnishing
Information.


 


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


 


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


 


(g)           Indemnification.


 


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


 


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


 


25

















 


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 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


 


26
















 


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.


 


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


 


27

















 


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


 


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


 


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


 


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


 


28

















 


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


 


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


 


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


 


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


 


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


 


4.6                                 Voting of
Warrant Shares. Notwithstanding anything in this Agreement to the


 


29

















 


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 ownership of any
other persons (other than the Company or any other Company Subsidiary),
including as


 


30

















 


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


 


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


 


31

















 


respective meanings:


 


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


 


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


 


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


 


Article V


Miscellaneous


 


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


 


32

















 


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


 


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


 


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


 


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


 


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


 


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


 


5.4                                 Waiver of
Conditions. The conditions to each party’s obligation to
consummate the Purchase are for the sole benefit of such party and may be
waived by such party in whole or in part to the extent permitted by applicable
law. No waiver will be effective unless it is in a 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.


 


33

















 


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


 


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


 


If to the Investor:


 


United
States Department of the Treasury 1500 Pennsylvania Avenue, NW, Room 2312  Washington, D.C. 20220 Attention: Assistant
General Counsel (Banking and Finance) Facsimile: (202) 622-1974


 


5.7                                 Definitions


 


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


 


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


 


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


 


34

















 


Company.


 


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


 


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


 


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


 


* * *


 


35
















 


ANNEX A


 


FORM OF CERTIFICATE OF DESIGNATIONS


 


[SEE ATTACHED]


 

















 


ARTICLES OF AMENDMENT


 


OF THE


 


CHARTER, AS AMENDED,


 


OF


 


TENNESSEE COMMERCE BANCORP, INC.


 


Pursuant to the provisions of Section 48-16-102
and 48-20-106 of the Tennessee Business Corporation Act, the undersigned
corporation adopts the following Articles of Amendment to its charter, as
amended:


 


1.             The
name of the corporation (the “Corporation”) is TENNESSEE COMMERCE
BANCORP, INC.


 


2.             The
Corporation’s charter, as amended, is hereby amended by the addition of a new
section 14 stating the number, designation, relative rights, preferences and
limitations of a new series of preferred stock as fixed by the board of
directors, which section shall read in its entirety as follows:


 


14.           Fixed
Rate Cumulative Perpetual Preferred Stock, Series A.


 


(a)           Designation and Number of Shares.
There is hereby created out of the authorized and unissued shares of preferred
stock of the Corporation a series of preferred stock designated as the “Fixed
Rate Cumulative Perpetual Preferred Stock, Series A” (the “Designated
Preferred Stock”). The authorized number of shares of Designated Preferred
Stock shall be 30,000 with a par value of $0.50 per share.


 


(b)           Standard Provisions. The
Standard Provisions contained in Annex A attached hereto are incorporated
herein by reference in their entirety and shall be deemed to be a part of this Section 14
to the same extent as if such provisions had been set forth in full herein.


 


(c)           Definitions. The following
terms are used in this Section 14 (including the Standard Provisions in
Annex A hereto) as defined below:


 


(i)            “Common Stock” means the
common stock, par value $0.50 per share, of the Corporation.


 


(ii)           “Dividend Payment Date” means February 15,
May 15, August 15 and November 15 of each year.


 


(iii)          “Junior Stock” means the Common
Stock and any other class or series of stock of the Corporation the terms of
which expressly provide that it ranks junior to Designated Preferred Stock as
to dividend rights and/or as to rights on liquidation, dissolution or winding
up of the Corporation.


 


(iv)          “Liquidation Amount” means
$1,000 per share of Designated Preferred Stock.


 


(v)           “Minimum Amount” means
$7,500,000.


 


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


 

















 


(vii)         “Signing Date” means the
Original Issue Date.


 


(d)           Certain Voting Matters.
Holders of shares of Designated Preferred Stock will be entitled to one vote
for each such share on any matter on which holders of Designated Preferred
Stock are entitled to vote, including any action by written consent.


 


3.             These
Articles of Amendment were duly adopted by the board of directors of the
Corporation on December 16, 2008. Shareholder action was not required.


 


4.             The
foregoing amendment will become effective upon its filing with the Tennessee
Secretary of State.


 


[Remainder of Page Intentionally Left Blank]


 

















 


IN WITNESS WHEREOF, Tennessee Commerce Bancorp, Inc.
has caused these Articles of Amendment to be signed by
                                                ,
its
                                                        ,
this        day of December, 2008.


 


	
   

  	
  Tennessee Commerce
  Bancorp, Inc.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
					



 

















 


ANNEX A


 


STANDARD PROVISIONS


 


Section 1.               General
Matters. Each share of Designated Preferred Stock shall be identical in all
respects to every other share of Designated Preferred Stock. The Designated
Preferred Stock shall be perpetual, subject to the provisions of Section 5
of these Standard Provisions that form a part of the Articles of Amendment. The
Designated Preferred Stock shall rank equally with Parity Stock and shall rank
senior to Junior Stock with respect to the payment of dividends and the
distribution of assets in the event of any dissolution, liquidation or winding
up of the Corporation.


 


Section 2.               Standard
Definitions. As used herein with respect to Designated Preferred Stock:


 


(a)           “Applicable
Dividend Rate” means (i) during the period from the Original Issue
Date to, but excluding, the first day of the first Dividend Period commencing
on or after the fifth anniversary of the Original Issue Date, 5% per annum and (ii) from
and after the first day of the first Dividend Period commencing on or after the
fifth anniversary of the Original Issue Date, 9% per annum.


 


(b)           “Appropriate
Federal Banking Agency” means the “appropriate Federal banking agency” with
respect to the Corporation as defined in Section 3(q) of the Federal
Deposit Insurance Act (12 U.S.C. Section 1813(q)), or any successor
provision.


 


(c)           “Articles
of Amendment” means the Articles of Amendment or comparable instrument
relating to the Designated Preferred Stock, of which these Standard Provisions
form a part, as it may be amended from time to time.


 


(d)           “Business
Combination” means a merger, consolidation, statutory share exchange or
similar transaction that requires the approval of the Corporation’s
stockholders.


 


(e)           “Business
Day” means 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.


 


(f)            “Bylaws”
means the bylaws of the Corporation, as they may be amended from time to time.


 


(g)           “Charter”
means the Corporation’s charter or similar organizational document.


 


(h)                                 “Dividend Period” has the meaning
set forth in Section 3(a).


 


(i)                                     “Dividend Record Date” has the
meaning set forth in Section 3(a).


 


(j)            “Liquidation
Preference” has the meaning set forth in Section 4(a).


 


(k)           “Original
Issue Date” means the date on which shares of Designated Preferred Stock
are first issued.


 


(l)            “Preferred
Director” has the meaning set forth in Section 7(b).


 


(m)          “Preferred
Stock” means any and all series of preferred stock of the Corporation,
including the Designated Preferred Stock.


 


(n)           “Qualified
Equity Offering” means the sale and issuance for cash by the Corporation to
persons other than the Corporation or any of its subsidiaries after the
Original Issue 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 Corporation at the time of issuance under the
applicable risk-based capital guidelines of the Corporation’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).


 


(o)           “Share
Dilution Amount” has the meaning set forth in Section 3(b).


 

















 


(p)           “Standard
Provisions” mean these Standard Provisions that form a part of the Articles
of Amendment relating to the Designated Preferred Stock.


 


(q)           “Successor
Preferred Stock” has the meaning set forth in Section 5(a).


 


(r)            “Voting
Parity Stock” means, with regard to any matter as to which the holders of
Designated Preferred Stock are entitled to vote as specified in Sections 7(a) and
7(b) of these Standard Provisions that form a part of the Articles of
Amendment, any and all series of Parity Stock upon which like voting rights
have been conferred and are exercisable with respect to such matter.


 


Section 3.                                            Dividends.


 


(a)           Rate.
Holders of Designated Preferred Stock shall be entitled to receive, on each
share of Designated Preferred Stock if, as and when declared by the board of
directors of the Corporation (the “Board of Directors”) or any duly authorized
committee of the Board of Directors, but only out of assets legally available
therefor, cumulative cash dividends with respect to each Dividend Period (as
defined below) at a rate per annum equal to the Applicable Dividend Rate on (i) the
Liquidation Amount per share of Designated Preferred Stock and (ii) the
amount of accrued and unpaid dividends for any prior Dividend Period on such
share of Designated Preferred Stock, if any. Such dividends shall begin to
accrue and be cumulative from the Original Issue Date, shall compound on each
subsequent Dividend Payment Date (i.e.,
no dividends shall accrue on other dividends unless and until the first
Dividend Payment Date for such other dividends has passed without such other
dividends having been paid on such date) and shall be payable quarterly in
arrears on each Dividend Payment Date, commencing with the first such Dividend
Payment Date to occur at least 20 calendar days after the Original Issue Date.
In the event that any Dividend Payment Date would otherwise fall on a day that
is not a Business Day, the dividend payment due on that date will be postponed
to the next day that is a Business Day and no additional dividends will accrue
as a result of that postponement. The period from and including any Dividend
Payment Date to, but excluding, the next Dividend Payment Date is a “Dividend
Period”, provided that the initial Dividend Period shall be the period from
and including the Original Issue Date to, but excluding, the next Dividend
Payment Date.


