Document:

ex10-1.htm

     

    
      Exhibit
10.1

       

       

    

    UNITED
STATES DEPARTMENT OF THE TREASURY

    1500
PENNSYLVANIA AVENUE, NW

    WASHINGTON,
D.C. 20220

     

    Dear
Ladies and Gentlemen:

     

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

     

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supplemented or superseded by the terms set forth herein or in the Schedules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

     

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

     

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

     

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

     

    * *
*

     

     

    
      
        
           

        

        
          24

          
            

          

        

        
           

        

      

    

     

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

     

    
      
        
          
            	 
      	
                    UNITED
      STATES DEPARTMENT OF THE TREASURY

                  
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
                    By:

                  	
                    /Neel
      Kashkari/

                  
	 
      	 
      	
                    Name:

                  	
                    Neel
      Kashkari

                  
	 
      	 
      	
                    Title:

                  	
                    Interim
      Assistant Secretary

                  
	 
      	 
      	
                  	
                    For
      Financial Stability

                  
	 
      	 
      	
                     

                  	 
      
	 
      	
                    COMPANY:
      CITY NATIONAL BANCSHARES CORPORATION

                  
	 
      	 
      	
                     
      

                  
	 
      	
                    By:

                  	
                    /Edward
      R. Wright/

                  
	 
      	 
      	
                    Name:

                  	
                    Edward
      R. Wright

                  
	 
      	 
      	
                    Title:

                  	
                    Vice
      President and

                  
	 
      	 
      	
                     
      

                  	
                    Chief
      Executive Officer

                  
	
                    Date:
      April 10, 2009

                  	 
      	
                     
      

                  	 
      
	 
      	 
      	
                     
      

                  	 
      

          

        

      

    

     

    
      
        
           

        

        
          25

          
            

          

        

        
           

        

      

    

     

    EXHIBIT
A

    ADDITIONAL
TERMS AND CONDITIONS

     

    Company
Information:

     

    Name of
the Company: City National Bancshares Corporation

     

    Corporate
or other organizational form: corporation

     

    Jurisdiction
of Organization: New Jersey

     

    Appropriate
Federal Banking Agency: Federal Reserve

     

    Notice
Information: City National Bancshares Corporation

    900 Broad
Street

    Newark,
NJ 07102

    Attn:
Edward R. Wright, SVP and CFO 
Fax: 973.624.5754

    Phone:
973.624.0865

    E-mail:

     

    Terms
of the Purchase:

     

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

     

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

     

    Number of
Shares of Preferred Stock Purchased: 9,439

     

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

     

    Series of
Warrant Preferred Stock: n/a (CDFI Exemption)

     

    Number of
Warrant Shares: n/a

     

    Number of
Net Warrant Shares (after net settlement): n/a

     

    Exercise
Price of the Warrant: n/a

     

    Purchase
Price: $9,439,000

     

     

    
      
        
           

        

        
          26

          
            

          

        

        
           

        

      

    

     

    Closing:

     

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

     

    Time of
Closing: 9:00 a.m. (EDT)

     

    Date of
Closing: April 10, 2009

     

     

    
      	
              Wire
      Information for Closing:

            	
              ABA
      Number:

            
	 
      	
              Bank.

            
	 
      	
              Account
      Name:

            
	 
      	
              Number:

            
	 
      	
              Beneficiary:
      City National Bancshares Corporation

            
	 
      	 
      
	
              Contact
      for Confirmation of Wire Information:

            	
              City
      National Bancshares Corporation 900 Broad Street

            
	 
      	
              Newark,
      NJ 07102

            
	 
      	
              Attn:
      Edward R. Wright, SVP and CFO

            
	 
      	
              Fax:
      973.624.5754

            
	 
      	
              Phone:
      973.624.0865

            
	 
      	
              E-mail:

            

    

     

    
      
        
           

        

        
          27

          
            

          

        

        
           

        

      

    

     

    SCHEDULE
B

    CAPITALIZATION

     

    Capitalization
Date: March 31, 2009

     

    Common
Stock

     

    Par
value: $10 per share

     

    Total
Authorized: 400,000

     

    Outstanding:
131,330

     

    Subject
to warrants, options, convertible

    securities,
etc.: 16,317 upon conversion of Series E Preferred Stock

     

    Reserved
for benefit plans and other issuances: 0*

     

    Remaining
authorized but unissued: 252,353

     

    Shares
issued after Capitalization Date (other N/A

    than
pursuant to warrants, options,

    convertible
securities, etc. as set forth

    above):

     

    Preferred
Stock

     

    Par
value: None

     

    Total
Authorized: 100,000

     

    Outstanding
(by series): A= 8, B =0, C=108, D=3,280, E=49, F=7,000

     

    Reserved
for issuance: A=0, B=0, C=0, D-0, E-0, F-0

     

    Remaining
authorized but unissued: 89,555

     

    
      
        
          	
                  Holders
      of 5% or more of any class of capital
      stock

                	
                  Primary
      Address

                
	
                  Eugene
      Giscombe (8.02% at 3/31/08)

                	
                  900
      Broad St., Newark, NJ 07102

                
	
                  Louis
      E. Prezeau (17.6% at 3/31/08)

                	
                  900
      Broad St., Newark, NJ 07102

                
	
                  Lemar
      C. Whigham (7.3% at 3/31/08)

                	
                  900
      Broad St., Newark, NJ 07102

                
	
                  Carolyn
      M. Whigham (6.44% at 3/31/08)

                	
                  900
      Broad St., Newark, NJ 07102

                
	 
      	 
      

        

      

    

    *Louis
Prezeau's performance bonus may be paid in common stock, at his election, and
the Board may grant him additional shares of common stock, at their sole
discretion, after completion of his annual performance review. There are
sufficient available shares of common stock for these purposes without an
express reservation of common stock if such rights are exercised, or granted,
under Mr. Prezeau's current employment agreement.

     

    
      
        
           

        

        
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    SCHEDULE
C

     

     

     

    LITIGATION

     

     

     

    List any
exceptions to the representation and warranty in Section 2.2(1) of the
Securities Purchase Agreement — Standard Terms.

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    If none, please so indicate by checking the box: x

     

     

    
      
        
           

        

        
          29

          
            

          

        

        
           

        

      

    

     

    SCHEDULE
D

     

     

     

    COMPLIANCE
WITH LAWS

     

     

     

    List any
exceptions to the representation and warranty in the second sentence of Section
2.2(m) of the Securities Purchase Agreement — Standard Terms.

     

     

     

     

     

     

     

    If none, please so indicate by checking the box: x

     

     

     

     

     

     

     

    List any
exceptions to the representation and warranty in the last sentence of Section
2.2(m) of the Securities Purchase Agreement — Standard Terms.

     

     

     

     

     

     

     

     

     

     

     

    If none, please so indicate by checking the box: x

     

     

    
      
        
           

        

        
          30

          
            

          

        

        
           

        

      

    

     

    SCHEDULE
E

     

     

     

    REGULATORY
AGREEMENTS

     

     

     

    List any
exceptions to the representation and warranty in Section 2.2(s) of the
Securities Purchase Agreement — Standard Terms.

