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 a series
of its preferred 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extent supplemented or superseded by the terms set forth herein or in the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), the Securities Purchase Agreement (including the Annexes
thereto), the Disclosure Schedules 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

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CONGAREE BANCSHARES, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ F. Harvin Ray, Jr.

  
	
   

  	
  Name: F. Harvin Ray, Jr.

  
	
   

  	
  Title: Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
  Date:
  January 9, 2009

  	
   

  	
   

  



 
















 


EXHIBIT A


(Non-Exchange-Traded QFIs, excluding S Corps


and Mutual Organizations)


 


	
   

  	
   

  	
   

  



SECURITIES PURCHASE AGREEMENT


 


STANDARD TERMS


	
   

  	
   

  	
   

  



 

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
   

  	
  Article I

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Purchase; Closing

  	
   

  
	
   

  	
   

  	
   

  
	
  1.1

  	
  Purchase

  	
   

  
	
  1.2

  	
  Closing

  	
  2

  
	
  1.3

  	
  Interpretation

  	
  4

  
	
   

  	
   

  	
   

  
	
   

  	
  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

  	
  13

  
	
  3.3

  	
  Sufficiency of Authorized Warrant Preferred Stock; Exchange Listing

  	
  13

  
	
  3.4

  	
  Certain Notifications Until Closing

  	
  13

  
	
  3.5

  	
  Access, Information and Confidentiality

  	
  14

  
	
   

  	
   

  	
   

  
	
   

  	
  Article IV

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Additional Agreements

  	
   

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  Purchase for Investment

  	
  15

  
	
  4.2

  	
  Legends

  	
  15

  
	
  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

  	
  Depositary Shares

  	
  29

  
	
  4.7

  	
  Restriction on Dividends and Repurchases

  	
  30

  
	
  4.8

  	
  Executive Compensation

  	
  32

  
	
  4.9

  	
  Related Party Transactions

  	
  32

  
	
  4.10

  	
  Bank and Thrift Holding Company Status

  	
  32

  
	
  4.11

  	
  Predominantly Financial

  	
  32

  



 


i

















 


	
   

  	
  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

  



 


ii

















 


LIST OF ANNEXES


 


ANNEX A:                           FORM OF
CERTIFICATE OF DESIGNATIONS FOR PREFERRED STOCK


 


ANNEX B:                             FORM OF
CERTIFICATE OF DESIGNATIONS FOR WARRANT PREFERRED STOCK


 


ANNEX C:                             FORM OF
WAIVER 


 


ANNEX D:                            FORM OF
OPINION 


 


ANNEX E:                              FORM OF
WARRANT


 


iii

















 


INDEX OF DEFINED TERMS


 


	
  Term

  	
   

  	
  Location of

  Definition

  
	
  Affiliate

  	
   

  	
  5.7(b)

  
	
  Agreement

  	
   

  	
  Recitals

  
	
  Appropriate
  Federal Banking Agency

  	
   

  	
  2.2(s)

  
	
  Bank Holding
  Company

  	
   

  	
  4.10

  
	
  Bankruptcy
  Exceptions

  	
   

  	
  2.2(d)

  
	
  Benefit
  Plans

  	
   

  	
  1.2(d)(iv)

  
	
  Board of
  Directors

  	
   

  	
  2.2(f)

  
	
  Business
  Combination

  	
   

  	
  5.8

  
	
  business day

  	
   

  	
  1.3

  
	
  Capitalization
  Date

  	
   

  	
  2.2(b)

  
	
  Certificates
  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

  	
   

  	
  2.2(b)

  
	
  Company

  	
   

  	
  Recitals

  
	
  Company
  Financial Statements

  	
   

  	
  2.2(h)

  
	
  Company
  Material Adverse Effect

  	
   

  	
  2.1(b)

  
	
  Company
  Reports

  	
   

  	
  2.2(i)(i)

  
	
  Company
  Subsidiary; Company Subsidiaries

  	
   

  	
  2.2(e)(ii)

  
	
  control;
  controlled by; under common control with

  	
   

  	
  5.7(b)

  
	
  Controlled
  Group

  	
   

  	
  2.2(n)

  
	
  CPP

  	
   

  	
  Recitals

  
	
  Disclosure
  Schedule

  	
   

  	
  2.1(a)

  
	
  EESA

  	
   

  	
  1.2(d)(iv)

  
	
  ERISA

  	
   

  	
  2.2(n)

  
	
  Exchange Act

  	
   

  	
  4.4

  
	
  Federal
  Reserve

  	
   

  	
  4.10

  
	
