Document:

Exhibit 10.1

 

UNITED
STATES DEPARTMENT OF THE TREASURY

1500 PENNSYLVANIA AVENUE, NW

WASHINGTON, D.C. 20220

 

Dear Ladies and Gentlemen:

 

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

 

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extent supplemented or superseded by the terms set forth herein or in the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

 

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

 

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

 

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

 

*
* *

 

 

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/
  David Miller

  
	
   

  	
   

  	
   

  	
   

  	
  Name:
  David Miller

  
	
   

  	
   

  	
   

  	
   

  	
  Title:
  Acting Chief Investment Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  ATLANTIC
  BANCSHARES, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/
  Robert P. Trask

  
	
   

  	
   

  	
   

  	
  Name:
  Robert P. Trask

  
	
   

  	
   

  	
   

  	
  Title:
  President & Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
  December 29,
  2009

  	
   

  	
   

  	
   

  

 

 

EXHIBIT A

(Non-Exchange-Traded QFIs, excluding S Corps

and Mutual Organizations)

 

 

 

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 Warrant Preferred Stock; Exchange
  Listing

  	
  14

  
	
  3.4

  	
  Certain Notifications Until Closing

  	
  14

  
	
  3.5

  	
  Access, Information and Confidentiality

  	
  14

  
	
   

  	
   

  	
   

  
	
  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

  	
  18

  
	
  4.6

  	
  Depositary Shares

  	
  30

  
	
  4.7

  	
  Restriction on Dividends and Repurchases

  	
  30

  
	
  4.8

  	
  Executive Compensation

  	
  33

  
	
  4.9

  	
  Related Party Transactions

  	
  33

  
	
  4.10

  	
  Bank and Thrift Holding Company Status

  	
  33

  
	
  4.11

  	
  Predominantly Financial

  	
  33

  
	
   

  	
   

  	
   

  
	
  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

  

 

i

 

LIST OF ANNEXES

 

	
  ANNEX
  A:

  	
   

  	
  FORM OF
  CERTIFICATE OF DESIGNATIONS FOR PREFERRED STOCK

  
	
   

  	
   

  	
   

  
	
  ANNEX
  B:

  	
   

  	
  FORM OF
  CERTIFICATE OF DESIGNATIONS FOR WARRANT PREFERRED STOCK

  
	
   

  	
   

  	
   

  
	
  ANNEX
  C:

  	
   

  	
  FORM OF
  WAIVER

  
	
   

  	
   

  	
   

  
	
  ANNEX
  D:

  	
   

  	
  FORM OF
  OPINION

  
	
   

  	
   

  	
   

  
	
  ANNEX
  E:

  	
   

  	
  FORM OF
  WARRANT

  

 

 

ii

 

INDEX OF DEFINED TERMS

 

	
  Term

  	
   

  	
  Location of

  Definition

  
	
  Affiliate

  	
   

  	
  5.7(b)

  
	
  Agreement

  	
   

  	
  Recitals

  
	
  Appropriate
  Federal Banking Agency

  	
   

  	
  2.2(s)

  
	
  Bank
  Holding Company

  	
   

  	
  4.10

  
	
  Bankruptcy
  Exceptions

  	
   

  	
  2.2(d)

  
	
  Benefit
  Plans

  	
   

  	
  1.2(d)(iv)

  
	
  Board
  of Directors

  	
   

  	
  2.2(f)

  
	
  Business
  Combination

  	
   

  	
  5.8

  
	
  business
  day

  	
   

  	
  1.3

  
	
  Capitalization
  Date

  	
   

  	
  2.2(b)

  
	
  Certificates
  of Designations

  	
   

  	
  1.2(d)(iii)

  
	
  Charter

  	
   

  	
  1.2(d)(iii)

  
	
  Closing

  	
   

  	
  1.2(a)

  
	
  Closing
  Date

  	
   

  	
  1.2(a)

  
	
  Code

  	
   