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    If none, please so indicate by checking the box: x

     

     

     

     

    
      
        
           

        

        
          31

          
            

          

        

        
           

        

      

    

     

    EXHIBIT
A

    SECURITIES
PURCHASE AGREEMENT

     

     

     

     

     

     

    
      
        
           

        

        
          32

          
            

          

        

        
           

        

      

    

     

    EXHIBIT
A

     

    (Non-Exchange-Traded
QFIs, excluding S Corps

     

    and
Mutual Organizations)

     

     

    
      

      

    

     

    SECURITIES
PURCHASE AGREEMENT

     

     

     

    
      

      

    

     

    STANDARD
TERMS

     

     

     

     

     

     

    
      
        
           

        

        
          33

          
            

          

        

        
           

        

      

    

     

    LIST OF
ANNEXES

     

     

    
      	
              ANNEX
      A:

            	
              FORM
      OF CERTIFICATE OF DESIGNATIONS FOR PREFERRED
  STOCK

            

    

     

    
      	
              ANNEX
      B:

            	
              FORM
      OF CERTIFICATE OF DESIGNATIONS FOR WARRANT PREFERRED
  STOCK

            

    

     

    
      	
              ANNEX
      C:

            	
              FORM
      OF WAIVER

            

    

     

    
      	
              ANNEX
      D:

            	
              FORM
      OF OPINION

            

    

     

    
      	
              ANNEX
      E:

            	
              FORM
      OF WARRANT

            

    

     

    
      
        
           

        

        
          34

          
            

          

        

        
           

        

      

    

     

    
      	
               
      

            	
              INDEX
      OF DEFINED TERMS

            

    

     

    
      	 
      	 
      	
              Location
      of

            
	
              Term

            	 
      	
              Definition

            
	
              Affiliate

            	 
      	
              5.7(b)

            
	
              Agreement

            	 
      	
              Recitals

            
	
              Appropriate
      Federal Banking Agency

            	 
      	
              2.2(s)

            
	
              Bank
      Holding Company

            	 
      	
              4.10

            
	
              Bankruptcy
      Exceptions

            	 
      	
              2.2(d)

            
	
              Benefit
      Plans

            	 
      	
              1.2(d)(iv)

            
	
              Board
      of Directors

            	 
      	
              2.2(f)

            
	
              Business
      Combination

            	 
      	
              5.8

            
	
              business
      day

            	 
      	
              1.3

            
	
              Capitalization
      Date

            	 
      	
              2.2(b)

            
	
              Certificates
      of Designations

            	 
      	
              1.2(d)(iii)

            
	
              Charter

            	 
      	
              1.2(d)(iii)

            
	
              Closing

            	 
      	
              1.2(a)

            
	
              Closing
      Date

            	 
      	
              1.2(a)

            
	
              Code

            	 
      	
              2.2(n)

            
	
              Common
      Stock

            	 
      	
              2.2(b)

            
	
              Company

            	 
      	
              Recitals

            
	
              Company
      Financial Statements

            	 
      	
              2.2(h)

            
	
              Company
      Material Adverse Effect

            	 
      	
              2.1(b)

            
	
              Company
      Reports

            	 
      	
              2.2(i)(i)

            
	
              Company
      Subsidiary; Company Subsidiaries

            	 
      	
              2.2(e)(ii)

            
	
              control;
      controlled by; under common control with

            	 
      	
              5.7(b)

            
	
              Controlled
      Group

            	 
      	
              2.2(n)

            
	
              CPP

            	 
      	
              Recitals

            
	
              Disclosure
      Schedule

            	 
      	
              2.1(a)

            
	
              EESA

            	 
      	
              1.2(d)(iv)

            
	
              ERISA

            	 
      	
              2.2(n)

            
	
              Exchange
      Act

            	 
      	
              4.4

            
	
              Federal
      Reserve

            	 
      	
              4.10

            
	
              GAAP

            	 
      	
              2.1(b)

            
	
              Governmental
      Entities

            	 
      	
              1.2(c)

            
	
              Holder

            	 
      	
              4.5(1)(i)

            
	
              Holders'
      Counsel

            	 
      	
              4.5
      (1) (ii)

            
	
              Indemnitee

            	 
      	
              4.
      5 (h) (i)

            
	
              Information

            	 
      	
              3.5(c)

            
	
              Investor

            	 
      	
              Recitals

            
	
              Junior
      Stock

            	 
      	
              4.7(f)

            
	
              knowledge
      of the Company; Company's knowledge

            	 
      	
              5.7(c)

            
	
              Letter
      Agreement

            	 
      	
              Recitals

            
	
              officers

            	 
      	
              5.7(c)

            
	
              Parity
      Stock

            	 
      	
              4.7(f)

            
	
              -iv-

            

    

     

     

     

    
      
        
           

        

        
          35

          
            

          

        

        
           

        

      

    

     

     

     

    
      	 
      	 
      	
              Location
      of

            
	
              Term

            	 
      	
              Definition

            
	
              Pending
      Underwritten Offering

            	 
      	
              4.5(m)

            
	
              Permitted
      Repurchases

            	 
      	
              4.7(c)

            
	
              Piggyback
      Registration

            	 
      	
              4.5(b)(iv)

            
	
              Plan

            	 
      	
              2.2(n)

            
	
              Preferred
      Shares

            	 
      	
              Recitals

            
	
              Preferred
      Stock

            	 
      	
              Recitals

            
	
              Previously
      Disclosed

            	 
      	
              2.1(c)

            
	
              Proprietary
      Rights

            	 
      	
              2.2(u)

            
	
              Purchase

            	 
      	
              Recitals

            
	
              Purchase
      Price

            	 
      	
              1.1

            
	
              Purchased
      Securities

            	 
      	
              Recitals

            
	
              register;
      registered; registration

            	 
      	
              4.5(1)(iii)

            
	
              Registrable
      Securities

            	 
      	
              4.5(1)(iv)

            
	
              Registration
      Expenses

            	 
      	
              4.5(1)(v)

            
	
              Regulatory
      Agreement

            	 
      	
              2.2(s)

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

            	 
      	
              4.5(1)(vi)

            
	
              Savings
      and Loan Holding Company

            	 
      	
              4.10

            
	
              Schedules

            	 
      	
              Recitals

            
	
              SEC

            	 
      	
              2.2(k)

            
	
              Securities
      Act

            	 
      	
              2.2(a)

            
	
              Selling
      Expenses

            	 
      	
              4.5(1)(vii)

            
	
              Senior
      Executive Officers

            	 
      	
              4.8

            
	
              Shelf
      Registration Statement

            	 
      	
              4.5(b)(ii)

            
	
              Signing
      Date

            	 
      	
              2.1(b)

            
	
              Special
      Registration

            	 
      	
              4.5(j)

            
	
              subsidiary

            	 
      	
              5.7(a)

            
	
              Tax;
      Taxes

            	 
      	
              2.2(o)

            
	
              Transfer

            	 
      	
              4.4

            
	
              Warrant

            	 
      	
              Recitals

            
	
              Warrant
      Preferred Stock

            	 
      	
              Recitals

            
	
              Warrant
      Shares

            	 
      	
              2.2(d)

            

    

     

     

    
      
        
           

        

        
          36

          
            

          

        

        
           

        

      

    

     

    SECURITIES
PURCHASE AGREEMENT — STANDARD TERMS

     

    Recitals:

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    Article
I

    Purchase;
Closing

     

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

     

     

    
      
        
           

        

        
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    1.2           Closing.

