EXHIBIT
10.1


 


UNITED STATES DEPARTMENT OF THE TREASURY


1500 PENNSYLVANIA AVENUE, NW


WASHINGTON, D.C. 20220


 


Dear Ladies and Gentlemen:


 


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


 


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extent supplemented or superseded by the terms set forth herein or in the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


 


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


 


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


 


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


 


* * *


 

















 


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


 


	
   

  	
  UNITED STATES DEPARTMENT OF

  THE TREASURY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   /s/
  Neel Kashkari

  
	
   

  	
   

  	
   Name: Neel Kashkari

  
	
   

  	
   

  	
   Title: Interim Assistant Secretary
  for

   Financial Stability

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HCSB FINANCIAL CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   /s/ James R. Clarkson

  
	
   

  	
   

  	
   Name: James R. Clarkson

  
	
   

  	
   

  	
   Title: Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
     March 6, 2009

  	
   

  
				



 


2

















 


EXHIBIT A


 






 


SECURITIES PURCHASE AGREEMENT


STANDARD TERMS


 






 


3

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
   

  	
  Page

  
	
  Article I

  	
   

  	
   

  	
   

  
	
  Purchase;
  Closing

  	
   

  	
   

  
	
  1.1

  	
  Purchase

  	
   

  	
  1

  
	
  1.2

  	
  Closing

  	
   

  	
  1

  
	
  1.3

  	
  Interpretation

  	
   

  	
  3

  
	
  Article II

  	
   

  	
   

  	
   

  
	
  Representations
  and Warranties

  	
   

  	
   

  
	
  2.1

  	
  Disclosure

  	
   

  	
  3

  
	
  2.2

  	
  Representations and Warranties of the
  Company

  	
   

  	
  4

  
	
  Article III

  	
   

  	
   

  	
   

  
	
  Covenants

  	
   

  	
   

  
	
  3.1

  	
  Commercially Reasonable Efforts

  	
   

  	
  10

  
	
  3.2

  	
  Expenses

  	
   

  	
  11

  
	
  3.3

  	
  Sufficiency of Authorized Common Stock;
  Exchange Listing

  	
   

  	
  11

  
	
  3.4

  	
  Certain Notifications Until Closing

  	
   

  	
  11

  
	
  3.5

  	
  Access, Information and Confidentiality

  	
   

  	
  11

  
	
  Article IV

  	
   

  	
   

  	
   

  
	
  Additional
  Agreements

  	
   

  	
   

  
	
  4.1

  	
  Purchase for Investment

  	
   

  	
  12

  
	
  4.2

  	
  Legends

  	
   

  	
  12

  
	
  4.3

  	
  Certain Transactions

  	
   

  	
  14

  
	
  4.4

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

  	
   

  	
  14

  
	
  4.5

  	
  Registration Rights

  	
   

  	
  14

  
	
  4.6

  	
  Voting of Warrant Shares

  	
   

  	
  23

  
	
  4.7

  	
  Depository Shares

  	
   

  	
  23

  
	
  4.8

  	
  Restriction on Dividends and Repurchases

  	
   

  	
  23

  
	
  4.9

  	
  Repurchase of Investor Securities

  	
   

  	
  24

  
	
  4.10

  	
  Executive Compensation

  	
   

  	
  25

  
	
  4.11

  	
  Bank and Thrift Holding Company Status

  	
   

  	
  25

  
	
  4.12

  	
  Predominantly Financial

  	
   

  	
  25

  
	
  Article V

  	
   

  	
   

  	
   

  
	
  Miscellaneous

  	
   

  	
   

  
	
  5.1

  	
  Termination

  	
   

  	
  25

  
	
  5.2

  	
  Survival of Representations and Warranties

  	
   

  	
  26

  
	
  5.3

  	
  Amendment

  	
   

  	
  26

  
	
  5.4

  	
  Waiver of Conditions

  	
   

  	
  26

  
	
  5.5

  	
  Governing Law: Submission to Jurisdiction,
  Etc.

  	
   

  	
  26

  
	
  5.6

  	
  Notices

  	
   

  	
  26

  
	
  5.7

  	
  Definitions

  	
   

  	
  27

  
	
  5.8

  	
  Assignment

  	
   

  	
  27

  
	
  5.9

  	
  Severability

  	
   

  	
  27

  
	
  5.10

  	
  No Third Party Beneficiaries

  	
   

  	
  27

  



 


i

















 


LIST OF ANNEXES


 


	
  ANNEX
  A:

  	
   

  	
  FORM OF
  CERTIFICATE OF DESIGNATIONS FOR PREFERRED STOCK

  
	
   

  	
   

  	
   

  
	
  ANNEX
  B:

  	
   

  	
  FORM OF
  WAIVER

  
	
   

  	
   

  	
   

  
	
  ANNEX
  C:

  	
   

  	
  FORM OF
  OPINION

  
	
   

  	
   

  	
   

  
	
  ANNEX
  D:

  	
   

  	
  FORM OF
  WARRANT

  



 


ii

















 


INDEX OF DEFINED
TERMS


 


	
   

  	
   

  	
  Location
  of

  
	
  Term

  	
   

  	
  Definition

  
	
  Affiliate

  	
   

  	
  5.7(b)

  
	
  Agreement

  	
   

  	
  Recitals

  
	
  Appraisal Procedure

  	
   

  	
  4.9(c)(i)

  
	
  Appropriate Federal
  Banking Agency

  	
   

  	
  2.2(s)

  
	
  Bank Holding Company

  	
   

  	
  4.11

  
	
  Bankruptcy Exceptions

  	
   

  	
  2.2(d)

  
	
  Benefit Plans

  	
   

  	
  1.2(d)(iv)

  
	
  Board of Directors

  	
   

  	
  2.2(f)

  
	
  Business Combination

  	
   

  	
  4.4

  
	
  business day

  	
   

  	
  1.3

  
	
  Capitalization Date

  	
   

  	
  2.2(b)

  
	
  Certificate of
  Designations

  	
   

  	
  1.2(d)(iii)

  
	
  Charter

  	
   

  	
  1.2(d)(iii)

  
	
  Closing

  	
   

  	
  1.2(a)

  
	
  Closing Date

  	
   

