Document:

EX-10.23 AMENDMENT #2 TO SUBORDINATED CREDIT AGMT

 

Exhibit 10.23

EXECUTION COPY

AMENDMENT NO. 2

TO

SUBORDINATED CREDIT AGREEMENT

     AMENDMENT NO. 2 TO SUBORDINATED CREDIT AGREEMENT, dated as of February 29, 2008 (this
“Amendment”), among TIMBERLANDS II, LLC, a Delaware limited liability company (“Wells
Timberland”), and WELLS TIMBERLAND ACQUISITION, LLC, a Delaware limited liability company
(“Wells Acquisition”; Wells Timberland and Wells Acquisition, each a “Borrower”
and, collectively, the “Borrowers”), the various other Loan Parties (as defined below) that
are parties hereto, the various financial institutions parties hereto (collectively, the
“Lenders”), and WACHOVIA BANK, NATIONAL ASSOCIATION, as administrative agent (in such
capacity, the “Administrative Agent”) for the Lenders.

W I T N E S S E T H:

     WHEREAS, the Borrowers, the Lenders and the Administrative Agent are parties to that certain
Subordinated Credit Agreement (the “Subordinated Credit Agreement”), dated as of October 9,
2007, as amended by that certain Amendment No. 1 to Subordinated Credit Agreement, dated as of
November 26, 2007 (together, the “Existing Credit Agreement”), and along with the other
Loan Parties, as applicable, the other Loan Documents;

     WHEREAS, the Borrowers have requested that, as of the Effective Date (as defined below), the
Existing Credit Agreement be amended as herein provided; and

     WHEREAS, the Lenders are willing, subject to the terms and conditions hereinafter set forth,
to make such amendments.

     NOW, THEREFORE, in consideration of the agreements herein contained, the parties hereto hereby
agree as follows:

ARTICLE I

DEFINITIONS

     SECTION 1.1. Certain Definitions. The following terms (whether or not underscored)
when used in this Amendment shall have the following meanings:

     “Administrative Agent” is defined in the preamble.

     “Amended Credit Agreement” means the Existing Credit Agreement as amended by this
Amendment as of the Effective Date.

     “Amendment” is defined in the preamble.

     “Borrower” is defined in the preamble.

     “Effective Date” is defined in Section 5.1.

 

 

     “Existing Credit Agreement” is defined in the first recital.

     “Lenders” is defined in the preamble.

     SECTION 1.2. Other Definitions. Unless otherwise defined or the context otherwise
requires, terms used herein (including in the preamble and recitals hereto) have the meanings
provided for in the Amended Credit Agreement.

ARTICLE II

AMENDMENTS

     Effective on (and subject to the occurrence of) the Effective Date, the Existing Credit
Agreement is amended as follows:

     SECTION 2.1. Addition to Section 1.1. The following new definitions are added to
Section 1.1 of the Existing Credit Agreement in the appropriate alphabetical order:

     “Amendment No. 2 to Subordinated Credit Agreement” means Amendment No. 2 to
Subordinated Credit Agreement, dated as of February 29, 2008, among the parties to this Amendment.

     “Extended Maturity Date” means March 2, 2009.

     “Secured Guaranty Pledge Agreement” means that certain Secured Guaranty Pledge
Agreement, dated as of October 9, 2007, by Wells Advisory Services I, LLC, a Georgia limited
liability company, in favor of the Administrative Agent, as amended by that certain Amendment No. 1
to Secured Guaranty Pledge Agreement, dated as of February 29, 2008.

     SECTION 2.2. Amendments to Section 1.1. Section 1.1 of the Existing Credit Agreement
is amended as follows:

     (a) The definition of “Agreement” is amended and restated in its entirety to read as
follows: ““Agreement” means this Agreement, as amended by Amendment No. 1 to Subordinated
Credit Agreement and Amendment No. 2 to Subordinated Credit Agreement.”

     (b) The definition of “First Principal Reduction Date” is amended by replacing
“February 29, 2008” with “June 30, 2008”.

     (c) The definition of “Interest Rate” is amended by replacing “nine percent (9%)” with
“eleven percent (11%)”.

     (d) The definition of “Second Principal Reduction Date” is amended by replacing “April
30, 2008” with “August 29, 2008”.

     (e) The definition of “Stated Maturity Date” is amended and restated to read in its
entirety as follows:

- 2 -

 

     “Stated Maturity Date” means October 17, 2008; provided, however, that
if terms of Section 3.1.2(a) hereof are satisfied and the aggregate outstanding principal
amount of all Loans, all other Obligations of Borrower under the Loan Documents, including all
Fees, shall be due and payable in full on the Extended Maturity Date, then “Stated Maturity Date”
shall mean the Extended Maturity Date.

     SECTION 2.3. Amendment to Section 3.1.2. Section 3.1.2 of the Existing Credit
Agreement is amended as follows:

     (a) Subsection (a) is amended by adding the following at the end of such section: “provided,
however, that if on the Stated Maturity Date (i) the aggregate outstanding principal amount of all
Loans is no greater than sixty million dollars ($60,000,000) and (ii) a lien and security interest
in favor of the Administrative Agent has attached to eighty percent (80%) of the Pledged Common
Stock (as such term is defined in the Secured Guaranty Pledge Agreement) under the Secured Guaranty
Pledge Agreement, then the aggregate outstanding principal amount of all Loans, all other
Obligations of Borrower under the Loan Documents, including all Fees, shall be due and payable in
full on the Extended Maturity Date.”

     (b) Subsection (b) is amended and restated to read in its entirety as follows:

     “(b) A principal payment shall be made on the First Principal Reduction Date in an amount
which, when added to all previously made principal payments, reduces the aggregate outstanding
principal balance of the Loans to an amount not greater than one hundred twenty million dollars
($120,000,000);”

     (c) Subsection (c) is amended and restated to read in its entirety as follows:

     “(c) A principal payment shall be made on the Second Principal Reduction Date in an amount
which, when added to all previously made principal payments, reduces the aggregate outstanding
principal balance of the Loans to an amount not greater than ninety million dollars ($90,000,000);”

ARTICLE III

REPRESENTATIONS AND WARRANTIES

     SECTION 3.1. Representations and Warranties. In order to induce the Lenders to make
the amendments provided for in Article II, the Borrowers hereby jointly and severally
represent and warrant that:

     (a) each of the representations and warranties of the Loan Parties contained in the Existing
Credit Agreement and in the other Loan Documents is true and correct in all material respects as of
the date hereof as if made on the date hereof (except, if any such representation and warranty
relates to an earlier date, such representation and warranty shall be true and correct in all
material respects as of such earlier date);

- 3 -

 

     (b) no Default or Event of Default has occurred and is continuing; and

     (c) the execution, delivery and performance by each Loan Party of this Amendment and the
consummation of the transactions contemplated hereby and the fulfillment of the terms hereof do not
(i) conflict with, result in any breach of any of the terms and provisions of, or constitute (with
or without notice or lapse of time) a default under (A) the formation documents of the Loan
Parties, or (B) any material indenture, agreement, mortgage, deed of trust, or other instrument to
which any Loan Party is a party or by which it is bound or any of its properties are subject; (ii)
result in the creation or imposition of any Lien upon any of its properties pursuant to the terms
of any such indenture, agreement, mortgage, deed of trust, or other instrument; or (iii) violate
any law, order, rule, or regulation applicable to any Loan Party of any court or of any Federal or
State regulatory body, administrative agency, or other governmental instrumentality having
jurisdiction over any Loan Party or its properties.

     SECTION 3.2. Further Agreement. The Borrowers hereby jointly and severally agree that
(a) the incorrectness in any material respect of any representation and warranty contained in the
preceding Section 3.1 shall constitute an immediate Event of Default, (b) each Loan
Document to which each Loan Party is a party is in full force and effect with respect to it, and
(c) no event that would reasonably be expected to have a Material Adverse Effect has occurred since
the execution of Amendment No. 1 to Subordinated Credit Agreement.

ARTICLE IV

ACKNOWLEDGMENT OF OTHER LOAN PARTIES

     By executing this Amendment, each of the Loan Parties (other than the Borrowers) hereby
confirms and agrees that each Loan Document to which it is a party is, and shall continue to be, in
full force and effect and is hereby ratified and confirmed in all respects, except that on and
after the Effective Date each reference therein to the Subordinated Credit Agreement shall refer to
the Existing Credit Agreement after giving effect to this Amendment.

ARTICLE V

CONDITIONS TO EFFECTIVENESS; EXPIRATION

     SECTION 5.1. Effective Date. This Amendment shall become effective on such date
(herein called the “Effective Date”) when the conditions set forth in this Section have
been satisfied.

     SECTION 5.2. Execution of Amendment. The Administrative Agent shall have received
counterparts of this Amendment duly executed and delivered on behalf of the Borrower, each of the
other Loan Parties, the Administrative Agent and all the Lenders.

     SECTION 5.3. Representations and Warranties. The representations, warranties and
agreements made by the Borrowers pursuant to Article III as of the Effective Date shall be
true and correct.

- 4 -

 

     SECTION 5.4. Amendment to Secured Guaranty Pledge Agreement. The Administrative Agent
shall have received a duly executed original copy of that certain Amendment No. 1 to Secured
Guaranty Pledge Agreement, dated as of even date herewith, made by Wells Advisory Services I, LLC,
a Georgia limited liability company, in favor of the Administrative Agent.

     SECTION 5.5. Expiration. If the Effective Date has not occurred on or prior to
February 29, 2008, the agreements of the parties contained in this Amendment shall, unless
otherwise agreed by all the Lenders, terminate immediately on such date and without further action.

ARTICLE VI

MISCELLANEOUS

     SECTION 6.1. Legal Opinions. No later than five (5) Business Days after the date of
this Amendment, the Administrative Agent shall have received from counsel to the Loan Parties legal
opinions regarding due organization, existence and good standing, due authorization, due execution
and delivery, enforceability and usury for the Loan Parties and the Amended Credit Agreement
substantially in the forms received by the Administrative Agent at the closing of the Subordinated
Credit Agreement.

     SECTION 6.2. Cross-References. References in this Amendment to any Article or Section
are, unless otherwise specified, to such Article or Section of this Amendment.

     SECTION 6.3. Loan Document Pursuant to Amended Credit Agreement. This Amendment is a
Loan Document executed pursuant to the Amended Credit Agreement. Except as expressly amended
hereby, all of the representations, warranties, terms, covenants and conditions contained in the
Existing Credit Agreement shall remain unamended or otherwise unmodified and in full force and
effect.

     SECTION 6.4. Limitation of Amendments. The amendments set forth in Article II
shall be limited precisely as provided for herein and shall not be deemed to be a waiver of,
amendment of, consent to or modification of any other term or provision of the Existing Credit
Agreement or of any term or provision of any other Loan Document or of any transaction or further
or future action on the part of the Borrower or any other Loan Party which would require the
consent of any of the Lenders under the Existing Credit Agreement or any other Loan Document.

     SECTION 6.5. Counterparts. This Amendment may be executed by the parties hereto in
several counterparts, each of which shall be deemed to be an original and all of which shall
constitute together but one and the same agreement.

     SECTION 6.6. Successors and Assigns. This Amendment shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and assigns.

     SECTION 6.7. Further Assurances. The Borrower shall execute and deliver, and shall
cause each other Loan Party to execute and deliver, from time to time in favor of the

- 5 -

 

Administrative Agent and the Lenders, such documents, agreements, certificates and other
instruments as shall be necessary or advisable to effect the purposes of this Amendment.

     SECTION 6.8. Costs and Expenses. The Borrowers agree to pay all reasonable costs and
expenses of the Administrative Agent (including the reasonable fees and out-of-pocket expenses of
legal counsel of the Administrative Agent) that are incurred in connection with the execution and
delivery of this Amendment and the other agreements and documents entered into in connection
herewith.

     SECTION 6.9. No Waiver; Reservation of Rights. In no way or manner shall this
Amendment or any provision herein be construed as a waiver by the Loan Parties of their rights or
remedies under the Amended Credit Agreement and the other Loan Documents. The Loan Parties hereby
expressly, fully and completely reserve all of their rights and remedies under the Amended Credit
Agreement and the other Loan Documents.

     SECTION 6.10. Release. Each of the Loan Parties hereby releases the Administrative
Agent, the Lenders and their respective officers, directors, equity owners, agents and employees
(collectively, the “Specified Parties”) of, from and against any and all claims, liability,
losses, costs and expenses directly or indirectly relating to or arising out of the Loan Documents
and the execution and delivery thereof or any act or omission of the Specified Parties thereunder
or relating thereto which has occurred up through and including the time of the execution and
delivery of this Amendment and which is known by, or should have been known by, any of the Loan
Parties.

     SECTION 6.11. GOVERNING LAW; WAIVER OF JURY TRIAL; ENTIRE AGREEMENT. THIS AMENDMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EACH
PERSON A PARTY HERETO KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION ARISING UNDER OR IN CONNECTION WITH THIS AMENDMENT OR ANY AGREEMENT OR
DOCUMENT ENTERED INTO IN CONNECTION HEREWITH. THIS AMENDMENT CONSTITUTES THE ENTIRE UNDERSTANDING
AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDES ANY PRIOR
AGREEMENT, WRITTEN OR ORAL, WITH RESPECT HERETO.

[Signature Pages Follow]

- 6 -

 

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their
respective officers hereunto duly authorized as of the day and year first above written.

	 	 	 	 	 
	 	BORROWERS:
	 	 
	 	 
	 	TIMBERLANDS II, LLC, a Delaware limited liability company
	 	 
	 	 
	 	By:

	 	WELLS TIMBERLAND MANAGEMENT

ORGANIZATION, LLC, a Georgia

limited liability company, as Manager
	 	 
	 	 
	 	By:
	 	 
	 	 

	 	 
	 	 

	 	Name: Brian Davis
	 	 

	 	Title: VP Finance
	 	 
	 	 
	 	WELLS TIMBERLAND ACQUISITION, LLC,

a Delaware limited liability company
	 	 
	 	 
	 	By:

	 	WELLS TIMBERLAND MANAGEMENT

ORGANIZATION, LLC, a Georgia

limited liability company, as Manager
	 	 
	 	 
	 	By:
	 	 
	 	 

	 	 
	 	 

	 	Name: Brian Davis
	 	 

	 	Title: VP Finance

Amendment No. 2 to Subordinated Credit Agreement

- 7 -

 

	 	 	 	 	 
	 	OTHER LOAN PARTIES:
	 	 
	 	 
	 	WELLS TRS HARVESTING OPERATIONS, LLC,
	 	a Delaware limited liability company
	 	 
	 	 
	 	BY:

	 	Forest Resource Consultants, Inc.,
	 	 

	 	a Georgia corporation, Manager
	 	 
	 	 
	 	By:
	 	 
	 	 

	 	 
	 	 

	 	Name: David Foil
	 	 

	 	Title: President
	 	 
	 	 
	 	WELLS TIMBERLAND REIT, INC., a Maryland corporation
	 	 
	 	 
	 	By:
	 	 
	 	 

	 	 
	 	 

	 	Name: Randall D. Fretz
	 	 

	 	Title: Senior Vice President
	 	 
	 	 
	 	WELLS TIMBERLAND TRS, INC., a Delaware corporation
	 	 
	 	 
	 	By:
	 	 
	 	 

	 	 
	 	 

	 	Name: Randall D. Fretz
	 	 

	 	Title: Senior Vice President
	 	 
	 	 
	 	WELLS REAL ESTATE FUNDS, INC., a Georgia corporation
	 	 
	 	 
	 	By:
	 	 
	 	 

	 	 
	 	 

	 	Name: Randall D. Fretz
	 	 

	 	Title: Vice President
	 	 
	 	 
	 	 
	 	 
	 	[continued on next page]

Amendment No. 2 to Subordinated Credit Agreement

- 8 -

 

	 	 	 	 	 
	 	WELLS TIMBERLAND OPERATING PARTNERSHIP, L.P.,
a Delaware limited partnership
	 	 
	 	 
	 	BY:

	 	Wells Timberland REIT, Inc., a Maryland
corporation, its General Partner
	 	 
	 	 
	 	By:
	 	 
	 	 

	 	 
	 	 

	 	Name: Randall D. Fretz
	 	 

	 	Title: Senior Vice President

Amendment No. 2 to Subordinated Credit Agreement

- 9 -

 

	 	 	 	 	 
	 	ADMINISTRATIVE AGENT:
	 	 
	 	 
	 	WACHOVIA BANK, NATIONAL ASSOCIATION,

as Administrative Agent
	 	 
	 	 
	 	By:
	 	 
	 	 

	 	 
	 	 

	 	Name: Brian Rubins
	 	 

	 	Title: Vice President

Amendment No. 2 to Subordinated Credit Agreement

- 10 -

 

	 	 	 	 	 
	 	LENDERS:
	 	 
	 	 
	 	WACHOVIA BANK, NATIONAL ASSOCIATION
	 	 
	 	 
	 	By:
	 	 
	 	 

	 	 
	 	 

	 	Name: Brian Rubins
	 	 

	 	Title: Vice President

Amendment No. 2 to Subordinated Credit Agreement

- 11 -EX-10.1

 

Exhibit 10.1

 

INVESTMENT AGREEMENT

dated as of April 20, 2008

between

National City Corporation

and

Corsair NC Co-Invest, L.P.