     

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

     

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

     

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

     

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

     

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

     

     

    
      
        
           

        

        
          38

          
            

          

        

        
           

        

      

    

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

     

    
      
        
           

        

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

     

    Article
II

    Representations
and Warranties

     

    2.1           Disclosure.

     

    (a)           On
or prior to the Signing Date, the Company delivered to the Investor a schedule
(“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.

     

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

     

     

    
      
        
           

        

        
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    (c)           “Previously
Disclosed” means information set forth on the 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.

     

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

     

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

     

    (b)           Capitalization.
The authorized capital stock of the Company, and the outstanding capital stock
of the Company (including securities convertible into, or exercisable or
exchangeable for, capital stock of the Company) as of the most recent fiscal
month-end preceding the Signing Date (the “Capitalization
Date”) is set forth on Schedule
B. The outstanding shares of capital stock of the Company have been duly
authorized and are validly issued and outstanding, fully paid and nonassessable,
and subject to no preemptive rights (and were not issued in violation of any
preemptive rights). As of the Signing Date, the Company does not have
outstanding any securities or other obligations providing the holder the right
to acquire its Common Stock (“Common
Stock”) that is not reserved for issuance as specified on Schedule
B, and the Company has not made any other commitment to authorize, issue
or sell any Common Stock. Since the Capitalization Date, the Company has not
issued any shares of Common Stock, other than (i) shares issued upon the
exercise of stock options or delivered under other equity-based awards or other
convertible securities or warrants which were issued and outstanding on the
Capitalization Date and disclosed on Schedule
B and (ii) shares disclosed on Schedule
B. Each holder of 5% or more of any class of capital stock of the Company
and such holder's primary address are set forth on Schedule
B.

     

     

    
      
        
           

        

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

     

    (d)           The
Warrant and Warrant Shares. The Warrant has been duly authorized and,
when executed and delivered as contemplated hereby, will constitute a valid and
legally binding obligation of the Company enforceable against the Company in
accordance with its terms, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and general equitable principles,
regardless of whether such enforceability is considered in a proceeding at law
or in equity (“Bankruptcy
Exceptions”). The shares of Warrant Preferred Stock issuable upon
exercise of the Warrant (the “Warrant
Shares”) have been duly authorized and reserved for issuance upon
exercise of the Warrant and when so issued in accordance with the terms of the
Warrant will be validly issued, fully paid and non-assessable, and will rank
part
passu with or senior to all other series or classes of Preferred Stock,
whether or not issued or outstanding, with respect to the payment of dividends
and the distribution of assets in the event of any dissolution, liquidation or
winding up of the Company.

     

    (e)           Authorization,
Enforceability.

     

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

     

    (ii)           The
execution, delivery and performance by the Company of this Agreement and the
Warrant and the consummation of the transactions contemplated hereby and thereby
and compliance by the Company with the provisions hereof and thereof, will not
(A) violate, conflict with, or result in a breach of any provision of, or
constitute a default (or an event which, with notice or lapse of time or both,
would constitute a default) under, or result in the termination of, or
accelerate the performance required by, or result in a right of termination or
acceleration of, or result in the creation of, any lien, security interest,
charge or encumbrance upon any of the properties or assets of the Company or any
subsidiary of the Company (each a “Company
Subsidiary” and, collectively, the “Company
Subsidiaries”) under any of the terms, conditions or provisions of (i)
its organizational documents or (ii) any note, bond, mortgage, indenture, deed
of trust, license, lease, agreement or other instrument or obligation to which
the Company or any Company Subsidiary is a party or by which it or any Company
Subsidiary may be bound, or to which the Company or any Company Subsidiary or
any of the properties or assets of the Company or any Company Subsidiary may be
subject, or

     

     

    
      
        
           

        

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

     

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

     

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

     

    (g)           No
Company Material Adverse Effect. Since the last day of the last completed
fiscal period for which financial statements are included in the Company
Financial Statements (as defined below), no fact, circumstance, event, change,
occurrence, condition or development has occurred that, individually or in the
aggregate, has had or would reasonably be expected to have a Company Material
Adverse Effect.

     

    (h)           Company
Financial Statements. The Company has Previously Disclosed each of the
consolidated financial statements of the Company and its consolidated
subsidiaries for each of the last three completed fiscal years of the Company
(which shall be audited to the extent audited financial statements are available
prior to the Signing Date) and each completed quarterly period since the last
completed fiscal year (collectively the “Company
Financial Statements”). The Company Financial Statements present fairly
in all material respects the consolidated financial position of the Company and
its consolidated subsidiaries as of the dates indicated therein and the
consolidated results of their operations for the periods specified therein; and
except as stated therein, such financial statements (A) were prepared in
conformity with GAAP applied on a consistent basis (except as may be noted
therein) and (B) have been prepared from, and are in accordance with, the books
and records of the Company and the Company Subsidiaries.

     

     

    
      
        
           

        

        
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    (i)           Reports.

     

    (i)           Since
December 31, 2006, the Company and each Company Subsidiary has filed all
reports, registrations, documents, filings, statements and submissions, together
with any amendments thereto, that it was required to file with any Governmental
Entity (the foregoing, collectively, the “Company
Reports”) and has paid all fees and assessments due and payable in
connection therewith, except, in each case, as would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect. As
of their respective dates of filing, the Company Reports complied in all
material respects with all statutes and applicable rules and regulations of the
applicable Governmental Entities.

     

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

     

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

     

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

     

     

    
      
        
           

        

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

     

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

     

    (n)           Employee
Benefit Matters. Except as would not reasonably be expected to have,
either individually or in the aggregate, a Company Material Adverse Effect: (A)
each “employee benefit plan” (within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”))
providing benefits to any current or former employee, officer or director
of the Company or any member of its “Controlled
Group” (defined as any organization which is a member of a controlled
group of corporations within the meaning of Section 414 of the Internal Revenue
Code of 1986, as amended (the “Code”))
that is sponsored, maintained or contributed to by the Company or any
member of its Controlled Group and for which the Company or any member of its
Controlled Group would have any liability, whether actual or contingent (each, a
“Plan”)
has been maintained in compliance with its terms and with the
requirements of all applicable statutes, rules and regulations, including ERISA
and the Code; (B) with respect to each Plan subject to Title IV of ERISA
(including, for purposes of this clause (B), any plan subject to Title IV of
ERISA that the Company or any member of its Controlled Group previously
maintained or contributed to in the six years prior to the Signing
Date),

     

     

    
      
        
           

        

        
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    (1) no
“reportable event” (within the meaning of Section 4043(c) of ERISA), other than
a reportable event for which the notice period referred to in Section 4043(c) of
ERISA has been waived, has occurred in the three years prior to the Signing Date
or is reasonably expected to occur, (2) no “accumulated funding deficiency”
(within the meaning of Section 302 of ERISA or Section 412 of the Code), whether
or not waived, has occurred in the three years prior to the Signing Date or is
reasonably expected to occur, (3) the fair market value of the assets under each
Plan exceeds the present value of all benefits accrued under such Plan
(determined based on the assumptions used to fund such Plan) and (4) neither the
Company nor any member of its Controlled Group has incurred in the six years
prior to the Signing Date, or reasonably expects to incur, any liability under
Title IV of ERISA (other than contributions to the Plan or premiums to the PBGC
in the ordinary course and without default) in respect of a Plan (including any
Plan that is a “multiemployer plan”, within the meaning of Section 4001(c)(3) of
ERISA); and (C) each Plan that is intended to be qualified under Section 401(a)
of the Code has received a favorable determination letter from the Internal
Revenue Service with respect to its qualified status that has not been revoked,
or such a determination letter has been timely applied for but not received by
the Signing Date, and nothing has occurred, whether by action or by failure to
act, which could reasonably be expected to cause the loss, revocation or denial
of such qualified status or favorable determination letter.

