Document:

enterprise_10q5.htm

     Exhibit
10.1

     

    LOAN SALE AGREEMENT 

     

    BY AND BETWEEN 

     

    FEDERAL DEPOSIT INSURANCE CORPORATION, 
AS
RECEIVER FOR HOME NATIONAL BANK, BLACKWELL, 
OKLAHOMA 

     

    AND 

     

    ENTERPRISE BANK & TRUST, ST. LOUIS,
MISSOURI 

     

    
      	Federal Deposit
      Insurance Corporation	 	Loan Pool
      Numbers(s):	          
	Loan Sale Agreement	
            	Pool “A”	
            
	Version 1.5 (FM)	
            	
            	
            
	09.27.04	
            	
            	
            

    

    

    
    

    TABLE OF CONTENTS 

     

    
      	
              Article
      I
Definitions

            
	
            	
            	 	
            
	1.	      	Definitions	1
	 
	Article II
	Purchase and Sale of Loans
	 
	2.1.	
            	Terms and Conditions of Sale	7
	2.2.	
            	Closing and Payment of Purchase Price	7
	2.3.	
            	Allocation of Payments Made on
      Loans	8
	2.4.	
            	Adjustments to Purchase Price; Offsets Against Deposits	8
	2.5.	
            	Rebates and Refunds	9
	2.6.	
            	Interest Conveyed	9
	2.7.	 	Retained Claims and Release	9
	2.8.	
            	Taxes	9
	2.9.	
            	Loans Made After the Date of the
      Information Package	10
	 
	Article III
	Transfer of Loan(s), Collateral
      Documents and Servicing
	 
	3.1.	
            	Delivery of Documents	10
	3.2.	
            	Recordation of Documents	13
	3.3.	
            	Transfer of Servicing	13
	 
	Article IV
	Representation and Warranties of
      Buyer
	 
	4.1.	
            	Buyer's Authorization	14
	4.2.	
            	Compliance with Law	14
	4.3.	
            	Execution and Enforceability	14
	4.4.	
            	Representations Remain True	14
	 
	Article V
	Covenants, Duties and Obligations of
      Buyer  
	 
	5.1.	
            	Servicing of Loans	14
	5.2.	
            	Disbursements of Principal	15
	5.3.	
            	Collection Agency/Contingency Fee
      Agreements	15
	5.4.	
            	Insured or Guaranteed Loans	15
	5.5.	
            	Buyer's Due Diligence	15
	5.6.	
            	Reporting to or for the Applicable Taxing Authorities	16

    

    
      	Federal Deposit
      Insurance Corporation	i	Loan Pool
      Numbers(s):	          
	Loan Sale Agreement	
            	Pool “A”	
            
	Version 1.5 (FM)	
            	
            	
            
	09.27.04	
            	
            	
            

    

    

    
    

    
      	5.7.	     
    	Loans in Litigation	16
	5.8.	
            	Loans
      in Bankruptcy	17
	5.9.	
            	Loan Related Insurance	17
	5.10.	
            	Loans
      with Escrow Accounts	17
	5.11.	
            	Loans in which Seller was the Lead
      Lender in a Participated Loan	18
	5.12.	
            	Contracts for Deed	18
	5.13.	
            	Leases	18
	5.14.	
            	Files
      and Records	18
	5.15.	
            	Reimbursement for Use of Seller's
      Employees	18
	5.16.	
            	Notice
      to Borrowers	19
	5.17.	
            	Notice of Claim	19
	5.18.	
            	Reserved	19
	5.19.	
            	Prior Servicer Information	19
	5.20.	
            	Release
      of Seller	19
	5.21.	 	Indemnification	20
	5.22.	
            	Borrower as Buyer	20
	 
	Article VI
	Loans Sold "As Is" and Without
      Recourse
	 
	6.1.	
            	Loans Sold "As Is"	20
	6.2.	
            	No
      Warranties or Representations with Respect to Escrow Accounts	21
	6.3.	
            	No Warranties or Representations as to
      Amounts of Unfunded Principal	21
	6.4.	
            	Disclaimer Regarding Calculation or Adjustment of Interest on any
      Loan	21
	6.5.	
            	No Warranties or Representations with
      Regard to Due Diligence Data	21
	6.6.	
            	Buyer's
      Waiver of Cause of Action  	21
	6.7.	
            	Intervening or Missing
    Assignments	21
	6.8.	
            	No
      Warranties or Representations as to Documents	21
	 
	Article VII
	 
	Reserved
	 
	Article VIII
	Notices
	8.1.	
            	Notices	22
	8.2.	
            	Reserved	22
	8.3.	
            	All Other Notices	22

    

    
      	Federal Deposit
      Insurance Corporation	ii	Loan Pool
      Numbers(s):	          
	Loan Sale Agreement	
            	Pool “A”	
            
	Version 1.5 (FM)	
            	
            	
            
	09.27.04	
            	
            	
            

    

    

    
    

    
      	Article IX
	Condition Precedent
	 
	9.1.	
            	Failure to Close	23
	 
	Article X
	Miscellaneous Provisions
	 
	10.1.	     
    	Severability	23
	10.2.	
            	Construction	23
	10.3.	
            	Survival	23
	10.4.	
            	Governing Law	23
	10.5.	
            	Cost, Fees and Expenses	23
	10.6.	 	Nonwaiver, Amendment and
      Assignment	23
	10.7.	
            	Drafting Presumption	24
	10.8.	
            	Controlling Agreement	24
	10.9.	
            	Venue	24
	10.10.	
            	Counterparts	24
	10.11.	
            	Waiver of Jury Trial	24
	 
	Attachments
	 
	Attachment "A"--Schedule of
    Loans	A-1
	Attachment "B"--Not Applicable	
            
	Attachment "C"--Bill of Sale	C-1
	Attachment "D"--Assignment and Assumption of
      Interests and Obligations	D-1
	Attachment "E"--Assignment and Lost Instrument
      Affidavit	E-1
	Attachment "F"--Affidavit and Assignment of
      Claim	F-1
	Attachment "G"--Limited Power of
      Attorney	G-1
	Attachment “H”-- Shared-Loss
      Agreements	H-1

    

    
      	Federal Deposit
      Insurance Corporation	iii	Loan Pool
      Numbers(s):	          
	Loan Sale Agreement	
            	Pool “A”	
            
	Version 1.5 (FM)	
            	
            	
            
	09.27.04	
            	
            	
            

    

    

    
    

    LOAN SALE AGREEMENT 

     

    LOAN POOL NUMBER(S): Pool “A” 

     

         THIS AGREEMENT, entered into as of
the 9th day of July, 2010, by and between the Federal
Deposit Insurance Corporation (the "FDIC"), as Receiver of Home National Bank,
Blackwell, Oklahoma ("Seller"), and Enterprise Bank & Trust, St. Louis,
Missouri ("Buyer"), sets forth the terms and conditions whereby Seller agrees to
sell and Buyer agrees to purchase all those Loans set forth in the attached
Schedule of Loans for the consideration herein stated. 

     

         NOW THEREFORE, Seller and Buyer
agree and represent as follows: 

     

    Article I 
Definitions 

     

         For purposes of this Agreement the
following terms shall have the meanings indicated: 

     

         "Accounting
Records" means the general ledger and supporting
subsidiary ledgers and schedules. 

     

         "Advances" means
the sum of all unreimbursed amounts advanced by or on behalf of the Failed Bank,
Seller or Buyer for the benefit of a Borrower or a third-party advanced to meet
required scheduled payments, or to protect the Noteholder's lien position or the
Collateral, including payment of ad valorem taxes and hazard and forced placed
insurance as permitted by the terms of any Loan sold hereunder. Advances do not
include Disbursements of Principal or Corporate Advances. 

     

         "Affidavit and Assignment of Claim"
means an Affidavit and
Assignment of Claim in the form of Attachment "F" to this Agreement.

     

         "Agreement" means this Loan Sale Agreement and the
Attachments hereto. 

     

         "Assignment and Assumption of
Interests and Obligations"
means an Assignment and Assumption of Interests and Obligations in the form of
Attachment "D" to this Agreement. 

     

         "Assignment and Lost Instrument
Affidavit" means an
Assignment and Lost Instrument Affidavit in the form of Attachment "E" to this
Agreement. 

     

         "Attachment" means any of the attachments to this
Agreement. 

     

         "Bank Closing
Date" means the close of
business of the Failed Bank on the date on which the Chartering Authority closed
such institution. 

     

    
      	Federal Deposit
      Insurance Corporation	1	Loan Pool
      Numbers(s):	          
	Loan Sale Agreement	
            	Pool “A”	
            
	Version 1.5 (FM)	
            	
            	
            
	09.27.04	
            	
            	
            

    

    

    
    

         "Bid" means the offer to purchase one or more Loan
Pool(s) that was submitted by Buyer and accepted by Seller. 

     

         "Bid Award Date" means the date the Bid Confirmation Letter is
sent to Buyer by Seller. 

     

         "Bid Confirmation
Letter" means the letter
sent to Buyer by Seller confirming acceptance of a Bid submitted by Buyer.

     

         "Bid Instructions" means the document under such title provided
to bidders and potential bidders. 

     

         "Bid Percentage" means Buyer's offer, expressed as a
percentage of Book Value, to purchase a Loan Pool. 

     

         "Bill of Sale" means a Bill of Sale in the form of
Attachment "C" to this Agreement. 

     

         "Book Value" means a Loan's unpaid principal balance as
stated on the Accounting Records of the Failed Bank as of Bank Closing Date and
adjusted by (i) subtracting payments of principal received by Seller or its
predecessor on or before the Calculation Date (including any adjustments made as
a result of a foreclosure sale on or before the Calculation Date as to which the
Redemption Period, if any, expired on or before the Calculation Date), (ii)
adding Disbursements of Principal made by Seller or its predecessor on or before
the Calculation Date, and (iii) adding back any principal previously charged or
written off by the Failed Bank subsequent to the date of the Information
Package. Book Value for pre-computed interest Loans shall include, in addition,
the amount of outstanding earned and unearned interest for such Loans. The Book
Value shall not include any general or specific reserves on the Accounting
Records of the Failed Bank. 

     

         "Borrower" means any obligor, guarantor or surety of any
Loan or any other party liable for the performance of obligations associated
with any Loan. 

     

         "Business Day" means any day other than a Saturday, Sunday
or federal legal holiday. 

     

         "Calculation Date" means Bank Closing Date, which date shall be
used to calculate the Purchase Price. For each Loan in Loan Pools serviced by
others, "Calculation Date" means the date of the most recent remittance report
prior to the Loan Sale Closing Date. 

     

         "Chartering
Authority" means (i) with
respect to a national bank, the Office of the Comptroller of the Currency, (ii)
with respect to a federal savings association or savings bank, the Office of
Thrift Supervision, (iii) with respect to a bank or savings institution
chartered by a state, the agency of such state charged with primary
responsibility for regulating and/or closing banks or savings institutions, as
the case may be, (iv) the Corporation in accordance with 12 U.S.C. Section
1821(c), with regard to self appointment, or (v) the appropriate federal banking
agency in accordance with 12 U.S.C. 1821(c)(9).

     

    
      	Federal Deposit
      Insurance Corporation	2	Loan Pool
      Numbers(s):	          
	Loan Sale Agreement	
            	Pool “A”	
            
	Version 1.5 (FM)	
            	
            	
            
	09.27.04	
            	
            	
            

    

    

	
    

         "Closing" means the
simultaneous delivery by Seller and Buyer of documents and funds and the
performance of the other acts herein provided to be performed on the Loan Sale
Closing Date in order to effect the consummation of the Loan Sale.

     

         "Collateral" means any and all collateral securing a Loan,
including without limitation, any accounts receivable, inventory, property of
any kind, whether real or personal (including but not limited to equipment and
other physical assets), and any contract and other rights and interests of a
Borrower pledged pursuant to or otherwise subject to any Collateral
Document.

     

         "Collateral
Document" means each deed
of trust, mortgage, assignment of production, security agreement, assignment of
security interest, personal guaranty, corporate guaranty, letter of credit,
pledge agreement, collateral agreement, loan agreement or other agreement or
document, whether an original or copy or whether similar to or different from
those enumerated, securing in any manner the performance or payment by any
Borrower of its obligations or the obligations of any other Borrower under any
Note evidencing a Loan.

     

         "Confidentiality Agreement"
means the confidentiality
agreement executed or assented to by Buyer in anticipation of gaining access to
the documents related to the sale of the Loans.

     

         "Contract for
Deed" means an executory
contract with a third party to convey real property.

     

         "Corporate
Advances" means the
payment of appraisal fees, broker opinion fees, attorney fees and associated
legal fees, foreclosure fees, trustee fees, property inspection fees, property
preservation and operating cost fees, tax penalties, title policies, lien search
fees or any other cost that can be directly associated with the collection and
servicing of a Note.

     

         "Corporation" means
the Federal Deposit Insurance Corporation in its corporate
capacity.

     

         "Deconversion Date"
means the date Loan
servicing records are transferred to the Buyer's system of record, which date
shall be a Business Day not later than ninety (90) calendar days after the Loan
Sale Closing Date.