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	ARTICLE I
	 	 	 	 
	 
	 	 	 	 	 	 
	PURCHASE; CLOSING	 	 	 	 
	 
	 	 	 	 	 	 
	1.1

	 	Purchase
	 	 	1	 
	1.2

	 	Closing
	 	 	1	 
	 
	 	 	 	 	 	 
	ARTICLE II
	 	 	 	 
	 
	 	 	 	 	 	 
	REPRESENTATIONS AND WARRANTIES
	 	 	 	 
	 
	 	 	 	 	 	 
	2.1

	 	Disclosure
	 	 	4	 
	2.2

	 	Representations and Warranties of the Company
	 	 	5	 
	2.3

	 	Representations and Warranties of Purchaser
	 	 	19	 
	 
	 	 	 	 	 	 
	ARTICLE III
	 	 	 	 
	 
	 	 	 	 	 	 
	COVENANTS
	 	 	 	 
	 
	 	 	 	 	 	 
	3.1

	 	Filings; Other Actions
	 	 	21	 
	3.2

	 	Access, Information and Confidentiality
	 	 	24	 
	3.3

	 	Conduct of the Business
	 	 	25	 
	 
	 	 	 	 	 	 
	ARTICLE IV
	 	 	 	 
	 
	 	 	 	 	 	 
	ADDITIONAL AGREEMENTS
	 	 	 	 
	 
	 	 	 	 	 	 
	4.1

	 	Agreement
	 	 	26	 
	4.2

	 	Transfer Restrictions
	 	 	27	 
	4.3

	 	Governance Matters
	 	 	29	 
	4.4

	 	Legend
	 	 	30	 
	4.5

	 	Reservation for Issuance
	 	 	31	 
	4.6

	 	Certain Transactions
	 	 	31	 
	4.7

	 	Indemnity
	 	 	31	 
	4.8

	 	Exchange Listing
	 	 	34	 
	4.9

	 	Registration Rights
	 	 	34	 
	4.10

	 	Certificate of Designations
	 	 	47	 
	4.11

	 	Reset
	 	 	47	 
	 
	 	 	 	 	 	 
	ARTICLE V
	 	 	 	 
	 
	 	 	 	 	 	 
	TERMINATION
	 	 	 	 
	 
	 	 	 	 	 	 
	5.1

	 	Termination
	 	 	49	 

i 

 

	 	 	 	 	 	 	 
	ARTICLE VI
	 	 	 	 
	 
	 	 	 	 	 	 
	MISCELLANEOUS
	 	 	 	 
	 
	 	 	 	 	 	 
	6.1

	 	Survival
	 	 	49	 
	6.2

	 	Expenses
	 	 	50	 
	6.3

	 	Amendment; Waiver
	 	 	50	 
	6.4

	 	Counterparts and Facsimile
	 	 	50	 
	6.5

	 	Governing Law
	 	 	50	 
	6.6

	 	WAIVER OF JURY TRIAL
	 	 	51	 
	6.7

	 	Notices
	 	 	51	 
	6.8

	 	Entire Agreement, Etc.
	 	 	52	 
	6.9

	 	Interpretation; Other Definitions
	 	 	52	 
	6.10

	 	Captions
	 	 	53	 
	6.11

	 	Severability
	 	 	53	 
	6.12

	 	No Third Party Beneficiaries
	 	 	53	 
	6.13

	 	Time of Essence
	 	 	54	 
	6.14

	 	Certain Adjustments
	 	 	54	 
	6.15

	 	Public Announcements
	 	 	54	 
	6.16

	 	Specific Performance
	 	 	54	 

ii 

 

INDEX OF DEFINED TERMS

	 	 	 
	 	 	Location of
	Term	 	Definition
	Affiliate
	 	6.9(a)
	Agency
	 	2.2(v)
	Agreement
	 	Preamble
	Beneficially Own
	 	4.1(f)
	Beneficial Owner
	 	4.1(f)
	Benefit Plan
	 	2.2(r)(1)
	BHC Act
	 	2.2(a)(1)
	Board of Directors
	 	2.2(d)(1)
	Board Representative
	 	4.3(a)
	business day
	 	6.9(e)
	Capitalization Date
	 	2.2(b)
	CERCLA
	 	2.2(u)
	Certificate of Incorporation
	 	Recitals
	Closing
	 	1.2(a)
	Closing Date
	 	1.2(a)
	Code
	 	2.2(i)
	Common Stock
	 	Recitals
	Company
	 	Preamble
	Company Financial Statements
	 	2.2(f)
	Company Preferred Stock
	 	2.2(b)
	Company Reports
	 	2.2(g)(1)
	Company Significant Agreement
	 	2.2(l)
	Company Significant Subsidiary
	 	2.2(a)(2)
	Company Subsidiary
	 	2.2(a)(2)
	Company 10-K
	 	2.1(c)(2)(A)
	control/controlled by/under common control with
	 	6.9(a)
	Convertible Preferred Stock
	 	Recitals
	Corsair
	 	6.2
	Delaware Secretary
	 	Recitals
	De Minimis Claim
	 	4.7(e)
	Disclosure Schedule
	 	2.1(a)
	Equity Commitment Letters
	 	3.1(f)
	ERISA
	 	2.2(r)(1)
	Exchange Act
	 	2.2(g)(1)
	Federal Reserve
	 	4.2(b)(3)
	Fundamental Change
	 	4.11(b)(1)
	GAAP
	 	2.1(b)
	Governance Committee
	 	4.3(a)
	Governmental Entity
	 	1.2(c)(1)(A)
	herein/hereof/hereunder
	 	6.9(d)
	Holder
	 	4.9(l)(1)

iii 

 

	 	 	 
	 	 	Location of
	Term	 	Definition
	Holders’ Counsel
	 	4.9(l)(2)
	HSR Act
	 	2.3(b)(3)
	including/includes/included/include
	 	6.9(c)
	Indemnified Party
	 	4.7(c)
	Indemnifying Party
	 	4.7(c)
	Indemnitee
	 	4.9(g)
	Information
	 	3.2(b)
	Insurer
	 	2.2(v)
	Investors
	 	3.1(f)
	knowledge of the Company
	 	6.9(g)
	Liens
	 	2.2(c)
	Loan Investor
	 	2.2(v)
	Losses
	 	4.7(a)
	Market Price
	 	4.11(b)(2)
	material
	 	2.1(b)
	Material Adverse Effect
	 	2.1(b)
	Net Income Drop Away Date
	 	4.11
	New Issuance Price
	 	4.11(a)(1)
	or
	 	6.9(b)
	Pending Underwritten Offering
	 	4.9(m)
	person
	 	6.9(f)
	Piggyback Registration
	 	4.9(a)(4)
	Pre-Closing Period
	 	3.3
	Preferred Stock Certificate of Designations
	 	Recitals
	Preliminary Fundamental Change
	 	4.11(b)(3)
	Previously Disclosed
	 	2.1(c)
	Purchase Price
	 	1.2(b)(2)
	Purchaser
	 	Preamble
	Qualifying Ownership Interest
	 	3.2(a)
	Reference Purchase Price
	 	1.2(b)(1)(B)
	Register, registered and registration
	 	4.9(l)(3)
	Registrable Securities
	 	4.9(l)(4)
	Registration Expenses
	 	4.9(l)(5)
	Regulatory Agreement
	 	2.2(t)
	Reset Event
	 	4.11(a)(2)
	Reset Issuance
	 	4.11(a)(1)
	Reset Payment
	 	4.11
	Reset Price
	 	4.11(a)(2)
	Rule 144
	 	4.9(l)(6)
	Rule 159A
	 	4.9(l)(6)
	Rule 405
	 	4.9(l)(6)
	Rule 415
	 	4.9(l)(6)
	Scheduled Black-out Period
	 	4.9(l)(7)
	SEC
	 	2.1(c)(2)(A)

iv 

 

	 	 	 
	 	 	Location of
	Term	 	Definition
	Securities
	 	Recitals
	Securities Act
	 	2.2(g)(1)
	Selling Expenses
	 	4.9(l)(8)
	Shelf Registration Statement
	 	4.9(a)(2)
	Special Registration
	 	4.9(j)
	Stockholder Proposals
	 	3.1(b)
	Significant Subsidiary
	 	2.2(a)(2)
	Subsidiary
	 	2.2(a)(2)
	Tax/Taxes
	 	2.2(i)
	Tax Return
	 	2.2(i)
	Threshold Amount
	 	4.7(e)
	Transfer
	 	4.2(a)
	Triggering Fundamental Change
	 	4.11(a)(2)
	Underlying Security Price
	 	4.11(b)(4)
	Voting Debt
	 	2.2(b)
	Voting Securities
	 	4.1(f)
	Warrant
	 	Recitals

v 

 

LIST OF SCHEDULES AND EXHIBITS

			
	Exhibit A:      	 	Form of Warrant

			
	Exhibit B:      	 	Preferred Stock Certificate of Designations

vi 

 

     INVESTMENT AGREEMENT, dated as of April 20, 2008 (this “Agreement”), between National
City Corporation, a Delaware corporation (the “Company”) and Corsair NC Co-Invest, L.P., a
Delaware limited partnership (“Purchaser”).

RECITALS:

     A. Purchaser. Purchaser is an alternative investment vehicle formed for the purpose
of making the investment in the Securities (as defined below) of the Company described herein.

     B. The Investment. The Company intends to sell to Purchaser, and Purchaser intends to
purchase from the Company, as an investment in the Company, shares of a series of contingent
convertible perpetual non-cumulative preferred stock, no par value, of the Company, having the
terms set forth on Exhibit B (the “Convertible Preferred Stock”). In connection
with the purchase and sale of the Convertible Preferred Stock hereunder, the Company intends to
issue Purchaser a warrant to purchase shares of common stock, par value $4.00 per share, of the
Company (the “Common Stock”), in the form set forth on Exhibit A (the
“Warrant”), all as described herein.

     C. The Securities. The term “Securities” refers collectively to (1) the
shares of Convertible Preferred Stock purchased, and the Warrant issued, under this Agreement and
(2) the shares of Common Stock into which the Convertible Preferred Stock is convertible and for
which the Warrant may be exercised in accordance with the terms thereof and of this Agreement.
When purchased, the Convertible Preferred Stock will be evidenced by a share certificate
incorporating the terms set forth in a certificate of designations for the Convertible Preferred
Stock in the form attached as Exhibit B (the “Preferred Stock Certificate of
Designations”) made a part of the Company’s Amended and Restated Certificate of Incorporation
(the “Certificate of Incorporation”) by the filing of the Preferred Stock Certificate of
Designations with the Secretary of State of the State of Delaware (the “Delaware
Secretary”).

     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 herein, Purchaser
will (i) purchase from the Company, and the Company will sell to Purchaser, a number of shares of
Convertible Preferred Stock determined in accordance with Section 1.2(b)(1)(A) and (ii) receive
from the Company the Warrant.

     1.2 Closing.

     (a) Subject to the satisfaction or waiver of the conditions set forth in this
Agreement, (i) the closing of the purchase of the Securities referred to in

 

 

Section 1.1 by Purchaser pursuant hereto (the “Closing”) shall occur at
9:30 a.m., New York time, on May 5, 2008, provided that if such conditions have not been so
satisfied or waived on such date, the Closing shall occur on the first business day after
the satisfaction or waiver (by the party entitled to grant such waiver) of the conditions
to the Closing set forth in this Agreement (other than those conditions that by their
nature are to be satisfied at the Closing, but subject to fulfillment or waiver of those
conditions), at the offices of Sullivan & Cromwell LLP located at 125 Broad Street, New
York, New York 10004 or such other date or location as agreed by the parties. The date of
the Closing is referred to as the “Closing Date.”

     (b) Subject to the satisfaction or waiver on the Closing Date of the applicable
conditions to the Closing in Section 1.2(c), at the Closing,

     (1) the Company will deliver to Purchaser:

     (A) certificates representing a number of shares of Convertible
Preferred Stock equal to (x) the Purchase Price divided by
(y) $100,000.00; and

     (B) a Warrant to purchase a number of shares of Common Stock equal to
(x) the Purchase Price divided by (y) the lower of (i) $5.00 and (ii) the
lowest purchase or conversion price of all shares of Common Stock or
Convertible Preferred Stock sold, or committed to be sold, on the Closing
Date pursuant to the transactions referred to in Section 1.2(c)(1)(B) (the
lower of (i) and (ii), the “Reference Purchase Price”) divided by
(z) four.

On the Closing Date, the Company shall deliver to Purchaser a certificate signed on behalf
of the Company by a senior officer certifying to the Reference Purchase Price.

     (2) Purchaser will deliver $785,000,000 (the “Purchase Price”) to the
Company.

     (c) Closing Conditions. (1)  The obligation of Purchaser, on the one hand,
and the Company, on the other hand, to effect the Closing is subject to the fulfillment or
written waiver by Purchaser and the Company prior to the Closing of the following
conditions:

     (A) no provision of any applicable law or regulation and no judgment,
injunction, order or decree shall prohibit the Closing or shall prohibit
or restrict Purchaser or its Affiliates from owning, voting, or, subject
to the receipt of approval of the Stockholder Proposals, converting or
exercising, any Securities in accordance with the terms thereof and no
lawsuit shall have been commenced by any court, administrative agency or
commission or other governmental authority or instrumentality, whether
federal, state,

2

 

local or foreign, or any applicable industry self-regulatory
organization (each, a “Governmental Entity”) seeking to effect any
of the foregoing;

     (B) the Company shall have received proceeds (net of fees and
underwriting discounts paid) of the sale of shares of Common Stock and
Convertible Preferred Stock to other purchasers of not less than
$4,215,000,000 and not more than $6,215,000,000 on or prior to the Closing
Date; and

     (C) the shares of Common Stock into which the Convertible Preferred
Stock is convertible and for which the Warrant may be exercised shall have
been authorized for listing on the New York Stock Exchange or such other
market on which the Common Stock is then listed or quoted, subject to
official notice of issuance.

     (2) The obligation of Purchaser to consummate the purchase of Securities to be
purchased by it at Closing is also subject to the fulfillment or written waiver by
Purchaser prior to the Closing of each of the following conditions:

     (A) the Company shall have performed in all material respects all
obligations required to be performed by it at or prior to Closing under
Sections 3.1, 3.2(a), 3.3, 4.5, 4.6 and 4.10 of this Agreement;

     (B) Purchaser 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(c)(2)(A) has been satisfied; and

     (C) Purchaser and its general partner shall have received written
confirmation, satisfactory to it in its reasonable good faith judgment,
from the Federal Reserve to the effect that neither they, nor any of their
respective Affiliates (which for purposes of this paragraph shall include
all “affiliates” as defined in the BHC Act or Regulation Y of the Federal
Reserve) shall be deemed to “control” the Company or any of its
Subsidiaries after the Closing for purposes of Sections 3 or 4 of the BHC
Act by reason of the purchase of the Securities or the consummation of the
other transactions contemplated by this Agreement.