  GAAP

  	
   

  	
  2.1(b)

  
	
  Governmental
  Entities

  	
   

  	
  1.2(c)

  
	
  Holder

  	
   

  	
  4.5(l)(i)

  
	
  Holders’
  Counsel

  	
   

  	
  4.5(l)(ii)

  
	
  Indemnitee

  	
   

  	
  4.5(h)(i)

  
	
  Information

  	
   

  	
  3.5(c)

  
	
  Investor

  	
   

  	
  Recitals

  
	
  Junior Stock

  	
   

  	
  4.7(f)

  
	
  knowledge of
  the Company; Company’s knowledge

  	
   

  	
  5.7(c)

  
	
  Letter
  Agreement

  	
   

  	
  Recitals

  
	
  officers

  	
   

  	
  5.7(c)

  
	
  Parity Stock

  	
   

  	
  4.7(f)

  



 


iv
















 


	
  Term

  	
   

  	
  Location of Definition

  	
   

  
	
  Pending Underwritten Offering

  	
   

  	
  4.5(m)

  	
   

  
	
  Permitted Repurchases

  	
   

  	
  4.7(c)

  	
   

  
	
  Piggyback Registration

  	
   

  	
  4.5(b)(iv)

  	
   

  
	
  Plan

  	
   

  	
  2.2(n)

  	
   

  
	
  Preferred Shares

  	
   

  	
  Recitals

  	
   

  
	
  Preferred Stock

  	
   

  	
  Recitals

  	
   

  
	
  Previously Disclosed

  	
   

  	
  2.1(c)

  	
   

  
	
  Proprietary Rights

  	
   

  	
  2.2(u)

  	
   

  
	
  Purchase

  	
   

  	
  Recitals

  	
   

  
	
  Purchase Price

  	
   

  	
  1.1

  	
   

  
	
  Purchased Securities

  	
   

  	
  Recitals

  	
   

  
	
  register; registered; registration

  	
   

  	
  4.5(l)(iii)

  	
   

  
	
  Registrable Securities

  	
   

  	
  4.5(l)(iv)

  	
   

  
	
  Registration Expenses

  	
   

  	
  4.5(l)(v)

  	
   

  
	
  Regulatory Agreement

  	
   

  	
  2.2(s)

  	
   

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

  	
   

  	
  4.5(l)(vi)

  	
   

  
	
  Savings and Loan Holding Company

  	
   

  	
  4.10

  	
   

  
	
  Schedules

  	
   

  	
  Recitals

  	
   

  
	
  SEC

  	
   

  	
  2.2(k)

  	
   

  
	
  Securities Act

  	
   

  	
  2.2(a)

  	
   

  
	
  Selling Expenses

  	
   

  	
  4.5(l)(vii)

  	
   

  
	
  Senior Executive Officers

  	
   

  	
  4.8

  	
   

  
	
  Shelf Registration Statement

  	
   

  	
  4.5(b)(ii)

  	
   

  
	
  Signing Date

  	
   

  	
  2.1(b)

  	
   

  
	
  Special Registration

  	
   

  	
  4.5(j)

  	
   

  
	
  subsidiary

  	
   

  	
  5.7(a)

  	
   

  
	
  Tax; Taxes

  	
   

  	
  2.2(o)

  	
   

  
	
  Transfer

  	
   

  	
  4.4

  	
   

  
	
  Warrant

  	
   

  	
  Recitals

  	
   

  
	
  Warrant Preferred Stock

  	
   

  	
  Recitals

  	
   

  
	
  Warrant Shares

  	
   

  	
  2.2(d)

  	
   

  



 


v

















 


SECURITIES PURCHASE AGREEMENT – STANDARD TERMS




Recitals:


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


Article I

Purchase; Closing


 


1.1                                 Purchase. On the terms
and subject to the conditions set forth in this Agreement, the Company agrees
to sell to the Investor, and the Investor agrees to purchase from the Company,
at the Closing (as hereinafter defined), the Purchased Securities for the price
set forth on Schedule A (the “Purchase
Price”).


 

















 


1.2                                 Closing.


 


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


 


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


 


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


 


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


 


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


 


2

















 


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


 


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


 


(iii)                               the Company
shall have duly adopted and filed with the Secretary of State of its
jurisdiction of organization or other applicable Governmental Entity the
amendments to its certificate or articles of incorporation, articles of
association, or similar organizational document (“Charter”) in substantially the forms attached hereto as Annex
A and Annex B (the “Certificates
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 C 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 D;


 


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


 


3

















 


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


 


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


 


Article II

Representations and Warranties


 


2.1                                 Disclosure.


 


(a)                                  On or prior to
the Signing Date, the Company delivered to the Investor a schedule (“Disclosure Schedule”) setting forth, among
other things, items the disclosure of which is necessary or appropriate either
in response to an express disclosure requirement contained in a provision
hereof or as an exception to one or more representations or warranties
contained in Section 2.2.