  	
  1.2(a)

  
	
  Code

  	
   

  	
  2.2(n)

  
	
  Common Stock

  	
   

  	
  Recitals

  
	
  Company

  	
   

  	
  Recitals

  
	
  Company Financial
  Statements

  	
   

  	
  2.2(h)

  
	
  Company Material Adverse
  Effect

  	
   

  	
  2.1(a)

  
	
  Company Reports

  	
   

  	
  2.2(i)(i)

  
	
  Company Subsidiary;
  Company Subsidiaries

  	
   

  	
  2.2(i)(i)

  
	
  Control; controlled by;
  under common control with

  	
   

  	
  5.7(b)

  
	
  Controlled Group

  	
   

  	
  2.2(n)

  
	
  CPP

  	
   

  	
  Recitals

  
	
  EESA

  	
   

  	
  1.2(d)(iv)

  
	
  ERISA

  	
   

  	
  2.2(n)

  
	
  Exchange Act

  	
   

  	
  2.1(b)

  
	
  Fair Market Value

  	
   

  	
  4.9(c)(ii)

  
	
  Federal Reserve

  	
   

  	
  4.11

  
	
  GAAP

  	
   

  	
  2.1(a)

  
	
  Governmental Entities

  	
   

  	
  1.2(c)

  
	
  Holder

  	
   

  	
  4.5(k)(i)

  
	
  Holders’ Counsel

  	
   

  	
  4.5(k)(ii)

  
	
  Indemnitee

  	
   

  	
  4.5(g)(i)

  
	
  Information

  	
   

  	
  3.5(b)

  
	
  Initial Warrant Shares

  	
   

  	
  Recitals

  
	
  Investor

  	
   

  	
  Recitals

  
	
  Junior Stock

  	
   

  	
  4.8(c)

  
	
  Knowledge of the Company;
  Company’s knowledge

  	
   

  	
  5.7(c)

  
	
  Last Fiscal Year

  	
   

  	
  2.1(b)

  
	
  Letter Agreement

  	
   

  	
  Recitals

  
	
  Officers

  	
   

  	
  5.7(c)

  
	
  Parity Stock

  	
   

  	
  4.8(c)

  
	
  Pending Underwritten
  Offering

  	
   

  	
  4.5(l)

  
	
  Permitted Repurchases

  	
   

  	
  4.8(a)(ii)

  
	
  Piggyback Registration

  	
   

  	
  4.5(a)(iv)

  
	
  Plan

  	
   

  	
  2.2(n)

  
	
  Preferred Shares

  	
   

  	
  Recitals

  
	
  Preferred Stock

  	
   

  	
  Recitals

  
	
  Previously

  	
   

  	
  Disclosed 2.1(b)

  
	
  Proprietary Rights

  	
   

  	
  2.2(u)

  
	
  Purchase

  	
   

  	
  Recitals

  



 


iii

















 


	
  Purchase Price

  	
   

  	
  1.1

  
	
  Purchased Securities

  	
   

  	
  Recitals

  
	
  Qualified Equity Offering

  	
   

  	
  4.4

  
	
  Register; registered;
  registration

  	
   

  	
  4.5(k)(iii)

  
	
  Registrable Securities

  	
   

  	
  4.5(k)(iv)

  
	
  Registration Expenses

  	
   

  	
  4.5(k)(v)

  
	
  Regulatory Agreement

  	
   

  	
  2.2(s)

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

  	
   

  	
  4.5(k)(vi)

  
	
  Savings and Loan Holding
  Company

  	
   

  	
  4.11

  
	
  Schedules

  	
   

  	
  Recitals

  
	
  SEC

  	
   

  	
  2.1(b)

  
	
  Securities Act

  	
   

  	
  2.2(a)

  
	
  Selling Expenses

  	
   

  	
  4.5(k)(vii)

  
	
  Senior Executive Officers

  	
   

  	
  4.10

  
	
  Share Dilution Amount

  	
   

  	
  4.8(a)(ii)

  
	
  Shelf Registration
  Statement

  	
   

  	
  4.5(a)(ii)

  
	
  Signing Date

  	
   

  	
  2.1(a)

  
	
  Special Registration

  	
   

  	
  4.5(i)

  
	
  Stockholder Proposals

  	
   

  	
  3.1(b)

  
	
  Subsidiary

  	
   

  	
  5.8(a)

  
	
  Tax; Taxes

  	
   

  	
  2.2(o)

  
	
  Transfer

  	
   

  	
  4.4

  
	
  Warrant

  	
   

  	
  Recitals

  
	
  Warrant Shares

  	
   

  	
  2.2(d)

  



 


iv
















 


SECURITIES PURCHASE AGREEMENT — STANDARD TERMS


 


Recitals:


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


Article I


Purchase; Closing


 


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


 


1.2                                 Closing.


 


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


 


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


 

















 


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


 


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


 


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


 


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


 


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


 


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


 


(v)                                 each of the Company’s Senior Executive
Officers shall have delivered to the Investor a written waiver in the form
attached hereto as Annex B releasing the Investor from any claims that
such Senior Executive Officers may otherwise have as a result of the issuance,
on or


 


2

















 


prior to the Closing Date,
of any regulations which require the modification of, and the agreement of the
Company hereunder to modify, the terms of any Benefit Plans with respect to its
Senior Executive Officers to eliminate any provisions of such Benefit Plans
that would not be in compliance with the requirements of Section 111(b) of
the EESA as implemented by guidance or regulation thereunder that has been
issued and is in effect as of the Closing Date;


 


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


 


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


 


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


 


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


 


Article II


Representations and Warranties


 


2.1                                 Disclosure.


 


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


 


3

















 


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


 


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


 


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


 


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


 


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


 


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


 


(d)                                 The Warrant and Warrant Shares. The Warrant has been duly authorized and,
when executed and delivered as contemplated hereby, will constitute a valid and
legally binding obligation of the Company enforceable against the Company in
accordance with its terms, except as the same may be limited


 


4

















 


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


 


(e)                                  Authorization, Enforceability.