     (3) The obligation of the Company to effect the Closing is subject to the
fulfillment or written waiver by the Company prior to the Closing of the following
additional conditions:

3

 

     (A) Purchaser has performed in all material respects all obligations
required to be performed by it at or prior to the Closing, as the case may
be, under Sections 3.1 of this Agreement; and

     (B) the Company shall have received a certificate signed on behalf of
Purchaser by a senior executive officer certifying to the effect that the
conditions set forth in Section 1.2(c)(3)(A) has been satisfied.

ARTICLE II

REPRESENTATIONS AND WARRANTIES

     2.1 Disclosure. (a) On or prior to the date hereof, the Company delivered to
Purchaser and Purchaser delivered to the Company a schedule (a “Disclosure Schedule”)
setting forth, among other things, items the disclosure of which is necessary or appropriate either
in response to an express disclosure requirement contained in a provision hereof or as an exception
to one or more representations or warranties contained in Section 2.2 with respect to the Company,
or in Section 2.3 with respect to Purchaser, or to one or more covenants contained in Article III.

     (b) As used in this Agreement, any reference to any fact, change, circumstance or
effect being “material” with respect to the Company means such fact, change, circumstance
or effect is material in relation to the business, assets, results of operations or
financial condition of the Company and the Company Subsidiaries taken as a whole. As used
in this Agreement, the term “Material Adverse Effect” means any circumstance,
event, change, development or effect that, individually or in the aggregate, (1) is
material and adverse to the business, assets, results of operations or financial condition
of the Company and Company Subsidiaries taken as a whole or (2) would materially impair the
ability of the Company to perform its obligations under this Agreement or to consummate the
Closing; provided, however, that in determining whether a Material Adverse Effect has
occurred, there shall be excluded any effect to the extent resulting from the following:
(A) changes, after the date hereof, in U.S. generally accepted accounting principles
(“GAAP”) or regulatory accounting principles generally applicable to banks, savings
associations or their holding companies, (B) changes, after the date hereof, in applicable
laws, rules and regulations or interpretations thereof by Governmental Entities,
(C) actions or omissions of the Company expressly required by the terms of this Agreement
or taken with the prior written consent of Purchaser, (D) changes in general economic,
monetary or financial conditions, including changes in prevailing interest rates, credit
markets, secondary mortgage market conditions or housing price appreciation/depreciation
trends, (E) changes in the market price or trading volumes of the Common Stock or the
Company’s other securities (but not the underlying causes of such changes), (F) the failure
of the Company to meet any internal or public projections, forecasts, estimates or guidance
(including guidance as to “earnings

4

 

drivers”) for any period ending on or after December 31, 2007 (but not the underlying
causes of such failure), (G) changes in global or national political conditions, including
the outbreak or escalation of war or acts of terrorism, and (H) the public disclosure of
this Agreement or the transactions contemplated hereby; except, with respect to clauses
(A), (D) and (G), to the extent that the effects of such changes have a disproportionate
effect on the Company and the Company Subsidiaries, taken as a whole, relative to other
similarly situated banks, savings associations or their holding companies generally.

     (c) “Previously Disclosed” with regard to (1) a party means information set
forth on its Disclosure Schedule, provided, however, that disclosure in any section of such
Disclosure Schedule shall apply only to the indicated section of this Agreement except to
the extent that it is reasonably apparent from the face of such disclosure that such
disclosure is relevant to another section of this Agreement, and (2) the Company means
information publicly disclosed by the Company in (A) its Annual Report on Form 10-K for the
fiscal year ended December 31, 2007, as filed by it with the Securities and Exchange
Commission (“SEC”) on February 13, 2008 (the “Company 10-K”), (B) its
Definitive Proxy Statement on Schedule 14A, as filed by it with the SEC on March 7, 2008 or
(C) any Current Report on Form 8-K filed or furnished by it with the SEC since January 1,
2008 and publicly available prior to the date of this Agreement (excluding any risk factor
disclosures contained in such documents under the heading “Risk Factors” and any disclosure
of risks included in any “forward-looking statements” disclaimer or other statements that
are similarly non-specific and are predictive or forward-looking in nature).

     2.2 Representations and Warranties of the Company. Except as Previously Disclosed,
the Company represents and warrants to Purchaser, as of the date of this Agreement and as of the
Closing Date (except to the extent made only as of a specified date in which case as of such date),
that:

     (a) Organization and Authority. (1) The Company is a corporation duly
organized and validly existing under the laws of the State of Delaware, is duly qualified
to do business and is in good standing in all jurisdictions where its ownership or leasing
of property or the conduct of its business requires it to be so qualified and where failure
to be so qualified would have a Material Adverse Effect, and has the corporate power and
authority to own its properties and assets and to carry on its business as it is now being
conducted. The Company is duly registered as a bank holding company under the Bank Holding
Company Act of 1956 (“BHC Act”). The Company has furnished to Purchaser true,
correct and complete copies of the Certificate of Incorporation and bylaws as in effect on
the date of this Agreement.

     (2) Each Company Significant Subsidiary is duly organized and validly existing
under the laws of its jurisdiction of organization, is duly qualified to do
business and is in good standing in all jurisdictions where its ownership or
leasing of property or the conduct of its business

5

 

requires it to be so qualified and where failure to be so qualified would have
a Material Adverse Effect, and has the corporate power and authority and
governmental authorizations to own its properties and assets and to carry on its
business as it is being conducted. The Company’s principal depository institution
subsidiary is duly organized and validly existing as a national banking association
and its deposit accounts are insured up to applicable limits by the Federal Deposit
Insurance Corporation, and all premiums and assessments required to be paid in
connection therewith have been paid when due. As used herein, “Subsidiary”
means, with respect to any person, 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; “Company Subsidiary” means any Subsidiary of the
Company; “Company Significant Subsidiary” means any Significant Subsidiary
of the Company; and “Significant Subsidiary” means, with respect to any
person, any Subsidiary that would constitute a “significant Subsidiary” of such
person within the meaning of Rule 1-02 of Regulation S-X of the SEC. Schedule
2.2(b) contains a correct and complete list of the Company Subsidiaries as of the
date hereof.

     (b) Capitalization. The authorized capital stock of the Company consists of
1,400,000,000 shares of Common Stock and 5,000,000 shares of preferred stock, no par value,
of the Company (the “Company Preferred Stock”). As of the close of business on
April 18, 2008 (the “Capitalization Date”), there were 634,165,584 shares of Common
Stock outstanding and 71,772 shares of Company Preferred Stock outstanding, consisting of
70,272 shares of Series D Non-Voting Convertible Preferred Stock and 1,500 shares of 9.875%
Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series F. In addition, 5,001 shares
of Non-Cumulative Perpetual Preferred Stock, Series E, $100,000 liquidation preference per
share, have been reserved in connection with the 12% Fixed-to-Floating Rate Normal
Automatic Preferred Enhanced Capital Securities. Since April 18, 2008 and through the date
of this Agreement, except in connection with this Agreement and the transactions
contemplated hereby, the Company has not (i) issued or authorized the issuance of any
shares of Common Stock or Company Preferred Stock, or any securities convertible into or
exchangeable or exercisable for shares of Common Stock or Company Preferred Stock, (ii)
reserved for issuance any shares of Common Stock or Company Preferred Stock or (iii)
repurchased or redeemed, or authorized the repurchase or redemption of, any shares of
Common Stock or Company Preferred Stock. As of the close of business on the Capitalization
Date, other than in respect of the 4.0% Convertible Senior Notes due 2011 and warrants for
Common Stock issued in connection with the issuance thereof and awards outstanding under
the

6

 

Company’s 1991 Restricted Stock Plan, the Company’s 1993 Stock Option Plan, the
Company’s 1997 Restricted Stock Plan, the Company’s 1997 Stock Option Plan, the Company’s
2001 Stock Option Plan, the Company’s 2002 Restricted Stock Plan and the Company’s
Long-Term Cash and Equity Incentive Plan in respect of which an aggregate of 6,801,455
shares of Common Stock have been reserved for issuance, no shares of Common Stock or
Company Preferred Stock were reserved for issuance. All of the issued and outstanding
shares of Common Stock and Company Preferred Stock have been duly authorized and validly
issued and are fully paid, nonassessable and free of preemptive rights, with no personal
liability attaching to the ownership thereof. No bonds, debentures, notes or other
indebtedness having the right to vote on any matters on which the stockholders of the
Company may vote (“Voting Debt”) are issued and outstanding. As of the date of
this Agreement, except (i) pursuant to any cashless exercise provisions of any Company
stock options or pursuant to the surrender of shares to the Company or the withholding of
shares by the Company to cover tax withholding obligations under the Benefit Plans, and
(ii) as set forth elsewhere in this Section 2.2(b), the Company does not have and is not
bound by any outstanding subscriptions, options, warrants, calls, commitments or agreements
of any character calling for the purchase or issuance of, or securities or rights
convertible into or exchangeable for, any shares of Common Stock or Company Preferred Stock
or any other equity securities of the Company or Voting Debt or any securities representing
the right to purchase or otherwise receive any shares of capital stock of the Company
(including any rights plan or agreement.

     (c) Company’s Subsidiaries. The Company owns, directly or indirectly, all of
the issued and outstanding shares of capital stock of or all other equity interests in each
of the Company Significant Subsidiaries, free and clear of any liens, charges, adverse
rights or claims, pledges, covenants, title defects, security interests and other
encumbrances of any kind (“Liens”), and all of such shares or equity interests are
duly authorized and validly issued and are fully paid, nonassessable and free of preemptive
rights, with no personal liability attaching to the ownership thereof. No Company
Subsidiary has or is bound by any outstanding subscriptions, options, warrants, calls,
commitments or agreements of any character calling for the purchase or issuance of any
shares of capital stock, any other equity security or any Voting Debt of such Company
Subsidiary or any securities representing the right to purchase or otherwise receive any
shares of capital stock, any other equity security or Voting Debt of such Company
Subsidiary.

     (d) Authorization. (1) The Company has the corporate power and authority to
enter into this Agreement and to carry out its obligations hereunder. The execution,
delivery and performance of this Agreement by the Company and the consummation of the
transactions contemplated hereby have been duly and unanimously authorized by the board of
directors of the Company (the “Board of Directors”). This Agreement has been duly
and validly executed and delivered by the Company and, assuming due authorization,
execution and delivery by Purchaser, is a valid and binding obligation of the Company
enforceable against

7

 

the Company in accordance with its terms (except as enforcement may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and
similar laws of general applicability relating to or affecting creditors’ rights or by
general equity principles). No other corporate proceedings are necessary for the execution
and delivery by the Company of this Agreement, the performance by it of its obligations
hereunder or the consummation by it of the transactions contemplated hereby, subject, in
the case of the authorization and issuance of the shares of Common Stock to be issued on
conversion or exercise of the Convertible Preferred Stock or the Warrant to be purchased or
acquired under this Agreement, to receipt of the approval by the Company’s stockholders of
the Stockholder Proposals. The only vote of the stockholders of the Company required to
approve (i) the conversion of the Convertible Preferred Stock into, and exercise of the
Warrant for, Common Stock for purposes of Section 312.03 of the NYSE Listed Company Manual,
is a majority of the votes cast on such proposal, provided that the total vote cast on the
proposal represents over 50% in interest of all securities entitled to vote on the proposal
and (ii) the amendment of the Certificate of Incorporation to increase the number of
authorized shares of Common Stock to at least such number as shall be sufficient to permit
the full conversion of the Convertible Preferred Stock into, and exercise of the Warrant
for, Common Stock, is the affirmative vote of the holders of not less than a majority of
the outstanding Common Stock. To the Company’s knowledge, all shares of Common Stock
outstanding on the record date for a meeting at which a vote is taken with respect to the
Stockholder Proposals shall be eligible to vote on such proposals.

     (2) Neither the execution and delivery by the Company of this Agreement, nor
the consummation of the transactions contemplated hereby, nor compliance by the
Company with any of the provisions hereof (including, without limitation, the
conversion or exercise provisions of the Convertible Preferred Stock or the
Warrant), will (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 result
in the loss of any benefit or creation of any right on the part of any third party
under, or accelerate the performance required by, or result in a right of
termination or acceleration of, or result in the creation of any Lien upon any of
the material properties or assets of the Company or any Company Subsidiary under
any of the terms, conditions or provisions of (i) subject in the case of the
authorization and issuance of the shares of Common Stock to be issued on conversion
or exercise of the Convertible Preferred Stock or the Warrant to be purchased under
this Agreement, to receipt of the approval by the Company’s stockholders of the
Stockholder Proposals, its Certificate of Incorporation or bylaws (or similar
governing documents) or the certificate of incorporation, charter, bylaws or other
governing instrument of any Company Significant Subsidiary or (ii) any note, bond,
mortgage, indenture, deed of trust, license, lease, agreement or other instrument
or obligation to which the Company or any Company

8

 

Significant Subsidiary is a party or by which it may be bound, or to which the
Company or any Company Significant 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 Section 2.2(e), violate any law,
statute, ordinance, rule, regulation, permit, concession, grant, franchise 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 such violations, conflicts and breaches as
would not reasonably be expected to have a Material Adverse Effect.

     (e) Governmental Consents. Other than the securities or blue sky laws of the
various states, no material notice to, registration, declaration or filing with, exemption
or review by, or authorization, order, consent or approval of, any Governmental Entity, or
expiration or termination of any statutory waiting period, is necessary for the
consummation by the Company of the transactions contemplated by this Agreement.

     (f) Financial Statements. Each of the consolidated balance sheets of the
Company and the Company Subsidiaries and the related consolidated statements of income,
stockholders’ equity and cash flows, together with the notes thereto (collectively, the
“Company Financial Statements”), included in any Company Report filed with the SEC
prior to the date of this Agreement, (1) have been prepared from, and are in accordance
with, the books and records of the Company and the Company Subsidiaries, (2) complied as to
form, as of their respective date of filing with the SEC, in all material respects with
applicable accounting requirements and with the published rules and regulations of the SEC
with respect thereto, (3) have been prepared in accordance with GAAP applied on a
consistent basis during the periods involved and (4) present fairly in all material
respects the consolidated financial position of the Company and the Company Subsidiaries as
of the dates set forth therein and the consolidated results of operations, changes in
stockholders’ equity and cash flows of the Company and the Company Subsidiaries for the
periods stated therein, subject, in the case of any unaudited financial statements, to
normal recurring year-end adjustments.

     (g) Reports. (1) Since December 31, 2005, the Company and each Company
Subsidiary has timely filed all material 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 material fees and assessments due and payable in connection
therewith. 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. To the knowledge of the Company, as of the date of this Agreement,
there are no outstanding comments from the SEC or any other Governmental Entity with
respect to any Company Report. In the case of each such Company Report filed

9

 

with or furnished to the SEC, such Company Report did not, as of its date or if
amended prior to the date of this Agreement, as of the date of such amendment, contain an
untrue statement of a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements made in it, in light of the
circumstances under which they were made, not misleading and complied as to form in all
material respects with the applicable requirements of the Securities Act of 1933, as
amended (the “Securities Act”) and the Securities Exchange Act of 1934, as amended
(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.

     (2) 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(g).
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 date hereof, to the Company’s
outside auditors and the audit committee of the Board of Directors (x) any
significant deficiencies and material weaknesses in the design or operation of
internal controls over financial reporting (as defined in Rule 13a-15(f) of the
Exchange Act) that are reasonably likely to adversely affect the Company’s ability
to record, process, summarize and report financial information and (y) any fraud,
whether or not material, that involves management or other employees who have a
significant role in the Company’s internal controls over financial reporting.
Since December 31, 2006 and until the date of this Agreement, (A) neither the
Company nor any Company Subsidiary nor, to the knowledge of the Company, any
director, officer, employee, auditor, accountant or representative of the Company
or any Company Subsidiary has received or otherwise had or obtained knowledge of
any material complaint, allegation, assertion or claim, whether written or oral,
regarding the accounting or auditing practices, procedures, methodologies or
methods of the Company or any Company Subsidiary or their respective internal
accounting controls, including any material complaint, allegation, assertion or
claim that the

10

 

Company or any Company Subsidiary has engaged in questionable accounting or
auditing practices, and (B) no attorney representing the Company or any Company
Subsidiary, whether or not employed by the Company or any Company Subsidiary, has
reported evidence of a material violation of securities laws, breach of fiduciary
duty or similar violation by the Company or any of its officers, directors,
employees or agents to the Board of Directors or any committee thereof or to any
director or officer of the Company.