     

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

     

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

     

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

     

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

     

     

    
      
        
           

        

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

     

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

     

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

     

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

     

     

    
      
        
           

        

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

     

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

     

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

     

    Article
III

    Covenants

     

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

     

     

    
      
        
           

        

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

     

    3.3           Sufficiency
of Authorized Warrant Preferred Stock; Exchange Listing.

     

    (a)           During
the period from the Closing Date until the date on which the Warrant has been
fully exercised, the Company shall at all times have reserved for issuance, free
of preemptive or similar rights, a sufficient number of authorized and unissued
Warrant Shares to effectuate such exercise.

     

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

     

    3.4           Certain
Notifications Until Closing. From the Signing Date until the Closing, the
Company shall promptly notify the Investor of (i) any fact, event or
circumstance of which it is aware and which would reasonably be expected to
cause any representation or warranty of the Company contained in this Agreement
to be untrue or inaccurate in any material respect or to cause any covenant or
agreement of the Company contained in this Agreement not to be complied with or
satisfied in any material respect and (ii) except as Previously Disclosed, any
fact, circumstance, event, change, occurrence, condition or development of which
the Company is aware and which, individually or in the aggregate, has had or
would reasonably be expected to have a Company Material Adverse Effect; provided,
however, that delivery of any notice pursuant to this Section 3.4 shall
not limit or affect any rights of or remedies available to the Investor; provided,
further, that a failure to comply with this Section 3 4 shall not
constitute a breach of this Agreement or the failure of any condition set forth
in Section 1.2 to be satisfied unless the underlying Company Material Adverse
Effect or material breach would independently result in the failure of a
condition set forth in Section 1.2 to be satisfied.

     

    3.5           Access,
Information and Confidentiality.

     

    (a)           From
the Signing Date until the date when the Investor holds an amount of Preferred
Shares having an aggregate liquidation value of less than 10% of the Purchase
Price, the Company will permit the Investor and its agents, consultants,
contractors and advisors (x) acting through the Appropriate Federal Banking
Agency, or otherwise to the extent necessary to evaluate, manage, or transfer
its investment in the Company, to examine the corporate books and make copies
thereof and to discuss the affairs, finances and accounts of the Company and the
Company Subsidiaries with the principal officers of the Company, all upon
reasonable notice and at such reasonable times and as often as the Investor may
reasonably request and (y) to review any information material to the Investor's
investment in the Company provided by the Company to its Appropriate Federal
Banking Agency. Any investigation pursuant to this Section 3.5 shall be
conducted during normal business hours and in such manner as not to interfere
unreasonably with the conduct of the business of the Company, and nothing herein
shall require the Company or any Company Subsidiary to disclose any information
to the Investor to the extent (i)

     

     

    
      
        
           

        

        
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    prohibited
by applicable law or regulation, or (ii) that such disclosure would reasonably
be expected to cause a violation of any agreement to which the Company or any
Company Subsidiary is a party or would cause a risk of a loss of privilege to
the Company or any Company Subsidiary (provided
that the Company shall use commercially reasonable efforts to make
appropriate substitute disclosure arrangements under circumstances where the
restrictions in this clause (ii) apply).

     

    (b)           From
the Signing Date until the date on which all of the Preferred Shares and Warrant
Shares have been redeemed in whole, the Company will deliver, or will cause to
be delivered, to the Investor:

     

    (i)           as
soon as available after the end of each fiscal year of the Company, and in any
event within 90 days thereafter, a consolidated balance sheet of the Company as
of the end of such fiscal year, and consolidated statements of income, retained
earnings and cash flows of the Company for such year, in each case prepared in
accordance with GAAP and setting forth in each case in comparative form the
figures for the previous fiscal year of the Company, and which shall be audited
to the extent audited financial statements are available; and

     

    (ii)           as
soon as available after the end of the first, second and third quarterly periods
in each fiscal year of the Company, a copy of any quarterly reports provided to
other stockholders of the Company or Company management.

     

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

     

    (d)           The
Investor's information rights pursuant to Section 3.5(b) may be assigned by the
Investor to a transferee or assignee of the Purchased Securities or the Warrant
Shares or with a liquidation preference or, in the case of the Warrant, the
liquidation preference of the underlying shares of Warrant Preferred Stock, no
less than an amount equal to 2% of the initial aggregate liquidation preference
of the Preferred Shares.

     

    Article
IV

    Additional
Agreements

     

    4.1           Purchase
for Investment. The Investor acknowledges that the Purchased Securities
and the Warrant Shares have not been registered under the Securities Act or
under any state securities laws. The Investor (a) is acquiring the Purchased
Securities pursuant to an exemption from registration under the Securities Act
solely for investment with no present intention to distribute them to any person
in violation of the Securities Act or any applicable U.S. state securities
laws,

     

     

    
      
        
           

        

        
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    (b) will
not sell or otherwise dispose of any of the Purchased Securities or the Warrant
Shares, except in compliance with the registration requirements or exemption
provisions of the Securities Act and any applicable U.S. state securities laws,
and (c) has such knowledge and experience in financial and business matters and
in investments of this type that it is capable of evaluating the merits and
risks of the Purchase and of making an informed investment
decision.

     

    4.2           Legends.

     

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

     

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

     

    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.”

     

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

     

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

     

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

     

     

    
      
        
           

        

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

     

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

     

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

     

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

     

     

    
      
        
           

        

        
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    4.4           Transfer
of Purchased Securities and Warrant Shares; Restrictions on Exercise of the
Warrant. Subject to compliance with applicable securities laws, the
Investor shall be permitted to transfer, sell, assign or otherwise dispose of
(“Transfer”)
all or a portion of the Purchased Securities or Warrant Shares at any
time, and the Company shall take all steps as may be reasonably requested by the
Investor to facilitate the Transfer of the Purchased Securities and the Warrant
Shares; provided
that the Investor shall not Transfer any Purchased Securities or Warrant
Shares if such transfer would require the Company to be subject to the periodic
reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934 (the “Exchange
Act”). In furtherance of the foregoing, the Company shall provide
reasonable cooperation to facilitate any Transfers of the Purchased Securities
or Warrant Shares, including, as is reasonable under the circumstances, by
furnishing such information concerning the Company and its business as a
proposed transferee may reasonably request (including such information as is
required by Section 4.5(k)) and making management of the Company reasonably
available to respond to questions of a proposed transferee in accordance with
customary practice, subject in all cases to the proposed transferee agreeing to
a customary confidentiality agreement.

