Document:

Exhibit 10.1

 

UST Seq. No. 155

 

UNITED STATES DEPARTMENT OF THE TREASURY

1500 PENNSYLVANIA AVENUE, NW

WASHINGTON, D.C. 20220

 

Dear Ladies and Gentlemen:

 

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

 

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superseded by the terms set forth herein or in the Schedules hereto, the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

 

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

 

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

 

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

 

* * *

 

 

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

 

	
   

  	
  UNITED STATES
  DEPARTMENT OF THE 

  TREASURY

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Neel Kashkari

  
	
   

  	
   

  	
  Name:

  	
  Neel Kashkari

  
	
   

  	
   

  	
  Title:

  	
  Interim
  Assistant Secretary

  
	
   

  	
   

  	
   

  	
  For Financial
  Stability

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  COMPANY: VIST
  FINANCIAL CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Robert D. Davis

  
	
   

  	
   

  	
  Name:

  	
  Robert D.
  Davis

  
	
   

  	
   

  	
  Title:

  	
  President and
  Chief Executive Officer

  
	
   

  	
   

  	
   

  

Date:  December 19, 2008

 

 

EXHIBIT A

 

 

SECURITIES PURCHASE AGREEMENT

 

STANDARD TERMS

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
   

  	
  Article I

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Purchase; Closing

  	
   

  
	
   

  	
   

  	
   

  
	
  1.1

  	
  Purchase

  	
  1

  
	
  1.2

  	
  Closing

  	
  2

  
	
  1.3

  	
  Interpretation

  	
  4

  
	
   

  	
   

  	
   

  
	
   

  	
  Article II

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Representations and Warranties

  	
   

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  Disclosure

  	
  4

  
	
  2.2

  	
  Representations
  and Warranties of the Company

  	
  5

  
	
   

  	
   

  	
   

  
	
   

  	
  Article III

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Covenants

  	
   

  
	
   

  	
   

  	
   

  
	
  3.1

  	
  Commercially
  Reasonable Efforts

  	
  13

  
	
  3.2

  	
  Expenses

  	
  14

  
	
  3.3

  	
  Sufficiency
  of Authorized Common Stock; Exchange Listing

  	
  14

  
	
  3.4

  	
  Certain
  Notifications Until Closing

  	
  15

  
	
  3.5

  	
  Access, Information
  and Confidentiality

  	
  15

  
	
   

  	
   

  	
   

  
	
   

  	
  Article IV

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Additional Agreements

  	
   

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  Purchase for
  Investment

  	
  16

  
	
  4.2

  	
  Legends

  	
  16

  
	
  4.3

  	
  Certain
  Transactions

  	
  18

  
	
  4.4

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

  	
  18

  
	
  4.5

  	
  Registration
  Rights

  	
  19

  
	
  4.6

  	
  Voting of
  Warrant Shares

  	
  30

  
	
  4.7

  	
  Depositary
  Shares

  	
  31

  
	
  4.8

  	
  Restriction
  on Dividends and Repurchases

  	
  31

  
	
  4.9

  	
  Repurchase
  of Investor Securities

  	
  32

  
	
  4.10

  	
  Executive
  Compensation

  	
  33

  

 

i

 

Article V

 

Miscellaneous

 

	
  5.1

  	
  Termination

  	
  34

  
	
  5.2

  	
  Survival of
  Representations and Warranties

  	
  34

  
	
  5.3

  	
  Amendment

  	
  34

  
	
  5.4

  	
  Waiver of
  Conditions

  	
  34

  
	
  5.5

  	
  Governing Law: Submission to Jurisdiction, Etc

  	
  35

  
	
  5.6

  	
  Notices

  	
  35

  
	
  5.7

  	
  Definitions

  	
  35

  
	
  5.8

  	
  Assignment

  	
  36

  
	
  5.9

  	
  Severability

  	
  36

  
	
  5.10

  	
  No Third
  Party Beneficiaries

  	
  36

  

 

ii

 

LIST OF ANNEXES

 

ANNEX A:            FORM OF
CERTIFICATE OF DESIGNATIONS FOR PREFERRED STOCK

 

ANNEX B:             FORM OF
WAIVER

 

ANNEX C:             FORM OF
OPINION

 

ANNEX D:            FORM OF
WARRANT

 

iii

 

INDEX OF DEFINED TERMS

 

	
  Term

  	
   

  	
  Location
  of 

  Definition

  
	
  Affiliate

  	
   

  	
  5.7(b)

  
	
  Agreement

  	
   

  	
  Recitals

  
	
  Appraisal Procedure

  	
   

  	
  4.9(c)(i)

  
	
  Appropriate Federal Banking Agency

  	
   

  	
  2.2(s)

  
	
  Bankruptcy Exceptions

  	
   

  	
  2.2(d)

  
	
  Benefit Plans

  	
   

  	
  1.2(d)(iv)

  
	
  Board of Directors

  	
   

  	
  2.2(f)

  
	
  Business Combination

  	
   

  	
  4.4

  
	
  business day

  	
   

  	
  1.3

  
	
  Capitalization Date

  	
   

  	
  2.2(b)

  
	
  Certificate of Designations

  	
   

  	
  1.2(d)(iii)

  
	
  Charter

  	
   

  	
  1.2(d)(iii)

  
	
  Closing

  	
   

  	
  1.2(a)

  
	
  Closing Date

  	
   

  	
  1.2(a)

  
	
  Code

  	
   

  	
  2.2(n)

  
	
  Common Stock

  	
   

  	
  Recitals

  
	
  Company

  	
   

  	
  Recitals

  
	
  Company Financial Statements

  	
   

  	
  2.2(h)

  
	
  Company Material Adverse Effect

  	
   

  	
  2.1(a)

  
	
  Company Reports

  	
   

  	
  2.2(i)(i)

  
	
  Company Subsidiary; Company Subsidiaries

  	
   

  	
  2.2(i)(i)

  
	
  control; controlled by; under common control with

  	
   

  	
  5.7(b)

  
	
  Controlled Group

  	
   

  	
  2.2(n)

  
	
  CPP

  	
   

  	
  Recitals

  
	
  EESA

  	
   

  	
  1.2(d)(iv)

  
	
  ERISA

  	
   

  	
  2.2(n)

  
	
  Exchange Act

  	
   

  	
  2.1(b)

  
	
  Fair Market Value

  	
   

  	
  4.9(c)(ii)

  
	
  GAAP

  	
   

  	
  2.1(a)

  
	
  Governmental Entities

  	
   

  	
  1.2(c)

  
	
  Holder

  	
   

  	
  4.5(k)(i)

  
	
  Holders’ Counsel

  	
   

  	
  4.5(k)(ii)

  
	
  Indemnitee

  	
   

  	
  4.5 (g)(i)

  
	
  Information

  	
   

  	
  3.5(b)

  
	
  Initial Warrant Shares

  	
   

  	
  Recitals

  
	
  Investor

  	
   

  	
  Recitals

  
	
  Junior Stock

  	
   

  	
  4.8(c)

  
	
  knowledge of the Company; Company’s knowledge

  	
   

  	
  5.7(c)

  
	
  Last Fiscal Year

  	
   

  	
  2.1(b)

  
	
  Letter Agreement

  	
   

  	
  Recitals

  
	
  officers

  	
   

  	
  5.7(c)

  

 

iv

 

	
  Term

  	
   

  	
  Location
  of 

  Definition

  
	
  Parity Stock

  	
   

  	
  4.8(c)

  
	
  Pending Underwritten Offering

  	
   

  	
  4.5(1)

  
	
  Permitted Repurchases

  	
   

  	
  4.8(a)(ii)

  
	
  Piggyback Registration

  	
   

  	
  4.5(a)(iv)

  
	
  Plan

  	
   

  	
  2.2(n)

  
	
  Preferred Shares

  	
   

  	
  Recitals

  
	
  Preferred Stock

  	
   

  	
  Recitals

  
	
  Previously Disclosed

  	
   

  	
  2.1(b)

  
	
  Proprietary Rights

  	
   

  	
  2.2(u)

  
	
  Purchase

  	
   

  	
  Recitals

  
	
  Purchase Price

  	
   

  	
  1.1

  
	
  Purchased Securities

  	
   

  	
  Recitals

  
	
  Qualified Equity Offering

  	
   

  	
  4.4

  
	
  register; registered; registration

  	
   

  	
  4.5(k)(iii)

  
	
  Registrable Securities

  	
   

  	
  4.5(k)(iv)

  
	
  Registration Expenses

  	
   

  	
  4.5(k)(v)

  
	
  Regulatory Agreement

  	
   

  	
  2.2(s)

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

  	
   

  	
  4.5(k)(vi)

  
	
  Schedules

  	
   

  	
  Recitals

  
	
  SEC

  	
   

  	
  2.1(b)

  
	
  Securities Act

  	
   

  	
  2.2(a)

  
	
  Selling Expenses

  	
   

  	
  4.5(k)(vii)

  
	
  Senior Executive Officers

  	
   

  	
  4.10

  
	
  Share Dilution Amount

  	
   

  	
  4.8(a)(ii)

  
	
  Shelf Registration Statement

  	
   

  	
  4.5(a)(ii)

  
	
  Signing Date

  	
   

  	
  2.1(a)

  
	
  Special Registration

  	
   

  	
  4.5(i)

  
	
  Stockholder Proposals

  	
   

  	
  3.1(b)

  
	
  subsidiary

  	
   

  	
  5.8(a)

  
	
  Tax; Taxes

  	
   

  	
  2.2(o)

  
	
  Transfer

  	
   

  	
  4.4

  
	
  Warrant

  	
   

  	
  Recitals

  
	
  Warrant Shares

  	
   

  	
  2.2(d)

  

 

v

 

SECURITIES PURCHASE AGREEMENT — STANDARD TERMS

 

Recitals:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Article I

Purchase; Closing

 

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

 

 

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

 

2

 

performed in
all material respects all obligations required to be performed by it under this
Agreement at or prior to the Closing;

 

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

 

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

 

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

 

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

 

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

 

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

 

3

 

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

 

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

 

Article II

Representations and Warranties

 

2.1                                 Disclosure.

 

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

 

4

 

or occurrences to the extent that such changes or
occurrences have or would reasonably be expected to have a materially
disproportionate adverse effect on the Company and its consolidated
subsidiaries taken as a whole relative to comparable U.S. banking or financial
services organizations), or (D) changes in the market price or trading
volume of the Common Stock or any other equity, equity-related or debt
securities of the Company or its consolidated subsidiaries (it being understood
and agreed that the exception set forth in this clause (D) does not apply
to the underlying reason giving rise to or contributing to any such change); or
(ii) the ability of the Company to consummate the Purchase and the other
transactions contemplated by this Agreement and the Warrant and perform its
obligations hereunder or thereunder on a timely basis.

 

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

 

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

 

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

 

(b)                                 Capitalization.  The authorized capital stock of the Company,
and the outstanding capital stock of the Company (including securities
convertible into, or exercisable or exchangeable for, capital stock of the
Company) as of the most recent fiscal month-end preceding the Signing Date (the
“Capitalization Date”) is set forth on Schedule B.  The outstanding shares of capital stock of
the Company have been duly authorized and are validly issued and outstanding,
fully paid and nonassessable, and subject to no preemptive rights (and were not
issued in violation of any preemptive rights). 
Except as provided in the Warrant, as of the Signing Date, the Company
does not have outstanding any securities or other obligations providing the
holder the right to acquire Common Stock that is not reserved for issuance as

 

5

 

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.

 

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

 

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

 

(e)                                  Authorization,
Enforceability.

 

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

 

(ii)                             The
execution, delivery and performance by the Company of this Agreement and the
Warrant and the consummation of the transactions contemplated hereby and
thereby and compliance by the Company with the provisions hereof and

 

6

 

thereof, will
not (A) violate, conflict with, or result in a breach of any provision of,
or constitute a default (or an event which, with notice or lapse of time or
both, would constitute a default) under, or result in the termination of, or
accelerate the performance required by, or result in a right of termination or
acceleration of, or result in the creation of, any lien, security interest,
charge or encumbrance upon any of the properties or assets of the Company or
any Company Subsidiary under any of the terms, conditions or provisions of (i) subject,
if applicable, to the approvals of the Company’s stockholders set forth on Schedule
C, its organizational documents or (ii) any note, bond, mortgage,
indenture, deed of trust, license, lease, agreement or other instrument or
obligation to which the Company or any Company Subsidiary is a party or by
which it or any Company Subsidiary may be bound, or to which the Company or any
Company Subsidiary or any of the properties or assets of the Company or any
Company Subsidiary may be subject, or (B) subject to compliance with the
statutes and regulations referred to in the next paragraph, violate any
statute, rule or regulation or any judgment, ruling, order, writ,
injunction or decree applicable to the Company or any Company Subsidiary or any
of their respective properties or assets except, in the case of clauses (A)(ii) and
(B), for those occurrences that, individually or in the aggregate, have not had
and would not reasonably be expected to have a Company Material Adverse Effect.