     (h) Properties and Leases. Except as would not reasonably be expected to have
a 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 that would affect the value thereof or interfere with the use
made or to be made thereof by them. Except as would not reasonably be expected to have a
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.

     (i) Taxes. (1) Each of the Company and the Company Subsidiaries has (x) duly
and timely filed (including pursuant to applicable extensions granted without penalty) all
material Tax Returns required to be filed by it and (y) paid in full all Taxes due or made
adequate provision in the financial statements of the Company (in accordance with GAAP) for
any such Taxes, whether or not shown as due on such Tax Returns; (2) no material
deficiencies for any Taxes have been proposed, asserted or assessed in writing against or
with respect to any Taxes due by or Tax Returns of the Company or any of the Company
Subsidiaries which deficiencies have not since been resolved, except for Taxes proposed,
asserted or assessed that are being contested in good faith by appropriate proceedings and
for which reserves adequate in accordance with GAAP have been provided; and (3) there are
no material Liens for Taxes upon the assets of either the Company or the Company
Subsidiaries except for statutory Liens for current Taxes not yet due or Liens for Taxes
that are being contested in good faith by appropriate proceedings and for which reserves
adequate in accordance with GAAP have been provided. None of the Company or any of the
Company Subsidiaries has been a “distributing corporation” or a “controlled corporation” in
any distribution occurring during the last two years in which the parties to such
distribution treated the distribution as one to which Section 355 of the Internal Revenue
Code of 1986, as amended (the “Code”) is applicable. None of the Company or any
Company Subsidiary has engaged in any transaction that is a “listed transaction” for
federal income tax purposes within the meaning of Treasury Regulations section 1.6011-4,
which has not yet been the subject of an audit. For purposes of this Agreement,
“Taxes” shall mean all taxes, charges, levies, penalties or other assessments
imposed by any United States federal, state, local or foreign taxing authority, including
any income, excise, property, sales, transfer, franchise, payroll, withholding, social
security or other taxes, together with any interest or penalties attributable thereto, and
any payments made or owing to any other

11

 

person measured by such taxes, charges, levies, penalties or other assessment, whether
pursuant to a tax indemnity agreement, tax sharing payment or otherwise (other than
pursuant to commercial agreements or Benefit Plans). For purposes of this Agreement,
“Tax Return” shall mean any return, report, information return or other document
(including any related or supporting information) required to be filed with any taxing
authority with respect to Taxes, including without limitation all information returns
relating to Taxes of third parties, any claims for refunds of Taxes and any amendments or
supplements to any of the foregoing.

     (j) Absence of Certain Changes. Since December 31, 2007 until the date
hereof, (1) the Company and the Company Subsidiaries have conducted their respective
businesses in all material respects in the ordinary course, consistent with prior practice,
(2) except for publicly disclosed ordinary dividends on the Common Stock and outstanding
Company Preferred Stock, the Company has not made or declared any distribution in cash or
in kind to its stockholders or issued or repurchased any shares of its capital stock or
other equity interests and (3) no event or events have occurred that has had or would
reasonably be expected to have a Material Adverse Effect.

     (k) 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 (1) liabilities that have arisen since December 31,
2007 in the ordinary and usual course of business and consistent with past practice,
(2) contractual liabilities under (other than liabilities arising from any breach or
violation of) agreements Previously Disclosed or not required by this Agreement to be so
disclosed and (3) liabilities that have not had and would not reasonably be expected to
have a Material Adverse Effect.

     (l) Commitments and Contracts. The Company has Previously Disclosed or
provided (by hard copy, electronic data room or otherwise) to Purchaser or its
representatives true, correct and complete copies of, each of the following to which the
Company or any Company Significant Subsidiary is a party or subject (whether written or
oral, express or implied) (each, a “Company Significant Agreement”):

     (1) any contract or agreement which limits the freedom of the Company or any
of the Company Subsidiaries to compete in any material line of business;

     (2) any contract or agreement which grants any person a right of first
refusal, right of first offer or similar right with respect to any material
properties, assets or businesses of the Company or the Company Subsidiaries; and

12

 

     (3) any contract relating to the acquisition or disposition of any material
business or material assets (whether by merger, sale of stock or assets or
otherwise), which acquisition or disposition is not yet complete or where such
contract contains continuing material obligations, including continuing material
indemnity obligations, of the Company or any of the Company Subsidiaries.

(i) Each of the Company Significant Agreements is valid and binding on the Company and the
Company Significant Subsidiaries, as applicable, and in full force and effect; (ii) the
Company and each of the Company Significant Subsidiaries, as applicable, are in all
material respects in compliance with and have in all material respects performed all
obligations required to be performed by them to date under each Company Significant
Agreement; and (iii) as of the date hereof, to the Company’s knowledge, neither the Company
nor any of the Company Significant Subsidiaries has received notice of any material
violation or default (or any condition which with the passage of time or the giving of
notice would cause such a violation of or a default) by any party under any Company
Significant Agreement.

     (m) 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 Securities to be issued pursuant to this Agreement 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 Securities to Purchaser pursuant to this Agreement to the
registration requirements of the Securities Act.

     (n) Status of Securities. The shares of Convertible Preferred Stock (upon
filing of the related Preferred Stock Certificate of Designations with the Delaware
Secretary) and the Warrant to be issued pursuant to this Agreement have been duly
authorized by all necessary corporate action. When issued and sold against receipt of the
consideration therefor as provided in this Agreement, such shares of Convertible Preferred
Stock will be validly issued, fully paid and nonassessable, will not subject the holders
thereof to personal liability and will not be subject to preemptive rights of any other
stockholder of the Company. The shares of Common Stock issuable upon the conversion of the
Convertible Preferred Stock and exercise of the Warrant will, upon receipt of the approval
by the Company’s stockholders of the Stockholder Proposals and filing of the related
Preferred Stock Certificate of Designations with the Delaware Secretary, have been duly
authorized by all necessary corporate action and when so issued upon such conversion or
exercise will be validly issued, fully paid and nonassessable, will not subject the holders
thereof to personal liability and will not be subject to preemptive rights of any other
stockholder of the Company. The Warrant, when executed and delivered by the Company
pursuant to this Agreement, will constitute a valid and legally binding agreement of the
Company enforceable in accordance with its terms (except as enforcement may be limited by
applicable

13

 

bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar
laws of general applicability relating to or affecting creditors’ rights or by general
equity principles).

     (o) Litigation and Other Proceedings. There is no 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, in
each case except as would not reasonably be expected to have a Material Adverse Effect.
Except as would not reasonably be expected to have a Material Adverse Effect, there is no
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.

     (p) Compliance with Laws. The Company and each Company Subsidiary have all
material 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. The Company and each Company Subsidiary has complied
in all material respects and is not in default or violation in any respect of, and none of
them is, to the knowledge of the Company, under investigation with respect to or, to the
knowledge of the Company, has been threatened to be charged with or given notice of any
material violation of, any applicable material 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 reasonably be expected to have a
Material Adverse Effect. Except for statutory or regulatory restrictions of general
application, no Governmental Entity has placed any material restriction on the business or
properties of the Company or any Company Subsidiary.

     (q) Labor. Employees of the Company and the Company Subsidiaries are not
represented by any labor union nor are any collective bargaining agreements otherwise in
effect with respect to such employees. No labor organization or group of employees of the
Company or any Company Subsidiary has made a pending demand for recognition or
certification, and there are no representation or certification proceedings or petitions
seeking a representation proceeding presently pending or threatened to be brought or filed
with the National Labor Relations Board or any other labor relations tribunal or authority.
There are no organizing activities, strikes, work stoppages, slowdowns, lockouts, material
arbitrations or material grievances, or other material labor disputes pending or threatened
against or involving the Company or any Company Subsidiary.

14

 

     (r) Company Benefit Plans.

     (1) Except as has not had or would not reasonably be expected to have a
Material Adverse Effect, (A) with respect to each Benefit Plan, the Company and the
Company Subsidiaries have complied, and are now in compliance, in all material
respects, with all provisions of ERISA, the Code and all laws and regulations
applicable to such Benefit Plan; and (B) each Benefit Plan has been administered in
all material respects in accordance with its terms. “Benefit Plan” means
any employee welfare benefit plan within the meaning of Section 3(1) of the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”), any
employee pension benefit plan within the meaning of Section 3(2) of ERISA and any
bonus, incentive, deferred compensation, vacation, stock purchase, stock option,
severance, employment, change of control or fringe benefit plan, program, agreement
or policy.

     (2) Except as has not had or would not reasonably be expected to have a
Material Adverse Effect, and except for liabilities fully reserved for or
identified in the Financial Statements, no claim has been made, or to the knowledge
of the Company threatened, against the Company or any of the Company Subsidiaries
related to the employment and compensation of employees or any Benefit Plan,
including without limitation any claim related to the purchase of employer
securities or to expenses paid under any defined contribution pension plan.

     (3) Except as has not had or would not reasonably be expected to have a
Material Adverse Effect, neither the Company nor the Company Subsidiaries has
incurred any withdrawal liability as a result of a complete or partial withdrawal
from a “multiemployer plan”, as that term is defined in Part I of Subtitle E of
Title IV of ERISA, that has not been satisfied in full.

     (4) Except as would not reasonably be expected to have a Material Adverse
Effect, (A) neither the execution and delivery of this Agreement, nor the
consummation of the transactions contemplated hereby will (i) result in any payment
(including severance, unemployment compensation, “excess parachute payment” (within
the meaning of Section 280G of the Code), forgiveness of indebtedness or otherwise)
becoming due to any current or former employee, officer or director of the Company
or any Company Subsidiary from the Company or any Company Subsidiary under any
Benefit Plan or otherwise, (ii) increase any benefits otherwise payable under any
Benefit Plan, (iii) result in any acceleration of the time of payment or vesting of
any such benefits, (iv) require the funding or increase in the funding of any such
benefits or (v) result in any limitation on the right of the Company or any Company
Subsidiary to amend, merge, terminate or receive a reversion of assets from any
Benefit Plan or related trust and (B) neither the Company nor

15

 

any Company Subsidiary has taken, or permitted to be taken, any action that
required, and no circumstances exist that will require the funding, or increase in
the funding, of any benefits or resulted, or will result, in any limitation on the
right of the Company or any Company Subsidiary to amend, merge, terminate or
receive a reversion of assets from any Benefit Plan or related trust.

     (s) Risk Management Instruments. Except as has not had or would not
reasonably be expected to have a Material Adverse Effect, all material 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,
were entered into (1) only in the ordinary course of business, (2) in accordance with
prudent practices and in all material respects with all applicable laws, rules, regulations
and regulatory policies and (3) with counterparties believed to be financially responsible
at the time; and each of them constitutes the valid and legally binding obligation of the
Company or one of the Company Subsidiaries, enforceable in accordance with its terms.
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 material obligations under any such
agreement or arrangement.

     (t) Agreements with Regulatory Agencies. Neither the Company nor any Company
Subsidiary is subject to any cease-and-desist or other similar order or enforcement action
issued by, or is a party to any 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 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, 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 and until the date hereof by any 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.

     (u) Environmental Liability. There is no legal, administrative, arbitral or
other proceeding, claim, action or notice of any nature seeking to impose, or that could
result in the imposition of, on the Company or any Company Subsidiary, any liability or
obligation of the Company or any Company Subsidiary with respect to any environmental
health or safety matters or any

16

 

private or governmental, health or safety investigations or remediation activities of
any nature arising under common law or under any local, state or federal environmental,
health or safety statute, regulation or ordinance, including the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
(“CERCLA”), pending or, to the Company’s knowledge, threatened against the Company
or any Company Subsidiary the result of which has had or would reasonably be expected to
have a Material Adverse Effect; to the Company’s knowledge, there is no reasonable basis
for, or circumstances that are reasonably likely to give rise to, any such proceeding,
claim, action, investigation or remediation; and to the Company’s knowledge, neither the
Company nor any Company Subsidiary is subject to any agreement, order, judgment, decree,
letter or memorandum by or with any Governmental Entity or third party imposing any such
environmental liability.

     (v) Mortgage Banking Business. Except as has not had and would not reasonably
be expected to have a Material Adverse Effect:

     (1) The Company and each Company Subsidiary has complied with, and all
documentation in connection with the origination, processing, underwriting and
credit approval of any mortgage loan originated, purchased or serviced by the
Company or any Company Subsidiary satisfied, (A) all applicable federal, state and
local laws, rules and regulations with respect to the origination, insuring,
purchase, sale, pooling, servicing, subservicing, or filing of claims in connection
with mortgage loans, including all laws relating to real estate settlement
procedures, consumer credit protection, truth in lending laws, usury limitations,
fair housing, transfers of servicing, collection practices, equal credit
opportunity and adjustable rate mortgages, (B) the responsibilities and obligations
relating to mortgage loans set forth in any agreement between the Company or any
Company Subsidiary and any Agency, Loan Investor or Insurer, (C) the applicable
rules, regulations, guidelines, handbooks and other requirements of any Agency,
Loan Investor or Insurer and (D) the terms and provisions of any mortgage or other
collateral documents and other loan documents with respect to each mortgage loan;
and

     (2) No Agency, Loan Investor or Insurer has (A) claimed in writing that the
Company or any Company Subsidiary has violated or has not complied with the
applicable underwriting standards with respect to mortgage loans sold by the
Company or any Company Subsidiary to a Loan Investor or Agency, or with respect to
any sale of mortgage servicing rights to a Loan Investor, (B) imposed in writing
restrictions on the activities (including commitment authority) of the Company or
any Company Subsidiary or (C) indicated in writing to the Company or any Company
Subsidiary that it has terminated or intends to terminate its relationship with the
Company or any Company Subsidiary for poor

17

 

performance, poor loan quality or concern with respect to the Company’s or any
Company Subsidiary’s compliance with laws.

     For purposes of this Section 2.2(v):

     (A) “Agency” shall mean the Federal Housing Administration,
the Federal Home Loan Mortgage Corporation, the Federal National Mortgage
Association, the Government National Mortgage Association, or any other
federal or state agency with authority to (i) authority to determine any
investment, origination, lending or servicing requirements with regard to
mortgage loans originated, purchased or serviced by the Company or any
Company Subsidiary or (ii) originate, purchase, or service mortgage loans,
or otherwise promote mortgage lending, including without limitation state
and local housing finance authorities.

     (B) “Loan Investor” shall mean any person (including an
Agency) having a beneficial interest in any mortgage loan originated,
purchased or serviced by the Company or any Company Subsidiary or a
security backed by or representing an interest in any such mortgage loan;
and

     (C) “Insurer” means a person who insures or guarantees for
the benefit of the mortgagee all or any portion of the risk of loss upon
borrower default on any of the mortgage loans originated, purchased or
serviced by the Company or any Company Subsidiary, including, the Federal
Housing Administration, the United States Department of Veterans’ Affairs,
the Rural Housing Service of the U.S. Department of Agriculture and any
private mortgage insurer, and providers of hazard, title or other
insurance with respect to such mortgage loans or the related collateral.

     (w) Anti-takeover Provisions Not Applicable. The Board of Directors has taken
all necessary action to ensure that the transactions contemplated by this Agreement and any
of the transactions contemplated hereby will be deemed to be exceptions to the provisions
of Section 203 of the Delaware General Corporation Law, and that any other similar
“moratorium,” “control share,” “fair price,” “takeover” or “interested stockholder” law
does not and will not apply to this Agreement or to any of the transactions contemplated
hereby.

     (x) Knowledge as to Conditions. As of the date of this Agreement, the Company
knows of no reason why any regulatory approvals and, to the extent necessary, any other
approvals, authorizations, filings, registrations, and notices required or otherwise a
condition to the consummation of the transactions contemplated by this Agreement will not
be obtained.

18

 

     (y) Brokers and Finders. Except for Goldman, Sachs & Co., neither the Company
nor any Company Subsidiary nor any of their respective officers, directors, employees or
agents has employed any broker or finder or incurred any liability for any financial
advisory fees, brokerage fees, commissions or finder’s fees, and no broker or finder has
acted directly or indirectly for the Company or any Company Subsidiary, in connection with
this Agreement or the transactions contemplated hereby.

