Document:

ex10-1.htm

    Exhibit
10.1

    UNITED STATES DEPARTMENT OF THE TREASURY

    1500
PENNSYLVANIA AVENUE, NW

    WASHINGTON, D.C.
20220

    

     

    Dear
Ladies and Gentlemen:

     

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

     

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 Except to the extent supplemented or superseded by the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

     

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

     

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

     

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

     

    * *
*

     

    

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

     

    
      
        	 
      	
                UNITED
      STATES DEPARTMENT OF THE TREASURY

              
	 
      	 
      	 
      
	 
      	
                By:

              	/s/
      Neel Kashkari  
	 
      	 
      	 
      
	 
      	
                Name:

              	Neel
      Kashkari
	 
      	
                Title:

              	Interim
      Assistant Secretary
	 
      	 
      	for
      the Office of Financial Stability
	 
      	 
      	 
      
	 
      	
                NATIONAL
      PENN BANCSHARES, INC.

              
	 
      	 
      	 
      
	 
      	
                By:

              	
                /s/
      Glenn E. Moyer

              
	 
      	 
      	 
      
	 
      	
                Name:

              	
                Glenn
      E. Moyer

              
	 
      	
                Title:

              	
                President
      and CEO

              

      

    

    

     

    Date:  December
12, 2008

     

    
      
        
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    EXHIBIT
A

     

    
      

       

      

       

       

      

       

        
          

        

      

       

      SECURITIES
PURCHASE AGREEMENT

       

    

    
      STANDARD
TERMS

       

      
        
          

        

       

      

    

    

     

    
      
        
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    TABLE
OF CONTENTS

     

    Page

    

      
        	
                Article
      I

              
	
                Purchase;
      Closing

              
	 
      	 
      	 
      
	
                1.1

              	
                Purchase

              	
                1

              
	
                1.2

              	
                Closing.

              	
                2

              
	
                1.3

              	
                Interpretation

              	
                4

              
	 
      
	
                Article
      II

              
	
                Representations
      and Warranties

              
	 
      	 
      	 
      
	
                2.1

              	
                Disclosure.

              	
                4

              
	
                2.2

              	
                Representations
      and Warranties of the Company

              	
                5

              
	 
      
	
                Article
      III

              
	
                Covenants

              
	 
      	 
      	 
      
	
                3.1

              	
                Commercially
      Reasonable Efforts.

              	
                13

              
	
                3.2

              	
                Expenses

              	
                14

              
	
                3.3

              	
                Sufficiency
      of Authorized Common Stock; Exchange Listing.

              	
                14

              
	
                3.4

              	
                Certain
      Notifications Until Closing

              	
                14

              
	
                3.5

              	
                Access,
      Information and Confidentiality.

              	
                15

              
	 
      
	
                Article
      IV

              
	
                Additional
      Agreements

              
	 
      	 
      	 
      
	
                4.1

              	
                Purchase
      for Investment

              	
                16

              
	
                4.2

              	
                Legends.

              	
                16

              
	
                4.3

              	
                Certain
      Transactions

              	
                17

              
	
                4.4

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

              	
                18

              
	
                4.5

              	
                Registration
      Rights.

              	
                18

              
	
                4.6

              	
                Voting
      of Warrant Shares

              	
                29

              
	
                4.7

              	
                Depositary
      Shares

              	
                30

              
	
                4.8

              	
                Restriction
      on Dividends and Repurchases.

              	
                30

              
	
                4.9

              	
                Repurchase
      of Investor Securities.

              	
                31

              
	
                4.10

              	
                Executive
      Compensation

              	
                32

              
	 
      
	
                Article
      V

              
	
                Miscellaneous

              
	 
      	 
      	 
      
	
                5.1

              	
                Termination

              	
                32

              
	
                5.2

              	
                Survival
      of Representations and Warranties

              	
                33

              
	
                5.3

              	
                Amendment

              	
                33

              
	
                5.4

              	
                Waiver
      of Conditions

              	
                33

              

         

        
          
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                5.5

              	
                Governing
      Law:  Submission to Jurisdiction, Etc.

              	
                33

              
	
                5.6

              	
                Notices

              	
                34

              
	
                5.7

              	
                Definitions

              	
                34

              
	
                5.8

              	
                Assignment

              	
                35

              
	
                5.9

              	
                Severability

              	
                35

              
	
                5.10

              	
                No
      Third Party Beneficiaries

              	
                35

              

      

      

        
          
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    LIST OF
ANNEXES

     

    
      	
              ANNEX
      A:

            	
              FORM
      OF CERTIFICATE OF DESIGNATIONS FOR PREFERRED
  STOCK

            

    

     

    
      	
              ANNEX
      B:

            	
              FORM
      OF WAIVER

            

    

     

    
      	
              ANNEX
      C:

            	
              FORM
      OF OPINION

            

    

     

    
      	
              ANNEX
      D:

            	
              FORM
      OF WARRANT

            

    

     

    
      
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    INDEX
OF DEFINED TERMS

     

    

     

    
      	
               

              Term

            	 
      	
              Location
      of

              Definition

            
	
              Affiliate

            	 
      	
              5.7(b)

            
	
              Agreement

            	 
      	
              Recitals

            
	
              Appraisal
      Procedure

            	 
      	
              4.9(c)(i)

            
	
              Appropriate
      Federal Banking Agency

            	 
      	
              2.2(s)

            
	
              Bankruptcy
      Exceptions

            	 
      	
              2.2(d)

            
	
              Benefit
      Plans

            	 
      	
              1.2(d)(iv)

            
	
              Board
      of Directors

            	 
      	
              2.2(f)

            
	
              Business
      Combination

            	 
      	
              4.4

            
	
              business
      day

            	 
      	
              1.3

            
	
              Capitalization
      Date

            	 
      	
              2.2(b)

            
	
              Certificate
      of Designations

            	 
      	
              1.2(d)(iii)

            
	
              Charter

            	 
      	
              1.2(d)(iii)

            
	
              Closing

            	 
      	
              1.2(a)

            
	
              Closing
      Date

            	 
      	
              1.2(a)

            
	
              Code

            	 
      	
              2.2(n)

            
	
              Common
      Stock

            	 
      	
              Recitals

            
	
              Company

            	 
      	
              Recitals

            
	
              Company
      Financial Statements

            	 
      	
              2.2(h)

            
	
              Company
      Material Adverse Effect

            	 
      	
              2.1(a)

            
	
              Company
      Reports

            	 
      	
              2.2(i)(i)

            
	
              Company
      Subsidiary; Company Subsidiaries

            	 
      	
              2.2(i)(i)

            
	
              control;
      controlled by; under common control with

            	 
      	
              5.7(b)

            
	
              Controlled
      Group

            	 
      	
              2.2(n)

            
	
              CPP

            	 
      	
              Recitals

            
	
              EESA

            	 
      	
              1.2(d)(iv)

            
	
              ERISA

            	 
      	
              2.2(n)

            
	
              Exchange
      Act

            	 
      	
              2.1(b)

            
	
              Fair
      Market Value

            	 
      	
              4.9(c)(ii)

            
	
              GAAP

            	 
      	
              2.1(a)

            
	
              Governmental
      Entities

            	 
      	
              1.2(c)

            
	
              Holder

            	 
      	
              4.5(k)(i)

            
	
              Holders’
      Counsel

            	 
      	
              4.5(k)(ii)

            
	
              Indemnitee

            	 
      	
              4.5(g)(i)

            
	
              Information

            	 
      	
              3.5(b)

            
	
              Initial
      Warrant Shares

            	 
      	
              Recitals

            
	
              Investor

            	 
      	
              Recitals

            
	
              Junior
      Stock

            	 
      	
              4.8(c)

            
	
              knowledge
      of the Company; Company’s knowledge

            	 
      	
              5.7(c)

            
	
              Last
      Fiscal Year

            	 
      	
              2.1(b)

            
	
              Letter
      Agreement

            	 
      	
              Recitals

            
	
              officers

            	 
      	
              5.7(c)

            

       

      
        
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                  Term

                	 
      	
                  Location
      of

                  Definition

                

        

      

      	
              Parity
      Stock

            	 
      	
              4.8(c)

            
	
              Pending
      Underwritten Offering

            	 
      	
              4.5(l)

            
	
              Permitted
      Repurchases

            	 
      	
              4.8(a)(ii)

            
	
              Piggyback
      Registration

            	 
      	
              4.5(a)(iv)

            
	
              Plan

            	 
      	
              2.2(n)

            
	
              Preferred
      Shares

            	 
      	
              Recitals

            
	
              Preferred
      Stock

            	 
      	
              Recitals

            
	
              Previously
      Disclosed

            	 
      	
              2.1(b)

            
	
              Proprietary
      Rights

            	 
      	
              2.2(u)

            
	
              Purchase

            	 
      	
              Recitals

            
	
              Purchase
      Price

            	 
      	
              1.1

            
	
              Purchased
      Securities

            	 
      	
              Recitals

            
	
              Qualified
      Equity Offering

            	 
      	
              4.4

            
	
              register;
      registered; registration

            	 
      	
              4.5(k)(iii)

            
	
              Registrable
      Securities

            	 
      	
              4.5(k)(iv)

            
	
              Registration
      Expenses

            	 
      	
              4.5(k)(v)

            
	
              Regulatory
      Agreement

            	 
      	
              2.2(s)

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

            	 
      	
              4.5(k)(vi)

            
	
              Schedules

            	 
      	