     

    4.5           Registration
Rights.

     

    (a)           Unless
and until the Company becomes subject to the reporting requirements of Section
13 or 15(d) of the Exchange Act, the Company shall have no obligation to comply
with the provisions of this Section 4.5 (other than Section 4.5(b)(iv)-(vi));
provided
that the Company covenants and agrees that it shall comply with this
Section 4.5 as soon as practicable after the date that it becomes subject to
such reporting requirements.

     

    (b)           Registration.

     

    (i)           Subject
to the terms and conditions of this Agreement, the Company covenants and agrees
that as promptly as practicable after the date that the Company becomes subject
to the reporting requirements of Section 13 or 15(d) of the Exchange Act (and in
any event no later than 30 days thereafter), the Company shall prepare and file
with the SEC a Shelf Registration Statement covering all Registrable Securities
(or otherwise designate an existing Shelf Registration Statement filed with the
SEC to cover the Registrable Securities), and, to the extent the Shelf
Registration Statement has not theretofore been declared effective or is not
automatically effective upon such filing, the Company shall use reasonable best
efforts to cause such Shelf Registration Statement to be declared or become
effective and to keep such Shelf Registration Statement continuously effective
and in compliance with the Securities Act and usable for resale of such
Registrable Securities for a period from the date of its initial effectiveness
until such time as there are no Registrable Securities remaining (including by
refiling such Shelf Registration Statement (or a new Shelf Registration
Statement) if the initial Shelf Registration Statement expires). Notwithstanding
the foregoing, if the Company is not eligible to file a registration statement
on Form S-3, then the Company shall not be obligated to file a Shelf
Registration Statement unless and until requested to do so in writing by the
Investor.

     

    (ii)           Any
registration pursuant to Section 4.5(b)(i) shall be effected by means of a shelf
registration on an appropriate form under Rule 415 under the Securities Act (a
“Shelf
Registration Statement”). If the Investor or any other Holder intends to
distribute any Registrable Securities by means of an underwritten offering it
shall promptly so advise the Company and the Company shall take all reasonable
steps to facilitate such distribution, including the actions required pursuant
to Section 4.5(d);

     

     

    
      
        
           

        

        
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    provided
that the Company shall not be required to facilitate an underwritten
offering of Registrable Securities unless the expected gross proceeds from such
offering exceed (i) 2% of the initial aggregate liquidation preference of the
Preferred Shares if such initial aggregate liquidation preference is less than
$2 billion and (ii) $200 million if the initial aggregate liquidation preference
of the Preferred Shares is equal to or greater than $2 billion. The lead
underwriters in any such distribution shall be selected by the Holders of a
majority of the Registrable Securities to be distributed; provided
that to the extent appropriate and permitted under applicable law, such
Holders shall consider the qualifications of any broker-dealer Affiliate of the
Company in selecting the lead underwriters in any such
distribution.

     

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

     

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

     

    (v)           If
the registration referred to in Section 4.5(b)(iv) is proposed to be
underwritten, the Company will so advise Investor and all other Holders as a
part of the written notice given pursuant to Section 4.5(b)(iv). In such event,
the right of Investor and all other Holders to registration pursuant to Section
4.5(b) will be conditioned upon such persons' participation in such underwriting
and the inclusion of such person's Registrable Securities in the underwriting if
such securities are of the same class of securities as the securities to be
offered in the underwritten offering, and each such person will (together with
the Company and the other persons distributing their securities through such
underwriting) enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting by the
Company;

     

     

    
      
        
           

        

        
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    provided
that the Investor (as opposed to other Holders) shall not be required to
indemnify any person in connection with any registration. If any participating
person disapproves of the terms of the underwriting, such person may elect to
withdraw therefrom by written notice to the Company, the managing underwriters
and the Investor (if the Investor is participating in the
underwriting).

     

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

     

    (c)           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.

     

    (d)           Obligations
of the Company. Whenever required to effect the registration of any
Registrable Securities or facilitate the distribution of Registrable Securities
pursuant to an effective Shelf Registration Statement, the Company shall, as
expeditiously as reasonably
practicable:

     

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

     

     

    
      
        
           

        

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

     

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

     

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

     

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

     

    (vi)           Give
written notice to the Holders:

     

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

     

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

     

    (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 applicable Registrable Securities
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
registrationstatement 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

     

     

    
      
        
           

        

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

     

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

     

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

     

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

     

    (x)     
      If an underwritten offering is requested
pursuant to Section 4.5(b)(ii), enter into an underwriting agreement in
customary form, scope and substance and take all such other actions reasonably
requested by the Holders of a majority of the Registrable Securities being sold
in connection therewith or by the managing underwriter(s), if any, to expedite
or facilitate the underwritten disposition of such Registrable Securities, and
in connection therewith in any underwritten offering (including making members
of management and executives of the Company available to participate in “road
shows”, similar sales events and other marketing activities), (A) make such
representations and warranties to the Holders that are selling stockholders and
the managing underwriter(s), if any, with respect to the business of the Company
and its subsidiaries, and the Shelf Registration Statement, prospectus and
documents, if any, incorporated or deemed to be incorporated by reference
therein, in each case, in customary form, substance and scope, and, if true,
confirm the same if and when requested, (B) use its reasonable best efforts to
furnish the underwriters with opinions of counsel to the Company, addressed to
the managing underwriter(s), if any, covering the matters customarily covered in
such opinions requested in underwritten offerings, (C) use its reasonable best
efforts to obtain “cold comfort” letters from the independent certified public
accountants of the Company (and, if necessary, any other independent certified
public accountants of any business

     

     

    
      
        
           

        

        
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    acquired
by the Company for which financial statements and financial data are included in
the Shelf Registration Statement) who have certified the financial statements
included in such Shelf Registration Statement, addressed to each of the managing
underwriter(s), if any, such letters to be in customary form and covering
matters of the type customarily covered in “cold comfort” letters, (D) if an
underwriting agreement is entered into, the same shall contain indemnification
provisions and procedures customary in underwritten offerings (provided that the
Investor shall not be obligated to provide any indemnity), and (E) deliver such
documents and certificates as may be reasonably requested by the Holders of a
majority of the Registrable Securities being sold in connection therewith, their
counsel and the managing underwriter(s), if any, to evidence the continued
validity of the representations and warranties made pursuant to clause (i) above
and to evidence compliance with any customary conditions contained in the
underwriting agreement or other agreement entered into by the
Company.