     2.3 Representations and Warranties of Purchaser. Except as Previously Disclosed,
Purchaser hereby represents and warrants to the Company, as of the date of this Agreement and as of
the Closing Date (except to the extent made only as of a specified date, in which case as of such
date), that:

     (a) Organization and Authority. Purchaser is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization, is duly
qualified to do business and is in good standing in all jurisdictions where its ownership
or leasing of property or the conduct of its business requires it to be so qualified and
where failure to be so qualified would be reasonably expected to materially and adversely
affect Purchaser’s ability to perform its obligations under this Agreement or consummate
the transactions contemplated hereby on a timely basis, and Purchaser has the corporate or
other power and authority and governmental authorizations to own its properties and assets
and to carry on its business as it is now being conducted.

     (b) Authorization. (1) Purchaser has the corporate or other power and
authority to enter into this Agreement and to carry out its obligations hereunder. The
execution, delivery and performance of this Agreement by Purchaser and the consummation of
the transactions contemplated hereby have been duly authorized by Purchaser’s board of
directors, general partner or managing members, as the case may be, and no further approval
or authorization by any of its partners or other equity owners, as the case may be, is
required. This Agreement has been duly and validly executed and delivered by Purchaser and
assuming due authorization, execution and delivery by the Company, is a valid and binding
obligation of Purchaser enforceable against Purchaser in accordance with its terms (except
as enforcement may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer and similar laws of general applicability relating to or
affecting creditors’ rights or by general equity principles).

     (2) Neither the execution, delivery and performance by Purchaser of this
Agreement, nor the consummation of the transactions contemplated hereby, nor
compliance by Purchaser with any of the provisions hereof, will (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

19

 

upon any of the properties or assets of Purchaser under any of the terms,
conditions or provisions of (i) its certificate of limited partnership or
partnership agreement or similar governing documents or (ii) any note, bond,
mortgage, indenture, deed of trust, license, lease, agreement or other instrument
or obligation to which Purchaser is a party or by which it may be bound, or to
which Purchaser or any of the properties or assets of Purchaser may be subject, or
(B) subject to compliance with the statutes and regulations referred to in the next
paragraph, violate any law, statute, ordinance, rule or regulation, permit,
concession, grant, franchise or any judgment, ruling, order, writ, injunction or
decree applicable to Purchaser or any of its properties or assets except in the
case of clauses (A)(ii) and (B) for such violations, conflicts and breaches as
would not reasonably be expected to materially and adversely affect Purchaser’s
ability to perform its respective obligations under this Agreement or consummate
the transactions contemplated hereby on a timely basis.

     (3) Other than the securities or blue sky laws of the various states, no
notice to, registration, declaration or filing with, exemption or review by, or
authorization, order, consent or approval of, any Governmental Entity, nor
expiration or termination of any statutory waiting period, is necessary for the
consummation by Purchaser of the transactions contemplated by this Agreement.
Purchaser is the “ultimate parent entity” of Purchaser for purposes of (and as
defined in) the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended
(the “HSR Act”) and the rules and regulations promulgated thereunder.

     (c) Purchase for Investment. Purchaser acknowledges that the Securities have
not been registered under the Securities Act or under any state securities laws. Purchaser
(1) is acquiring the Securities pursuant to an exemption from registration under the
Securities Act solely for investment with no present intention to distribute any of the
Securities to any person, (2) will not sell or otherwise dispose of any of the Securities,
except in compliance with the registration requirements or exemption provisions of the
Securities Act and any other applicable securities laws, (3) 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 its investment in the Securities and of
making an informed investment decision, and (4) is an “accredited investor” (as that term
is defined by Rule 501 of the Securities Act).

     (d) Ownership. As of the date of this Agreement, neither Purchaser nor any of
its Affiliates (other than any portfolio company with respect to which Purchaser is not the
party exercising control over investment decisions) are the owners of record or the
Beneficial Owners of shares of Common Stock or securities convertible into or exchangeable
for Common Stock.

20

 

     (e) Financial Capability. At Closing Purchaser will have available funds
necessary to consummate the Closing on the terms and conditions contemplated by this
Agreement.

     (f) Knowledge as to Conditions. As of the date of this Agreement, Purchaser
does not know of any reason why any regulatory approvals and, to the extent necessary, any
other approvals, authorizations, filings, registrations, and notices required or otherwise
a condition to the consummation of the transactions contemplated by this Agreement will not
be obtained.

     (g) Purchaser’s Operations. Purchaser has not conducted any business other
than that (x) incident to its formation for the sole purpose of carrying out the
transactions contemplated by this Agreement and (y) in relation to this Agreement the
transactions contemplated hereby.

     (h) Brokers and Finders. Neither Purchaser nor its Affiliates, any of their
respective officers, directors, employees or agents has employed any broker or finder or
incurred any liability for any financial advisory fees, brokerage fees, commissions or
finder’s fees, and no broker or finder has acted directly or indirectly for Purchaser, in
connection with this Agreement or the transactions contemplated hereby, in each case, whose
fees the Company would be required to pay (other than pursuant to the reimbursement of
expenses provisions of Section 6.2).

ARTICLE III

COVENANTS

     3.1 Filings; Other Actions.

     (a) Purchaser, on the one hand, and the Company, on the other hand, will cooperate and
consult with the other and use reasonable best efforts to prepare and file all necessary
documentation, to effect all necessary applications, notices, petitions, filings and other
documents, and to obtain all necessary permits, consents, orders, approvals and
authorizations of, or any exemption by, all third parties and Governmental Entities, and
the expiration or termination of any applicable waiting period, necessary or advisable to
consummate the transactions contemplated by this Agreement, and to perform the covenants
contemplated by this Agreement. Each party shall execute and deliver both before and after
the Closing such further certificates, agreements and other documents and take such other
actions as the other parties may reasonably request to consummate or implement such
transactions or to evidence such events or matters. In particular, Purchaser will use its
reasonable best efforts to promptly obtain or submit, and the Company will cooperate as may
reasonably be requested by Purchaser to help Purchaser promptly obtain or submit, as the
case may be, as promptly as practicable, the approvals and authorizations of, filings and
registrations with, and notifications to, or expiration or termination of any

21

 

applicable waiting period, under the HSR Act or applicable competition or merger
control laws of other jurisdictions, all notices to and, to the extent required by
applicable law or regulation, consents, approvals or exemptions from bank regulatory
authorities, for the transactions contemplated by this Agreement. Without limiting the
foregoing, to the extent required, Purchaser and the Company shall prepare and file a
Notification and Report Form pursuant to the HSR Act in connection with the transactions
contemplated by this Agreement as promptly as practicable after the date of this Agreement.
Purchaser and the Company will have the right to review in advance, and to the extent
practicable each will consult with the other, in each case subject to applicable laws
relating to the exchange of information, all the information relating to such other party,
and any of their respective Affiliates, which appears in any filing made with, or written
materials submitted to, any third party or any Governmental Entity in connection with the
transactions to which it will be party contemplated by this Agreement. In exercising the
foregoing right, each of the parties hereto agrees to act reasonably and as promptly as
practicable. Each party hereto agrees to keep the other party apprised of the status of
matters referred to in this Section 3.1(a). Purchaser shall promptly furnish the Company,
and the Company shall promptly furnish Purchaser, to the extent permitted by applicable
law, with copies of written communications received by it or its Subsidiaries from, or
delivered by any of the foregoing to, any Governmental Entity in respect of the
transactions contemplated by this Agreement.

     (b) Unless this Agreement has been terminated pursuant to Section 5.1, the Company
shall call a special meeting of its stockholders, as promptly as practicable following the
later of (1) the Closing and (2) the 2008 annual meeting of its stockholders, but in any
event on or before July 15, 2008, to vote on proposals (collectively, the “Stockholder
Proposals”) to (A) approve the conversion of the Convertible Preferred Stock into, and
exercise of the Warrant for, Common Stock for purposes of Section 312.03 of the NYSE Listed
Company Manual and (B) amend the Certificate of Incorporation to increase the number of
authorized shares of Common Stock to at least such number as shall be sufficient to permit
the full conversion of all shares of the Convertible Preferred Stock into, and exercise of
the Warrant (and exercise of any warrants issued to other purchasers in the offering
contemplated by Section 1.2(c)(1)(B)) for Common Stock. The Board of Directors shall
unanimously recommend to the Company’s stockholders that such stockholders vote in favor of
the Stockholder Proposals. In connection with such meeting, the Company shall promptly
prepare (and Purchaser will reasonably cooperate with the Company to prepare) and file (but
in no event more than ten business days after the date of this Agreement) with the SEC a
preliminary proxy statement, shall use its reasonable best efforts to respond to any
comments of the SEC or its staff 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. The Company shall notify Purchaser
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

22

 

SEC or its staff for amendments or supplements to such proxy statement or for
additional information and will supply Purchaser 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
Purchaser and the Company agrees promptly to correct any information provided by it or on
its behalf for use in the proxy statement if and to the extent that such information shall
have become false or misleading in any material respect, and the Company shall as promptly
as practicable prepare and mail to its stockholders an amendment or supplement to correct
such information to the extent required by applicable laws and regulations. The Company
shall consult with Purchaser prior to filing any proxy statement, or any amendment or
supplement thereto, and provide Purchaser 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 unanimously recommend approval of) each such proposal at a meeting
of its stockholders no less than once in each subsequent six-month period beginning on July
31, 2008 until all such approvals are obtained or made.

     (c) Purchaser, on the one hand, agrees to furnish the Company, and the Company, on the
other hand, agrees, upon request, to furnish to Purchaser, all information concerning
itself, its Affiliates, directors, officers, partners and stockholders and such other
matters as may be reasonably necessary or advisable in connection with the proxy statement
in connection with any such stockholders meeting and any other statement, filing, notice or
application made by or on behalf of such other party or any of its Subsidiaries to any
Governmental Entity in connection with the Closing and the other transactions contemplated
by this Agreement.

     (d) Unless this Agreement has been terminated pursuant to Section 5.1, Purchaser
hereby agrees that at any meeting of the stockholders of the Company held to vote on the
Stockholder Proposals, however called, Purchaser shall vote, or cause to be voted, all of
the shares of Common Stock or other Voting Securities Beneficially Owned by Purchaser and
its Affiliates in favor of the Stockholder Proposals. The Company shall use its reasonable
best efforts to obtain a commitment substantially identical to Purchaser’s commitment under
this Section 3.1(d) from each other purchaser in the transactions referred to in Section
1.2(c)(1)(B).

     (e) Without limiting the other obligations of the Company under this Agreement, in the
event that the Stockholder Proposal to approve the conversion of the Convertible Preferred
Stock into, and exercise of the Warrant for, Common Stock for purposes of Section 312.03 of
the NYSE Listed Company Manual is

23

 

approved by the Company’s stockholders, but the other Stockholder Proposal is not so
approved, the Company shall negotiate in good faith with Purchaser promptly to provide
Purchaser with the option of exchanging its Convertible Preferred Stock into (and to
exchange its Warrant for securities exercisable for) depositary receipts for a junior
participating preferred stock with rights as to voting, liquidation and dividends identical
to those of Common Stock, all on such terms and conditions as the Company and Purchaser may
mutually agree.

     (f) Purchaser has provided the Company with true, correct and complete copies of the
Equity Financing Commitment letters (the “Equity Commitment Letters”), dated as of
the date hereof, between Purchaser and the parties thereto (the “Investors”). As
of the date hereof, each Equity Commitment Letter (i) is in full force and effect, (ii) is
a valid and binding agreement of Purchaser and, to Purchaser’s knowledge, each of the other
parties thereto and (iii) has not been amended or modified in any respect. Purchaser shall
take all actions reasonably necessary to enforce the obligations of the Investors under the
Equity Commitment Letters.

     3.2 Access, Information and Confidentiality.

     (a) From the date hereof, until the date when the Securities purchased pursuant to
this Agreement and held by Purchaser represent less than 5% of the outstanding Common Stock
(counting as shares owned by Purchaser all shares into which shares of Convertible
Preferred Stock or the Warrant owned by Purchaser are convertible or exercisable and
assuming that to the extent Purchaser shall purchase any additional shares of Common Stock,
any later sales of Common Stock by Purchaser shall be deemed to be shares other than
Securities to the extent of such additional purchases) (the “Qualifying Ownership
Interest”), the Company will permit Purchaser to visit and inspect, at Purchaser’s
expense, the properties of the Company and the Company Subsidiaries, to examine the
corporate books 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 Purchaser may reasonably request. Any
investigation pursuant to this Section 3.2 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 extent (i) prohibited by applicable law or regulation, (ii) that the
Company reasonably believes such information to be competitively sensitive proprietary
information (except to the extent Purchaser provides assurances reasonably acceptable to
the Company that such information shall not be used by Purchaser or its Affiliates to
compete with the Company and Company Subsidiaries), or (iii) 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

24

 

circumstances where the restrictions in this clause (iii) apply). In the event, and
to the extent, that, as a result of any change in applicable law or regulation or a
judicial or administrative interpretation of applicable law or regulation, it is reasonably
determined that the rights afforded pursuant to this Section 3.2 are not sufficient for
purposes of the Department of Labor’s “plan assets” regulations, to the extent such plan
assets regulation applies to the investment in the Securities, Purchaser and the Company
shall cooperate in good faith to agree upon mutually satisfactory management access and
information rights which satisfy such regulations.

     (b) Each party to this Agreement will hold, and will cause its respective Affiliates
and their directors, officers, employees, agents, consultants and advisors to hold, in
strict confidence, unless disclosure to a regulatory authority is necessary or appropriate
in connection with any necessary regulatory approval or unless disclosure is required by
judicial or administrative process or, in the written opinion of its counsel, by other
requirement of law or the applicable requirements of any regulatory agency or relevant
stock exchange, all non-public records, books, contracts, instruments, computer data and
other data and information (collectively, “Information”) concerning the other party
hereto furnished to it by such other party or its representatives pursuant to this
Agreement (except to the extent that such information can be shown to have been (1)
previously known by such party on a non-confidential basis, (2) in the public domain
through no fault of such party or (3) later lawfully acquired from other sources by the
party to which it was furnished), and neither party hereto shall release or disclose such
Information to any other person, except its auditors, attorneys, financial advisors, other
consultants and advisors.

     3.3 Conduct of the Business. Prior to the earlier of the Closing Date and the
termination of this Agreement pursuant to Section 5.1 (the “Pre-Closing Period”), the
Company shall, and shall cause each Company Subsidiary to, use commercially reasonable efforts to
carry on its business in the ordinary course of business and use reasonable best efforts to
maintain and preserve its and such Company Subsidiary’s business (including its organization,
assets, properties, goodwill and insurance coverage) and preserve its business relationships with
customers, strategic partners, suppliers, distributors and others having business dealings with it;
provided that nothing in this sentence shall limit or require any actions that the Board of
Directors may, in good faith, determine to be inconsistent with their duties or the Company’s
obligations under applicable law or imposed by any Governmental Entity. During the Pre-Closing
Period, (i) the Company shall not declare or pay any dividend or distribution on the Common Stock
(other than regular quarterly cash dividends of not more than $0.01) and (ii) if the Company takes
any action that would require any antidilution adjustment to be made under the Preferred Stock
Certificate of Designations or the Warrant as if issued on the date of this Agreement, the Company
shall make appropriate adjustments such that Purchaser will receive the benefit of such transaction
as if the Securities to be purchased by Purchaser at the Closing had been outstanding as of the
date of such action.