              Recitals

            
	
              SEC

            	 
      	
              2.1(b)

            
	
              Securities
      Act

            	 
      	
              2.2(a)

            
	
              Selling
      Expenses

            	 
      	
              4.5(k)(vii)

            
	
              Senior
      Executive Officers

            	 
      	
              4.10

            
	
              Share
      Dilution Amount

            	 
      	
              4.8(a)(ii)

            
	
              Shelf
      Registration Statement

            	 
      	
              4.5(a)(ii)

            
	
              Signing
      Date

            	 
      	
              2.1(a)

            
	
              Special
      Registration

            	 
      	
              4.5(i)

            
	
              Stockholder
      Proposals

            	 
      	
              3.1(b)

            
	
              subsidiary

            	 
      	
              5.8(a)

            
	
              Tax;
      Taxes

            	 
      	
              2.2(o)

            
	
              Transfer

            	 
      	
              4.4

            
	
              Warrant

            	 
      	
              Recitals

            
	
              Warrant
      Shares

            	 
      	
              2.2(d)

            

    

    
      
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    SECURITIES
PURCHASE AGREEMENT – STANDARD TERMS

     

    Recitals:

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    Article
I

    Purchase;
Closing

     

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

     

    
      
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    1.2 Closing.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    Article
II

    Representations
and Warranties

     

    2.1 Disclosure.

     

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

     

    
      
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    subsidiaries
(it being understood and agreed that the exception set forth in this clause (D)
does not apply to the underlying reason giving rise to or contributing to any
such change); or (ii) the ability of the Company to consummate the Purchase and
the other transactions contemplated by this Agreement and the Warrant and
perform its obligations hereunder or thereunder on a timely basis.

     

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

     

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

     

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

     

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

     

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

     

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

     

    (e) Authorization,
Enforceability.

     

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

     

    (ii) The
execution, delivery and performance by the Company of this Agreement and the
Warrant and the consummation of the transactions contemplated hereby and thereby
and compliance by the Company with the provisions hereof and thereof, will not
(A) violate, conflict with, or result in a breach of any provision of, or
constitute a default (or an event which, with notice or lapse of time or both,
would constitute a default) under, or result in the termination of, or
accelerate the performance required by, or result in a right of termination or
acceleration of, or result in the creation of, any lien, security interest,
charge or encumbrance upon any of the properties or assets of the Company or any
Company Subsidiary under any of the terms, conditions or provisions of (i)
subject, if applicable, to the approvals of the Company’s stockholders set forth
on Schedule C,
its organizational documents or (ii) any note, bond, mortgage, indenture, deed
of trust, license, lease, agreement or other instrument or obligation to

     

    
      
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    which the
Company or any Company Subsidiary is a party or by which it or any Company
Subsidiary may be bound, or to which the Company or any Company Subsidiary or
any of the properties or assets of the Company or any Company Subsidiary may be
subject, or (B) subject to compliance with the statutes and regulations referred
to in the next paragraph, violate any statute, rule or regulation or any
judgment, ruling, order, writ, injunction or decree applicable to the Company or
any Company Subsidiary or any of their respective properties or assets except,
in the case of clauses (A)(ii) and (B), for those occurrences that, individually
or in the aggregate, have not had and would not reasonably be expected to have a
Company Material Adverse Effect.

     

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

     

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

     

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

     

    (h) Company Financial
Statements.  Each of the consolidated financial statements of
the Company and its consolidated subsidiaries (collectively the “Company Financial
Statements”) included or incorporated by reference in the Company Reports
filed with the SEC since December 31, 2006, present fairly in all material
respects the consolidated financial position of the Company and its consolidated
subsidiaries as of the dates indicated therein (or if amended prior to the
Signing Date, as of the date of such amendment) and the consolidated results of
their operations for the periods specified therein; and except as stated
therein, such 

     

    
      
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    financial
statements (A) were prepared in conformity with GAAP applied on a consistent
basis (except as may be noted therein), (B) have been prepared from, and are in
accordance with, the books and records of the Company and the Company
Subsidiaries and (C) complied as to form, as of their respective dates of filing
with the SEC, in all material respects with the applicable accounting
requirements and with the published rules and regulations of the SEC with
respect thereto.

     

    (i) Reports.

     

    (i) Since
December 31, 2006, the Company and each subsidiary of the Company (each a “Company Subsidiary” and,
collectively, the “Company
Subsidiaries”) has timely filed all reports, registrations, documents,
filings, statements and submissions, together with any amendments thereto, that
it was required to file with any Governmental Entity (the foregoing,
collectively, the “Company
Reports”) and has paid all fees and assessments due and payable in
connection therewith, except, in each case, as would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse
Effect.  As of their respective dates of filing, the Company Reports
complied in all material respects with all statutes and applicable rules and
regulations of the applicable Governmental Entities.  In the case of
each such Company Report filed with or furnished to the SEC, such Company Report
(A) did not, as of its date or if amended prior to the Signing Date, as of the
date of such amendment, contain an untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements made therein,
in light of the circumstances under which they were made, not misleading, and
(B) complied as to form in all material respects with the applicable
requirements of the Securities Act and the Exchange Act.  With respect
to all other Company Reports, the Company Reports were complete and accurate in
all material respects as of their respective dates.  No executive
officer of the Company or any Company Subsidiary has failed in any respect to
make the certifications required of him or her under Section 302 or 906 of the
Sarbanes-Oxley Act of 2002.

     

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

     

    
      
        UST
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        - 8
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    are
reasonably likely to adversely affect the Company’s ability to record, process,
summarize and report financial information and (y) any fraud, whether or not
material, that involves management or other employees who have a significant
role in the Company’s internal controls over financial reporting.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    (s) Agreements with Regulatory
Agencies.  Except as set forth on Schedule F, neither
the Company nor any Company Subsidiary is subject to any material
cease-and-desist or other 

     

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

     

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

     

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

     

    
      
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    person
has infringed, diluted, misappropriated or violated, any of the Proprietary
Rights owned by the Company and the Company Subsidiaries.

     

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

     

    Article
III

    Covenants

     

    3.1 Commercially Reasonable
Efforts.

     

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

     

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

     

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

     

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

     

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

     

    3.3 Sufficiency of Authorized
Common Stock; Exchange Listing.

     

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

     

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

     

    3.4 Certain Notifications Until
Closing.  From
the Signing Date until the Closing, the Company shall promptly notify the
Investor of (i) any fact, event or circumstance of which it is aware and which
would reasonably be expected to cause any representation or warranty of the
Company contained in this Agreement to be untrue or inaccurate in any material
respect or to 

     

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

     

    3.5 Access, Information and
Confidentiality.

     

    (a) From the
Signing Date until the date when the Investor holds an amount of Preferred
Shares having an aggregate liquidation value of less than 10% of the Purchase
Price, the Company will permit the Investor and its agents, consultants,
contractors and advisors (x) acting through the Appropriate Federal Banking
Agency, to examine the corporate books and make copies thereof and to discuss
the affairs, finances and accounts of the Company and the Company Subsidiaries
with the principal officers of the Company, all upon reasonable notice and at
such reasonable times and as often as the Investor may reasonably request and
(y) to review any information material to the Investor’s investment in the
Company provided by the Company to its Appropriate Federal Banking
Agency.  Any investigation pursuant to this Section 3.5 shall be
conducted during normal business hours and in such manner as not to interfere
unreasonably with the conduct of the business of the Company, and nothing herein
shall require the Company or any Company Subsidiary to disclose any information
to the Investor to the extent (i) prohibited by applicable law or regulation, or
(ii) that such disclosure would reasonably be expected to cause a violation of
any agreement to which the Company or any Company Subsidiary is a party or would
cause a risk of a loss of privilege to the Company or any Company Subsidiary
(provided that the Company shall use commercially reasonable efforts to make
appropriate substitute disclosure arrangements under circumstances where the
restrictions in this clause (ii) apply).

     

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

     

    Article
IV

    Additional
Agreements

     

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

     

    4.2 Legends.

     

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

     

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

     

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

     

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

     

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

     

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

     

    THE
SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE 

     

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

     

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

     

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

     

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

     

    4.5 Registration
Rights.

     

    (a) Registration.

     

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

     

    
      
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    Shelf
Registration Statement unless and until requested to do so in writing by the
Investor.

     

    (ii) Any
registration pursuant to Section 4.5(a)(i) shall be effected by means of a shelf
registration on an appropriate form under Rule 415 under the Securities Act (a
“Shelf Registration
Statement”).  If the Investor or any other Holder intends to
distribute any Registrable Securities by means of an underwritten offering it
shall promptly so advise the Company and the Company shall take all reasonable
steps to facilitate such distribution, including the actions required pursuant
to Section 4.5(c); provided that the Company
shall not be required to facilitate an underwritten offering of Registrable
Securities unless the expected gross proceeds from such offering exceed (i) 2%
of the initial aggregate liquidation preference of the Preferred Shares if such
initial aggregate liquidation preference is less than $2 billion and (ii) $200
million if the initial aggregate liquidation preference of the Preferred Shares
is equal to or greater than $2 billion.  The lead underwriters in any
such distribution shall be selected by the Holders of a majority of the
Registrable Securities to be distributed; provided that to the extent
appropriate and permitted under applicable law, such Holders shall consider the
qualifications of any broker-dealer Affiliate of the Company in selecting the
lead underwriters in any such distribution.