 


(b)                                 “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


 


4
















 


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, or (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 (ii) the
ability of the Company to consummate the Purchase and other transactions
contemplated by this Agreement and the Warrant and perform its obligations
hereunder or thereunder on a timely basis.


 


(c)                                  “Previously Disclosed” means information set forth on the
Disclosure Schedule, provided, however, that disclosure in any section of such
Disclosure Schedule shall apply only to the indicated section of this Agreement
except to the extent that it is reasonably apparent from the face of such
disclosure that such disclosure is relevant to another section of this
Agreement.


 


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 would be considered 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). As of the
Signing Date, the Company does not have outstanding any securities or other
obligations providing the holder the right to


 


5

















 


acquire its Common Stock (“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. Each holder of 5% or more of any class of
capital stock of the Company and such holder’s primary address are set forth on
Schedule B.


 


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


 


(d)                                 The
Warrant and Warrant Shares. The Warrant has been duly authorized and, when
executed and delivered as contemplated hereby, will constitute a valid and
legally binding obligation of the Company enforceable against the Company in
accordance with its terms, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors’ rights generally and general equitable
principles, regardless of whether such enforceability is considered in a
proceeding at law or in equity (“Bankruptcy
Exceptions”). The shares of Warrant Preferred 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, and will rank pari passu with or senior to all other
series or classes of Preferred Stock, whether or not issued or outstanding,
with respect to the payment of dividends and the distribution of assets in the
event of any dissolution, liquidation or winding up of the Company.


 


(e)                                  Authorization,
Enforceability.


 


(i)                                     The Company has
the corporate power and authority to execute and deliver this Agreement and the
Warrant and 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. 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.


 


6

















 


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


 


(iii)                               Other
than the filing of the Certificates of Designations with the Secretary of State
of its jurisdiction of organization or other applicable Governmental Entity,
such filings and approvals as are required to be made or obtained under any
state “blue sky” laws 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.


 


(g)                                 No
Company Material Adverse Effect. Since the last day of the last completed
fiscal period for which financial statements are included in the Company
Financial Statements (as defined below), no fact, circumstance, event, change,
occurrence, condition or development


 


7

















 


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. The Company has Previously Disclosed each of the
consolidated financial statements of the Company and its consolidated
subsidiaries for each of the last three completed fiscal years of the Company
(which shall be audited to the extent audited financial statements are
available prior to the Signing Date) and each completed quarterly period since
the last completed fiscal year (collectively the “Company Financial Statements”). The Company Financial
Statements present fairly in all material respects the consolidated financial
position of the Company and its consolidated subsidiaries as of the dates
indicated therein 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) and (B) have been
prepared from, and are in accordance with, the books and records of the Company
and the Company Subsidiaries.


 


(i)                                     Reports.


 


(i)                                     Since
December 31, 2006, the Company and each Company Subsidiary has 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.


 


(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 adequate disclosure controls and procedures 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 that are reasonably likely to
adversely affect the Company’s ability to record, process, summarize and report
financial information and (y) any fraud, whether or not material, that
involves management or


 


8

















 


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 Securities and Exchange Commission (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 C 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 D,
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 D, no Governmental Entity has placed any
restriction on the business or properties of


 


9
















 


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


 


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


 


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


 


10

















 


governmental fee or other like
assessment or charge of any kind whatsoever, together with any interest or
penalty, imposed by any Governmental Entity.


 


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


 


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


 


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


 


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


 


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


 


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


 


11

















 


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


 


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


 


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


 


12

















 


expected to
have a Company Material Adverse Effect, to the Company’s knowledge, no other
person is infringing, diluting, misappropriating or violating, nor has the
Company or any or the Company Subsidiaries sent any written communications
since January 1, 2006 alleging that any person has infringed, diluted,
misappropriated or violated, any of the Proprietary Rights owned by the Company
and the Company Subsidiaries.


 


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


 


Article III

Covenants


 


3.1                                 Commercially
Reasonable Efforts. 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.


 


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 Warrant Preferred Stock; Exchange Listing.


 


(a)                                  During
the period from the Closing Date 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.