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ARTICLE IV

ADDITIONAL AGREEMENTS

     4.1 Agreement. Purchaser agrees that until such time as Purchaser no longer has a
Qualifying Ownership Interest, without the prior written approval of the Company, neither Purchaser
nor any of its Affiliates will, directly or indirectly:

     (a) in any way acquire, offer or propose to acquire or agree to acquire, Beneficial
Ownership of any Voting Securities if such acquisition would result in Purchaser or its
Affiliates (i) being deemed to “control” the Company within the meaning of the BHC Act and
the Change in Bank Control Act of 1978, as amended or (ii) having Beneficial Ownership of
10% or more of the outstanding shares of a class of voting securities (under the meaning of
the BHC Act and the rules and regulations promulgated thereunder) Common Stock of the
Company (for the avoidance of doubt, for purposes of calculating the Beneficial Ownership
of Purchaser and its Affiliates hereunder, (x) any security that is convertible into, or
exercisable for, any such voting securities or Common Stock that is Beneficially Owned by
Purchaser or its Affiliates shall be treated as fully converted or exercised, as the case
may be, into the underlying voting securities or Common Stock, and (y) any security
convertible into, or exercisable for, the Common Stock that is Beneficially Owned by any
person other than Purchaser or any of its Affiliates shall not be taken into account),
other than in the case of clauses (i) or (ii), solely as a result of the exercise of any
rights or obligations set forth in this Agreement;

     (b) enter into or agree, offer, propose or seek (whether publicly or otherwise) to
enter into, or otherwise be involved in or part of, any acquisition transaction, merger or
other business combination relating to all or part of the Company or any of the Company
Subsidiaries or any acquisition transaction for all or part of the assets of the Company or
any Company Subsidiary or any of their respective businesses;

     (c) make, or in any way participate in, any “solicitation” of “proxies” (as such terms
are defined under Regulation 14A under the Exchange Act, disregarding clause (iv) of
Rule 14a-1(1)(2) and including any otherwise exempt solicitation pursuant to Rule 14a-2(b))
to vote, or seek to advise or influence any person or entity with respect to the voting of,
any voting securities of the Company or any Company Subsidiary;

     (d) call or seek to call a meeting of the stockholders of the Company or any of the
Company Subsidiaries or initiate any stockholder proposal for action by stockholders of the
Company or any of the Company Subsidiaries, form, join or in any way participate in a
“group” (within the meaning of Section 13(d)(3) of the Exchange Act and the rules and
regulations promulgated thereunder) with respect to any Voting Securities, or seek, propose
or otherwise act alone or in

26

 

concert with others, to influence or control the management, board of directors or
policies of the Company or any Company Subsidiaries; or

     (e) bring any action or otherwise act to contest the validity of this Section 4.1
(provided that neither Purchaser nor any of its Affiliates shall be restricted from
contesting the applicability of this Section 4.1 to Purchaser or any of its Affiliates
under any particular circumstance) or seek a release of the restrictions contained herein,
or make a request to amend or waive any provision of this Section 4.1;

provided that without limiting Purchaser’s obligations under Section 3.1(d), nothing in this
Section 4.1 shall prevent Purchaser or its Affiliates from voting any Voting Securities then
Beneficially Owned by Purchaser or its Affiliates in any manner; provided, further, that nothing in
clauses (b), (c) or (d) of this Section 4.1 shall apply to Purchaser’s Board Representative solely
in his or her capacity as a director of the Company.

     (f) For purposes of this Agreement, a person shall be deemed to “Beneficially
Own” any securities of which such person is considered to be a “Beneficial
Owner” under Rule 13d-3 under the Exchange Act. For purposes of this Agreement,
“Voting Securities” shall mean at any time shares of any class of capital stock of
the Company that are then entitled to vote generally in the election of directors.

     (g) Notwithstanding the foregoing, the parties hereby agree that nothing in this
Section 4.1 shall apply to any portfolio company with respect to which Purchaser is not the
party exercising control over the decision to purchase Voting Securities or to vote such
Voting Securities; provided that Purchaser does not provide to such entity any non-public
information concerning the Company or any Company Subsidiary and such portfolio company is
not acting at the request or direction of or in coordination with Purchaser; and provided,
further, that ownership of such shares is not attributed to Purchaser under the BHC Act and
the rules and regulations promulgated thereunder.

     4.2 Transfer Restrictions.

     (a) Restrictions on Transfer. Except as otherwise permitted in this
Agreement, Purchaser will not transfer, sell, assign or otherwise dispose of
(“Transfer”) any Securities acquired pursuant to this Agreement, except as follows:
(1) following the date that is eighteen months from the Closing Date, Purchaser may
Transfer 1/18th (calculated on an as converted basis) of the Securities owned by
Purchaser as of the date that is eighteen months from the Closing Date per month; provided
that Purchaser shall be entitled to Transfer any non-Transferred portion of such 1/18th
amount during any later period; and (2) if the approval by the Company’s stockholders of
the Stockholder Proposals shall not have been obtained by the date that is six months from
the Closing Date, Purchaser may Transfer (A) 50% of the Convertible Preferred Stock and the
Warrant owned by Purchaser during the six-month period commencing on such

27

 

date and (B) the remaining 50% of the Convertible Preferred Stock and the Warrant
owned by Purchaser commencing on the first anniversary of the Closing Date; provided that,
except for Transfers pursuant to Rule 144 under the Securities Act or a registered
underwritten offering, Purchaser must reasonably believe that any transferee in any such
Transfer would not own more than 4.9% of the Common Stock of the Company after such
Transfer unless being transferred to a person Purchaser reasonably believes would upon such
purchase be eligible to file a Schedule 13G in respect thereof. The Transfer restrictions
set forth in this Section 4.2(a) shall terminate and be of no further force or effect on
the third anniversary of the Closing Date.

     (b) Purchaser Permitted Transfers. Notwithstanding Section 4.2(a), Purchaser
shall be permitted to Transfer any portion or all of its Securities at any time under the
following circumstances:

     (1) Transfers to (A) any Affiliate of Purchaser under common control with
Purchaser’s ultimate parent, general partner or investment advisor, (B) any limited
partner or shareholder of Purchaser, but in each case only if the transferee agrees
in writing for the benefit of the Company (with a copy thereof to be furnished to
the Company) to be bound by the terms of this Agreement (any such transferee shall
be included in the term “Purchaser”) or (C) as provided in Section 4.2(b)
of the Company’s Disclosure Schedule.

     (2) Transfers pursuant to a merger, tender offer or exchange offer or other
business combination, acquisition of assets or similar transaction or change of
control involving the Company or any Company Subsidiaries; provided that such
transaction has been approved by the Board of Directors. In order to facilitate
Transfers into a tender or exchange offer permitted hereby, the Company agrees, to
the fullest extent legally permitted, to effect an exercise of the Warrant in
accordance with the terms set forth in the Warrant and, notwithstanding the
transfer restrictions contained in Section 4.2(a), permit Purchaser to Transfer the
Warrant to a transferee conditioned upon such transferee exercising the Warrant in
connection with such tender or exchange offer.

     (3) In the event that, as a result of any share repurchases,
recapitalizations, redemptions or similar actions by the Company not caused by
Purchaser, Purchaser reasonably determines, based on the advice of legal counsel
and following consultation with the Company and, if the Company reasonably so
requests, the Board of Governors of the Federal Reserve System (the “Federal
Reserve”), that unless it disposes of all or a portion of its Securities, it or
any of its Affiliates could reasonably be deemed to “control” the Company for
purposes of the BHC Act or any rules or regulations promulgated thereunder (or any
successor provision), then Purchaser shall be permitted to Transfer the portion of
the Securities reasonably necessary to avoid such control determination; provided
that

28

 

any such Transfer may only be made in the manner described in the second
proviso to Section 4.2(a).

     (c) Hedging. Purchaser agrees that, during the one-year period following the
Closing, it shall not, directly or indirectly, enter into any hedging agreement,
arrangement or transaction, the value of which is based upon the value of any of the
Securities purchased pursuant to this Agreement, except for transactions involving an
index-based portfolio of securities that includes Common Stock (provided that the value of
such Common Stock in such portfolio is not more than 5% of the total value of the portfolio
of securities). For the avoidance of doubt, following the first anniversary of the
Closing, Purchaser shall be permitted to, directly or indirectly, enter into any such
hedging agreement, arrangement or transaction, including any transactions involving
index-based portfolio of securities that includes Common Stock (regardless of the value of
such Common Stock in such portfolio relative to the total value of the portfolio of
securities) or involving the purchase or sale of derivative securities or any short sale of
Common Stock.

     4.3 Governance Matters. (a) The Company will promptly cause one person
nominated by Purchaser (the “Board Representative”) to be elected or appointed to the Board
of Directors, subject to satisfaction of all legal and governance requirements regarding service as
a director of the Company and to the reasonable approval of the Company’s Nominating and Board of
Directors Governance Committee (“Governance Committee”) (such approval not to be
unreasonably withheld or delayed). After such appointment, so long as Purchaser holds at least 50%
of the shares of Common Stock (including for this purpose shares of Common Stock issuable upon
conversion of the Convertible Preferred Stock and exercise of the Warrant acquired pursuant to this
Agreement) acquired by Purchaser in connection with the transactions contemplated by this Agreement
(as adjusted from time to time for any reorganization, recapitalization, reclassification, stock
dividend, stock split, reverse stock split, or other like changes in the Company’s capitalization),
the Company will be required to recommend to its stockholders the election of the Board
Representative at the Company’s annual meeting, subject to satisfaction of all legal and governance
requirements regarding service as a director of the Company and to the reasonable approval of the
Governance Committee (such approval not to be unreasonably withheld or delayed), to the Board of
Directors. If Purchaser no longer holds the minimum number of Securities specified in the prior
sentence, Purchaser will have no further rights under Sections 4.3(a) through 4.3(c) and, at the
written request of the Board of Directors, shall use all reasonable best efforts to cause its Board
Representative to resign from the Board of Directors as promptly as possible thereafter. At the
option of the Board Representative, the Board of Directors shall cause the Board Representative to
be appointed to the Governance Committee of the Board of Directors (or any successor committee
thereto), so long as the Board Representative qualifies to serve on such Committee under the
applicable rules of the NYSE and the Company’s corporate governance guidelines and the charter of
such Committee.

29

 

     (b) The Board Representative (including any successor nominee) duly selected in
accordance with Section 4.3(a) shall, subject to applicable law, be the Company’s and the
Governance Committee’s nominee to serve on the Board of Directors. The Company shall use
its reasonable best efforts to have the Board Representative elected as a director of the
Company and the Company shall solicit proxies for each such person to the same extent as it
does for any of its other nominees to the Board of Directors.

     (c) Subject to Section 4.3(a), Purchaser shall have the power to designate the Board
Representative’s replacement upon the death, resignation, retirement, disqualification or
removal from office of such director, subject to satisfaction of all legal and governance
requirements regarding service as a director of the Company and to the reasonable approval
of the Governance Committee (such approval not to be unreasonably withheld or delayed).
The Board of Directors will promptly take all action reasonably required to fill the
vacancy resulting therefrom with such person (including such person, subject to applicable
law, being the Company’s and the Governance Committee’s nominee to serve on the Board of
Directors, using all reasonable best efforts to have such person elected as director of the
Company and the Company soliciting proxies for such person to the same extent as it does
for any of its other nominees to the Board of Directors).

     (d) The Board Representative shall be entitled to the same compensation and same
indemnification in connection with his or her role as a director as the other members of
the Board of Directors, and each Board Representative shall be entitled to reimbursement
for documented, reasonable out-of-pocket expenses incurred in attending meetings of the
Board of Directors or any committees thereof, to the same extent as the other members of
the Board of Directors. The Company shall notify the Board Representative of all regular
and special meetings of the Board of Directors and shall notify the Board Representative of
all regular and special meetings of any committee of the Board of Directors of which the
Board Representative is a member. The Company shall provide the Board Representative with
copies of all notices, minutes, consents and other materials provided to all other members
of the Board of Directors concurrently as such materials are provided to the other members.

     4.4 Legend. (a) Purchaser agrees that all certificates or other instruments
representing the Securities subject to this Agreement will bear a legend substantially to the
following effect:

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

30

 

PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS.

     (2) THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO TRANSFER AND
OTHER RESTRICTIONS SET FORTH IN AN INVESTMENT AGREEMENT, DATED AS OF APRIL 20,
2008, COPIES OF WHICH ARE ON FILE WITH THE SECRETARY OF THE ISSUER.

     (b) Upon request of Purchaser, upon receipt by the Company of an opinion of counsel
reasonably satisfactory to the Company to the effect that such legend is no longer required
under the Securities Act and applicable state laws, the Company shall promptly cause clause
(1) of the legend to be removed from any certificate for any Securities to be Transferred
in accordance with the terms of this Agreement and clause (2) of the legend shall be
removed upon the expiration of such transfer and other restrictions set forth in this
Agreement. Purchaser acknowledges that the Securities have not been registered under the
Securities Act or under any state securities laws and agrees that it will not sell or
otherwise dispose of any of the Securities, except in compliance with the registration
requirements or exemption provisions of the Securities Act and any other applicable
securities laws.

     4.5 Reservation for Issuance. The Company will reserve that number of shares of
Common Stock and Convertible Preferred Stock sufficient for issuance upon exercise or conversion of
Securities owned at any time by Purchaser without regard to any limitation on such conversion;
provided that in the case of the Convertible Preferred Stock and the Warrant, the Company will
reserve such sufficient number of shares of Common Stock following the approval of the stockholders
pursuant to Section 3.1(b).

     4.6 Certain Transactions. The Company will not merge or consolidate into, 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, as the case may be (if not the Company), expressly assumes
the due and punctual performance and observance of each and every covenant and condition of this
Agreement to be performed and observed by the Company.

     4.7 Indemnity. (a) The Company agrees to indemnify and hold harmless
Purchaser and its Affiliates and each of their respective officers, directors, partners, members
and employees, and each person who controls Purchaser within the meaning of the Exchange Act and
the rules and regulations promulgated thereunder, to the fullest extent lawful, from and against
any and all actions, suits, claims, proceedings, costs, losses, liabilities, damages, expenses
(including reasonable attorneys’ fees and disbursements), amounts paid in settlement and other
costs (collectively, “Losses”) arising out of or resulting from (1) any inaccuracy in or
breach of the Company’s representations or warranties in this Agreement or (2) the Company’s breach
of agreements or covenants made by the Company in this Agreement or (3) any action, suit, claim,
proceeding or investigation by any Governmental Entity, stockholder of the

31

 

Company or any other person (other than the Company) relating to this Agreement or the
transactions contemplated hereby (other than any Losses attributable to the acts, errors or
omissions on the part of Purchaser, but not including the transactions contemplated hereby).

     (b) Purchaser agrees to indemnify and hold harmless each of the Company and its
Affiliates and each of their officers, directors, partners, members and employees, and each
person who controls the Company within the meaning of the Exchange Act and the rules and
regulations promulgated thereunder, to the fullest extent lawful, from and against any and
all Losses arising out of or resulting from (1) any inaccuracy in or breach of Purchaser’s
representations or warranties in this Agreement or (2) Purchaser’s breach of agreements or
covenants made by Purchaser in this Agreement.

     (c) A party entitled to indemnification hereunder (each, an “Indemnified
Party”) shall give written notice to the party indemnifying it (the “Indemnifying
Party”) of any claim with respect to which it seeks indemnification promptly after the
discovery by such Indemnified Party of any matters giving rise to a claim for
indemnification; provided that the failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its obligations under this
Section 4.7 unless and to the extent that the Indemnifying Party shall have been actually
prejudiced by the failure of such Indemnified Party to so notify such party. Such notice
shall describe in reasonable detail such claim. In case any such action, suit, claim or
proceeding is brought against an Indemnified Party, the Indemnified Party shall be entitled
to hire, at its own expense, separate counsel and participate in the defense thereof;
provided, however, that the Indemnifying Party shall be entitled to assume and conduct the
defense thereof, unless the counsel to the Indemnified Party advises such Indemnifying
Party in writing that such claim involves a conflict of interest (other than one of a
monetary nature) that would reasonably be expected to make it inappropriate for the same
counsel to represent both the Indemnifying Party and the Indemnified Party, in which case
the Indemnified Party shall be entitled to retain its own counsel at the cost and expense
of the Indemnifying Party (except that the Indemnifying Party shall only be liable for the
legal fees and expenses of one law firm for all Indemnified Parties, taken together with
respect to any single action or group of related actions). If the Indemnifying Party
assumes the defense of any claim, all Indemnified Parties shall thereafter deliver to the
Indemnifying Party copies of all notices and documents (including court papers) received by
the Indemnified Party relating to the claim, and each Indemnified Party shall cooperate in
the defense or prosecution of such claim. Such cooperation shall include the retention and
(upon the Indemnifying Party’s request) the provision to the Indemnifying Party of records
and information that are reasonably relevant to such claim, and making employees available
on a mutually convenient basis to provide additional information and explanation of any
material provided hereunder. The Indemnifying Party shall not be liable for any settlement
of any action, suit, claim or proceeding effected without its written consent; provided,
however, that the Indemnifying Party shall not unreasonably withhold or delay its

32

 

consent. The Indemnifying Party further agrees that it will not, without the
Indemnified Party’s prior written consent (which shall not be unreasonably withheld or
delayed), settle or compromise any claim or consent to entry of any judgment in respect
thereof in any pending or threatened action, suit, claim or proceeding in respect of which
indemnification has been sought hereunder unless such settlement or compromise includes an
unconditional release of such Indemnified Party from all liability arising out of such
action, suit, claim or proceeding.