 

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

 

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

 

(g)                                 No Company
Material Adverse Effect. 
Since the last day of the last completed fiscal period for which the
Company has filed a Quarterly Report on Form 10-Q or an Annual

 

7

 

Report on Form 10-K with the SEC prior to the
Signing Date, no fact, circumstance, event, change, occurrence, condition or
development has occurred that, individually or in the aggregate, has had or
would reasonably be expected to have a Company Material Adverse Effect.

 

(h)                                 Company Financial
Statements.  Each of the consolidated
financial statements of the Company and its consolidated subsidiaries
(collectively the “Company Financial Statements”) included or incorporated by
reference in the Company Reports filed with the SEC since December 31,
2006, present fairly in all material respects the consolidated financial
position of the Company and its consolidated subsidiaries as of the dates
indicated therein (or if amended prior to the Signing Date, as of the date of
such amendment) and the consolidated results of their operations for the
periods specified therein; and except as stated therein, such financial
statements (A) were prepared in conformity with GAAP applied on a
consistent basis (except as may be noted therein), (B) have been prepared
from, and are in accordance with, the books and records of the Company and the
Company Subsidiaries and (C) complied as to form, as of their respective
dates of filing with the SEC, in all material respects with the applicable
accounting requirements and with the published rules and regulations of
the SEC with respect thereto.

 

(i)                                     Reports.

 

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

 

(ii)                             The
records, systems, controls, data and information of the Company and the Company
Subsidiaries are recorded, stored, maintained and operated under means
(including any electronic, mechanical or photographic process, whether
computerized or not) that are under the exclusive ownership and direct control
of the Company or the

 

8

 

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

 

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

 

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

 

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

 

(m)                               Compliance with Laws.  Except as would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect,
the Company and the

 

9

 

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

 

(n)                                 Employee Benefit
Matters.  Except as would not reasonably
be expected to have, either individually or in the aggregate, a Company
Material Adverse Effect: (A) each “employee benefit plan” (within the
meaning of Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended (“ERISA”)) providing
benefits to any current or former employee, officer or director of the Company
or any member of its “Controlled Group”
(defined as any organization which is a member of a controlled group of
corporations within the meaning of Section 414 of the Internal Revenue
Code of 1986, as amended (the “Code”)) that is
sponsored, maintained or contributed to by the Company or any member of its
Controlled Group and for which the Company or any member of its Controlled
Group would have any liability, whether actual or contingent (each, a “Plan”) has been maintained in compliance with its terms and
with the requirements of all applicable statutes, rules and regulations,
including ERISA and the Code; (B) with respect to each Plan subject to
Title IV of ERISA (including, for purposes of this clause (B), any plan subject
to Title IV of ERISA that the Company or any member of its Controlled Group
previously maintained or contributed to in the six years prior to the Signing
Date), (1) no “reportable event” (within the meaning of Section 4043(c) of
ERISA), other than a reportable event for which the notice period referred to
in Section 4043(c) of ERISA has been waived, has occurred in the
three years prior to the Signing Date or is reasonably expected to occur, (2) no
“accumulated funding deficiency” (within the meaning of Section 302 of
ERISA or Section 412 of the Code), whether or not waived, has occurred in
the three years prior to the Signing Date or is reasonably expected to occur, (3) the
fair market value of the assets under each Plan exceeds the present value of
all benefits accrued under such Plan (determined based on the assumptions used
to fund such Plan) and (4) neither the Company nor any member of its
Controlled Group has incurred in the six years prior to the Signing Date, or
reasonably expects to incur, any liability under Title IV of ERISA (other than
contributions to the Plan or premiums to the PBGC in the ordinary course and
without default) in respect of a Plan (including any Plan that is a “multiemployer
plan”, within the meaning of Section 4001(c)(3) of ERISA); and (C) each
Plan that is intended to be qualified under Section 401(a) of the
Code has received a favorable

 

10

 

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;

 

(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.

 

11

 

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

 

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

 

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

 

12

 

(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.

 

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

 

(b)                                 If the Company is
required to obtain any stockholder approvals set forth on Schedule C,
then the Company shall comply with this Section 3.1(b) and Section 3.1(c).  The Company shall call a special meeting of
its stockholders, as promptly as practicable following the Closing, to vote on
proposals (collectively, the “Stockholder Proposals”)
to (i) approve the exercise of the Warrant for Common Stock for purposes
of the rules of the national security exchange on which the Common Stock
is listed and/or (ii) amend the Company’s Charter to increase the number
of authorized shares of Common Stock to at least such number as shall be
sufficient to permit the full exercise of the Warrant for Common Stock and
comply with the

 

13

 

other provisions of this Section 3.1(b) and Section 3.1(c).  The Board of Directors shall recommend to the
Company’s stockholders that such stockholders vote in favor of the Stockholder
Proposals.  In connection with such
meeting, the Company shall prepare (and the Investor will reasonably cooperate
with the Company to prepare) and file with the SEC as promptly as practicable
(but in no event more than ten business days after the Closing) a preliminary
proxy statement, shall use its reasonable best efforts to respond to any
comments of the SEC or its staff thereon and to cause a definitive proxy
statement related to such stockholders’ meeting to be mailed to the Company’s
stockholders not more than five business days after clearance thereof by the
SEC, and shall use its reasonable best efforts to solicit proxies for such
stockholder approval of the Stockholder Proposals.  The Company shall notify the Investor
promptly of the receipt of any comments from the SEC or its staff with respect
to the proxy statement and of any request by the SEC or its staff for amendments
or supplements to such proxy statement or for additional information and will
supply the Investor with copies of all correspondence between the Company or
any of its representatives, on the one hand, and the SEC or its staff, on the
other hand, with respect to such proxy statement.  If at any time prior to such stockholders’
meeting there shall occur any event that is required to be set forth in an
amendment or supplement to the proxy statement, the Company shall as promptly
as practicable prepare and mail to its stockholders such an amendment or
supplement.  Each of the Investor and the
Company agrees promptly to correct any information provided by it or on its
behalf for use in the proxy statement if and to the extent that such
information shall have become false or misleading in any material respect, and
the Company shall as promptly as practicable prepare and mail to its
stockholders an amendment or supplement to correct such information to the
extent required by applicable laws and regulations.  The Company shall consult with the Investor
prior to filing any proxy statement, or any amendment or supplement thereto,
and provide the Investor with a reasonable opportunity to comment thereon.  In the event that the approval of any of the
Stockholder Proposals is not obtained at such special stockholders meeting, the
Company shall include a proposal to approve (and the Board of Directors shall
recommend approval of) each such proposal at a meeting of its stockholders no
less than once in each subsequent six- month period beginning on January 1,
2009 until all such approvals are obtained or made.

 

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

 

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

 

3.3                                 Sufficiency of
Authorized Common Stock; Exchange Listing.

 

14

 

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

 

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

 

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

 

3.5                                 Access, Information
and Confidentiality.

 

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

 

15

 

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

 

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

 

Article IV

Additional Agreements

 

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

 

4.2                                 Legends.

 

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

 

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

 

16

 

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

 

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

 

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

 

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

 

THE SECURITIES REPRESENTED
BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT
BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION
STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR
SUCH LAWS.  EACH PURCHASER OF THE
SECURITIES REPRESENTED BY THIS INSTRUMENT IS NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION FROM SECTION 5 OF THE SECURITIES ACT PROVIDED BY
RULE 144A THEREUNDER.  ANY TRANSFEREE OF
THE SECURITIES REPRESENTED BY THIS INSTRUMENT BY ITS ACCEPTANCE HEREOF (1) REPRESENTS
THAT IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT), (2) AGREES THAT IT WILL NOT OFFER, SELL OR OTHERWISE
TRANSFER THE SECURITIES REPRESENTED BY THIS INSTRUMENT EXCEPT (A) PURSUANT
TO A REGISTRATION STATEMENT WHICH IS THEN EFFECTIVE UNDER THE SECURITIES ACT, (B) FOR
SO LONG AS THE SECURITIES REPRESENTED BY THIS INSTRUMENT ARE ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED
INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (C) TO THE ISSUER OR (D) PURSUANT TO ANY OTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION

 

17

 

REQUIREMENTS OF THE
SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THE
SECURITIES REPRESENTED BY THIS INSTRUMENT ARE TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.”

 

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

 

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

 

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

 

18

 

2008). “Business Combination” means a
merger, consolidation, statutory share exchange or similar transaction that
requires the approval of the Company’s stockholders.

 

4.5                                 Registration Rights.

 

(a)                                  Registration.

 

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

 

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

 

19

 

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

 

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

 

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

 

20

 

to the Company, the
managing underwriters and the Investor (if the Investor is participating in the
underwriting).

 

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

 

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

 

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

 

(i)                                Prepare
and file with the SEC a prospectus supplement with respect to a proposed
offering of Registrable Securities pursuant to an effective registration
statement, subject to Section 4.5(d), keep such registration statement
effective and keep

 

21

 

such
prospectus supplement current until the securities described therein are no
longer Registrable Securities.

 

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

 

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

 

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

 

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

 

22

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(x)                              If an
underwritten offering is requested pursuant to Section 4.5(a)(ii), enter
into an underwriting agreement in customary form, scope and substance and take
all such

 

23

 

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

 

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

 

24

 

Registrable Securities to be
listed on such securities exchange as the Investor may designate.

 

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

 

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

 

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

 

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

 

(f)                                    Furnishing Information.

 

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

 

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

 

25

 

disposition of such
securities as shall be required to effect the registered offering of their
Registrable Securities.

 

(g)                                 Indemnification.

 

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

 

(ii)                             If the
indemnification provided for in Section 4.5(g)(i) is unavailable to
an Indemnitee with respect to any losses, claims, damages, actions,
liabilities, costs or expenses referred to therein or is insufficient to hold
the Indemnitee harmless as contemplated therein, then the Company, in lieu of
indemnifying such Indemnitee, shall contribute to the amount paid or payable by
such Indemnitee as a result of such losses, claims, damages, actions,
liabilities, costs or expenses in such proportion as is appropriate to reflect
the relative fault of the Indemnitee, on the one hand, and the Company, on the
other hand, in connection with the statements or omissions which resulted in such
losses, claims, damages, actions, liabilities, costs or expenses as well as any
other relevant

 

26

 

equitable
considerations.  The relative fault of
the Company, on the one hand, and of the Indemnitee, on the other hand, shall
be determined by reference to, among other factors, whether the untrue
statement of a material fact or omission to state a material fact relates to
information supplied by the Company or by the Indemnitee and the parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission; the Company and each Holder agree that it
would not be just and equitable if contribution pursuant to this Section 4.5(g)(ii) were
determined by pro rata allocation or by any
other method of allocation that does not take account of the equitable
considerations referred to in Section 4.5(g)(i).  No Indemnitee guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from the Company if the
Company was not guilty of such fraudulent misrepresentation.

 

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

 

(i)                                     Clear Market.  With respect to any underwritten offering of
Registrable Securities by the Investor or other Holders pursuant to this Section 4.5,
the Company agrees not to effect (other than pursuant to such registration or
pursuant to a Special Registration) any public sale or distribution, or to file
any Shelf Registration Statement (other than such registration or a Special
Registration) covering, in the case of an underwritten offering of Common Stock
or Warrants, any of its equity securities or, in the case of an underwritten
offering of Preferred Shares, any Preferred Stock of the Company, or, in each
case, any securities convertible into or exchangeable or exercisable for such
securities, during the period not to exceed ten days prior and 60 days
following the effective date of such offering or such longer period up to 90
days as may be requested by the managing underwriter for such underwritten
offering.  The Company also agrees to
cause such of its directors and senior executive officers to execute and
deliver customary lock-up agreements in such form and for such time period up
to 90 days as may be requested by the managing underwriter. “Special Registration” means the registration of (A) equity
securities and/or options or other rights in respect thereof solely registered
on Form S-4 or Form S-8 (or successor form) or (B) shares of
equity securities and/or options or other rights in respect thereof to be
offered to directors, members of management, employees, consultants,

 

27

 

customers, lenders or vendors of the Company or Company Subsidiaries or
in connection with dividend reinvestment plans.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(iii)                          “Register,” “registered,”
and “registration” shall refer to a
registration effected by preparing and (A) filing a registration statement
in compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of effectiveness of such
registration statement or (B) filing a prospectus and/or

 

28

 

prospectus supplement in
respect of an appropriate effective registration statement on Form S-3.