 


Dividends that are payable on Designated Preferred
Stock in respect of any Dividend Period shall be computed on the basis of a
360-day year consisting of twelve 30-day months. The amount of dividends
payable on Designated Preferred Stock on any date prior to the end of a
Dividend Period, and for the initial Dividend Period, shall be computed on the
basis of a 360-day year consisting of twelve 30-day months, and actual days
elapsed over a 30-day month.


 


Dividends that are payable on Designated Preferred
Stock on any Dividend Payment Date will be payable to holders of record of
Designated Preferred Stock as they appear on the stock register of the
Corporation on the applicable record date, which shall be the 15th calendar day
immediately preceding such Dividend Payment Date or such other record date
fixed by the Board of Directors or any duly authorized committee of the Board
of Directors that is not more than 60 nor less than 10 days prior to such
Dividend Payment Date (each, a “Dividend Record Date”). Any such day
that is a Dividend Record Date shall be a Dividend Record Date whether or not
such day is a Business Day.


 


Holders of Designated Preferred Stock shall not be
entitled to any dividends, whether payable in cash, securities or other
property, other than dividends (if any) declared and payable on Designated
Preferred Stock as specified in this Section 3 (subject to the other
provisions of the Articles of Amendment).


 


(b)           Priority
of Dividends. So long as any share of Designated Preferred Stock remains
outstanding, no dividend or distribution shall be declared or paid on the
Common Stock or any other shares of Junior Stock (other than dividends payable
solely in shares of Common Stock) or Parity Stock, subject to the immediately
following paragraph in the case of Parity Stock, and no Common Stock, Junior
Stock or Parity Stock shall be, directly or indirectly, purchased, redeemed or
otherwise acquired for consideration by the Corporation or any of its
subsidiaries unless all accrued and unpaid dividends for all past Dividend
Periods, including the latest completed Dividend Period (including, if applicable
as provided in Section 3(a) above, dividends on such amount), on all
outstanding shares of Designated Preferred Stock have been or are
contemporaneously declared and paid in full (or have been declared and a sum
sufficient for the payment thereof has been set aside for the benefit of the
holders of shares of Designated Preferred Stock on the applicable record date).
The foregoing limitation shall not apply to (i) redemptions, purchases or
other acquisitions of shares of Common Stock or other Junior Stock 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; (ii) purchases or other acquisitions by a
broker-dealer subsidiary of the Corporation 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; (iii) purchases by a broker-dealer subsidiary of
the Corporation of capital stock of the Corporation for resale pursuant to an offering
by the Corporation of such capital stock underwritten by such broker-dealer
subsidiary; (iv) any dividends or distributions of rights or Junior Stock
in connection with a stockholders’ rights plan or any redemption or repurchase
of rights pursuant to any stockholders’ rights plan; (v) the acquisition
by the Corporation or any of its subsidiaries of record ownership in Junior
Stock or Parity Stock for the beneficial ownership of any other persons (other
than the Corporation or any of its subsidiaries), including as trustees or
custodians; and (vi) the exchange or conversion of Junior Stock for or
into other Junior Stock or of Parity Stock for or into other Parity Stock (with
the same or lesser aggregate liquidation amount) or Junior Stock, in each case,
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. “Share
Dilution Amount” means the increase in the number of diluted shares
outstanding (determined in accordance with generally accepted accounting
principles in the United States, and as measured from the date of the
Corporation’s consolidated financial statements most recently filed with the
Securities and Exchange Commission prior to the Original Issue 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.


 


When dividends are not paid (or declared and a sum
sufficient for payment thereof set aside for the benefit of the holders thereof
on the applicable record date) on any Dividend Payment Date (or, in the case of
Parity Stock having dividend payment dates different from the Dividend Payment
Dates, on a dividend payment date falling within a Dividend Period related to
such Dividend Payment Date) in full upon Designated Preferred Stock and any
shares of Parity Stock, all dividends declared on Designated Preferred Stock
and all such Parity Stock and payable on such Dividend Payment Date (or, in the
case of Parity Stock having dividend payment dates different from the Dividend
Payment Dates, on a dividend payment date falling within the Dividend Period
related to such Dividend Payment Date) shall be declared pro rata so that the respective amounts of
such dividends declared shall bear the same ratio to each other as all accrued
and unpaid dividends per share on the shares of Designated Preferred Stock
(including, if applicable as provided in Section 3(a) above,
dividends on such amount) and all Parity Stock payable on such Dividend Payment
Date (or, in the case of Parity Stock having dividend payment dates different
from the Dividend Payment Dates, on a dividend payment date falling within the
Dividend Period related to such Dividend Payment Date) (subject to their having
been declared by the Board of Directors or a duly authorized committee of the
Board of Directors out of legally available funds and including, in the case of
Parity Stock that bears cumulative dividends, all accrued but unpaid dividends)
bear to each other. If the Board of Directors or a duly authorized committee of
the Board of Directors determines not to pay any dividend or a full dividend on
a Dividend Payment Date, the Corporation will provide written notice to the
holders of Designated Preferred Stock prior to such Dividend Payment Date.


 


Subject to the foregoing, and not otherwise, such
dividends (payable in cash, securities or other property) as may be determined
by the Board of Directors or any duly authorized committee of the Board of
Directors may be declared and paid on any securities, including Common Stock
and other Junior Stock, from time to time out of any funds legally available
for such payment, and holders of Designated Preferred Stock shall not be
entitled to participate in any such dividends.


 


Section 4.                                            Liquidation Rights.


 


(a)           Voluntary
or Involuntary Liquidation. In the event of any liquidation, dissolution or
winding up of the affairs of the Corporation, whether voluntary or involuntary,
holders of Designated Preferred Stock shall be entitled to receive for each
share of Designated Preferred Stock, out of the assets of the Corporation or
proceeds thereof (whether capital or surplus) available for distribution to
stockholders of the Corporation, subject to the rights of any creditors of the
Corporation, before any distribution of such assets or proceeds is made to or
set aside for the holders of Common Stock and any other stock of the
Corporation ranking junior to Designated Preferred Stock as to such
distribution, payment in full in an amount equal to the sum of (i) the
Liquidation Amount per share and (ii) the amount of any accrued and unpaid
dividends (including, if applicable as provided in Section 3(a) above,
dividends on such amount), whether or not declared, to the date of payment
(such amounts collectively, the “Liquidation Preference”).


 


(b)           Partial
Payment. If in any distribution described in Section 4(a) above
the assets of the Corporation or proceeds thereof are not sufficient to pay in
full the amounts payable with respect to all outstanding shares of Designated
Preferred Stock and the corresponding amounts payable with respect of any other
stock of the Corporation ranking equally with Designated Preferred Stock as to
such distribution, holders of Designated Preferred Stock and the holders of
such other stock shall share ratably in any such distribution in proportion to
the full respective distributions to which they are entitled.


 

















 


(c)           Residual
Distributions. If the Liquidation Preference has been paid in full to all
holders of Designated Preferred Stock and the corresponding amounts payable
with respect of any other stock of the Corporation ranking equally with
Designated Preferred Stock as to such distribution has been paid in full, the
holders of other stock of the Corporation shall be entitled to receive all
remaining assets of the Corporation (or proceeds thereof) according to their
respective rights and preferences.


 


(d)           Merger,
Consolidation and Sale of Assets Not Liquidation. For purposes of this Section 4,
the merger or consolidation of the Corporation with any other corporation or
other entity, including a merger or consolidation in which the holders of
Designated Preferred Stock receive cash, securities or other property for their
shares, or the sale, lease or exchange (for cash, securities or other property)
of all or substantially all of the assets of the Corporation, shall not constitute
a liquidation, dissolution or winding up of the Corporation.


 


Section 5.                                            Redemption.


 


(a)           Optional
Redemption. Except as provided below, the Designated Preferred Stock may
not be redeemed prior to the first Dividend Payment Date falling on or after the
third anniversary of the Original Issue Date. On or after the first Dividend
Payment Date falling on or after the third anniversary of the Original Issue
Date, the Corporation, at its option, subject to the approval of the
Appropriate Federal Banking Agency, may redeem, in whole or in part, at any
time and from time to time, out of funds legally available therefor, the shares
of Designated Preferred Stock at the time outstanding, upon notice given as
provided in Section 5(c) below, at a redemption price equal to the sum of (i) the
Liquidation Amount per share and (ii) except as otherwise provided below,
any accrued and unpaid dividends (including, if applicable as provided in Section 3(a) above,
dividends on such amount) (regardless of whether any dividends are actually
declared) to, but excluding, the date fixed for redemption.