     (d) For purposes of the indemnity contained in Section 4.7(a)(1) and Section
4.7(b)(1), all qualifications and limitations set forth in the parties’ representations and
warranties (other than Section 2.2(j)(3)) as to “materiality,” “Material Adverse Effect”
and words of similar import, shall be disregarded in determining whether there shall have
been any inaccuracy in or breach of any representations and warranties in this Agreement;
provided that no inaccuracy in or breach of the representations and warranties contained in
Section 2.2(v) shall be deemed to occur if such representations and warranties are true and
correct in all material respects.

     (e) The Company shall not be required to indemnify the Indemnified Parties pursuant to
Section 4.7(a)(1), (1) with respect to any claim for indemnification if the amount of
Losses with respect to such claim (including a series of related claims) are less than
$250,000 (any claim involving Losses less than such amount being referred to as a “De
Minimis Claim”) and (2) unless and until the aggregate amount of all Losses incurred
with respect to all claims (other than De Minimis Claims) pursuant to Section 4.7(a)(1)
exceed 3.0% of the Purchase Price (the “Threshold Amount”), in which event the
Company shall be responsible for only the amount of such Losses in excess of the Threshold
Amount. Purchaser shall not be required to indemnify the Indemnified Parties pursuant to
Section 4.7(b)(1), (A) with respect to any De Minimis Claim and (B) unless and until the
aggregate amount of all Losses incurred with respect to all claims (other than De Minimis
Claims) pursuant to Section 4.7(b)(1) exceed the Threshold Amount, in which event Purchaser
shall be responsible for only the amount of such Losses in excess of the Threshold Amount.
The cumulative indemnification obligation of (1) the Company to Purchaser and all of the
Indemnified Parties affiliated with (or whose claims are permitted by virtue of their
relationship with) Purchaser or (2) Purchaser to the Company and the Indemnified Parties
affiliated with (or whose claims are permitted by virtue of their relationship with the)
Company, in each case for inaccuracies in or breaches of representations and warranties,
shall in no event exceed the Purchase Price.

     (f) Any claim for indemnification pursuant to this Section 4.7 for breach of any
representation or warranty can only be brought on or prior to the second anniversary of the
Closing Date; provided that if notice of a claim for indemnification pursuant to this
Section 4.7 for breach of any representation or warranty is brought prior to the end of
such period, then the obligation to

33

 

indemnify in respect of such breach shall survive as to such claim, until such claim
has been finally resolved.

     (g) The indemnity provided for in this Section 4.7 shall be the sole and exclusive
monetary remedy of Indemnified Parties after the Closing for any inaccuracy of any
representation or warranty or any other breach of any covenant or agreement contained in
this Agreement; provided that nothing herein shall limit in any way any such party’s
remedies in respect of fraud by any other party in connection with the transactions
contemplated hereby. No party to this Agreement (or any of its Affiliates) shall, in any
event, be liable or otherwise responsible to any other party (or any of its Affiliates) for
any consequential or punitive damages of such other party (or any of its Affiliates)
arising out of or relating to this Agreement or the performance or breach hereof.

     (h) No investigation of the Company by Purchaser, or by the Company of Purchaser,
whether prior to or after the date hereof shall limit any Indemnified Party’s exercise of
any right hereunder or be deemed to be a waiver of any such right.

     (i) Any indemnification payments pursuant to this Section 4.7 shall be treated as an
adjustment to the Purchase Price for the Securities for U.S. federal income and applicable
state and local Tax purposes, unless a different treatment is required by applicable law.

     4.8 Exchange Listing. The Company shall promptly use its reasonable best efforts to
cause the shares of Common Stock reserved for issuance pursuant to the conversion of the
Convertible Preferred Stock and exercise of the Warrant to be approved for listing on the New York
Stock Exchange, subject to official notice of issuance and upon receipt of the approval by the
Company’s stockholders of the Stockholder Proposals, as promptly as practicable, and in any event
before the Closing if permitted by the rules of the New York Stock Exchange.

     4.9 Registration Rights.

     (a) Registration.

     (1) Subject to the terms and conditions of this Agreement, the Company
covenants and agrees that no later than the date that is six months after the
Closing Date, the Company shall have prepared and filed 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

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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.

     (2) Any registration pursuant to this Section 4.9(a) shall be effected by
means of a shelf registration under the Securities Act (a “Shelf Registration
Statement”) in accordance with the methods and distribution set forth in the
Shelf Registration Statement and Rule 415. If Purchaser or any other holder of
Registrable Securities to whom the registration rights conferred by this Agreement
have been transferred in compliance with this Agreement 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 4.9(c). The
lead underwriters in any such distribution shall be selected by the holders of a
majority of the Registrable Securities to be distributed.

     (3) The Company shall not be required to effect a registration (including a
resale of Registrable Securities from an effective Shelf Registration Statement)
pursuant to this Section 4.9(a): (i) with respect to any Registrable Securities
that cannot be sold under a registration statement as a result of the Transfer
restrictions set forth herein; (ii) with respect to securities that are not
Registrable Securities; (iii) during any Scheduled Black-out Period; or (iv) if the
Company has notified Purchaser 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 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 90 days
after receipt of the request of Purchaser; provided that such right to delay a
registration shall be exercised by the Company (A) 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 (B) not
more than twice in any 12-month period and not more than 90 days in the aggregate
in any 12-month period.

     (4) Whenever the Company proposes to register any of its securities, other
than a registration pursuant to Section 4.9(a)(1) 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 Purchaser and all other Holders of its intention to effect such a
registration (but in no event less

35

 

than ten days prior to the anticipated filing date) and will include in such
registration all Registrable Securities with respect to which the Company has
received written requests for inclusion therein within ten business days after the
date of the Company’s notice (a “Piggyback Registration”). Any such person
that has made such a written request may withdraw its Registrable Securities from
such Piggyback Registration by giving written notice to the Company and the
managing underwriter, if any, on or before the fifth business day prior to the
planned effective date of such Piggyback Registration. The Company may terminate or
withdraw any registration under this Section 4.9(a)(4) prior to the effectiveness
of such registration, whether or not Purchaser or any other Holders have elected to
include Registrable Securities in such registration.

     (5) If the registration referred to in Section 4.9(a)(4) is proposed to be
underwritten, the Company will so advise Purchaser and all other Holders as a part
of the written notice given pursuant to Section 4.9(a)(4). In such event, the
right of Purchaser and all other Holders to registration pursuant to this Section
4.9(a) will be conditioned upon such persons’ participation in such underwriting
and the inclusion of such person’s Registrable Securities in the underwriting, 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. 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 underwriter and Purchaser.

     (6) If a Piggyback Registration relates to an underwritten primary offering on
behalf of the Company, and the managing underwriters advise the Company that in
their reasonable opinion the number of securities requested to be included in such
registration 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 registration or prospectus only
such number of securities that in the reasonable opinion of such 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: (i) first, the securities the Company
proposes to sell, (ii) second, Registrable Securities of Purchaser and all other
Holders who have requested registration of Registrable Securities pursuant to
Section 4.9(a)(4), pro rata on the basis of the aggregate number of such securities
or shares owned by each such person and (iii) third, any other securities of the
Company that have been requested to be so included, subject to the terms of this
Agreement.

36

 

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

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

     (1) 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 4.9(c), keep such registration statement effective or
such prospectus supplement current.

     (2) 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.

     (3) 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.

     (4) 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

37

 

condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions.

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

     (6) Give written notice to the Holders;

     (A) when any registration statement filed pursuant to Section 4.9(a)
or any amendment thereto has been filed with the SEC 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 4.9(c)(10)
cease to be true and correct.

     (7) 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 4.9(c)(6)(C) at the earliest practicable time.

38

 

     (8) Upon the occurrence of any event contemplated by Section 4.9(c)(5) or
4.9(c)(6)(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 4.9(c)(6)(E) to suspend the use of the
prospectus until the requisite changes to the prospectus have been made, then the
Holders and any underwriters shall suspend use of such prospectus and use their
reasonable best efforts to return to the Company all copies of such prospectus (at
the Company’s expense) other than permanent file copies then in such Holder’s or
underwriter’s possession. The total number of days that any such suspension may be
in effect in any 180 day period shall not exceed 45 days.

     (9) 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).

     (10) 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 show”, similar sales events and other
marketing activities), (i) 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 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, (ii) use its
reasonable best efforts to furnish underwriters 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, (iii) 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 Registration
Statement) who have certified the financial statements included in such
Registration Statement,

39

 

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, (iv) if an underwriting agreement is entered into, the same shall
contain indemnification provisions and procedures customary in underwritten
offerings, and (v) 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. Notwithstanding anything contained herein to the contrary, the Company
shall not be required to enter into any underwriting agreement or permit any
underwritten offering absent an agreement by the applicable underwriter(s) to
indemnify the Company in form, scope and substance as is customary in underwritten
offerings by the Company in which an affiliate of the Company acts as an
underwriter

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

     (12) Cause all such Registrable Securities (other than Convertible Preferred
Stock) to be listed on each 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 securities exchange, use its reasonable best efforts to
cause all such Registrable Securities (other than Convertible Preferred Stock) to
be listed on the New York Stock Exchange or the NASDAQ Stock Market, as determined
by the Company.

     (13) 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.

40

 

     (14) 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. During any Scheduled Black-out Period and 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 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, Purchaser and each Holder
of Registrable Securities shall forthwith discontinue disposition of Registrable Securities
until termination of such Scheduled Black-Out Period or until Purchaser and/or Holder has
received copies of a supplemented or amended prospectus or prospectus supplement, or until
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, such
Holder shall deliver to the Company (at the Company’s expense) all copies, other than
permanent file copies then in 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 180 day period shall not exceed 45 days.

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

     (f) Furnishing Information.

     (1) Neither Purchaser 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.

     (2) It shall be a condition precedent to the obligations of the Company to
take any action pursuant to Section 4.9(c) that Purchaser 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.

     (1) 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

41

 

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 without limitation 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 (i) 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 (ii) offers or sales effected by or on
behalf 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.

     (2) If the indemnification provided for in Section 4.9(g)(1) 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

42

 

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 4.9(g)(2) 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 4.9(g)(1). 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 Purchaser to
registration of Registrable Securities pursuant to Section 4.9(a) may be assigned by
Purchaser to a transferee or assignee of Registrable Securities to which (i) there is
transferred to such transferee no less than $50,000,000 in Registrable Securities and
(b) such Transfer is permitted under the terms hereof; 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.

     (i) “Market Stand-Off’ Agreement; Agreement to Furnish Information. Purchaser
and each Holder hereby agrees:

     (1) that Purchaser shall not sell, transfer, make any short sale of, grant any
option for the purchase of, or enter into any hedging or similar transaction with
the same economic effect as a sale with respect to any common equity securities of
the Company or any securities convertible into or exchangeable or exercisable for
any common equity securities of the Company held by Purchaser (other than those
included in the registration) for a period specified by the representatives of the
underwriters of the common equity or equity-related securities not to exceed ten
days prior and 90 days following the effective date of any firm commitment
underwritten registered sale of common equity securities of the Company or any
securities convertible into or exchangeable or exercisable for any common equity
securities of the Company by the Company for the Company’s own account in which the
Company gave Purchaser an opportunity to participate in accordance with Section
4.9(a)(4) through (a)(6); provided that all executive officers and directors of the
Company enter into similar agreements and only if such persons remain subject
thereto (and are not released from such agreement) for such period; provided that
nothing herein will prevent Purchaser from making any distribution of Registrable
Securities to the partners or shareholders thereof or a transfer to an Affiliate
that is otherwise in compliance with

43

 

applicable securities laws, so long as such distributees or transferees agree
to be bound by the restrictions set forth in this Section 4.9(i);

     (2) to execute and deliver such other agreements as may be reasonably
requested by the Company or the representatives of the underwriters which are
consistent with the foregoing obligation in Section 4.9(i)(1) or which are
necessary to give further effect thereto; and

     (3) if requested by the Company or the representative of the underwriters of
Common Stock (or other securities of the Company), Purchaser shall provide, within
ten days of such request, such information as may be required by the Company or
such representative in connection with the completion of any public offering of the
Company’s securities pursuant to a registration statement filed under the
Securities Act in which Purchaser participates;

provided, that clauses (1) and (2) of this Section 4.9(i) shall not apply to Purchaser or
any Holder that, together with its affiliates, is the Beneficial Owner of less than 5% of
the outstanding Common Stock.

     (j) With respect to any underwritten offering of Registrable Securities by Purchaser
or other Holders pursuant to this Section 4.9, 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 Registration Statement (other than such registration or a
Special Registration) covering any of its equity securities, or any securities convertible
into or exchangeable or exercisable for such securities, during the period not to exceed
ten days prior and 90 days following the effective date of such offering, if requested by
the managing underwriter. “Special Registration” means the registration of (i)
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 (ii) 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 its direct or
indirect Subsidiaries or in connection with dividend reinvestment plans.

     (k) Rule 144 Reporting. With a view to making available to Purchaser 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:

     (1) 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 effective date of this Agreement;

     (2) file with the SEC, in a timely manner, all reports and other documents
required of the Company under the Exchange Act; and

44

 

     (3) so long as Purchaser or a Holder owns any Registrable Securities, furnish
to Purchaser 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 Purchaser
or Holder may reasonably request in availing itself of any rule or regulation of
the SEC allowing it to sell any such securities without registration.

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

     (1) “Holder” means Purchaser and any other holder of Registrable
Securities to whom the registration rights conferred by this Agreement have been
transferred in compliance with Section 4.9(h) hereof.

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

     (3) “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.

     (4) “Registrable Securities” means the Securities (and any shares of
capital stock or other equity interests issued or issuable to any Holder with
respect to such Securities by way of stock dividends or stock splits or in
connection with a combination of shares, recapitalization, merger or other
reorganization), provided that, once issued, such Securities will not be
Registrable Securities when (i) they are sold pursuant to an effective registration
statement under the Securities Act, (ii) they may be sold pursuant to Rule 144
without limitation thereunder on volume or manner of sale, (iii) they shall have
ceased to be outstanding or (iv) 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.

     (5) “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 4.9,

45

 

including, without limitation, 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 and the compensation of regular employees of the Company, which shall be
paid in any event by the Company.

     (6) “Rule 144”, “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.

     (7) “Scheduled Black-out Period” means the period from and including
the last day of a fiscal quarter of the Company to and including the business day
after the day on which the Company publicly releases its earnings for such fiscal
quarter, provided that the trading window applicable to the Company’s senior
management under the Company’s trading policies then in effect is not open any time
during such period.

     (8) “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).

     (m) At any time, any holder of Securities (including any Holder) may elect to forfeit
its rights set forth in this Section 4.9 from that date forward; provided, that a Holder
forfeiting such rights shall nonetheless (i) be obligated under Section 4.9(i)(1) with
respect to any Pending Underwritten Offering to the same extent that such Holder would have
been obligated if the holder had not withdrawn and (ii) be entitled to participate under
Section 4.9(a)(4) – (6) 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
4.9(f) with respect to any prior registration or Pending Underwritten Offering.
“Pending Underwritten Offering” means, with respect to any Holder forfeiting its
rights pursuant to this Section 4.9(m), (i) any registered sale described in Section
4.9(i)(1) that has an effective date prior to the date of such Holder’s forfeiture, and
(ii) any other underwritten offering of Registrable Securities (including an underwritten
offering pursuant to a Shelf Registration Statement) in which such Holder has advised the
Company of its intent to register its Registrable Securities either pursuant to Section
4.9(a)(2) or 4.9(a)(4) prior to the date of such Holder’s forfeiture.