  	
  2.2(n)

  
	
  Common
  Stock

  	
   

  	
  2.2(b)

  
	
  Company

  	
   

  	
  Recitals

  
	
  Company
  Financial Statements

  	
   

  	
  2.2(h)

  
	
  Company
  Material Adverse Effect

  	
   

  	
  2.1(b)

  
	
  Company
  Reports

  	
   

  	
  2.2(i)(i)

  
	
  Company
  Subsidiary; Company Subsidiaries

  	
   

  	
  2.2(e)(ii)

  
	
  control;
  controlled by; under common control with

  	
   

  	
  5.7(b)

  
	
  Controlled
  Group

  	
   

  	
  2.2(n)

  
	
  CPP

  	
   

  	
  Recitals

  
	
  Disclosure
  Schedule

  	
   

  	
  2.1(a)

  
	
  EESA

  	
   

  	
  1.2(d)(iv)

  
	
  ERISA

  	
   

  	
  2.2(n)

  
	
  Exchange
  Act

  	
   

  	
  4.4

  
	
  Federal
  Reserve

  	
   

  	
  4.10

  
	
  GAAP

  	
   

  	
  2.1(b)

  
	
  Governmental
  Entities

  	
   

  	
  1.2(c)

  
	
  Holder

  	
   

  	
  4.5(l)(i)

  
	
  Holders’
  Counsel

  	
   

  	
  4.5(l)(ii)

  
	
  Indemnitee

  	
   

  	
  4.5(h)(i)

  
	
  Information

  	
   

  	
  3.5(c)

  
	
  Investor

  	
   

  	
  Recitals

  
	
  Junior
  Stock

  	
   

  	
  4.7(f)

  
	
  knowledge
  of the Company; Company’s knowledge

  	
   

  	
  5.7(c)

  
	
  Letter
  Agreement

  	
   

  	
  Recitals

  
	
  officers

  	
   

  	
  5.7(c)

  
	
  Parity
  Stock

  	
   

  	
  4.7(f)

  
	
  Pending
  Underwritten Offering

  	
   

  	
  4.5(m)

  
	
  Permitted
  Repurchases

  	
   

  	
  4.7(c)

  

 

iii

 

	
  Term

  	
   

  	
  Location of

  Definition

  
	
  Piggyback
  Registration

  	
   

  	
  4.5(b)(iv)

  
	
  Plan

  	
   

  	
  2.2(n)

  
	
  Preferred
  Shares

  	
   

  	
  Recitals

  
	
  Preferred
  Stock

  	
   

  	
  Recitals

  
	
  Previously
  Disclosed

  	
   

  	
  2.1(c)

  
	
  Proprietary
  Rights

  	
   

  	
  2.2(u)

  
	
  Purchase

  	
   

  	
  Recitals

  
	
  Purchase
  Price

  	
   

  	
  1.1

  
	
  Purchased
  Securities

  	
   

  	
  Recitals

  
	
  register;
  registered; registration

  	
   

  	
  4.5(l)(iii)

  
	
  Registrable
  Securities

  	
   

  	
  4.5(l)(iv)

  
	
  Registration
  Expenses

  	
   

  	
  4.5(l)(v)

  
	
  Regulatory
  Agreement

  	
   

  	
  2.2(s)

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

  	
   

  	
  4.5(l)(vi)

  
	
  Savings
  and Loan Holding Company

  	
   

  	
  4.10

  
	
  Schedules

  	
   

  	
  Recitals

  
	
  SEC

  	
   

  	
  2.2(k)

  
	
  Securities
  Act

  	
   

  	
  2.2(a)

  
	
  Selling
  Expenses

  	
   

  	
  4.5(l)(vii)

  
	
  Senior
  Executive Officers

  	
   

  	
  4.8

  
	
  Shelf
  Registration Statement

  	
   

  	
  4.5(b)(ii)

  
	
  Signing
  Date

  	
   