 


(b)                                 If
the Company lists its Common Stock on any national securities exchange, the
Company shall, if requested by the Investor, promptly use its reasonable best
efforts to cause the Preferred Shares and Warrant 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


 


13

















 


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


 


3.5                                 Access,
Information and Confidentiality.


 


(a)                                  From
the Signing Date until the date when the Investor holds an amount of Preferred
Shares having an aggregate liquidation value of less than 10% of the Purchase
Price, the Company will permit the Investor and its agents, consultants,
contractors and advisors (x) acting through the Appropriate Federal
Banking Agency, or otherwise to the extent necessary to evaluate, manage, or
transfer its investment in the Company, 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)                                 From
the Signing Date until the date on which all of the Preferred Shares and
Warrant Shares have been redeemed in whole, the Company will deliver, or will
cause to be delivered, to the Investor:


 


(i)                                     as
soon as available after the end of each fiscal year of the Company, and in any
event within 90 days thereafter, a consolidated balance sheet of the Company as
of the end of such fiscal year, and consolidated statements of income, retained
earnings and cash flows of the Company for such year, in each case prepared in
accordance with GAAP and setting forth in each case in comparative form the
figures for the previous fiscal year of the Company, and which shall be audited
to the extent audited financial statements are available; and


 


14
















 


(ii)                                  as soon as
available after the end of the first, second and third quarterly periods in
each fiscal year of the Company, a copy of any quarterly reports provided to
other stockholders of the Company or Company management.


 


(c)                                  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.


 


(d)                                 The Investor’s
information rights pursuant to Section 3.5(b) may be assigned by the
Investor to a transferee or assignee of the Purchased Securities or the Warrant
Shares or with a liquidation preference or, in the case of the Warrant, the
liquidation preference of the underlying shares of Warrant Preferred Stock, no
less than an amount equal to 2% of the initial aggregate liquidation preference
of the Preferred Shares.


 


Article IV

Additional Agreements


 


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


 


4.2                                 Legends.


 


(a)                                  The Investor
agrees that all certificates or other instruments representing the Warrant 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


 


15

















 


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.”


 


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


 


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


 


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


 


16

















 


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.


 


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 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 (b) above; provided
that the Investor surrenders to the Company the previously issued certificates
or other instruments.


 


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


 


4.4                                 Transfer of
Purchased Securities and Warrant Shares; Restrictions on Exercise of the
Warrant. Subject to compliance with applicable securities laws, the Investor
shall be permitted to transfer, sell, assign or otherwise dispose of (“Transfer”) all or a portion of the
Purchased Securities or Warrant Shares at any time, and the Company shall take
all steps as may be reasonably requested by the Investor to facilitate the
Transfer of the Purchased Securities and the Warrant Shares; provided that the Investor shall not
Transfer any Purchased Securities or Warrant Shares if such transfer would
require the Company to be subject to the periodic reporting requirements of Section 13
or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”). In furtherance of the
foregoing, the Company shall provide reasonable cooperation to facilitate any
Transfers of the Purchased Securities or Warrant Shares, including, as is
reasonable under the circumstances, by furnishing such information concerning
the Company and its business as a proposed transferee may reasonably request
(including such information as is required by Section 4.5(k)) and making
management of the Company


 


17

















 


reasonably
available to respond to questions of a proposed transferee in accordance with
customary practice, subject in all cases to the proposed transferee agreeing to
a customary confidentiality agreement.


 


4.5                                 Registration
Rights.


 


(a)                                  Unless and
until the Company becomes subject to the reporting requirements of Section 13
or 15(d) of the Exchange Act, the Company shall have no obligation to
comply with the provisions of this Section 4.5 (other than Section 4.5(b)(iv)-(vi));
provided that the Company
covenants and agrees that it shall comply with this Section 4.5 as soon as
practicable after the date that it becomes subject to such reporting
requirements.


 


(b)                                 Registration.


 


(i)                                     Subject to the
terms and conditions of this Agreement, the Company covenants and agrees that
as promptly as practicable after the date that the Company becomes subject to
the reporting requirements of Section 13 or 15(d) of the Exchange Act
(and in any event no later than 30 days thereafter), 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).
Notwithstanding the foregoing, if the Company is not eligible to file a
registration statement on Form S-3, then the Company shall not be
obligated to file a Shelf Registration Statement unless and until requested to
do so in writing by the Investor.


 


(ii)                                  Any
registration pursuant to Section 4.5(b)(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(d); 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


 


18

















 


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(b): (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(b)(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(b)(iv) prior to the effectiveness of such registration,
whether or not Investor or any other Holders have elected to include
Registrable Securities in such registration.