 

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

 

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

 

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

 

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

 

(l)                                     At any time, any holder of
Securities (including any Holder) may elect to forfeit its rights set forth in
this Section 4.5 from that date forward; provided,
that a Holder forfeiting such rights shall nonetheless be entitled to
participate under Section 4.5(a)(iv) — (vi) in any Pending
Underwritten Offering to the same extent that such Holder would have been
entitled to if the holder had not withdrawn; and provided,
further , that no such forfeiture shall terminate a Holder’s rights
or obligations under Section 4.5(f) with respect to any prior
registration or Pending Underwritten Offering. “Pending
Underwritten Offering” means, with respect to any Holder forfeiting
its rights pursuant to this Section 4.5(1), any underwritten offering of

 

29

 

Registrable Securities in which such Holder has advised the Company of
its intent to register its Registrable Securities either pursuant to Section 4.5(a)(ii) or
4.5(a)(iv) prior to the date of such Holder’s forfeiture.

 

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

 

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

 

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

 

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

 

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

 

30

 

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

 

4.8                                 Restriction on Dividends and Repurchases.

 

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

 

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

 

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

 

31

 

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

 

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

 

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

 

4.9                                 Repurchase of Investor Securities.

 

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

 

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

 

32

 

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

 

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

 

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

 

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

 

33

 

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.

 

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

 

34

 

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 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 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.

 

35

 

(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 Business Combination where such party is not the surviving
entity, or a sale of substantially all of its assets, to the entity which is
the survivor of such Business Combination or the purchaser in such sale and (b) as
provided in Section 4.5.

 

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

 

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

 

* * *

 

36

 

ANNEX A

 

FORM OF CERTIFICATE OF DESIGNATIONS

 

CERTIFICATE OF DESIGNATIONS

 

OF

 

FIXED RATE CUMULATIVE PERPETUAL PREFERRED STOCK,
SERIES [·]

 

OF

 

[·]

 

[Insert name of Corporation], a
[corporation] organized and existing under the laws of the [Insert jurisdiction of
organization] (the “Corporation”), in accordance with the
provisions of Section[s] [·] of the [Insert applicable statute] thereof,
does hereby certify:

 

The
board of directors of the Corporation (the “Board of Directors”) or an
applicable committee of the Board of Directors, in accordance with the
[certificate of incorporation and bylaws] of the Corporation and applicable
law, adopted the following resolution on [·]
creating a series of [·] shares of
Preferred Stock of the Corporation designated as “Fixed Rate Cumulative
Perpetual Preferred Stock, Series [·]”.

 

RESOLVED, that pursuant to the provisions
of the [certificate of incorporation and the bylaws] of the Corporation and
applicable law, a series of Preferred Stock, par value $[·]
per share, of the Corporation be and hereby is created, and that the
designation and number of shares of such series, and the voting and other
powers, preferences and relative, participating, optional or other rights, and
the qualifications, limitations and restrictions thereof, of the shares of such
series, are as follows:

 

Part 1.
Designation and Number of Shares. There is hereby created out of the
authorized and unissued shares of preferred stock of the Corporation a series
of preferred stock designated as the “Fixed Rate Cumulative Perpetual Preferred
Stock, Series [·]”
(the “Designated Preferred  Stock”). The authorized number of
shares of Designated Preferred Stock shall be [·].

 

Part 2.  Standard Provisions.  The Standard Provisions contained in Annex A
attached hereto are incorporated herein by reference in their entirety and
shall be deemed to be a part of this Certificate of Designations to the same
extent as if such provisions had been set forth in full herein.

 

Part.
3.  Definitions. The following
terms are used in this Certificate of Designations (including the Standard
Provisions in Annex A hereto) as defined below:

 

(a)                                       “Common Stock”
means the common stock, par value $[~]
per share, of the Corporation.

 

37

 

(b)                                      “Dividend
Payment Date” means [February 15, May 15, August 15 and November 15]
of each year.

 

(c)                                       “Junior Stock”
means the Common Stock, [Insert
titles of any existing Junior Stock] and any other class or
series of stock of the Corporation the terms of which expressly provide that it
ranks junior to Designated Preferred Stock as to dividend rights and/or as to
rights on liquidation, dissolution or winding up of the Corporation.

 

(d)                                      “Liquidation
Amount” means $[1,000](1) per share of Designated Preferred Stock.

 

(e)                                       “Minimum
Amount” means $ [Insert
$ amount equal to 25% of the aggregate value of the Designated Preferred Stock
issued on the Original Issue Date].

 

(f)                                         “Parity
Stock” means any class or series of stock of the Corporation (other than
Designated Preferred Stock) the terms of which do not expressly provide that
such class or series will rank senior or junior to Designated Preferred Stock
as to dividend rights and/or as to rights on liquidation, dissolution or
winding up of the Corporation (in each case without regard to whether dividends
accrue cumulatively or non-cumulatively). Without limiting the foregoing,
Parity Stock shall include the Corporation’s [Insert title(s) of existing classes or series of
Parity Stock].

 

(g)                                      “Signing
Date” means [Insert
date of applicable securities purchase agreement].

 

Part.
4. Certain Voting Matters.  [To be inserted if the Charter
provides for voting in proportion to liquidation preferences:  Whether the vote or consent of
the holders of a plurality, majority or other portion of the shares of
Designated Preferred Stock and any Voting Parity Stock has been cast or given
on any matter on which the holders of shares of Designated Preferred Stock are
entitled to vote shall be determined by the Corporation by reference to the
specified liquidation amount of the shares voted or covered by the consent as
if the Corporation were liquidated on the record date for such vote or consent,
if any, or, in the absence of a record date, on the date for such vote or
consent. For purposes of determining the voting rights of the holders of
Designated Preferred Stock under Section 7 of the Standard Provisions
forming part of this Certificate of Designations, each holder will be entitled
to one vote for each $1,000 of liquidation preference to which such holder’s
shares are entitled.] [To
be inserted if the Charter does not provide for voting in proportion to
liquidation preferences:  Holders
of shares of Designated Preferred Stock will be entitled to one vote for each
such share on any matter on which holders of Designated Preferred Stock are
entitled to vote, including any action by written consent.]

 

[Remainder of Page Intentionally Left
Blank]

 

(1)          If issuer desires
to issue shares with a higher dollar amount liquidation preference, liquidation
preference references will be modified accordingly. In such case (in accordance
with Section 4.7 of the Securities Purchase Agreement), the issuer will be
required to enter into a deposit agreement.

 

38

 

IN WITNESS WHEREOF, [Insert name of Corporation] has caused this Certificate
of Designations to be signed by [·], its
[·], this
[·] day
of [·].

 

	
   

  	
  [Insert
  name of Corporation]

  
	
   

  	
   

  
	
   

  	
  By:

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

39

 

ANNEX A

 

STANDARD PROVISIONS

 

Section 1. General Matters. Each share of Designated
Preferred Stock shall be identical in all respects to every other share of
Designated Preferred Stock. The Designated Preferred Stock shall be perpetual,
subject to the provisions of Section 5 of these Standard Provisions that
form a part of the Certificate of Designations. The Designated Preferred Stock
shall rank equally with Parity Stock and shall rank senior to Junior Stock with
respect to the payment of dividends and the distribution of assets in the event
of any dissolution, liquidation or winding up of the Corporation.

 

Section 2. Standard Definitions. As used herein with
respect to Designated Preferred Stock:

 

(a)                                       “Applicable
Dividend Rate” means (i) during the period from the Original Issue
Date to, but excluding, the first day of the first Dividend Period commencing
on or after the fifth anniversary of the Original Issue Date, 5% per annum and (ii) from
and after the first day of the first Dividend Period commencing on or after the
fifth anniversary of the Original Issue Date, 9% per annum.

 

(b)                                      “Appropriate
Federal Banking Agency” means the “appropriate Federal banking agency” with
respect to the Corporation as defined in Section 3(q) of the Federal
Deposit Insurance Act (12 U.S.C. Section 1813(q)), or any successor
provision.

 

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

 

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

 

(e)                                       “Bylaws”
means the bylaws of the Corporation, as they may be amended from time to time.

 

(f)                                         “Certificate
of Designations” means the Certificate of Designations or comparable
instrument relating to the Designated Preferred Stock, of which these Standard
Provisions form a part, as it may be amended from time to time.

 

(g)                                      “Charter”
means the Corporation’s certificate or articles of incorporation, articles of
association, or similar organizational document.

 

(h)                                      “Dividend
Period” has the meaning set forth in Section 3(a).

 

(i)                                          “Dividend
Record Date” has the meaning set forth in Section 3(a).

 

(j)                                          “Liquidation
Preference” has the meaning set forth in Section 4(a).

 

A-1

 

(k)                                  “Original Is sue
Date” means the date on which shares of Designated Preferred Stock are
first issued.

 

(l)                                     “Preferred
Director” has the meaning set forth in Section 7(b).

 

(m)                               “Preferred Stock”
means any and all series of preferred stock of the Corporation, including the
Designated Preferred Stock.

 

(n)                                 “Qualified Equity
Offering” means the sale and issuance for cash by the Corporation to
persons other than the Corporation or any of its subsidiaries after the
Original Issue Date of shares of perpetual Preferred Stock, Common Stock or any
combination of such stock, that, in each case, qualify as and may be included
in Tier 1 capital of the Corporation at the time of issuance under the
applicable risk-based capital guidelines of the Corporation’s Appropriate
Federal Banking Agency (other than any such sales and issuances made pursuant
to agreements or arrangements entered into, or pursuant to financing plans
which were publicly announced, on or prior to October 13, 2008).

 

(o)                                 “Share Dilution
Amount” has the meaning set forth in Section 3(b).

 

(p)                                 “Standard
Provisions” mean these Standard Provisions that form a part of the
Certificate of Designations relating to the Designated Preferred Stock.

 

(q)                                 “Successor
Preferred Stock” has the meaning set forth in Section 5(a).

 

(r)                                    “Voting Parity
Stock” means, with regard to any matter as to which the holders of
Designated Preferred Stock are entitled to vote as specified in Sections 7(a) and
7(b) of these Standard Provisions that form a part of the Certificate of
Designations, any and all series of Parity Stock upon which like voting rights
have been conferred and are exercisable with respect to such matter.

 

Section 3. Dividends.

 

(a)                                     Rate.
Holders of Designated Preferred Stock shall be entitled to receive, on each
share of Designated Preferred Stock if, as and when declared by the Board of
Directors or any duly authorized committee of the Board of Directors, but only
out of assets legally available therefor, cumulative cash dividends with
respect to each Dividend Period (as defined below) at a rate per annum equal to
the Applicable Dividend Rate on (i) the Liquidation Amount per share of
Designated Preferred Stock and (ii) the amount of accrued and unpaid
dividends for any prior Dividend Period on such share of Designated Preferred
Stock, if any. Such dividends shall begin to accrue and be cumulative from the
Original Issue Date, shall compound on each subsequent Dividend Payment Date (i.e., no
dividends shall accrue on other dividends unless and until the first Dividend
Payment Date for such other dividends has passed without such other dividends
having been paid on such date) and shall be payable quarterly in arrears on
each Dividend Payment Date, commencing with the first such Dividend Payment
Date to occur at least 20 calendar days after the Original Issue Date. In the
event that any Dividend Payment Date would otherwise fall on a day that is not
a Business Day, the dividend payment due on that date will be postponed to the
next day that is a Business Day and no additional dividends will accrue as a result
of that postponement. The period from and including any Dividend Payment Date
to, but

 

A-2

 

excluding, the next Dividend Payment Date is a “Dividend Period”,
provided that the initial Dividend Period shall be the period from and
including the Original Is sue Date to, but excluding, the next Dividend Payment
Date.