 


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


 


(ii)                                  The execution, delivery and performance by
the Company of this Agreement and the Warrant and the consummation of the
transactions contemplated hereby and thereby and compliance by the Company with
the provisions hereof and thereof, will not (A) violate, conflict with, or
result in a breach of any provision of, or constitute a default (or an event
which, with notice or lapse of time or both, would constitute a default) under,
or result in the termination of, or accelerate the performance required by, or
result in a right of termination or acceleration of, or result in the creation
of, any lien, security interest, charge or encumbrance upon any of the
properties or assets of the Company or any Company Subsidiary under any of the
terms, conditions or provisions of (i) subject, if applicable, to the
approvals of the Company’s stockholders set forth on Schedule C, its
organizational documents or (ii) any note, bond, mortgage, indenture, deed
of trust, license, lease, agreement or other instrument or obligation to which
the Company or any Company Subsidiary is a party or by which it or any Company
Subsidiary may be bound, or to which the Company or any Company Subsidiary or
any of the properties or assets of the Company or any Company Subsidiary may be
subject, or (B) subject to compliance with the statutes and regulations
referred to in the next paragraph, violate any statute, rule or regulation
or any judgment, ruling, order, writ, injunction or decree applicable to the
Company or any Company Subsidiary or any of their respective properties or
assets except, in the case of clauses (A)(ii) and (B), for those
occurrences that, individually or in the aggregate, have not had and would not
reasonably be expected to have a Company Material Adverse Effect.


 


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


 


(f)                                    Anti-takeover Provisions and Rights Plan. The Board of Directors of the Company (the
“Board of Directors”) has taken
all necessary action to ensure that the transactions contemplated by this
Agreement and the Warrant and the consummation of the transactions contemplated
hereby and thereby,


 


5

















 


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


accordance with its terms.


 


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


 


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


 


(i)                                     Reports.


 


(i)                                     Since December 31, 2006, the Company and
each subsidiary of the Company (each a “Company
Subsidiary” and, collectively, the “Company
Subsidiaries”) has timely filed all reports, registrations,
documents, filings, statements and submissions, together with any amendments
thereto, that it was required to file with any Governmental Entity (the
foregoing, collectively, the “Company
Reports”) and has paid all fees and assessments due and payable in
connection therewith, except, in each case, as would not, individually or in
the aggregate, reasonably be expected to have a Company Material Adverse
Effect. As of their respective dates of filing, the Company Reports complied in
all material respects with all statutes and applicable rules and
regulations of the applicable Governmental Entities. In the case of each such
Company Report filed with or furnished to the SEC, such Company Report (A) did
not, as of its date or if amended prior to the Signing Date, as of the date of
such amendment, contain an untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements made therein, in
light of the circumstances under which they were made, not misleading, and (B) complied
as to form in all material respects with the applicable requirements of the
Securities Act and the Exchange Act. With respect to all other Company Reports,
the Company Reports were complete and accurate in all material respects as of
their respective dates. No executive officer of the Company or any Company
Subsidiary has failed in any respect to make the certifications required of him
or her under Section 302 or 906 of the Sarbanes-Oxley Act of 2002. (ii) The
records, systems, controls, data and information of the Company and the Company
Subsidiaries are recorded, stored, maintained and operated under means
(including any electronic, mechanical or photographic process, whether
computerized or not) that are under the exclusive ownership and direct control
of the Company or the Company Subsidiaries or their accountants (including all
means of access thereto and therefrom), except for any non-exclusive ownership
and non-direct control that would not reasonably be expected to have a material
adverse effect on the system of internal accounting controls described below in
this Section 2.2(i)(ii). The Company (A) has implemented and
maintains


 


6

















 


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


 


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


 


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


 


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


 


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


 


7

















 


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


 


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


 


(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


 


8

















 


Act of 1980, pending or, to
the Company’s knowledge, threatened against the Company or any Company
Subsidiary;


 


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


 


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


 


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


 


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


 


9

















 


authorship and copyrights
therein, that are used in the conduct of their existing businesses and all
rights relating to the plans, design and specifications of any of its branch
facilities (“Proprietary Rights”)
free and clear of all liens and any claims of ownership by current or former
employees, contractors, designers or others and (ii) neither the Company
nor any of the Company Subsidiaries is materially infringing, diluting, misappropriating
or violating, nor has the Company or any or the Company Subsidiaries received
any written (or, to the knowledge of the Company, oral) communications alleging
that any of them has materially infringed, diluted, misappropriated or
violated, any of the Proprietary Rights owned by any other person. Except as
would not, individually or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect, to the Company’s knowledge, no other person is
infringing, diluting, misappropriating or violating, nor has the Company or any
or the Company Subsidiaries sent any written communications since January 1,
2006 alleging that any person has infringed, diluted, misappropriated or
violated, any of the Proprietary Rights owned by the Company and the Company
Subsidiaries.


 


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


 


Article III


Covenants


 


3.1                                 Commercially Reasonable Efforts.


 


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


 


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


 


10
















 


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


 


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


 


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


 


3.3                                 Sufficiency of Authorized Common Stock;
Exchange Listing.


 


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


 


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


 


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


 


3.5                                 Access, Information and Confidentiality.


 


(a)                                  From the Signing Date until the date when the
Investor holds an amount of Preferred Shares having an aggregate liquidation
value of less than 10% of the Purchase Price, the Company will permit the
Investor and its agents, consultants, contractors and advisors (x) acting
through the Appropriate Federal Banking Agency, to examine the corporate books
and make copies thereof and to discuss the affairs,


 


11

















 


finances and accounts of the
Company and the Company Subsidiaries with the principal officers of the
Company, all upon reasonable notice and at such reasonable times and as often
as the Investor may reasonably request and (y) to review any information
material to the Investor’s investment in the Company provided by the Company to
its Appropriate Federal Banking Agency. Any investigation pursuant to this Section 3.5
shall be conducted during normal business hours and in such manner as not to
interfere unreasonably with the conduct of the business of the Company, and
nothing herein shall require the Company or any Company Subsidiary to disclose any
information to the Investor to the extent (i) prohibited by applicable law
or regulation, or (ii) that such disclosure would reasonably be expected
to cause a violation of any agreement to which the Company or any Company
Subsidiary is a party or would cause a risk of a loss of privilege to the
Company or any Company Subsidiary (provided that
the Company shall use commercially reasonable efforts to make appropriate
substitute disclosure arrangements under circumstances where the restrictions
in this clause (ii) apply).


