Document:

Exhibit 4.2

 

WARRANT TO
PURCHASE COMMON STOCK

 

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

 

WARRANT

to purchase

364,078

Shares of Common Stock

 

of VIST
FINANCIAL CORP.

 

Issue Date:  December 19, 2008

 

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

 

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

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Exercise Price” means the amount set forth in Item 2 of
Schedule A hereto. “Expiration Time” has the meaning set forth in Section 3.

 

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

 

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

 

2

 

“Governmental Entities” has the meaning ascribed to it in the
Purchase Agreement. “Initial Number” has the meaning set forth in Section 13(B).

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

4

 

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

 

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

 

“Warrant-holder”
has the meaning set forth in Section 2.

 

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

 

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

 

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

 

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

 

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

 

5

 

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

 

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

 

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

 

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

 

6

 

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

 

8.                                       Transfer/Assignment.

 

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

 

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

 

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

 

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

 

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

 

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

 

7

 

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

 

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

 

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

 

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

 

8

 

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

 

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

 

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

 

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

 

9

 

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

 

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

 

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

 

10

 

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

 

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

 

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

 

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

 

11

 

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

 

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

 

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

 

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

 

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

 

12

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

13

 

all shares of
Common Stock then outstanding and all shares of Common Stock then issuable upon
the exercise of all outstanding options, warrants, conversion and other rights,
would exceed the total number of shares of Common Stock then authorized by its
Charter.

 

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

 

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

 

[Remainder
of page intentionally left blank]

 

14

 

[Form of
Notice of Exercise]

	
   

  	
  Date:

  	
   

  	
   

  

 

TO:                            VIST
Financial Corp.

 

RE:                              Election
to Purchase Common Stock

 

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

 

	
  Number of Shares
  of Common Stock

  	
   

  	
   

  

 

	
  Method of
  Payment of Exercise Price (note if cashless exercise pursuant to
  Section 3(i) of the Warrant or cash exercise pursuant to 

  
	
  Section 3(ii) of
  the Warrant, with consent of the Company and the Warrantholder)

  	
   

  	
   

  

 

	
  Aggregate
  Exercise Price:

  	
   

  	
   

  

 

	
   

  	
  Holder:

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

15

 

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

 

Dated:  December 19, 2008

 

	
   

  	
  COMPANY: VIST FINANCIAL
  CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert D.
  Davis

  
	
   

  	
   

  	
  Name:

  	
  Robert D. Davis

  
	
   

  	
   

  	
  Title: 

  	
  President and Chief
  Executive

  
	
   

  	
   

  	
   

  	
  Officer

  

 

 

	
   

  	
  Attest:

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Edward C. Barrett

  
	
   

  	
   

  	
  Name:

  	
  Edward C. Barrett

  
	
   

  	
   

  	
  Title: 

  	
  Executive Vice
  President and

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  

 

[Signature Page to Warrant]

 

16

 

SCHEDULE
A

 

Item 1

Name:  VIST Financial
Corp.

Corporate or other organizational form: 
Corporation

Jurisdiction of organization: 
Commonwealth of Pennsylvania

 

Item 2 

Exercise Price:  $10.30

 

Item 3

Issue Date:  December 19, 2008

 

Item 4 

Amount of last dividend declared prior to the Issue Date: $0.10

 

Item 5 

Date of Letter Agreement between the Company and the United States Department
of the Treasury:  December 19, 2008

 

Item 6 

Number of shares of Common Stock: 
364,078

 

Item 7 

Company’s address:

 

VIST Financial Corp.

1240 Broadcasting Road

Wyomissing, Pennsylvania 19610-0219

 

Item 8 

Notice information:

 

If to the Company:

 

VIST Financial
Corp.

1240 Broadcasting Road

Wyomissing, Pennsylvania 19610-0219

Attention:  Robert D. Davis, President and CEO

Facsimile:  (610) 603-2082

 

with a copy to:

 

Stevens &
Lee

111 North Sixth Street

Reading, Pennsylvania 19603

Attention:  David W. Swartz, Esquire

Facsimile:  (610) 988-0815

 

 

If to the Warrantholder:

 

United States
Department of the Treasury

1500
Pennsylvania Avenue, NW, Room 2312

Washington,
D.C. 20220

Attention:  Assistant General Counsel (Banking and Finance)

Facsimile:  (202) 622-1974

 

18Exhibit 4.3

 

AMENDMENT TO AMENDED AND RESTATED RIGHTS AGREEMENT

 

This
AMENDMENT TO AMENDED AND RESTATED RIGHTS AGREEMENT, dated as of December 17,
2008 (the “Amendment”), is by and between VIST
FINANCIAL CORP., a Pennsylvania corporation (the “Company”), and
AMERICAN STOCK TRANSFER & TRUST COMPANY, a New York corporation (the “Rights
Agent”).