 

Dividends that are payable on Designated Preferred Stock in respect of
any Dividend Period shall be computed on the basis of a 360-day year consisting
of twelve 30-day months. The amount of dividends payable on Designated
Preferred Stock on any date prior to the end of a Dividend Period, and for the
initial Dividend Period, shall be computed on the basis of a 360-day year
consisting of twelve 30-day months, and actual days elapsed over a 30-day
month.

 

Dividends that are payable on Designated Preferred Stock on any
Dividend Payment Date will be payable to holders of record of Designated
Preferred Stock as they appear on the stock register of the Corporation on the
applicable record date, which shall be the 15th calendar day immediately
preceding such Dividend Payment Date or such other record date fixed by the Board
of Directors or any duly authorized committee of the Board of Directors that is
not more than 60 nor less than 10 days prior to such Dividend Payment Date
(each, a “Dividend Record  Date”). Any such day that is a Dividend
Record Date shall be a Dividend Record Date whether or not such day is a
Business Day.

 

Holders of Designated Preferred Stock shall not be entitled to any
dividends, whether payable in cash, securities or other property, other than
dividends (if any) declared and payable on Designated Preferred Stock as
specified in this Section 3 (subject to the other provisions of the Certificate
of Designations).

 

(b)                                  Priority of
Dividends.  So long as any share of
Designated Preferred Stock remains outstanding, no dividend or distribution
shall be declared or paid on the Common Stock or any other shares of Junior
Stock (other than dividends payable solely in shares of Common Stock) or Parity
Stock, subject to the immediately following paragraph in the case of Parity Stock,
and no Common Stock, Junior Stock or Parity Stock shall be, directly or
indirectly, purchased, redeemed or otherwise acquired for consideration by the
Corporation or any of its subsidiaries unless all accrued and unpaid dividends
for all past Dividend Periods, including the latest completed Dividend Period
(including, if applicable as provided in Section 3(a) above, dividends
on such amount), on all outstanding shares of Designated Preferred Stock have
been or are contemporaneously declared and paid in full (or have been declared
and a sum sufficient for the payment thereof has been set aside for the benefit
of the holders of shares of Designated Preferred Stock on the applicable record
date). The foregoing limitation shall not apply to (i) redemptions,
purchases or other acquisitions of shares of Common Stock or other Junior Stock
in connection with the administration of any employee benefit plan in the
ordinary course of business (including purchases to offset the Share Dilution
Amount (as defined below) pursuant to a publicly announced repurchase plan) and
consistent with past practice, provided that any purchases to offset the Share
Dilution Amount shall in no event exceed the Share Dilution Amount; (ii) purchases
or other acquisitions by a broker-dealer subsidiary of the Corporation solely
for the purpose of market-making, stabilization or customer facilitation
transactions in Junior Stock or Parity Stock in the ordinary course of its
business; (iii) purchases by a broker-dealer subsidiary of the Corporation
of capital stock of the Corporation for resale pursuant to an offering by the
Corporation of such capital stock underwritten by such broker-dealer
subsidiary; (iv) any dividends or distributions of rights or Junior Stock
in connection with a stockholders’

 

A-3

 

rights plan or any redemption or repurchase of rights pursuant to any
stockholders’ rights plan; (v) the acquisition by the Corporation or any
of its subsidiaries of record ownership in Junior Stock or Parity Stock for the
beneficial ownership of any other persons (other than the Corporation or any of
its subsidiaries), including as trustees or custodians; and (vi) the
exchange or conversion of Junior Stock for or into other Junior Stock or of
Parity Stock for or into other Parity Stock (with the same or lesser aggregate
liquidation amount) or Junior Stock, in each case, 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. “Share Dilution Amount”
means the increase in the number of diluted shares outstanding (determined in
accordance with generally accepted accounting principles in the United States,
and as measured from the date of the Corporation’s consolidated financial
statements most recently filed with the Securities and Exchange Commission
prior to the Original Issue Date) resulting from the grant, vesting or exercise
of equity-based compensation to employees and equitably adjusted for any stock
split, stock dividend, reverse stock split, reclassification or similar
transaction.

 

When dividends are not paid (or declared and a sum sufficient for
payment thereof set aside for the benefit of the holders thereof on the
applicable record date) on any Dividend Payment Date (or, in the case of Parity
Stock having dividend payment dates different from the Dividend Payment Dates,
on a dividend payment date falling within a Dividend Period related to such
Dividend Payment Date) in full upon Designated Preferred Stock and any shares
of Parity Stock, all dividends declared on Designated Preferred Stock and all
such Parity Stock and payable on such Dividend Payment Date (or, in the case of
Parity Stock having dividend payment dates different from the Dividend Payment
Dates, on a dividend payment date falling within the Dividend Period related to
such Dividend Payment Date) shall be declared pro rata so that
the respective amounts of such dividends declared shall bear the same ratio to
each other as all accrued and unpaid dividends per share on the shares of
Designated Preferred Stock (including, if applicable as provided in Section 3(a) above,
dividends on such amount) and all Parity Stock payable on such Dividend Payment
Date (or, in the case of Parity Stock having dividend payment dates different
from the Dividend Payment Dates, on a dividend payment date falling within the
Dividend Period related to such Dividend Payment Date) (subject to their having
been declared by the Board of Directors or a duly authorized committee of the
Board of Directors out of legally available funds and including, in the case of
Parity Stock that bears cumulative dividends, all accrued but unpaid dividends)
bear to each other. If the Board of Directors or a duly authorized committee of
the Board of Directors determines not to pay any dividend or a full dividend on
a Dividend Payment Date, the Corporation will provide written notice to the
holders of Designated Preferred Stock prior to such Dividend Payment Date.

 

Subject to the foregoing, and not otherwise, such dividends (payable in
cash, securities or other property) as may be determined by the Board of
Directors or any duly authorized committee of the Board of Directors may be
declared and paid on any securities, including Common Stock and other Junior
Stock, from time to time out of any funds legally available for such payment,
and holders of Designated Preferred Stock shall not be entitled to participate
in any such dividends.

 

A-4

 

Section 4. Liquidation Rights.

 

(a)                                  Voluntary or
Involuntary Liquidation. In the event of any liquidation, dissolution or
winding up of the affairs of the Corporation, whether voluntary or involuntary,
holders of Designated Preferred Stock shall be entitled to receive for each
share of Designated Preferred Stock, out of the assets of the Corporation or
proceeds thereof (whether capital or surplus) available for distribution to
stockholders of the Corporation, subject to the rights of any creditors of the
Corporation, before any distribution of such assets or proceeds is made to or
set aside for the holders of Common Stock and any other stock of the
Corporation ranking junior to Designated Preferred Stock as to such
distribution, payment in full in an amount equal to the sum of (i) the
Liquidation Amount per share and (ii) the amount of any accrued and unpaid
dividends (including, if applicable as provided in Section 3(a) above,
dividends on such amount), whether or not declared, to the date of payment
(such amounts collectively, the “Liquidation Preference”).

 

(b)                                 Partial
Payment. If in any distribution described in Section 4(a) above
the assets of the Corporation or proceeds thereof are not sufficient to pay in
full the amounts payable with respect to all outstanding shares of Designated
Preferred Stock and the corresponding amounts payable with respect of any other
stock of the Corporation ranking equally with Designated Preferred Stock as to
such distribution, holders of Designated Preferred Stock and the holders of
such other stock shall share ratably in any such distribution in proportion to
the full respective distributions to which they are entitled.

 

(c)                                  Residual
Distributions. If the Liquidation Preference has been paid in full to all
holders of Designated Preferred Stock and the corresponding amounts payable
with respect of any other stock of the Corporation ranking equally with
Designated Preferred Stock as to such distribution has been paid in full, the
holders of other stock of the Corporation shall be entitled to receive all
remaining assets of the Corporation (or proceeds thereof) according to their
respective rights and preferences.

 

(d)                                 Merger,
Consolidation and Sale of Assets Not Liquidation. For purposes of this Section 4,
the merger or consolidation of the Corporation with any other corporation or
other entity, including a merger or consolidation in which the holders of
Designated Preferred Stock receive cash, securities or other property for their
shares, or the sale, lease or exchange (for cash, securities or other property)
of all or substantially all of the assets of the Corporation, shall not
constitute a liquidation, dissolution or winding up of the Corporation.

 

Section 5. Redemption.

 

(a)                                    Optional
Redemption. Except as provided below, the Designated Preferred Stock may
not be redeemed prior to the first Dividend Payment Date falling on or after
the third anniversary of the Original Issue Date. On or after the first
Dividend Payment Date falling on or after the third anniversary of the Original
Issue Date, the Corporation, at its option, subject to the approval of the
Appropriate Federal Banking Agency, may redeem, in whole or in part, at any time
and from time to time, out of funds legally available therefor, the shares of
Designated Preferred Stock at the time outstanding, upon notice given as
provided in Section 5(c) below, at a redemption price equal to the
sum of (i) the Liquidation Amount per share and (ii) except as
otherwise provided below, any accrued and unpaid dividends (including, if
applicable as

 

A-5

 

provided in Section 3(a) above, dividends on such amount)
(regardless of whether any dividends are actually declared) to, but excluding,
the date fixed for redemption.

 

Notwithstanding the foregoing, prior to the first Dividend Payment Date
falling on or after the third anniversary of the Original Issue Date, the
Corporation, at its option, subject to the approval of the Appropriate Federal
Banking Agency, may redeem, in whole or in part, at any time and from time to
time, the shares of Designated Preferred Stock at the time outstanding, upon
notice given as provided in Section 5(c) below, at a redemption price
equal to the sum of (i) the Liquidation Amount per share and (ii) except as
otherwise provided below, any accrued and unpaid dividends (including, if
applicable as provided in Section 3(a) above, dividends on such
amount) (regardless of whether any dividends are actually declared) to, but
excluding, the date fixed for redemption; provided that (x) the
Corporation (or any successor by Business Combination) has received aggregate
gross proceeds of not less than the Minimum Amount (plus the “Minimum Amount”
as defined in the relevant certificate of designations for each other outstanding
series of preferred stock of such successor that was originally issued to the
United States Department of the Treasury (the “Successor Preferred Stock”)
in connection with the Troubled Asset Relief Program Capital Purchase Program)
from one or more Qualified Equity Offerings (including Qualified Equity
Offerings of such successor), and (y) the aggregate redemption price of
the Designated Preferred Stock (and any Successor Preferred Stock) redeemed
pursuant to this paragraph may not exceed the aggregate net cash proceeds
received by the Corporation (or any successor by Business Combination) from
such Qualified Equity Offerings (including Qualified Equity Offerings of such
successor).

 

The redemption price for any shares of Designated Preferred Stock shall
be payable on the redemption date to the holder of such shares against
surrender of the certificate(s) evidencing such shares to the Corporation
or its agent. Any declared but unpaid dividends payable on a redemption date
that occurs subsequent to the Dividend Record Date for a Dividend Period shall
not be paid to the holder entitled to receive the redemption price on the
redemption date, but rather shall be paid to the holder of record of the
redeemed shares on such Dividend Record Date relating to the Dividend Payment
Date as provided in Section 3 above.

 

(b)                                 No Sinking Fund.
The Designated Preferred Stock will not be subject to any mandatory redemption,
sinking fund or other similar provisions. Holders of Designated Preferred Stock
will have no right to require redemption or repurchase of any shares of
Designated Preferred Stock.

 

(c)                                  Notice of
Redemption. Notice of every redemption of shares of Designated Preferred
Stock shall be given by first class mail, postage prepaid, addressed to the
holders of record of the shares to be redeemed at their respective last
addresses appearing on the books of the Corporation. Such mailing shall be at
least 30 days and not more than 60 days before the date fixed for redemption.
Any notice mailed as provided in this Subsection shall be conclusively presumed
to have been duly given, whether or not the holder receives such notice, but
failure duly to give such notice by mail, or any defect in such notice or in
the mailing thereof, to any holder of shares of Designated Preferred Stock
designated for redemption shall not affect the validity of the proceedings for
the redemption of any other shares of Designated Preferred Stock.
Notwithstanding the foregoing, if shares of Designated Preferred Stock are
issued in book-entry form through The Depository Trust Corporation or any other
similar facility, notice of

 

A-6

 

redemption may be given to the holders of Designated Preferred Stock at
such time and in any manner permitted by such facility. Each notice of
redemption given to a holder shall state: (1) the redemption date; (2) the
number of shares of Designated Preferred Stock to be redeemed and, if less than
all the shares held by such holder are to be redeemed, the number of such shares
to be redeemed from such holder; (3) the redemption price; and (4) the
place or places where certificates for such shares are to be surrendered for
payment of the redemption price.