 


(v)                                 If the
registration referred to in Section 4.5(b)(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(b)(iv). In such
event, the right of Investor and all other Holders to registration pursuant to Section 4.5(b) 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


 


19
















 


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(b)(ii) or (y) a
Piggyback Registration under Section 4.5(b)(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(b)(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(b)(ii) or Section 4.5(b)(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.


 


(c)                                  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.


 


(d)                                 Obligations
of the Company. 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 or post-effective amendment with respect
to a proposed offering of Registrable Securities pursuant to an effective
registration statement, subject to Section 4.5(d), keep such registration


 


20

















 


statement effective and keep such prospectus supplement current until
the securities described therein are no longer Registrable Securities.


 


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


 


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


 


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


 


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


 


(vi)                              Give
written notice to the Holders:


 


(A)                              when
any registration statement filed pursuant to 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;


 


21

















 


(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 applicable Registrable
Securities 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(d)(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(d)(vi)(C) at the earliest practicable time.


 


(viii)                        Upon
the occurrence of any event contemplated by Section 4.5(d)(v) or
4.5(d)(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(d)(vi)(E) to
suspend the use of the prospectus until the requisite changes to the prospectus
have been made, then the Holders and any underwriters shall suspend use of such
prospectus and use their reasonable best efforts to return to the Company all
copies of such prospectus (at the Company’s expense) other than permanent file
copies then in such Holders’ or underwriters’ possession. The total number of
days that any such suspension may be in effect in any 12-month period shall not
exceed 90 days.


 


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


 


(x)                                   If
an underwritten offering is requested pursuant to Section 4.5(b)(ii),
enter into an underwriting agreement in customary form, scope and substance and
take all


 


22

















 


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 (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


 


23

















 


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.


 


(e)                                  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.


 


(f)                                    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.


 


(g)                                 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(d) 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


 


24
















 


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


 


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


 


25

















 


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(h)(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(h)(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.


 


(i)                                     Assignment of Registration Rights. The rights of the Investor to registration
of  Registrable Securities pursuant to Section 4.5(b) may
be assigned by the Investor to a transferee or assignee of Registrable
Securities with a liquidation preference or, in the case of the Warrant, the
liquidation preference of the underlying shares of Warrant Preferred Stock, 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.


 


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


 


(k)                                  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:


 


26

















 


(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.


 


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


 


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


 


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


 


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


 


27

















 


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(p), 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).


 


(m)                               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(b)(iv) – (vi) in any Pending
Underwritten Offering to the same extent that such Holder would have been
entitled to if the holder had not withdrawn; and provided, further,
that no such forfeiture shall terminate a Holder’s rights or obligations under Section 4.5(g) 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(m), 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(b)(ii) or
4.5(b)(iv) prior to the date of such Holder’s forfeiture.


 


(n)                                 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


 


28

















 


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.


 


(o)                                 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(b)(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.


 


(p)                                 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(b)(ii), clauses (iv), (ix) and (x)-(xii) of Section 4.5(d), Section 4.5(h) and
Section 4.5(j) 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.


 


(q)                                 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                                 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 or the Warrant Shares may be deposited and
depositary shares, each representing a fraction of a Preferred Share or Warrant
Share, as applicable, 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 or Warrant Shares, as applicable, pursuant thereto, the
depositary shares issued pursuant thereto shall be deemed “Preferred Shares”, “Warrant
Shares” and, as applicable, “Registrable Securities” for purposes of this Agreement.


 


29

















 


4.7                                 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 all of the
Preferred Shares and Warrant Shares have been redeemed in whole or the Investor
has transferred all of the Preferred Shares and Warrant 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, declare or pay any
dividend or make any distribution on capital stock or other equity securities
of any kind of the Company or any Company Subsidiary (other than (i) regular
quarterly cash dividends of not more than the amount of the last quarterly cash
dividend per share declared or, if lower, announced to its holders of Common
Stock an intention to declare, on the Common Stock prior to November 17,
2008, as adjusted for any stock split, stock dividend, reverse stock split,
reclassification or similar transaction, (ii) dividends payable solely in
shares of Common Stock, (iii) regular dividends on shares of preferred
stock in accordance with the terms thereof and which are permitted under the
terms of the Preferred Shares and the Warrant Shares, (iv) dividends or
distributions by any wholly-owned Company Subsidiary or (v) dividends or
distributions by any Company Subsidiary required pursuant to binding
contractual agreements entered into prior to November 17, 2008).