  	
  2.1(b)

  
	
  Special
  Registration

  	
   

  	
  4.5(j)

  
	
  subsidiary

  	
   

  	
  5.7(a)

  
	
  Tax;
  Taxes

  	
   

  	
  2.2(o)

  
	
  Transfer

  	
   

  	
  4.4

  
	
  Warrant

  	
   

  	
  Recitals

  
	
  Warrant
  Preferred Stock

  	
   

  	
  Recitals

  
	
  Warrant
  Shares

  	
   

  	
  2.2(d)

  

 

iv

 

SECURITIES PURCHASE AGREEMENT — STANDARD TERMS

 

Recitals:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Article I

Purchase; Closing

 

1.1           Purchase.  On the terms and subject to the conditions
set forth in this Agreement, the Company agrees to sell to the Investor, and
the Investor agrees to 

 

 

purchase
from the Company, at the Closing (as hereinafter defined), the Purchased
Securities for the price set forth on Schedule A (the “Purchase Price”).

 

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 

 

2

 

such other date), except to the extent that the failure of such
representations and warranties referred to in this Section 1.2(d)(i)(A)(z) to
be so true and correct, individually or in the aggregate, does not have and
would not reasonably be expected to have a Company Material Adverse Effect and (B) the
Company shall have performed in all material respects all obligations required
to be performed by it under this Agreement at or prior to the Closing;

 

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

 

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

 

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

 

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

 

(vi)          the Company shall have delivered to the Investor a
written opinion from counsel to the Company (which may be internal counsel),
addressed to the

 

3

 

Investor and dated as of
the Closing Date, in substantially the form attached hereto as Annex D;

 

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

 

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

 

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

 

Article II

Representations and Warranties

 

2.1                                 Disclosure.

 

(a)                                  On or prior to the Signing Date, the
Company delivered to the Investor a schedule (“Disclosure
Schedule”) setting forth, among other things, items the disclosure
of which is necessary or appropriate either in response to an express
disclosure requirement contained in a provision hereof or as an exception to
one or more representations or warranties contained in Section 2.2.

 

(b)                                 “Company
Material Adverse Effect” means a material adverse effect on
(i) the business, results of operation or financial condition of the
Company and its 

 

4

 

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

 

(c)                                  “Previously
Disclosed” means information set forth on the Disclosure Schedule,
provided, however, that disclosure in any section of such Disclosure Schedule
shall apply only to the indicated section of this Agreement except to the
extent that it is reasonably apparent from the face of such disclosure that
such disclosure is relevant to another section of this Agreement.

 

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

 

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

 

5

 

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

 

(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 Warrant Preferred Stock
issuable upon exercise of the Warrant (the “Warrant
Shares”) have been duly authorized and reserved for issuance upon
exercise of the Warrant and when so issued in accordance with the terms of the
Warrant will be validly issued, fully paid and non-assessable, and will rank 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.

 

6

 

(e)                                  Authorization, Enforceability.

 

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

 

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

 

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

 

7

 

the aggregate, reasonably
be expected to have a Company Material Adverse Effect.

 

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

 

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

 

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

 

(i)                                     Reports.

 

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

 

(ii)                                  The records, systems, controls, data and
information of the Company and the Company Subsidiaries are recorded, stored,
maintained and 

 

8

 

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

 

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

 

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

 

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

 

9

 

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

 

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

 

10

 

Plan or premiums to the PBGC in the ordinary course
and without default) in respect of a Plan (including any Plan that is a
“multiemployer plan”, within the meaning of Section 4001(c)(3) of
ERISA); and (C) each Plan that is intended to be qualified under
Section 401(a) of the Code has received a favorable determination
letter from the Internal Revenue Service with respect to its qualified status
that has not been revoked, or such a determination letter has been timely
applied for but not received by the Signing Date, and nothing has occurred,
whether by action or by failure to act, which could reasonably be expected to
cause the loss, revocation or denial of such qualified status or favorable
determination letter.