     

         "Deficiency
Balance" means the
remaining unpaid principal balance of any Note purchased hereunder after
crediting to it the proceeds of a foreclosure sale which occurred on or before
the Calculation Date, and for which the Redemption Period, if any, expired on or
before the Calculation Date.

     

         "Disbursement of Principal"
means incremental funding
of loan proceeds under a Note, such as in the case of a revolving credit loan or
a construction loan.

     

    
      	Federal Deposit
      Insurance Corporation	3	Loan Pool
      Number(s):	          
  
	Loan Sale Agreement	
            	Pool “A”	
            
	Version 1.5 (FM)	
            	
            	
            
	09.27.04	
            	  	
            

    

    

    
    

         "Failed
Bank" means Home National
Bank, Blackwell, Oklahoma.

     

         "Foreign Loan" means a Loan regarding which the Borrower or
any of the Collateral concerning the Loan is located in a country other than the
United States.

     

         "Foreign Jurisdiction"
means any country, other
than the United States, and any subdivision or other jurisdiction of or in such
other country in which a Borrower or any Collateral is located.

     

         "Information
Package" means the
compilation of financial and other data with respect to the Failed Bank entitled
"Information Package" dated as of May 20, 2010, and any amendments or
supplements thereto provided to the Buyer by the Corporation.

     

         "Internal Revenue Code" means the Internal Revenue Code of 1986 of the United States, as it may
be amended from time to time.

     

         "Limited Power of
Attorney" means the
Limited Power of Attorney in the form of Attachment “G” to this
Agreement.

     

         "Loan(s)" means and includes: (a) any obligation
evidenced by a Note or other evidence of indebtedness; (b) all rights, powers,
liens or security interests of Seller in or under the Collateral Document(s);
(c) any judgment founded upon a note to the extent attributable thereto and any
lien arising therefrom; (d) any Contract for Deed and the real property which is
subject to such Contract for Deed; (e) any lease and the related leased
property; (f) all right, title and interest in and to any Deficiency Balance;
and (g) any other asset of whatever kind or type, all as identified on the
attached Schedule of Loans, including without limitation, all rights arising
therefrom or appurtenant thereto. Loan(s) include Other Real
Estate.

     

         "Loan File" means (i) all Failed Bank documents
pertaining to any Loan, either copies or originals, that are in the possession
of Seller excluding the Note, renewals of the Note and Collateral Documents and
(ii) any files with respect to a Loan established and maintained by Seller's
employee(s) or contractor(s) responsible for the management of that Loan
following the closing of the Failed Bank, excluding Seller's internal memoranda
and confidential communications between Seller and its legal counsel. The Loan
File does not include other files maintained by other employees or agents of
Seller, such as Seller's legal counsel.

     

         "Loan Pool(s)" means one (or more) of the groups of Loans
identified in the Schedule of Loans set forth in Attachment "A" to this
Agreement.

     

         "Loan Pool Combination"
means a group of Loan
Pools for which Buyer submitted a Bid linking the purchase of the Loan Pools to
one another.

     

         "Loan Sale" means the sale of Loans of the Failed Bank by
Seller.

     

    
      	Federal Deposit
      Insurance Corporation	4	Loan Pool
      Number(s):	          
  
	Loan Sale Agreement	
            	Pool “A”	
            
	Version 1.5 (FM)	
            	
            	
            
	09.27.04	
            	  	
            

    

    

    
    

         "Loan Sale Closing
Date" means no later than
2:00PM CDT on a date that is no later than July 14, 2010.

     

         "Mortgaged
Property" means the land,
fixtures and improvements, if any, securing any Loan sold to Buyer under the
terms and conditions of this Agreement. Mortgaged Property does not include
property repossessed or foreclosed on or before the Calculation Date as to which
the Redemption Period, if any, expired on or before the Calculation
Date.

     

         "Non-Foreign Loan"
means any Loan which is
not a Foreign Loan.

     

        
"Non-Performing Loan(s)" means any Loan other than a Performing Loan.

     

         "Note" means each agreement, document and instrument
evidencing a Loan, including without limitation, each promissory note, loan
agreement, shared credit or participation agreement, inter-creditor agreement,
letter of credit, reimbursement agreement, draft, bankers' acceptance,
transmission system confirmation of transaction or other evidence of
indebtedness of any kind evidencing each Loan (including loan histories,
affidavits, general collection information, correspondence and comments
pertaining to such obligation).

     

         "Noteholder" means the holder of a Note.

     

         Section 1.01 "Obligations" means
all obligations and commitments of Seller relating to a Loan and arising under
and in accordance with the relevant Note(s) or Collateral Documents relating
thereto, including without limitation the commitment to make advances of funds
to or for the benefit of a Borrower.

     

         "Other Real
Estate" means all
interests in real estate (other than Bank Premises and Fixtures) as identified
on the Schedule of Loans set forth in Attachment “A” hereto, including but not
limited to mineral rights, leasehold rights, condominium and cooperative
interests, air rights and development rights that are owned by the Failed
Bank.

     

         "Participated
Loan" means any Loan
subject to a shared credit, participation or similar inter-creditor agreement
under which the Failed Bank was lead or agent financial depository institution
or otherwise managed the credit or sold participations, or under which the
Failed Bank was a participating financial depository institution or purchased
participations in a credit managed by another.

     

         "Performing Loan" means any Loan for which the last payment of
principal, interest and any escrow amounts that is required to be paid by the
terms of the Note or Collateral Documents is less than sixty days past due (for
matured loans, less than thirty days past due) as of the Calculation Date as
shown on the Schedule of Loans attached hereto as Attachment "A," regardless of
whether such Loan is in a Loan Pool consisting primarily of Performing Loans or
consisting primarily of Non-Performing Loans.

     

    
      	Federal Deposit
      Insurance Corporation	5	Loan Pool
      Number(s):	          
  
	Loan Sale Agreement	
            	Pool “A”	
            
	Version 1.5 (FM)	
            	
            	
            
	09.27.04	
            	  	
            

    

    

    
    

         "Property" means the real or personal property securing
any Loan contained in a Loan Pool.

     

         "Purchase Price" means, an amount equal to the sum of (i) the
Book Value of all Loans multiplied by the Bid Percentage of eighty-seven and
one-half percent (87.5%), plus (ii) Disbursements of Principal made by Seller
that are not included in the Book Value, plus (iii) any Advances made by the
Failed Bank or Seller, plus (iv) interest calculated on the Book Value and at
the rate payable for each Performing Loan (except those with pre-computed
interest) from the interest "paid-to date" to, but not including, the Loan Sale
Closing Date. No amount with respect to unpaid interest shall be due for
Non-Performing Loans.

     

         "Purchaser Eligibility
Certification" means the
document under such title provided to bidders and potential bidders as part of
the Information Package and executed by Buyer in connection with the Loan
Sale.

     

         "Redemption Period"
means the applicable state
statutory time period, if any, during which a foreclosed owner may buy back
foreclosed real property from the foreclosure sale purchaser. Not all states
provide for a Redemption Period. The length of a Redemption Period may vary
among the states which do provide for a Redemption Period. The law of the state
in which the real property is located is the applicable law in determining
whether there is a Redemption Period and if so, how long it is.

     

         "Related Party" means any party related to the Borrower in
the manner delineated in 26 U.S.C.A 267(b) and the regulations promulgated
thereunder, as such law and regulations may be amended from time to
time.

     

         "Schedule of Loans" means the
list of all Loans that are the subject of this transaction appended to this
Agreement as Attachment "A."

     

         "Settlement Date" means a date determined by Seller upon which
final adjustments will be made to the Purchase Price pursuant to Section 2.4
hereof. Any Settlement Date determined by Seller shall be a Business Day not
later than one hundred eighty (180) calendar days
after the Loan Sale Closing Date.

     

         "Shared-Loss Agreements"
means the Single Family
Shared-Loss Agreement and the Commercial Shared-Loss Agreement attached hereto
as Attachment "H."

     

         "Tax Certificate" means a certificate signed by the chief
financial officer, chief accounting officer or other executive officer with
knowledge of tax matters, or the general counsel, of Buyer certifying that under
the applicable laws of each relevant Foreign Jurisdiction and jurisdiction in
which Buyer, its lending or other relevant office or agents may be located, (i)
no Taxes are payable by Seller or Buyer, or if any such Taxes are payable,
certifying the type and amount of such taxes, the party responsible for the
payment thereof, the relevant taxing authority to which payment of such Taxes
must be made and the timing for such payment as required by applicable law, and
(ii) no Tax forms or other information reports are required of the Seller, or if
any such forms or reports are required, certifying the type of form, the
relevant taxing authority and the deadline for such form or other
report.

     

    
      	Federal Deposit
      Insurance Corporation	6	Loan Pool
      Number(s):	          
  
	Loan Sale Agreement	
            	Pool “A”	
            
	Version 1.5 (FM)	
            	
            	
            
	09.27.04	
            	  	
            

    

    

    
    

         "Taxes"
means any taxes,
assessments, levies, imposts, duties, deductions, fees, withholdings or other
charges of whatever nature, including interest and penalties thereon, required
to be paid to any taxing authority of or in any Foreign Jurisdiction or any
jurisdiction in which Buyer, its lending or other relevant office or agents may
be located under the applicable laws of such Foreign Jurisdiction or other
jurisdiction with respect to the sale and transfer of the Loans, the Collateral
Documents or the rights in the Collateral or the assignment and assumption of
Obligations thereunder, including without limitation any withholding taxes
payable by virtue of the sale of the Loans at a discount from Book Value and any
value-added taxes.

     

         "Transfer
Documents" means the
endorsements and allonges to Notes, Assignment and Lost Instrument Affidavits
(if applicable), assignments, deeds and other documents of assignment,
conveyance or transfer required under the laws of any jurisdiction within the
United States to evidence the transfer to Buyer of the Loans, the Collateral
Documents and Seller’s rights with respect to the Loans and the Collateral.
Transfer Documents do not include this Agreement, the Bill of Sale, and the
Assignment and Assumption of Interests and Obligations.

     

         "Uniform Commercial
Code" means the uniform
law governing commercial transactions as adopted by the State of New
York.

     

    Article II
Purchase and Sale of Loans

     

         2.1. Terms and Conditions of
Sale. Seller agrees to
sell, assign, transfer and convey to Buyer, and Buyer agrees to purchase and
accept from Seller, all the right, title and interest of Seller, subject to the
provisions of Section 3.3, as of the Bank Closing Date, in and to each Loan in
the Loan Pool(s) on a servicing-released basis, and all rights in the Property
pursuant to the Collateral Documents. Seller agrees to assign and Buyer agrees
to assume all of the Obligations of the Failed Bank or Seller under and with
respect to all the Notes and Collateral Documents. Such sale, assignment,
transfer and conveyance by Seller and the purchase, acceptance and assumption by
Buyer shall occur at and as of the Bank Closing Date, and shall be on the terms
and subject to the conditions set forth in this Agreement, including without
limitation, the payment by Buyer of the Purchase Price. Seller and Buyer agree
that after the Bank Closing Date, the Loans sold and purchased hereunder shall
be subject to the terms of the Shared-Loss Agreements attached hereto as
Attachment “H.”

     

         2.2. Closing and Payment of Purchase Price. The Closing shall occur on the Loan Sale
Closing Date, and, at Seller's option, be either by mail or conducted in person
at a place designated by Seller. Buyer shall pay to Seller at the Closing, by
wire transfer of immediately available funds the amount of the Purchase Price.
Wire transfers shall be made to Seller's account in accordance with such
instructions as Seller shall notify to Buyer in writing on or prior to the Loan
Sale Closing Date.

     

    
      	Federal Deposit
      Insurance Corporation	7	Loan Pool
      Number(s):	          
  
	Loan Sale Agreement	
            	Pool “A”	
            
	Version 1.5 (FM)	
            	
            	
            
	09.27.04	
            	  	
            

    

    

    
    

         2.3. Allocation of Payments Made on
Loans. All payments
received by Seller on account of any of the Loans on or before the Calculation
Date shall belong to Seller. All payments received by Seller on account of the
Loans after the Calculation Date shall belong to Buyer. In the event that a
check Seller has received with respect to a Loan on or before the Calculation
Date is dishonored before or after the Calculation Date, an adjustment to the
Purchase Price in Seller's favor in the amount of the dishonored check shall be
made within ten (10) days of notification by Seller to Buyer that a check has
been dishonored. In the event Seller deposits a check received after the
Calculation Date and issues a check or other payment therefor to Buyer, Buyer
shall bear the risk that any such check will be dishonored and Buyer shall
reimburse Seller within ten (10) Business Days after receipt of notice by Seller
to Buyer that such check was dishonored.