 


(b)                                 During the period beginning on the third
anniversary of the Closing Date and ending on the earlier of (i) the tenth
anniversary of the Closing Date and (ii) the date on which all of the
Preferred Shares and Warrant Shares have been redeemed in whole or the Investor
has transferred all of the Preferred Shares and Warrant 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, (A) pay any per
share dividend or distribution on capital stock or other equity securities of
any kind of the Company at a per annum rate that is in excess of 103% of the
aggregate per share dividends and distributions for the immediately prior
fiscal year (other than regular dividends on shares of preferred stock in
accordance with the terms thereof and which are permitted under the terms of
the Preferred Shares and the Warrant Shares); provided
that no increase in the aggregate amount of dividends or distributions on
Common Stock shall be permitted as a result of any dividends or distributions
paid in shares of Common Stock, any stock split or any similar transaction or (B) pay
aggregate dividends or distributions on capital stock or other equity
securities of any kind of any Company Subsidiary that is in excess of 103% of
the aggregate dividends and distributions paid for the immediately prior fiscal
year (other than in the case of this clause (B), (1) regular dividends on
shares of preferred stock in accordance with the terms thereof and which are
permitted under the terms of the Preferred Shares and the Warrant Shares, (2) dividends
or distributions by any wholly-owned Company Subsidiary, (3) dividends or
distributions by any Company Subsidiary required pursuant to binding
contractual agreements entered into prior to November 17, 2008) or (4) dividends
or distributions on newly issued shares of capital stock for cash or other
property.


 


(c)                                  Prior to the earlier of (x) the tenth
anniversary of the Closing Date and (y) the date on which all of the
Preferred Shares and Warrant Shares have been redeemed in whole or the Investor
has transferred all of the Preferred Shares and Warrant 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, 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 Company Subsidiary, or any trust
preferred securities issued by the Company or any Affiliate of the Company, other


 


30

















 


than
(i) redemptions, purchases or other acquisitions of the Preferred Shares
and Warrant Shares, (ii) in connection with the administration of any
employee benefit plan in the ordinary course of business and consistent with
past practice, (iii) the acquisition by the Company or any of the Company
Subsidiaries of record ownership in Junior Stock or Parity Stock for the
beneficial ownership of any other persons (other than the Company or any other
Company Subsidiary), including as trustees or custodians, (iv) 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 (iv), 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 (ii) and (iii), collectively, the “Permitted Repurchases”), (v) redemptions
of securities held by the Company or any wholly- owned Company Subsidiary or (vi) redemptions,
purchases or other acquisitions of capital stock or other equity securities of
any kind of any Company Subsidiary required pursuant to binding contractual
agreements entered into prior to November 17, 2008.


 


(d)                                 Until such time as the Investor ceases to own
any Preferred Shares or Warrant Shares, the Company shall not repurchase any
Preferred Shares or Warrant 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 or Warrant Shares, as the case may be, then held by the
Investor on the same terms and conditions.


 


(e)                                  During the period beginning on the tenth
anniversary of the Closing and ending on the date on which all of the Preferred
Shares and Warrant Shares have been redeemed in whole or the Investor has
transferred all of the Preferred Shares and Warrant 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 capital stock or other equity
securities of any kind of the Company or any Company Subsidiary; 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 Company Subsidiary, 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 and Warrant Shares, (B) regular dividends on shares
of preferred stock in accordance with the terms thereof and which are permitted
under the terms of the Preferred Shares and the Warrant Shares, or (C) dividends
or distributions by any wholly-owned Company Subsidiary.


 


(f)                                    “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).


 


31

















 


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


 


4.9                                 Related Party Transactions. Until such time as the Investor ceases to
own any Purchased Securities or Warrant Shares, the Company and the Company
Subsidiaries shall not enter into transactions with Affiliates or related
persons (within the meaning of Item 404 under the SEC’s Regulation S-K) unless (i) such
transactions are on terms no less favorable to the Company and the Company
Subsidiaries than could be obtained from an unaffiliated third party, and (ii) have
been approved by the audit committee of the Board of Directors or comparable
body of independent directors of the Company.


 


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


 


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


 


Article V

Miscellaneous


 


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


 


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


 


33
















 


the extent such law is applicable, and
otherwise in accordance with the laws of the State of New York applicable to
contracts made and to be performed entirely within such State. Each of the
parties hereto agrees (a) to submit to the exclusive jurisdiction and
venue of the United States District Court for the District of Columbia and the
United States Court of Federal Claims for any and all civil actions, suits or
proceedings arising out of or relating to this Agreement or the Warrant or the
transactions contemplated hereby or thereby, and (b) that notice may be
served upon (i) the Company at the address and in the manner set forth for
notices to the Company in Section 5.6 and (ii) the Investor in
accordance with federal law. To the extent permitted by applicable law, each of
the parties hereto hereby unconditionally waives trial by jury in any civil
legal action or proceeding relating to this Agreement or the Warrant or the
transactions contemplated hereby or thereby.