 

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

 

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

 

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

 

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

 

11

 

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

 

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

 

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

 

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

 

12

 

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

 

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

 

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

 

Article III

Covenants

 

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

 

13

 

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

 

3.3                                 Sufficiency of Authorized Warrant
Preferred Stock; Exchange Listing.

 

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

 

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

 

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

 

3.5                                 Access, Information and Confidentiality.

 

(a)                                  From the Signing Date until the date when
the Investor holds an amount of Preferred Shares having an aggregate
liquidation value of less than 10% of the Purchase Price, the Company will
permit the Investor and its agents, consultants, contractors and advisors
(x) acting through the Appropriate Federal Banking Agency, or otherwise to
the extent necessary to evaluate, manage, or transfer its investment in the
Company, to examine the corporate books and make copies thereof and to discuss
the affairs, finances and accounts of the Company and the Company Subsidiaries
with the principal officers of the Company, all upon reasonable notice and at such
reasonable times and as often as the Investor may reasonably request and
(y) to review any information material to the Investor’s investment in the
Company provided by the Company to its Appropriate 

 

14

 

Federal Banking Agency.  Any investigation pursuant to this
Section 3.5 shall be conducted during normal business hours and in such
manner as not to interfere unreasonably with the conduct of the business of the
Company, and nothing herein shall require the Company or any Company Subsidiary
to disclose any information to the Investor to the extent (i) prohibited
by applicable law or regulation, or (ii) that such disclosure would
reasonably be expected to cause a violation of any agreement to which the
Company or any Company Subsidiary is a party or would cause a risk of a loss of
privilege to the Company or any Company Subsidiary (provided that the Company shall use commercially reasonable
efforts to make appropriate substitute disclosure arrangements under
circumstances where the restrictions in this clause (ii) apply).

 

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

 

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

 

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

 

(c)                                  The Investor will use reasonable best
efforts to hold, and will use reasonable best efforts to cause its agents,
consultants, contractors and advisors to hold, in confidence all 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.

 

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

 

15

 

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 will bear a legend substantially
to the following effect:

 

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

 

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

 

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

 

“THE SECURITIES REPRESENTED BY THIS INSTRUMENT ARE NOT
SAVINGS ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF A BANK 

 

16

 

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

 

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

 

17

 

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

 

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

 

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

 

4.5                                 Registration Rights.

 

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

 

(b)                                 Registration.

 

(i)                                     Subject to the terms and conditions of
this Agreement, the Company covenants and agrees that as promptly as
practicable after the date that the Company becomes subject to the reporting
requirements of Section 13 or 

 

18

 

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

 

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

 

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

 

19

 

has generally exercised
(or is concurrently exercising) similar black-out rights against holders of similar
securities that have registration rights and (2) not more than three times
in any 12-month period and not more than 90 days in the aggregate in any
12-month period.

 

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

 

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

 

(vi)                              If either (x) the Company grants
“piggyback” registration rights to one or more third parties to include their
securities in an underwritten offering under the Shelf Registration Statement
pursuant to Section 4.5(b)(ii) or (y) a Piggyback Registration
under Section 4.5(b)(iv) relates to an underwritten offering on
behalf of the Company, and in either case the managing underwriters advise the
Company that in their reasonable opinion the number of securities 

 

20

 

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

 

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

 

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

 

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

 

(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, 

 

21

 

and such other documents
as they may reasonably request in order to facilitate the disposition of
Registrable Securities owned or to be distributed by them.

 

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

 

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

 

(vi)                              Give written notice to the Holders:

 

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

 

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

 

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

 

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

 

(E)                                 of the happening of any event that
requires the Company to make changes in any effective registration statement or
the prospectus related to the 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

 

22

 

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

 

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

 

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

 

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

 

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

 

23

 

(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 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.

 

24

 

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

 

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

 

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

 

(g)                                 Furnishing
Information.

