Document:

ex4-2.htm

    EXHIBIT 4.2

    

    UST Seq. No.
290

    

      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

      625,135

      Shares
of Common Stock

       

      of MutualFirst Financial, Inc.

       

      Issue
Date: December 23, 2008

       

      

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

       

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

       

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

       

      
        
           

        

        
           

           

        

        
           

        

      

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

      “Fair Market Value” means,
with respect to any security or other property, the fair market value of such
security or other property as determined by the Board of Directors, acting in
good faith or, with respect to Section 14, as determined by the Original
Warrantholder acting in good faith. For so long as the Original Warrantholder
holds this Warrant or any portion thereof, it may object in writing to the Board
of Director’s calculation of fair market value within 10 days of receipt of
written notice thereof. If the Original Warrantholder and the Company are unable
to agree on fair market value during the 10-day period following the delivery of
the Original Warrantholder’s objection, the Appraisal Procedure may be invoked
by either party to

       

      
        
           

        

        
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      determine
Fair Market Value by delivering written notification thereof not later than the
30th day after delivery of the Original Warrantholder’s objection.

       

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

       

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

       

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

       

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

       

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

       

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

       

      
        
           

        

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

      “trading day” means (A) if
the shares of Common Stock are not traded on any national or regional securities
exchange or association or over-the-counter market, a business day or (B) if the
shares of Common Stock are traded on any national or regional securities
exchange or

       

      
        
           

        

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

       

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

       

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

       

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

       

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

       

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

       

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

       

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

       

      
        
           

        

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

       

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

       

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

       

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

       

       

      
        
          
          

        

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

       

      8.           Transfer/Assignment.

       

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

       

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

       

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

       

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

       

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

       

      12.           Rule 144
Information.  The Company covenants that it will use its
reasonable best efforts to timely file all reports and other documents required
to be filed by it under the Securities Act and the Exchange Act and the rules
and regulations promulgated by the SEC thereunder (or, if the Company is not
required to file such reports, it will, upon the request of any

       

      
        
           

        

        
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      Warrantholder,
make publicly available such information as necessary to permit sales pursuant
to Rule 144 under the Securities Act), and it will use reasonable best efforts
to take such further action as any Warrantholder may reasonably request, in each
case to the extent required from time to time to enable such holder to, if
permitted by the terms of this Warrant and the Purchase Agreement, sell this
Warrant without registration under the Securities Act within the limitation of
the exemptions provided by (A) Rule 144 under the Securities Act, as such rule
may be amended from time to time, or (B) any successor rule or regulation
hereafter adopted by the SEC. Upon the written request of any Warrantholder, the
Company will deliver to such Warrantholder a written statement that it has
complied with such requirements.

       

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

       

      (A)           Stock Splits, Subdivisions,
Reclassifications or Combinations.  If the Company shall (i)
declare and pay a dividend or make a distribution on its Common Stock in shares
of Common Stock, (ii) subdivide or reclassify the outstanding shares of Common
Stock into a greater number of shares, or (iii) combine or reclassify the
outstanding shares of Common Stock into a smaller number of shares, the number
of Shares issuable upon exercise of this Warrant at the time of the record date
for such dividend or distribution or the effective date of such subdivision,
combination or reclassification shall be proportionately adjusted so that the
Warrantholder after such date shall be entitled to purchase the number of shares
of Common Stock which such holder would have owned or been entitled to receive
in respect of the shares of Common Stock subject to this Warrant after such date
had this Warrant been exercised immediately prior to such date. In such event,
the Exercise Price in effect at the time of the record date for such dividend or
distribution or the effective date of such subdivision, combination or
reclassification shall be adjusted to the number obtained by dividing (x) the
product of (1) the number of Shares issuable upon the exercise of this Warrant
before such adjustment and (2) the Exercise Price in effect immediately prior to
the record or effective date, as the case may be, for the dividend,
distribution, subdivision, combination or reclassification giving rise to this
adjustment by (y) the new number of Shares issuable upon exercise of the Warrant
determined pursuant to the immediately preceding sentence.

