Document:

Exhibit 4.1

 

WARRANT TO PURCHASE COMMON
STOCK

 

THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT
WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER SUCH ACT OR SUCH LAWS. THIS INSTRUMENT IS ISSUED SUBJECT TO THE
RESTRICTIONS ON TRANSFER AND OTHER PROVISIONS OF A SECURITIES PURCHASE
AGREEMENT BETWEEN THE ISSUER OF THESE SECURITIES AND THE INVESTOR REFERRED TO
THEREIN, A COPY OF WHICH IS ON FILE WITH THE ISSUER. THE SECURITIES REPRESENTED
BY THIS INSTRUMENT MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT IN
COMPLIANCE WITH SAID AGREEMENT. ANY SALE OR OTHER TRANSFER NOT IN COMPLIANCE
WITH SAID AGREEMENT WILL BE VOID.

 

WARRANT

to
purchase

158,133

Shares
of Common Stock

 

of
Central Valley Community Bancorp

 

Issue Date: January 30,
2009

 

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

 

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

 

“ Appraisal
Procedure ” means a procedure whereby two independent appraisers,
one chosen by the Company and one by the Original Warrantholder, shall mutually
agree upon the determinations then the subject of appraisal. Each party shall
deliver a notice to the other appointing its appraiser within 15 days after the
Appraisal Procedure is invoked. If within 30 days after appointment of the two
appraisers they are unable to agree upon the amount in question, a third
independent appraiser shall be chosen within 10 days thereafter by the mutual
consent of such first two appraisers. The decision of the third appraiser so
appointed and chosen shall be given within 30 days after the selection of such
third appraiser. If three appraisers shall be appointed and the determination
of one appraiser is disparate from the middle determination by more than twice
the amount by which the other determination is disparate from the middle
determination, then the determination of such appraiser shall be excluded, the
remaining two determinations shall be averaged and such average shall be
binding and conclusive upon the Company and the Original Warrantholder;
otherwise, the average of all three determinations shall be binding upon the
Company and the Original Warrantholder. The costs of conducting any Appraisal
Procedure shall be borne by the Company.

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

3

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

5

 

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

 

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

 

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

 

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

 

8. Transfer/Assignment .

 

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

 

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

 

6

 

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

 

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

 

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

 

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

 

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

 

(A) Stock Splits, Subdivisions,
Reclassifications or Combinations . If the Company shall (i) declare
and pay a dividend or make a distribution on its Common Stock in shares of
Common Stock, (ii) subdivide or reclassify the outstanding shares of
Common Stock into a greater number of shares, or (iii) combine or
reclassify the outstanding shares of Common Stock into a smaller 

 

7

 

number of shares, the number of Shares issuable upon exercise of this
Warrant at the time of the record date for such dividend or distribution or the
effective date of such subdivision, combination or reclassification shall be
proportionately adjusted so that the Warrantholder after such date shall be
entitled to purchase the number of shares of Common Stock which such holder
would have owned or been entitled to receive in respect of the shares of Common
Stock subject to this Warrant after such date had this Warrant been exercised
immediately prior to such date. In such event, the Exercise Price in effect at
the time of the record date for such dividend or distribution or the effective
date of such subdivision, combination or reclassification shall be adjusted to
the number obtained by dividing (x) the product of (1) the number of
Shares issuable upon the exercise of this Warrant before such adjustment and (2) the
Exercise Price in effect immediately prior to the record or effective date, as
the case may be, for the dividend, distribution, subdivision, combination or
reclassification giving rise to this adjustment by (y) the new number of
Shares issuable upon exercise of the Warrant determined pursuant to the immediately
preceding sentence.