 


Notwithstanding the foregoing, prior to the first
Dividend Payment Date falling on or after the third anniversary of the Original
Issue Date, the Corporation, at its option, subject to the approval of the
Appropriate Federal Banking Agency, may redeem, in whole or in part, at any
time and from time to time, the shares of Designated Preferred Stock at the
time outstanding, upon notice given as provided in Section 5(c) below,
at a redemption price equal to the sum of (i) the Liquidation Amount per
share and (ii) except as otherwise provided below, any accrued and unpaid
dividends (including, if applicable as provided in Section 3(a) above,
dividends on such amount) (regardless of whether any dividends are actually
declared) to, but excluding, the date fixed for redemption; provided that (x) the Corporation (or
any successor by Business Combination) has received aggregate gross proceeds of
not less than the Minimum Amount (plus the “Minimum Amount” as defined in the
relevant articles of amendment for each other outstanding series of preferred
stock of such successor that was originally issued to the United States
Department of the Treasury (the “Successor Preferred Stock”) in
connection with the Troubled Asset Relief Program Capital Purchase Program)
from one or more Qualified Equity Offerings (including Qualified Equity
Offerings of such successor), and (y) the aggregate redemption price of
the Designated Preferred Stock (and any Successor Preferred Stock) redeemed
pursuant to this paragraph may not exceed the aggregate net cash proceeds
received by the Corporation (or any successor by Business Combination) from
such Qualified Equity Offerings (including Qualified Equity Offerings of such
successor).


 


The redemption price for any shares of Designated
Preferred Stock shall be payable on the redemption date to the holder of such
shares against surrender of the certificate(s) evidencing such shares to
the Corporation or its agent. Any declared but unpaid dividends payable on a
redemption date that occurs subsequent to the Dividend Record Date for a
Dividend Period shall not be paid to the holder entitled to receive the
redemption price on the redemption date, but rather shall be paid to the holder
of record of the redeemed shares on such Dividend Record Date relating to the
Dividend Payment Date as provided in Section 3 above.


 


(b)           No
Sinking Fund. The Designated Preferred Stock will not be subject to any
mandatory redemption, sinking fund or other similar provisions. Holders of
Designated Preferred Stock will have no right to require redemption or
repurchase of any shares of Designated Preferred Stock.


 


(c)           Notice
of Redemption. Notice of every redemption of shares of Designated Preferred
Stock shall be given by first class mail, postage prepaid, addressed to the
holders of record of the shares to be redeemed at their respective last
addresses appearing on the books of the Corporation. Such mailing shall be at
least 30 days and not more than 60 days before the date fixed for
redemption. Any notice mailed as provided in this Subsection shall be
conclusively presumed to have been duly given, whether or not the holder
receives such notice, but failure duly to give such notice by mail, or any defect
in such notice or in the mailing thereof, to any holder of shares of Designated
Preferred


 

















 


Stock designated for redemption shall not affect the
validity of the proceedings for the redemption of any other shares of
Designated Preferred Stock. Notwithstanding the foregoing, if shares of
Designated Preferred Stock are issued in book-entry form through The Depository
Trust Corporation or any other similar facility, notice of redemption may be
given to the holders of Designated Preferred Stock at such time and in any
manner permitted by such facility. Each notice of redemption given to a holder
shall state: (1) the redemption date; (2) the number of shares of
Designated Preferred Stock to be redeemed and, if less than all the shares held
by such holder are to be redeemed, the number of such shares to be redeemed
from such holder; (3) the redemption price; and (4) the place or
places where certificates for such shares are to be surrendered for payment of
the redemption price.


 


(d)           Partial
Redemption. In case of any redemption of part of the shares of Designated
Preferred Stock at the time outstanding, the shares to be redeemed shall be
selected either pro rata or in
such other manner as the Board of Directors or a duly authorized committee
thereof may determine to be fair and equitable. Subject to the provisions
hereof, the Board of Directors or a duly authorized committee thereof shall
have full power and authority to prescribe the terms and conditions upon which
shares of Designated Preferred Stock shall be redeemed from time to time. If
fewer than all the shares represented by any certificate are redeemed, a new
certificate shall be issued representing the unredeemed shares without charge
to the holder thereof.


 


(e)           Effectiveness
of Redemption. If notice of redemption has been duly given and if on or
before the redemption date specified in the notice all funds necessary for the
redemption have been deposited by the Corporation, in trust for the pro rata benefit of the holders of the
shares called for redemption, with a bank or trust company doing business in
the Borough of Manhattan, The City of New York, and having a capital and
surplus of at least $500 million and selected by the Board of Directors, so as
to be and continue to be available solely therefor, then, notwithstanding that
any certificate for any share so called for redemption has not been surrendered
for cancellation, on and after the redemption date dividends shall cease to
accrue on all shares so called for redemption, all shares so called for redemption
shall no longer be deemed outstanding and all rights with respect to such
shares shall forthwith on such redemption date cease and terminate, except only
the right of the holders thereof to receive the amount payable on such
redemption from such bank or trust company, without interest. Any funds
unclaimed at the end of three years from the redemption date shall, to the
extent permitted by law, be released to the Corporation, after which time the
holders of the shares so called for redemption shall look only to the
Corporation for payment of the redemption price of such shares.


 


(f)            Status
of Redeemed Shares. Shares of Designated Preferred Stock that are redeemed,
repurchased or otherwise acquired by the Corporation shall revert to authorized
but unissued shares of Preferred Stock (provided
that any such cancelled shares of Designated Preferred Stock may be reissued
only as shares of any series of Preferred Stock other than Designated Preferred
Stock).


 


Section 6.               Conversion.
Holders of Designated Preferred Stock shares shall have no right to exchange or
convert such shares into any other securities.


 


Section 7.                                            Voting Rights.


 


(a)           General.
The holders of Designated Preferred Stock shall not have any voting rights
except as set forth below or as otherwise from time to time required by law.


 


(b)           Preferred
Stock Directors. Whenever, at any time or times, dividends payable on the
shares of Designated Preferred Stock have not been paid for an aggregate of six
quarterly Dividend Periods or more, whether or not consecutive, the authorized
number of directors of the Corporation shall automatically be increased by two
and the holders of the Designated Preferred Stock shall have the right, with
holders of shares of any one or more other classes or series of Voting Parity
Stock outstanding at the time, voting together as a class, to elect two
directors (hereinafter the “Preferred Directors” and each a “Preferred
Director”) to fill such newly created directorships at the Corporation’s
next annual meeting of stockholders (or at a special meeting called for that
purpose prior to such next annual meeting) and at each subsequent annual
meeting of stockholders until all accrued and unpaid dividends for all past
Dividend Periods, including the latest completed Dividend Period (including, if
applicable as provided in Section 3(a) above, dividends on such
amount), on all outstanding shares of Designated Preferred Stock have been
declared and paid in full at which time such right shall terminate with respect
to the Designated Preferred Stock, except as herein or by law expressly
provided, subject to revesting in the event of each and every subsequent
default of the character above mentioned; provided
that it shall be a qualification for election for any Preferred Director that
the election of such Preferred Director shall not cause the Corporation to
violate any corporate governance requirements of any securities exchange or
other trading facility on which securities of the Corporation may then be
listed or traded that listed or traded companies must have a majority of
independent directors. Upon any termination of the right of the holders of
shares of Designated Preferred Stock and Voting Parity Stock as a class


 

















 


to vote for directors as provided above, the Preferred
Directors shall cease to be qualified as directors, the term of office of all
Preferred Directors then in office shall terminate immediately and the
authorized number of directors shall be reduced by the number of Preferred
Directors elected pursuant hereto. Any Preferred Director may be removed at any
time, with or without cause, and any vacancy created thereby may be filled,
only by the affirmative vote of the holders a majority of the shares of
Designated Preferred Stock at the time outstanding voting separately as a class
together with the holders of shares of Voting Parity Stock, to the extent the
voting rights of such holders described above are then exercisable. If the
office of any Preferred Director becomes vacant for any reason other than
removal from office as aforesaid, the remaining Preferred Director may choose a
successor who shall hold office for the unexpired term in respect of which such
vacancy occurred.