       

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

       

       

      
        
          
          

        

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

       

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

       

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

       

      (C)           Other
Distributions.  In case the Company shall fix a record date for
the making of a distribution to all holders of shares of its Common Stock of
securities, evidences of indebtedness, assets, cash, rights or warrants
(excluding Ordinary Cash Dividends, dividends of its Common Stock and other
dividends or distributions referred to in Section 13(A)), in each such case, the
Exercise Price in effect prior to such record date shall be reduced immediately
thereafter to the price determined by multiplying the Exercise Price in effect
immediately prior to the reduction by the quotient of (x) the Market Price of
the Common Stock on the last trading day preceding the first date on which the
Common Stock trades regular way on the principal

       

      
        
           

        

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

       

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

       

      (E)           Business
Combinations.  In case of any Business Combination or
reclassification of Common Stock (other than a reclassification of Common Stock
referred to in Section 13(A)), the Warrantholder’s right to receive Shares upon
exercise of this Warrant shall be converted into the right to exercise this
Warrant to acquire the number of shares of stock or other securities or property
(including cash) which the Common Stock issuable (at the time of such Business
Combination or reclassification) upon exercise of this Warrant immediately prior
to such

       

      
        
           

        

        
          10

           

        

        
           

        

      

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

       

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

       

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

       

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

       

      
        
           

        

        
          11

           

        

        
           

        

      

      the
Warrant on the Issue Date (adjusted to take into account all other theretofore
made adjustments pursuant to this Section 13).

       

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

       

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

       

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

       

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

       

       

      
        
          
          

        

        
          12

          
          

        

        
          
          

        

      

       

       

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

       

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

       

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

       

      16.           Governing
Law.  This
Warrant will be governed by and construed in accordance with the federal law of
the United States if and to the extent such law is applicable, and otherwise in
accordance with the laws of the State of New York applicable to contracts made and to be performed
entirely within such State.  Each of the Company and the Warrantholder
agrees (a) to submit to the exclusive jurisdiction and venue of the United States District Court for the
District of Columbia for any civil action, suit or proceeding arising out of or
relating to this Warrant or the transactions contemplated hereby, and (b) that
notice may be served upon the Company at the address in Section 20 below and
upon the Warrantholder
at the address for the Warrantholder set forth in the registry maintained by the
Company pursuant to Section 9 hereof.  To the extent permitted by
applicable law, each of the Company and the Warrantholder hereby unconditionally
waives trial by jury in any civil legal action or proceeding relating to the
Warrant or the transactions contemplated hereby or thereby.

       

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

       

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

       

      19.           Prohibited
Actions.  The Company agrees that it will not take any action
which would entitle the Warrantholder to an adjustment of the Exercise Price if
the total number of shares of Common Stock issuable after such action upon
exercise of this Warrant, together with

       

      
        
           

        

        
          13

           

        

        
           

        

      

      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]

      
        
           

        

        
          14

           

        

        
           

        

      

      Form of
Notice of Exercise

      

      Date:
_________________

       

      TO:  MutualFirst Financial,
Inc.

       

      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:     ______________________________

      

      
        
           

        

        
          15

           

        

        
           

        

      

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

       

       

      Dated:  December
23, 2008

       

      

        
          	 
      	
                  COMPANY:   MutualFirst Financial,
      Inc.

                
	 
      	 
      	 
      
	 
      	
                  By:

                	
                  /s/
      David W.
      Heeter                                       
      

                
	 
      	 
      	
                  Name:  David
      W. Heeter

                
	 
      	 
      	
                  Title:  President  and
      Chief Executive Officer

                
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                  Attest:

                
	 
      	 
      	 
      
	 
      	
                  By:

                	
                  /s/
      Rosalie
      Petro                                            
      

                
	 
      	 
      	
                  Name:  Rosalie
      Petro

                
	 
      	 
      	
                  Title:  Secretary

                

        

       

      [Signature
Page to Warrant]

      
        
           

        

        
          16

           

        

        
           

        

      

      SCHEDULE
A

      

      

      Item 1

      Name:                                                                           MutualFirst Financial,
Inc.