 

(d)                                 Partial
Redemption. In case of any redemption of part of the shares of Designated
Preferred Stock at the time outstanding, the shares to be redeemed shall be
selected either pro
rata or in such other manner as the Board of Directors or a duly
authorized committee thereof may determine to be fair and equitable. Subject to
the provisions hereof, the Board of Directors or a duly authorized committee
thereof shall have full power and authority to prescribe the terms and
conditions upon which shares of Designated Preferred Stock shall be redeemed
from time to time. If fewer than all the shares represented by any certificate
are redeemed, a new certificate shall be issued representing the unredeemed
shares without charge to the holder thereof.

 

(e)                                  Effectiveness of
Redemption. If notice of redemption has been duly given and if on or before
the redemption date specified in the notice all funds necessary for the
redemption have been deposited by the Corporation, in trust for the pro rata benefit
of the holders of the shares called for redemption, with a bank or trust
company doing business in the Borough of Manhattan, The City of New York, and
having a capital and surplus of at least $500 million and selected by the Board
of Directors, so as to be and continue to be available solely therefor, then,
notwithstanding that any certificate for any share so called for redemption has
not been surrendered for cancellation, on and after the redemption date
dividends shall cease to accrue on all shares so called for redemption, all
shares so called for redemption shall no longer be deemed outstanding and all
rights with respect to such shares shall forthwith on such redemption date cease
and terminate, except only the right of the holders thereof to receive the
amount payable on such redemption from such bank or trust company, without
interest. Any funds unclaimed at the end of three years from the redemption
date shall, to the extent permitted by law, be released to the Corporation,
after which time the holders of the shares so called for redemption shall look only
to the Corporation for payment of the redemption price of such shares.

 

(f)                                    Status
of Redeemed Shares. Shares of Designated Preferred Stock that are redeemed,
repurchased or otherwise acquired by the Corporation shall revert to authorized
but unissued shares of Preferred Stock (provided that any such cancelled shares of
Designated Preferred Stock may be reissued only as shares of any series of
Preferred Stock other than Designated Preferred Stock).

 

Section 6. Conversion. Holders of
Designated Preferred Stock shares shall have no right

to exchange or convert such shares into any other securities.

 

Section 7. Voting Rights.

 

(a)                                    General.
The holders of Designated Preferred Stock shall not have any voting rights
except as set forth below or as otherwise from time to time required by law.

 

A-7

 

(b)                                 Preferred Stock
Directors. Whenever, at any time or times, dividends payable on the shares
of Designated Preferred Stock have not been paid for an aggregate of six
quarterly Dividend Periods or more, whether or not consecutive, the authorized
number of directors of the Corporation shall automatically be increased by two
and the holders of the Designated Preferred Stock shall have the right, with
holders of shares of any one or more other classes or series of Voting Parity
Stock outstanding at the time, voting together as a class, to elect two
directors (hereinafter the “Preferred Directors” and each a “Preferred
Director”) to fill such newly

created directorships at the Corporation’s next annual meeting of stockholders
(or at a special meeting called for that purpose prior to such next annual
meeting) and at each subsequent annual meeting of stockholders until all
accrued and unpaid dividends for all past Dividend Periods, including the
latest completed Dividend Period (including, if applicable as provided in Section 3(a) above,
dividends on such amount), on all outstanding shares of Designated Preferred
Stock have been declared and paid in full at which time such right shall
terminate with respect to the Designated Preferred Stock, except as herein or
by law expressly provided, subject to revesting in the event of each and every
subsequent default of the character above mentioned; provided that it shall be a qualification
for election for any Preferred Director that the election of such Preferred
Director shall not cause the Corporation to violate any corporate governance
requirements of any securities exchange or other trading facility on which
securities of the Corporation may then be listed or traded that listed or
traded companies must have a majority of independent directors. Upon any
termination of the right of the holders of shares of Designated Preferred Stock
and Voting Parity Stock as a class to vote for directors as provided above, the
Preferred Directors shall cease to be qualified as directors, the term of
office of all Preferred Directors then in office shall terminate immediately
and the authorized number of directors shall be reduced by the number of
Preferred Directors elected pursuant hereto. Any Preferred Director may be
removed at any time, with or without cause, and any vacancy created thereby may
be filled, only by the affirmative vote of the holders a majority of the shares
of Designated Preferred Stock at the time outstanding voting separately as a
class together with the holders of shares of Voting Parity Stock, to the extent
the voting rights of such holders described above are then exercisable. If the
office of any Preferred Director becomes vacant for any reason other than removal
from office as aforesaid, the remaining Preferred Director may choose a
successor who shall hold office for the unexpired term in respect of which such
vacancy occurred.

 

(c)                                  Class Voting
Rights as to Particular Matters. So long as any shares of Designated
Preferred Stock are outstanding, in addition to any other vote or consent of
stockholders required by law or by the Charter, the vote or consent of the
holders of at least 66 2/3% of the shares of Designated Preferred Stock at the
time outstanding, voting as a separate class, given in person or by proxy,
either in writing without a meeting or by vote at any meeting called for the
purpose, shall be necessary for effecting or validating:

 

(i)                                       Authorization
of Senior Stock. Any amendment or alteration of the Certificate of
Designations for the Designated Preferred Stock or the Charter to authorize or
create or increase the authorized amount of, or any issuance of, any shares of,
or any securities convertible into or exchangeable or exercisable for shares of,
any class or series of capital stock of the Corporation ranking senior to
Designated Preferred Stock with respect to either or both the payment of
dividends and/or the distribution of assets on any liquidation, dissolution or
winding up of the Corporation;

 

A-8

 

(ii)                                       Amendment
of Designated Preferred Stock. Any amendment, alteration or repeal of any
provision of the Certificate of Designations for the Designated Preferred Stock
or the Charter (including, unless no vote on such merger or consolidation is
required by Section 7(c)(iii) below, any amendment, alteration or
repeal by means of a merger, consolidation or otherwise) so as to adversely
affect the rights, preferences, privileges or voting powers of the Designated
Preferred Stock; or

 

(iii)                                    Share
Exchanges, Reclassifications, Mergers and Consolidations. Any consummation
of a binding share exchange or reclassification involving the Designated
Preferred Stock, or of a merger or consolidation of the Corporation with
another corporation or other entity, unless in each case (x) the shares of
Designated Preferred Stock remain outstanding or, in the case of any such
merger or consolidation with respect to which the Corporation is not the
surviving or resulting entity, are converted into or exchanged for preference
securities of the surviving or resulting entity or its ultimate parent, and (y) such
shares remaining outstanding or such preference securities, as the case may be,
have such rights, preferences, privileges and voting powers, and limitations
and restrictions thereof, taken as a whole, as are not materially less
favorable to the holders thereof than the rights, preferences, privileges and
voting powers, and limitations and restrictions thereof, of Designated
Preferred Stock immediately prior to such consummation, taken as a whole;

 

provided, however, that for all
purposes of this Section 7(c), any increase in the amount of the
authorized Preferred Stock, including any increase in the authorized amount of
Designated Preferred Stock necessary to satisfy preemptive or similar rights
granted by the Corporation to other persons prior to the Signing Date, or the
creation and issuance, or an increase in the authorized or issued amount,
whether pursuant to preemptive or similar rights or otherwise, of any other
series of Preferred Stock, or any securities convertible into or exchangeable
or exercisable for any other series of Preferred Stock, ranking equally with
and/or junior to Designated Preferred Stock with respect to the payment of
dividends (whether such dividends are cumulative or non-cumulative) and the
distribution of assets upon liquidation, dissolution or winding up of the
Corporation will not be deemed to adversely affect the rights, preferences,
privileges or voting powers, and shall not require the affirmative vote or
consent of, the holders of outstanding shares of the Designated Preferred
Stock.

 

(d)                                      Changes
after Provision for Redemption. No vote or consent of the holders of
Designated Preferred Stock shall be required pursuant to Section 7(c) above
if, at or prior to the time when any such vote or consent would otherwise be
required pursuant to such Section, all outstanding shares of the Designated
Preferred Stock shall have been redeemed, or shall have been called for
redemption upon proper notice and sufficient funds shall have been deposited in
trust for such redemption, in each case pursuant to Section 5 above.

 

(e)                                       Procedures
for Voting and Consents. The rules and procedures for calling and
conducting any meeting of the holders of Designated Preferred Stock (including,
without limitation, the fixing of a record date in connection therewith), the
solicitation and use of proxies at such a meeting, the obtaining of written
consents and any other aspect or matter with regard to such a meeting or such
consents shall be governed by any rules of the Board of Directors or any
duly authorized committee of the Board of Directors, in its discretion, may
adopt from time to

 

A-9

 

time, which rules and procedures shall conform to the requirements
of the Charter, the Bylaws, and applicable law and the rules of any
national securities exchange or other trading facility on which Designated
Preferred Stock is listed or traded at the time.

 

Section 8. Record Holders. To the fullest extent permitted
by applicable law, the Corporation and the transfer agent for Designated
Preferred Stock may deem and treat the record holder of any share of Designated
Preferred Stock as the true and lawful owner thereof for all purposes, and
neither the Corporation nor such transfer agent shall be affected by any notice
to the contrary.

 

Section 9. Notices. All notices
or communications in respect of Designated Preferred Stock shall be sufficiently
given if given in writing and delivered in person or by first class mail,
postage prepaid, or if given in such other manner as may be permitted in this
Certificate of Designations, in the Charter or Bylaws or by applicable law.
Notwithstanding the foregoing, if shares of Designated Preferred Stock are
issued in book-entry form through The Depository Trust Corporation or any
similar facility, such notices may be given to the holders of Designated
Preferred Stock in any manner permitted by such facility.

 

Section 10. No Preemptive Rights. No share of Designated
Preferred Stock shall have any rights of preemption whatsoever as to any
securities of the Corporation, or any warrants, rights or options issued or
granted with respect thereto, regardless of how such securities, or such
warrants, rights or options, may be designated, issued or granted.

 

Section 11. Replacement Certificates.
The Corporation shall replace any mutilated certificate at the holder’s expense
upon surrender of that certificate to the Corporation. The Corporation shall
replace certificates that become destroyed, stolen or lost at the holder’s expense
upon delivery to the Corporation of reasonably satisfactory evidence that the
certificate has been destroyed, stolen or lost, together with any indemnity
that may be reasonably required by the Corporation.

 

Section 12. Other Rights. The shares of Designated
Preferred Stock shall not have any rights, preferences, privileges or voting
powers or relative, participating, optional or other special rights, or
qualifications, limitations or restrictions thereof, other than as set forth
herein or in the Charter or as provided by applicable law.

 

A-10

 

ANNEX B

 

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.

 

 

ANNEX C

 

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 Common
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 [insert, if applicable:
,subject to the appr ovals of the Company’s stockholders set forth on Schedule
C].

 

(e)                                  The Company has the
corporate power and authority to execute and deliver the Agreement and the
Warrant and [insert, if applicable:
,subject to the approvals of the Company’s stockholders set forth on Schedule
C,] 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 [insert, if  applicable: ,subject t, in each case, to the
approvals of the Company’s stockholders set forth on Schedule C].

 

(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(g) or
the severability provisions of the Agreement insofar as Section 4.5(g) is
concerned.