 


(c)           Class Voting
Rights as to Particular Matters. So long as any shares of Designated
Preferred Stock are outstanding, in addition to any other vote or consent of
stockholders required by law or by the Charter, the vote or consent of the
holders of at least 66 2/3% of the shares of Designated Preferred Stock at the
time outstanding, voting as a separate class, given in person or by proxy,
either in writing without a meeting or by vote at any meeting called for the
purpose, shall be necessary for effecting or validating:


 


(i)            Authorization of Senior Stock.
Any amendment or alteration of the Articles of Amendment for the Designated
Preferred Stock or the Charter to authorize or create or increase the
authorized amount of, or any issuance of, any shares of, or any securities
convertible into or exchangeable or exercisable for shares of, any class or
series of capital stock of the Corporation ranking senior to Designated
Preferred Stock with respect to either or both the payment of dividends and/or
the distribution of assets on any liquidation, dissolution or winding up of the
Corporation;


 


(ii)           Amendment of Designated Preferred
Stock. Any amendment, alteration or repeal of any provision of the Articles
of Amendment for the Designated Preferred Stock or the Charter (including,
unless no vote on such merger or consolidation is required by Section 7(c)(iii) below,
any amendment, alteration or repeal by means of a merger, consolidation or
otherwise) so as to adversely affect the rights, preferences, privileges or
voting powers of the Designated Preferred Stock; or


 


(iii)          Share Exchanges, Reclassifications,
Mergers and Consolidations. Any consummation of a binding share exchange or
reclassification involving the Designated Preferred Stock, or of a merger or
consolidation of the Corporation with another corporation or other entity,
unless in each case (x) the shares of Designated Preferred Stock remain
outstanding or, in the case of any such merger or consolidation with respect to
which the Corporation is not the surviving or resulting entity, are converted
into or exchanged for preference securities of the surviving or resulting
entity or its ultimate parent, and (y) such shares remaining outstanding
or such preference securities, as the case may be, have such rights,
preferences, privileges and voting powers, and limitations and restrictions
thereof, taken as a whole, as are not materially less favorable to the holders
thereof than the rights, preferences, privileges and voting powers, and
limitations and restrictions thereof, of Designated Preferred Stock immediately
prior to such consummation, taken as a whole;


 


provided, however,
that for all purposes of this Section 7(c), any increase in the amount of
the authorized Preferred Stock, including any increase in the authorized amount
of Designated Preferred Stock necessary to satisfy preemptive or similar rights
granted by the Corporation to other persons prior to the Signing Date, or the
creation and issuance, or an increase in the authorized or issued amount,
whether pursuant to preemptive or similar rights or otherwise, of any other
series of Preferred Stock, or any securities convertible into or exchangeable
or exercisable for any other series of Preferred Stock, ranking equally with
and/or junior to Designated Preferred Stock with respect to the payment of
dividends (whether such dividends are cumulative or non-cumulative) and the
distribution of assets upon liquidation, dissolution or winding up of the
Corporation will not be deemed to adversely affect the rights, preferences,
privileges or voting powers, and shall not require the affirmative vote or
consent of, the holders of outstanding shares of the Designated Preferred
Stock.


 


(d)           Changes
after Provision for Redemption. No vote or consent of the holders of
Designated Preferred Stock shall be required pursuant to Section 7(c) above
if, at or prior to the time when any such vote or consent would otherwise be
required pursuant to such Section, all outstanding shares of the Designated
Preferred Stock shall have been redeemed, or shall have been called for
redemption upon proper notice and sufficient funds shall have been deposited in
trust for such redemption, in each case pursuant to Section 5 above.


 


(e)           Procedures
for Voting and Consents. The rules and procedures for calling and
conducting any meeting of the holders of Designated Preferred Stock (including,
without limitation, the fixing of a record date in connection therewith), the
solicitation and use of proxies at such a meeting, the obtaining of written
consents and any other aspect or matter with


 

















 


regard to such a meeting or such consents shall be
governed by any rules of the Board of Directors or any duly authorized
committee of the Board of Directors, in its discretion, may adopt from time to
time, which rules and procedures shall conform to the requirements of the
Charter, the Bylaws, and applicable law and the rules of any national
securities exchange or other trading facility on which Designated Preferred
Stock is listed or traded at the time.


 


Section 8.               Record
Holders. To the fullest extent permitted by applicable law, the Corporation
and the transfer agent for Designated Preferred Stock may deem and treat the
record holder of any share of Designated Preferred Stock as the true and lawful
owner thereof for all purposes, and neither the Corporation nor such transfer
agent shall be affected by any notice to the contrary.


 


Section 9.               Notices.
All notices or communications in respect of Designated Preferred Stock shall be
sufficiently given if given in writing and delivered in person or by first
class mail, postage prepaid, or if given in such other manner as may be
permitted in this Articles of Amendment, in the Charter or Bylaws or by
applicable law. Notwithstanding the foregoing, if shares of Designated
Preferred Stock are issued in book-entry form through The Depository Trust
Corporation or any similar facility, such notices may be given to the holders
of Designated Preferred Stock in any manner permitted by such facility.


 


Section 10.             No
Preemptive Rights. No share of Designated Preferred Stock shall have any
rights of preemption whatsoever as to any securities of the Corporation, or any
warrants, rights or options issued or granted with respect thereto, regardless
of how such securities, or such warrants, rights or options, may be designated,
issued or granted.


 


Section 11.             Replacement
Certificates. The Corporation shall replace any mutilated certificate at
the holder’s expense upon surrender of that certificate to the Corporation. The
Corporation shall replace certificates that become destroyed, stolen or lost at
the holder’s expense upon delivery to the Corporation of reasonably
satisfactory evidence that the certificate has been destroyed, stolen or lost,
together with any indemnity that may be reasonably required by the Corporation.


 


Section 12.             Other
Rights. The shares of Designated Preferred Stock shall not have any rights,
preferences, privileges or voting powers or relative, participating, optional
or other special rights, or qualifications, limitations or restrictions
thereof, other than as set forth herein or in the Charter or as provided by
applicable law.


 

















 


ANNEX B


 


FORM OF WAIVER


 


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


 


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


 


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


 
















 


ANNEX C


 


FORM OF OPINION


 


(1)           The Company has been duly
incorporated and is validly existing as a corporation in good standing under
the laws of the State of Tennessee.


 


(2)           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.


 


(3)           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.


 


(4)           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.


 


(5)           The Company has the corporate power
and authority to execute and deliver the Agreement and the Warrant and to carry
out its obligations thereunder (which includes the issuance of the Preferred
Shares, Warrant and Warrant Shares).


 


(6)           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
shareholders, and no further approval or authorization is required on the part
of the Company.


 


(7)           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.


 

















 


ANNEX D


 


FORM OF WARRANT


 


[SEE ATTACHED]


 

















 


ANNEX D


 


FORM OF WARRANT TO PURCHASE COMMON STOCK


 


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.  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.


 


WARRANT


to purchase


461,538


Shares of Common Stock


of Tennessee Commerce Bancorp, Inc.


 


Issue Date: December 19, 2008


 


1. Definitions.
Unless the context otherwise requires, when used herein the following terms
shall have the meanings indicated.


 


“Affiliate” has the meaning ascribed to it
in the Purchase Agreement.


 


“Appraisal Procedure” means a procedure
whereby two independent appraisers, one chosen by the Company and one by the
Original Warrantholder, shall mutually agree upon the determinations then the
subject of appraisal.  Each party shall
deliver a notice to the other appointing its appraiser within 15 days after the
Appraisal Procedure is invoked.  If
within 30 days after appointment of the two appraisers they are unable to agree
upon the amount in question, 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 Original Warrantholder; otherwise, the


 

















 


average of all
three determinations shall be binding upon the Company and the Original
Warrantholder.  The costs of conducting
any Appraisal Procedure shall be borne by the Company.


 


“Board of Directors” means the board of
directors of the Company, including any duly authorized committee thereof.


 


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


 


“business day” means 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.


 


“Capital Stock” means (A) with respect
to any Person that is a corporation or company, any and all shares, interests,
participations or other equivalents (however designated) of capital or capital
stock of such Person and (B) with respect to any Person that is not a
corporation or company, any and all partnership or other equity interests of
such Person.


 


“Charter” means, with respect to any
Person, its certificate or articles of incorporation, articles of association,
or similar organizational document.


 


“Common Stock” has the meaning ascribed to
it in the Purchase Agreement.


 


“Company” means the Person whose name,
corporate or other organizational form and jurisdiction of organization is set
forth in Item 1 of Schedule A hereto.


 


“conversion” has the meaning set forth in Section 13(B).


 


“convertible securities” has the meaning
set forth in Section 13(B).


 


“CPP” has the meaning ascribed to it in the
Purchase Agreement.


 


“Exchange Act” means the Securities
Exchange Act of 1934, as amended, or any successor statute, and the rules and
regulations promulgated thereunder.


 


“Exercise Price” means the amount set forth
in Item 2 of Schedule A hereto.


 


“Expiration Time” has the meaning set forth
in Section 3.