      Corporate
or other organizational
form:                       Corporation

      Jurisdiction
of
organization:                                         Maryland

      

      Item 2

      Exercise
Price:                                    $7.77

      

      Item 3

      Issue
Date:                                           December
23, 2008

      

      Item 4

      
        Amount of
last dividend declared prior to the Issue Date:    Quarterly dividend
of $0.16 per share.

      

      

      Item 5

      Date of
Letter Agreement between the Company and the United States Department of the
Treasury:    December 23,
2008

      

      Item 6

      Number of
shares of Common
Stock:                625,135

      

      Item 7

      Company’s
address:                110
E. Charles Street

      Muncie, Indiana 47305

      

      Item 8

      Notice
information:                 David
W. Heeter

      President and Chief Executive
Officer

      MutualFirst
Financial,
Inc.

      110 E. Charles Street

      Muncie, Indiana 47305

      (765) 747-2880

      Fax:  (765)
213-2981ex10-1.htm

    EXHIBIT 10.1

      

       

      
        UNITED STATES DEPARTMENT OF THE TREASURY

         

        1500
PENNSYLVANIA AVENUE, NW

         

        WASHINGTON, D.C.
20220

         

        Dear
Ladies and Gentlemen:

         

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

         

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

         

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

         

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

         

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

         

        * *
*

      UST Seq. No. 290

      
        
           

        

        
           

           

        

        
           

        

      

 

    

     

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

     

    

    
      	 
      	
              UNITED
      STATES DEPARTMENT OF THE TREASURY

            
	 
      	 
      	 
      
	 
      	By: 
      	/s/
      Neel Kashkari  
	 
      	
               

            	
              Name: 
      Neel Kashkari

              Title: 
      Interim Assistant Secretary for Financial Stability

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              COMPANY:  MutualFirst Financial,
    Inc.

            
	 
      	 
      	 
      
	 
      	By: 
      	/s/ David
      W. Heeter  
	 
      	
               

            	
              Name:  David
      W. Heeter

              Title:  President
      and Chief Executive Officer

            

    

     

    

     

    Date:
December 23, 2008

     

     

     

    UST Seq. No.
290

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    

    

     

    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

            	
              14

            
	
              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; Restriction 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

            

    

     

     

    
      
        
        

      

      
        i

        
        

      

      
        
        

      

    

     

     

     

    
      	 
      	 
      	 
      
	
              Article
      V

              Miscellaneous

            
	 
      	 
      	 
      
	
              5.1

            	
              Termination

            	
              34

            
	
              5.2

            	
              Survival
      of Representations and Warrants

            	
              34

            
	
              5.3

            	
              Amendment

            	
              34

            	 
      	 
      
	
              5.4

            	
              Waiver
      of Conditions

            	
              34

            	 
      	 
      
	
              5.5

            	
              Governing
      Law: Submission to Jurisdiction, Etc.

            	
              35

            	 
      	 
      
	
              5.6

            	
              Notices

            	
              35

            	 
      	 
      
	
              5.7

            	
              Definitions

            	
              35

            	 
      	 
      
	
              5.8

            	
              Assignment

            	
              36

            	 
      	 
      
	
              5.9

            	
              Severability

            	
              36

            	 
      	 
      
	
              5.10

            	
              No
      Third Party Beneficiaries

            	
              36

            	 
      	 
      

    

     

    

    
      
        
           

        

        
          ii

           

        

        
           

        

      

    

    

    

     

    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

    

    

    
      
        
           

        

        
          iii

           

        

        
           

        

      

    

    

    
      	
              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)

            

    

    

    
      
        
           

        

        
          iv

           

        

        
           

        

      

    

    

    
      	
              Term

            	
              Location
      of

              Definition

            
	
              Parity
      Stock

            	
              4.8(c)

            
	
              Pending
      Underwritten Offering

            	
              4.5(l)

            
	
              Permitted
      Repurchases

            	
              4.8(a)(ii)

            
	
              Piggyback
      Registration

            	
              4.5(a)(iv)

            
	
              Plan

            	
              2.2(n)

            
	
              Preferred
      Shares

            	
              Recitals

            
	
              Preferred
      Stock

            	
              Recitals

            
	
              Previously
      Disclosed

            	
              2.1(b)