 

 

ANNEX D

 

FORM OF
WARRANT

 

FORM OF WARRANT TO PURCHASE COMMON STOCK

 

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

 

WARRANT

to purchase

Shares of Common Stock

 

of                                           

 

	
  Issue Date: 

  	
   

  	
   

  

 

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

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

2

 

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

 

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

 

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

 

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

 

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

 

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

 

3

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

4

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

5

 

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

 

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

 

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

 

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

 

6

 

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

 

8.                                       Transfer/Assignment.

 

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

 

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

 

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

 

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

 

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

 

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

 

7

 

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

 

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

 

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

 

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

 

8

 

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

 

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

 

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

 

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

 

9

 

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

 

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

 

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

 

10

 

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

 

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

 

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

 

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

 

11

 

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

 

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

 

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

 

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

 

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

 

12

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

13

 

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

 

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

 

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

 

[Remainder of page intentionally left blank]

 

14

 

[Form of Notice of Exercise]

	
   

  	
  Date:

  	
   

  	
   

  

 

TO:                            [Company]

 

RE:                              Election
to Purchase Common Stock

 

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

 

	
  Number of Shares of Common Stock

  	
   

  	
   

  

 

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

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

  	
   

  	
   

  

 

	
  Aggregate Exercise Price:

  	
   

  	
   

  

 

	
   

  	
  Holder:

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

15

 

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

 

Dated:

 

	
   

  	
  COMPANY:

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
					

 

	
   

  	
  Attest:

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
				

 

[Signature Page to Warrant]

 

16

 

SCHEDULE A

 

Item 1

Name:

Corporate or other organizational form:

Jurisdiction of organization:

 

Item 2 

Exercise Price:(2)

 

Item 3  

Issue Date:

 

Item 4 

Amount of last dividend declared prior to the Issue Date:

 

Item 5 

Date of Letter Agreement between the Company and the United States Department
of the Treasury:

 

Item 6 

Number of shares of Common Stock:

 

Item 7 

Company’s address:

 

Item 8 

Notice information:

 

(2)         Initial exercise price to be calculated based
on the average of closing prices of the Common Stock on the 20 trading days
ending on the last trading day prior to the date the Company’s application for
participation in the Capital Purchase Program was approved by the United States
Department of the Treasury.Exhibit
10.1

 

3M NONQUALIFIED PENSION PLAN I

 

(Amended and Restated
Effective January 1, 2009)

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I: INTRODUCTION

  	
  1

  
	
  1.01

  	
  Title

  	
  1

  
	
  1.02

  	
  Purpose

  	
  1

  
	
  1.03

  	
  History

  	
  1

  
	
  1.04

  	
  Effect

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE II: DEFINITIONS

  	
  2

  
	
  2.01

  	
  Annuity Starting Date

  	
  2

  
	
  2.02

  	
  Code

  	
  2

  
	
  2.03

  	
  Compensation Committee

  	
  3

  
	
  2.04

  	
  Discharge for Cause

  	
  3

  
	
  2.05

  	
  ERIP

  	
  3

  
	
  2.06

  	
  Former Member

  	
  3

  
	
  2.07

  	
  Member

  	
  3

  
	
  2.08

  	
  Nonqualified Plan I

  	
  3

  
	
  2.09

  	
  Nonqualified Plan I Benefit

  	
  3

  
	
  2.10

  	
  Plan Administrator

  	
  4

  
	
  2.11

  	
  Retirement; Retire

  	
  4

  
	
  2.12

  	
  Separation from Service

  	
  4

  
	
  2.13

  	
  Specified Employee

  	
  5

  
	
  2.14

  	
  Supplemental Plan

  	
  5

  
	
   

  	
   

  	
   

  
	
  ARTICLE III: ELIGIBILITY AND PARTICIPATION

  	
  5

  
	
  3.01

  	
  Eligibility

  	
  5

  
	
  3.02

  	
  Participation

  	
  5

  
	
  3.03

  	
  Forfeiture

  	
  5

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV: AMOUNT AND DISTRIBUTION OF BENEFITS

  	
  6

  
	
  4.01

  	
  Additional Monthly Benefit

  	
  6

  
	
  4.02

  	
  Time of Payment

  	
  6

  
	
  4.03

  	
  Form of Payment

  	
  8

  
	
  4.04

  	
  Pre-Commencement Death.

  	
  10

  
	
  4.05

  	
  Beneficiary

  	
  11

  
	
  4.06

  	
  Incapacity

  	
  11

  

 

 

	
  ARTICLE V: UNFUNDED PLAN

  	
  12

  
	
  5.01

  	
  No Trust

  	
  12

  
	
  5.02

  	
  No Contributions by Members

  	
  12

  
	
  5.03

  	
  Unsecured Creditor Status

  	
  12

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI: PLAN ADMINISTRATION

  	
  12

  
	
  6.01

  	
  Powers and Duties of the Plan Administrator

  	
  12

  
	
  6.02

  	
  Records

  	
  13

  
	
  6.03

  	
  Advisers

  	
  13

  
	
  6.04

  	
  Payment of Expenses

  	
  13

  
	
  6.05

  	
  Indemnity of the Plan Administrator

  	
  13

  
	
  6.06

  	
  Service of Process

  	
  14

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII: AMENDMENT AND TERMINATION

  	
  14

  
	
  7.01

  	
  Right to Amend

  	
  14

  
	
  7.02

  	
  Termination

  	
  14

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII: MISCELLANEOUS

  	
  14

  
	
  8.01

  	
  No Contract of Employment

  	
  14

  
	
  8.02

  	
  No Assignment

  	
  15

  
	
  8.03

  	
  Governing Law

  	
  15

  
	
  8.04

  	
  Separable Provisions

  	
  15

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX: CHANGE IN CONTROL

  	
  16

  
	
  9.01

  	
  Distribution Following Change in Control

  	
  16

  
	
  9.02

  	
  Definition of Change in Control

  	
  16

  
	
  9.03

  	
  Determination of Present Value

  	
  16

  
	
  9.04

  	
  Tax Equalization

  	
  16

  
	
  9.05

  	
  Fees and Expenses

  	
  17

  
	
   

  	
   

  	
   

  
	
  SCHEDULE
  I

  	
  SI-1

  

 

 

3M NONQUALIFIED PENSION PLAN I

 

ARTICLE I:  INTRODUCTION

 

1.01              Title

 

This plan shall be known as
the 3M Nonqualified Pension Plan I (hereinafter the “Nonqualified
Plan I”).

 

1.02              Purpose

 

The purpose of this
Nonqualified Plan I is to provide retirement benefits to participants and
their beneficiaries in the 3M Employee Retirement Income Plan (hereinafter “ERIP”)
which such ERIP is unable to provide solely because of the limitations imposed
by section 415 of the Code.  This
Nonqualified Plan I is intended to supplement the ERIP originally adopted
by 3M in 1931 and as amended from time to time thereafter.

 

1.03              History

 

3M originally adopted a
nonqualified pension plan on November 7, 1978.  This original plan was named the Supplemental
Pension Plan of Minnesota Mining and Manufacturing Company (hereinafter the “Supplemental
Plan”).  The Supplemental Plan was
amended from time to time after its adoption. 
Effective January 1, 1993, the Supplemental Plan was amended and
restated as two separate plans:  the “Nonqualified
Pension Plan I of Minnesota Mining and Manufacturing Company” and “Nonqualified
Pension Plan II of Minnesota Mining and Manufacturing Company”.  The provisions of the restatements superseded
all prior versions of the Supplemental Plan. 
Such restatements have been amended from time to time since their
adoption.  Nonqualified Plan I
provides supplemental benefits that are strictly in excess of section 415
of the Code.  Nonqualified Plan II
provided certain additional supplemental retirement benefits, but effective January 1,
2009, such plan has been amended to provide supplemental retirement benefits
that are strictly in excess of limitations under section 401(a)(17) and
402(g) of the Code.

 

1.04              Effect

 

Effective January 1,
2009, this Nonqualified Plan I is hereby again amended and restated.  The provisions of this restatement 

 

 

supersede all prior versions
of the Plan.  The purpose of this
restatement is to bring the Plan into compliance with section 409A of the
Code by “de-linking” the payment provisions under this Plan from the payment
provisions under the ERIP.  From October 3,
2004 (the date section 409A was added to the Code) through December 31,
2008, the Plan continued to operate with “linked” payment provisions in
accordance with special transition rules issued by the IRS and the U.S.
Department of Treasury in connection with the implementation of
section 409A of the Code.  For
avoidance of doubt, this restatement is intended to apply both to deferred
compensation subject to section 409A of the Code (i.e., deferred
compensation credited under the Plan which related all or in part to services
performed on or after January 1, 2005), as well as deferred compensation
credited under the Plan which relates entirely to services performed on or
before December 31, 2004 that is eligible to be “grandfathered” from
application of section 409A of the Code. 
However, the benefits payable to Members and Former Members (and their
Beneficiaries) who commenced payment of their Nonqualified Plan I Benefit
prior to January 1, 2009 will be determined in accordance with the
provisions of the Plan in effect at the time of their benefit commencement and
will not be adjusted or recomputed to reflect this or any subsequent amendment
or restatement of this Nonqualified Plan I.

 

ARTICLE II:  DEFINITIONS

 

Except where specifically
defined in this Nonqualified Plan I, the words and phrases which appear in
this document shall have the meanings set forth in the ERIP plan document.  Except for definitions and other substantive
provisions of this Nonqualified Plan I, the terms and conditions of the
ERIP shall govern the construction and administration of this Nonqualified
Plan I.

 

2.01              Annuity Starting Date

 

“Annuity Starting Date” means the benefit starting
date as determined under Section 4.02.

 

2.02              Code

 

“Code” means the Internal Revenue Code of 1986, as
amended.

 

2

 

2.03              Compensation Committee

 

“Compensation Committee”
means the Compensation Committee of the Board of Directors of 3M.

 

2.04              Discharge for Cause

 

“Discharge for Cause” or “Discharged
for Cause” means the termination of an employee’s employment for reasons of
dishonesty, embezzlement, conviction of a crime or a misdemeanor involving
moral turpitude, willful misconduct, or personal misconduct which is
detrimental to 3M and its business, as determined in the sole discretion of the
Compensation Committee.

 

2.05              ERIP

 

“ERIP” means the 3M Employee
Retirement Income Plan.

 

2.06              Former Member

 

“Former Member” means a
former employee who is receiving benefit payments under the provisions of this
Nonqualified Plan I, or a former employee whose employment with 3M has
terminated for any reason other than Discharge for Cause and who is entitled to
a vested Nonqualified Plan I Benefit under the provisions of this
Nonqualified Plan I.

 

2.07              Member

 

“Member” means an employee
who is a participant in the ERIP and who is accruing an additional Nonqualified
Plan I Benefit under the provisions of this Nonqualified Plan I.

 

2.08              Nonqualified Plan I

 

“Nonqualified Plan I”
means the 3M Nonqualified Pension Plan I.

 

2.09              Nonqualified Plan I
Benefit

 

“Nonqualified Plan I
Benefit” means the benefit payable under this Plan described in Section 4.01.

 

3

 

2.10              Plan Administrator

 

“Plan
Administrator” means the 3M Vice President, Global Compensation and Benefits or
his or her successor.

 

2.11              Retirement; Retire

 

“Retirement” means a
Separation from Service after the Member has both attained age fifty five (55)
and completed five (5) years of “Credited Service” (as defined under the
ERIP), or a Separation from Service after the Member has attained age sixty
five(65).

 

2.12              Separation from Service

 

“Separation from Service”
means a severance of a Member’s employment relationship with 3M and all
affiliates for any reason other than the Member’s death or Discharge for Cause.

 

Whether a Separation from
Service has occurred is determined under section 409A of the Code and
Treasury reg. section 1.409A-1(h) (i.e., whether
the facts and circumstances indicate that the employer and the employee
reasonably anticipated that no further services would be performed after a
certain date or that the level of bona fide services the employee would perform
after such date (whether as an employee or independent contractor) would
permanently decrease to no more than 20% of the average level of bona fide
services performed (whether as an employee or an independent contractor) over
the immediately preceding 36 month period (or the full period of services to
the employer if the employee has been providing services to the employer less
than 36 months)).

 

Separation from Service
shall not be deemed to occur while the employee is on military leave, sick
leave or other bona fide leave of absence if the period does not exceed six (6) months
or, if longer, so long as the employee retains a right to reemployment with 3M
or an affiliate under an applicable statute or by contract.  For this purpose, a leave is bona fide only
if, and so long as, there is a reasonable expectation that the employee will
return to perform services for 3M or an affiliate.  Notwithstanding the foregoing, a 29 month
period of absence will be substituted for such 6 month period if the leave is
due to any medically determinable physical or mental impairment that can be
expected to result in death or can be expected to last for a continuous period
of no less than 6 months and that causes the 

 

4

 

employee to be unable to
perform the duties of his or her position of employment.

 

2.13              Specified Employee

 

“Specified Employee” means a “specified employee” as
defined in Treas. Reg. section 1.409-1(i) or such other regulation or
guidance issued under section 409A of the Code.