     

         2.4. Adjustments to Purchase Price; Offsets Against
Deposits.

     

              (a) On or
before the Settlement Date, Seller shall provide Buyer with a statement(s)
setting forth adjustments to the Purchase Price that Buyer or Seller discovers
reflecting (1) any changes in the Book Value (i) because of miscalculations,
misapplied payments, unapplied payments, unrecorded Disbursements of Principal
disbursed on or before the Calculation Date, or other accounting errors; or (ii)
resulting from a final court decree, unappealable regulatory enforcement order
or other similar action of a legal or regulatory nature effective on or before
the Calculation Date; and (2) any unreimbursed Advances or Disbursements of
Principal disbursed after the Calculation Date that were not previously included
in the Purchase Price. No adjustment to Purchase Price will be made for any
changes resulting from any calculation or adjustment of interest on any Loan as
provided in Section 6.4 hereof. Any monies due Buyer or Seller as a result of
any adjustments made pursuant to Section 2.4(a)(1) hereof will be calculated by
multiplying the resulting net change in Book Value by the Bid Percentage. Any
monies due Seller as a result of any adjustments made pursuant to Section
2.4(a)(2) will be equal to 100% of the aggregate amount of payments not
previously included in the Purchase Price. The total aggregate amount owed to
Seller shall be subtracted from the total aggregate amount owed to Buyer. If the
resulting amount is a positive number, Seller shall pay such amount to Buyer,
and if the resulting amount is a negative number, Buyer shall pay such amount to
Seller as if such number were a positive number. Any monies due Buyer or Seller
will be paid no later than ten (10) Business Days after the Settlement Date.
Buyer shall adjust its servicing records to reflect any changes to the unpaid
principal balance of any Loan made pursuant to this Section 2.4(a).

     

              (b) With
respect to any Loan, Seller reserves the right to permit or require offsets
against deposit accounts of the Failed Bank. If allowed by Seller, such offsets
will be retroactive to the date such Failed Bank closed. At such time as an
offset is effected, Seller will give notice of such to Buyer and pay Buyer the
amount of the offset on a dollar-for-dollar basis and Buyer shall credit such
amount to the Loan according to the terms and conditions of the applicable
Note(s) as of the Bank Closing Date.

     

    
      	Federal Deposit
      Insurance Corporation	8	Loan Pool
      Number(s):	          
  
	Loan Sale Agreement	
            	Pool “A”	
            
	Version 1.5 (FM)	
            	
            	
            
	09.27.04	
            	  	
            

    

    

    
    

         2.5. Rebates and Refunds. Buyer is not entitled to any rebates or
refunds from Seller from any pre-computed interest Loan regardless of when the
Note matures. Further, on precomputed interest Loans, Seller will not refund any
unearned discount amounts to Buyer.

     

         2.6. Interest Conveyed.
Seller shall convey all of its right, title and interest in and to each Loan. In
the event a foreclosure occurs after the Calculation Date, or occurred on or
before the Calculation Date, but the Redemption Period had not expired on or
before the Calculation Date, Seller shall convey to Buyer the Deficiency
Balance, if any, together with the net proceeds, if any, of such foreclosure
sale. If Seller was the purchaser at such foreclosure sale, Seller shall convey
to Buyer the Deficiency Balance, if any, together with a quitclaim deed to the
property purchased at such foreclosure sale. Buyer acknowledges and agrees that
Buyer shall not acquire any interest in or to any performance or completion bond
filed with any governmental entity for the purpose of ensuring that improvements
constructed or to be constructed on such property are completed in accordance
with any governmental regulation(s) or building requirement(s) applicable to the
proposed or completed improvement.

     

         2.7. Retained Claims and Release. Buyer and Seller agree that the sale of the
Loans pursuant to this Agreement will exclude the transfer to Buyer of all
right, title and interest of Seller in and to any and all claims of any nature
whatsoever that might now exist or hereafter arise, whether known or unknown,
that Seller has or might have (a) against officers, directors, employees,
insiders, accountants, attorneys, other persons employed by Seller or the Failed
Bank and any of its predecessors, underwriters or any other similar persons who
have caused a loss to Seller or the Failed Bank and any of its predecessors in
connection with the initiation, origination or administration of a Loan, (b)
against any appraisers, accountants, auditors, attorneys, investment bankers or
brokers, loan brokers, deposit brokers, securities dealers or other professional
individuals or entities who performed services for the Seller or the Failed Bank
or any of its predecessors, relative to a Loan, (c) against any third parties
involved in any alleged fraud or other misconduct relating to the making or
servicing of a Loan or (d) against any appraiser or other party from whom Seller
or any servicing agent contracted for services or title insurance in connection
with the making, insuring or servicing of a Loan.

     

         2.8. Taxes.
Notwithstanding that Taxes may, under applicable law, be assessed against and
payable by Seller, Buyer hereby agrees to accept responsibility for and to pay,
on its own behalf or on behalf of Seller, as the case may be, any and all Taxes,
and Seller shall have no obligation to reimburse Buyer therefor. Payment of
Taxes shall not affect the Purchase Price. Within thirty days after the Loan
Sale Closing Date, Buyer shall deliver to Seller a Tax Certificate in accordance
with Section 3.1 hereof. In the event that the Tax Certificate shall prove to
have been incorrect or for any other reason Buyer becomes
aware of Taxes due, Buyer shall promptly notify Seller and shall pay such Taxes
in accordance with the provisions of this Section 2.8. In the event that Taxes
shall be payable, Buyer shall make payment thereof to the relevant taxing
authorities when due, identifying to such authorities in appropriate manner and
in accordance with applicable law the nature of the payment and identifying the
party on whose behalf the payment is being made. In the event that, under
applicable law, Buyer shall be unable to make payment of Taxes on behalf of
Seller, then Buyer shall promptly notify Seller thereof and Seller may, at its
sole option, grant to Buyer a limited power of attorney, in such form as Seller
shall determine, solely for the purpose of making payment of such Taxes and
filing information returns with respect thereto as agent for Seller. Buyer shall
notify Seller, in accordance with the provisions of Article VIII of this
Agreement, promptly after payment of any Taxes that such payment has been
made.

     

    
      	Federal Deposit
      Insurance Corporation	9	Loan Pool
      Number(s):	          
  
	Loan Sale Agreement	
            	Pool “A”	
            
	Version 1.5 (FM)	
            	
            	
            
	09.27.04	
            	  	
            

    

    

    
    

         2.9. Loans Made After the Date of the Information
Package. Loans made after
the date of the Information Package may be placed, in the sole discretion of
Seller, in a Loan Pool of like Loans, and such Loans shall be purchased by Buyer
on the same terms and conditions as the other Loans in the Loan
Pool(s).

     

    Article III
Transfer of Loan(s), Collateral Documents and
Servicing

     

         3.1. Delivery of Documents. Buyer and Seller agree to execute and deliver
to one another the following files and documents:

     

              (a) At
Closing, Buyer shall deliver to Seller:

     

         1. Two originals of the
Assignment and Assumption of Interests and Obligations, in the form of Attachment "D"
to this Agreement, executed by Buyer.

     

         2. A corporate resolution
certified by Buyer's corporate secretary or, if Buyer is not a corporation,
other evidence satisfactory to Seller as to Buyer's authority: (i) to purchase
the Loans and assume the Obligations thereunder, and (ii) to execute and deliver
this Agreement and all related instruments required to consummate the
transactions contemplated hereby and to carry out all of its obligations
hereunder (including a certificate of incumbency of any person who executes any
document on behalf of Buyer).

     

         3. Two originals of this
Agreement executed by Buyer. 

     

         4. Other documents as Seller
may reasonably require as evidence of Buyer's good standing, existence or authority.

     

              (b) At
Closing, Seller shall deliver to Buyer: 

     

         1. A Bill of Sale
transferring all of Seller's right, title and interest in and to the Loans to
Buyer, in the form of Attachment "C" to this Agreement, executed
by Seller.

     

    
      	Federal Deposit
      Insurance Corporation	10	Loan Pool
      Number(s):	          
  
	Loan Sale Agreement	
            	Pool “A”	
            
	Version 1.5 (FM)	
            	
            	
            
	09.27.04	
            	  	
            

    

    

    
    

         2. Two originals of the
Assignment and Assumption of Interests and Obligations, in the form of Attachment "D"
to this Agreement, executed by Seller.

     

         3. Two originals of
this Agreement executed by Seller.

     

         4. Such Transfer Documents executed by Seller as Seller elects to deliver
at Closing, including, without limitation, quitclaim deed(s) where appropriate,
transferring all of Seller’s right, title and interest in and to any Loan(s)
that are comprised of Other Real Estate.

     

              (c)
Within thirty days after the Loan Sale Closing Date, Buyer shall deliver the Tax
Certificate to Seller, if applicable.

     

              (d)
Within a reasonable time after the Loan Sale Closing Date, Seller shall deliver
to Buyer the Note, the Loan File(s) and Collateral Document(s) pertaining to the
Loan(s) sold.

     

              (e)
After Closing, Seller, in Seller’s sole discretion, may elect to grant a Limited
Power of Attorney to selected Buyer employees. If Seller elects to grant such a
Limited Power of Attorney, Seller will provide it to Buyer within a reasonable
time after the Loan Sale Closing Date. If Buyer is granted such a Limited Power
of Attorney, Buyer, at Buyer’s expense, will prepare and execute on behalf of
Seller, within a reasonable time after the Loan Sale Closing Date, all Transfer
Documents not delivered by Seller to Buyer at Closing. All Transfer Documents
prepared by Buyer shall be in appropriate form suitable for filing or recording
(if applicable) in the relevant jurisdiction and otherwise subject to the
limitations set forth herein, and Buyer shall be solely responsible for the
preparation, contents and form of such documents. Buyer hereby releases Seller
from any loss or damage incurred by Buyer due to the contents and form of any
documents prepared by Buyer and shall indemnify and hold Seller harmless for any
action or cause of action by any person, including Buyer, arising out of the
contents or form of the Transfer Documents, including without limitation, any
claim relating to the adequacy or inadequacy of any of such documents or
instruments for the purposes thereof.

     

    The form which Buyer
shall use for endorsing promissory notes or preparing allonges to promissory
notes is as follows:

     

    
      	Pay to the order of
	 	
            	 
	Without Recourse
	 	
            
	FEDERAL DEPOSIT INSURANCE
	CORPORATION [insert applicable
      capacity(ies)]
	 	
            
	By:	
            	 
	Name:  	
            	 
	Title:	Attorney-in-Fact

    

    
      	Federal Deposit
      Insurance Corporation	11	Loan Pool
      Number(s):	          
  
	Loan Sale Agreement	
            	Pool “A”	
            
	Version 1.5 (FM)	
            	
            	
            
	09.27.04	
            	  	
            

    

    

	
    

	All other documents
of assignment, conveyance or transfer shall contain this sentence: “This
_____________________ [assignment or conveyance or transfer, as the case may
be] is made without
recourse, representation or warranty, express or implied, by the FDIC in its
corporate capacity or as Receiver.” 

     

              (f) In the event Seller elects not to provide
Buyer with a Limited Power of Attorney in accordance with Section 3.1(e), then
all Transfer Documents not delivered by Seller to Buyer at Closing shall be
prepared and executed by one of the following methods, at Seller’s option:

     

         1. Seller, at Seller’s expense, will prepare and execute all endorsements
and allonges to Notes or Assignment and Lost Instrument Affidavits (if
applicable) not delivered by Seller to Buyer at Closing and provide them to
Buyer within a reasonable time after the Loan Sale Closing Date. Buyer, at
Buyer’s expense, will prepare all other Transfer Documents not delivered by
Seller to Buyer at Closing and shall deliver such documents to Seller for
execution within a reasonable time after the Loan Sale Closing Date. All
Transfer Documents prepared by Buyer shall be subject to the terms and
conditions for Transfer Documents specified in Section 3.1(e) above. If any
Transfer Document delivered by Buyer to Seller for execution is unacceptable to
Seller for any reason whatsoever, Seller may return such document to Buyer along
with an explanation as to why the document is unacceptable to Seller. When
requesting execution of any such document, Buyer shall furnish Seller with the
Loan Pool and the Loan numbers set forth on the Schedule of Loans, and a copy of
the Note(s), a copy of the Collateral Document(s) or other document(s) to be
transferred, and copies of any previous assignments of the applicable Collateral
Document or other document; or

     

         2. Seller, at Seller’s expense, will prepare and execute all Transfer
Documents not delivered by Seller to Buyer at Closing and provide them to Buyer
within a reasonable time after the Loan Sale Closing Date. Seller shall furnish
all such documents to Buyer in appropriate form suitable for filing or recording
(if applicable) in the relevant jurisdiction and otherwise subject to the
limitations set forth herein. 

     

              (g) As to Foreign Loans, Buyer, at its own
expense, must retain counsel who are licensed in the Foreign Jurisdiction(s)
involved with the Foreign Loans. Such foreign counsel must draft the documents
necessary to assign the Foreign Loans to Buyer. Documents presented to Seller to
assign Foreign Loans to Buyer must be accompanied by a letter on the foreign
counsel's letterhead, signed by the foreign counsel preparing those documents,
certifying that those documents conform to all the laws of the Foreign
Jurisdiction. Each such document and instrument shall be delivered to Seller in
the English language, provided, however, that any document required for its
purposes to be executed by Seller in a language other than the English language
shall be delivered to Seller in such language, accompanied by a translation
thereof in the English language,
certified as to its accuracy by an executive officer or general counsel of Buyer
and, if such executive officer or general counsel shall not be fluently
bilingual, by the translator thereof. 