 


“Fair Market Value” means, with respect to
any security or other property, the fair market value of such security or other
property as determined by the Board of Directors, acting in good faith or, with
respect to Section 14, as determined by the Original Warrantholder acting
in good faith. For so long as the Original Warrantholder holds this Warrant or
any portion thereof, it may object in writing to the Board of Director’s
calculation of fair market value within 10 days of receipt of written notice
thereof.  If the Original Warrantholder
and the Company are unable to agree on fair market value during the 10-day
period following the delivery of the Original Warrantholder’s objection, the
Appraisal Procedure may be invoked by either party to determine Fair Market
Value by delivering written notification thereof not later than the 30th day after delivery of the Original
Warrantholder’s objection.


 

















 


“Governmental Entities” has the meaning
ascribed to it in the Purchase Agreement.


 


“Initial Number” has the meaning set forth
in Section 13(B).


 


“Issue Date” means the date set forth in Item
3 of Schedule A hereto.


 


“Market Price” means, with respect to a
particular security, on any given day, the last reported sale price regular way
or, in case no such reported sale takes place on such day, the average of the last
closing bid and ask prices regular way, in either case on the principal
national securities exchange on which the applicable securities are listed or
admitted to trading, or if not listed or admitted to trading on any national
securities exchange, the average of the closing bid and ask prices as furnished
by two members of the Financial Industry Regulatory Authority, Inc.
selected from time to time by the Company for that purpose.  “Market Price” shall be determined without
reference to after hours or extended hours trading. If such security is not
listed and traded in a manner that the quotations referred to above are
available for the period required hereunder, the Market Price per share of
Common Stock shall be deemed to be (i) in the event that any portion of
the Warrant is held by the Original Warrantholder, the fair market value per
share of such security as determined in good faith by the Original
Warrantholder or (ii) in all other circumstances, the fair market value
per share of such security as determined in good faith by the Board of
Directors in reliance on an opinion of a nationally recognized independent
investment banking corporation retained by the Company for this purpose and
certified in a resolution to the Warrantholder. 
For the purposes of determining the Market Price of the Common Stock on
the “trading day” preceding, on or following the occurrence of an event, (i) that
trading day shall be deemed to commence immediately after the regular scheduled
closing time of trading on the New York Stock Exchange or, if trading is closed
at an earlier time, such earlier time and (ii) that trading day shall end
at the next regular scheduled closing time, or if trading is closed at an
earlier time, such earlier time (for the avoidance of doubt, and as an example,
if the Market Price is to be determined as of the last trading day preceding a
specified event and the closing time of trading on a particular day is 4:00 p.m.
and the specified event occurs at 5:00 p.m. on that day, the Market Price
would be determined by reference to such 4:00 p.m. closing price).


 


“Ordinary Cash Dividends” means a regular
quarterly cash dividend on shares of Common Stock out of surplus or net profits
legally available therefor (determined in accordance with generally accepted
accounting principles in effect from time to time), provided that Ordinary Cash Dividends shall not include any
cash dividends paid subsequent to the Issue Date to the extent the aggregate
per share dividends paid on the outstanding Common Stock in any quarter exceed
the amount set forth in Item 4 of Schedule A hereto, as adjusted for any stock
split, stock dividend, reverse stock split, reclassification or similar
transaction.


 


“Original Warrantholder” means the United
States Department of the Treasury.  Any
actions specified to be taken by the Original Warrantholder hereunder may only
be taken by such Person and not by any other Warrantholder.


 


“Permitted Transactions” has the meaning
set forth in Section 13(B).


 


“Person” has the meaning given to it in Section 3(a)(9) of
the Exchange Act and as used in Sections 13(d)(3) and 14(d)(2) of the
Exchange Act.


 


“Per Share Fair Market Value” has the
meaning set forth in Section 13(C).


 

















 


“Preferred Shares” means the perpetual
preferred stock issued to the Original Warrantholder on the Issue Date pursuant
to the Purchase Agreement.


 


“Pro Rata Repurchases” means any purchase
of shares of Common Stock by the Company or any Affiliate thereof pursuant to (A) any
tender offer or exchange offer subject to Section 13(e) or 14(e) of
the Exchange Act or Regulation 14E promulgated thereunder or (B) any other
offer available to substantially all holders of Common Stock, in the case of
both (A) or (B), whether for cash, shares of Capital Stock of the Company,
other securities of the Company, evidences of indebtedness of the Company or
any other Person or any other property (including, without limitation, shares
of Capital Stock, other securities or evidences of indebtedness of a
subsidiary), or any combination thereof, effected while this Warrant is
outstanding.  The “Effective Date” of a Pro Rata Repurchase
shall mean the date of acceptance of shares for purchase or exchange by the
Company under any tender or exchange offer which is a Pro Rata Repurchase or
the date of purchase with respect to any Pro Rata Repurchase that is not a
tender or exchange offer.


 


“Purchase Agreement” means the Securities
Purchase Agreement — Standard Terms incorporated into the Letter Agreement,
dated as of the date set forth in Item 5 of Schedule A hereto, as amended from
time to time, between the Company and the United States Department of the
Treasury (the “Letter Agreement”),
including all annexes and schedules thereto.


 


“Qualified Equity Offering” has the meaning
ascribed to it in the Purchase Agreement.


 


“Regulatory Approvals” with respect to the
Warrantholder, means, to the extent applicable and required to permit the
Warrantholder to exercise this Warrant for shares of Common Stock and to own
such Common Stock without the Warrantholder being in violation of applicable
law, rule or regulation, the receipt of any necessary approvals and
authorizations of, filings and registrations with, notifications to, or
expiration or termination of any applicable waiting period under, the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and
regulations thereunder.


 


“SEC” means the U.S. Securities and
Exchange Commission.


 


“Securities Act” means the Securities Act
of 1933, as amended, or any successor statute, and the rules and regulations
promulgated thereunder.


 


“Shares” has the meaning set forth in Section 2.


 


“trading day” means (A) if the shares of
Common Stock are not traded on any national or regional securities exchange or
association or over-the-counter market, 
a business day or (B) if the shares of Common Stock are traded on
any national or regional securities exchange or association or over-the-counter
market, a business day on which such relevant exchange or quotation system is
scheduled to be open for business and on which the shares of  Common Stock (i) are not suspended from
trading on any national or regional securities exchange or association or
over-the-counter market for any period or periods aggregating one half hour or
longer; and (ii) have traded at least once on the national or regional
securities exchange or association or over-the-counter market that is the
primary market for the trading of the shares of Common Stock.


 


“U.S. GAAP” means United States generally
accepted accounting principles.


 

















 


“Warrantholder” has the meaning set forth
in Section 2.


 


“Warrant” means this Warrant, issued
pursuant to the Purchase Agreement.


 


2.             Number of
Shares; Exercise Price. This certifies that, for value received, the United
States Department of the Treasury or its permitted assigns (the “Warrantholder”) is entitled, upon the
terms and subject to the conditions hereinafter set forth, to acquire from the
Company, in whole or in part, after the receipt of all applicable Regulatory
Approvals, if any, up to an aggregate of the number of fully paid and
nonassessable shares of Common Stock set forth in Item 6 of Schedule A hereto,
at a purchase price per share of Common Stock equal to the Exercise Price.  The number of shares of Common Stock (the “Shares”) and the Exercise Price are
subject to adjustment as provided herein, and all references to “Common Stock,”
“Shares” and “Exercise Price” herein shall be deemed to include any such
adjustment or series of adjustments.


 


3.             Exercise of
Warrant; Term. Subject to Section 2, to the extent permitted by
applicable laws and regulations, the right to purchase the Shares represented
by this Warrant is exercisable, in whole or in part by the Warrantholder, at
any time or from time to time after the execution and delivery of this Warrant
by the Company on the date hereof, but in no event later than 5:00 p.m.,
New York City time on the tenth anniversary of the Issue Date (the “Expiration Time”), by (A) the
surrender of this Warrant and Notice of Exercise annexed hereto, duly completed
and executed on behalf of the Warrantholder, at the principal executive office
of the Company located at the address set forth in Item 7 of Schedule A hereto
(or such other office or agency of the Company in the United States as it may
designate by notice in writing to the Warrantholder at the address of the
Warrantholder appearing on the books of the Company), and (B) payment of
the Exercise Price for the Shares thereby purchased:


 


(i) by
having the Company withhold, from the shares of Common Stock that would otherwise
be delivered to the Warrantholder upon such exercise, shares of Common stock
issuable upon exercise of the Warrant equal in value to the aggregate Exercise
Price as to which this Warrant is so exercised based on the Market Price of the
Common Stock on the trading day on which this Warrant is exercised and the
Notice of Exercise is delivered to the Company pursuant to this Section 3,
or


 


(ii) with
the consent of both the Company and the Warrantholder, by tendering in cash, by
certified or cashier’s check payable to the order of the Company, or by wire
transfer of immediately available funds to an account designated by the
Company.