 

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

 

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

 

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

 

8

 

For purposes of the foregoing, the aggregate
consideration receivable by the Company in connection with the issuance of such
shares of Common Stock or convertible securities shall be deemed to be equal to
the sum of the net offering price (including the Fair Market Value of any
non-cash consideration and after deduction of any related expenses payable to
third parties) of all such securities plus the minimum aggregate amount, if
any, payable upon exercise or conversion of any such convertible securities
into shares of Common Stock; and “ Permitted
Transactions ” shall mean issuances (i) as consideration for or
to fund the acquisition of businesses and/or related assets, (ii) in
connection with employee benefit plans and compensation related arrangements in
the ordinary course and consistent with past practice approved by the Board of
Directors, (iii) in connection with a public or broadly marketed offering
and sale of Common Stock or convertible securities for cash conducted by the
Company or its affiliates pursuant to registration under the Securities Act or Rule 144A
thereunder on a basis consistent with capital raising transactions by
comparable financial institutions and (iv) in connection with the exercise
of preemptive rights on terms existing as of the Issue Date. Any adjustment
made pursuant to this Section 13(B) shall become effective
immediately upon the date of such issuance.

 

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

 

9

 

(D) Certain Repurchases of Common
Stock . In case the Company effects a Pro Rata Repurchase of Common Stock,
then the Exercise Price shall be reduced to the price determined by multiplying
the Exercise Price in effect immediately prior to the Effective Date of such
Pro Rata Repurchase by a fraction of which the numerator shall be (i) the
product of (x) the number of shares of Common Stock outstanding
immediately before such Pro Rata Repurchase and (y) the Market Price of a
share of Common Stock on the trading day immediately preceding the first public
announcement by the Company or any of its Affiliates of the intent to effect
such Pro Rata Repurchase, minus (ii) the aggregate purchase price of the
Pro Rata Repurchase, and of which the denominator shall be the product of (i) the
number of shares of Common Stock outstanding immediately prior to such Pro Rata
Repurchase minus the number of shares of Common Stock so repurchased and (ii) the
Market Price per share of Common Stock on the trading day immediately preceding
the first public announcement by the Company or any of its Affiliates of the
intent to effect such Pro Rata Repurchase. In such event, the number of shares
of Common Stock issuable upon the exercise of this Warrant shall be increased
to the number obtained by dividing (x) the product of (1) the number
of Shares issuable upon the exercise of this Warrant before such adjustment,
and (2) the Exercise Price in effect immediately prior to the Pro Rata
Repurchase giving rise to this adjustment by (y) the new Exercise Price
determined in accordance with the immediately preceding sentence. For the
avoidance of doubt, no increase to the Exercise Price or decrease in the number
of Shares issuable upon exercise of this Warrant shall be made pursuant to this
Section 13(D).

 

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

 

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

 

10

 

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

 

(H) Completion of Qualified Equity
Offering . In the event the Company (or any successor by Business
Combination) completes one or more Qualified Equity Offerings on or prior to December 31,
2009 that result in the Company (or any such successor ) receiving aggregate
gross proceeds of not less than 100% of the aggregate liquidation preference of
the Preferred Shares (and any preferred stock issued by any such successor
to the Original Warrantholder under the CPP), the number of shares of Common
Stock underlying the portion of this Warrant then held by the Original
Warrantholder shall be thereafter reduced by a number of shares of Common Stock
equal to the product of (i) 0.5 and (ii) the number of shares underlying
the Warrant on the Issue Date (adjusted to take into account all other
theretofore made adjustments pursuant to this Section 13).

 

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

 

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

 

(K) Notice of Adjustment Event .
In the event that the Company shall propose to take any action of the type
described in this Section 13 (but only if the action of the type described
in this Section 13 would result in an adjustment in the Exercise Price or
the number of Shares into which this Warrant is exercisable or a change in the
type of securities or property to be delivered 

 

11

 

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

 

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

 

(M) Adjustment Rules . Any
adjustments pursuant to this Section 13 shall be made successively whenever
an event referred to herein shall occur. If an adjustment in Exercise Price
made hereunder would reduce the Exercise Price to an amount below par value of
the Common Stock, then such adjustment in Exercise Price made hereunder shall
reduce the Exercise Price to the par value of the Common Stock.