     

    
      	Federal Deposit
      Insurance Corporation	12	Loan Pool
      Number(s):	          
  
	Loan Sale Agreement	
            	Pool “A”	
            
	Version 1.5 (FM)	
            	
            	
            
	09.27.04	
            	  	
            

    

    

    
    

              (h) Nothing contained herein or elsewhere in
this Agreement shall require Seller to make any agreement, representation or
warranty or provide any indemnity in any such document or instrument or
otherwise, nor is Seller obligated to obtain any consents or approval to the
sale or transfer of the Loans or the related servicing rights, if any, or the
assumption by the Buyer of the Obligations.

     

              (i) Seller agrees to execute any additional
documents required by applicable law or necessary to effectively transfer and
assign any and all Loans to Buyer. Seller shall have no obligation to provide,
review or execute any such additional documents unless the same shall have been
requested of Seller within 365 calendar days of the Loan Sale Closing
Date.

     

         3.2. Recordation of Documents. Buyer shall be responsible for, and agrees to promptly deliver, at its
sole cost and expense, all appropriate documents and instruments with respect to
each Loan for recordation or filing in the appropriate land, chattel, Uniform
Commercial Code, and other records of the appropriate county, state and/or other
jurisdiction(s) or Foreign Jurisdiction to effect the transfer of the Loans and
the Collateral Documents and all rights in Collateral, and to render legal,
valid and enforceable the obligations of the Borrower(s) to the Buyer and the
assumption by the Buyer of any Obligations related to a Loan arising under and
in accordance with the relevant Note and Collateral Documents. Seller shall, if
such is affirmatively required under the applicable laws of a relevant Foreign
Jurisdiction, take such actions as are necessary in such Foreign Jurisdiction to
effect the purposes of this Article III. In accordance with Section 2.8 hereof,
Buyer shall be responsible for and shall pay any and all Taxes, fees, costs and
expenses incurred in connection therewith, including without limitation
notarization fees and stamp, transfer and similar Taxes or fees. 

     

         3.3. Transfer of Servicing. The Loans are hereby sold and conveyed to Buyer subject to servicing
agreements, if any, which Buyer will assume. From and after the Bank Closing
Date, all rights, obligations, liabilities and responsibilities with respect to
the servicing of the Loans shall pass to Buyer, and Seller shall be discharged
from all liability therefor, including any liability arising from any limited
interim servicing provided by Seller pursuant to this Section 3.3.

     

         To provide for the orderly transfer of the
servicing to Buyer, Seller will provide, at Seller’s expense, limited interim
servicing of the Loans on Buyer’s behalf from the Bank Closing Date through the
Deconversion Date, as follows: (i) receive payments and post them to the system
of record, (ii) maintain records reflecting payments received, (iii) provide
Buyer on request a schedule of payments processed, and (iv) provide payoff
information to Buyer regarding particular Loans as applicable. Seller may engage
agents of Seller’s own choosing to perform such limited interim servicing.
Seller’s performance of this limited interim servicing shall cease on the
Deconversion Date.

     

    
      	Federal Deposit
      Insurance Corporation	13	Loan Pool
      Number(s):	          
  
	Loan Sale Agreement	
            	Pool “A”	
            
	Version 1.5 (FM)	
            	
            	
            
	09.27.04	
            	  	
            

    

    

    
    

    Article IV
Representation and Warranties of Buyer

     

         Buyer hereby represents and warrants to Seller as of the date of this
Agreement and as of the Loan Sale Closing Date: 

     

         4.1. Buyer's Authorization. Buyer and the undersigned duly authorized representative of Buyer,
acting individually, represent that Buyer is authorized to enter into this
Agreement and that all laws, rules, regulations, charter provisions and bylaws
to which Buyer may be subject have been duly complied with, and that such
representative is authorized to act upon behalf of and bind Buyer to the terms
of this Agreement. 

     

         4.2. Compliance with Law. Neither Buyer nor any of its subsidiaries is
in violation of any statute, regulation, order, decision, judgment or decree of,
or any restriction imposed by, the United States of America, any State,
municipality or other political subdivision or any agency of any of the
foregoing, or any court or other tribunal having jurisdiction over Buyer or any
of its subsidiaries or any assets of any such person, or any foreign government
or agency thereof having such jurisdiction, with respect to the conduct of the
business of Buyer or of its subsidiaries, or the ownership of the properties of
Buyer or any of its subsidiaries, which, either individually or in the aggregate
with all other such violations, would materially and adversely affect the
business, operations or condition (financial or otherwise) of Buyer or the
ability of Buyer to perform, satisfy or observe any obligation or condition
under this Agreement. Neither the execution and delivery nor the performance by
Buyer of this Agreement will result in any violation by Buyer of, or be in
conflict with, any provision of any applicable law or regulation, or any order,
writ or decree of any court or governmental authority.

     

         4.3. Execution and Enforceability. This Agreement has been duly executed and
delivered by Buyer and when duly authorized, executed and delivered by Seller,
this Agreement will constitute a legal, valid and binding obligation of Buyer,
enforceable in accordance with its terms.

     

         4.4. Representations Remain True. Buyer represents and warrants that all
information and documents provided to Seller or its agents by or on behalf of
Buyer in connection with this Agreement and the transactions contemplated
hereby, including, but not limited to, the Purchaser Eligibility Certification
and the Confidentiality Agreement, are true and correct in all material respects
and do not fail to state any fact necessary to make the information contained
therein not misleading.

     

    Article V
Covenants, Duties and Obligations of Buyer 

     

         5.1. Servicing of Loans. From and after the Deconversion Date, Buyer
shall comply with all state and federal laws and the laws of any Foreign
Jurisdiction applicable with respect to the ownership and/or servicing of the
Loans, including, without limitation, the Fair Debt Collection Practices Act (15 U.S.C. § 1692
et seq., as amended) and similar state requirements,
rules and regulations, and shall abide by and be subject to all of the terms and
conditions of the Collateral Documents and other instruments and documents
governing or relating to the Loans and/or the servicing rights and other rights
thereunder. 

     

    
      	Federal Deposit
      Insurance Corporation	14	Loan Pool
      Number(s):	          
  
	Loan Sale Agreement	
            	Pool “A”	
            
	Version 1.5 (FM)	
            	
            	
            
	09.27.04	
            	  	
            

    

    

    
    

         5.2. Disbursements of Principal. Buyer accepts and assumes and expressly
agrees to perform in accordance with the terms, all Obligations under the Note
or the Collateral Documents, including without limitation, all Obligations for
Disbursements of Principal, and Buyer hereby expressly agrees to indemnify,
defend and hold harmless the Failed Bank, Seller and Seller's agents and
employees from and against any claims, demands and causes of action arising out
of claims of breach or default by Buyer of such Obligations. 

     

         5.3. Collection Agency/Contingency Fee
Agreements. Buyer takes
the Loan(s) subject to any agreements with collection agencies currently in
force or contingency fee agreements with attorneys and agrees to fulfill all
Obligations of Seller thereunder. Buyer hereby indemnifies and agrees to hold
Seller harmless from and against any and all claims, demands, losses, damages,
penalties, forfeitures or judgments made or rendered against Seller or any legal
fees or other costs, fees or expenses incurred by Seller arising out of or based
upon such agreements with collection agencies or contingency fee agreements with
attorneys. Buyer agrees to notify Seller within ten (10) Business Days of notice
or knowledge of any such claim or demand. 

     

         5.4. Insured or Guaranteed Loans. If any Loans being transferred pursuant to
this Agreement are insured or guaranteed by any department or agency of any
governmental unit, federal, state or local and such insurance or guaranty is not
being specifically terminated by Seller, Buyer represents that Buyer has been
approved by such agency and is an approved lender or mortgagee, as appropriate,
if such approval is required or, if Buyer has not been approved, Buyer
recognizes that any such insurance or guarantees may be terminated. Buyer
further assumes full responsibility for determining whether or not such
insurance or guarantees are in full force and effect on the date of this
Agreement and with respect to those Loans whose insurance or guaranty is in full
force and effect on the date of this Agreement, Buyer assumes full
responsibility for doing all things necessary to insure such insurance or
guarantees remain in full force and effect. Buyer agrees to assume all of
Seller's Obligations under the contract(s) of insurance or guaranty, agrees to
indemnify and hold Seller harmless from and against any claims of breach thereof
after the Closing and agrees to cooperate with Seller where necessary to
complete forms required by the insuring or guaranteeing department or agency to
effect or complete the transfer to Buyer. 

     

         5.5. Buyer's Due Diligence. Buyer represents that it has made an independent evaluation of the Loan
and Loan Files and/or any electronic data made available to it pertaining to the
Loans being purchased hereunder. Buyer also represents that it has conducted
such other investigations as it deems appropriate and as are consistent with the
terms of the Confidentiality Agreement executed or assented to by Buyer in
connection with this transaction, including, without limitation, searches of
Uniform Commercial Code, title, court, bankruptcy and other public records. Buyer agrees and represents
that it is entering into this Agreement solely on the basis of its own
investigations and its judgment as to the nature, validity, enforceability,
collectibility and value of the Loans and all other facts material to their
purchase, including, but not limited to the legal matters and risks relating to
the collection and enforcement, and the performance of Obligations in any
Foreign Jurisdiction. Buyer further acknowledges that no employee or
representative of Seller has been authorized to make any statements or
representations other than those specifically contained in this Agreement.

     

    
      	Federal Deposit
      Insurance Corporation	15	Loan Pool
      Number(s):	          
  
	Loan Sale Agreement	
            	Pool “A”	
            
	Version 1.5 (FM)	
            	
            	
            
	09.27.04	
            	  	
            

    

    

    
    

         5.6 Reporting to or for the Applicable Taxing
Authorities. The Seller
shall be responsible for submitting all Internal Revenue Service information
returns related to the Loans sold hereunder for all applicable periods prior to
the Deconversion Date. The Buyer shall be responsible for submitting all
Internal Revenue Service information returns related to the Loans sold hereunder
for all applicable periods commencing with the Deconversion Date. Information
returns include 1098 and 1099 reporting. Buyer shall be responsible for
submitting all information returns required under applicable laws of any Foreign
Jurisdiction, to the extent such are required to be filed by Buyer or Seller
under such laws, relating to the loans sold hereunder, for the calendar or tax
year in which the Closing occurs and thereafter. 

     

         5.7. Loans in Litigation. With respect to any Loan sold pursuant to this Agreement, which is the
subject of any type of pending litigation, Buyer shall notify Seller's Regional
Counsel, 1601 Bryan St., Dallas, Texas 75201, within fifteen (15) Business Days
of the Loan Sale Closing Date of the name of the attorney selected by Buyer to
represent Buyer's interests in the litigation. Buyer shall, within fifteen (15)
Business Days of the Loan Sale Closing Date, notify the clerk of the court or
other appropriate official and all counsel of record that ownership of the Loan
was transferred from Seller to Buyer. Buyer shall have its attorney file
appropriate pleadings and other documents and instruments with the court or
other appropriate body within twenty (20) Business Days of the Loan Sale Closing
Date, substituting Buyer's attorney for Seller's attorney and also removing
Seller as a party to the litigation and substituting Buyer as the real
party-in-interest. Except as provided in the next succeeding sentence, should
Buyer fail to comply with the provisions of this section within twenty (20)
Business Days after the Loan Sale Closing Date, Seller may, at its option,
dismiss with or without prejudice or withdraw from, any such pending litigation.

     

    In the event that
Buyer shall be unable, as a matter of applicable law, to cause Seller to be
replaced by Buyer as party-in-interest in any such litigation, Buyer shall
provide to Seller's Regional Counsel at the address specified above within
twenty (20) Business Days of the Loan Sale Closing Date a legal opinion of
Buyer's legal counsel, qualified in the relevant jurisdiction, to such effect
and stating the reasons for such failure. In such event, (i) Buyer shall cause
its attorney to conduct such litigation at Buyer's sole cost and expense; (ii)
Buyer shall cause the removal of Seller and substitution of Buyer as
party-in-interest in such litigation at the earliest time possible under
applicable law; (iii) Buyer shall use its best efforts to cause such litigation
to be resolved by judgment or settlement in as reasonably efficient a manner as
practical; (iv) Seller shall cooperate with Buyer and Buyer's attorney as
reasonably required in Seller's sole judgment to bring such litigation or any
settlement relating thereto to a reasonable and prompt conclusion; (v) no settlement shall be agreed upon by
Buyer or its agents or counsel without the express prior written consent of
Seller, unless such settlement includes an irrevocable and complete waiver and
release of any and all potential claims against Seller in relation to such
litigation or the subject Loans or Obligations by any person, including without
limitation Buyer and any Borrower, and any and all losses, liabilities, claims,
causes of action, damages, demands, taxes, fees, costs and expenses relating
thereto are expressly agreed, duly, validly and enforceably, to be paid by Buyer
without recourse of any kind to Seller; and (vi) Buyer shall pay all costs and
expenses of Seller and Seller's counsel, if any, engaged in connection with such
litigation as provided for in the next succeeding sentence. 