            
	
              Proprietary
      Rights

            	
              2.2(u)

            
	
              Purchase

            	
              Recitals

            
	
              Purchase
      Price

            	
              1.1

            
	
              Purchased
      Securities

            	
              Recitals

            
	
              Qualified
      Equity Offering

            	
              4.4

            
	
              register;
      registered; registration

            	
              4.5(k)(iii)

            
	
              Registrable
      Securities

            	
              4.5(k)(iv)

            
	
              Registration
      Expenses

            	
              4.
      5(k)(v)

            
	
              Regulatory
      Agreement

            	
              2.2(s)

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

            	
              4.5(k)(vi)

            
	
              Schedules

            	
              Recitals

            
	
              SEC

            	
              2.1(b)

            
	
              Securities
      Act

            	
              2.2(a)

            
	
              Selling
      Expenses

            	
              4.5(k)(vii)

            
	
              Senior
      Executive Officers

            	
              4.10

            
	
              Share
      Dilution Amount

            	
              4.
      8(a)(ii)

            
	
              Shelf
      Registration Statement

            	
              4.5(a)(ii)

            
	
              Signing
      Date

            	
              2.1(a)

            
	
              Special
      Registration

            	
              4.5(i)

            
	
              Stockholder
      Proposals

            	
              3.1(b)

            
	
              subsidiary

            	
              5.8(a)

            
	
              Tax;
      Taxes

            	
              2.2(o)

            
	
              Transfer

            	
              4.4

            
	
              Warrant

            	
              Recitals

            
	
              Warrant
      Shares

            	
              2.2(d)

            

    

    

    

    

    
      
        
           

        

        
          v

           

        

        
           

        

      

    

    

    SECURITIES
PURCHASE AGREEMENT – STANDARD TERMS

    Recitals:

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    Article
I

    Purchase;
Closing

     

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

     

     

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    

    1.2           Closing.

     

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

     

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

     

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

     

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

     

    (i)           (A)
the representations and warranties of the Company set forth in (x) Section
2.2(g) of this Agreement shall be true and correct in all respects as though
made on and as of the Closing Date, (y) Sections 2.2(a) through (f) shall be
true and correct in all material respects as though made on and as of the
Closing Date (other than representations and warranties that by their terms
speak as of another date, which representations and warranties shall be true and
correct in all material respects as of such other date) and (z) Sections 2.2(h)
through (v) (disregarding all qualifications or limitations set forth in such
representations and warranties as to “materiality”, “Company Material Adverse
Effect” and words of similar import) shall be true and correct as though made on
and as of the Closing Date (other than representations and warranties that by
their terms speak as of another date, which representations and warranties shall
be true and correct as of such other date), except to the extent that the
failure of such representations and warranties referred to in this Section 1
..2(d)(i)(A)(z) to be so true and correct, individually or in the aggregate, does
not have and would not reasonably be expected to have a Company Material Adverse
Effect and (B) the Company shall

     

     

    
      
        
        

      

      
        2

        
        

      

      
        
        

      

    

     

     

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

    

    (ii)           the
Investor shall have received a certificate signed on behalf of the Company by a
senior executive officer certifying to the effect that the conditions set forth
in Section 1 .2(d)(i) have been satisfied;

     

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

     

    (iv)           (A)
the Company shall have effected such changes to its compensation, bonus,
incentive and other benefit plans, arrangements and agreements (including golden
parachute, severance and employment agreements) (collectively, “Benefit Plans”) with respect
to its Senior Executive Officers (and to the extent necessary for such changes
to be legally enforceable, each of its Senior Executive Officers shall have duly
consented in writing to such changes), as may be necessary, during the period
that the Investor owns any debt or equity securities of the Company acquired
pursuant to this Agreement or the Warrant, in order to comply with Section
111(b) of the Emergency Economic Stabilization Act of 2008 (“EESA”) as implemented by
guidance or regulation thereunder that has been issued and is in effect as of
the Closing Date, and (B) the Investor shall have received a certificate signed
on behalf of the Company by a senior executive officer certifying to the effect
that the condition set forth in Section 1 .2(d)(iv)(A) has been
satisfied;

     

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

     

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

     

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

     

     

    
      
        
        

      

      
        3

        
        

      

      
        
        

      

    

     

     

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

    

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

     

    Article
II

    Representations
and Warranties

     

    2.1           Disclosure.

     

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

     

     

    
      
        
        

      

      
        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.