 


If the
Warrantholder does not exercise this Warrant in its entirety, the Warrantholder
will be entitled to receive from the Company within a reasonable time, and in
any event not exceeding three business days, a new warrant in substantially
identical form for the purchase of that number of Shares equal to the
difference between the number of Shares subject to this Warrant and the number
of Shares as to which this Warrant is so exercised.  Notwithstanding anything in this Warrant to
the contrary, the Warrantholder hereby acknowledges and agrees that its
exercise of this Warrant for Shares is subject to the condition that the Warrantholder
will have first received any applicable Regulatory Approvals.


 


4.             Issuance of
Shares; Authorization; Listing. Certificates for Shares issued upon
exercise of this Warrant will be issued in such name or names as the
Warrantholder may designate and will be delivered to such named Person or
Persons within a reasonable time, not to exceed three business days after the
date on which this Warrant has been duly exercised in accordance with the terms
of this Warrant.  The Company hereby
represents and warrants that any Shares issued upon the exercise of this


 

















 


Warrant in
accordance with the provisions of Section 3 will be duly and validly
authorized and issued, fully paid and nonassessable and free from all taxes,
liens and charges (other than liens or charges created by the Warrantholder,
income and franchise taxes incurred in connection with the exercise of the
Warrant or taxes in respect of any transfer occurring contemporaneously
therewith). The Company agrees that the Shares so issued will be deemed to have
been issued to the Warrantholder as of the close of business on the date on
which this Warrant and payment of the Exercise Price are delivered to the
Company in accordance with the terms of this Warrant, notwithstanding that the
stock transfer books of the Company may then be closed or certificates
representing such Shares may not be actually delivered on such date.  The Company will at all times reserve and
keep available, out of its authorized but unissued Common Stock, solely for the
purpose of providing for the exercise of this Warrant, the aggregate number of
shares of Common Stock then issuable upon exercise of this Warrant at any
time.  The Company will (A) procure,
at its sole expense, the listing of the Shares issuable upon exercise of this Warrant
at any time, subject to issuance or notice of issuance, on all principal stock
exchanges on which the Common Stock is then listed or traded and (B) maintain
such listings of such Shares at all times after issuance.  The Company will use reasonable best efforts
to ensure that the Shares may be issued without violation of any applicable law
or regulation or of any requirement of any securities exchange on which the
Shares are listed or traded.


 


5.             No Fractional
Shares or Scrip. No fractional Shares or scrip representing fractional
Shares shall be issued upon any exercise of this Warrant.  In lieu of any fractional Share to which the
Warrantholder would otherwise be entitled, the Warrantholder shall be entitled
to receive a cash payment equal to the Market Price of the Common Stock on the
last trading day preceding the date of exercise less the pro-rated Exercise
Price for such fractional share.


 


6.             No Rights as
Stockholders; Transfer Books. This Warrant does not entitle the
Warrantholder to any voting rights or other rights as a stockholder of the
Company prior to the date of exercise hereof. The Company will at no time close
its transfer books against transfer of this Warrant in any manner which
interferes with the timely exercise of this Warrant.


 


7.             Charges, Taxes
and Expenses. Issuance of certificates for Shares to the Warrantholder upon
the exercise of this Warrant shall be made without charge to the Warrantholder
for any issue or transfer tax or other incidental expense in respect of the
issuance of such certificates, all of which taxes and expenses shall be paid by
the Company.


 


8.             Transfer/Assignment.


 


(A)          Subject to compliance with clause (B) of
this Section 8, this Warrant and all rights hereunder are transferable, in
whole or in part, upon the books of the Company by the registered holder hereof
in person or by duly authorized attorney, and a new warrant shall be made and
delivered by the Company, of the same tenor and date as this Warrant but
registered in the name of one or more transferees, upon surrender of this
Warrant, duly endorsed, to the office or agency of the Company described in Section 3.  All expenses (other than stock transfer
taxes) and other charges payable in connection with the preparation, execution
and delivery of the new warrants pursuant to this Section 8 shall be paid
by the Company.


 


(B)           The transfer of the Warrant and the
Shares issued upon exercise of the Warrant are subject to the restrictions set
forth in Section 4.4 of the Purchase Agreement.  If and for so long as required by the
Purchase Agreement, this Warrant shall contain the legends as set forth in
Sections 4.2(a) and 4.2(b) of the Purchase Agreement.


 

















 


9.             Exchange and
Registry of Warrant. This Warrant is exchangeable, upon the surrender
hereof by the Warrantholder to the Company, for a new warrant or warrants of
like tenor and representing the right to purchase the same aggregate number of
Shares.  The Company shall maintain a
registry showing the name and address of the Warrantholder as the registered
holder of this Warrant. This Warrant may be surrendered for exchange or
exercise in accordance with its terms, at the office of the Company, and the
Company shall be entitled to rely in all respects, prior to written notice to
the contrary, upon such registry.


 


10.           Loss, Theft,
Destruction or Mutilation of Warrant. Upon receipt by the Company of
evidence reasonably satisfactory to it of the loss, theft, destruction or
mutilation of this Warrant, and in the case of any such loss, theft or
destruction, upon receipt of a bond, indemnity or security reasonably
satisfactory to the Company, or, in the case of any such mutilation, upon
surrender and cancellation of this Warrant, the Company shall make and deliver,
in lieu of such lost, stolen, destroyed or mutilated Warrant, a new Warrant of
like tenor and representing the right to purchase the same aggregate number of
Shares as provided for in such lost, stolen, destroyed or mutilated Warrant.


 


11.           Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any
action or the expiration of any right required or granted herein shall not be a
business day, then such action may be taken or such right may be exercised on
the next succeeding day that is a business day.


 


12.           Rule 144
Information. The Company covenants that it will use its reasonable best
efforts to timely file all reports and other documents required to be filed by
it under the Securities Act and the Exchange Act and the rules and
regulations promulgated by the SEC thereunder (or, if the Company is not
required to file such reports, it will, upon the request of any Warrantholder,
make publicly available such information as necessary to permit sales pursuant
to Rule 144 under the Securities Act), and it will use reasonable best
efforts to take such further action as any Warrantholder may reasonably
request, in each case to the extent required from time to time to enable such
holder to, if permitted by the terms of this Warrant and the Purchase
Agreement, sell this Warrant without registration under the Securities Act
within the limitation of the exemptions provided by (A) Rule 144
under the Securities Act, as such rule may be amended from time to time,
or (B) any successor rule or regulation hereafter adopted by the SEC.
Upon the written request of any Warrantholder, the Company will deliver to such
Warrantholder a written statement that it has complied with such requirements.


 


13.           Adjustments and
Other Rights. The Exercise Price and the number of Shares issuable upon
exercise of this Warrant shall be subject to adjustment from time to time as
follows; provided, that if more
than one subsection of this Section 13 is applicable to a single event,
the subsection shall be applied that produces the largest adjustment and no
single event shall cause an adjustment under more than one subsection of this Section 13
so as to result in duplication:


 


(A)          Stock Splits, Subdivisions,
Reclassifications or Combinations. If the Company shall (i) declare
and pay a dividend or make a distribution on its Common Stock in shares of
Common Stock, (ii) subdivide or reclassify the outstanding shares of
Common Stock into a greater number of shares, or (iii) combine or
reclassify the outstanding shares of Common Stock into a smaller number of
shares, the number of Shares issuable upon exercise of this Warrant at the time
of the record date for such dividend or distribution or the effective date of
such subdivision, combination or reclassification shall be proportionately
adjusted so that the Warrantholder after such date shall be entitled to
purchase the number of shares of Common Stock which such holder would have
owned or been entitled to receive in respect of the shares of Common Stock
subject to this Warrant after such date had this Warrant been


 

















 


exercised
immediately prior to such date.  In such
event, the Exercise Price in effect at the time of the record date for such
dividend or distribution or the effective date of such subdivision, combination
or reclassification shall be adjusted to the number obtained by dividing (x) the
product of (1) the number of Shares issuable upon the exercise of this
Warrant before such adjustment and (2) the Exercise Price in effect
immediately prior to the record or effective date, as the case may be, for the
dividend, distribution, subdivision, combination or reclassification giving
rise to this adjustment by (y) the new number of Shares issuable upon
exercise of the Warrant determined pursuant to the immediately preceding
sentence.