 


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


 


If to the Investor:


 


United States Department of the Treasury


1500 Pennsylvania Avenue, NW, Room 2312


Washington, D.C. 20220


Attention: Assistant General Counsel (Banking and Finance)


Facsimile: (202) 622-1974


 


5.7                                 Definitions


 


(a)                                  When
a reference is made in this Agreement to a subsidiary of a person, the term “subsidiary” means any corporation,
partnership, joint venture, limited liability company or other entity (x) of
which such person or a subsidiary of such person is a general partner or (y) of
which a majority of the voting securities or other voting interests, or a
majority of the securities or other interests of which having by their terms
ordinary voting power to elect a 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


 


34

















 


policies of such person, whether through the ownership of voting
securities by contract or otherwise.


 


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


 


5.8                                 Assignment.
Neither this Agreement nor any right, remedy, obligation nor liability arising
hereunder or by reason hereof shall be assignable by any party hereto without
the prior written consent of the other party, and any attempt to assign any
right, remedy, obligation or liability hereunder without such consent shall be
void, except (a) an assignment, in the case of a merger, consolidation,
statutory share exchange or similar transaction that requires the approval of
the Company’s stockholders (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 Sections 3.5 and 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 FOR
PREFERRED STOCK


 


[SEE ATTACHED]


 

















 


ANNEX B


 


FORM OF CERTIFICATE OF DESIGNATIONS

FOR WARRANT PREFERRED STOCK


 


[SEE ATTACHED]


 

















 


ANNEX
C


 


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
D


 


FORM OF OPINION


 


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


 


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


 


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


 


(d)                                 The
shares of Warrant Preferred 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, and will rank pari passu with or senior to all other series or classes of
Preferred Stock, whether or not issued or outstanding, with respect to the
payment of dividends and the distribution of assets in the event of any
dissolution, liquidation or winding up of the Company.


 


(e)                                  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).


 


(f)                                    The
execution, delivery and performance by the Company of the Agreement and the
Warrant and the consummation of the transactions contemplated thereby have been
duly authorized by all necessary corporate action on the part of the Company
and its stockholders, and no further approval or authorization is required on
the part of the Company.


 


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


 

















 


ANNEX E


 


FORM OF WARRANT


 


[SEE ATTACHED]


 
















 


SCHEDULE A


 


ADDITIONAL
TERMS AND CONDITIONS


 


Company Information:


 


Name of the Company:  Congaree Bancshares, Inc.


 


Corporate or other organizational form:  Corporation


 


Jurisdiction of Organization:  South Carolina


 


Appropriate Federal Banking Agency:  The Board of Governors of the Federal Reserve
System (Richmond Branch)


 


	
  Notice
  Information:

  	
  Congaree
  Bancshares, Inc.

  
	
   

  	
  1201 Knox Abbott Drive

  
	
   

  	
  Cayce, South Carolina 29033

  
	
   

  	
   

  
	
  With a copy to:

  	
  Nelson Mullins Riley & Scarborough LLP

  
	
   

  	
  J.
  Brennan Ryan

  
	
   

  	
  Atlantic Station

  
	
   

  	
  201 17th Street NW,
  Suite 1700

  
	
   

  	
  Atlanta, Georgia 30363

  



 


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:  3,285


 


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


 


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


 


Number of Warrant Shares:  164.00164


 


Number of Net Warrant Shares (after net
settlement):  164


 


Exercise Price of the Warrant:  $.01


 


Purchase Price:  $3,285,000


 


Closing:


 


	
  Location
  of Closing:

  	
  Hughs
  Hubbard & Reed LLP

  
	
   

  	
  One Battery Park Plaza

  
	
   

  	
  New York, New York 1004-1482

  
	
   

  	
  Facsimile: (212) 422-4726

  



 


Time of Closing:  9:00 a.m. (Eastern time)


 


Date of Closing:  January 9, 2009


 

















 


SCHEDULE B


 


CAPITALIZATION


 


Capitalization Date:  December 31,
2008


 


Common Stock


 


Par
value:  $0.01


 


Total
Authorized:  10,000,000


 


Outstanding:  1,763,279


 


