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 its common stock set forth on
Schedule A hereto (the "Warrant" and, together with the Preferred Shares, the
"Purchased Securities") and the United States Department of the Treasury (the
"Investor") intends to purchase from the Company the Purchased Securities.
The purpose of this letter agreement is to confirm the terms and
conditions of the purchase by the Investor of the Purchased Securities. Except
to the extent supplemented or superseded by the terms set forth herein or in the
Schedules hereto, the provisions contained in the Securities Purchase Agreement
- - Standard Terms attached hereto as Exhibit A (the "Securities Purchase
Agreement") are incorporated by reference herein. Terms that are defined in the
Securities Purchase Agreement are used in this letter agreement as so defined.
In the event of any inconsistency between this letter agreement and the
Securities Purchase Agreement, the terms of this letter agreement shall govern.
Each of the Company and the Investor hereby confirms its agreement with
the other party with respect to the issuance by the Company of the Purchased
Securities and the purchase by the Investor of the Purchased Securities pursuant
to this letter agreement and the Securities Purchase Agreement on the terms
specified on Schedule A hereto.
This letter agreement (including the Schedules hereto) and the
Securities Purchase Agreement (including the Annexes thereto) and the Warrant
constitute the entire agreement, and supersede all other prior agreements,
understandings, representations and warranties, both written and oral, between
the parties, with respect to the subject matter hereof. This letter agreement
constitutes the "Letter Agreement" referred to in the Securities Purchase
Agreement.
This letter agreement may be executed in any number of separate
counterparts, each such counterpart being deemed to be an original instrument,
and all such counterparts will together constitute the same agreement. Executed
signature pages to this letter agreement may be delivered by facsimile and such
facsimiles will be deemed as sufficient as if actual signature pages had been
delivered.
* * *
In witness whereof, this letter agreement has been duly executed and delivered
by the duly authorized representatives of the parties hereto as of the date
written below.
UNITED STATES DEPARTMENT OF THE TREASURY
By: ______________________________________________
Name: ____________________________________________
Title: ___________________________________________
COMPANY: SALISBURY BANCORP, INC.
By: ______________________________________________
Name: John F. Perotti
Title: Chairman and Chief Executive Officer
Dated: March 13, 2009
SCHEDULE A
ADDITIONAL TERMS AND CONDITIONS
Company Information:
Name of the Company: SALISBURY BANCORP, INC.
Corporate or other
organizational form: Corporation
Jurisdiction of Organization: Connecticut
Appropriate Federal
Banking Agency: Federal Deposit Insurance Corporation
Notice Information: John F. Perotti
Chairman and Chief Executive Officer
5 Bissell Street
Lakeville, CT 06039
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: 8,816
Dividend Payment Dates on
the Preferred Stock: February 15, May 15, August 15, November 15
Number of Initial
Warrant Shares: 57,671
Exercise Price of the Warrant: $22.93
Purchase Price: $8,816,000
Closing:
Location of Closing: Hughes Hubbard.
One Battery Park Plaza
New York, NY 10004
Time of Closing: 9:00 A.M., E.S.T.
Date of Closing: March 13, 2009
Wire Information for Closing: ABA Number:
Bank:
Account Name:
Account Number:
Beneficiary:
SCHEDULE B
CAPITALIZATION
Capitalization Date: February 28, 2009
Common Stock
Par value: $.10 per share
Total authorized: 3,000,000
Outstanding: 1,685,861
Subject to warrants, options, convertible
securities, etc.: -0-
Reserved for benefit plans and other
issuances: 106,020
Remaining authorized but unissued: 1,579,841
Shares issued after Capitalization Date
(other than pursuant to warrants, options,
convertible securities, etc. as set forth
above): -0-
Preferred Stock (as of March 10, 2009)
Par value: $.01 per share
Total authorized: 25,000
Outstanding (by series): None
Reserved for issuance: None
Remaining authorized
but unissued: 25,000
SCHEDULE C
REQUIRED STOCKHOLDER APPROVALS
Required(1) % Vote Required
Warrants - Common Stock Issuance
Charter Amendment
Stock Exchange Rules
If no stockholder approvals are required, please so indicate by checking the
box: [x]
(1) If stockholder approval is required, indicate applicable class/series of
capital stock that are required to vote.