     

    
      	Federal Deposit
      Insurance Corporation	16	Loan Pool
      Number(s):	          
  
	Loan Sale Agreement	
            	Pool “A”	
            
	Version 1.5 (FM)	
            	
            	
            
	09.27.04	
            	  	
            

    

    

    
    

    Buyer agrees to
reimburse Seller, upon demand, for Seller's legal expenses in such litigation.
Buyer shall pay all of the costs and expenses incurred by it in connection with
the actions provided for in this Section 5.7, including, without limitation, all
legal fees and expenses and court costs, and agrees to pay or reimburse Seller,
upon demand, for Seller's legal expenses in connection with such litigation
incurred on or after the Loan Sale Closing Date, including the dismissal thereof
or withdrawal therefrom. 

     

         5.8. Loans in Bankruptcy. In accordance with Bankruptcy Rule 3001(e),
Buyer agrees to take all actions necessary to file within thirty (30) Business
Days of the Loan Sale Closing Date, (i) proofs of claims in pending bankruptcy
cases involving any Loans purchased for which Seller has not already filed a
proof of claim, and (ii) all documents required by Rule 3001(e)(2) of the
Federal Rules of Bankruptcy Procedure and to take all such similar actions as
may be required in any relevant jurisdiction in any pending bankruptcy or
insolvency case or proceeding in such jurisdiction involving any Loans purchased
in order to evidence and assert Buyer's rights. Buyer shall prepare and provide
to Seller within thirty (30) Business Days of the Loan Sale Closing
Date, an Affidavit and Assignment of Claim or any similar forms as may be
required in any relevant Foreign Jurisdiction and shall be acceptable to Seller,
for each Loan purchased pursuant to this Agreement where a Borrower under such
Loan is in bankruptcy at Closing. Buyer releases Seller from any claim, demand,
suit or cause of action Buyer may have as a result of any action or inaction on
the part of the Failed Bank or the Seller with respect to such Loan and Buyer
further agrees to reimburse Seller for any cost or expense incurred by Seller as
a result of Buyer's failure to file an Affidavit and Assignment of Claim or
similar forms as required herein. 

     

         5.9. Loan Related Insurance. As of the Bank Closing Date, Buyer is
responsible for having itself substituted as loss payee on all Loan related
insurance in which the Failed Bank or Seller is currently listed as a loss
payee. Any loss after the Bank Closing Date to a Borrower, a participant in a
Participated Loan, or to Buyer or to the value or collectibility of any Loan due
to Seller's cancellation of any insurance is the sole responsibility of
Buyer.

     

         5.10. Loans with Escrow Accounts. Buyer agrees to assume, undertake and
discharge any and all Obligations of the holder of the Loans with respect to any
escrow, maintenance of escrow and payments from escrow of monies paid by or on
account of the Borrower. Seller shall transfer to Buyer that sum of monies held by Seller as of the
Deconversion Date, which represents undisbursed escrow payments. 

     

    
      	Federal Deposit
      Insurance Corporation	17	Loan Pool
      Number(s):	          
  
	Loan Sale Agreement	
            	Pool “A”	
            
	Version 1.5 (FM)	
            	
            	
            
	09.27.04	
            	  	
            

    

    

    
    

         5.11. Loans in which Seller was the Lead Lender in a
Participated Loan. Buyer
hereby agrees to assume the role of lead lender for any Loan in which a portion
of the Loan was participated to one or more other entities and in which Seller
was the lead lender as of the Loan Sale Closing Date. Buyer hereby agrees to
accept any such Participated Loan subject to all participants' right, title and
interest in such Participated Loan. 

     

         5.12. Contracts for Deed.
Buyer agrees to comply with all Obligations set forth in any Contract for Deed
contained in any Loan Pool subject to this Agreement. Pursuant to the provisions
of Section 3.1 hereof, Seller may require Buyer to prepare and furnish Special
Warranty Deed(s) for Seller's approval and execution, conveying the real
property subject to any such contract to Buyer. 

     

         5.13. Leases. Buyer
agrees to comply with all Obligations set forth in any lease related to any Loan
Pool subject to this Agreement. Pursuant to the provisions of Section 3.1
hereof, Seller may require Buyer to prepare and furnish applicable Transfer
Documents for Seller’s approval and execution. 

     

         5.14. Files and Records.
Buyer agrees to abide by all applicable state, federal and Foreign
Jurisdiction laws, rules and regulations regarding the handling and maintenance
of all documents and records relating to the Loans purchased hereunder
including, but not limited to, the length of time such documents and records are
to be retained. Buyer further agrees to: 

     

              (a) Allow
Seller the continuing right to use, inspect and make extracts from or copies of
any such documents or records upon Seller's reasonable notice to Buyer.

     

              (b) Allow
Seller the possession, custody and use of original documents for any lawful
purpose and upon reasonable terms and conditions. 

     

              (c) Give
reasonable notice to Seller of Buyer's intention to destroy or dispose of any
documents or files and to allow Seller, at its own expense, to recover the same
from Buyer. 

     

         5.15. Reimbursement for Use of Seller's Employees. In the event of litigation with respect to
the Loans purchased by Buyer in which Seller or its employees are requested or
required by subpoena, court order or otherwise, to perform any acts including,
but not limited to, testifying in litigation, preparing responses to subpoenas
or other legal process or pleadings, and/or performing any review of public or
private records such as tracing funds, whether said litigation is commenced by
Buyer or any other party, Seller shall be reimbursed by Buyer for the time
expended by each of Seller's employees involved in the performance of said acts
at the rate of the greater of $75.00 per hour per employee or the then
prevailing hourly rate per employee charged by Seller or the FDIC to perform
such services, plus all associated travel, lodging and per diem costs. Seller shall, in its sole and
absolute discretion, determine and assign the personnel necessary to perform
said acts. Buyer also agrees to reimburse Seller for copies made in the course
of performing said acts at the rate of 25 cents ($.25) per copy. Nothing in this
section shall require Seller to provide Buyer with any information or service in
this regard. 

     

    
      	Federal Deposit
      Insurance Corporation	18	Loan Pool
      Number(s):	          
  
	Loan Sale Agreement	
            	Pool “A”	
            
	Version 1.5 (FM)	
            	
            	
            
	09.27.04	
            	  	
            

    

    

    
    

         5.16. Notice to Borrowers. Buyer or, at Seller's option, Seller shall
promptly after the Loan Sale Closing Date, but in no event later than thirty
(30) calendar days after the Loan Sale Closing Date, at
its own cost and expense, give notice of this transfer to all Borrowers or Loan
servicers, in the case of Borrowers located in the United States, by first class
U.S. mail at their current or last known address of record or, in the case of
Borrowers located in a Foreign Jurisdiction, in such manner as may be required
under the laws of such jurisdiction in order to effectively give notice to such
Borrowers of the transfer of the Loans. In the event there is no known address
for a Borrower, no personal notice to that Borrower shall be necessary. Upon
subsequently locating such Borrower, Buyer shall send such notice to such
Borrower. Buyer shall be liable to Seller for any and all costs and expenses
incurred by Seller as a result of Buyer's failure to comply with the provisions
of this section. Such costs and expenses shall include, but not be limited to,
salaries of Seller's personnel and other administrative expenses, the time
expended by each of Seller's employees involved in the performance of said acts
at the rate of the greater of $75.00 per hour per employee or the then
prevailing hourly rate per employee charged by Seller or the FDIC to perform
such services, plus all associated travel, lodging and per diem costs. Seller
shall, in its sole and absolute discretion, determine and assign the personnel
necessary to perform said acts. Buyer also agrees to reimburse Seller for copies
made in the course of performing said acts at the rate of 25 cents ($.25) per
copy. Nothing in this section shall require Seller to provide Buyer with any
information or service in this regard.

     

         5.17. Notice of Claim. Buyer shall immediately notify Seller of any
claim, threatened claim or litigation against Seller or the Failed Bank arising
out of any Loan contained in a Loan Pool or Loan Pool Combination purchased by
Buyer that may come to its attention.

     

         5.18. Reserved.

     

         5.19. Prior Servicer Information. Buyer acknowledges and agrees that Seller might not have access to
information from prior servicers of a Loan and that Seller has not requested any
information not in the possession of Seller or its servicing contractor from any
prior servicer of a Loan. Buyer acknowledges and agrees that Seller will not be
required under the terms of this Agreement to request any information from any
prior servicer. 

     

         5.20. Release of Seller.
(a) Buyer hereby releases and forever discharges Seller, the Failed Bank and the
FDIC, all of their officers, directors, employees, agents, attorneys,
contractors and representatives, and their successors, assigns and affiliates,
from any and all claims (including any counterclaim or defensive claim),
demands, causes of action, judgments or legal proceedings and remedies of
whatever kind or nature that Buyer now has or might have in the future, whether
now known or unknown, which are related in any manner whatsoever to the Loans
and this Agreement.

     

    
      	Federal Deposit
      Insurance Corporation	19	Loan Pool
      Number(s):	          
  
	Loan Sale Agreement	
            	Pool “A”	
            
	Version 1.5 (FM)	
            	
            	
            
	09.27.04	
            	  	
            

    

    

    
    

              (b) Buyer agrees that it will not renew,
extend, renegotiate, compromise, settle or release any Note or Loan or any right
of Buyer founded upon or growing out of this Agreement, except upon payment in
full thereof, unless all Borrowers on said Note or Loan shall first release and
discharge the Failed Bank(s) and Seller and its agents and assigns (the
"Released Parties") from all claims, demands and causes of action which any such
Borrower may have against any such Released Party arising from or growing out of
any act or omission occurring prior to the date of such release. If Buyer fails
to obtain such release, Buyer agrees
to protect, save and hold Seller harmless from
any expense or damage Seller suffers that might have been prevented had Buyer
obtained the release. 

     

         5.21. Indemnification.
Buyer agrees to pay, or reimburse to Seller, and
to protect, indemnify, save and hold harmless
Seller, Seller's agents and financial services advisor engaged in connection
with the Loan Sale from and against any and all losses, liabilities, claims,
causes of action, damages, demands, taxes, fees, costs
and expenses of whatever kind, arising out of, incurred in
connection with or otherwise relating to Buyer's actions or inactions in
performing, or failure to perform, the
obligations of Buyer set forth in this Agreement. Buyer
further agrees to pay when due or promptly reimburse Seller for
any fees, taxes, costs and expenses incurred by Seller in connection with the
performance or nonperformance by Buyer of all of the
obligations of Buyer specified herein. 

     

         5.22. Borrower as Buyer.
In the event that Buyer is the Borrower or a Related Party with respect to any
Loan in the Loan Pool, then Buyer, on its own behalf and on behalf of any
Related Party, agrees that it shall, and hereby does, release and discharge and
agrees to indemnify, defend and hold harmless the Failed Bank(s), Seller and
Seller's agents and employees from and against all claims, demands and causes of
action arising out of any act or omission related to said Loan. At Buyer's
request, and upon preparation of appropriate documentation by Buyer in
conformance with Section 3.1, Seller will release and discharge a Loan for which
Buyer is the Borrower in lieu of assigning the same to Buyer. In any event,
Seller will issue a 1099 to report any discharge of indebtedness in connection
with the sale or release of the Loan to the Borrower or a Related Party in
accordance with IRS regulations and FDIC policy. Notwithstanding the foregoing,
any failure by the FDIC to issue a 1099 does not relieve the Buyer of its
responsibility to report the discharge of indebtedness in accordance with
applicable federal tax law. 

     

    Article VI
Loans Sold “As Is” and Without Recourse

     

         6.1. Loans Sold “As Is.”
THE LOANS ARE SOLD "AS IS" AND "WITH ALL FAULTS," WITHOUT ANY REPRESENTATION,
WARRANTY OR RECOURSE WHATSOEVER AS TO EITHER COLLECTIBILITY, CONDITION, FITNESS
FOR ANY PARTICULAR PURPOSE, MERCHANTABILITY OR ANY OTHER WARRANTY, EXPRESS OR
IMPLIED. SELLER SPECIFICALLY DISCLAIMS ANY WARRANTY, GUARANTY OR REPRESENTATION,
ORAL OR WRITTEN, PAST OR PRESENT, EXPRESS OR IMPLIED, CONCERNING THE LOANS,
THE STRATIFICATION OR PACKAGING OF THE LOANS, THE
COLLATERAL OR THE COLLATERAL DOCUMENTS.

     

    
      	Federal Deposit
      Insurance Corporation	20	Loan Pool
      Number(s):	          
  
	Loan Sale Agreement	
            	Pool “A”	
            
	Version 1.5 (FM)	
            	
            	
            
	09.27.04	
            	  	
            

    

    

	
    

	         6.2. No Warranties or
Representations with Respect to Escrow Accounts. Seller makes no warranties or
representation of any kind or nature as to the sufficiency of funds held in any
escrow account to discharge any obligations related in any manner to an escrow
obligation, as to the accuracy of the amount of any monies held in any escrow
account or as to the propriety of any previous disbursements or payments from
any escrow account. 

     

         6.3. No Warranties or
Representations as to Amounts of Unfunded Principal. Seller further makes no
warranties or representation of any kind or nature as to the amount of any
additional or future Disbursements of Principal Buyer is obligated to
make.

     

         6.4. Disclaimer Regarding Calculation or Adjustment of Interest on any Loan.
Seller makes no warranties
or representation of any kind as to the accuracy of any calculation or
adjustment of interest on any Loan, including, without limitation, any
adjustable rate mortgage Loan, whether such calculation or adjustment is made by
the Failed Bank, Seller, any agent or contractor of Seller, or any
predecessor-in-interest of Seller or any other party. 