     

    (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 

     

     

    
      
        
        

      

      
        7

        
        

      

      
        
        

      

    

     

     

    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 1 3a- 15(e) of the Exchange Act) to ensure that material
information relating to the Company, including the consolidated Company
Subsidiaries, is made known to the chief executive officer and the chief
financial officer of the Company by others within those entities, and (B) has
disclosed, based on its most recent evaluation prior to the Signing Date, to the
Company’s outside auditors and the audit committee of the Board of Directors (x)
any significant deficiencies and material weaknesses in the design or operation
of internal controls over financial reporting (as defined in Rule 13a-15(f) of
the Exchange Act) that are reasonably likely to adversely affect the Company’s
ability to record, process, summarize
and report financial information and (y) any fraud, whether or not material,
that involves management or other employees who have a significant role in the
Company’s internal controls over financial reporting.

     

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

     

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

     

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

     

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

     

     

    
      
        
        

      

      
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    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 

     

     

    
      
        
        

      

      
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    determination
letter from the Internal Revenue Service with respect to its qualified status
that has not been revoked, or such a determination letter has been timely
applied for but not received by the Signing Date, and nothing has occurred,
whether by action or by failure to act, which could reasonably be expected to
cause the loss, revocation or denial of such qualified status or favorable
determination letter.

     

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

    

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

     

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

     

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

     

     

    
      
        
        

      

      
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    (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.

     

     

    
      
        
        

      

      
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    (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
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    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.

     

    3.3           Sufficiency of Authorized
Common Stock; Exchange Listing.

     

     

    
      
        
        

      

      
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    (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

     

     

    
      
        
        

      

      
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    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.”

     

     

    
      
        
        

      

      
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    (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

     

     

    
      
        
        

      

      
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    REQUIREMENTS
OF THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM
THE SECURITIES REPRESENTED BY THIS INSTRUMENT ARE TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.”

     

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

     

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

     

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

     

     

    
      
        
        

      

      
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    2008).
“Business Combination”
means a merger, consolidation, statutory share exchange or similar
transaction that requires the approval of the Company’s
stockholders.

     

    4.5           Registration
Rights.

     

    (a)           Registration.

     

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

     

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

     

     

    
      
        
        

      

      
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    (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 

     

     

    
      
        
        

      

      
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    to the
Company, the managing underwriters and the Investor (if the Investor is
participating in the underwriting).

     

    (vi)          If
either (x) the Company grants “piggyback” registration rights to one or more
third parties to include their securities in an underwritten offering under the
Shelf Registration Statement pursuant to Section 4 .5(a) (ii) or (y) a Piggyback
Registration under Section 4.5(a)(iv) relates to an underwritten offering on
behalf of the Company, and in either case the managing underwriters advise the
Company that in their reasonable opinion the number of securities requested to
be included in such offering exceeds the number which can be sold without
adversely affecting the marketability of such offering (including an adverse
effect on the per share offering price), the Company will include in such
offering only such number of securities that in the reasonable opinion of such
managing underwriters can be sold without adversely affecting the marketability
of the offering (including an adverse effect on the per share offering price),
which securities will be so included in the following order of priority: (A)
first, in the case of a Piggyback Registration under Section 4.5(a)(iv), the
securities the Company proposes to sell, (B) then the Registrable Securities of
the Investor and all other Holders who have requested inclusion of Registrable
Securities pursuant to Section 4.5(a)(ii) or Section 4.5(a)(iv), as applicable,
pro rata
on the basis of the aggregate number of such securities or shares owned
by each such person and (C) lastly, any other securities of the Company that
have been requested to be so included, subject to the terms of this Agreement;
provided,
however, that if the Company has, prior to the Signing Date, entered into
an agreement with respect to its securities that is inconsistent with the order
of priority contemplated hereby then it shall apply the order of priority in
such conflicting agreement to the extent that it would otherwise result in a
breach under such agreement.