     

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

     

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

     

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

     

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

     

    (e)           Suspension
of Sales. Upon receipt of written notice from the Company that a
registration statement, prospectus or prospectus supplement contains or may
contain an untrue statement of a material fact or omits or may omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading or that circumstances exist that make inadvisable use of
such registration statement, prospectus or prospectus supplement, the Investor
and each Holder of Registrable Securities shall forthwith discontinue
disposition of Registrable Securities until the Investor and/or Holder has
received copies of a supplemented or amended prospectus or prospectus
supplement,

     

     

    
      
        
           

        

        
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    or until
the Investor and/or such Holder is advised in writing by the Company that the
use of the prospectus and, if applicable, prospectus supplement may be resumed,
and, if so directed by the Company, the Investor and/or such Holder shall
deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in the Investor and/or such Holder's possession, of
the prospectus and, if applicable, prospectus supplement covering such
Registrable Securities current at the time of receipt of such notice. The total
number of days that any such suspension may be in effect in any 12-month period
shall not exceed 90 days.

     

    (f)           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.

     

    (g)           Furnishing
Information.

     

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

     

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

     

    (h)           Indemnification.

     

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

     

     

    
      
        
           

        

        
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    supplements
thereto or contained in any free writing prospectus (as such term is defined in
Rule 405) prepared by the Company or authorized by it in writing for use by such
Holder (or any amendment or supplement thereto), in reliance upon and in
conformity with information regarding such Indemnitee or its plan of
distribution or ownership interests which was furnished in writing to the
Company by such Indemnitee for use in connection with such registration
statement, including any such preliminary prospectus or final prospectus
contained therein or any such amendments or supplements thereto, or (B) offers
or sales effected by or on behalf of such Indemnitee “by means of (as defined in
Rule 159A) a “free writing prospectus” (as defined in Rule 405) that was not
authorized in writing by the Company.

     

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

     

    (i)           Assignment
of Registration Rights. The rights of the Investor to registration of
Registrable Securities pursuant to Section 4.5(b) may be assigned by the
Investor to a transferee or assignee of Registrable Securities with a
liquidation preference or, in the case of the Warrant, the liquidation
preference of the underlying shares of Warrant Preferred Stock, no less than an
amount equal to (i) 2% of the initial aggregate liquidation preference of the
Preferred Shares if such initial aggregate liquidation preference is less than
$2 billion and (ii) $200 million if the initial aggregate liquidation preference
of the Preferred Shares is equal to or greater than $2 billion; provided,
however, the transferor shall, within ten days after such transfer,
furnish to the Company written notice of the name and address of such transferee
or assignee and the number and type of Registrable Securities that are being
assigned.

     

    (j)           Clear
Market. With respect to any underwritten offering of Registrable
Securities by the Investor or other Holders pursuant to this Section 4.5, the
Company agrees not to effect (other than pursuant to such registration or
pursuant to a Special Registration) any public sale or distribution, or to file
any Shelf Registration Statement (other than such registration or a Special
Registration) covering any preferred stock of the Company or any securities
convertible into or exchangeable or exercisable for preferred stock of the
Company, during the period not to exceed ten days prior and 60 days following
the effective date of such offering or such longer period up to 90 days as may
be requested by the managing underwriter for such underwritten
offering.

     

     

    
      
        
           

        

        
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    The
Company also agrees to cause such of its directors and senior executive officers
to execute and deliver customary lock-up agreements in such form and for such
time period up to 90 days as may be requested by the managing underwriter. “Special
Registration” means the registration of (A) equity securities and/or
options or other rights in respect thereof solely registered on Form S­4 or
Form S-8 (or successor form) or (B) shares of equity securities and/or options
or other rights in respect thereof to be offered to directors, members of
management, employees, consultants, customers, lenders or vendors of the Company
or Company Subsidiaries or in connection with dividend reinvestment
plans.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

     

    
      
        
           

        

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

     

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

     

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

     

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

     

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

     

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

     

     

    
      
        
           

        

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

     

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

     

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

     

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

     

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

     

    4.6           Depositary
Shares. Upon request by the Investor at any time following the Closing
Date, the Company shall promptly enter into a depositary arrangement, pursuant
to customary agreements reasonably satisfactory to the Investor and with a
depositary reasonably acceptable to the Investor, pursuant to which the
Preferred Shares or the Warrant Shares may be deposited and depositary
shares,

     

     

    
      
        
           

        

        
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    each
representing a fraction of a Preferred Share or Warrant Share, as applicable, as
specified by the Investor, may be issued. From and after the execution of any
such depositary arrangement, and the deposit of any Preferred Shares or Warrant
Shares, as applicable, pursuant thereto, the depositary shares issued pursuant
thereto shall be deemed “Preferred Shares”, “Warrant Shares” and, as applicable,
“Registrable Securities” for purposes of this Agreement.

     

    4.7           Restriction
on Dividends and Repurchases.

     

    (a)           Prior
to the earlier of (x) the third anniversary of the Closing Date and (y) the date
on which all of the Preferred Shares and Warrant Shares have been redeemed in
whole or the Investor has transferred all of the Preferred Shares and Warrant
Shares to third parties which are not Affiliates of the Investor, neither the
Company nor any Company Subsidiary shall, without the consent of the Investor,
declare or pay any dividend or make any distribution on capital stock or other
equity securities of any kind of the Company or any Company Subsidiary (other
than (i) regular quarterly cash dividends of not more than the amount of the
last quarterly cash dividend per share declared or, if lower, announced to its
holders of Common Stock an intention to declare, on the Common Stock prior to
November 17, 2008, as adjusted for any stock split, stock dividend, reverse
stock split, reclassification or similar transaction, (ii) dividends payable
solely in shares of Common Stock, (iii) regular dividends on shares of preferred
stock in accordance with the terms thereof and which are permitted under the
terms of the Preferred Shares and the Warrant Shares, (iv) dividends or
distributions by any wholly-owned Company Subsidiary or (v) dividends or
distributions by any Company Subsidiary required pursuant to binding contractual
agreements entered into prior to November 17,
2008).

     

    (b)           During
the period beginning on the third anniversary of the Closing Date and ending on
the earlier of (i) the tenth anniversary of the Closing Date and (ii) the date
on which all of the Preferred Shares and Warrant Shares have been redeemed in
whole or the Investor has transferred all of the Preferred Shares and Warrant
Shares to third parties which are not Affiliates of the Investor, neither the
Company nor any Company Subsidiary shall, without the consent of the Investor,
(A) pay any per share dividend or distribution on capital stock or other equity
securities of any kind of the Company at a per annum rate that is in excess of
103% of the aggregate per share dividends and distributions for the immediately
prior fiscal year (other than regular dividends on shares of preferred stock in
accordance with the terms thereof and which are permitted under the terms of the
Preferred Shares and the Warrant Shares); provided
that no increase in the aggregate amount of dividends or distributions on
Common Stock shall be permitted as a result of any dividends or distributions
paid in shares of Common Stock, any stock split or any similar transaction or
(B) pay aggregate dividends or distributions on capital stock or other equity
securities of any kind of any Company Subsidiary that is in excess of 103% of
the aggregate dividends and distributions paid for the immediately prior fiscal
year (other than in the case of this clause (B), (1) regular dividends on shares
of preferred stock in accordance with the terms thereof and which are permitted
under the terms of the Preferred Shares and the Warrant Shares, (2) dividends or
distributions by any wholly-owned Company Subsidiary, (3) dividends or
distributions by any Company Subsidiary required pursuant to binding contractual
agreements entered into prior to November 17, 2008) or (4) dividends or
distributions on newly issued shares of capital stock for cash or other
property.