     

         6.5. No Warranties or Representations With Regard
to Due Diligence Data. Seller makes no warranties or representation of any kind as to the
completeness or accuracy of any information provided by Seller with respect to
any Loan. Buyer's exclusive remedies with respect to any inaccurate or
incomplete information provided by Seller are an adjustment to the Purchase
Price in accordance with Section 2.4 hereof and such exclusive remedies are
available only if all other conditions therefor expressed in this Agreement have
been met.

     

         6.6. Buyer’s Waiver of Cause of Action. Buyer hereby waives any right or cause of
action it might now or in the future have against the Failed Bank(s) or Seller
as a result of its purchase of the Loan Pool(s) subject to this Agreement;
provided, however, that this waiver does not include any action taken as a
result of Seller's failure to perform under the terms of this
Agreement.

     

         6.7. Intervening or Missing Assignments. Buyer acknowledges and agrees that Seller
shall have no obligation to secure or obtain any missing intervening assignment
or any assignment to Seller that is not contained in the Loan File or among the
Collateral Documents. Buyer shall have the sole responsibility and expense of
securing any intervening assignment or any assignment to Seller that may be
missing from the Collateral Documents from the appropriate source.

     

         6.8 No Warranties or Representations as to Documents. Seller makes no warranties or representations
of any kind or nature as to the effectiveness or enforceability in any Foreign
Jurisdiction of this Agreement, the Bill of Sale, the Assignment and Assumption
of Interests and Obligations or any other document or instrument prepared in
connection herewith, whether or not prepared and executed in the forms provided
herewith, all of such forms being provided for reference only.

     

    
      	Federal Deposit
      Insurance Corporation	21	Loan Pool
      Number(s):	          
  
	Loan Sale Agreement	
            	Pool “A”	
            
	Version 1.5 (FM)	
            	
            	
            
	09.27.04	
            	  	
            

    

    

    
    

    Article VII
Reserved

     

    Article VIII
Notices

     

         8.1. Notices. All notices or deliveries required or
permitted hereunder shall be in writing and shall be deemed given when
personally delivered to the individual hereinafter designated or when actually
received by means of e-mail, facsimile, overnight mail or certified mail, return
receipt requested, at the following address or such other address as either
party may hereafter designate by notice to the other party, making specific
reference to this Article VIII of this Agreement. Any notice sent by facsimile
must be confirmed by submission of an original or hard copy on the next Business
Day following such notification.

     

         8.2. Reserved.

     

         8.3. All Notices. Notice
required by any provision(s) of this Agreement shall be delivered
to:

     

    
      	BUYER:	      	Enterprise Bank & Trust
	
            	
            	150 North Meramec, Suite
      300
	
            	
            	St. Louis, Missouri
	Attention:	
            	Frank H. Sanfilippo
	Telephone Number:	
            	(314) 512-7214
	Facsimile Number:	
            	(314) 812-1576
	E-mail Address:	
            	FSanfilippo@enterprisebank.com
	 
	SELLER:	
            	Federal Deposit Insurance Corporation
	
            	
            	Franchise and Asset Marketing Branch
	
            	
            	1601 Bryan
  Street
	
            	
            	Dallas, Texas 75201
	 
	
            	
            	Federal Deposit Insurance Corporation
	
            	
            	Regional Counsel, Litigation Branch
	
            	
            	1601 Bryan
  Street
	
            	
            	Dallas, Texas 75201

    

    
      	Federal Deposit
      Insurance Corporation	22	Loan Pool
      Number(s):	          
  
	Loan Sale Agreement	
            	Pool “A”	
            
	Version 1.5 (FM)	
            	
            	
            
	09.27.04	
            	  	
            

    

    

    
    

    Article IX
Condition
Precedent

     

         9.1 Failure to Close. The obligations of the parties to this
Agreement are subject to Seller and the Corporation having received at or before
the Bank Closing Date evidence reasonably satisfactory to each of any necessary
approval, waiver, or other action by any governmental authority, the board of
directors of the Buyer, or other third party, with respect to this Agreement and
the transactions contemplated hereby, of the closing of the Failed Bank and the
appointment of Seller, the chartering of the Buyer, and any agreements,
documents, matters or proceedings contemplated hereby or thereby.

     

    Article X
Miscellaneous
Provisions

     

         10.1. Severability. Each
part of this Agreement is intended to be severable. If any term, covenant,
condition or provision hereof is unlawful, invalid or unenforceable for any
reason whatsoever, such illegality, invalidity or unenforceability shall not
affect the legality, validity or enforceability of the remaining parts of this
Agreement and all such remaining parts hereof shall be valid and enforceable and
have full force and effect as if the invalid or unenforceable part had not been
included.

     

         10.2. Construction. Unless the context otherwise requires, singular nouns and pronouns when
used herein, shall be deemed to include the plural and vice versa and impersonal
pronouns shall be deemed to include the personal pronoun of the appropriate
gender.

     

         10.3. Survival. Each and
every covenant made by Buyer or Seller in this Agreement shall survive the
Closing and shall not merge into the closing documents, but instead shall be
independently enforceable.

     

         10.4. Governing Law.
Federal law of the United States shall control this Agreement. To the extent
that federal law does not supply a rule of decision, this Agreement shall be
governed by, and construed and enforced in accordance with, the laws of the
State of New York. Nothing in this Agreement will require any unlawful action or
inaction by either party. 

     

         10.5. Cost, Fees and Expenses. Except as otherwise provided herein, each party hereto agrees to pay all
costs, fees and expenses which it has incurred in connection with or incidental
to the matters contained in this Agreement, including without limitation any
fees and disbursements to its accountants and counsel; provided that Buyer shall
pay all fees, costs and expenses (other than attorneys' fees incurred by Seller)
incurred in connection with the transfer to it of any Loan
hereunder.

     

         10.6. Nonwaiver, Amendment and Assignment. No provision of this Agreement may be amended
or waived except in writing executed by all of the parties to this Agreement.
This Agreement and the terms, covenants, conditions, provisions, obligations,
undertakings, rights and benefits hereof, including the Attachments to this
Agreement, shall be binding upon, and shall inure to the benefit of the
undersigned parties and their respective heirs, executors, administrators,
representatives, successors and assigns. Notwithstanding the foregoing, this
Agreement may not be transferred or assigned without the express prior written
consent of Seller (and any attempted assignment without such consent shall be
void).

     

    
      	Federal Deposit
      Insurance Corporation	23	Loan Pool
      Number(s):	          
  
	Loan Sale Agreement	
            	Pool “A”	
            
	Version 1.5 (FM)	
            	
            	
            
	09.27.04	
            	  	
            

    

    

    
    

         10.7. Drafting Presumption. This Agreement will be construed fairly as to
each party regardless of which party drafted it.

     

         10.8. Controlling Agreement. Seller and Buyer hereby acknowledge and agree that this Agreement shall
in all instances be the controlling document with respect to the terms of the
sale and transfer of the Loans, Collateral Documents and Collateral, and the
assignment and assumption of all obligations thereunder, except in the event of
a conflict with the Shared-Loss Agreements, in which case, the terms of the
Shared Loss Agreements shall control. In the event of a conflict between the
terms of this Agreement and the terms of any other document or instrument (other
than the Shared-Loss Agreements) executed in connection herewith and with the
transactions contemplated hereby, including, without limitation, any translation
into a foreign language of this Agreement, any Collateral Document, or any other
document or instrument executed in connection herewith which is prepared for
notarization, filing or any other purpose, the terms of this Agreement shall
control. Furthermore, with the exception of the Shared Loss Agreements, the
terms of this Agreement shall in no way be or be deemed to be amended, modified
or otherwise affected in any manner by the terms of such other document or
instrument.

     

         10.9. Venue. Buyer and
Seller each hereby irrevocably and unconditionally agree that any legal action
arising under or in connection with the sale, this Agreement or the transactions
contemplated hereby are to be instituted in the United States District Court in
and for the District of Columbia.

     

         10.10. Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed to be an original and all of which together shall be deemed to be one and
the same instrument.

     

         10.11. Waiver of Jury Trial. Buyer and Seller each hereby irrevocably and
unconditionally waive any right to have a jury participate in resolving any
dispute, whether sounding in contract, tort or otherwise, arising out of or
relating to or in connection with the sale of the Loans, this Agreement or any
transaction contemplated hereby.

     

     

     

    [Signature page follows]

     

    
      	Federal Deposit
      Insurance Corporation	24	Loan Pool
      Number(s):	          
  
	Loan Sale Agreement	
            	Pool “A”	
            
	Version 1.5 (FM)	
            	
            	
            
	09.27.04	
            	  	
            

    

    

    
    

              THIS LOAN SALE AGREEMENT is executed as of the
day and year first set forth above.

     

    
      	BUYER:	      	SELLER
	 	
            	
            
	ENTERPRISE BANK & TRUST,	
            	FEDERAL DEPOSIT INSURANCE
	a Missouri trust company with
      banking	
            	CORPORATION, as Receiver of
	powers	
            	HOME NATIONAL BANK, Blackwell,
    OK
	
            	 	
            
	By:	/s/ John G. Barry	
            	By:	/s/ Daniel M. Bell
	
            	
            	 	
            	
            
	Name:   	 	
            	Name:   	 
	
            	
            	 	
            	
            
	Title:	EVP	
            	Title:	Attorney-in-Fact

    

    
      	Federal Deposit
      Insurance Corporation	25	Loan Pool
      Number(s):	          
  
	Loan Sale Agreement	
            	Pool “A”	
            
	Version 1.5 (FM)	
            	
            	
            
	09.27.04f10k2010ex4i_prevention.htm

EXHIBIT 4.1

 

EXHIBIT 1

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

PREVENTION INSURANCE.COM

Warrant to Purchase Common Stock

Warrant No.: A-7

Number of Shares of Common Stock: 20,000,000

Date of Issuance: June 4, 2010

         PREVENTION INSURANCE.COM, a Nevada corporation (the "Company"), hereby certifies that, for $20,000, the receipt and sufficiency of which are hereby acknowledged, Paragon Capital LP and/or its affiliates and/or designees, the registered holder hereof or its permitted assigns (the "Holder"), is entitled, subject to the terms set forth below, to purchase from the Company, at the Exercise Price (as defined below) then in effect, upon surrender of this Warrant, to purchase Common Stock (including any warrants to Purchase Common Stock issued in exchange, transfer or replacement hereof, the "Warrant"), at any time or times on or after the date hereof, but not after 11:59 p.m., New York time, on the Expiration Date (as defined below), 20,000,000 fully paid nonassessable shares of Common Stock (as defined below) (the "Warrant Shares"). Except as otherwise defined herein, capitalized terms in this Warrant shall have the meanings set forth in Section 17.  This Warrant is the Warrant to purchase Common Stock issued pursuant to a Stock Purchase Agreement dated as of June 4, 2010 (the "Closing Date"), by and between the Company and the Holder (the "Agreement").

         Section 1. Exercise of Warrant.

            (a) Mechanics of Exercise. Subject to the terms and conditions hereof (including, without limitation, the limitations set forth in Section 1(f)), this Warrant may be exercised by the Holder on any day on or after the date hereof, in whole or in part, by (i) delivery of a written notice, in the form attached hereto as Exhibit A (the "Exercise Notice"), of the Holder's election to exercise this Warrant and (ii) (A) payment to the Company of an  amount equal to the applicable Exercise Price multiplied by the number of Warrant Shares as to which this Warrant is being exercised (the "Aggregate Exercise Price") in cash or wire transfer of immediately available funds or (B) by notifying the Company that this Warrant is being exercised pursuant to a Cashless Exercise (as defined in Section 1(d)). The Holder shall not be required to deliver the original Warrant in order to effect an exercise hereunder. Execution and delivery of the Exercise Notice with respect to less than all of the Warrant Shares shall have the same effect as cancellation of the original Warrant and issuance of a new Warrant evidencing the right to purchase the remaining number of Warrant Shares. On or before the first Business Day following the date on which the Company has received each of the Exercise Notice and the Aggregate Exercise Price (or notice of a Cashless Exercise) (the "Exercise Delivery Documents"), the Company shall transmit an acknowledgment of confirmation of receipt of the Exercise Delivery Documents to the Holder and the Company's transfer agent (the "Transfer Agent"). On or before the third Business Day following the date on which the Company has received all of the Exercise Delivery Documents, the Company shall (X) issue and deliver to the address specified in the Exercise Notice, a certificate, registered in the name of the holder of this Warrant or its designee, for the number of shares of Common Stock to which the holder of this Warrant is entitled pursuant to such exercise, or (Y) provided that the Transfer Agent is participating in the Depository Trust Company ("DTC") Fast Automated Securities Transfer Program, upon the request of the Holder, credit such aggregate number of shares of Common Stock to which the Holder is entitled pursuant to such exercise to the Holder's or its designee's balance account with DTC through its Deposit Withdrawal Agent Commission system. Upon delivery of the Exercise Notice and Aggregate Exercise Price referred to in clause (ii)(A) above or notification to the Company of a Cashless Exercise referred to in Section 1(d), the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the certificates evidencing such Warrant Shares. If this Warrant is submitted in connection with any exercise pursuant to this Section 1(a) and the number of Warrant Shares represented by this Warrant submitted for exercise is greater than the number of Warrant Shares being acquired upon an exercise, then the Company shall as soon as practicable and in no event later than three Business Days after any exercise and at its own expense, issue a new Warrant (in accordance with Section 8(d)) representing the right to purchase the number of Warrant Shares purchasable immediately prior to such exercise under this Warrant, less the number of Warrant Shares with respect to which this Warrant is exercised. No fractional shares of Common Stock are to be issued upon the exercise of this Warrant, but rather the number of shares of Common Stock to be issued shall be rounded up to the nearest whole number. The Company shall pay any and all taxes which may be payable with respect to the issuance and delivery of Warrant Shares upon exercise of this Warrant.