     

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

     

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

     

    
      
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    business
day prior to the planned effective date of such Piggyback
Registration.  The Company may terminate or withdraw any registration
under this Section 4.5(a)(iv) prior to the effectiveness of such registration,
whether or not Investor or any other Holders have elected to include Registrable
Securities in such registration.

     

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

     

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

     

    (b) Expenses of
Registration.  All Registration Expenses incurred in connection
with any registration, qualification or compliance hereunder shall be borne by
the Company.  All 

     

    
      
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    Selling
Expenses incurred in connection with any registrations hereunder shall be borne
by the holders of the securities so registered pro rata on the basis of the
aggregate offering or sale price of the securities so registered.

     

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

     

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

     

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

     

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

     

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

     

    (v) Notify
each Holder of Registrable Securities at any time when a prospectus relating
thereto is required to be delivered under the Securities Act of the happening of
any event as a result of which the applicable prospectus, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to 

     

    
      
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    be stated
therein or necessary to make the statements therein not misleading in light of
the circumstances then existing.

     

    (vi) Give
written notice to the Holders:

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    (viii) Upon the
occurrence of any event contemplated by Section 4.5(c)(v) or 4.5(c)(vi)(E),
promptly prepare a post-effective amendment to such registration statement or a
supplement to the related prospectus or file any other required document so
that, as thereafter delivered to the Holders and any underwriters, the
prospectus will not contain an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.  If the
Company notifies the Holders in accordance with Section 4.5(c)(vi)(E) to suspend
the use of the prospectus until the requisite changes to the prospectus have
been made, then the Holders and any underwriters shall suspend use of such
prospectus 

     

    
      
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    and use
their reasonable best efforts to return to the Company all copies of such
prospectus (at the Company’s expense) other than permanent file copies then in
such Holders’ or underwriters’ possession.  The total number of days
that any such suspension may be in effect in any 12-month period shall not
exceed 90 days.

     

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

     

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

     

    (xi) Make
available for inspection by a representative of Holders that are selling
stockholders, the managing underwriter(s), if any, and any attorneys or
accountants retained by such Holders or managing underwriter(s), at the offices
where 

     

    
      
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    normally
kept, during reasonable business hours, financial and other records, pertinent
corporate documents and properties of the Company, and cause the officers,
directors and employees of the Company to supply all information in each case
reasonably requested (and of the type customarily provided in connection with
due diligence conducted in connection with a registered public offering of
securities) by any such representative, managing underwriter(s), attorney or
accountant in connection with such Shelf Registration Statement.

     

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

     

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

     

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

     

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

     

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

     

    
      
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    (f) Furnishing
Information.

     

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

     

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

     

    (g) Indemnification.

     

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

     

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

     

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

     

    (i) Clear
Market.  With respect to any underwritten offering of
Registrable Securities by the Investor or other Holders pursuant to this Section
4.5, the Company agrees not to effect (other than pursuant to such registration
or pursuant to a Special Registration) any public sale or distribution, or to
file any Shelf Registration Statement (other than such registration or a Special
Registration) covering, in the case of an underwritten offering of Common Stock
or Warrants, any of its equity securities or, in the case of an underwritten
offering of Preferred Shares, any Preferred Stock of the Company, or, in each
case, any securities convertible into or exchangeable or exercisable for such
securities, during the period not to exceed ten days prior and 60 days

     

    
      
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    following
the effective date of such offering or such longer period up to 90 days as may
be requested by the managing underwriter for such underwritten
offering.  The Company also agrees to cause such of its directors and
senior executive officers to execute and deliver customary lock-up agreements in
such form and for such time period up to 90 days as may be requested by the
managing underwriter.  “Special Registration” means
the registration of (A) equity securities and/or options or other rights in
respect thereof solely registered on Form S-4 or Form S-8 (or successor form) or
(B) shares of equity securities and/or options or other rights in respect
thereof to be offered to directors, members of management, employees,
consultants, customers, lenders or vendors of the Company or Company
Subsidiaries or in connection with dividend reinvestment plans.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
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    Pending
Underwritten Offering.  “Pending Underwritten
Offering” means, with respect to any Holder forfeiting its rights
pursuant to this Section 4.5(l), any underwritten offering of Registrable
Securities in which such Holder has advised the Company of its intent to
register its Registrable Securities either pursuant to Section 4.5(a)(ii) or
4.5(a)(iv) prior to the date of such Holder’s forfeiture.

     

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

     

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

     

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

     

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

     

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

     

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

     

    4.8 Restriction on Dividends and
Repurchases.

     

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

     

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

     

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

     

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

     

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

     

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

     

    4.9 Repurchase of Investor
Securities.

     

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

     

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

     

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

     

    (i) “Appraisal Procedure” means a
procedure whereby two independent appraisers, one chosen by the Company and one
by the Investor, shall mutually agree 

     

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

     

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

     

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

     

    Article
V

    Miscellaneous

     

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

     

    (a) by either
the Investor or the Company if the Closing shall not have occurred by the 30th
calendar day following the Signing Date; provided, however, that in
the event the Closing has not occurred by such 30th calendar day, the parties
will consult in good faith to determine whether to extend the term of this
Agreement, it being understood that the parties shall 

     

    
      
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    be
required to consult only until the fifth day after such 30th calendar day and
not be under any obligation to extend the term of this Agreement thereafter;
provided, further, that
the right to terminate this Agreement under this Section 5.1(a) shall not be
available to any party whose breach of any representation or warranty or failure
to perform any obligation under this Agreement shall have caused or resulted in
the failure of the Closing to occur on or prior to such date; or

     

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

     

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

     

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

     

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

     

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

     

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

     

    5.5 Governing
Law:  Submission to Jurisdiction, Etc.

     

      This
Agreement will be governed by and construed in accordance with the federal law
of the United States if and to the extent such law is applicable, and otherwise
in accordance with the laws of the State of New York applicable to contracts
made and to be performed entirely within such State.  Each of the
parties hereto agrees (a) to submit to the exclusive jurisdiction and venue of
the United States District Court for the District of Columbia and the United
States Court of Federal Claims for any and all civil actions, suits or
proceedings arising out of or relating to this Agreement or the Warrant or the
transactions contemplated hereby or thereby, and 

     

    
      
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    (b)
that notice may be served upon (i) the Company at the address and in the manner
set forth for notices to the Company in Section 5.6 and (ii) the Investor in
accordance with federal law.  To the extent permitted by applicable
law, each of the parties hereto hereby unconditionally waives trial by jury in
any civil legal action or proceeding relating to this Agreement or the Warrant
or the transactions contemplated hereby or thereby.

     

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

     

    If to the
Investor:

     

    United
States Department of the Treasury

    1500
Pennsylvania Avenue, NW, Room 2312

    Washington,
D.C. 20220

    Attention:  Assistant
General Counsel (Banking and Finance)

    Facsimile:  (202)
622-1974

     

    5.7 Definitions.

     

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

     

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

     

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

     

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

     

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

     

    5.10 No Third Party
Beneficiaries.  Nothing
contained in this Agreement, expressed or implied, is intended to confer upon
any person or entity other than the Company and the Investor any benefit, right
or remedies, except that the provisions of Section 4.5 shall inure to the
benefit of the persons referred to in that Section.

     

    * *
*

    

    
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      - 35 -EXHIBIT 10.1

                           SMALL CAP STRATEGIES, INC.
                             2008 STOCK OPTION PLAN

1.   Purposes of the Plan. The purposes of the "Plan" (as defined herein) are to
     attract  and  retain  the  best   available   personnel  for  positions  of
     substantial  responsibility,  to provide additional  incentive to Employees
     and  Consultants  and to  promote  the  success of the  Company's  business
     through the issuance of options,  stock purchase rights,  other stock-based
     awards, and other benefits. Options granted under the Plan may be Incentive
     Stock Options or Nonstatutory Stock Options. Stock purchase rights may also
     be granted under the Plan

2.   Definitions. As used herein, the following definitions shall apply:

     a.   "Administrator"  means  the Board or any of its  Committees  appointed
          pursuant to Section 4 of the Plan to administer the Plan.

     b.   "Award" means any award or benefit  granted to any  participant  under
          the Plan, including,  without limitation,  the grant of Options, Stock
          Purchase Rights, and other Stock-based awards and other benefits.

     c.   "Board" means the Board of Directors of the Company.

     d.   "Code" means the Internal Revenue Code of 1986, as amended.

     e.   "Committee"  means a Committee  appointed by the Board of Directors in
          accordance with Section 4 of the Plan.

     f.   "Common Stock" means the Common Stock of the Company.

     g.   "Company" means Small Cap Strategies, Inc.

     h.   "Consultant"  means any person,  including  an advisor,  who is not an
          Employee but is engaged by the Company or any Parent or  Subsidiary to
          render services and is compensated for such services, and any director
          of the Company  whether  compensated for such services or not provided
          that if and in the event the Company registers any class of any equity
          security  pursuant to the  Exchange  Act,  the term  Consultant  shall
          thereafter  not include  directors who are not  compensated  for their
          services or are paid only a director's fee by the Company.

     i.   "Disability" means, with respect to an Optionee, that the Optionee has
          any medically  determinable physical or mental impairment which can be
          expected  to result in death or which has lasted or can be expected to
          last for a continuous period of not less than twelve (12) months,  and
          which renders the Optionee unable to engage in any substantial gainful
          activity.  An Optionee  shall not be  considered  to have a Disability
          unless Optionee  furnishes proof of the existence thereof in such form
          and manner,  and at such time, as the Administrator  may require,  and
          the  Administrator  determines in its discretion that the Optionee has
          such a medically determinable physical or mental impairment.