 

WITNESSETH

 

WHEREAS,
the Company and Rights Agent have heretofore entered into the Amended and
Restated Rights Agreement, dated as of March 3, 2008 (the “Rights
Agreement”);

 

WHEREAS,
no Distribution Date (as defined in the Rights Agreement) has occurred;

 

WHEREAS,
the Board of Directors of the Company has adopted, in accordance with Section 27
of the Rights Agreement, a resolution approving this Amendment and directing
the appropriate officers of the Company to take all appropriate steps to
execute and put into effect this Amendment, and an appropriate officer of the
Company has provided a certificate to the Rights Agent as provided for in such Section 27.

 

NOW,
THEREFORE, in consideration of the premises and covenants set forth in the
Rights Agreement and this Amendment, the parties hereby agree as follows:

 

1.               Certain Definitions.  Sections 1(a) and 1(b) of the
Rights Agreement are hereby amended and restated to read in their entirety as
follows:

 

(a)  “Acquiring Person”
shall mean any Person who or which, together with all Affiliates and Associates
of such Person, shall be the Beneficial Owner of (i) 15% or more of the
shares of Common Stock or (ii) Voting Securities that in the aggregate
represent 15% or more of the Total Voting Power, but shall not include (x) the
Company, any Subsidiary of the Company, any employee stock option plan or other
employee benefit plan of the Company or of any Subsidiary of the Company, or
any Person or entity organized, appointed, or established by the Company for or
pursuant to the terms of any such plan, (y) the United States Department
of the Treasury (the “Investor”) and be inapplicable to a certain Letter
Agreement, dated December 19, 2008 (the “Purchase Agreement”), between the
Company and the Investor and a warrant (the “Warrant”) to purchase
364,078 shares of Common Stock issued to the Investor and the consummation
of the transactions contemplated thereby, including the exercise of the Warrant
by the Investor in accordance with its terms.

 

(b)  “Adverse Person”
shall mean any Person declared to be an Adverse Person by the Board of
Directors upon a determination that the criteria set forth in Section 11(a)(ii)(B) apply
to such Person; provided, however, that the term “Adverse Person”
shall not include the Investor and be inapplicable to the Purchase Agreement
and the Warrant and the consummation of the transactions contemplated thereby,
including the exercise of the Warrant by the Investor in accordance with its
terms.

 

2.               Exhibits.  Exhibit B of the Rights Agreement is
hereby amended and restated to read in its entirety as attached hereto.

 

1

 

3.               Rights Agreement.  On or after the date hereof, each reference
in the Rights Agreement (including the Exhibits thereto) to “This Agreement,” “hereunder,”
“herein” or words of like import shall mean and be a reference to the Rights
Agreement as amended hereby and all Exhibits thereto shall be deemed to be
amended to reflect the amendments made hereby.

 

4.               Effective Date.  This Amendment shall be effective as of the
date of its execution and, except as set forth herein, the Rights Agreement
shall remain in full force and effect and shall be otherwise unaffected hereby.

 

5.               Capitalized Terms.  Capitalized terms which are used but not
defined herein shall have the meaning ascribed to such terms in the Rights
Agreement.

 

6.               Enforceability.  If any term, provision, covenant, or
restriction of this Amendment is held by a court of competent jurisdiction or
other authority to be invalid, void, or unenforceable, the remainder of the
terms, provisions, covenants, and restrictions of this Amendment shall remain
in full force and effect and shall in no way be affected, impaired, or
invalidated.

 

7.               Governing Law.  This Amendment shall be deemed to be a
contract made under the laws of the Commonwealth of Pennsylvania and for all
purposes shall be governed by and construed in accordance with the laws of the
Commonwealth applicable to contracts made and to be performed entirely within
the Commonwealth; provided, however, that all provisions regarding the rights,
duties and obligations of the Rights Agent shall 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.

 

2

 

8.               Counterparts.  This Amendment may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.

 

	
   

  	
  VIST
  FINANCIAL CORP

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Robert D. Davis

  
	
   

  	
  Robert D. Davis

  
	
   

  	
  President and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
  Attest:

  	
  /s/
  Jenette L. Eck

  
	
   

  	
   Jenette L. Eck

  
	
   

  	
   Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AMERICAN STOCK
  TRANSFER & TRUST

  COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Herbert J. Lemmur

  
	
   

  	
  Herbert J. Lemmur

  
	
   

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
  Attest:

  	
  /s/ Susan Silber

  
	
   

  	
   Susan Silber

  
	
   

  	
   Assistant Secretary

  
					

 

3

 

Exhibit B

 

SUMMARY OF RIGHTS TO PURCHASE

COMMON STOCK

 