Subject to warrants, options, convertible
securities, etc.:  362,636


 


Reserved for benefit plans and other issuances:  84,963


 


Remaining authorized but unissued:  7,789,122


 


Shares issued after Capitalization Date 

(other than pursuant to warrants, options, convertible securities, etc. as set
forth above):  0


 


Preferred
Stock


 


Par value:  $0.01


 


Total Authorized:  10,000,000


 


Outstanding (by series):  0


 


Reserved for issuance: 3,449


 


Remaining
authorized but unissued: 9,996,551


 


	
  Holders of 5% or more of any class of capital stock

  	
   

  	
  Primary Address

  
	
   

  	
   

  	
   

  
	
  None.

  	
   

  	
   

  



 

















 


SCHEDULE C


 


LITIGATION


 


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


 


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


 

















 


SCHEDULE D


 


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 E


 


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


 
















 


UST Seq. No. 384


 


UNITED STATES
DEPARTMENT OF THE TREASURY


1500 Pennsylvania
Avenue, NW


Washington, D.C.
20220


 


January 9,
2009


 


Ladies and Gentlemen:


 


Reference
is made to that certain Letter Agreement incorporating the Securities Purchase
Agreement — Standard Terms dated of as of the date of this letter agreement
(the “Securities Purchase Agreement”) between
United States Department of Treasury (“Investor”) and
the company named on the signature page hereto (the “Company”).  Investor and the Company desire to amend the
Securities Purchase Agreement as follows:


 


1.                                       Section 2.1(a) of the
Securities Purchase Agreement is amended to read in its entirety as follows:


 


                                                “(a)                            [Intentionally Omitted.]”


 


2.                                       Section 2.1(c) of the
Securities Purchase Agreement is amended to read in its entirety as follows:


 


“(c)                            “Previously Disclosed” means information set forth or
incorporated in the Company’s Annual Report on Form 10-KSB for the most
recently completed fiscal year of the Company filed with the Primary Federal
Securities Regulator prior to the execution and delivery of this Agreement (the
“Last Fiscal Year”) or in its
other reports and forms filed with or furnished to the Primary Federal
Securities Regulator as contemplated under Sections 13(a), 14(a) or 15(d) of
the Exchange Act on or after the last day of the Last Fiscal Year and prior to
the execution and delivery of this Agreement. 
“Primary Federal Securities Regulator”
means the SEC or the primary federal bank regulator with which the Company
files its reports, registration statements, proxy statements and other filings
under the Exchange Act.  If the Company
is required to make filings with a Primary Federal Securities Regulator other
than the SEC, all references in this Agreement to the SEC shall be deemed to refer
to the Company’s Primary Federal Securities Regulator.”


 


3.                                       The definition of “Registrable Securities”
in Section 4.5(l)(iv) of the Securities Purchase Agreement is amended
by adding the following sentence at the end thereof:


 


“Notwithstanding anything in this Section 4.5(l)(iv) to
the contrary, Registrable Securities shall not include any securities of the
Company that are referred to in Section 3(a) of the Securities Act; provided,
however, that in the event that the Company’s Primary Federal Securities
Regulator is not the SEC, the Company shall take such actions (if any)
as are provided for under such Primary Federal Securities Regulator’s rules in
order to permit the resale of Registrable Securities by the Holders in
accordance with such rules.”


 

















 


From
and after the date hereof, each reference in the Securities Purchase Agreement
to “this Agreement” or words of like import shall mean and be a reference to
the Agreement (as defined in the Securities Purchase Agreement) as amended by
this letter agreement and each reference in the Securities Purchase Agreement
to “this Securities Purchase Agreement” or words of like import shall mean and
be a reference to the Securities Purchase Agreement as amended by this letter
agreement.


 


This letter 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.


 


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
sufficient as if actual signature pages had been delivered.


 


[Remainder of this page intentionally
left blank]


 

















 


In
witness whereof, the parties have duly executed this letter agreement as of the
date first written above.


 


	
   

  	
  UNITED STATES DEPARTMENT OF

  
	
   

  	
  THE TREASURY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Neel Kashkari

  
	
   

  	
   

  	
  Name: Neel Kashkari

  
	
   

  	
   

  	
  Title: Interim
  Assistant Secretary For

  
	
   

  	
   

  	
  Financial
  Stability

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CONGAREE BANCSHARES,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ F. Harvin
  Ray, Jr.

  
	
   

  	
   

  	
  Name: F. Harvin
  Ray, Jr.

  
	
   

  	
   

  	
  Title: Chief Executive
  Officer