 


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


 


Article IV


Additional Agreements


 


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


 


4.2                                 Legends.


 


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


 


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


 


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


 


“THIS INSTRUMENT IS ISSUED
SUBJECT TO THE RESTRICTIONS ON TRANSFER AND OTHER PROVISIONS OF A SECURITIES
PURCHASE


 


12

















 


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


 


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


 


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


 


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


 


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


 


13

















 


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


 


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


 


4.5                                 Registration Rights.


 


(a)                                  Registration.


 


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


 


(ii)                                  Any registration pursuant to Section 4.5(a)(i) shall
be effected by means of a shelf registration on an appropriate form under Rule 415
under the Securities Act (a “Shelf
Registration Statement”). If the Investor or any other Holder
intends to distribute any Registrable Securities by means of an underwritten
offering it shall promptly so advise the Company and the Company shall take all
reasonable steps to facilitate such distribution, including the actions
required pursuant to Section 4.5(c); provided
that the Company shall not be required to facilitate


 


14

















 


an underwritten offering of
Registrable Securities unless the expected gross proceeds from such offering
exceed (i) 2% of the initial aggregate liquidation preference of the
Preferred Shares if such initial aggregate liquidation preference is less than
$2 billion and (ii) $200 million if the initial aggregate liquidation
preference of the Preferred Shares is equal to or greater than $2 billion. The
lead underwriters in any such distribution shall be selected by the Holders of
a majority of the Registrable Securities to be distributed; provided that to the extent appropriate
and permitted under applicable law, such Holders shall consider the
qualifications of any broker-dealer Affiliate of the Company in selecting the
lead underwriters in any such distribution.


 


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


 


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


 


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


 


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


 


15

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


16

















 


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


 


(vi)                              Give written notice to the Holders:


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


(viii)                        Upon the occurrence of any event contemplated
by Section 4.5(c)(v) or 4.5(c)(vi)(E), promptly prepare a
post-effective amendment to such registration statement or a supplement to the
related prospectus or file any other required document so that, as thereafter
delivered to the Holders and any underwriters, the prospectus will not contain
an untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. If the Company notifies the Holders in
accordance with Section 4.5(c)(vi)(E) to suspend the use of the
prospectus until the requisite changes to the prospectus have been made, then
the Holders and any underwriters shall suspend use of such prospectus and use
their reasonable best efforts to return to the Company all copies of such
prospectus (at the Company’s expense) other than permanent file copies then in
such Holders’ or underwriters’ possession. The total number of days that any
such suspension may be in effect in any 12-month period shall not exceed 90
days.


 


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


 


17

















 


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


 


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


 


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


 


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


 


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


 


18

















 


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


 


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


 


(f)                                    Furnishing Information.


 


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


 


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


 


(g)                                 Indemnification.


 


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


 


19

















 


prospectus or final
prospectus contained therein or any such amendments or supplements thereto, or (B) offers
or sales effected by or on behalf of such Indemnitee “by means of” (as defined
in Rule 159A) a “free writing prospectus” (as defined in Rule 405)
that was not authorized in writing by the Company. (ii) If the
indemnification provided for in Section 4.5(g)(i) is unavailable to
an Indemnitee with respect to any losses, claims, damages, actions,
liabilities, costs or expenses referred to therein or is insufficient to hold
the Indemnitee harmless as contemplated therein, then the Company, in lieu of
indemnifying such Indemnitee, shall contribute to the amount paid or payable by
such Indemnitee as a result of such losses, claims, damages, actions,
liabilities, costs or expenses in such proportion as is appropriate to reflect
the relative fault of the Indemnitee, on the one hand, and the Company, on the
other hand, in connection with the statements or omissions which resulted in
such losses, claims, damages, actions, liabilities, costs or expenses as well
as any other relevant equitable considerations. The relative fault of the
Company, on the one hand, and of the Indemnitee, on the other hand, shall be
determined by reference to, among other factors, whether the untrue statement
of a material fact or omission to state a material fact relates to information
supplied by the Company or by the Indemnitee and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission; the Company and each Holder agree that it would not be
just and equitable if contribution pursuant to this Section 4.5(g)(ii) were
determined by pro rata allocation
or by any other method of allocation that does not take account of the
equitable considerations referred to in Section 4.5(g)(i). No Indemnitee
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from the Company if the
Company was not guilty of such fraudulent misrepresentation.


 


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


 


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


 


20
















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


21

















 


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


 


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


 


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


 


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


 


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


 


 


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


 


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


 


22

















 


“prospectus” shall include
any offering document approved by the Company and used in connection with such
distribution.


 


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


 


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


 


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


 


4.8                                 Restriction on Dividends and Repurchases.


 


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


 


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


 


(ii)                                  redeem, purchase or acquire any shares of
Common Stock or other capital stock or other equity securities of any kind of
the Company, or any trust preferred securities issued by the Company or any
Affiliate of the Company, other than (A) redemptions, purchases or other
acquisitions of the Preferred Shares, (B) redemptions, purchases or other
acquisitions of shares of Common Stock or other Junior Stock, in each case in
this clause (B) in connection with the administration of any employee
benefit plan in the ordinary course of business (including purchases to offset
the Share Dilution Amount (as defined below) pursuant to a publicly announced
repurchase plan) and consistent with past practice; provided that any purchases to offset the Share Dilution
Amount shall in no event exceed the Share Dilution Amount, (C) purchases
or other acquisitions by a broker-dealer subsidiary of the Company solely for
the purpose of market-making, stabilization or customer facilitation
transactions in Junior Stock or Parity Stock in the ordinary course of its
business, (D) purchases by a broker-dealer subsidiary of the Company of
capital stock of the Company for resale pursuant to an offering by the Company
of such capital stock underwritten by such broker-dealer subsidiary, (E) any
redemption or repurchase of rights pursuant to any stockholders’ rights plan, (F) the
acquisition by the Company or any of the Company Subsidiaries of record
ownership in Junior Stock or Parity Stock for the beneficial ownership of any
other persons (other than the Company or any other Company Subsidiary),
including as trustees or custodians, and (G) the exchange or conversion of
Junior Stock for or into other Junior Stock or of Parity Stock or trust
preferred securities for or into other Parity Stock (with the same or lesser
aggregate liquidation amount) or Junior Stock, in each case