     

     

    
      
        
           

        

        
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    (c)           Prior
to the earlier of (x) the tenth anniversary of the Closing Date and (y) the date
on which all of the Preferred Shares and Warrant Shares have been redeemed in
whole or the Investor has transferred all of the Preferred Shares and Warrant
Shares to third parties which are not Affiliates of the Investor, neither the
Company nor any Company Subsidiary shall, without the consent of the Investor,
redeem, purchase or acquire any shares of Common Stock or other capital stock or
other equity securities of any kind of the Company or any Company Subsidiary, or
any trust preferred securities issued by the Company or any Affiliate of the
Company, other than (i) redemptions, purchases or other acquisitions of the
Preferred Shares and Warrant Shares, (ii) in connection with the administration
of any employee benefit plan in the ordinary course of business and consistent
with past practice, (iii) the acquisition by the Company or any of the Company
Subsidiaries of record ownership in Junior Stock or Parity Stock for the
beneficial ownership of any other persons (other than the Company or any other
Company Subsidiary), including as trustees or custodians, (iv) the exchange or
conversion of Junior Stock for or into other Junior Stock or of Parity Stock or
trust preferred securities for or into other Parity Stock (with the same or
lesser aggregate liquidation amount) or Junior Stock, in each case set forth in
this clause (iv), solely to the extent required pursuant to binding contractual
agreements entered into prior to the Signing Date or any subsequent agreement
for the accelerated exercise, settlement or exchange thereof for Common Stock
(clauses (ii) and (iii), collectively, the “Permitted
Repurchases”), (v) redemptions of securities held by the Company or any
wholly- owned Company Subsidiary or (vi) redemptions, purchases or other
acquisitions of capital stock or other equity securities of any kind of any
Company Subsidiary required pursuant to binding contractual agreements entered
into prior to November 17,
2008.

     

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

     

    (e)           During
the period beginning on the tenth anniversary of the Closing and ending on the
date on which all of the Preferred Shares and Warrant Shares have been redeemed
in whole or the Investor has transferred all of the Preferred Shares and Warrant
Shares to third parties which are not Affiliates of the Investor, neither the
Company nor any Company Subsidiary shall, without the consent of the Investor,
(i) declare or pay any dividend or make any distribution on capital stock or
other equity securities of any kind of the Company or any Company Subsidiary; or
(ii) redeem, purchase or acquire any shares of Common Stock or other capital
stock or other equity securities of any kind of the Company or any Company
Subsidiary, or any trust preferred securities issued by the Company or any
Affiliate of the Company, other than (A) redemptions, purchases or other
acquisitions of the Preferred Shares and Warrant Shares, (B) regular dividends
on shares of preferred stock in accordance with the terms thereof and which are
permitted under the terms of the Preferred Shares and the Warrant Shares, or (C)
dividends or distributions by any wholly-owned Company
Subsidiary.

     

    (f)           “Junior
Stock” means Common Stock and any other class or series of stock of the
Company the terms of which expressly provide that it ranks junior to the
Preferred Shares as to dividend rights and/or as to rights on liquidation,
dissolution or winding up of the
Company.

     

     

    
      
        
           

        

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

     

    4.8           Executive
Compensation. Until such time as the Investor ceases to own any
debt

     

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

     

    4.9           Related
Party Transactions. Until such time as the Investor ceases to own
any

     

    Purchased
Securities or Warrant Shares, the Company and the Company Subsidiaries shall not
enter into transactions with Affiliates or related persons (within the meaning
of Item 404 under the SEC's Regulation S-K) unless (i) such transactions are on
terms no less favorable to the Company and the Company Subsidiaries than could
be obtained from an unaffiliated third party, and (ii) have been approved by the
audit committee of the Board of Directors or comparable body of independent
directors of the Company.

     

    4.10           Bank
and Thrift Holding Company Status. If the Company is a Bank Holding
Company or a Savings and Loan Holding Company on the Signing Date, then the
Company shall maintain its status as a Bank Holding Company or Savings and Loan
Holding Company, as the case may be, for as long as the Investor owns any
Purchased Securities or Warrant Shares. The Company shall redeem all Purchased
Securities and Warrant Shares held by the Investor prior to terminating its
status as a Bank Holding Company or Savings and Loan Holding Company, as
applicable. “Bank
Holding Company” means a company registered as such with the Board of
Governors of the Federal Reserve System (the “Federal
Reserve”) pursuant to 12 U.S.C. § 1842 and the regulations of the Federal
Reserve promulgated thereunder. “Savings
and Loan Holding Company” means a company registered as such with the
Office of Thrift Supervision pursuant to 12 U.S.C. § 1467(a) and the regulations
of the Office of Thrift Supervision promulgated thereunder.

     

    4.11           Predominantly
Financial. For as long as the Investor owns any Purchased Securities or
Warrant Shares, the Company, to the extent it is not itself an insured
depository institution, agrees to remain predominantly engaged in financial
activities. A company is predominantly engaged in financial activities if the
annual gross revenues derived by the company and all subsidiaries of the company
(excluding revenues derived from subsidiary depository institutions), on a
consolidated basis, from engaging in activities that are financial in nature or
are incidental to a financial activity under subsection (k) of Section 4 of the
Bank Holding Company Act of 1956 (12 U.S.C. 1843(k)) represent at least 85
percent of the consolidated annual gross revenues of the company.

     

     

    
      
        
           

        

        
          66

          
            

          

        

        
           

        

      

    

     

    Article
V

    Miscellaneous

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

     

    
      
        
           

        

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

     

    5.5           Governing
Law: Submission to Jurisdiction, Etc.
This Agreement will be governed by and construed in accordance with the federal
law of the United States if and to the extent such law is applicable, and
otherwise in accordance with the laws of the State of New York applicable to
contracts made and to be performed entirely within such State. Each of the
parties hereto agrees (a) to submit to the exclusive jurisdiction and venue of
the United States District Court for the District of Columbia and the United
States Court of Federal Claims for any and all civil actions, suits or
proceedings arising out of or relating to this Agreement or the Warrant or the
transactions contemplated hereby or thereby, and (b) that notice may be served
upon (i) the Company at the address and in the manner set forth for notices to
the Company in Section 5.6 and (ii) the Investor in accordance with federal law.
To the extent permitted by applicable law, each of the parties hereto hereby
unconditionally waives trial by jury in any civil legal action or proceeding
relating to this Agreement or the Warrant or the transactions contemplated
hereby or thereby.

     

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

     

    If to the
Investor:

     

    United
States Department of the Treasury

    1500
Pennsylvania Avenue, NW, Room 2312

    Washington,
D.C. 20220

    Attention:
Assistant General Counsel (Banking and Finance)

    Facsimile.
(202) 622-1974

     

    5.7           Definitions

     

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

     

     

    
      
        
           

        

        
          68

          
            

          

        

        
           

        

      

    

     

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

     

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

     

    5.8           Assignment.
Neither this Agreement nor any right, remedy, obligation nor liability arising
hereunder or by reason hereof shall be assignable by any party hereto without
the prior written consent of the other party, and any attempt to assign any
right, remedy, obligation or liability hereunder without such consent shall be
void, except (a) an assignment, in the case of a merger, consolidation,
statutory share exchange or similar transaction that requires the approval of
the Company's stockholders (a “Business
Combination”) where such party is not the surviving entity, or a sale of
substantially all of its assets, to the entity which is the survivor of such
Business Combination or the purchaser in such sale and (b) as provided in
Sections 3.5 and 4.5.