  

1

  

 

            (b) Exercise Price. For purposes of this Warrant, "Exercise Price" means $0.005, subject to adjustment as provided herein.

            (c) Company's Failure to Timely Deliver Securities. If the Company shall fail for any reason or for no reason to issue to the Holder within three Business Days of receipt of the Exercise Delivery Documents, a certificate for the number of shares of Common Stock to which the Holder is entitled and register such shares of Common Stock on the Company's share register or to credit the Holder's balance account with DTC for such number of shares of Common Stock to which the Holder is entitled upon the Holder's exercise of this  Warrant, and if on or after such Business Day the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of shares of Common Stock issuable upon such exercise that the Holder anticipated receiving from the Company, then the Company shall, within three Business Days after the Holder's request and in the Holder's discretion, either (i) pay cash to the Holder in an amount equal to the Holder's total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased (the "Buy-In Price"), at which point the Company's obligation to deliver such certificate (and to issue such shares of Common Stock) shall terminate, or (ii) promptly honor its obligation to deliver to the Holder a certificate or certificates representing such shares of Common Stock and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares of Common Stock, times (B) the Closing Bid Price on the date of exercise.

 

            (d) Cashless Exercise. Notwithstanding anything contained herein to the contrary, the Holder may, in its sole discretion, exercise this Warrant in whole or in part and, in lieu of making the cash payment otherwise contemplated to be made to the Company upon such exercise in payment of the Aggregate Exercise Price (a "Cash Exercise"), elect instead to receive upon such exercise the "Net Number" of shares of Common Stock determined according to the following formula (a "Cashless Exercise"):

 

                                            (A x B) - (A x C)

    Net Number =               -------------------------

                                                       B

               For purposes of the foregoing formula:

                     A = the total number of Warrant Shares with respect to which this Warrant is then being exercised.

                     B = the Closing Sale Price of the shares of Common Stock (as reported by Bloomberg) on the date immediately preceding the date of the Exercise Notice.

                     C = the Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.

            (e) Disputes. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the Company shall promptly issue to the Holder the number of Warrant Shares that are not disputed and resolve such dispute in accordance with Section 14.

            (f) Limitations on Exercise; Beneficial Ownership. The Holder shall not have any restriction on exercise of this Warrant.

         Section 2. Adjustment of Exercise Price and Number of Warrant Shares. The Exercise Price and the number of Warrant Shares shall be adjusted from time to time as follows:

            (a) Adjustment upon Issuance of shares of Common Stock. If and whenever on or after the Closing Date the Company issues or sells, or in accordance with this Section 2 is deemed to have issued or sold, any shares of Common Stock (including the issuance or sale of shares of Common Stock owned or held by or for the account of the Company, but excluding shares of Common Stock deemed to have been issued or sold by the Company in connection with any Excluded Security) for a consideration per share (the "New Issuance Price") less than a price (the "Applicable Price") equal to the Exercise Price in effect immediately prior to such issue or sale or deemed issuance or sale (the foregoing a "Dilutive Issuance"), then immediately after such Dilutive Issuance, the Exercise Price then in effect shall be reduced to an amount equal to the New Issuance Price. Upon each such adjustment of the Exercise Price hereunder, the number of Warrant Shares shall be adjusted to the number of shares of Common Stock determined by multiplying the Exercise Price in effect immediately prior to such adjustment by the number of Warrant Shares acquirable upon exercise of this Warrant immediately prior to such adjustment and dividing the product thereof by the Exercise Price resulting from such adjustment. For purposes of determining the adjusted Exercise Price under this Section 2(a), the following shall be applicable:

  

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                     (i) Issuance of Options. If the Company in any manner grants any Options and the lowest price per share for which one share of Common Stock is issuable upon the exercise of any such Option or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any such Option is less than the Applicable Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the granting or sale of such Option for such price per share. For purposes of this Section 2(a)(i), the "lowest price per share for which one share of Common Stock is issuable upon exercise of such Options or upon conversion, exercise or exchange of such Convertible Securities" shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to any one share of Common Stock upon the granting or sale of the Option, upon exercise of the Option and upon conversion, exercise or exchange of any Convertible Security issuable upon exercise of such Option. No further adjustment of the Exercise Price shall be made upon the actual issuance of such shares of Common Stock or of such Convertible Securities upon the exercise of such Options or upon the actual issuance of such shares of Common Stock upon conversion, exercise or exchange of such Convertible Securities.

                     (ii) Issuance of Convertible Securities. If the Company in any manner issues or sells any Convertible Securities and the lowest price per share for which one share of Common Stock is issuable upon the conversion, exercise or exchange thereof is less than the Applicable Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the issuance or sale of such Convertible Securities for such price per share. For the purposes of this Section 2(a)(ii), the "lowest price per share for which one share of Common Stock is issuable upon the conversion, exercise or exchange" shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to one share of Common Stock upon the issuance or sale of the Convertible Security. No further adjustment of the Exercise Price shall be made upon the actual issuance of such shares of Common Stock upon conversion, exercise or exchange of such Convertible Securities, and if any such issue or sale of such Convertible Securities is made upon exercise of any Options for which adjustment of this Warrant has been or is to be made pursuant to other provisions of this Section 2(a), no further adjustment of the Exercise Price shall be made by reason of such issue or sale.

                     (iii) Change in Option Price or Rate of Conversion. If the purchase price provided for in any Options, the additional consideration, if any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at which any Convertible Securities are convertible into or exercisable or exchangeable for shares of Common Stock increases or decreases at any time, the Exercise Price and the number of Warrant Shares in effect at the time of such increase or decrease shall be adjusted to the Exercise Price and the number of Warrant Shares which would have been in effect at such time had such Options or Convertible Securities provided for such increased or decreased purchase price, additional consideration or increased or decreased conversion rate, as the case may be, at the time initially granted, issued or sold. For purposes of this Section 2(a)(iii), if the terms of any Option or Convertible Security that was outstanding as of the date of issuance of this Warrant are increased or decreased in the manner described in the immediately preceding sentence, then such Option or Convertible Security and the shares of Common Stock deemed issuable upon exercise, conversion or exchange thereof shall be deemed to have been issued as of the date of such increase or decrease. No adjustment pursuant to this Section 2(a) shall be made if such adjustment would result in an increase of the Exercise Price then in effect or a decrease in the number of Warrant Shares.

                     (iv) Calculation of Consideration Received. In case any Option is issued in connection with the issue or sale of other securities of the Company, together comprising one integrated transaction in which no specific consideration is allocated to such Options by the parties thereto, the Options will be deemed to have been issued for a consideration of $0.001. If any shares of Common Stock, Options or Convertible Securities are issued or sold or deemed to have been issued or sold for cash, the consideration received therefore will be deemed to be the net amount received by the Company therefore. If any shares of Common Stock, Options or Convertible Securities are issued or sold for a consideration other than cash, the amount of such consideration received by the Company will be the fair value of such consideration, except where such consideration consists of securities, in which case the amount of consideration received by the Company will be the Closing Sale Price of such security on the date of receipt. If any shares of Common Stock, Options or Convertible Securities are issued to the owners of the non-surviving entity in connection with any merger in which the Company is the surviving entity, the amount of consideration therefore will be deemed to be the fair value of such portion of the net assets and business of the non-surviving entity as is attributable to such shares of Common Stock, Options or Convertible Securities, as the case may be. The fair value of any consideration other than cash or securities will be determined jointly by the Company and the Holder. If such parties are unable to reach agreement within ten days after the occurrence of an event requiring valuation (the "Valuation Event"), the fair value of such consideration will be determined within five Business Days after the tenth day following the Valuation Event by an independent, reputable appraiser selected by the Holder and approved by the Company. The determination of such appraiser shall be final and binding upon all parties absent manifest error and the fees and expenses of such appraiser shall be borne by the Company.

 

  

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                     (v) Record Date. If the Company takes a record of the  holders of shares of Common Stock for the purpose of  entitling them (A) to receive a dividend or other distribution payable in shares of Common Stock, Options or  in Convertible Securities or (B) to subscribe for or  purchase shares of Common Stock, Options or Convertible Securities, then such record date will be deemed to be the date of the issue or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution or  the date of the granting of such right of subscription or purchase, as the case may be.

           (b) Adjustment upon Subdivision or Combination of shares of Common Stock. If the Company at any time on or after the Closing Date subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into a greater number of shares, the Exercise Price in effect immediately prior to such subdivision will be proportionately reduced and the number of Warrant Shares will be proportionately increased. If the Company at any time on or after the Closing Date combines (by combination, reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the Exercise Price in effect immediately prior to such combination will be proportionately increased and the number of Warrant Shares will be proportionately decreased. Any adjustment under this Section 2(b) shall become effective at the close of business on the date the subdivision or combination becomes effective.

            (c) Other Events. If any event occurs of the type contemplated by the provisions of this Section 2 but not expressly provided for by such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights with equity features), then the Company's Board of Directors will make an appropriate adjustment in the Exercise Price so as to protect the rights of the Holder; provided that no such adjustment pursuant to this Section 2(c) will increase the Exercise Price or decrease the number of Warrant Shares as otherwise determined pursuant to this Section 2.

 

            Section 3. Rights upon Distribution of Assets. If the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a "Distribution"), at any time after the issuance of this Warrant, then, in each such case:

            (a) any Exercise Price in effect immediately prior to the close of business on the record date fixed for the determination of holders of shares of Common Stock entitled to receive the Distribution shall be reduced, effective as of the close of business on such record date, to a price determined by multiplying such Exercise Price by a fraction of which (i) the numerator shall be the Closing Bid Price of the shares of Common Stock on the trading day immediately preceding such record date minus the value of the Distribution (as determined in good faith by the Holder and approved by the Company's Board of Directors) applicable to one share of Common Stock, and (ii) the denominator shall be the Closing Bid Price of the shares of Common Stock on the trading day immediately preceding such record date; and

             (b) the number of Warrant Shares shall be increased to a number of shares equal to the number of shares of Common Stock obtainable immediately prior to the close of business on the record date fixed for the determination of holders of Common Stock entitled to receive the Distribution multiplied by the reciprocal of the fraction set forth in the immediately preceding paragraph (a); provided that in the event that the Distribution is of shares of or common stock ("Other Shares of Common Stock") of a company whose common shares are traded on a national securities exchange or a national automated quotation system, then the Holder may elect to receive a warrant to purchase Other Shares of Common Stock, the terms of which shall be identical to those of this Warrant, except that such warrant shall be exercisable into the number of shares of Other Shares of Common Stock that would have been payable to the Holder pursuant to the Distribution had the Holder exercised this Warrant immediately prior to such record date and with an aggregate exercise price equal to the product of the amount by which the exercise price of this Warrant was decreased with respect to the Distribution pursuant to the terms of the immediately preceding paragraph (a), and the number of Warrant Shares calculated in accordance with the first part of this paragraph (b).

         Section 4. Purchase Rights; Fundamental Transactions.

            (a) Purchase Rights. In addition to any adjustments pursuant to Section 2 above, if at any time the Company grants, issues or sells any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock (the "Purchase Rights"), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights.

  

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            (b) Fundamental Transactions. If the Company enters into or is party to a Fundamental Transaction, then the Holder shall have the right to either (A) purchase and receive upon the basis and upon the terms and conditions herein specified and in lieu of the Warrant Shares immediately theretofore issuable upon exercise of the Warrant, such shares of stock, securities or assets (including cash) as would have been issuable or payable with respect to or in exchange for a number of Warrant Shares equal to the number of Warrant Shares immediately theretofore issuable upon exercise of the Warrant, had such Fundamental Transaction not taken place or (B) require the repurchase of this Warrant for a purchase price, payable in cash within five Business Days after such request, equal to the Black Scholes Value of the remaining unexercised portion of this Warrant on the date of such request. The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity and Holder to comply with the provisions of this Section 4(b). The provisions of this Section shall apply similarly and equally to successive Fundamental Transactions and shall be applied without regard to any limitations on the exercise of this Warrant.

         Section 5. Noncircumvention. The Company hereby covenants and agrees that the Company will not, by amendment of its Articles of Incorporation, Bylaws or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, 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 of this Warrant, and will at all times in good faith carry out all the provisions of this Warrant and take all action as may be required to protect the rights of the Holder. Without limiting the generality of the foregoing, the Company (i) shall not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, (ii) shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant, and (iii) shall, so long as this Warrant is outstanding, take all action necessary to reserve and keep available out of its authorized and unissued shares of Common Stock, solely for the purpose of effecting the exercise of this Warrant, the number of shares of Common Stock as shall from time to time be necessary to effect the exercise of this Warrant then outstanding (without regard to any limitations on exercise).