 


23

















 


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


 


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


 


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


 


4.9                                 Repurchase of Investor Securities.


 


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


 


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


 


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


 


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


 


24

















 


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


 


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


 


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


 


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


 


Article V


Miscellaneous


 


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


 


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


 


25

















 


to any party whose breach of
any representation or warranty or failure to perform any obligation under this
Agreement shall have caused or resulted in the failure of the Closing to occur
on or prior to such date; or


 


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


 


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


 


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


 


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


 


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


 


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


 


5.5                                 Governing Law: Submission to
Jurisdiction, Etc.  This
Agreement will be governed by and construed in accordance with the federal law
of the United States if and to the extent such law is applicable, and otherwise
in accordance with the laws of the State of New York applicable to contracts
made and to be performed entirely within such State. 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.


 


26

















 


If
to the Investor:


 


United
States Department of the Treasury


1500
Pennsylvania Avenue, NW, Room 2312


Washington,
D.C. 20220


Attention:
Assistant General Counsel (Banking and Finance)


Facsimile:
(202) 622-1974


 


5.7                                 Definitions


 


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


 


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


 


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


 


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


 


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


 


*
* *


 


27

















 


ANNEX A


 


FORM OF CERTIFICATE OF DESIGNATIONS


 


[SEE
ATTACHED]


 

















 


ANNEX A


 


CERTIFICATE OF DESIGNATIONS


 


OF


 


FIXED RATE CUMULATIVE PERPETUAL PREFERRED STOCK, SERIES [·]


 


OF


 


[·]


 


[Insert name of Corporation], a [corporation] organized and existing
under the laws of the [Insert jurisdiction of organization] (the
“Corporation”), in accordance with the provisions of Section[s] [·] of the [Insert applicable statute] thereof,
does hereby certify:


 


The board of directors of
the Corporation (the “Board of Directors”) or an applicable committee of the
Board of Directors, in accordance with the [certificate of incorporation and
bylaws] of the Corporation and applicable law, adopted the following resolution
on [·] creating a series of [·] shares of Preferred Stock of the
Corporation designated as “Fixed Rate Cumulative Perpetual Preferred Stock, Series [·]”.


 


RESOLVED, that pursuant to the provisions of the
[certificate of incorporation and the bylaws] of the Corporation and applicable
law, a series of Preferred Stock, par value $[·] per share, of the Corporation be and hereby
is created, and that the designation and number of shares of such series, and
the voting and other powers, preferences and relative, participating, optional
or other rights, and the qualifications, limitations and restrictions thereof,
of the shares of such series, are as follows:


 


Part 1.               Designation and Number of Shares. There is hereby created out of the
authorized and unissued shares of preferred stock of the Corporation a series
of preferred stock designated as the “Fixed Rate Cumulative Perpetual Preferred
Stock, Series [·]” (the “Designated Preferred Stock”).
The authorized number of shares of Designated Preferred Stock shall be [·].


 


Part 2.               Standard Provisions. The Standard Provisions contained in Annex
A attached hereto are incorporated herein by reference in their entirety and
shall be deemed to be a part of this Certificate of Designations to the same
extent as if such provisions had been set forth in full herein.


 


Part. 3.            Definitions. The following terms are used in this Certificate of Designations
(including the Standard Provisions in Annex A hereto) as defined below:


 


(a)                                  “Common Stock” means the common stock,
par value $[·] per share, of the Corporation.


 


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


 


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


 


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


 






(1) If issuer desires
to issue shares with a higher dollar amount liquidation preference, liquidation
preference references will be modified accordingly. In such case (in accordance
with Section 4.7 of the Securities Purchase Agreement), the issuer will be
required to enter into a deposit agreement.


 


1

















 


(e)                                  “Minimum Amount” means $[Insert $ amount
equal to 25% of the aggregate value of the Designated Preferred Stock issued on
the Original Issue Date].


 


(f)                                    “Parity Stock” means any class or
series of stock of the Corporation (other than Designated Preferred Stock) the
terms of which do not expressly provide that such class or series will rank
senior or junior to Designated Preferred Stock as to dividend rights and/or as
to rights on liquidation, dissolution or winding up of the Corporation (in each
case without regard to whether dividends accrue cumulatively or
non-cumulatively). Without limiting the foregoing, Parity Stock shall include
the Corporation’s [Insert title(s) of existing classes or series of Parity Stock].


 


(g)                                 “Signing Date” means [Insert date of
applicable securities purchase agreement].


 


Part. 4.            Certain Voting Matters. [To be inserted if the Charter provides for voting in
proportion to liquidation preferences: Whether the vote
or consent of the holders of a plurality, majority or other portion of the
shares of Designated Preferred Stock and any Voting Parity Stock has been cast
or given on any matter on which the holders of shares of Designated Preferred
Stock are entitled to vote shall be determined by the Corporation by reference
to the specified liquidation amount of the shares voted or covered by the
consent as if the Corporation were liquidated on the record date for such vote
or consent, if any, or, in the absence of a record date, on the date for such
vote or consent. For purposes of determining the voting rights of the holders
of Designated Preferred Stock under Section 7 of the Standard Provisions
forming part of this Certificate of Designations, each holder will be entitled
to one vote for each $1,000 of liquidation preference to which such holder’s
shares are entitled.] [To be inserted if the Charter does not provide for
voting in proportion to liquidation preferences: Holders
of shares of Designated Preferred Stock will be entitled to one vote for each
such share on any matter on which holders of Designated Preferred Stock are
entitled to vote, including any action by written consent.]


 


[Remainder of Page Intentionally Left Blank]


 


2

















 


IN WITNESS WHEREOF, [Insert name of
Corporation] has caused this Certificate of Designations
to be signed by [·], its [·], this [·] day of [·].


 


	
   

  	
  [Insert name of Corporation]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 


3
















 


ANNEX A


 


STANDARD PROVISIONS


 


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


 


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


 


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


 


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


 


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


 


(d)           “Business Day” means any day except Saturday,
Sunday and any day on which banking institutions in the State of New York
generally are authorized or required by law or other governmental actions to
close.