     

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

     

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

     

    * *
*

     

     

    
      
        
           

        

        
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    ANNEX
A

     

    FORM
OF CERTIFICATE OF DESIGNATIONS FOR PREFERRED
STOCK

     

    [SEE
ATTACHED]

     

     

     

    See
Exhibit 3.1 to this Form 8-K

     

     

    
      
        
           

        

        
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    ANNEX
B

     

    FORM
OF CERTIFICATE OF DESIGNATIONS

     

    FOR
WARRANT PREFERRED STOCK

     

    [NOT
APPLICABLE]

     

     

    
      
        
           

        

        
          71

          
            

          

        

        
           

        

      

    

     

    ANNEX
C

     

    FORM
OF WAIVER

     

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

     

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

     

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

     

     

    
      
        
           

        

        
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    ANNEX
D

     

    FORM
OF OPINION

     

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

     

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

     

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

     

    (d)            The
shares of Warrant Preferred Stock issuable upon exercise of the Warrant have
been duly authorized and reserved for issuance upon exercise of the Warrant and
when so issued in accordance with the terms of the Warrant will be validly
issued, fully paid and non-assessable, and will rank pan
passu with or senior to all other series or classes of Preferred Stock,
whether or not issued or outstanding, with respect to the payment of dividends
and the distribution of assets in the event of any dissolution, liquidation or
winding up of the Company.

     

    (e)            The
Company has the corporate power and authority to execute and deliver the
Agreement and the Warrant and to carry out its obligations thereunder (which
includes the issuance of the Preferred Shares, Warrant and Warrant
Shares).

     

    (f)            The
execution, delivery and performance by the Company of the Agreement and the
Warrant and the consummation of the transactions contemplated thereby have been
duly authorized by all necessary corporate action on the part of the Company and
its stockholders, and no further approval or authorization is required on the
part of the Company.

     

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

     

     

    
      
        
           

        

        
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    ANNEX
E

     

    FORM
OF WARRANT

     

    [NOT
APPLICABLE]

     

     

     

    74ex10-2.htm

    

     

    Exhibit
10.2

     

    United
States Department of the Treasury

    1500
Pennsylvania Avenue, NW

    Washington,
D.C. 20220

    

    

    April 10,
2009

    

    Ladies
and Gentlemen:

    

    Reference
is made to that certain Letter Agreement incorporating the Securities Purchase
Agreement – Standard Terms dated of as of the date of this letter agreement (the
“Securities Purchase
Agreement”) between United States Department of Treasury (“Investor”) and the company
named on the signature page hereto (the “Company”).  Capitalized
terms used but not defined herein shall have the meanings assigned to them in
the Securities Purchase Agreement.

    

    The
American Recovery and Reinvestment Act of 2009, as it may be amended from time
to time (the “Act”),
includes provisions relating to executive compensation and other matters that
may be inconsistent with the Securities Purchase Agreement, the Warrant and the
Certificate(s) of Designation (the “Transaction
Documents”).  Accordingly, Investor and the Company desire to
confirm their understanding as follows:

    

    1.           Notwithstanding
anything in the Transaction Documents to the contrary, in the event that the Act
or any rules or regulations promulgated thereunder are inconsistent with any of
the terms of the Transaction Documents, the Act and such rules and regulations
shall control.

    

    2.           For
the avoidance of doubt (and without limiting the generality of Paragraph
1):

    

    (a)           the
provisions of Section 111 of the Emergency Economic Stabilization Act of 2008,
as amended by the Act or otherwise from time to time (“EESA”), shall apply to the
Company;

    

    (b)           the
waiver to be delivered by each of the Company’s Senior Executive Officers
pursuant to Section 1.2(d)(v) of the Securities Purchase Agreement shall, in
addition, be delivered by any additional highly compensated employees required
by applicable rules or regulations under EESA;

    

    (c)           the
Company’s chief executive officer and chief financial officer shall provide the
written certification of compliance by the Company with the requirements of
Section 111 of EESA in the manner specified by Section 111(b)(4) thereunder or
in any rules or regulations under EESA; and

    
      
         

      

      
        75

        
          

        

      

      
         

      

    

    

    (d)           the
Company shall be permitted to repay preferred shares, and when such preferred
shares are repaid, the Investor shall liquidate warrants associated with such
preferred shares, all in accordance with the Act and any rules and regulations
thereunder.

    From and
after the date hereof, each reference in the Securities Purchase Agreement to
“this Agreement” or “this Securities Purchase Agreement” or words of like import
shall mean and be a reference to the Agreement (as defined in the Securities
Purchase Agreement) as amended by this letter agreement.

    

    This
letter agreement will be governed by and construed in accordance with the
federal law of the United States if and to the extent such law is applicable,
and otherwise in accordance with the laws of the State of New York applicable to
contracts made and to be performed entirely within such State.

    

    This
letter agreement, the Securities Purchase Agreement, the Warrant, the
Certificate(s) of Designation and any other documents executed by the parties at
the Closing constitute the entire agreement of the parties with respect to the
subject matter hereof.

    

    Nothing
in this letter agreement shall be deemed an admission by Investor as to the
necessity of obtaining the consent of the Company in order to effect the changes
to the Transaction Documents contemplated by this letter agreement, nor shall
anything in this letter agreement be deemed to require Investor to obtain the
consent of any other TARP recipient (as defined in the Act) participating in the
Capital Purchase Program (the “CPP”) in order to effect
changes to their documentation under the CPP.

    

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

    [Remainder
of this page intentionally left blank]

    
      
         

      

      
        76

        
          

        

      

      
         

      

    

    In
witness whereof, the parties have duly executed this letter agreement as of the
date first written above.

     

    

    
      
        
          
            	 
      	
                    UNITED
      STATES DEPARTMENT OF

                  
	 
      	
                    THE
      TREASURY

                  
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
                    By:

                  	
                    /Neel
      Kashkari/

                  
	 
      	 
      	
                    Name:

                  	
                    Neel
      Kashkari

                  
	 
      	 
      	
                    Title:

                  	
                    Interim
      Assistant Secretary

                  
	 
      	 
      	 
      	
                    For
      Financial Stability

                  
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
                    COMPANY:
      CITY NATIONAL

                  
	 
      	
                    BANCSHARES
      CORPORATION

                  
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
                    By:

                  	
                    /Edward
      R. Wright/

                  
	 
      	 
      	
                    Name:

                  	
                    Edward
      R. Wright

                  
	 
      	 
      	
                    Title:

                  	
                    Senior
      Vice President and

                  
	 
      	 
      	 
      	
                    Chief
      Financial Officer

                  

          

        

      

    

     

    77

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