     

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

     

    (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 

     

     

    
      
        
        

      

      
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    such
prospectus supplement current until the securities described therein are no
longer Registrable Securities.

     

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

     

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

     

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

     

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

     

    (vi)          Give
written notice to the Holders:

     

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

     

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

     

     

    
      
        
        

      

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    (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 

     

     

    
      
        
        

      

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

     

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

     

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

     

     

    
      
        
        

      

      
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    Registrable
Securities to be listed on such securities exchange as the Investor may
designate.

     

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

     

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

     

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

     

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

     

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

     

    (g)           Indemnification.

     

    (i)           The
Company agrees to indemnify each Holder and, if a Holder is a person other than
an individual, such Holder’s officers, directors, employees, agents,
representatives and Affiliates, and each Person, if any, that controls a Holder
within the meaning of the Securities Act (each, an “Indemnitee”),
against any and all losses, claims, damages, actions, liabilities, costs
and expenses (including reasonable fees, expenses and disbursements of attorneys
and other professionals incurred in connection with investigating, defending,
settling, compromising or paying any such losses, claims, damages, actions,
liabilities, costs and expenses), joint or several, arising out of or based upon
any untrue statement or alleged untrue statement of material fact contained in
any registration statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements thereto or any
documents incorporated therein by reference or contained in any free writing
prospectus (as such term is defined in Rule 405) prepared by the Company or
authorized by it in writing for use by such Holder (or any amendment or
supplement thereto); or any omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading; provided,
that the Company shall not be liable to such Indemnitee in any such case
to the extent that any such loss, claim, damage, liability (or action or
proceeding in respect thereof) or expense arises out of or is based upon (A) an
untrue statement or omission made in such registration statement, including any
such preliminary prospectus or final prospectus contained therein or any such
amendments or supplements thereto or contained in any free writing prospectus
(as such term is defined in Rule 405) prepared by the Company or authorized by
it in writing for use by such Holder (or any amendment or supplement thereto),
in reliance upon and in conformity with information regarding such Indemnitee or
its plan of distribution or ownership interests which was furnished in writing
to the Company by such Indemnitee for use in connection with such registration
statement, including any such preliminary prospectus or final prospectus
contained therein or any such amendments or supplements thereto, or (B) offers
or sales effected by or on behalf of such Indemnitee “by means of” (as defined
in Rule 1 59A) 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,
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    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
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    customers,
lenders or vendors of the Company or Company Subsidiaries or in connection with
dividend reinvestment plans.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    (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

     

    

    
      
        
           

        

        
          28

           

        

        
           

        

      

    

    

    prospectus
supplement in respect of an appropriate effective registration statement on Form
S-3.

     

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

     

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

     

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

     

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

     

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

     

    

    
      
        
           

        

        
          29

           

        

        
           

        

      

    

     

    

    Registrable
Securities in which such Holder has advised the Company of its intent to
register its Registrable Securities either pursuant to Section 4.5(a)(ii) or
4.5(a)(iv) prior to the date of such Holder’s forfeiture.

     

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

     

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

     

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

     

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

     

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

     

     

    
      
        
        

      

      
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    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 30th day
after delivery of the Investor’s objection.

     

    4.10
Executive
Compensation. Until such time as the Investor ceases to own any debt or
equity securities of the Company acquired pursuant to this Agreement or the
Warrant, the Company shall take all necessary action to ensure that its Benefit
Plans with respect to its Senior Executive Officers comply in all respects with
Section 111(b) of the EESA as implemented by any guidance or regulation
thereunder that has been issued and is in effect as of the Closing Date, and
shall not adopt any new Benefit Plan with respect to its Senior Executive
Officers that does not comply therewith. “Senior Executive Oficers”
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.

     

     

    
      
        
        

      

      
        33

        
        

      

      
        
        

      

    

     

     

     

    Article
V

    Miscellaneous

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

     

    
      
        
        

      

      
        34

        
        

      

      
        
        

      

    

     

     

    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

     

    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.