 

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

 

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

 

16. Governing Law . This Warrant will be governed by and construed in
accordance with the federal law of the United States if and to the extent such
law is applicable, and otherwise in accordance with the laws of the State of
New York applicable to contracts made and to be performed entirely within such
State. Each of the Company and the Warrantholder agrees (a) to submit to
the exclusive jurisdiction and venue of the United States District Court for
the District of Columbia for any civil action, suit or proceeding 

 

12

 

arising out of or relating to this Warrant or
the transactions contemplated hereby, and (b) that notice may be served
upon the Company at the address in Section 20 below and upon the
Warrantholder at the address for the Warrantholder set forth in the registry
maintained by the Company pursuant to Section 9 hereof. To the extent
permitted by applicable law, each of the Company and the Warrantholder hereby
unconditionally waives trial by jury in any civil legal action or proceeding
relating to the Warrant or the transactions contemplated hereby or thereby.

 

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

 

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

 

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

 

20. Notices . Any notice, request,
instruction or other document to be given hereunder by any party to the other
will be in writing and will be deemed to have been duly given (a) on the
date of delivery if delivered personally, or by facsimile, upon confirmation of
receipt, or (b) on the second business day following the date of dispatch
if delivered by a recognized next day courier service. All notices hereunder
shall be delivered as set forth in Item 8 of Schedule A hereto, or
pursuant to such other instructions as may be designated in writing by the
party to receive such notice.

 

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

 

[Remainder of page intentionally left blank]

 

13

 

[Form of
Notice of Exercise]

Date:______________

 

	
   

  	
   

  
	
  TO:

  	
  Central Valley Community Bancorp
 7100 N. Financial Drive

  Fresno, CA 93720

  Attn: Daniel J. Doyle

  
	
   

  	
   

  
	
  RE:

  	
  Election to Purchase Common Stock

  

 

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

 

Number of Shares of Common Stock  ___________________

 

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

 

Aggregate Exercise Price:     ___________________

 

	
   

  	
  Holder:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  

 

14

 

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

 

Dated: January 30, 2009

 

 

	
   

  	
  CENTRAL VALLEY

  COMMUNITY BANCORP

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  
	
   

  	
  Name:

  	
  Daniel J. Doyle

  
	
   

  	
  Title:

  	
  President & Chief Executive

  Officer

  
	
   

  	
   

  
	
   

  	
  Attest:

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  
	
   

  	
  Name:

  	
  Cathy Ponte

  
	
   

  	
  Title:

  	
  Assistant Secretary

  

 

[Signature Page to Warrant]

 

15

 

SCHEDULE A

 

	
  Item 1

  	
   

  
	
   

  	
   

  
	
  Name:

  	
  Central
  Valley Community Bancorp

  
	
   

  	
   

  
	
  Corporate or
  other organizational form:

  	
  Corporation

  
	
  Jurisdiction
  of organization:

  	
  California

  
	
   

  	
   

  
	
  Item 2

  	
   

  
	
  Exercise
  Price:

  	
  $6.64

  
	
   

  	
   

  
	
  Item 3

  	
   

  
	
  Issue Date:

  	
  January 30,
  2009

  
	
   

  	
   

  
	
  Item 4

  	
   

  
	
  Amount of
  last dividend declared prior to the Issue Date:

  	
  $.10 per
  share

  
	
   

  	
   

  
	
  Item 5

  	
   

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

  	
  January 30,
  2009

  
	
   

  	
   

  
	
  Item 6

  	
   

  
	
  Number of
  shares of Common Stock:

  	
  158,133

  
	
   

  	
   

  
	
  Item 7

  	
   

  
	
  Company’s
  address:

  	
  7100 N.
  Financial Drive

  
	
   

  	
  Fresno, CA
  93720

  
	
   

  	
   

  
	
  Item 8

  	
   

  
	
  Notice
  information:

  	
   

  
	
   