 

2.14              Supplemental Plan

 

“Supplemental
Plan” means the Supplemental Pension Plan of Minnesota Mining and Manufacturing
Company, the predecessor to this Nonqualified Plan I.

 

ARTICLE III: 
ELIGIBILITY AND PARTICIPATION

 

3.01              Eligibility

 

Any employee of 3M or an
affiliate who is a participant in the ERIP shall be eligible to become a Member
in this Nonqualified Plan I if and only if the Retirement Income which
would otherwise have been earned by or payable to such employee under the
provisions of the ERIP is being limited by the application of the limitations
on benefits under section 415 of the Code (as reflected in Section 3.08
of Article III of the ERIP, as the same may be amended from time to time).

 

3.02              Participation

 

Participation in this
Nonqualified Plan I shall be automatic by operation of Section 4.01
without any further action by the Compensation Committee.

 

3.03              Forfeiture

 

A Member or Former Member
shall cease to be a Member or Former Member and shall forfeit all rights and
benefits under this Nonqualified Plan I when the Compensation Committee
determines, in its sole discretion, that such Member or Former Member is
employed by, acting as a consultant for or is otherwise directly or indirectly
performing services for any person or entity engaged in the (i) manufacture
or sale of any product similar to or in competition with any product
manufactured or sold by 3M or any of its subsidiaries, or (ii) manufacture
or sale of special machinery 

 

5

 

or equipment, or furnishing
of engineering or technical services concerning such machinery or equipment,
used in the manufacture or sale of any product similar to or in competition
with any product manufactured or sold by 3M or any of its subsidiaries, without
the written consent of the Compensation Committee.  Before making a determination that a Member
or Former Member is covered by the provisions of this Section 3.03, the
Compensation Committee shall give the Member or Former Member notice of its
intention to invoke this forfeiture provision and an opportunity to discontinue
such employment or consulting relationship or the provision of such services
within a period of 90 days following the date of such notice.

 

ARTICLE IV:  AMOUNT AND DISTRIBUTION OF BENEFITS

 

4.01              Additional Monthly Benefit

 

In addition to the amount of
Retirement Income payable to a Member or Former Member under the ERIP, this
Nonqualified Plan I shall pay an additional monthly benefit to such Member
or Former Member equal to the amount by which (a) exceeds (b), where:

 

                (a)           is
the monthly Retirement Income that would have been payable to such Member or
Former Member by the ERIP if that plan’s benefits were not limited in
accordance with the provisions of section 415 of the Code; and

 

                (b)           is
the monthly Retirement Income actually payable to such Member or Former Member
under the ERIP.

 

Such additional benefit
shall be referred to herein as the “Nonqualified Plan I Benefit”.  For avoidance of doubt, a Member or Former
Member who is not entitled to a vested benefit under the ERIP shall not be
entitled to any Nonqualified Plan I Benefit hereunder unless and until
such benefit under the ERIP becomes vested.

 

4.02              Time of Payment

 

Payment
of the Nonqualified Plan I Benefit described in Section 4.01 above
will begin as of the first of the
calendar month (the “Annuity Starting Date”) coincident with or next following
the Member’s  Separation from Service;
provided, however, that:

 

6

 

                (a)           Members whose job grades were classified as CEO, L1, L2,
L3 and T7 whose planned income for 2008 was more than $230,000 were permitted
to make a one-time irrevocable election in 2008 to elect to receive their
Nonqualified Plan I Benefit in the form of an annuity in lieu of a lump
sum.  If a timely election was made in
2008, payment of such Member’s Nonqualified Plan I Benefit shall commence
as of the Annuity Starting Date coincident with or next following the Member’s
Retirement.  If such Member Separates
from Service prior to becoming eligible for Retirement, his or her Nonqualified
Plan I Benefit shall be paid in a single lump sum as of the Annuity
Starting Date coincident with or next following the Member’s Separation from
Service;

 

                (b)           One Member classified as L3 on Transitional Retirement
Leave who incurred a Separation from Service prior to 2008 was permitted to
make a one-time irrevocable election in 2008 to receive his Nonqualified
Plan I Benefit in the form of an annuity in lieu of a lump sum.  Such Member did in fact timely elect, and
accordingly, his Nonqualified Plan I Benefit shall commence upon his
scheduled date of termination given in Schedule I attached hereto (which shall
be treated as a Retirement for purposes of Section 4.03(b));

 

                (c)           Former Members classified as L1 and L2 who incurred a
Separation from Service prior to 2009 were permitted to make a one-time
irrevocable election in 2008 to elect to receive their Nonqualified Plan I
Benefit in the form of an annuity in lieu of a lump sum.  If a timely election was made in 2008, payment
of their Nonqualified Plan I Benefit shall commence upon the first day of
the calendar month coincident with or next following the Former Member’s
attainment of age sixty five (65);

 

                (d)           All other Former Members who incurred a Separation from
Service prior to 2009 and who have not commenced payment of their Nonqualified
Plan I Benefit prior to January 1, 2009 shall receive payment of
their Nonqualified Plan I Benefit in January, 2009 in a single lump
sum.  (For this purpose, the Member’s
Annuity Starting Date shall be January 1, 2009.)

 

Notwithstanding
the foregoing, in the event that the Member is a Specified Employee, payment on
account of Separation from Service shall begin as of the first day of the
seventh month following the Member’s Separation, and the first payment shall
include all payments delayed since the Annuity Starting Date (accordingly, if
payment is in the form of an annuity, such annuity shall be 

 

7

 

calculated
based on the Annuity Starting Date without regard to the delay).

 

4.03              Form of Payment

 

(a)           Lump Sum.  Except as otherwise provided in this Section 4.03,
the Nonqualified Plan I Benefit payable to each Member or Former Member
under this Plan shall be paid in a single lump sum, determined by converting
the monthly Nonqualified Plan I Benefit amount in Section 4.01 into a
present value lump sum using the applicable interest rate on 30-year U.S.
Treasury securities and RP2000 3M mortality. 
For purposes of this conversion, the “applicable interest rate” shall
mean the average of the daily rates on 30-year U.S. Treasury securities in
effect during the calendar quarter first preceding the calendar quarter that
ends immediately prior to the Annuity Starting Date.

 

(b)           Optional Annuity Forms for
Eligible Retirees.  Members whose job
grades were classified as CEO, L1, L2, L3 and T7 whose planned income for 2008
was more than $230,000, and one Member classified as job grade L3 on TSR
(collectively, “Annuity Eligible Members”), were permitted to make a one-time
irrevocable election in 2008 to elect to receive their Nonqualified Plan I
Benefit in the form of an annuity in lieu of a lump sum.  If a timely election was made in 2008, the rules under
this Section 4.03(b) shall apply. 
If an Eligible Member dies or Separates from Service prior to becoming
eligible for Retirement, his or her Nonqualified Plan I Benefit shall be
paid in a single lump sum pursuant to Section 4.03(a).

 

(i)        Presumed
Form:  Single Life Annuity.  If an Annuity Eligible Member Retires and is
not legally married on his or her Annuity Starting Date, then the normal form
of payment of his or her Nonqualified Plan I Benefit shall be the Life
Annuity form, and his or her Nonqualified Plan I Benefit shall, unless he
or she elects to waive the Life Annuity form of payment and selects a Joint and
Nonspouse Beneficiary Survivor Annuity form, be paid in the form of a Life
Annuity. Except as otherwise specifically provided in the Plan, Nonqualified
Plan I Benefit payments will be made monthly to a Member or Former Member
commencing on his or her Annuity Starting Date and ending on the first day of
the month in which his or her death occurs.

 

8

 

(ii)       Presumed
Form:  Joint and Survivor Life Annuity.  If an Annuity Eligible Member Retires and is
legally married on his or her Annuity Starting Date, then his or her
Nonqualified Plan I Benefit shall be paid in the form of a 50% Joint and
Spouse Beneficiary Survivor Annuity form, unless he or she elects to waive the
50% Joint and Spouse Beneficiary Survivor Annuity form and selects either the
Life Annuity form, an alternative Joint and Spouse Beneficiary Survivor Annuity
form available under the ERIP (i.e., 75%
or 100%) or a Joint and Nonspouse Beneficiary Survivor Annuity form available
under the ERIP (50%, 75% or 100%).

 

(c)           Optional Annuity Forms for Certain
Vested Former Members.  Certain
Former Members classified as L1 or L2 who incurred a Separation from Service
prior to 2009 were permitted to make a one-time irrevocable election in 2008 to
elect to receive their Nonqualified Plan I Benefit in the Life Annuity
form or the Joint and Spouse Beneficiary Survivor Annuity form (50% or
75%).  If a timely election was made in
2008, then the Former Member’s Nonqualified Plan I Benefit shall commence
upon the first day of the calendar month coincident with or next following
attainment of age sixty five (65) in the annuity form elected (in lieu of a
single lump sum).

 

(d)           Total Pension Value Guarantee.  To the extent that a Member’s or Former
Member’s Retirement Income is calculated pursuant to Article XIII of the
ERIP (Portfolio II), he or she shall be entitled to a Total Pension Value
Guarantee (as determined under Section 13.10 of the ERIP, as the same may
be amended from time to time) if he or she Retires and elects payment in the
form of a Life Annuity, Joint and Spouse Beneficiary Annuity or Joint and Non-Spouse
Beneficiary Annuity under Section 4.03(b) or (c) of this Plan,
so long as the Total Pension Value Guarantee with respect to the Nonqualified
Plan I Benefit qualifies as a cash refund feature under which payment is
provided upon the death of the last annuitant in an amount that is not greater
than the excess of the Total Pension Value with respect to the Nonqualified
Plan I Benefit at the Annuity Starting Date over the total of payments
before the death of the last annuitant.

 

(e)           Subsidized 50% Joint and Survivor
Annuity.  If a Member or Former
Member is entitled to elect a subsidized 50% Joint and Survivor Annuity under Section 3.10
of the ERIP (as the same may be amended from time to time), he or she shall
also 

 

9

 

be entitled to a subsidized
annuity under this Plan if he or she elects the 50% Joint and Spouse
Beneficiary Annuity pursuant to Section 4.03(b) or (c), provided that
the annual lifetime annuity benefit available to such Member is not greater
than the annual lifetime annuity benefit available under the Life Annuity form,
and provided that the annual survivor annuity benefit is not greater than the
annual lifetime annuity benefit available to such Member under the 50% Joint
and Survivor Annuity form.

 

(f)            Definitions.  For purposes of this Article IV, the
terms Life Annuity, Joint and Spouse Beneficiary Survivor Annuity, Joint and
Nonspouse Beneficiary Survivor Annuity and Total Pension Value Guarantee shall
have the same meanings as under the ERIP, as the same may be amended from time
to time.

 

4.04              Pre-Commencement Death.

 

Notwithstanding
any provision in this Plan to the contrary, if a Member or Former Member dies
after becoming vested under the ERIP but prior to his or her Annuity Starting
Date, the following rules shall apply:

 

(a)           To the extent that a Member’s or
Former Member’s Retirement Income is calculated pursuant to Article III of
the ERIP (Portfolio I), and if the Member or Former Member is married, his or
her surviving spouse shall be entitled a “Preretirement Survivor Annuity”
determined in the same manner as provided under Section 3.07 of the ERIP,
as amended from time to time, with respect to the Member’s or Former Member’s
Nonqualified Plan I Benefit.  Such
Preretirement Survivor Annuity shall be converted into a present value lump
sum, using the interest and mortality factors in Section 4.03(a), and paid
as of the first day of the calendar month following the Member’s or Former
Member’s death;

 

(b)           To the extent that a Member’s or
Former Member’s Retirement Income is calculated pursuant to Article III of
the ERIP (Portfolio I), and if the Member or Former Member is not married, no
benefit shall be payable under this Plan, and

 

(c)           To the extent that a Member’s or
Former Member’s Retirement Income is calculated pursuant to Article XIII
of the ERIP (Portfolio II), and if such Member or Former Member dies prior to
his or her Annuity Starting Date, his or her Beneficiary shall receive the
Member’s or Former Member’s 

 

10

 

Nonqualified Plan I
Benefit attributable to Portfolio II an immediate single lump sum, determined
by converting the monthly Nonqualified Plan I Benefit amount in Section 4.01
into a present value lump sum using the interest and mortality factors in Section 4.03(a).  For this purpose, the first day of the
calendar month coincident with or next following the Member’s death shall be
treated as the Annuity Starting Date.