 


(B)           Certain Issuances of Common Shares
or Convertible Securities. Until the earlier of (i) the date on which
the Original Warrantholder no longer holds this Warrant or any portion thereof
and (ii) the third anniversary of the Issue Date, if the Company shall
issue shares of Common Stock (or rights or warrants or other securities
exercisable or convertible into or exchangeable (collectively, a “conversion”) for shares of Common Stock)
(collectively, “convertible securities”)
(other than in Permitted Transactions (as defined below) or a transaction to
which subsection (A) of this Section 13 is applicable) without
consideration or at a consideration per share (or having a conversion price per
share) that is less than 90% of the Market Price on the last trading day
preceding the date of the agreement on pricing such shares (or such convertible
securities) then, in such event:


 


(A) the
number of Shares issuable upon the exercise of this Warrant immediately prior
to the date of the agreement on pricing of such shares (or of such convertible
securities) (the “Initial Number”)
shall be increased to the number obtained by multiplying the Initial Number by
a fraction (A) the numerator of which shall be the sum of (x) the
number of shares of Common Stock of the Company outstanding on such date and (y) the
number of additional shares of Common Stock issued (or into which convertible
securities may be exercised or convert) and (B) the denominator of which
shall be the sum of (I) the number of shares of Common Stock outstanding
on such date and (II) the number of shares of Common Stock which the
aggregate consideration receivable by the Company for the total number of
shares of Common Stock so issued (or into which convertible securities may be
exercised or convert) would purchase at the Market Price on the last trading
day preceding the date of the agreement on pricing such shares (or such
convertible securities); and


 


(B) the
Exercise Price payable upon exercise of the Warrant shall be adjusted by
multiplying such Exercise Price in effect immediately prior to the date of the
agreement on pricing of such shares (or of such convertible securities) by a
fraction, the numerator of which shall be the number of shares of Common Stock
issuable upon exercise of this Warrant prior to such date and the denominator
of which shall be the number of shares of Common Stock issuable upon exercise
of this Warrant immediately after the adjustment described in clause (A) above.


 


For purposes
of the foregoing, the aggregate consideration receivable by the Company in
connection with the issuance of such shares of Common Stock or convertible
securities shall be deemed to be equal to the sum of the net offering price
(including the Fair Market Value of any non-cash consideration and after
deduction of any related expenses payable to third parties) of all such
securities plus the minimum aggregate amount, if any, payable upon exercise or
conversion of any such convertible securities into shares of Common Stock; and “Permitted Transactions” shall mean
issuances (i) as consideration for or to fund the acquisition of
businesses and/or related assets, (ii) in connection with employee benefit
plans and compensation related arrangements in the ordinary course and
consistent with past practice approved by the Board of Directors, (iii) in
connection with a public or broadly marketed offering and sale of Common Stock
or convertible securities for cash conducted by


 

















 


the Company or
its affiliates pursuant to registration under the Securities Act or Rule 144A
thereunder on a basis consistent with capital raising transactions by
comparable financial institutions and (iv) in connection with the exercise
of preemptive rights on terms existing as of the Issue Date.  Any adjustment made pursuant to this Section 13(B) shall
become effective immediately upon the date of such issuance.


 


(C)           Other Distributions. In case
the Company shall fix a record date for the making of a distribution to all
holders of shares of its Common Stock of securities, evidences of indebtedness,
assets, cash, rights or warrants (excluding Ordinary Cash Dividends, dividends
of its Common Stock and other dividends or distributions referred to in Section 13(A)),
in each such case, the Exercise Price in effect prior to such record date shall
be reduced immediately thereafter to the price determined by multiplying the
Exercise Price in effect immediately prior to the reduction by the quotient of (x) the
Market Price of the Common Stock on the last trading day preceding the first
date on which the Common Stock trades regular way on the principal national
securities exchange on which the Common Stock is listed or admitted to trading
without the right to receive such distribution, minus the amount of cash and/or
the Fair Market Value of the securities, evidences of indebtedness, assets,
rights or warrants to be so distributed in respect of one share of Common Stock
(such amount and/or Fair Market Value, the “Per
Share Fair Market Value”) divided by (y) such Market Price on
such date specified in clause (x); such adjustment shall be made successively
whenever such a record date is fixed.  In
such event, the number of Shares issuable upon the exercise of this Warrant
shall be increased to the number obtained by dividing (x) the product of (1) the
number of Shares issuable upon the exercise of this Warrant before such adjustment,
and (2) the Exercise Price in effect immediately prior to the distribution
giving rise to this adjustment by (y) the new Exercise Price determined in
accordance with the immediately preceding sentence.  In the case of adjustment for a cash dividend
that is, or is coincident with, a regular quarterly cash dividend, the Per
Share Fair Market Value would be reduced by the per share amount of the portion
of the cash dividend that would constitute an Ordinary Cash Dividend. In the
event that such distribution is not so made, the Exercise Price and the number
of Shares issuable upon exercise of this Warrant then in effect shall be
readjusted, effective as of the date when the Board of Directors determines not
to distribute such shares, evidences of indebtedness, assets, rights, cash or
warrants, as the case may be, to the Exercise Price that would then be in
effect and the number of Shares that would then be issuable upon exercise of
this Warrant if such record date had not been fixed.


 


(D)          Certain Repurchases of Common Stock.
In case the Company effects a Pro Rata Repurchase of Common Stock, then the
Exercise Price shall be reduced to the price determined by multiplying the
Exercise Price in effect immediately prior to the Effective Date of such Pro
Rata Repurchase by a fraction of which the numerator shall be (i) the
product of (x) the number of shares of Common Stock outstanding
immediately before such Pro Rata Repurchase and (y) the Market Price of a
share of Common Stock on the trading day immediately preceding the first public
announcement by the Company or any of its Affiliates of the intent to effect
such Pro Rata Repurchase, minus (ii) the aggregate purchase price of the
Pro Rata Repurchase, and of which the denominator shall be the product of (i) the
number of shares of Common Stock outstanding immediately prior to such Pro Rata
Repurchase minus the number of shares of Common Stock so repurchased and (ii) the
Market Price per share of Common Stock on the trading day immediately preceding
the first public announcement by the Company or any of its Affiliates of the
intent to effect such Pro Rata Repurchase. 
In such event, the number of shares of Common Stock issuable upon the
exercise of this Warrant shall be increased to the number obtained by dividing (x) the
product of (1) the number of Shares issuable upon the exercise of this
Warrant before such adjustment, and (2) the Exercise Price in effect
immediately prior to the Pro Rata Repurchase giving rise to this adjustment by (y) the
new Exercise Price determined in accordance


 

















 


with the
immediately preceding sentence.  For the
avoidance of doubt, no increase to the Exercise Price or decrease in the number
of Shares issuable upon exercise of this Warrant shall be made pursuant to this
Section 13(D).


 


(E)           Business Combinations. In case
of any Business Combination or reclassification of Common Stock (other than a
reclassification of Common Stock referred to in Section 13(A)), the
Warrantholder’s right to receive Shares upon exercise of this Warrant shall be
converted into the right to exercise this Warrant to acquire the number of
shares of stock or other securities or property (including cash) which the
Common Stock issuable (at the time of such Business Combination or
reclassification) upon exercise of this Warrant immediately prior to such
Business Combination or reclassification would have been entitled to receive
upon consummation of such Business Combination or reclassification; and in any
such case, if necessary, the provisions set forth herein with respect to the
rights and interests thereafter of the Warrantholder shall be appropriately
adjusted so as to be applicable, as nearly as may reasonably be, to the
Warrantholder’s right to exercise this Warrant in exchange for any shares of
stock or other securities or property pursuant to this paragraph.  In determining the kind and amount of stock,
securities or the property receivable upon exercise of this Warrant following
the consummation of such Business Combination, if the holders of Common Stock
have the right to elect the kind or amount of consideration receivable upon
consummation of such Business Combination, then the consideration that the
Warrantholder shall be entitled to receive upon exercise shall be deemed to be
the types and amounts of consideration received by the majority of all holders
of the shares of common stock that affirmatively make an election (or of all
such holders if none make an election).


 


(F)           Rounding of Calculations; Minimum
Adjustments. All calculations under this Section 13 shall be made to
the nearest one-tenth (1/10th) of a cent or to the nearest one-hundredth
(1/100th) of a share, as the case may be. 
Any provision of this Section 13 to the contrary notwithstanding,
no adjustment in the Exercise Price or the number of Shares into which this
Warrant is exercisable shall be made if the amount of such adjustment would be
less than $0.01 or one-tenth (1/10th) of a share of Common Stock, but any such
amount shall be carried forward and an adjustment with respect thereto shall be
made at the time of and together with any subsequent adjustment which, together
with such amount and any other amount or amounts so carried forward, shall
aggregate $0.01 or 1/10th of a share of Common Stock, or more.


 


(G)           Timing of Issuance of Additional
Common Stock Upon Certain Adjustments. In any case in which the provisions
of this Section 13 shall require that an adjustment shall become effective
immediately after a record date for an event, the Company may defer until the
occurrence of such event (i) issuing to the Warrantholder of this Warrant
exercised after such record date and before the occurrence of such event the
additional shares of Common Stock issuable upon such exercise by reason of the
adjustment required by such event over and above the shares of Common Stock
issuable upon such exercise before giving effect to such adjustment and (ii) paying
to such Warrantholder any amount of cash in lieu of a fractional share of
Common Stock; provided, however, that the Company upon request
shall deliver to such Warrantholder a due bill or other appropriate instrument
evidencing such Warrantholder’s right to receive such additional shares, and
such cash, upon the occurrence of the event requiring such adjustment.