  	
  Daniel J.
  Doyle, President & CEO

  
	
   

  	
  Central
  Valley Community Bancorp

  
	
   

  	
  7100 N.
  Financial Drive

  
	
   

  	
  Fresno, CA
  93720

  

 

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

 

16Exhibit 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/

  	
   

  
	
  Name: Neel
  Kashkari

  	
   

  
	
  Title:
  Interim Assistant Secretary for Financial Stability

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  CENTRAL
  VALLEY COMMUNITY BANCORP

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/

  	
   

  
	
  Name: Daniel
  J. Doyle

  	
   

  
	
  Title:
  President and Chief Executive Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Date:

  	
  1/30/2009

  	
   

  
				

 

 

EXHIBIT A

SECURITIES PURCHASE AGREEMENT

 

 

EXHIBIT
A

 

SECURITIES
PURCHASE AGREEMENT

 

STANDARD
TERMS

 

 

TABLE
OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
  Article I

  
	
   

  	
   

  	
   

  
	
  Purchase; Closing

  
	
   

  	
   

  	
   

  
	
  1.1

  	
  Purchase

  	
  1

  
	
   

  	
   

  	
   

  
	
  1.2

  	
  Closing

  	
  2

  
	
   

  	
   

  	
   

  
	
  1.3

  	
  Interpretation

  	
  4

  
	
   

  	
   

  	
   

  
	
  Article II

  
	
   

  	
   

  	
   

  
	
  Representations and Warranties

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  Disclosure

  	
  4

  
	
   

  	
   

  	
   

  
	
  2.2

  	
  Representations and Warranties of the Company

  	
  5

  
	
   

  	
   

  	
   

  
	
  Article III

  
	
   

  	
   

  	
   

  
	
  Covenants

  
	
   

  	
   

  	
   

  
	
  3.1

  	
  Commercially Reasonable Efforts

  	
  13

  
	
   

  	
   

  	
   

  
	
  3.2

  	
  Expenses

  	
  14

  
	
   

  	
   

  	
   

  
	
  3.3

  	
  Sufficiency of Authorized Common Stock; Exchange Listing

  	
  15

  
	
   

  	
   

  	
   

  
	
  3.4

  	
  Certain Notifications Until Closing

  	
  15

  
	
   

  	
   

  	
   

  
	
  3.5

  	
  Access, Information and Confidentiality

  	
  15

  
	
   

  	
   

  	
   

  
	
  Article IV

  
	
   

  
	
  Additional Agreements

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  Purchase for Investment

  	
  16

  
	
   

  	
   

  	
   

  
	
  4.2

  	
  Legends

  	
  16

  
	
   

  	
   

  	
   

  
	
  4.3

  	
  Certain Transactions

  	
  18

  

 

 

	
  4.4

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

  	
  18

  
	
   

  	
   

  	
   

  
	
  4.5

  	
  Registration Rights

  	
  19

  
	
   

  	
   

  	
   

  
	
  4.6

  	
  Voting of Warrant Shares

  	
  30

  
	
   

  	
   

  	
   

  
	
  4.7

  	
  Depositary Shares

  	
  31

  
	
   

  	
   

  	
   

  
	
  4.8

  	
  Restriction on Dividends and Repurchases

  	
  31

  
	
   

  	
   

  	
   

  
	
  4.9

  	
  Repurchase of Investor Securities

  	
  32

  
	
   

  	
   

  	
   

  
	
  4.10

  	
  Executive Compensation

  	
  33

  

 

 

	
  Article V

  
	
   

  	
   

  	
   

  
	
  Miscellancous

  
	
   

  	
   

  	
   

  
	
  5.1 

  	
  Termination 

  	
  34 

  
	
   

  	
   

  	
   

  
	
  5.2 

  	
  Survival of Representations and Warranties 

  	
  34 

  
	
   

  	
   

  	
   

  
	
  5.3 

  	
  Amendment 

  	
  35

  
	
   

  	
   

  	
   

  
	
  5.4 

  	
  Waiver of Conditions 

  	
  35

  
	
   

  	
   

  	
   

  
	
  5.5 

  	
  Governing Law: Submission to Jurisdiction,
  Etc. 