     

     

    
      
        
        

      

      
        35

        
        

      

      
        
        

      

    

     

     

    (b)           The
term “Afiliate” 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 “oficers” (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.

     

     

    * *
*

    

    
      
        
           

        

        
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    ANNEX
A

     

    FORM OF CERTIFICATE OF
DESIGNATIONS

    See
Exhibit 3.1 to this Form 8-K

    

    
      
        
           

        

        
           

           

        

        
           

        

      

    

    

    

     

    ANNEX
B

    FORM OF
WAIVER

     

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

     

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

     

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

    

    
      
        
           

        

        
           

           

        

        
           

        

      

    

    

    

     

    ANNEX
C

    FORM OF
OPINION

     

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

     

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

     

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

     

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

     

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

     

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

     

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

    

    
      
        
           

        

        
           

           

        

        
           

        

      

    

    

    

     

    ANNEX
D

     

     

    FORM OF
WARRANT

     

    See
Exhibit 4.2 to this Form 8-K

    

    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    

    SCHEDULE
A

     

    ADDITIONAL TERMS AND
CONDITIONS

     

     

    
      Company
Information:

       

    

    Name of
the
Company:                                                                  MutualFirst Financial, Inc.

     

    Corporate
or other organizational
form:                                        Corporation

     

    Jurisdiction
of
Organization:                                                         Maryland

     

    Appropriate
Federal Banking
Agency:                                          Office
of Thrift Supervision

     

    
      
        	Notice
      Information: 	
                David
      W. Heeter

                President
      and Chief Executive Officer

                MutualFirst Financial, Inc.

                110
      E. Charles Street

                Muncie,
      Indiana 47305

              	
                Martin
      L. Meyrowitz

                Silver,
      Freedman & Taff, L.L.P.

                3299
      K Street, N.W., Suite 100

                Washington,
      D.C. 20007

              
	 	
                (765)
      747-2880

                Fax: 
      (765) 213-2981

              	
                202-295-4527

                Fax:
      202-337-5502

              

      

    

     

    Terms of the
Purchase:

     

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

     

    Per Share
Liquidation Preference of Preferred
Stock:                   $1,000

     

    Number of
Shares of Preferred Stock
Purchased:                          32,382

     

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

     

    Number of
Initial Warrant
Shares:                                                  625,135

     

    Exercise
Price of the
Warrant:                                                        $7.77

     

    Purchase
Price:                                                                               $32,382,000

     

    Closing:

     

    Location
of
Closing:                                      Hughes,
Hubbard & Reed LLP, One Battery Park Plaza, New York, NY 10004

     

    Time of
Closing:                                           
9:00 a.m. Eastern Time

     

    Date of
Closing:                                           
December 23, 2008

    

    
      	
              Wire
      Information for Closing:

            	
              ABA
      Number:  

            
	 
      	
              Bank:
      Mutual Bank

            
	 
      	
              Account
      Name: MutualFirst Financial,
      Inc.

            
	 
      	
              Account
      Number:  

            
	 
      	
              Beneficiary:  MutualFirst Financial,
    Inc.

            

    

    
      
        
          UST Seq.
No. 290

        

         

      

      
         

         

      

      
         

      

    

    

    SCHEDULE
B

    

    CAPITALIZATION

     

    Capitalization
Date:                                                                November
30, 2008

     

    Common
Stock

     

    
              
Par
value:              $0.01

       

    

    Total
Authorized:   20,000,000

     

    Outstanding:  6,984,754

     

    
      Subject
to warrants, options, convertible securities,
etc.:  677,168

    

     

    
      Reserved
for benefit plans and other issuances:  357,902

       

      Remaining authorized but
unissued:  11,980,176

       

      
        Shares
issued after Capitalization Date (other than pursuant to warrants, options,

            convertible
securities, etc. as set forth above): None

      

    

     

     

    Preferred
Stock

     

    Par
value:  $0.01

     

    Total
Authorized:  5,000,000

     

    Outstanding
(by series):  None

     

    Reserved
for issuance:  None

     

    Remaining
authorized but unissued:  5,000,000

     

    

    

    

    UST Seq. No.
290

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00151-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00151-of-00352.parquet"}]]