     j.   "Employee" means any person who is determined by the  Administrator to
          be a common law employee of the Company or any Parent or Subsidiary of
          the  Company.  With respect to any entity for which the Company or any
          Parent of  Subsidiary  of the  Company is a single  owner and which is
          disregarded as an entity  separate from its owner pursuant to Treasury
          Regulations  Section  301.7701-3,  any  person who  determined  by the

<PAGE>
          Administrator  to be a common law  employee  of that  entity  shall be
          treated as an Employee.

     k.   "Exchange Act" means the Securities Exchange Act of 1934, as amended.

     l.   "Fair Market Value" means,  as of any date,  the value of Common Stock
          determined as follows:

          i.   If the Common Stock is listed on any  established  stock exchange
               or a national  market system  including  without  limitation  the
               National Market System of the National  Association of Securities
               Dealers,  Inc.  Automated  Quotation  ("NASDAQ") System, its Fair
               Market  Value shall be the closing  sales price for such stock on
               the date of  determination  (or the closing bid, if no sales were
               reported,  as quoted  on such  exchange  or  system  for the last
               market  trading  day  prior  to the  time  of  determination)  as
               reported in The Wall Street  Journal or such other  source as the
               Administrator deems reliable;

          ii.  If the Common  Stock is quoted on the NASDAQ  System  (but not on
               the National  Market  System  thereof) or  regularly  quoted by a
               recognized securities dealer but selling prices are not reported,
               its Fair Market  Value shall be the mean between the high bid and
               low  asked   prices  for  the   Common   Stock  on  the  date  of
               determination or;

          iii. In the absence of an established market for the Common Stock, the
               Fair Market Value  thereof  shall be  determined in good faith by
               the Administrator.

     m.   "Incentive  Stock  Option"  means an  Option  which is  treated  as an
          incentive  stock option within the meaning of Section 422 of the Code.
          An Option shall only be treated as an Incentive  Stock Option pursuant
          to the  Plan if it is  originally  designated  as an  Incentive  Stock
          Option in the Option Agreement.  An Option originally designated in an
          Option  Agreement as an  Incentive  Stock  Option may  nonetheless  be
          treated as a Nonstatutory Stock Option if the Option at any time after
          grant  fails  to meet  to  requirements  for  incentive  stock  option
          treatment under Section 422 of the Code.

     n.   "Nonstatutory  Stock Option" means an Option which is not an Incentive
          Stock Option.  An Option which is designated as a  Nonstatutory  Stock
          Option  in the  Option  Agreement  pursuant  to which the  Option  was
          granted shall in all events be treated as a Nonstatutory Stock Option.
          Furthermore,  an Option  originally  designated as an Incentive  Stock
          Option may  subsequently  become a Nonstatutory  Stock Option upon the
          Option  subsequently  failing to meet the  requirements  for incentive
          stock option under Section 422 of the Code.

     o.   "Officer"  means a person who is an officer of the Company  within the
          meaning  of  Section  16  of  the  Exchange  Act  and  the  rules  and
          regulations promulgated thereunder.

     p.   "Option" means a stock option granted pursuant to the Plan.

     q.   "Option Agreement" has the meaning set forth in Section 18 hereof.

     r.   "Optioned  Stock"  means the  Common  Stock  subject to an Option or a
          Stock Purchase Right.

     s.   "Optionee"  means an Employee or Consultant  who receives an Option or
          Stock Purchase Right, other Stock-based award, or other benefit.

<PAGE>
     t.   "Parent"  means  a  "parent  corporation,"  whether  now or  hereafter
          existing, as defined in Section 424(e) of the Code.

     u.   "Plan" means this 2008 Stock Option Plan, as amended from time to time
          in  accordance  with the terms  hereof.  When  referenced  in  another
          document, the name "Small Cap Strategies, Inc. 2008 Stock Option Plan"
          refers to this Plan.

     v.   "Restricted Stock" has the meaning set forth in Section 11(a) hereof.

     w.   "Restricted  Stock  Purchase  Agreement"  has the meaning set forth in
          Section 11(a) hereof.

     x.   "Share" means a share of the Common  Stock,  as adjusted in accordance
          with Section 12 below.

     y.   "Stock  Purchase  Right"  means the  right to  purchase  Common  Stock
          pursuant to Section 11 below.

     z.   "Stock Purchase Right  Agreement" has the meaning set forth in Section
          18 hereof.

     aa.  "Subsidiary"  means  a  "subsidiary   corporation,"   whether  now  or
          hereafter existing, as defined in Section 424(f) of the Code.

     bb.  "Ten Percent Shareholder" means a person who, at the time an Option is
          granted, owns, or is deemed within the meaning of Section 422(b)(6) of
          the Code to own, stock  possessing  more than ten percent (10%) of the
          total combined voting power of all classes of stock of the Company (or
          of its  Subsidiary or parent  (within the meaning of Section 424(e) of
          the Code)).

3.   Stock Subject to the Plan. Subject to adjustment  pursuant to Section 12 of
     the Plan,  and  effective as of November 15,  2008,  the maximum  aggregate
     number of shares  which may be  issued  pursuant  to the Plan is  3,000,000
     shares of Common Stock. Such number of shares of Common Stock may be issued
     under this Plan pursuant to Incentive  Stock  Options,  Nonstatutory  Stock
     Options,  Stock Purchase Rights,  other Stock-based awards, other benefits,
     or any combination  thereof,  so long as the aggregate  number of shares so
     issued  does not  exceed  such  maximum  aggregate  number  of  shares,  as
     adjusted.  The shares may be authorized,  but unissued or reacquired Common
     Stock.  If an Option should expire or become  unexercisable  for any reason
     without having been exercised in full,  the  unpurchased  Shares which were
     subject thereto shall,  unless the Plan shall have been terminated,  become
     available for future grant under the Plan.

4.   Administration of the Plan.

     a.   Procedure.   The  Plan  shall  be   administered  by  a  "Compensation
          Committee"  whose members are appointed by the Board. The Compensation
          Committee  shall be  comprised of not less than two (2) members of the
          Board  whose role,  in  addition to any other roles such  Compensation
          Committee  is required or  empowered  to  administer  on behalf of the
          Board,  shall be to  administer  the Plan,  subject  to such terms and
          conditions  as  the  Board  may   prescribe.   Once   appointed,   the
          Compensation   Committee  shall  continue  to  serve  until  otherwise
          directed by the Board.  From time to time,  the Board may increase the
          size of the  Compensation  Committee  and appoint  additional  members
          thereof,  remove  members  (with or  without  cause) and  appoint  new
          members in substitution therefor, fill vacancies,  however caused, and
          remove all  members of the  Compensation  Committee  and,  thereafter,
          directly  administer  the  Plan.  In the  event  that the Board is the
          administrator  of the Plan in lieu of a  Compensation  Committee,  the

<PAGE>
          term  "Compensation  Committee" as used herein shall be deemed to mean
          the Board.

               i.   Members  of the  Board  or  Compensation  Committee  who are
                    either eligible for Options or have been granted Options may
                    vote on any matters affecting the administration of the Plan
                    or the grant of Options pursuant to the Plan, except that no
                    such  member  shall  act upon the  granting  of an Option to
                    himself or  herself,  but any such  member may be counted in
                    determining  the existence of a quorum at any meeting of the
                    Board or the  Compensation  Committee during which action is
                    taken with  respect to the  granting  of an Option to him or
                    her.

               ii.  The  Compensation  Committee  shall  meet at such  times and
                    places and upon such notice as it may determine.  A majority
                    of the Compensation Committee shall constitute a quorum. Any
                    acts  by the  Compensation  Committee  may be  taken  at any
                    meeting  at  which a  quorum  is  present  and  shall  be by
                    majority   vote  of   those   members   entitled   to  vote.
                    Additionally,  any acts  reduced to writing or  approved  in
                    writing by all of the members of the Compensation  Committee
                    shall be valid acts of the Compensation Committee.

               iii. Multiple  Administrative Bodies. If permitted by Rule 16b-3,
                    the  Plan  may be  administered  by  different  bodies  with
                    respect to  directors,  non-director  officers and Employees
                    who are neither directors nor officers.

               iv.  Administration   With  Respect  to  Consultants   and  Other
                    Employees. With respect to grants of Options, Stock Purchase
                    Rights,  other  Stock-based  awards,  or other benefits,  to
                    Employees  or  Consultants  who are  neither  directors  nor
                    officers of the Company,  the Plan shall be  administered by
                    (A) the Board or (B) a  committee  designated  by the Board,
                    which  committee shall be constituted in such a manner as to
                    satisfy   the   legal    requirements    relating   to   the
                    administration  of incentive  stock option plans, if any, of
                    Nevada  corporate and  securities  laws, of the Code, and of
                    any applicable stock exchange (the "Applicable  Laws"). Once
                    appointed,  such  Committee  shall  continue to serve in its
                    designated  capacity until otherwise  directed by the Board.
                    From  time to time the Board  may  increase  the size of the
                    Committee and appoint  additional  members  thereof,  remove
                    members  (with or without  cause) and appoint new members in
                    substitution therefor,  fill vacancies,  however caused, and
                    remove all members of the Committee and thereafter  directly
                    administer  the Plan,  all to the  extent  permitted  by the
                    Applicable Laws.

               v.   Administration   With  Respect  to  Directors  Who  Are  Not
                    Employees. With respect to grants of Options, Stock Purchase
                    Rights,  other  Stock-based  awards,  or other  benefits  to
                    directors  who  are  not   Employees,   the  Plan  shall  be
                    administered by (A) the Board or (B) a committee  designated
                    by the  Board;  provided  that  any  policy  of the  Company
                    concerning grants of Options,  Stock Purchase Rights,  other
                    Stock-based   awards,  or  other  benefits  to  non-Employee
                    directors  as director  compensation  shall be approved by a
                    majority  of  the  members  of  the  Board  who  are  either
                    Employees of the Company or non-Employee  directors who have
                    waived their right to receive such compensation.