  	
  35 

  
	
   

  	
   

  	
   

  
	
  5.6 

  	
  Notices 

  	
  35 

  
	
   

  	
   

  	
   

  
	
  5.7 

  	
  Definitions 

  	
  36

  
	
   

  	
   

  	
   

  
	
  5.8 

  	
  Assignment 

  	
  36 

  
	
   

  	
   

  	
   

  
	
  5.9 

  	
  Severability 

  	
  36 

  
	
   

  	
   

  	
   

  
	
  5.10 

  	
  No Third Party Beneficiaries 

  	
  36 

  

 

 

LIST OF ANNEXES

 

	
  ANNEX A:

  	
  FORM OF CERTIFICATE OF DESIGNATIONS FOR PREFERRED STOCK

  
	
   

  	
   

  
	
  ANNEX B:

  	
  FORM OF WAIVER

  
	
   

  	
   

  
	
  ANNEX C:

  	
  FORM OF OPINION

  
	
   

  	
   

  
	
  ANNEX D:

  	
  FORM OF WARRANT

  

 

 

INDEX OF DEFINED TERMS

 

	
  Term

  	
   

  	
  Location of

  Definition

  
	
   

  	
   

  	
   

  
	
  Affiliate

  	
   

  	
  5.7(b)

  
	
   

  	
   

  	
   

  
	
  Agreement

  	
   

  	
  Recitals

  
	
   

  	
   

  	
   

  
	
  Appraisal Procedure

  	
   

  	
  4.9(c)(i)

  
	
   

  	
   

  	
   

  
	
  Appropriate Federal Banking Agency

  	
   

  	
  2.2(s)

  
	
   

  	
   

  	
   

  
	
  Bankruptcy Exceptions

  	
   

  	
  2.2(d)

  
	
   

  	
   

  	
   

  
	
  Benefit Plans

  	
   

  	
  1.2(d)(iv)

  
	
   

  	
   

  	
   

  
	
  Board of Directors

  	
   

  	
  2.2(f)

  
	
   

  	
   

  	
   

  
	
  Business Combination

  	
   

  	
  4.4

  
	
   

  	
   

  	
   

  
	
  business day

  	
   

  	
  1.3

  
	
   

  	
   

  	
   

  
	
  Capitalization Date

  	
   

  	
  2.2(b)

  
	
   

  	
   

  	
   

  
	
  Certificate of Designations

  	
   

  	
  1.2(d)(iii)

  
	
   

  	
   

  	
   

  
	
  Charter

  	
   

  	
  1.2(d)(iii)

  
	
   

  	
   

  	
   

  
	
  Closing

  	
   

  	
  1.2(a)

  
	
   

  	
   

  	
   

  
	
  Closing Date

  	
   

  	
  1.2(a)

  
	
   

  	
   

  	
   

  
	
  Code

  	
   

  	
  2.2(n)

  
	
   

  	
   

  	
   

  
	
  Common Stock

  	
   

  	
  Recitals

  
	
   

  	
   

  	
   

  
	
  Company

  	
   

  	
  Recitals

  
	
   

  	
   

  	
   

  
	
  Company Financial Statements

  	
   

  	
  2.2(h)

  
	
   

  	
   

  	
   

  
	
  Company Material Adverse Effect

  	
   

  	
  2.1(a)

  
	
   

  	
   

  	
   

  
	
  Company Reports

  	
   

  	
  2.2(i)(i)

  
	
   

  	
   

  	
   

  
	
  Company Subsidiary; Company Subsidiaries

  	
   

  	
  2.2(i)(i)

  
	
   

  	
   

  	
   

  
	
  control; controlled by; under common control with

  	
   

  	
  5.7(b)

  
	
   

  	
   