 


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


 


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


 


(g)           “Charter” means the Corporation’s certificate or
articles of incorporation, articles of association, or similar organizational
document.


 


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


 


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


 


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


 


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


 


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


 


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


 


(n)           “Qualified Equity Offering” means the sale and
issuance for cash by the Corporation to persons other than the Corporation or
any of its subsidiaries after the Original Issue Date of shares of perpetual
Preferred Stock, Common Stock or any combination of such stock, that, in each
case, qualify as 


 


A-1

















 


and may be included in Tier
1 capital of the Corporation at the time of issuance under the applicable
risk-based capital guidelines of the Corporation’s Appropriate Federal Banking
Agency (other than any such sales and issuances made pursuant to agreements or
arrangements entered into, or pursuant to financing plans which were publicly
announced, on or prior to October 13, 2008).


 


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


 


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


 


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


 


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


 


Section 3. Dividends.


 


(a)           Rate. Holders of Designated Preferred Stock shall
be entitled to receive, on each share of Designated Preferred Stock if, as and
when declared by the Board of Directors or any duly authorized committee of the
Board of Directors, but only out of assets legally available therefor,
cumulative cash dividends with respect to each Dividend Period (as defined
below) at a rate per annum equal to the Applicable Dividend Rate on (i) the
Liquidation Amount per share of Designated Preferred Stock and (ii) the
amount of accrued and unpaid dividends for any prior Dividend Period on such
share of Designated Preferred Stock, if any. Such dividends shall begin to
accrue and be cumulative from the Original Issue Date, shall compound on each
subsequent Dividend Payment Date (i.e.,
no dividends shall accrue on other dividends unless and until the first
Dividend Payment Date for such other dividends has passed without such other
dividends having been paid on such date) and shall be payable quarterly in
arrears on each Dividend Payment Date, commencing with the first such Dividend
Payment Date to occur at least 20 calendar days after the Original Issue Date.
In the event that any Dividend Payment Date would otherwise fall on a day that
is not a Business Day, the dividend payment due on that date will be postponed
to the next day that is a Business Day and no additional dividends will accrue
as a result of that postponement. The period from and including any Dividend Payment
Date to, but A-2 excluding, the next Dividend Payment Date is a “Dividend
Period”, provided that the initial Dividend Period shall be the period from
and including the Original Issue Date to, but excluding, the next Dividend
Payment Date.


 


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


 


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


 


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


 


A-2

















 


(b)           Priority of Dividends. So long as any share of
Designated Preferred Stock remains outstanding, no dividend or distribution
shall be declared or paid on the Common Stock or any other shares of Junior
Stock (other than dividends payable solely in shares of Common Stock) or Parity
Stock, subject to the immediately following paragraph in the case of Parity
Stock, and no Common Stock, Junior Stock or Parity Stock shall be, directly or
indirectly, purchased, redeemed or otherwise acquired for consideration by the
Corporation or any of its subsidiaries unless all accrued and unpaid dividends
for all past Dividend Periods, including the latest completed Dividend Period
(including, if applicable as provided in Section 3(a) above,
dividends on such amount), on all outstanding shares of Designated Preferred
Stock have been or are contemporaneously declared and paid in full (or have
been declared and a sum sufficient for the payment thereof has been set aside
for the benefit of the holders of shares of Designated Preferred Stock on the
applicable record date). The foregoing limitation shall not apply to (i) redemptions,
purchases or other acquisitions of shares of Common Stock or other Junior Stock
in connection with the administration of any employee benefit plan in the
ordinary course of business (including purchases to offset the Share
Dilution Amount (as defined below) pursuant to a publicly announced
repurchase plan) and consistent with past practice, provided that any purchases to offset the Share Dilution
Amount shall in no event exceed the Share Dilution Amount; (ii) purchases
or other acquisitions by a broker-dealer subsidiary of the Corporation solely
for the purpose of market-making, stabilization or customer facilitation
transactions in Junior Stock or Parity Stock in the ordinary course of its business;
(iii) purchases by a brokerdealer subsidiary of the Corporation of capital
stock of the Corporation for resale pursuant to an offering by the Corporation
of such capital stock underwritten by such broker-dealer subsidiary; (iv) any
dividends or distributions of rights or Junior Stock in connection with a
stockholders’ rights plan or any redemption or repurchase of rights pursuant to
any stockholders’ rights plan; (v) the acquisition by the Corporation or
any of its subsidiaries of record ownership in Junior Stock or Parity Stock for
the beneficial ownership of any other persons (other than the Corporation or
any of its subsidiaries), including as trustees or custodians; and (vi) the
exchange or conversion of Junior Stock for or into other Junior Stock or of
Parity Stock for or into other Parity Stock (with the same or lesser aggregate
liquidation amount) or Junior Stock, in each case, solely to the extent
required pursuant to binding contractual agreements entered into prior to the
Signing Date or any subsequent agreement for the accelerated exercise,
settlement or exchange thereof for Common Stock. “Share Dilution Amount” means
the increase in the number of diluted shares outstanding (determined in
accordance with generally accepted accounting principles in the United States,
and as measured from the date of the Corporation’s consolidated financial
statements most recently filed with the Securities and Exchange Commission
prior to the Original Issue Date) resulting from the grant, vesting or exercise
of equity-based compensation to employees and equitably adjusted for any stock
split, stock dividend, reverse stock split, reclassification or similar
transaction.


 


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


 


A-3

















 


on any securities, including
Common Stock and other Junior Stock, from time to time out of any funds legally
available for such payment, and holders of Designated Preferred Stock shall not
be entitled to participate in any such dividends.


 


Section 4. Liquidation
Rights.


 


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


 


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


 


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


 


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


 


Section 5. Redemption.