<PAGE>

     b.   Rule   16b-3   Requirements.   Unless  the  Board  is  acting  as  the
          Compensation Committee or the Board specifically determines otherwise,
          the members of the Compensation  Committee shall be both "non-employee
          directors"  within the meaning of Rule 16b-3, and "outside  directors"
          within the meaning of Section 162(m) of the Code. The Board shall take
          all  action  necessary  to  cause  the  Plan  to  be  administered  in
          accordance with the then effective provisions of Rule 16b-3,  provided
          that any  amendment  to the Plan  required  for  compliance  with such
          provisions shall be made in accordance with Section 10 of the Plan.

     c.   Powers of the Compensation Committee. The Compensation Committee shall
          have all the powers vested in it by the terms of the Plan, such powers
          to include authority,  in its sole and absolute  discretion,  to grant
          Options under the Plan, prescribe  agreements  evidencing such Options
          and  establish   programs  for  granting  Options.   The  Compensation
          Committee  shall  have  full  power  and  authority  to take all other
          actions  necessary  to carry out the  purpose  and intent of the Plan,
          including,  but not limited to, the authority to do the  following,  n
          its discretion:

          i.   to  determine  the Fair  Market  Value of the  Common  Stock,  in
               accordance with Section 2(k) of the Plan;

          ii.  to select the  Consultants  and Employees to whom Options,  Stock
               Purchase Rights,  other Stock-based awards, or other benefits may
               from time to time be granted hereunder;

          iii. to  determine  whether  and to  what  extent  Options  and  Stock
               Purchase Rights or any combination thereof are granted hereunder;

          iv.  to  determine  the number of shares of Common Stock to be covered
               by each such award granted hereunder;

          v.   to approve forms of agreement  for use under the Plan,  including
               without limitation,  Stock Purchase Right Agreements,  Restricted
               Stock Purchase Agreements and Option Agreements, which forms need
               not be the same for any Optionee;

          vi.  to determine the terms and conditions,  not inconsistent with the
               terms of the Plan, of any Option,  Stock  Purchase  Right,  other
               Stock-based   awards,   or  other  benefits  granted   hereunder,
               including without limitation  establishing  vesting schedules for
               the exercise of Options  which are based upon the passage of time
               performing   services   for  the   Company,   meeting   specified
               performance  criteria or any other standards as may be determined
               appropriate by the Administrator;

          vii. to determine  whether and under what  circumstances an Option may
               be settled in cash instead of Common Stock;

          viii. to reduce the  exercise  price of any Option to the then current
               Fair Market  Value if the Fair Market  Value of the Common  Stock
               covered by such  Option  shall have  declined  since the date the
               Option was granted;

          ix.  to  determine  the terms  and  restrictions  applicable  to Stock
               Purchase Rights and the Restricted  Stock purchased by exercising
               such Stock Purchase Rights; and

          x.   to interpret the Plan, establish, amend and rescind any rules and
               regulations  relating  to the Plan,  to  determine  the terms and

<PAGE>
               provision of any  agreements  entered into  pursuant to the Plan,
               and to make all other  determinations  that may be  necessary  or
               advisable for the administration of the Plan.

     d.   Effect  of  Administrator's  Decision.   Whether  explicitly  provided
          elsewhere  in this Plan with  respect to any  matter,  all  decisions,
          determinations and  interpretations  of the Administrator  provided in
          this  Plan  shall be made in the  Administrator's  sole  and  absolute
          discretion,  and shall be final and binding on all  Optionees  and any
          other holders of any Options, Stock Purchase Rights, other Stock-based
          awards, or other benefits.

     e.   Limited  Liability.  To the maximum extent permitted by law, no member
          of the Compensation  Committee shall be liable for any action taken or
          decision  made in  good  faith  relating  to the  Plan  or any  Option
          thereunder.

     f.   Indemnification.  To the maximum extent  permitted by law, the members
          of the Compensation  Committee shall be indemnified by the Corporation
          in respect of all their activities under the Plan.

     g.   Effect of  Compensation  Committee's  Decision.  All actions taken and
          decisions and determinations made by the Compensation Committee on all
          matters  relating  to the Plan  pursuant  to the  powers  vested in it
          hereunder shall be in the  Compensation  Committee's sole and absolute
          discretion  and  shall  be  conclusive  and  binding  on  all  parties
          concerned,   including  the   Corporation,   its   stockholders,   any
          participants  in the Plan and any other  employee of the  Corporation,
          and their respective successors in interest.

5.   Eligibility.

     a.   Nonstatutory Stock Options and Stock Purchase Rights may be granted to
          such   Employees   and   Consultants   as  may  be   selected  by  the
          Administrator.   Incentive  Stock  Options  may  be  granted  to  such
          Employees as may be selected by the  Administrator and may in no event
          be granted to someone  who, on the date of grant,  is not an Employee.
          An  Employee  or  Consultant  who has been  granted an Option or Stock
          Purchase  Right may,  if  otherwise  eligible,  be granted  additional
          Options,  Stock Purchase Rights,  other  Stock-based  awards, or other
          benefits.

     b.   Each Option shall be designated  in the Option  Agreement as either an
          Incentive Stock Option or a Nonstatutory Stock Option. Notwithstanding
          such designations,  to the extent that the aggregate Fair Market Value
          (determined  as of the date of grant of the  Option)  of the shares of
          Option Stock with respect to which  Options  initially  designated  as
          Incentive  Stock  Options  are  exercisable  for the first time by any
          Optionee  during any calendar  year (under all plans of the Company or
          any Parent or Subsidiary) exceeds $100,000,  such excess Options shall
          be treated as Nonstatutory Stock Options.

     c.   For purposes of Section 5(b),  Incentive  Stock Options shall be taken
          into  account  in the order in which they were  granted,  and the Fair
          Market  Value of the  Shares  shall be  determined  as of the time the
          Option with respect to such Shares is granted.

     d.   The Plan shall not confer upon any  Optionee any right with respect to
          continuation  of  employment  or  consulting   relationship  with  the
          Company,  nor shall it  interfere  in any way with his or her right or
          the Company's  right to terminate his or her  employment or consulting
          relationship at any time, with or without cause.

<PAGE>
     e.   Non-Uniform Determinations.  The Administrator's  determinations under
          the Plan (including without  limitation  determinations of the persons
          to receive  awards,  the form,  amount and timing of such awards,  the
          terms and  provisions  of such  awards and the  agreements  evidencing
          same)  need not be  uniform  and may be made by it  selectively  among
          persons who  receive,  or are  eligible to receive,  awards  under the
          Plan, whether or not such persons are similarly situated.

     f.   Newly Eligible Employees.  The Administrator shall be entitled to make
          such  rules,  regulations,  determinations  and  awards  as  it  deems
          appropriate  in  respect  of any  Employee  who  becomes  eligible  to
          participate in the Plan or any portion thereof after the  commencement
          of an award or incentive period.

     g.   Leaves of Absence.  The  Administrator  shall be entitled to make such
          rules,  regulations and  determinations  as it deems appropriate under
          the Plan in respect of any leave of absence  taken by the recipient of
          any award.  Without  limiting the  generality  of the  foregoing,  the
          Administrator  shall be entitled to  determine  (i) whether or not any
          such leave of absence  shall  constitute a  termination  of employment
          within the  meaning of the Plan and (ii) the  impact,  if any,  of any
          such leave of absence on awards under the Plan theretofore made to any
          recipient who takes such leave of absence.

6.   Term of Plan. The Plan shall become  effective upon the earlier to occur of
     its adoption by the Board of Directors or its approval by the  shareholders
     of the Company as described in Section 19 of the Plan. It shall continue in
     effect for a term of ten (10) years unless sooner  terminated under Section
     15 of the Plan.

7.   Term of Option.  The term of each  Option  shall be the term  stated in the
     Option Agreement;  provided,  however,  that the term shall be no more than
     ten (10) years from the date of grant thereof.  However,  in the case of an
     Incentive Stock Option granted to a Ten Percent Shareholder the term of the
     Option  shall be five (5)  years  from  the date of grant  thereof  or such
     shorter term as may be provided in the Option Agreement.