  	
   

  
	
  Controlled Group

  	
   

  	
  2.2(n)

  
	
   

  	
   

  	
   

  
	
  CPP

  	
   

  	
  Recitals

  

 

 

	
  EESA

  	
   

  	
  1.2(d)(iv)

  
	
   

  	
   

  	
   

  
	
  ERISA

  	
   

  	
  2.2(n)

  
	
   

  	
   

  	
   

  
	
  Exchange Act

  	
   

  	
  2.1(b)

  
	
   

  	
   

  	
   

  
	
  Fair Market Value

  	
   

  	
  4.9(c)(ii)

  
	
   

  	
   

  	
   

  
	
  GAAP

  	
   

  	
  2.1(a)

  
	
   

  	
   

  	
   

  
	
  Governmental Entities

  	
   

  	
  1.2(c)

  
	
   

  	
   

  	
   

  
	
  Holder

  	
   

  	
  4.5(k)(i)

  
	
   

  	
   

  	
   

  
	
  Holders’ Counsel

  	
   

  	
  4.5(k)(ii)

  
	
   

  	
   

  	
   

  
	
  Indemnitee

  	
   

  	
  4.5(g)(i)

  
	
   

  	
   

  	
   

  
	
  Information

  	
   

  	
  3.5(b)

  
	
   

  	
   

  	
   

  
	
  Initial Warrant Shares

  	
   

  	
  Recitals

  
	
   

  	
   

  	
   

  
	
  Investor

  	
   

  	
  Recitals

  
	
   

  	
   

  	
   

  
	
  Junior Stock

  	
   

  	
  4.8(c)

  
	
   

  	
   

  	
   

  
	
  knowledge of the Company; Company’s knowledge

  	
   

  	
  5.7(c)

  
	
   

  	
   

  	
   

  
	
  Last Fiscal Year

  	
   

  	
  2.1(b)

  
	
   

  	
   

  	
   

  
	
  Letter Agreement

  	
   

  	
  Recitals

  
	
   

  	
   

  	
   

  
	
  officers

  	
   

  	
  5.7(c)

  
	
   

  	
   

  	
   

  
	
  Parity Stock

  	
   

  	
  4.8(c)

  

 

	
  Term

  	
   

  	
  Location of Definition

  
	
   

  	
   

  	
   

  
	
  Pending Underwritten Offering

  	
   

  	
  4.5(l)

  
	
   

  	
   

  	
   

  
	
  Permitted Repurchases

  	
   

  	
  4.8(a)(ii)

  
	
   

  	
   

  	
   

  
	
  Piggyback Registration

  	
   

  	
  4.5(a)(iv)

  
	
   

  	
   

  	
   

  
	
  Plan

  	
   

  	
  2.2(n)

  
	
   

  	
   

  	
   

  
	
  Preferred Shares

  	
   

  	
  Recitals

  
	
   

  	
   

  	
   

  
	
  Preferred Stock

  	
   

  	
  Recitals

  

 

 

	
  Previously Disclosed

  	
   

  	
  2.1(b)

  
	
   

  	
   

  	
   

  
	
  Proprietary Rights

  	
   

  	
  2.2(u)

  
	
   

  	
   

  	
   

  
	
  Purchase

  	
   

  	
  Recitals

  
	
   

  	
   

  	
   

  
	
  Purchase Price

  	
   

  	
  1.1

  
	
   

  	
   

  	
   

  
	
  Purchased Securities

  	
   

  	
  Recitals

  
	
   

  	
   

  	
   

  
	
  Qualified Equity Offering

  	
   

  	
  4.4

  
	
   

  	
   

  	
   

  
	
  register; registered; registration

  	
   

  	
  4.5(k)(iii)

  
	
   

  	
   

  	
   

  
	
  Registrable Securities

  	
   

  	
  4.5(k)(iv)

  
	
   

  	
   

  	
   

  
	
  Registration Expenses

  	
   

  	
  4.5(k)(v)