 

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

 

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

 

(h)                                 Indemnification.

 

(i)                                     The Company agrees to
indemnify each Holder and, if a Holder is a person other than an individual,
such Holder’s officers, directors, employees, agents, representatives and
Affiliates, and each Person, if any, that controls a Holder within the meaning
of the Securities Act (each, an “Indemnitee”),
against any and all losses, claims, damages, actions, liabilities, costs and
expenses (including reasonable fees, expenses and disbursements of attorneys
and other professionals incurred in connection with investigating, defending,
settling, compromising or paying any such losses, claims, damages, actions,
liabilities, 

 

25

 

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

 

26

 

contribution from the Company if the Company was not guilty of such
fraudulent misrepresentation.

 

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

 

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

 

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

 

(i)                                     make and keep
public information available, as those terms are understood and defined in Rule 144(c)(l) 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 

 

27

 

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.

 

(l)                                     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)

 

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

 

(iv)                              “Registrable Securities” means (A) all
Preferred Shares, (B) the Warrant (subject to Section 4.5(q)) and (C) any
equity securities issued or issuable directly or indirectly with respect to the
securities referred to in the foregoing clauses (A) or (B) by way of
conversion, exercise or exchange thereof, including the Warrant Shares, or
share dividend or share split or in connection with a combination of shares,
recapitalization, reclassification, merger, amalgamation, arrangement,
consolidation or other reorganization, provided that,
once issued, such securities will not be Registrable Securities when (1) they
are sold (1) they are sold pursuant to an effective registration statement
under the Securities Act, (2) except as provided below in Section 4.5(p),
they may be sold pursuant to Rule 144 without limitation thereunder on
volume or manner of sale, (3) they shall have ceased to be outstanding or (4) they
have been sold in a private 

 

28

 

transaction in which the transferor’s rights under this Agreement are
not assigned to the transferee of the securities. No Registrable Securities may
be registered under more than one registration statement at any one time.

 

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

 

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

 

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

 

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

 

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

 

29

 

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

 

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

 

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

 

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

 

4.7                                 Restriction on
Dividends and Repurchases.

 

(a)                                  Prior to the
earlier of (x) the third anniversary of the Closing Date and (y) the
date on which all of the Preferred Shares and Warrant Shares have been redeemed
in whole or the Investor has transferred all of the Preferred Shares and
Warrant Shares to third parties which are not Affiliates of the Investor,
neither the Company nor any 

 

30

 

Company
Subsidiary shall, without the consent of the Investor, declare or pay any
dividend or make any distribution on capital stock or other equity securities
of any kind of the Company or any Company Subsidiary (other than (i) regular
quarterly cash dividends of not more than the amount of the last quarterly cash
dividend per share declared or, if lower, announced to its holders of Common
Stock an intention to declare, on the Common Stock prior to November 17,
2008, as adjusted for any stock split, stock dividend, reverse stock split,
reclassification or similar transaction, (ii) dividends payable solely in
shares of Common Stock, (iii) regular dividends on shares of preferred
stock in accordance with the terms thereof and which are permitted under the
terms of the Preferred Shares and the Warrant Shares, (iv) dividends or
distributions by any wholly-owned Company Subsidiary or (v) dividends or
distributions by any Company Subsidiary required pursuant to binding
contractual agreements entered into prior to November 17, 2008).