         Section 6. Reservation of Authorized Shares.

            (a) Initial Reservation. Within 60 days of a written demand by the Holder, the Company shall reserve out of its authorized and unissued Common Stock the number of shares of Common Stock needed to satisfy a full exercise of this Warrant and provide to the Holder evidence thereof in form and substance satisfactory to the Holder.

            (b) Ongoing Reservation. So long as this Warrant is outstanding, the Company shall take all actions necessary to reserve and keep available out of its authorized and unissued Common Stock, solely for the purpose of effecting the exercise of this Warrant, the number of shares of Common Stock as shall at all times after 60 days from a written demand by the Holder and from time to time thereafter as necessary to effect the exercise of this Warrant; provided that at no time shall the number of shares of Common Stock so reserved be less than the number of shares required to be reserved by Section 6(a) hereof (without regard to any limitations on conversions) (the "Required Reserve Amount").

            (c) Insufficient Authorized Shares. If, at any time after 60 days of a written demand by the Holder while this Warrant remain outstanding the Company does not have a sufficient number of authorized and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance  upon the exercise of this Warrant at least a number of shares of Common Stock equal to the Required Reserve Amount (an "Authorized Share Failure"), then the Company shall immediately take all  action necessary to increase the Company's authorized shares of Common Stock to an amount sufficient to allow the Company to reserve the Required Reserve Amount for this Warrant. Without limiting the generality of the foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized Share Failure, but in no event later than 60 days after the occurrence of such Authorized Share Failure, the Company shall hold a meeting of its stockholders for the approval of an increase in the number of authorized shares of Common Stock. In connection with such meeting, the Company shall provide each stockholder with a proxy statement and shall use its best efforts to solicit its stockholders' approval of such increase in authorized shares of Common Stock and to cause its Board of Directors to recommend to the stockholders that they approve such proposal.

 

         Section 7. Warrant Holder not Deemed a Stockholder. Except as otherwise specifically provided herein, the Holder, solely in such Person's capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in such Person's capacity as the Holder of this Warrant, any of the rights of a shareholder of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the Holder of the Warrant Shares which such Person is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a shareholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company. Notwithstanding this Section 7, the Company shall provide the Holder with copies of the same notices and other information given to the shareholders of the Company generally, contemporaneously with the giving thereof to the shareholders.

 

  

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         Section 8. Reissuance of Warrants.

            (a) Transfer of Warrant. If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company, whereupon the Company will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 8(d)), registered as the Holder may request.

            (b) Lost, Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant, and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company in customary form and, in the case of mutilation, upon surrender and cancellation of this Warrant, the Company shall execute and deliver to the Holder a new Warrant (in accordance with Section 8(d)).

            (c) Exchangeable for Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of the Company, for a new Warrant or Warrants (in accordance with Section 8(d)) representing in the aggregate the right to purchase the number of Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right to purchase such portion of such Warrant Shares as is designated by the Holder at the time of such surrender; provided, however, that no Warrants for fractional shares of Common Stock shall be given.

            (d) Issuance of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant (i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the right to purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant to Section 8(a) or Section 8(c), the Warrant Shares designated by the Holder  which, when added to the number of shares of Common Stock  underlying the other new Warrants issued in connection with such issuance, does not exceed the number of Warrant Shares then  underlying  this Warrant),  (iii) shall have an issuance date,  as  indicated  on the face of such new  Warrant  which is the same as the Closing  Date,  and (iv)  shall  have the same  rights  and  conditions  as this Warrant.

         Section 9. Notices. Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in accordance with Section 7 of the Agreement. The Company shall provide the Holder with prompt written notice of all actions taken pursuant to this Warrant, including in reasonable detail a description of such action and the reason therefor. Without limiting the generality of the foregoing, the Company will give written notice to the Holder (i) immediately upon any adjustment of the Exercise Price, setting forth in reasonable detail, and certifying, the calculation of such adjustment and (ii) at least fifteen days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend or distribution upon the shares of Common Stock, (B) with respect to any grants, issuances or sales of any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property to holders of shares of Common Stock or (C) for determining rights to vote with respect to any Fundamental Transaction, dissolution or liquidation, provided in each case that such information shall be made known to the public prior to or in conjunction with such notice being provided to the Holder.

         Section 10. Amendment and Waiver. Except as otherwise provided herein, the provisions of this Warrant may be amended and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the prior written consent of the Holder; provided that no such action may increase the Exercise Price of this Warrant or decrease the number of shares or class of stock obtainable upon exercise of this Warrant.

         Section 11. Severability. If any provision of this Warrant or the application thereof becomes or is declared by a court of competent jurisdiction to be illegal, void or unenforceable, the remainder of the terms of this Warrant will continue in full force and effect.

         Section 12. Governing Law; Jurisdiction; Jury Trial. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Warrant and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF ANY TRANSACTION CONTEMPLATED HEREBY.

 

  

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         Section 13. Construction; Headings. This Warrant shall be deemed to be jointly drafted by the Company and the Holder and shall not be construed against any person as the drafter hereof. The headings of this Warrant are for convenience of reference and shall not form part of, or affect the interpretation of, this Warrant.

         Section 14. Dispute Resolution. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the Company shall submit the disputed determinations or arithmetic calculations within two Business Days of receipt of the Exercise Notice giving rise to such dispute, as the case may be, to the Holder. If the Holder and the Company are unable to agree upon such determination or calculation of the Exercise Price or the Warrant Shares within one Business Day of such disputed determination or arithmetic calculation being submitted to the Holder, then the Company shall, within one Business Day submit (a) the disputed determination of the Exercise Price to an independent, reputable investment bank selected by the Holder and approved by the Company or (b) the disputed arithmetic calculation of the Warrant Shares to an independent, reputable accounting firm selected by the Holder and approved by the Company. The Company shall cause, at its expense, the investment bank or the accounting firm, as the case may be, to perform the determinations or calculations and notify the Company and the Holder of the results no later than five Business Days from the date it receives the disputed determinations or calculations. Such investment bank's or accountant's determination or calculation, as the case may be, shall be binding upon all parties absent demonstrable error.

         Section 15. Remedies, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Warrant shall be cumulative and in addition to all other remedies available under this Warrant, at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the right of the Holder to seek actual damages for any failure by the Company to comply with the terms of this Warrant. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, the holder of this Warrant shall be entitled, in addition to all other available remedies, to an injunction restraining any breach, without the necessity of showing economic loss and without any bond or other security being required.

         Section 16. Transfer. This Warrant may be offered for sale, sold, transferred or assigned without the consent of the Company.

         Section 17.  Certain  Definitions.  For purposes of this Warrant, the following terms shall have the following meanings:

            "Affiliate" means, as to any Person, any other Person which directly or indirectly controls, is controlled by, or is under common control with such Person. For purposes of this definition, "control" of a Person includes (A) the power, direct or indirect, (i) to vote or direct the voting of 10% or more of the outstanding shares of Voting Stock of such Person, or (ii) to direct or cause the direction of the management and policies of such Person (whether by ownership of Capital Stock, by contract or otherwise) or (B) the ownership of Capital Stock or other securities representing 10% or more of the total economic interests of such Person; provided, that the Holder shall be deemed to be an Affiliate of the Company.

 

            "Aggregate Exercise Price" has the meaning set forth in Section 1(a).

            "Applicable Price" has the meaning set forth in Section 2(a).

            "Approved Stock Plan" means any employee benefit plan which has been approved by the Board of Directors of the Company, pursuant to which the Company's securities may be issued to any employee, officer or director for services provided to the Company.

            "Authorized  Share  Failure"  has the  meaning  set forth in Section 6(b).

 

  

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            "Black Scholes Value" means the value of this Warrant based on the Black and Scholes Option Pricing Model obtained from the "OV" function on Bloomberg determined as of the day immediately following the public announcement of the applicable Fundamental Transaction and reflecting (i) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the remaining term of this Warrant as of such date of request is 2.5% and (ii) an expected volatility equal to 60%.

            "Bloomberg" means Bloomberg Financial Markets.

            "Business Day" means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York, New York are authorized or required by law to remain closed.

            "Buy-In Price" has the meaning set forth in Section 1(c).

            "Capital Stock" means and includes, with respect to any Person (a) any and all shares, interests, participations or other equivalents of or interests in (however designated) corporate stock, including shares of preferred or preference stock of such Person, (b) all partnership interests (whether general or limited) in such Person which is a partnership, (c) all membership interests or limited liability company interests in such Person which is a limited liability company, (d) any interest or participation that confers on a Person the right to receive a share of the profits and/or losses of, or distributions of assets of such Person, and (e) all equity or ownership interests in such Person of any other type, and any and all warrants, rights or options to purchase any of the foregoing.

            "Cash Exercise" has the meaning set forth in Section 1(d).

            "Cashless Exercise" has the meaning set forth in Section 1(d).

             "Closing Bid Price" and "Closing Sale Price" means, for any security as of any date, the last closing bid price and last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the Principal Market begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade price, as the case may be, then the last bid price or last trade price, respectively, of such security prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such security, the last closing bid price or last trade price, respectively, of such security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing bid price or last trade price, respectively, of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such security by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported in the "pink sheets" by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.). If the Closing Bid Price or the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Bid Price or the Closing Sale Price, as the case may be, of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved in the same manner as the disputes described in Section 14. All such determinations to be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during the applicable calculation period.

            "Closing Date" has the meaning set forth in the preamble to this Warrant.

            "Common Stock" means (i) the Company's shares of common stock, $0.001 par value per share, and (ii) any share capital into which such common stock shall have been changed or any share capital resulting from a reclassification of such common stock.

            "Company" has the meaning set forth in the preamble to this Warrant.

            "Convertible Securities" means any stock or securities (other than Options) directly or indirectly convertible into or exercisable or exchangeable for shares of Common Stock.

            "Dilutive Issuance" has the meaning set forth in Section 2(a).

            "Distribution" has the meaning set forth in Section 3.

            "DTC" has the meaning set forth in Section 1(a).

 

  

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            "Excluded Security" means any Common Stock issued or issuable: (i) in connection with any Approved Stock Plan; (ii) upon conversion of any Preferred Stock or this exercise of the Warrant; and (iii) upon conversion of any Options or Convertible Securities which are outstanding on the day immediately preceding the Closing Date, provided that the terms of each such Options or Convertible Securities are not amended, modified or changed on or after the Closing Date.

             "Exercise Delivery Documents" has the meaning set forth in Section 1(a).

            "Exercise Price" has the meaning set forth in Section 1(b).

            "Exercise Notice" has the meaning set forth in Section 1(a).

            "Expiration Date" means the date three year after the Closing Date or, if such date falls on a day other than a Business Day or on which trading does not take place on the Principal Market (a "Holiday"), the next date that is not a Holiday.

            "Fundamental Transaction" means that the Company shall, directly or indirectly, in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the surviving corporation) another Person, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of the Company to another Person, or (iii) allow another Person to make a purchase, tender or exchange offer that is accepted by the holders of more than the 50% of either the outstanding shares of Common Stock (not including any shares of Common Stock held by the Person or Persons making or party to, or associated or affiliated with the Persons making or party to, such purchase, tender or exchange offer), or (iv) consummate a stock purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person acquires more than the 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock purchase agreement or other business combination), or (v) reorganize, recapitalize or reclassify its Common Stock. 

            "Holder" has the meaning set forth in the preamble to this Warrant.

            "New Issuance Price" has the meaning set forth in Section 2(a).

            "Maximum Percentage" has the meaning set forth in Section 1(f).

            "Consulting Agreement" has the meaning set forth in the preamble to this Warrant.

            "Options" means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.

            "Other Shares of Common Stock" has the meaning set forth in Section 3(b).

             "Person" means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and a government or any department or agency thereof.

            "Principal Market" means the NASD OTC Bulletin Board.

            "Purchase Rights" has the meaning set forth in Section 4(a).

            "Registration Rights Agreement" means that certain Registration Rights Agreement, dated as of even date herewith, by and among the Company and the Holder.

            "Required Reserve Amount" has the meaning set forth in Section 6(a).

  

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            "Transfer Agent" has the meaning set forth in Section 1(a).

            "Valuation Event" has the meaning set forth in Section 2(a)(iv).

            "Voting Stock" means, with respect to any Person, the Capital Stock of such Person of any class or classes, the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of members of the Board of Directors (or Persons performing similar functions) of such Person.

            "Warrant" has the meaning set forth in the preamble to this Warrant.

            "Warrant Shares" has the meaning set forth in the preamble to this Warrant.

                             [Signature Page Follows]

  

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         IN WITNESS WHEREOF, the Company has caused this Warrant to Purchase Common Stock to be duly executed as of the Date of Issuance set out above. 

	 	  	
PREVENTION INSURANCE.COM

	  
	 	  	  	  
	 	
By:

	
/s/ Alan P. Donenfeld

	  
	 	
Name:

	
Alan P. Donenfeld

	  
	 	
Title:

	
CEO

	  

 

 

 

 

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