 

4.05              Beneficiary

 

                (a)           Joint
Annuitant.  An Annuity Eligible
Member or Former Member shall be entitled to designate a Beneficiary to receive
the survivor income portion of the Joint and Non-Spouse Beneficiary Annuity, if
selected, on forms furnished by and filed with 3M.

 

                (b)           Total
Pension Value.  To the extent that a
Member’s or Former Member’s Retirement Income is calculated pursuant to Article XIII
of the ERIP (Portfolio II), a Member or Former Member shall be entitled to
designate a Beneficiary to receive payment of the remainder of the Total
Pension Value of the Nonqualified Plan I Benefit attributable to Portfolio II,
if any, on forms furnished by and filed with 3M.  Notwithstanding the foregoing, with respect
to any pre-commencement death benefit payable under Section 4.04(c) above,
the Member’s or Former Member’s beneficiary designation under the ERIP shall
apply.  In all events, in the absence of
a designation or if such designation fails, the rules for automatic
beneficiaries under the ERIP shall apply.

 

4.06              Incapacity

 

If a Member, Former Member
or Beneficiary is under a legal disability or, by reason of illness or mental
or physical disability, is in the opinion of the Plan Administrator unable to
attend properly to his or her personal financial matters, this Nonqualified
Plan I may pay the benefits payable hereunder in such of the following
ways as the Plan Administrator shall direct:

 

                (a)           Directly
to such Member, Former Member or Beneficiary;

 

                (b)           To
the legal representative of such Member, Former Member or Beneficiary; or

 

11

 

                (c)           To
some relative by blood or marriage, or friend, for the benefit of such Member,
Former Member or Beneficiary.

 

Any payment made pursuant to
this Section shall be in complete discharge of the obligation therefor
under this Nonqualified Plan I.

 

ARTICLE V:  UNFUNDED
PLAN

 

5.01              No Trust

 

The benefits payable under
this Nonqualified Plan I shall be paid solely from the general assets of
3M.  3M does not intend to create any
trust in connection with this Nonqualified Plan I.  Neither 3M nor any other employer shall have
any obligation to make contributions or set aside funds in order to pay such
benefits.  3M’s obligation under this
Nonqualified Plan I shall be merely that of an unfunded and unsecured
promise to pay money in the future.

 

5.02              No Contributions by Members

 

Members and Former Members
shall not be required or permitted to make contributions under this
Nonqualified Plan I.

 

5.03              Unsecured Creditor Status

 

No Member, Former Member or
Beneficiary shall have any right to receive any payments from this Nonqualified
Plan I except as provided in Article IV above.  Until such payments are received, the rights
of each Member, Former Member and Beneficiary under this Nonqualified
Plan I shall be no greater than the rights of an unsecured general
creditor of 3M.

 

ARTICLE VI:  PLAN
ADMINISTRATION

 

6.01              Powers and Duties of the Plan
Administrator

 

Subject to the powers of the
Compensation Committee specified herein, the Plan Administrator shall
administer this Nonqualified Plan I in accordance with its terms and shall
have all powers necessary to carry out the provisions of such Plan.  The Plan Administrator shall have the power
and discretion to interpret the provisions of this Nonqualified Plan I,
and to determine all questions arising in the administration, interpretation
and 

 

12

 

application of such
Plan.  Any such determination by the Plan
Administrator shall be conclusive and binding on all persons.  The Plan Administrator may adopt such
policies and procedures, correct any defects, supply any information, or
reconcile any inconsistency in such manner and to such extent as he or she
deems necessary or desirable to carry out the purposes of this Nonqualified
Plan I; provided, however, that any policies, procedures, determinations
or interpretations shall be done in a nondiscriminatory manner based upon
uniform policies consistently applied to all persons in similar circumstances.

 

6.02              Records

 

The regularly kept records
of 3M shall be conclusive and binding upon all persons with respect to a Member’s
or Former Member’s Hours of Service, Credited Service, Covered Compensation,
Salaried Pension Earnings and all other matters contained therein relating to
Members and Former Members.

 

6.03              Advisers

 

The Plan Administrator may
appoint such legal counsel, accountants, actuaries and other persons as he or
she deems desirable to advise and assist such Administrator with the
administration of this Nonqualified Plan I.  The Plan Administrator shall be entitled to
rely conclusively upon, and shall be fully protected with respect to any action
taken by him or her in good faith in reliance upon, any advice or information
furnished by such advisers.

 

6.04              Payment of Expenses

 

The Plan Administrator shall
not be paid for the performance of his or her duties under this Nonqualified
Plan I, but all expenses incurred by 3M or the Plan Administrator in
connection with the administration of such Plan shall be paid by 3M.

 

6.05              Indemnity of the Plan
Administrator

 

3M shall indemnify the Plan
Administrator from and against any and all claims, losses, damages and
liabilities arising from any act or failure to act in connection with the
administration of this Nonqualified Plan I, and shall defend and/or
reimburse the Plan Administrator for all expenses (including reasonable
attorneys fees) incurred in connection with any pending or threatened claim 

 

13

 

or any action or proceeding
arising therefrom, unless and to the extent that any claim, loss, damage,
liability or expense is judicially determined to have resulted from the Plan
Administrator’s bad faith or gross negligence.

 

6.06              Service of Process

 

In any legal proceeding
involving this Nonqualified Plan I, the Secretary of 3M is designated as
the exclusive agent for receipt of service of process directed to such Plan.

 

ARTICLE VII: 
AMENDMENT AND TERMINATION

 

7.01              Right
to Amend

 

3M’s Board of Directors, the
Compensation Committee or (only for amendments whose projected costs do not
exceed $25,000,000 in any calendar year) any duly authorized officer of 3M may
amend or modify, in whole or in part, this Nonqualified Plan I at any time
without submitting the amendment or modification to the shareholders of 3M
(except that, to the extent necessary to comply with applicable corporate or
securities law, or applicable rules of the New York Stock Exchange, 3M’s
Board of Directors or the Compensation Committee shall have the exclusive
authority to make amendments with respect to benefits under this Plan).  However, no amendment or modification shall
adversely affect the rights of any Member, Former Member or Beneficiary
acquired under the provisions of such Plan in effect prior to such action.

 

7.02              Termination

 

While it expects to continue
this Nonqualified Plan I indefinitely, 3M (acting through its Board of
Directors or the Compensation Committee) reserves the right to terminate such
Plan at any time and for any reason. 
Termination of this Nonqualified Plan I shall not affect 3M’s
obligation to pay the benefits already earned under the provisions of such Plan
in effect prior to the termination.

 

ARTICLE VIII:  MISCELLANEOUS

 

8.01              No Contract of Employment

 

This Nonqualified Plan I
shall not be deemed to constitute a contract of employment between 3M and any
Member or Former Member.  

 

14

 

Nothing in this Plan shall
be deemed to give any Member or Former Member the right to be retained in the
service of 3M or an affiliate or to interfere with the right of 3M or an
affiliate to discipline or discharge any Member or Former Member at any time.

 

8.02              No Assignment

 

No Member, Former Member or
Beneficiary shall have any right to commute, sell, assign, transfer, pledge,
anticipate, mortgage or otherwise encumber, transfer, hypothecate or convey the
benefits, if any, payable under this Nonqualified Plan I.  All payments and the rights to all payments
of benefits under this Nonqualified Plan I are expressly declared to be
nonassignable and nontransferable. 
Neither this Nonqualified Plan I nor any portion of the benefits
payable hereunder shall be liable for, or subject to, the debts, contracts,
liabilities, engagements or torts of any Member, Former Member or
Beneficiary.  No portion of the benefits
payable under this Nonqualified Plan I shall be subject to attachment,
garnishment or other legal process by any creditor of any Member, Former Member
or Beneficiary, except to the extent that 3M determines that it will honor the
creation, assignment or recognition of any right to any benefit payable under
the Plan with respect to a Member or Former Member pursuant to a domestic
relations order if that domestic relations order satisfies the requirements of
a qualified domestic relations order within the meaning of
section 414(p)(1)(A) of the Code.

 

8.03              Governing Law

 

The provisions of this Nonqualified
Plan I shall be interpreted and enforced in accordance with the laws of
the State of Minnesota.

 

8.04              Separable Provisions

 

In the
event any provision of this Nonqualified Plan I is ruled or declared
illegal or unenforceable for any reason, such illegality or unenforceability
shall not affect the remaining provisions hereof and this Nonqualified
Plan I shall be interpreted and enforced as if such illegal or
unenforceable provision had never been included herein.

 

15

 

ARTICLE IX:  CHANGE IN CONTROL

 

9.01              Distribution
Following Change in Control

 

Upon the occurrence of a
Change in Control of 3M, this Nonqualified Plan I shall terminate and 3M
shall immediately distribute the remaining accrued retirement benefits
hereunder to the respective Members, Former Members and Beneficiaries in lump
sum cash payments in amounts equal to the present values of such accrued
retirement benefits as of the date of the Change in Control.  The Compensation Committee shall have the
discretion to decide whether some or all of the lump sum amounts will be paid
directly to the respective Members, Former Members and Beneficiaries, or will
be applied toward fully paid annuity contracts issued by an A+ rated insurance
company, which provide for the payment of all the amounts that would otherwise
have been paid after the Change in Control pursuant to this Nonqualified
Plan I.

 

9.02              Definition
of Change in Control

 

For purposes of this Article IX,
a Change in Control of 3M shall be deemed to have occurred if there is a “change
in the ownership of 3M,” “change in effective control of 3M,” and/or a “change
in the ownership of a substantial portion of 3M’s assets” as defined under
Treasury reg. section 1.409A-3(i)(5) or such other regulation or
guidance issued under section 409A of the Code.

 

9.03              Determination
of Present Value

 

Except where otherwise
expressly provided in this Nonqualified Plan I, the present value of each
Member’s, each Former Member’s and each Beneficiary’s remaining accrued
retirement benefits hereunder shall be determined in accordance with such
actuarial assumptions as the Compensation Committee, in its discretion, may
adopt for such purpose.

 

9.04              Tax
Equalization

 

In the event that the
payments made pursuant to this Article IX are finally determined to be
subject to the excise tax imposed by section 4999 of the Code, 3M shall
pay to each Member, Former Member and Beneficiary an additional amount such
that the net amount retained by such Member, Former Member or Beneficiary,
after allowing for the amount of such excise tax and any 

 

16

 

additional federal, state
and local income taxes paid on the additional amount, shall be equal to the
value of the retirement benefits distributed to such Member, Former Member or
Beneficiary pursuant to this Article IX. 
Such tax gross-up payment shall be made no later than the end of the
recipient’s taxable year following the taxable year in which the recipient
remits the related taxes.  If a Member is
a Specified Employee and such gross-up payment is made on account of the Member’s
Separation from Service, payment shall not be made prior to the first day of
the seventh month following the Member’s Separation from Service.

 

9.05              Fees
and Expenses

 

3M shall
pay to each Member, Former Member and Beneficiary the amount of all reasonable
legal and accounting fees and expenses incurred by such Member, Former Member
or Beneficiary in seeking to obtain or enforce his or her rights under this Article IX
or in connection with any income tax audit or proceeding to the extent
attributable to the application of section 4999 of the Code to the
payments made pursuant to this Article IX, unless a lawsuit commenced by
the Member, Former Member or Beneficiary for such purposes is dismissed by the
court as being spurious or frivolous.  3M
shall also pay to each Member, Former Member and Beneficiary the amount of all
reasonable tax and financial planning fees and expenses incurred by such
Member, Former Member or Beneficiary in connection with the receipt by such
Member, Former Member or Beneficiary of payments pursuant to this Article IX.  Such payment or reimbursement shall be made
no later than the end of the recipient’s taxable year following the taxable year
in which the recipient incurs the related expenses.  If a Member is a Specified Employee and such
payment or reimbursement is made on account of the Member’s Separation from
Service, payment or reimbursement shall not be made prior to the first day of
the seventh month following the Member’s Separation from Service.

 

17

 

SCHEDULE I

 

	
  Member:

  	
  Phil Yates

  
	
   

  	
   

  
	
  Commencement Date:

  	
  October 1, 2011
  (scheduled termination date)

  

 

SI-1

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