 

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

 

(c)                                  Prior to the
earlier of (x) the tenth anniversary of the Closing Date and (y) the
date on which all of the Preferred Shares and Warrant Shares have been redeemed
in whole or the Investor has transferred all of the Preferred Shares and
Warrant Shares to third parties which are not Affiliates of the Investor,
neither the Company nor any Company Subsidiary shall, without the consent of
the Investor, redeem, purchase or acquire any shares of Common Stock or other
capital stock or other equity securities of any kind of the Company or any
Company Subsidiary, or any trust preferred securities issued by the Company or
any Affiliate of the Company, other than (i) redemptions, purchases or
other acquisitions of the Preferred Shares and Warrant Shares, (ii) in 

 

31

 

connection
with the administration of any employee benefit plan in the ordinary course of
business and consistent with past practice, (iii) the acquisition by the
Company or any of the Company Subsidiaries of record ownership in Junior Stock
or Parity Stock for the beneficial ownership of any other persons (other than
the Company or any other Company Subsidiary), including as trustees or
custodians, (iv) the exchange or conversion of Junior Stock for or into
other Junior Stock or of Parity Stock or trust preferred securities for or into
other Parity Stock (with the same or lesser aggregate liquidation amount) or
Junior Stock, in each case set forth in this clause (iv), solely to the extent
required pursuant to binding contractual agreements entered into prior to the
Signing Date or any subsequent agreement for the accelerated exercise,
settlement or exchange thereof for Common Stock (clauses (ii) and (iii),
collectively, the “Permitted Repurchases”),
(v) redemptions of securities held by the Company or any whollyowned
Company Subsidiary or (vi) redemptions, purchases or other acquisitions of
capital stock or other equity securities of any kind of any Company Subsidiary
required pursuant to binding contractual agreements entered into prior to November 17,
2008.

 

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

 

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

 

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

 

32

 

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

 

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

 

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

 

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

 

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 writing signed by a duly
authorized officer of the waiving party that makes express reference to the
provision or provisions subject to such waiver.

 

34

 

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 -34-
095331-0002-10033-NY02.2690847.9 the
extent such law is applicable, and otherwise in accordance with the laws of the
State of New York applicable to contracts made and to be performed entirely
within such State. Each of the parties hereto agrees (a) to submit to the
exclusive jurisdiction and venue of the United States District Court for the
District of Columbia and the United States Court of Federal Claims for any and
all civil actions, suits or proceedings arising out of or relating to this
Agreement or the Warrant or the transactions contemplated hereby or thereby,
and (b) that notice may be served upon (i) the Company at the address
and in the manner set forth for notices to the Company in Section 5.6 and (ii) the
Investor in accordance with federal law. To the extent permitted by applicable
law, each of the parties hereto hereby unconditionally waives trial by jury in
any civil legal action or proceeding relating to this Agreement or the Warrant
or the transactions contemplated hereby or thereby.

 

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

 

If to the Investor:

 

United States Department of the Treasury

1500 Pennsylvania Avenue, NW, Room 2312

Washington, D.C. 20220

Attention: Assistant General Counsel (Banking and
Finance)

Facsimile: (202) 622-1974

 

5.7                                 Definitions

 

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

 

(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 

 

35

 

“controlled by” and “under common control with”) when used with
respect to any person, means the possession, directly or indirectly, of the
power to cause the direction of management and/or policies of such person,
whether through the ownership of voting securities by contract or otherwise.

 

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

 

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

 

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

 

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

 

36

 

ANNEX A

 

FORM OF
CERTIFICATE OF DESIGNATIONS FOR PREFERRED STOCK

 

[SEE ATTACHED]

 

 

ANNEX B

 

FORM OF
CERTIFICATE OF DESIGNATIONS

FOR
WARRANT PREFERRED STOCK

 

[SEE ATTACHED]

 

 

ANNEX C

 

FORM OF
WAIVER

 

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

 

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

 

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

 

 

ANNEX D

 

FORM OF
OPINION

 

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

 

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

 

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

 

(d)                                 The shares of
Warrant Preferred Stock issuable upon exercise of the Warrant have been duly
authorized and reserved for issuance upon exercise of the Warrant and when so
issued in accordance with the terms of the Warrant will be validly issued,
fully paid and non-assessable, and will rank 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.

 

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

 

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

 

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

 

 

ANNEX E

 

FORM OF
WARRANT

 

[SEE ATTACHED]

 

 

SCHEDULE A

 

ADDITIONAL TERMS AND CONDITIONS

 

Company Information:

 

Name of the Company:  Atlantic Bancshares, Inc.