SCHEDULE D
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 E
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 F
REGULATORY AGREEMENTS
List any exceptions to the representation and warranty in Section 2.2(s) of the
Securities Purchase Agreement - Standard Terms.
If none, please so indicate by checking the box: [x]
EXHIBIT A
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SECURITIES PURCHASE AGREEMENT
STANDARD TERMS
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TABLE OF CONTENTS
Page
Article I
Purchase; Closing
1.1 Purchase........................................................................1
1.2 Closing.........................................................................2
1.3 Interpretation..................................................................4
Article II
Representations and Warranties
2.1 Disclosure .....................................................................4
2.2 Representations and Warranties of the Company...................................5
Article III
Covenants
3.1 Commercially Reasonable Efforts................................................13
3.2 Expenses.......................................................................14
3.3 Sufficiency of Authorized Common Stock; Exchange Listing.......................14
3.4 Certain Notifications Until Closing............................................15
3.5 Access, Information and Confidentiality........................................15
Article IV
Additional Agreements
4.1 Purchase for Investment........................................................16
4.2 Legends........................................................................16
4.3 Certain Transactions...........................................................18
4.4 Transfer of Purchase Securities and Warrant Shares; Restrictions on Exercise
of the Warrant.................................................................18
4.5 Registration Rights............................................................19
4.6 Voting of Warrant Shares.......................................................30
4.7 Depository Shares..............................................................31
4.8 Restriction on Dividends and Repurchase........................................31
4.9 Repurchase of Investor Securities..............................................32
4.10 Executive Compensation.........................................................33
i
Article V
Miscellaneous
5.1 Termination....................................................................34
5.2 Survival of Representations and Warranties.....................................34
5.3 Amendment......................................................................34
5.4 Waiver of Conditions...........................................................34
5.5 Governing Law: Submission to Jurisdiction, Etc.................................35
5.6 Notices........................................................................35
5.7 Definitions....................................................................35
5.8 Assignment.....................................................................36
5.9 Severability...................................................................36
5.10 No Third Party Beneficiaries...................................................36
ii
LIST OF ANNEXES
ANNEX A: FORM OF CERTIFICATE OF DESIGNATIONS FOR PREFERRED STOCK
ANNEX B: FORM OF WAIVER
ANNEX C: FORM OF OPINION
ANNEX D: FORM OF WARRANT
iii
INDEX OF DEFINED TERMS
Location of
Term Definition
Affiliate 5.7(b)
Agreement Recitals
Appraisal Procedure 4.9(c)(i)
Appropriate Federal Banking Agency 2.2(s)
Bankruptcy Exceptions 2.2(d)
Benefit Plans 1.2(d)(iv)
Board of Directors 2.2(f)
Business Combination 4.4
business day 1.3
Capitalization Date 2.2(b)
Certificate of Designations 1.2(d)(iii)
Charter 1.2(d)(iii)
Closing 1.2(a)
Closing Date 1.2(a)
Code 2.2(n)