  
	
   

  	
   

  	
   

  
	
  Regulatory Agreement

  	
   

  	
  2.2(s)

  
	
   

  	
   

  	
   

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

  	
   

  	
  4.5(k)(vi)

  
	
   

  	
   

  	
   

  
	
  Schedules

  	
   

  	
  Recitals

  
	
   

  	
   

  	
   

  
	
  SEC

  	
   

  	
  2.1(b)

  
	
   

  	
   

  	
   

  
	
  Securities Act

  	
   

  	
  2.2(a)

  
	
   

  	
   

  	
   

  
	
  Selling Expenses

  	
   

  	
  4.5(k)(vii)

  
	
   

  	
   

  	
   

  
	
  Senior Executive Officers

  	
   

  	
  4.10

  
	
   

  	
   

  	
   

  
	
  Share Dilution Amount

  	
   

  	
  4.8(a)(ii)

  
	
   

  	
   

  	
   

  
	
  Shelf Registration Statement

  	
   

  	
  4.5(a)(ii)

  
	
   

  	
   

  	
   

  
	
  Signing Date

  	
   

  	
  2.1(a)

  
	
   

  	
   

  	
   

  
	
  Special Registration

  	
   

  	
  4.5(i)

  
	
   

  	
   

  	
   

  
	
  Stockholder Proposals

  	
   

  	
  3.1(b)

  
	
   

  	
   

  	
   

  
	
  subsidiary

  	
   

  	
  5.8(a)

  
	
   

  	
   

  	
   

  
	
  Tax; Taxes

  	
   

  	
  2.2(o)

  
	
   

  	
   

  	
   

  
	
  Transfer

  	
   

  	
  4.4

  
	
   

  	
   

  	
   

  
	
  Warrant

  	
   

  	
  Recitals

  
	
   

  	
   

  	
   

  
	
  Warrant Shares

  	
   

  	
  2.2(d)

  

 

 

SECURITIES
PURCHASE AGREEMENT — STANDARD TERMS

 

Recitals:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Article I

Purchase;
Closing

 

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

 

1

 

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;

 

2

 

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

 

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

 

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

 

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

 

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

 

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

 

3

 

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

 

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

 

Article II

Representations
and Warranties

 

2.1 Disclosure .

 

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

 

4

 

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

 

(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

 

5

 

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 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

 

6

 

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, 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.

 

7

 

(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

 

8

 

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

 

9

 

(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 (“ 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.

 

10

 

(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
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.

 

11

 

(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.

 

12

 

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

 

(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

 

13

 

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 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.

 

14

 

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, 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

 

15

 

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.”

 

16

 

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

 

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

 

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

 

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

 

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

 

17

 

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

 

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

 

4.4 Transfer of Purchased Securities and
Warrant Shares; Restrictions on Exercise of the Warrant . Subject to
compliance with applicable securities laws, the Investor shall be 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).

 

18

 

“ 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 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.

 

19

 

(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).

 

20

 

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

 

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

 

(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.

 

21

 

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

 

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

 

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

 

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

 

(vi) Give written notice to the Holders:

 

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

 

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

 

(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;

 

22

 

(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).

 

(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 

 

23

 

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.

 

24

 

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

 

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

 

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

 

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

 

(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.

 

25

 

(g) Indemnification .

 

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

 

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

 

26

 

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.

 

27

 

(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.

 

28

 

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

 

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

 

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

 

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

 

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

 

29

 

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

 

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

 

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

 

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

 

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

 

30

 

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

 

31

 

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

 

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

 

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

 

4.9 Repurchase of Investor Securities .

 

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

 

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

 

32

 

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

 

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

 

(ii) “ Fair
Market Value ” means, with respect to any security, the fair market
value of such security as determined by the Board of Directors, acting in good
faith in reliance on an opinion of a nationally recognized independent
investment banking firm retained by the Company for this purpose and certified
in a resolution to the Investor. If the Investor does not agree with the Board
of 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 30 th 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

 

33

 

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 30 th calendar day following the Signing Date; provided , however , that in the event the Closing has not occurred by
such 30 th 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 30 th calendar day and not be under any obligation
to extend the term of this Agreement thereafter; provided , further ,
that the right to terminate this Agreement under this Section 5.1(a) shall
not be available to any party whose breach of any representation or warranty or
failure to perform any obligation under this Agreement shall have caused or
resulted in the failure of the Closing to occur on or prior to such date; or

 

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

 

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

 

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

 

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

 

34

 

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.