8.   Option Exercise Price and Consideration.

     a.   The per share exercise  price for the Shares to be issued  pursuant to
          exercise  of an Option  shall be such  price as is  determined  by the
          Administrator;  provided  however,  that with respect to any Incentive
          Stock Option, the price shall be:

          i.   no less than 110% of the Fair Market  Value per Share on the date
               of grant, if granted to a Ten Percent Shareholder;

          ii.  no less than 100% of the Fair Market  Value per Share on the date
               of  grant,  if  granted  to a  person  other  than a Ten  Percent
               Shareholder.

     b.   The consideration to be paid for the Shares to be issued upon exercise
          of an Option,  including the method of payment, shall be determined by
          the  Administrator  (and,  in the case of an Incentive  Stock  Option,
          shall be determined at the time of grant) and may consist  entirely of
          (1) cash, (2) check,  (3) promissory  note, (4) other Shares which (x)
          in the case of Shares  acquired upon exercise of an Option either have
          been  owned by the  Optionee  for more than six  months on the date of
          surrender  or were not  acquired,  directly  or  indirectly,  from the
          Company,  and (y) have a Fair  Market  Value on the date of  surrender
          equal to the aggregate  exercise  price of the Shares as to which said
          Option  shall  be  exercised,  (5)  delivery  of a  properly  executed
          exercise  notice  together  with  such  other   documentation  as  the

<PAGE>
          Administrator and the broker,  if applicable,  shall require to effect
          an exercise  of the Option and  delivery to the Company of the sale or
          loan  proceeds  required  to  pay  the  exercise  price,  or  (6)  any
          combination  of the  foregoing  methods  of  payment.  In  making  its
          determination  as  to  the  type  of  consideration  to  accept,   the
          Administrator  shall consider if acceptance of such  consideration may
          be reasonably expected to benefit the Company.

9.   Exercise of Option.

     a.   Procedure for Exercise;  Rights as a  Shareholder.  Any Option granted
          hereunder shall be exercisable at such times and under such conditions
          as determined by the  Administrator,  including  performance  criteria
          with  respect  to the  Company  and/or the  Optionee,  and as shall be
          permissible under the terms of the Plan.

          i.   An Option may not be exercised for a fraction of a Share.

          ii.  An Option shall be deemed to be exercised  when written notice of
               such  exercise has been given to the Company in  accordance  with
               the terms of the  Option  Agreement  by the  person  entitled  to
               exercise  the Option and full payment for the Shares with respect
               to  which  the  Option  is  exercised  has been  received  by the
               Company.  Full payment may, as authorized  by the  Administrator,
               consist of any  consideration  and  method of  payment  allowable
               under Section 8(b) of the Plan.  Until the issuance (as evidenced
               by the appropriate entry on the books of the Company or of a duly
               authorized   transfer   agent  of  the   Company)  of  the  stock
               certificate  evidencing such Shares,  no right to vote or receive
               dividends or any other rights as a  shareholder  shall exist with
               respect to the Optioned  Stock,  notwithstanding  the exercise of
               the Option.  The Company shall issue (or cause to be issued) such
               stock  certificate  promptly  upon  exercise  of the  Option.  No
               adjustment  will be made for a dividend  or other right for which
               the  record  date is prior to the date the stock  certificate  is
               issued, except as provided in Section 12 of the Plan.

          iii. Exercise of an Option in any manner shall result in a decrease in
               the number of Shares which thereafter may be available,  both for
               purposes of the Plan and for sale under the Option, by the number
               of Shares as to which the Option is exercised.

     b.   Withholding  Taxes.  Whenever  the Company  proposes or is required to
          issue or transfer  shares of Common Stock under the Plan,  the Company
          shall have the right to require the grantee to remit to the Company an
          amount   sufficient  to  satisfy  any  federal,   state  and/or  local
          withholding tax requirements  prior to the delivery of any certificate
          or certificates for such shares. Alternatively,  the Company may issue
          or transfer  such  shares of Common  Stock net of the number of shares
          sufficient  to  satisfy  the   withholding   tax   requirements.   For
          withholding  tax purposes,  the shares of Common Stock shall be valued
          on the date the withholding obligation is incurred.

     c.   Termination  or Lapse of Options  Issued to  Employees.  The following
          provisions  of this Section 9(c) and Section 9(e) shall apply to every
          Option  unless the Option  Agreement  explicitly  specifies  that such
          provisions  do not  apply  to the  Option  evidenced  by  that  Option
          Agreement. Any portion of an Option which is not otherwise exercisable
          as of the date of an Optionee's  termination  of  employment  with the
          Company  and any  Parent  or  Subsidiary  shall  terminate  and not be
          exercisable.  Any portion of an Option which was exercisable as of the

<PAGE>
          date of  termination  of any  such  employment  shall  be  exercisable
          following such termination of employment only as hereinafter  provided
          in this Section 9(c), subject to Section 9(e).

          i.   Termination of Employment; Generally. In the event of termination
               of an  Optionee's  employment  with the Company and any Parent or
               Subsidiary  under any situation not described in paragraphs 2) or
               3) of this Section 9(c),  the Optionee may exercise any Option to
               the  extent  the  Option  was  exercisable  as  of  the  date  of
               termination of employment  until the earlier of the date which is
               three (3) months after the date of  termination  of employment or
               the  expiration the term of the Option as set forth in the Option
               Agreement,  whereupon the Option shall terminate and no longer be
               exercisable.  For  purposes  of this  paragraph,  a  transfer  of
               employment  relationship  between or among the  Company  and/or a
               related  entity shall not be deemed to  constitute a cessation of
               the  employment  relationship  with  the  Company  or  any of its
               related entities. For purposes of this paragraph, with respect to
               Incentive Stock Options,  employment  shall be deemed to continue
               while the Optionee is on military leave, sick leave or other bona
               fide leave of absence (as determined by the  Administrator).  The
               foregoing  notwithstanding,  employment  shall  not be  deemed to
               continue  beyond  the  first 90 days of such  leave,  unless  the
               Optionee's  reemployment  rights are  guaranteed by statute or by
               contract.

          ii.  Disability  of  Optionee.  In  the  event  of  termination  of an
               Optionee's   employment  with  the  Company  and  any  Parent  or
               Subsidiary  due to  Disability,  the  Optionee  may  exercise any
               Option to the extent the Option was exercisable as of the date of
               termination of employment  until the earlier of the date which is
               twelve  (12)  months  from  the date of such  termination  or the
               expiration  of the term of the  Option as set forth in the Option
               Agreement,  whereupon the Option shall terminate and no longer be
               exercisable.

          iii. Death of Optionee.  In the event of  termination of an Optionee's
               employment  with the  Company and any Parent or  Subsidiary  as a
               result of the death of an  Optionee,  the Option may be exercised
               to the extent the Option was  exercisable as of the date of death
               until the  earlier of the date which is twelve  (12)  months from
               the date of death or the  expiration of the term of the Option as
               set forth in the Option  Agreement,  whereupon  the Option  shall
               terminate and no longer be exercisable.

     d.   Termination of Options  issued to  Consultants.  The  conditions  upon
          which an Option granted to a Consultant  will terminate as a result of
          the Consultants'  termination of services to the Company, whether as a
          result of death,  disability,  voluntary termination,  termination for
          cause,  or  nonrenewal  of  any  consulting  agreement,  shall  be  as
          determined  by the Company and the  Consultant at the time of grant of
          the Option as set forth in the Option Agreement.

     e.   Termination of Options due to Termination  for Cause.  In the event an
          Optionee is  terminated  as an Employee or  Consultant  for cause,  as
          determined by the  Administrator in its sole  discretion,  or breaches
          any agreement with the Company, before or after termination, including
          any  noncompete  covenant,  confidentiality  agreement,  or employment
          agreement,  then any Options  held by the Optionee  shall  immediately

<PAGE>
          terminate.  As used  herein,  "cause"  shall mean  fraud;  dishonesty;
          negligence;  willful misconduct in the performance of a persons duties
          as an Employee or Consultant; commission of a felony; commission of an
          act of moral turpitude (e.g.  theft,  embezzlement and the like) which
          in the good faith  determination of the  Administrator,  is materially
          injurious to the Company or any Parent or  Subsidiary;  inattention to
          or substandard  performance  of duties;  failure to perform a properly
          assigned duty; failure to follow the lawful written policies, rules or
          directives of the Company or any Parent of Subsidiary  which failures,
          in the good faith  determination of the Administrator,  are materially
          injurious to the Company or any Parent or  Subsidiary;  violating  any
          restrictive  covenant  in  favor  of  the  Company  or any  Parent  of
          Subsidiary  or  any  other  material   breach  of  any  employment  or
          consulting agreement with the Company or any Parent or Subsidiary.

     f.   Rule 16b-3. Options granted to persons subject to Section 16(b) of the
          Exchange  Act must  comply  with Rule  16b-3 and  shall  contain  such
          additional  conditions  or  restrictions  as may be  determined by the
          Administrator  to be  required  thereunder  to qualify for the maximum
          exemption  from  Section 16 of the  Exchange  Act with respect to Plan
          transactions.

     g.   Buyout Provisions.  The Administrator may at any time offer to buy out
          for a payment in cash or Shares, an Option previously  granted,  based
          on such terms and conditions as the Administrator  shall establish and
          communicate to the Optionee at the time that such offer is made.

     10.  Non-Transferability  of Options and Stock Purchase Rights. Options and
          Stock   Purchase   Rights   may  not  be  sold,   pledged,   assigned,
          hypothecated,  transferred, or disposed of in any manner other than by
          will or by the laws of descent or  distribution  and may be exercised,
          during the lifetime of the Optionee, only by the Optionee.