 


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


 


Notwithstanding the
foregoing, prior to the first Dividend Payment Date falling on or after the
third anniversary of the Original Issue Date, the Corporation, at its option,
subject to the approval of the Appropriate Federal Banking Agency, may redeem,
in whole or in part, at any time and from time to time, the shares of
Designated Preferred Stock at the time outstanding, upon notice given as
provided in Section 5(c) below, at a redemption price equal to the
sum of (i) the Liquidation Amount per share and (ii) except as
otherwise provided below, any accrued and unpaid dividends (including, if
applicable as provided in 


 


A-4

















 


Section 3(a) above,
dividends on such amount) (regardless of whether any dividends are actually
declared) to, but excluding, the date fixed for redemption; provided that (x) the Corporation (or
any successor by Business Combination) has received aggregate gross proceeds of
not less than the Minimum Amount (plus the “Minimum Amount” as defined in the
relevant certificate of designations for each other outstanding series of
preferred stock of such successor that was originally issued to the United
States Department of the Treasury (the “Successor Preferred Stock”) in
connection with the Troubled Asset Relief Program Capital Purchase Program)
from one or more Qualified Equity Offerings (including Qualified Equity
Offerings of such successor), and (y) the aggregate redemption price of
the Designated Preferred Stock (and any Successor Preferred Stock) redeemed
pursuant to this paragraph may not exceed the aggregate net cash proceeds
received by the Corporation (or any successor by Business Combination) from
such Qualified Equity Offerings (including Qualified Equity Offerings of such
successor).


 


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


 


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


 


(c)           Notice of Redemption. Notice of every redemption of
shares of Designated Preferred Stock shall be given by first class mail,
postage prepaid, addressed to the holders of record of the shares to be
redeemed at their respective last addresses appearing on the books of the
Corporation. Such mailing shall be at least 30 days and not more than 60 days before
the date fixed for redemption. Any notice mailed as provided in this Subsection
shall be conclusively presumed to have been duly given, whether or not the
holder receives such notice, but failure duly to give such notice by mail, or
any defect in such notice or in the mailing thereof, to any holder of shares of
Designated Preferred Stock designated for redemption shall not affect the
validity of the proceedings for the redemption of any other shares of
Designated Preferred Stock. Notwithstanding the foregoing, if shares of
Designated Preferred Stock are issued in book-entry form through The Depository
Trust Company or any other similar facility, notice of redemption may be given
to the holders of Designated Preferred Stock at such time and in any manner
permitted by such facility. Each notice of redemption given to a holder shall
state: (1) the redemption date; (2) the number of shares of
Designated Preferred Stock to be redeemed and, if less than all the shares held
by such holder are to be redeemed, the number of such shares to be redeemed
from such holder; (3) the redemption price; and (4) the place or
places where certificates for such shares are to be surrendered for payment of
the redemption price.


 


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


 


(e)           Effectiveness of Redemption. If notice of
redemption has been duly given and if on or before the redemption date
specified in the notice all funds necessary for the redemption have been
deposited by the Corporation, in trust for the pro
rata benefit of the holders of the shares called for redemption,
with a bank or trust company doing business in the Borough of Manhattan, The
City of New York, and having a capital and surplus of at least $500 million and
selected by the Board of Directors, so as to be and continue to be available
solely therefor, then, notwithstanding that any certificate for any share so 


 


A-5

















 


called for redemption has
not been surrendered for cancellation, on and after the redemption date
dividends shall cease to accrue on all shares so called for redemption, all
shares so called for redemption shall no longer be deemed outstanding and all
rights with respect to such shares shall forthwith on such redemption date
cease and terminate, except only the right of the holders thereof to receive
the amount payable on such redemption from such bank or trust company, without
interest. Any funds unclaimed at the end of three years from the redemption
date shall, to the extent permitted by law, be released to the Corporation,
after which time the holders of the shares so called for redemption shall look
only to the Corporation for payment of the redemption price of such shares.


 


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


 


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


 


Section 7. Voting
Rights.


 


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


 


(b)           Preferred Stock Directors. Whenever, at any time or
times, dividends payable on the shares of Designated Preferred Stock have not
been paid for an aggregate of six quarterly Dividend Periods or more, whether
or not consecutive, the authorized number of directors of the Corporation shall
automatically be increased by two and the holders of the Designated Preferred
Stock shall have the right, with holders of shares of any one or more other
classes or series of Voting Parity Stock outstanding at the time, voting
together as a class, to elect two directors (hereinafter the “Preferred Directors” and each a “Preferred Director”)
to fill such newly created directorships at the Corporation’s next annual
meeting of stockholders (or at a special meeting called for that purpose prior
to such next annual meeting) and at each subsequent annual meeting of
stockholders until all accrued and unpaid dividends for all past Dividend
Periods, including the latest completed Dividend Period (including, if
applicable as provided in Section 3(a) above, dividends on such
amount), on all outstanding shares of Designated Preferred Stock have been
declared and paid in full at which time such right shall terminate with respect
to the Designated Preferred Stock, except as herein or by law expressly
provided, subject to revesting in the event of each and every subsequent
default of the character above mentioned; provided
that it shall be a qualification for election for any Preferred
Director that the election of such Preferred Director shall not cause the
Corporation to violate any corporate governance requirements of any securities
exchange or other trading facility on which securities of the Corporation may then
be listed or traded that listed or traded companies must have a majority of
independent directors. Upon any termination of the right of the holders of
shares of Designated Preferred Stock and Voting Parity Stock as a class to vote
for directors as provided above, the Preferred Directors shall cease to be
qualified as directors, the term of office of all Preferred Directors then in
office shall terminate immediately and the authorized number of directors shall
be reduced by the number of Preferred Directors elected pursuant hereto. Any
Preferred Director may be removed at any time, with or without cause, and any
vacancy created thereby may be filled, only by the affirmative vote of the
holders a majority of the shares of Designated Preferred Stock at the time
outstanding voting separately as a class together with the holders of shares of
Voting Parity Stock, to the extent the voting rights of such holders described
above are then exercisable. If the office of any Preferred Director becomes
vacant for any reason other than removal from office as aforesaid, the
remaining Preferred Director may choose a successor who shall hold office for
the unexpired term in respect of which such vacancy occurred.