On September 19, 2001, the Board of Directors of VIST Financial
Corp. (formerly known as Leesport Financial Corp. and First Leesport Bancorp, Inc.)
(the “Company”) declared a dividend distribution of one right (a “Right”) for
each outstanding share of the Company’s common stock, par value $5.00 per share
(the “Common Stock”), to shareholders of record at the close of business on October 10,
2001.  The Board of Directors amended the
terms and conditions of the Rights as of March 3, 2008 and December 17,
2008.  Each Right entitles the registered
holder to purchase from the Company one share of Common Stock, at a purchase
price of $70.00, subject to adjustment. 
The description and terms of the Rights are set forth in the Amended and
Restated Rights Agreement, dated as of March 3, 2008, as amended December 17,
2008 (collectively, the “Rights Agreement”) between the Company and American
Stock Transfer & Trust Company, as Rights Agent.

 

Initially, the Rights will be evidenced by Common Stock certificates
representing shares then outstanding, and no separate Rights certificates will
be distributed.  The Rights will separate
from the Common Stock and be distributed (the “Distribution Date”) upon the
earlier of (i) 10 business days following a public announcement that a
person or group of affiliated or associated persons (an “Acquiring Person”) has
acquired 15% or more of the outstanding shares of Common Stock or voting
securities representing 15% or more of the total voting power of the Company; (ii) 10
business days (or such later date as the Board of Directors shall determine)
following the commencement of a tender offer or exchange offer that would
result in a person or group acquiring 15% or more of such outstanding shares of
Common Stock or total voting power; or (iii) 10 business days following
the determination by the Board of Directors that, with respect to any person
who, alone or together with his affiliates or associates, has acquired 4.9% or
more of such outstanding shares of Common Stock or total voting power of the
Company, such beneficial ownership by such person is intended in the view of
the Board of Directors to cause the Company to take actions to provide
short-term financial gain to such person under circumstances not in the best
long-term interests of the Company and its other shareholders (any such person
referred to as an “Adverse Person”).

 

On December 17, 2008, the Board of Directors and the Rights Agent
amended the provisions of the Rights Agreement to provide that both the terms “Acquiring
Person” and “Adverse Person” shall not include the United States Department of
the Treasury (the “Investor”) and be inapplicable to a certain Letter
Agreement, dated December 19, 2008, between the Company and the Investor
and a warrant (the “Warrant”) to purchase 364,078 shares of Common
Stock issued to the Investor and the consummation of the transactions
contemplated thereby, including the exercise of the Warrant by the Investor in
accordance with its terms.

 

Until the Distribution Date, the Rights will be evidenced by the Common
Stock certificates and will be transferred with and only with such Common Stock
certificates, and the surrender for transfer of any certificate for Common
Stock outstanding will also constitute the transfer of the Rights associated
with the Common Stock represented by such certificate.  The Rights are not exercisable until the
Distribution Date and will expire at the close of business on September 19,
2011, unless earlier redeemed as described below.

 

B-1

 

After the Rights become exercisable, upon the occurrence of certain
events specified in the Rights Agreement, including the acquisition of the
Company in a merger transaction or a sale of 50% or more of the Company’s
assets or earning power, each holder of a Right will thereafter have the right
to receive upon exercise of the Right, Common Stock (or common stock of the
acquiring company depending on the type of transaction) having a market value
equal to twice the exercise price of the Right.  If the Rights become
exercisable, all Rights beneficially owned by an Acquiring Person or an Adverse
Person will be null and void.  Rights are
not exercisable under any circumstances until such time as the Rights are no
longer redeemable as described below.

 

For example, at an exercise price of $70.00 per Right, each Right not
owned by an Acquiring Person or an Adverse Person following an acquisition of
the Company in a merger transaction in which the Company is the legally
surviving entity would entitle its holder to purchase $140.00 worth of Common
Stock (based on the lowest closing price over the prior twelve months) for
$70.00.  Assuming that the lowest closing
price of the Common Stock during the prior twelve months was $17.50, the holder
of each valid Right would be entitled to purchase eight shares of Common Stock
for $70.00.

 

At any time until ten business days following the Stock Acquisition
Date, the Company may, by action of a majority of the Board of Directors,
redeem the Rights at a price of $0.001 per Right.  At any time prior to the date the Rights
would otherwise become nonredeemable, a majority of the Board of Directors may
extend the period for redemption.

 

Immediately upon the action of the Board of Directors ordering
redemption of the Rights, the Rights will terminate and the only right of the
holders of Rights will be to receive the $0.001 redemption price.  The Board of Directors may not redeem the
Rights following a determination that any person is an Adverse Person.

 

Copies of the Rights Agreement are available free of charge from the
Rights Agent.  This summary description
of the Rights does not purport to be complete and is qualified in its entirety
by reference to the Rights Agreement.

 

B-2

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