 

Corporate or other
organizational form:  Corporation

 

Jurisdiction of
Organization:  South Carolina

 

Appropriate Federal Banking
Agency:  The Board of Governors of the
Federal Reserve System (Richmond Branch)

 

	
  Notice
  Information:

  	
  Atlantic
  Bancshares, Inc.

  
	
   

  	
  One Sheridan Park Circle,
  PO Box 3077

  
	
   

  	
  Bluffton, South Carolina
  29910

  
	
   

  	
   

  
	
  With
  a copy to:

  	
  Nelson Mullins
  Riley & Scarborough LLP

  
	
   

  	
  Attn:
  Benjamin A. Barnhill, Esq.

  
	
   

  	
  Suite 900, Poinsett
  Plaza

  
	
   

  	
  104 S. Main Street

  
	
   

  	
  Greenville, South Carolina
  29601

  

 

Terms of the Purchase:

 

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

 

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

 

Number of Shares of
Preferred Stock Purchased:  2,000

 

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

 

Series of Warrant
Preferred Stock: Fixed Rate Cumulative Perpetual Preferred Stock, Series B

 

Number of Warrant
Shares:  98.00098

 

Number of Net Warrant Shares
(after net settlement):  98

 

Exercise Price of the
Warrant:  $0.01 per share

 

Purchase Price:  $2,000,000

 

Closing:

 

	
  Location
  of Closing:

  	
  Squire, Sanders & Dempsey L.L.P.

  
	
   

  	
  2000
  Huntington Center

  
	
   

  	
  41
  S. High Street

  
	
   

  	
  Columbus,
  OH 43215

  
	
  Time of Closing: 9:00 A.M. EST

  
	
  Date of Closing:
  December 29, 2009

  

 

 

SCHEDULE B

 

CAPITALIZATION

 

Capitalization Date:  November 30, 2009

 

Common Stock

 

Par value: None

 

Total Authorized:  10,000,000

 

Outstanding:  1,403,147

 

Subject to warrants,
options, convertible securities, etc.: 
172,313

 

Reserved for benefit plans
and other issuances:  158,002

 

Remaining authorized but
unissued:  8,266,538

 

Shares
issued after Capitalization Date (other than pursuant to warrants, options,
convertible securities, etc. as set forth above):  None

 

Preferred Stock

 

Par value:  No par

 

Total Authorized:  10,000,000

 

Outstanding (by series):  0

 

Reserved for issuance:  0

 

Remaining authorized but
unissued:  10,000,000

 

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

  	
   

  	
  Primary Address

  
	
   

  	
   

  	
   

  

 

 

SCHEDULE C

 

LITIGATION

 

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

 

 

 

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

 

 

SCHEDULE D

 

COMPLIANCE WITH LAWS

 

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

 

 

 

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

 

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

 

 

 

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

 

 

SCHEDULE E

 

REGULATORY AGREEMENTS

 

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

 

 

 

If none, please so indicate by checking the
box:  xExhibit 10.2

 

UNITED STATES
DEPARTMENT OF THE TREASURY

1500 Pennsylvania
Avenue, NW

Washington, D.C.
20220

 

December 29,
2009

 

Ladies and Gentlemen:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

[Remainder of this page intentionally
left blank]

 

2

 

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

 

	
   

  	
  UNITED STATES DEPARTMENT OF THE TREASURY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David Miller

  
	
   

  	
   

  	
  Name: David Miller

  
	
   

  	
   

  	
  Title: Acting Chief
  Investment Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ATLANTIC BANCSHARES,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert P. Trask

  
	
   

  	
   

  	
  Name: Robert P. Trask

  
	
   

  	
   

  	
  Title: Chief Executive
  Officer

  

 

SIGNATURE PAGE TO LETTER AGREEMENT

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