 


(H)          Completion of Qualified Equity Offering.
In the event the Company (or any successor by Business Combination) completes
one or more Qualified Equity Offerings on or prior to December 31, 2009
that result in the Company (or any such successor ) receiving aggregate gross
proceeds of not less than 100% of the aggregate liquidation preference of the
Preferred Shares (and any preferred stock


 
















 


issued by any such successor to the Original Warrantholder under the
CPP), the number of shares of Common Stock underlying the portion of this
Warrant then held by the Original Warrantholder shall be thereafter reduced by
a number of shares of Common Stock equal to the product of (i) 0.5 and (ii) the
number of shares underlying the Warrant on the Issue Date (adjusted to take
into account all other theretofore made adjustments pursuant to this Section 13).


 


(I)            Other Events.
For so long as the Original Warrantholder holds this Warrant or any portion
thereof, if any event occurs as to which the provisions of this Section 13
are not strictly applicable or, if strictly applicable, would not, in the good
faith judgment of the Board of Directors of the Company, fairly and adequately
protect the purchase rights of the Warrants in accordance with the essential
intent and principles of such provisions, then the Board of Directors shall
make such adjustments in the application of such provisions, in accordance with
such essential intent and principles, as shall be reasonably necessary, in the
good faith opinion of the Board of Directors, to protect such purchase rights
as aforesaid.  The Exercise Price or the
number of Shares into which this Warrant is exercisable shall not be adjusted
in the event of a change in the par value of the Common Stock or a change in
the jurisdiction of incorporation of the Company.


 


(J)            Statement Regarding
Adjustments. Whenever the Exercise Price or the number of Shares into which
this Warrant is exercisable shall be adjusted as provided in Section 13,
the Company shall forthwith file at the principal office of the Company a
statement showing in reasonable detail the facts requiring such adjustment and
the Exercise Price that shall be in effect and the number of Shares into which
this Warrant shall be exercisable after such adjustment, and the Company shall
also cause a copy of such statement to be sent by mail, first class postage
prepaid, to each Warrantholder at the address appearing in the Company’s
records.


 


(K)          Notice of Adjustment
Event. In the event that the Company shall propose to take any action of
the type described in this Section 13 (but only if the action of the type
described in this Section 13 would result in an adjustment in the Exercise
Price or the number of Shares into which this Warrant is exercisable or a
change in the type of securities or property to be delivered upon exercise of
this Warrant), the Company shall give notice to the Warrantholder, in the
manner set forth in Section 13(J), which notice shall specify the record
date, if any, with respect to any such action and the approximate date on which
such action is to take place.  Such
notice shall also set forth the facts with respect thereto as shall be
reasonably necessary to indicate the effect on the Exercise Price and the
number, kind or class of shares or other securities or property which shall be
deliverable upon exercise of this Warrant. 
In the case of any action which would require the fixing of a record
date, such notice shall be given at least 10 days prior to the date so fixed,
and in case of all other action, such notice shall be given at least 15 days
prior to the taking of such proposed action. Failure to give such notice, or
any defect therein, shall not affect the legality or validity of any such
action.


 


(L)           Proceedings Prior to
Any Action Requiring Adjustment. As a condition precedent to the taking of
any action which would require an adjustment pursuant to this Section 13,
the Company shall take any action which may be necessary, including obtaining
regulatory, New York Stock Exchange, NASDAQ Stock Market or other applicable
national securities exchange or stockholder approvals or exemptions, in order
that the Company may thereafter validly and legally issue as fully paid and
nonassessable all shares of Common Stock that the Warrantholder is entitled to
receive upon exercise of this Warrant pursuant to this Section 13.


 


(M)         Adjustment Rules.
Any adjustments pursuant to this Section 13 shall be made successively
whenever an event referred to herein shall occur.  If an adjustment in Exercise Price made 


 

















 


hereunder
would reduce the Exercise Price to an amount below par value of the Common
Stock, then such adjustment in Exercise Price made hereunder shall reduce the
Exercise Price to the par value of the Common Stock.


 


14.           Exchange.
At any time following the date on which the shares of Common Stock of the
Company are no longer listed or admitted to trading on a national securities
exchange (other than in connection with any Business Combination), the Original
Warrantholder may cause the Company to exchange all or a portion of this
Warrant for an economic interest (to be determined by the Original
Warrantholder after consultation with the Company) of the Company classified as
permanent equity under U.S. GAAP having a value equal to the Fair Market Value
of the portion of the Warrant so exchanged. 
The Original Warrantholder shall calculate any Fair Market Value required
to be calculated pursuant to this Section 14, which shall not be subject
to the Appraisal Procedure.


 


15.           No
Impairment. The Company will not, by amendment of its Charter or through
any reorganization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms to be observed or
performed hereunder by the Company, but will at all times in good faith assist
in the carrying out of all the provisions of this Warrant and in taking of all
such action as may be necessary or appropriate in order to protect the rights
of the Warrantholder.


 


16.           Governing
Law. This Warrant 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 Company and the Warrantholder agrees (a) to
submit to the exclusive jurisdiction and venue of the United States District
Court for the District of Columbia for any civil action, suit or proceeding
arising out of or relating to this Warrant or the transactions contemplated
hereby, and (b) that notice may be served upon the Company at the address
in Section 20 below and upon the Warrantholder at the address for the
Warrantholder set forth in the registry maintained by the Company pursuant to Section 9
hereof.  To the extent permitted by
applicable law, each of the Company and the Warrantholder hereby
unconditionally waives trial by jury in any civil legal action or proceeding
relating to the Warrant or the transactions contemplated hereby or thereby.


 


17.           Binding
Effect. This Warrant shall be binding upon any successors or assigns of the
Company.


 


18.           Amendments.
This Warrant may be amended and the observance of any term of this Warrant may
be waived only with the written consent of the Company and the Warrantholder.


 


19.           Prohibited
Actions. The Company agrees that it will not take any action which would
entitle the Warrantholder to an adjustment of the Exercise Price if the total
number of shares of Common Stock issuable after such action upon exercise of
this Warrant, together with all shares of Common Stock then outstanding and all
shares of Common Stock then issuable upon the exercise of all outstanding
options, warrants, conversion and other rights, would exceed the total number
of shares of Common Stock then authorized by its Charter.


 


20.           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 hereunder shall be delivered
as set forth in Item 8 of Schedule A hereto, or pursuant to such other
instructions as may be designated in writing by the party to receive such
notice.


 


21.           Entire
Agreement. This Warrant, the forms attached hereto and Schedule A hereto
(the terms of which are incorporated by reference herein), and the Letter
Agreement (including all documents incorporated therein), contain the entire
agreement between the parties with respect to the subject matter hereof and
supersede all prior and contemporaneous arrangements or undertakings with
respect thereto.


 


[Remainder of page intentionally left
blank]


 

















 


[Form of Notice of Exercise]


Date:             


 


TO: [Company]


 


RE: Election
to Purchase Common Stock


 


The
undersigned, pursuant to the provisions set forth in the attached Warrant,
hereby agrees to subscribe for and purchase the number of shares of the Common
Stock set forth below covered by such Warrant. 
The undersigned, in accordance with Section 3 of the Warrant,
hereby agrees to pay the aggregate Exercise Price for such shares of Common
Stock in the manner set forth below. A new warrant evidencing the remaining
shares of Common Stock covered by such Warrant, but not yet subscribed for and
purchased, if any, should be issued in the name set forth below.


 


Number of
Shares of Common Stock


 


Method of
Payment of Exercise Price (note if cashless exercise pursuant to Section 3(i) of
the Warrant or cash exercise pursuant to Section 3(ii) of the
Warrant, with consent of the Company and the Warrantholder)


 


Aggregate Exercise Price:


 


	
   

  	
  Holder:

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					



 

















 


IN WITNESS
WHEREOF, the Company has caused this Warrant to be duly executed by a duly
authorized officer.


 


Dated:


 


	
   

  	
  COMPANY: TENNESSEE COMMERCE BANCORP,

  INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  Attest:

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
  [Signature Page to Warrant]

  



 

















 


SCHEDULE A


 


Item 1 


Name: 


Corporate or
other organizational form: 


Jurisdiction
of organization:


 


Item 2
Exercise Price:(1)


Item 3 Issue
Date:


Item 4
 Amount of last dividend declared prior to the Issue
Date:


 


Item 5 Date
of Letter Agreement between the Company and the United States Department of the
Treasury:


Item 6
 Number of shares of Common Stock:


 


Item 7
 Company’s address:


 


Item 8
 Notice information:


 






(1) Initial
exercise price to be calculated based on the average of closing prices of the
Common Stock on the 20 trading days ending on the last trading day prior to the
date the Company’s application for participation in the Capital Purchase
Program was approved by the United States Department of the Treasury.