 

	
   

  	
  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

  

 

35

 

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.

 

* * *

 

36

 

ANNEX A

 

FORM OF CERTIFICATE OF DESIGNATIONS

 

[SEE ATTACHED]

 

37

 

ANNEX B

 

FORM OF WAIVER

 

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

 

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

 

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

 

38

 

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.

 

39

 

ANNEX D

 

FORM OF WARRANT

 

[SEE ATTACHED]

 

40

 

SCHEDULE A

 

ADDITIONAL TERMS AND CONDITIONS

 

Company Information:

 

	
  Name of the Company:

  	
   

  	
  CENTRAL VALLEY COMMUNITY
  BANCORP

  
	
   

  	
   

  	
   

  
	
  Corporate or other organizational form:

  	
   

  	
  CALIFORNIA CORPORATION
  2000

  
	
   

  	
   

  	
   

  
	
  Jurisdiction of Organization:

  	
   

  	
  CALIFORNIA

  
	
   

  	
   

  	
   

  
	
  Appropriate Federal Banking Agency:

  	
   

  	
  FDIC — FEDERAL RESERVE
  BANK SAN FRANCISCO

  
	
   

  	
   

  	
   

  
	
  Notice
  Information:

  	
   

  	
  ATT:

  	
  Daniel J. Doyle,
  President & CEO

  
	
   

  	
   

  	
   

  	
  Central Valley Community
  Bancorp

  
	
   

  	
   

  	
   

  	
  7100 North Financial Drive

  
	
   

  	
   

  	
   

  	
  Suite 101

  
	
   

  	
   

  	
   

  	
  Fresno, CA 93720

  

 

Terms of the Purchase:

 

	
  Series of Preferred Stock Purchased:

  	
   

  	
  SERIES ‘A’ Fixed Rate
  Cumulative Perpetual Preferred Stock

  
	
   

  	
   

  	
   

  
	
  Per Share Liquidation Preference of Preferred
  Stock:

  	
   

  	
  $1,000

  
	
   

  	
   

  	
   

  
	
  Number of Shares of Preferred Stock Purchased:

  	
   

  	
  7,000

  
	
   

  	
   

  	
   

  
	
  Dividend Payment Dates on the Preferred Stock:

  	
   

  	
  February 15;
  May 15; August 15; November 15

  
	
   

  	
   

  	
   

  
	
  Number of Initial Warrant Shares:

  	
   

  	
  158,133

  
	
   

  	
   

  	
   

  
	
  Exercise Price of the Warrant:

  	
   

  	
  $6.64

  
	
   

  	
   

  	
   

  
	
  Purchase Price:

  	
   

  	
  $7,000,000

  

 

Closing:

 

	
  Location of Closing:

  	
   

  	
  To be mutually agreed upon
  by the Parties

  
	
   

  	
   

  	
   

  
	
  Time of Closing:

  	
   

  	
  9:00 a.m. Eastern
  Standard Time

  
	
   

  	
   

  	
   

  
	
  Date of Closing:

  	
   

  	
  January 30, 2009

  
	
   

  	
   

  	
   

  
	
  Wire Information for Closing:

  	
   

  	
  ABA Number:

  
	
   

  	
   

  	
  Bank:

  
	
   

  	
   

  	
  Account Name:

  
	
   

  	
   

  	
  Account Number:

  
	
   

  	
   

  	
  Beneficiary:

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