     11.  Stock Purchase Rights.

          a.   Rights to Purchase.  Stock  Purchase  Rights may be issued to any
               Employee or Consultant.  After the Administrator  determines that
               it will offer  Stock  Purchase  Rights  under the Plan,  it shall
               advise  the  offeree in  writing  of the  terms,  conditions  and
               restrictions related to the offer, including the number of Shares
               that such person shall be entitled to  purchase,  the price to be
               paid,  and the time  within  which such  person  must accept such
               offer,  which shall in no event  exceed  sixty (60) days from the
               date upon which the Administrator made the determination to grant
               the  Stock  Purchase  Right.  The  offer  shall  be  accepted  by
               execution of a restricted  stock  purchase  agreement in the form
               determined  by  the  Administrator  ("Restricted  Stock  Purchase
               Agreement").  Shares  purchased  pursuant to the grant of a Stock
               Purchase  Right  shall  be  referred  to  herein  as  "Restricted
               Stock").

          b.   Repurchase Option. Unless the Administrator determines otherwise,
               the Restricted Stock Purchase Agreement shall grant the Company a
               repurchase  option  exercisable upon the voluntary or involuntary
               termination of the  purchaser's  employment  with the Company for
               any reason  (including  death or Disability).  The purchase price
               for Shares repurchased  pursuant to the Restricted Stock Purchase
               Agreement  shall be the original  price paid by the purchaser and
               may be paid by cancellation of any  indebtedness of the purchaser
               to the Company. The repurchase option shall lapse at such rate as
               the Administrator may determine.

<PAGE>

          c.   Other Provisions.  The Restricted Stock Purchase  Agreement shall
               contain  such  other  terms,   provisions   and   conditions  not
               inconsistent   with  the  Plan  as  may  be   determined  by  the
               Administrator in its sole discretion. In addition, the provisions
               of Restricted Stock Purchase Agreements need not be the same with
               respect to each purchaser.

          d.   Rights  as a  Shareholder.  Once  the  Stock  Purchase  Right  is
               exercised,  the  purchaser  shall have the rights  equivalent  to
               those of a  shareholder,  and shall be a shareholder  when his or
               her purchase is entered  upon the records of the duly  authorized
               transfer agent of the Company.  No adjustment  will be made for a
               dividend or other right for which the record date is prior to the
               date the Stock Purchase Right is exercised, except as provided in
               Section 12 of the Plan.

12.  Other Awards.

     a.   Other Stock-Based Awards. Other awards,  valued in whole or in part by
          reference to, or otherwise  based on, shares of Stock,  may be granted
          either  alone or in  addition  to or in  conjunction  with any  awards
          described  in this Plan for such  consideration,  if any,  and in such
          amounts  and  having  such  terms  and  conditions  as the  Board  may
          determine.

     b.   Other  Benefits.  The Board  shall have the right to provide  types of
          benefits under the Plan in addition to those  specifically  listed, if
          the Board  believe that such  benefits  would further the purposes for
          which the Plan was established.

13.  Adjustments upon Changes in Capitalization or Change in Control.

     a.   Changes  in  Capitalization.  If the shares of Common  Stock  shall be
          subdivided or combined into a greater or smaller number of shares,  or
          if the  Company  shall  issue any  shares  of Common  Stock as a stock
          dividend  on its  outstanding  Common  Stock,  the number of shares of
          Option  Stock  deliverable  upon the  exercise  of an  Option or Stock
          Purchase   Right  shall  be   appropriately   increased  or  decreased
          proportionately,  and  appropriate  adjustments  shall  be made in the
          purchase price per share to reflect such  subdivision,  combination or
          stock  dividend,  all  as  determined  by  the  Administrator  in  its
          discretion.  Except as expressly  provided herein,  no issuance by the
          Company of shares of stock of any  class,  or  securities  convertible
          into shares of stock of any class,  shall affect, and no adjustment by
          reason  thereof  shall be made with respect to, the number or price of
          shares of Common Stock  subject to an Option,  Stock  Purchase  Right,
          other Stock-based awards, or other benefits. Upon the happening of any
          of the events  described in this  paragraph,  the class and  aggregate
          number  of  shares  set  forth  in  Section  3  hereof  shall  also be
          appropriately adjusted to reflect such events. The Administrator shall
          determine the specific adjustments to be made under this paragraph.

     b.   Change in Control. In the event of (1) a dissolution or liquidation of
          the Company, (2) a merger or consolidation in which the Company is not
          the surviving corporation (other than a merger or consolidation with a
          wholly-owned  subsidiary,  a  reincorporation  of  the  Company  in  a
          different  jurisdiction,  or other  transaction  in which  there is no
          substantial  change  in the  stockholders  of  the  Company  or  their
          relative  stock  holdings and the Options  granted under this Plan are
          assumed,  converted or replaced by the  successor  corporation,  which
          assumption  will be binding on  Optionees),  (3) a merger in which the
          Company is the surviving  corporation but after which the stockholders
          of the  Company  immediately  prior  to such  merger  (other  than any

<PAGE>
          stockholder that merges, or which owns or controls another corporation
          that  merges,  with the  Company  in such  merger)  cease to own their
          shares  or  equity  interests  in  the  Company),   (4)  the  sale  of
          substantially   all  of  the  assets  of  the  Company;   or  (5)  the
          acquisition,  sale,  or transfer  of more than 50% of the  outstanding
          shares of the Company by tender offer or similar  transaction  (any of
          the foregoing shall be referred to as a "Corporate Transaction"),  any
          or all outstanding  Options,  Stock Purchase Rights, other Stock-based
          awards, or other benefits may be assumed, converted or replaced by the
          successor  corporation  (if  any),  which  assumption,  conversion  or
          replacement will be binding on all Optionees. In the alternative,  the
          successor  corporation  may  substitute   equivalent  Options,   Stock
          Purchase Rights other Stock-based awards, or other benefits or provide
          substantially  similar  consideration  to Optionees as was provided to
          stockholders (after taking into account the existing provisions of the
          Options and the Stock  Purchase  Rights).  In the event such successor
          corporation (if any) refuses to assume or substitute such Options,  as
          provided above,  pursuant to a Corporate Transaction described in this
          paragraph,  then any Options, Stock Purchase Rights, other Stock-based
          awards,  or  other  benefits  which  are not  exercised  prior  to the
          consummation   of  the  Corporate   Transaction   shall  terminate  in
          accordance  with  the  provisions  of this  Plan.  In the  event  of a
          Corporate  Transaction,  the Administrator is authorized,  in its sole
          discretion,  but is not  obligated,  to waive any vesting  schedule in
          some or all of the Options,  Stock Purchase Rights,  other Stock-based
          awards,  or other benefits,  such that the vesting of any such Options
          and Stock  Purchase  Rights be  accelerated so that all or part of the
          previously  unvested  portion of such Options,  Stock Purchase Rights,
          other  Stock-based  awards, or other benefits are exercisable prior to
          the  consummation  of such Corporate  Transaction at such times and on
          such  conditions as the  Administrator  determines.  In addition,  the
          Administrator  is  authorized,  but not  obligated,  at the  time  any
          Options,  Stock Purchase Rights,  other  Stock-based  awards, or other
          benefits is granted or  thereafter,  to grant  Optionees  the right to
          receive a cash payment  equal to the  difference  between the exercise
          price of the Options, Stock Purchase Rights, other Stock-based awards,
          or other  benefits and the price per share of the Common Stock paid in
          connection with the Corporate Transaction on such terms and conditions
          that the Administrator may approve at the time.

14.  Time of Granting Options and Stock Purchase Rights. The date of grant of an
     Option,  Stock Purchase Right, other Stock-based  awards, or other benefits
     shall, for all purposes,  be the date on which the Administrator  makes the
     determination  granting such Option or Stock Purchase  Right, or such other
     date as is determined  by the  Administrator.  Notice of the  determination
     shall be given to each  Employee  or  Consultant  to whom an Option,  Stock
     Purchase Right,  other Stock-based  awards, or other benefits is so granted
     within a reasonable time after the date of such grant.

15.  Amendment and Termination of the Plan.

     a.   Amendment  and  Termination.  The Board may at any time amend,  alter,
          suspend  or  discontinue  the  Plan,  but  no  amendment,  alteration,
          suspension  or  discontinuation  shall be made which would  impair the
          rights of any Optionee under any grant theretofore  made,  without his
          or her consent. In addition,  to the extent necessary and desirable to
          comply with Rule 16b-3 under the  Exchange  Act or with Section 422 of
          the Code (or any other  applicable  law or  regulation,  including the

<PAGE>
          requirements  of the  NASD  or an  established  stock  exchange),  the
          Company  shall obtain  shareholder  approval of any Plan  amendment in
          such a manner and to such a degree as required.

     b.   Effect of Amendment or Termination.  Any such amendment or termination
          of the Plan shall not affect  Options,  Stock Purchase  Rights,  other
          Stock-based awards, or other benefits already granted and such Options
          and Stock Purchase  Rights shall remain in full force and effect as if
          this Plan had not been amended or terminated,  unless  mutually agreed
          otherwise between the Optionee and the Administrator,  which agreement
          must be in writing and signed by the Optionee and the Company.