46

 

     4.10 Certificate of Designations. In connection with the Closing, the Company shall
file the Preferred Stock Certificate of Designations for the Convertible Preferred Stock in the
form attached to this Agreement as Exhibit B in the State of Delaware, and such Preferred
Stock Certificate of Designations shall continue to be in full force and effect as of the Closing
Date.

     4.11 Reset.

     (a) If, from the date hereof until the earlier of the (i) Net Income Drop Away Date
and (ii) third anniversary of the Closing Date:

     (1) the Company issues or sells, or agrees to issue or sell, in one or more
transactions, more than an aggregate of $300,000,000 of Common Stock (or other
securities that are convertible into or exchangeable or exercisable for, or are
otherwise linked to, Common Stock) (excluding up to an aggregate of $25,000,000 of
Common Stock or other equity securities and/or options or other rights in respect
thereof to be offered to directors, employees or consultants of the Company or its
direct or indirect Subsidiaries pursuant to employee benefit plans, employment
agreements or other customary compensatory plans or arrangements) at a purchase (or
reference, implied, conversion, exchange or comparable) price (the “New
Issuance Price”) per share less than the Reference Purchase Price (a “Reset
Issuance”), or

     (2) there occurs any Fundamental Change in which the Underlying Security Price
(together with the New Issuance Price, the “Reset Price”) is less than the
Reference Purchase Price (a “Triggering Fundamental Change” and, together
with a Reset Issuance, a “Reset Event”).

then, on the earlier of (A) the second business day after the closing of any Reset Issuance and
(B) the date of the occurrence of a Triggering Fundamental Change (or, if later, on the Closing
Date, or, if later, on the second business day following the later of (x) the average price
calculation specified below in this Section 4.11 and (y) the stockholder approval specified below
in this Section 4.11, if and as applicable), the Company shall make a payment to Purchaser (the
“Reset Payment”) equal to the product of (i) an amount equal to the (z) Reference Purchase
Price minus the Reset Price, divided by (y) the Reference Purchase Price and (ii) the Purchase
Price (including (1) if the Warrant has been exercised by Purchaser prior to such date, the
aggregate exercise price paid by Purchaser for the Warrant shares and (2) if the Warrant has been
exchanged for Convertible Preferred Stock by Purchaser prior to such date, the value of the Warrant
as calculated pursuant to the terms of the Warrant), grossed up as required to compensate Purchaser
for any diminution in value in the Securities resulting from such Reset Payment; provided that the
Company may, at its option and as an alternative to making all or any portion of such Reset Payment
in cash, instead pay the Reset Payment due Purchaser by delivering to Purchaser shares of Common
Stock valued at the lower of the Market Price of a share of Common Stock as of (x) the last trading
day prior to the date

47

 

on which this payment occurs or (y) the first date of the announcement of the Reset Issuance or the
Preliminary Fundamental Change that resulted in a Triggering Fundamental Change, but solely to the
extent that any such issuance of shares of Common Stock would not result in (A) Purchaser owning or
being deemed for applicable regulatory purposes to own 25% or more of the voting securities of the
Company (or the surviving corporation resulting from such Triggering Change of Control), (B) unless
the Federal Reserve shall have issued a written determination, satisfactory to Purchaser in its
reasonable good faith judgment, that Purchaser does not exercise control under the BHC Act,
Purchaser owning or being deemed for applicable regulatory purposes to own 10% or more of the total
number of voting securities of the Company then outstanding (or the surviving corporation resulting
from such Triggering Change of Control) or (C) the Company failing to comply with applicable New
York Stock Exchange requirements or the requirement of any other Governmental Entity (provided
that, in the case of this clause (C), the Company shall, at its election, have a reasonable period
of time in which to seek any stockholder approval required to satisfy such requirements and the
Company’s payment obligation pursuant hereto shall be postponed until such time as such stockholder
approval shall have been obtained or denied). “Net Income Drop Away Date” means the second
anniversary of the Closing Date; provided, however, that the Net Income Drop Away Date will only
apply if the Company reports positive net income for its fiscal year ended December 31, 2009 in the
financial statements included in its Annual Report on Form 10-K for the fiscal year ending December
31, 2009, excluding the effect of (i) accounting changes resulting from changes, after the date
hereof, in GAAP or regulatory accounting principles generally applicable to banks, savings
associations or their holding companies, (ii) goodwill writedowns, (iii) income from direct or
indirect dispositions of any of its equity interest in Visa Inc., (iv) income from dispositions of
any of the assets of or interests in the Company’s leasing business owned as of the date of this
Agreement (including its commercial equipment and automobile leasing businesses, but excluding (x)
such income of up to $15 million from periodic sales of less than all or substantially all of the
assets of such leasing business or (y) such income from periodic sales of less than an aggregate of
50% of the Company’s interests held as of the date hereof in such leasing business), and (v) losses
on loan sales of up to $100,000,000 (in the aggregate), in each case calculated in accordance with
GAAP applied on a consistent basis during such period.

     (b) For purposes of this Section 4.11:

     (1) “Fundamental Change” has the meaning set forth in the Warrant Certificate.

     (2) “Market Price” has the meaning set forth in the Warrant Certificate.

     (3) “Preliminary Fundamental Change” has the meaning set forth in the Warrant
Certificate.

     (4) “Underlying Security Price” has the meaning set forth in Exhibit A
to the Warrant Certificate.

48

 

     (5) “Reference Purchase Price” shall, solely for purposes of this Section 4.11
be appropriately adjusted to take into account any split, subdivision, combination,
consolidation, recapitalization or similar event with respect to the Common Stock.

     (c) Any such Reset Payment shall be treated by the parties as an adjustment to the
Purchase Price for the shares of Common Stock, Convertible Preferred Stock and/or Warrant,
as relevant.

ARTICLE V

TERMINATION

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

     (a) by mutual written agreement of the Company and Purchaser;

     (b) by the Company or Purchaser, upon written notice to the other parties, in the
event that the Closing does not occur on or before December 31, 2008; provided, however,
that the right to terminate this Agreement pursuant to this Section 5.1(b) shall not be
available to any party whose failure to fulfill any obligation under this Agreement shall
have been the cause of, or shall have resulted in, the failure of the Closing to occur on
or prior to such date;

     (c) by the Company or Purchaser, upon written notice to the other parties, in the
event that any Governmental Entity shall have issued any order, decree or injunction or
taken any other action restraining, enjoining or prohibiting any of the transactions
contemplated by this Agreement, and such order, decree, injunction or other action shall
have become final and nonappealable; or

     (d) by Purchaser, if Purchaser or any of its Affiliates receives written notice from
or is otherwise advised by the Federal Reserve that the Federal Reserve will not grant (or
intends to rescind or revoke if previously granted) any of the written confirmations or
determinations described in Section 1.2(c)(2)(C).

     5.2 Effects of Termination. In the event of any termination of this Agreement as
provided in Section 5.1, this Agreement (other than Section 3.2(b) and Article VI, which shall
remain in full force and effect) shall forthwith become wholly void and of no further force and
effect; provided that nothing herein shall relieve any party from liability for intentional breach
of this Agreement.

ARTICLE VI

MISCELLANEOUS

     6.1 Survival. Each of the representations and warranties set forth in this Agreement
shall survive the Closing under this Agreement but only for a period of two years following the
Closing Date (or until final resolution of any claim or action arising

49

 

from the breach of any such representation and warranty, if notice of such breach was provided
prior to the end of such period) and thereafter shall expire and have no further force and effect,
including in respect of Section 4.7. Except as otherwise provided herein, all covenants and
agreements contained herein, other than those which by their terms are to be performed in whole or
in part after the Closing Date, shall terminate as of the Closing Date.

     6.2 Expenses. Each of the parties will bear and pay all other costs and expenses
incurred by it or on its behalf in connection with the transactions contemplated pursuant to this
Agreement; except that the Company shall bear and upon Corsair Capital, LLC’s (“Corsair”)
request, reimburse Corsair for all of its reasonable out-of-pocket expenses incurred in connection
with due diligence, the negotiation and preparation of this Agreement and undertaking of the
transactions contemplated pursuant to this Agreement (including fees and expenses of attorneys and
accounting and financial advisers and HSR Act filing fees incurred by or on behalf of Corsair or
its Affiliates in connection with the transactions contemplated pursuant to this Agreement), up to
a maximum amount of $3,000,000.

     6.3 Amendment; Waiver. No amendment or waiver of any provision of this Agreement will
be effective with respect to any party unless made in writing and signed by an officer of a duly
authorized representative of such party. 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 thereof or the exercise of any other right,
power or privilege. The conditions to each party’s obligation to consummate the Closing 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 of any party to this Agreement, as the case may be, 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. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided
by law.  

     6.4 Counterparts and Facsimile. For the convenience of the parties hereto, this
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 Agreement may be delivered by facsimile and such
facsimiles will be deemed as sufficient as if actual signature pages had been delivered.

     6.5 Governing Law. This Agreement will be governed by and construed in accordance
with the laws of the State of New York applicable to contracts made and to be performed entirely
within such State (except to the extent that mandatory provisions of Delaware law are applicable).
The parties hereby irrevocably and unconditionally consent to submit to the exclusive jurisdiction
of the state and federal courts located in the Borough of Manhattan, State of New York for any
actions, suits or proceedings arising out of or relating to this Agreement and the transactions
contemplated hereby.

50

 

     6.6 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY
AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY.

     6.7 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 telecopy or facsimile, upon confirmation of receipt,
(b) on the first business day following the date of dispatch if delivered by a recognized next-day
courier service, or (c) on the third business day following the date of mailing if delivered by
registered or certified mail, return receipt requested, postage prepaid. All notices hereunder
shall be delivered as set forth below, or pursuant to such other instructions as may be designated
in writing by the party to receive such notice.

	 	(a)	 	If to Purchaser to it at:
	 
	 	 	 	c/o Corsair Capital LLC

717 Fifth Avenue

24th Floor

New York, New York 10022

Attn: Richard E. Thornburgh

          D.T. Ignacio Jayanki

Telephone: (212) 224-9400

Fax: (212) 224-9451
	 
	 	 	 	with a copy to (which copy alone shall not constitute notice):
	 
	 	 	 	Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, New York 10017

Attn: Lee Meyerson

          Ellen R. Patterson

Telephone: (212) 455-2000

Fax: (212) 455-2502
	 
	 	(b)	 	If to the Company:
	 
	 	 	 	National City Corporation

1900 East Ninth Street

Cleveland, OH 44114

Law Department

Locator number 01-2174

Attn: General Counsel

Telephone: (216) 222-2978

Fax: (216) 222-2336
	 
	 	 	 	with a copy to (which copy alone shall not constitute notice):

51

 

Sullivan & Cromwell LLP

125 Broad Street

New York, New York 10004

Attn: H. Rodgin Cohen

          Donald J. Toumey

Telephone: (212) 558-4000

Fax: (212) 558-3588

and

Jones Day

North Point

901 Lakeside Avenue

Cleveland, Ohio 44114

Attn: Lyle G. Ganske

         Christopher J. Hewitt

Telephone: (216) 586-3939

Fax: (216) 579-0212

     6.8 Entire Agreement, Etc. (a) This Agreement (including the Exhibits, Schedules and
Disclosure Schedules hereto) constitutes the entire agreement, and supersedes all other prior
agreements, understandings, representations and warranties, both written and oral, among the
parties, with respect to the subject matter hereof; and (b) this Agreement will not be assignable
by operation of law or otherwise (any attempted assignment in contravention hereof being null and
void); provided that Purchaser may assign its rights and obligations under this Agreement (i) to
any Affiliate, but only if the transferee agrees in writing for the benefit of the Company (with a
copy thereof to be furnished to the Company) to be bound by the terms of this Agreement (any such
transferee shall be included in the term “Purchaser”); provided, further, that no such
assignment shall relieve Purchaser of its obligations hereunder and (ii) as provided in Section
4.9.

     6.9 Interpretation; Other Definitions. Wherever required by the context of this
Agreement, the singular shall include the plural and vice versa, and the masculine gender shall
include the feminine and neuter genders and vice versa, and references to any agreement, document
or instrument shall be deemed to refer to such agreement, document or instrument as amended,
supplemented or modified from time to time. All article, section, paragraph or clause references
not attributed to a particular document shall be references to such parts of this Agreement, and
all exhibit, annex and schedule references not attributed to a particular document shall be
references to such exhibits, annexes and schedules to this Agreement. In addition, the following
terms are ascribed the following meanings:

     (a) 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 

52

 

with”) when used with respect to any person, means the possession, directly or
indirectly, of the power to cause the direction of management or policies of such person,
whether through the ownership of voting securities by contract or otherwise;

     (b) the word “or” is not exclusive;

     (c) the words “including,” “includes,” “included” and
“include” are deemed to be followed by the words “without limitation”; and

     (d) the terms “herein,” “hereof” and “hereunder” and other
words of similar import refer to this Agreement as a whole and not to any particular
section, paragraph or subdivision;

     (e) “business day” means any day except Saturday, Sunday and any day which
shall be a legal holiday or a day on which banking institutions in the State of New York or
in the State of Ohio generally are authorized or required by law or other governmental
action to close;

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

     (g) to the “knowledge of the Company” or “Company’s knowledge” means
the actual knowledge after 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.

     6.10 Captions. The article, section, paragraph and clause captions herein are for
convenience of reference only, do not constitute part of this Agreement and will not be deemed to
limit or otherwise affect any of the provisions hereof.

     6.11 Severability. If any provision of this Agreement or the application thereof to
any person (including the officers and directors the parties hereto) 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.

     6.12 No Third Party Beneficiaries. Nothing contained in this Agreement, expressed or
implied, is intended to confer upon any person other than the parties hereto, any benefit right or
remedies, except that the provisions of Sections 4.7 and 4.9 shall inure to the benefit of the
persons referred to in that Section.

53

 

     6.13 Time of Essence. Time is of the essence in the performance of each and every
term of this Agreement.

     6.14 Certain Adjustments. If the representations and warranties set forth in
Section 2.2(b) shall not be true and correct as of the Closing Date, the number of shares of
Convertible Preferred Stock and the number of shares of Common Stock subject to the Warrant (and
the exercise price of such Warrant) shall be, at Purchaser’s option, proportionately adjusted to
provide Purchaser the same economic effect as contemplated by this Agreement in the absence of such
failure to be true and correct.

     6.15 Public Announcements. Subject to each party’s disclosure obligations imposed by
law or regulation or the rules of any stock exchange upon which its securities are listed, each of
the parties hereto will cooperate with each other in the development and distribution of all news
releases and other public information disclosures with respect to this Agreement and any of the
transactions contemplated by this Agreement, and neither the Company nor Purchaser will make any
such news release or public disclosure without first consulting with the other, and, in each case,
also receiving the other’s consent (which shall not be unreasonably withheld or delayed) and each
party shall coordinate with the party whose consent is required with respect to any such news
release or public disclosure.

     6.16 Specific Performance. The parties agree that irreparable damage would occur in
the event that any of the provisions of this Agreement were not performed in accordance with their
specific terms. It is accordingly agreed that the parties shall be entitled to seek specific
performance of the terms hereof, this being in addition to any other remedies to which they are
entitled at law or equity.

* * *

54

 

     IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized
officers of the parties hereto as of the date first herein above written.

	 	 	 	 	 
	 	NATIONAL CITY CORPORATION

 	 
	 	By: 	/s/
Thomas A. Richlovsky	 
	 	 	Name:	Thomas A. Richlovsky	 
	 	 	Title:	Treasurer and Senior Vice President	 
	 
	 	CORSAIR NC CO-INVEST, L.P.

 	 
	 	By:  	/s/
D.T. Ignacio Jayanti	 
	 	 	Name:  	D.T. Ignacio Jayanti	 
	 	 	Title:  	Managing Member	 
	 

[Signature Page to Investment Agreement]

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