 


(c)           Class Voting Rights as to Particular Matters.
So long as any shares of Designated Preferred Stock are outstanding, in
addition to any other vote or consent of stockholders required by law or by the
Charter, the vote or consent of the holders of at least 66 2/3% of the shares
of Designated Preferred Stock at the time outstanding, voting as a separate
class, given in person or by proxy, either in writing 


 


A-6

















 


without a meeting or by vote
at any meeting called for the purpose, shall be necessary for effecting or
validating:


 


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


 


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


 


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


 


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


 


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


 


(e)           Procedures for Voting and Consents. The rules and
procedures for calling and conducting any meeting of the holders of Designated
Preferred Stock (including, without limitation, the fixing of a record date in
connection therewith), the solicitation and use of proxies at such a meeting,
the obtaining of written consents and any other aspect or matter with regard to
such a meeting or such consents shall be governed by any rules of the
Board of Directors or any duly authorized committee of the Board of Directors,
in its discretion, may adopt from time to time, which rules and procedures
shall conform to the 


 


A-7

















 


requirements of the Charter,
the Bylaws, and applicable law and the rules of any national securities
exchange or other trading facility on which Designated Preferred Stock is
listed or traded at the time.


 


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


 


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


 


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


 


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


 


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


 


A-8

















 


ANNEX B


 


FORM OF WAIVER


 


In consideration for the
benefits I will receive as a result of my employer’s participation in the
United States Department of the Treasury’s TARP Capital Purchase Program, I
hereby voluntarily waive any claim against the United States or any state or
territory thereof or my employer or any of its directors, officers, employees
and agents for any changes to my compensation or benefits that are required in
order to comply with Section 111(b) of the Emergency Economic
Stabilization Act of 2008, as amended (“EESA”),
and rules, regulations, guidance or other requirements issued thereunder
(collectively, the “EESA Restrictions”).


 


I acknowledge that the EESA
Restrictions may require modification of the employment, compensation, bonus,
incentive, severance, retention and other benefit plans, arrangements, policies
and agreements (including so-called “golden parachute” agreements), whether or
not in writing, 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 and I hereby
consent to all such modifications. I further acknowledge and agree that if my
employer notifies me in writing that I have received payments in violation of
the EESA Restrictions, I shall repay the aggregate amount of such payments to
my employer no later than fifteen business days following my receipt of such
notice.


 


This waiver includes all
claims I may have under the laws of the United States or any other jurisdiction
related to the requirements imposed by the EESA Restrictions (including without
limitation, any claim for any compensation or other payments or benefits I
would otherwise receive absent the EESA Restrictions, any challenge to the
process by which the EESA Restrictions were adopted and any tort or
constitutional claim about the effect of the foregoing on my employment
relationship) and I hereby agree that I will not at any time initiate, or cause
or permit to be initiated on my behalf, any such claim against the United
States, my employer or its directors, officers, employees or agents in or
before any local, state, federal or other agency, court or body.


 


In witness whereof, I
execute this waiver on my own behalf, thereby communicating my acceptance and
acknowledgement to the provisions herein.


 


	
   

  	
  Respectfully,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
  Date:

  



 
















 


ANNEX C


 


FORM OF OPINION


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 

















 


ANNEX D


 


FORM OF WARRANT


 


[SEE
ATTACHED]


 

















 


SCHEDULE A


 


ADDITIONAL
TERMS AND CONDITIONS


Company Information:


 


Name of the Company: 
HCSB Financial Corporation


 


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:

  	
   

  	
  HCSB Financial Corporation

  
	
   

  	
   

  	
  5201 Broad Street

  
	
   

  	
   

  	
  Loris, South Carolina 29569

  
	
   

  	
   

  	
  Attention: James R. Clarkson

  
	
   

  	
   

  	
  Facsimile No.  (843) 839-3263

  



 


	
  With a copy to:

  	
   

  	
  Nelson Mullins Riley & Scarborough LLP

  
	
   

  	
   

  	
  104 South Main Street, Suite 900

  
	
   

  	
   

  	
  Greenville, South Carolina, 29601

  
	
   

  	
   

  	
  Attention: Benjamin A. Barnhill, Esq.

  
	
   

  	
   

  	
  Facsimile No.  (864) 250-2373

  



 


Terms of the Purchase:


 


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


 


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


 


Number of Shares of Preferred Stock Purchased:
12,895


 


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


 


Number of Initial Warrant Shares: 91,714


 


Exercise Price of the Warrant: $21.09 per share


 


Purchase Price: $12,895,000


 


Closing:


 


	
  Location of Closing:

  	
   

  	
  Hughes Hubbard & Reed LLP

  
	
   

  	
   

  	
  One Battery Park Plaza

  
	
   

  	
   

  	
  New York, New York 10004-1482

  
	
   

  
	
  Time of Closing: 

  	
   

  	
  9:00AM Eastern Standard Time

  
	
   

  	
   

  	
   

  
	
  Date of Closing: 

  	
   

  	
  March 6, 2009

  
					



 


UST Sequence No. 328


 

















 


SCHEDULE
B


 


CAPITALIZATION


 


Capitalization Date: As of February 28, 2009


 


Common Stock


 


Par value: $0.01


 


Total Authorized: 10,000,000


 


Outstanding: 3,787,170


 


Subject to
warrants, options, convertible securities, etc.: 71,676


 


Reserved for benefit plans and other issuances:
79,457


 


Remaining authorized but unissued: 6,061,697


 


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


 


Preferred Stock


 


Par value: $0.01


 


Total Authorized: 5,000,000(2)


 


Outstanding (by series): 0


 


Reserved for issuance: 0


 


Remaining authorized but unissued: 5,000,000


 






(2) These preferred shares were authorized by amendment to the
Company’s Articles of Incorporation dated March 2, 2009.


 


UST Sequence No. 328


 

















 


SCHEDULE
C


 


REQUIRED
STOCKHOLDER APPROVALS


 


	
   

  	
   

  	
  Required %(3)

  	
   

  	
  Vote Required

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Warrants —
  Common Stock Issuance

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Charter
  Amendment

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Stock
  Exchange Rules

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


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






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


 


UST Sequence No. 328


 

















 


SCHEDULE
D


 


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.


 


UST Sequence No. 328


 

















 


SCHEDULE
E


 


COMPLIANCE
WITH LAWS


 


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


 


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


 


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


 


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


 


UST Sequence No. 328


 

















 


SCHEDULE
F


 


REGULATORY
AGREEMENTS


 


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


 


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


 


UST Sequence No. 328