16.  Conditions upon Issuance of Shares.  Shares shall not be issued pursuant to
     the exercise of an Option,  Stock Purchase Right, other Stock-based awards,
     or other  benefits  unless the  exercise of such  Option or Stock  Purchase
     Right and the issuance and delivery of such Shares  pursuant  thereto shall
     comply with all relevant provisions of law, including,  without limitation,
     the  Securities  Act of 1933,  as amended,  the Exchange Act, the rules and
     regulations  promulgated  thereunder,  and the  requirements  of any  stock
     exchange  upon which the  Shares  may then be listed,  and shall be further
     subject to the  approval of counsel for the  Company  with  respect to such
     compliance.  As a condition  to the exercise of an Option,  Stock  Purchase
     Right, other Stock-based  awards, or other benefits the Company may require
     the person  exercising such Option or Stock Purchase Right to represent and
     warrant  at the  time of any  such  exercise  that  the  Shares  are  being
     purchased only for investment and without any present  intention to sell or
     distribute such Shares if, in the opinion of counsel for the Company,  such
     a  representation  is  required  by  any  of  the  aforementioned  relevant
     provisions  of law. The Company  shall be under no obligation to any person
     receiving  an Award under the Plan to register for offering or resale or to
     qualify for exemption  under the Securities  Act, or to register or qualify
     under  state  securities  laws,  any shares of Common  Stock,  security  or
     interest in a security paid or issued under, or created by, the Plan, or to
     continue in effect any such  registrations or  qualifications  if made. The
     Company may issue  certificates for shares with such legends and subject to
     such restrictions or transfer and stop-transfer instructions as counsel for
     the Company deems necessary or desirable for compliance by the Company with
     federal and state securities laws.

17.  Reservation of Shares. The Company,  during the term of this Plan, will, at
     all times,  reserve  and keep  available  such number of Shares as shall be
     sufficient to satisfy the  requirements  of the Plan.  The inability of the
     Company to obtain  authority from any regulatory body having  jurisdiction,
     which  authority is deemed by the Company's  counsel to be necessary to the
     lawful issuance and sale of any Shares hereunder, shall relieve the Company
     of any  liability in respect of the failure to issue or sell such Shares as
     to which such requisite authority shall not have been obtained.

18.  Agreements.  The grant of any Option  shall be evidenced by the Company and
     the Optionee entering into a written  agreement (an "Option  Agreement") in
     such form as the Administrator  shall from time to time approve.  The grant
     of a Stock Purchase Right shall be evidenced by written agreement (a "Stock
     Purchase Right Agreement") in such form as the Administrator  shall approve
     from  time to time.  The  grant  of any  other  Stock-based  award or other
     benefit shall be evidenced in such form as the Administrator  shall approve
     from time to time.

19.  Shareholder Approval.  Continuance of the Plan shall be subject to approval
     by the  shareholders  of the Company  within  twelve (12) months  before or
     after the date the Plan is  adopted.  Such  shareholder  approval  shall be

<PAGE>
     obtained  in the degree  and manner  required  under  applicable  state and
     federal law and the rules of any stock exchange upon which the Common Stock
     is listed.

20.  Information to Optionees and  Purchasers.  The Company shall make available
     to each Optionee and to each individual who acquired Shares pursuant to the
     Plan, during the period such Optionee or purchaser has one or more Options,
     Stock  Purchase  Rights,   other  Stock-based  awards,  or  other  benefits
     outstanding, and, in the case of an individual who acquired Shares pursuant
     to the Plan, during the period such individual owns such Shares,  copies of
     annual financial  statements.  The Company shall not be required to provide
     such  statements  to key  employees  whose  duties in  connection  with the
     Company assure their access to equivalent information.

21.  Certain Tax Matters.

     a.   The Administrator may require the holder of any Option, Stock Purchase
          Right,  Option Stock,  other Stock-based  awards, or other benefits to
          remit to the Company,  regardless of when such  liability  arises,  an
          amount  sufficient  to  satisfy  any  Federal,  state  and  local  tax
          withholding   requirements  associated  with  such  Stock  Right.  The
          Administrator  may,  in its  discretion,  permit the holder of a Stock
          Right to  satisfy  any such  obligation  by having  withheld  from the
          shares (or where  applicable,  cash) to be  delivered to the holder of
          upon exercise of an Option or Stock  Purchase Right a number of shares
          (or,  where  applicable,  amount of cash)  sufficient to meet any such
          withholding requirement.

     b.   If a  Participant  makes an election  under  Section 83(b) of the Code
          with respect to the  acquisition  of any Option Stock,  or disposes of
          Option Stock acquired  pursuant to the exercise of an Incentive  Stock
          Option in a transaction deemed to be a disqualifying disposition under
          Section 421 of the Code, then, within thirty (30) days of such Section
          83(b) election or  disqualifying  disposition,  the Participant  shall
          inform the Company of such actions.

22.  Limitation  on Benefits.  With respect to persons  subject to Section 16 of
     the Exchange Act,  transactions under this Plan are intended to comply with
     all applicable conditions of Rule 16b-3. To the extent any provision of the
     Plan or action by the Compensation  Committee fails to so comply,  it shall
     be  deemed  null  and  void,  to the  extent  permitted  by law and  deemed
     advisable by the Compensation Committee.

23.  Listing and Registration.  If the Corporation  determines that the listing,
     registration  or  qualification  upon any  securities  exchange or upon any
     NASDAQ  system  or under  any law,  of  shares  subject  to any  Option  is
     necessary  or  desirable  as a condition  of, or in  connection  with,  the
     granting  of same or the issue or purchase  of shares  thereunder,  no such
     Option may be  exercised  in whole or in part and no  restrictions  on such
     Option shall lapse,  unless such listing,  registration or qualification is
     effected free of any conditions not acceptable to the Corporation.

24.  Compliance  with  Securities  Laws.  The  Corporation  may  require  that a
     Optionee,  as a condition  to exercise of an Option,  and as a condition to
     the delivery of any share certificate,  provide to the Corporation,  at the
     time of each such exercise and each such delivery, a written representation
     that the Common  Stock being  acquired  shall be  acquired by the  Optionee
     solely  for  investment  and  will  not  be  sold  or  transferred  without
     registration or the  availability of an exemption from  registration  under
     the Securities Act and applicable  state  securities  laws. The Corporation
     may also require that a Optionee submit other written representations which

<PAGE>
     will permit the  Corporation  to comply with federal and  applicable  state
     securities  laws in  connection  with the  issuance  of the  Common  Stock,
     including  representations  as to the knowledge and experience in financial
     and business matters of the Optionee and the Optionee's ability to bear the
     economic risk of the grantee's investment. The Corporation may require that
     the Optionee obtain a "purchaser representative" as that term is defined in
     applicable  federal and state securities  laws. The stock  certificates for
     any shares of Common Stock  issued  pursuant to this Plan may bear a legend
     restricting  transferability  of the  shares of Common  Stock  unless  such
     shares are registered or an exemption from  registration is available under
     the Securities Act and applicable  state  securities  laws. The Corporation
     may  notify its  transfer  agent to stop any  transfer  of shares of Common
     Stock not made in compliance  with these  restrictions.  Common Stock shall
     not be issued with respect to an Option  granted  under the Plan unless the
     exercise of such Option and the issuance and delivery of share certificates
     for such Common  Stock  pursuant  thereto  shall  comply with all  relevant
     provisions of law, including,  without limitation,  the Securities Act, the
     Exchange Act, the rules and  regulations  promulgated  thereunder,  and the
     requirements  of any  national  securities  exchange or NASDAQ  system upon
     which the Common  Stock may then be listed or quoted,  and shall be further
     subject to the approval of counsel for the Corporation with respect to such
     compliance  to the  extent  such  approval  is sought  by the  Compensation
     Committee.

25.  Governing  Law.  The  validity,  construction  and  effect of the Plan,  of
     Options  granted  pursuant  to the  Plan,  and of any  rules,  regulations,
     determinations  or decisions  made by the Board or  Compensation  Committee
     relating to the Plan or such  grants of Options,  and the rights of any and
     all persons having or claiming to have any interest  therein or thereunder,
     shall be determined  exclusively in accordance with applicable federal laws
     and the laws of the State of Nevada, without regard to its conflict of laws
     rules and principles.

26.  Plan Subject to Articles of Incorporation and By-Laws. This Plan is subject
     to the Articles of Incorporation  and By-Laws of the  Corporation,  as they
     may be amended from time to time.

27.  Miscellaneous.

     a.   Upon  receipt of any  shares of Common  Stock  under the Plan,  if the
          Company  requires  its  shareholders  to  enter  into  a  shareholders
          agreement at the time of their acquisition of Common Stock, then, as a
          condition to the receipt of shares under the Plan,  the  Administrator
          may  require  the  holder of an Award to  execute  and  deliver to the
          Company a shareholders  agreement in substantially  the form in use at
          the time of exercise or receipt of shares.  This requirement shall not
          apply if either:  (i) the holder of the Award has previously  executed
          and delivered such shareholder agreement,  it is in effect at the time
          the  holder  of  Award  receives  the  shares,  and  the  shareholders
          agreement would cover the shares received under the Plan; or (ii) such
          shareholders  agreement  is no longer in effect with  respect to other
          holders of Common Stock.

     b.   The  Administrator  may,  in its  discretion,  subject  any  Award  to
          repurchase  rights  provisions.   The  terms  and  conditions  of  any
          repurchase rights will be established by the Administrator in its sole
          discretion  and shall be set forth in the agreement  representing  the
          Award.  To ensure that shares of Common Stock  subject to a repurchase
          right under this Section 22(b) will be available for  repurchase,  the
          Administrator  may  require  the  holder  of an Award to  deposit  the
          certificate  or  certificates  evidencing  such  shares  with an agent

<PAGE>
          designated  by the  Administrator  under the terms and  conditions  of
          escrow and security agreements approved by the Administrator.

     c.   The Administrator may, in its discretion, subject any Award consisting
          of Common Stock to right of first  refusal  provisions.  The terms and
          conditions  of  any  right  of  first  refusal   provisions   will  be
          established by the  Administrator in its sole discretion and set forth
          in the agreement representing the Award.

Adopted as of this 25th day of November 2008.

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