Common Stock Recitals
Company Recitals
Company Financial Statements 2.2(h)
Company Material Adverse Effect 2.1(a)
Company Reports 2.2(i)(i)
Company Subsidiary; Company Subsidiaries 2.2(i)(i)
control; controlled by; under common control with 5.7(b)
Controlled Group 2.2(n)
CPP Recitals
EESA 1.2(d)(iv)
ERISA 2.2(n)
Exchange Act 2.1(b)
Fair Market Value 4.9(c)(ii)
GAAP 2.1(a)
Governmental Entities 1.2(c)
Holder 4.5(k)(i)
Holders' Counsel 4.5(k)(ii)
Indemnitee 4.5(g)(i)
Information 3.5(b)
Initial Warrant Shares Recitals
Investor Recitals
Junior Stock 4.8(c)
knowledge of the Company; Company's knowledge 5.7(c)
Last Fiscal Year 2.1(b)
Letter Agreement Recitals
officers 5.7(c)
iv
Location of
Term Definition
Parity Stock 4.8(c)
Pending Underwritten Offering 4.5(l)
Permitted Repurchases 4.8(a)(ii)
Piggyback Registrations 4.5(a)(iv)
Plan 2.2(n)
Preferred Shares Recitals
Preferred Stock Recitals
Previously Disclosed 2.1(b)
Proprietary Rights 2.2(u)
Purchase Recitals
Purchase Price 1.1
Purchased Securities Recitals
Qualified Equity Offering 4.4
Register; registered; registration 4.5(k)(iii)
Registrable Securities 4.5(k)(iv)
Registration Expenses 4.5(k)(v)
Regulatory Agreement 2.2(s)
Rule 144; Rule 144A; Rule 159A; Rule 405; Rule 415 4.5(k)(vi)
Schedules Recitals
SEC 2.1(b)
Securities Act 2.2(a)
Selling Expenses 4.5(k)(vii)
Senior Executive Officers 4.10
Share Dilution Amount 4.8(a)(ii)
Shelf Registration Statement 4.5(a)(ii)
Signing Date 2.1(a)
Special Registration 4.5(i)
Stockholder Proposals 3.1(b)
Subsidiary 5.7(a)
Tax; Taxes 2.2(o)
Transfer 4.4
Warrant Recitals
Warrant Shares 2.2(d)
v
SECURITIES PURCHASE AGREEMENT - STANDARD TERMS
Recitals:
WHEREAS, the United States Department of the Treasury (the "Investor")
may from time to time agree to purchase shares of preferred stock and warrants
from eligible financial institutions which elect to participate in the Troubled
Asset Relief Program Capital Purchase Program ("CPP");
WHEREAS, an eligible financial institution electing to participate in
the CPP and issue securities to the Investor (referred to herein as the
"Company") shall enter into a letter agreement (the "Letter Agreement") with the
Investor which incorporates this Securities Purchase Agreement - Standard Terms;
WHEREAS, the Company agrees to expand the flow of credit to U.S.
consumers and businesses on competitive terms to promote the sustained growth
and vitality of the U.S. economy;
WHEREAS, the Company agrees to work diligently, under existing
programs, to modify the terms of residential mortgages as appropriate to
strengthen the health of the U.S. housing market;
WHEREAS, the Company intends to issue in a private placement the number
of shares of the series of its Preferred Stock ("Preferred Stock") set forth on
Schedule A to the Letter Agreement (the "Preferred Shares") and a warrant to
purchase the number of shares of its Common Stock ("Common Stock") set forth on
Schedule A to the Letter Agreement (the "Initial Warrant Shares") (the "Warrant"
and, together with the Preferred Shares, the "Purchased Securities") and the
Investor intends to purchase (the "Purchase") from the Company the Purchased
Securities; and
WHEREAS, the Purchase will be governed by this Securities Purchase
Agreement - Standard Terms and the Letter Agreement, including the schedules
thereto (the "Schedules"), specifying additional terms of the Purchase. This
Securities Purchase Agreement - Standard Terms (including the Annexes hereto)
and the Letter Agreement (including the Schedules thereto) are together referred
to as this "Agreement". All references in this Securities Purchase Agreement -
Standard Terms to "Schedules" are to the Schedules attached to the Letter
Agreement.
NOW, THEREFORE, in consideration of the premises, and of the
representations, warranties, covenants and agreements set forth herein, the
parties agree as follows:
Article I
Purchase; Closing
1.1 Purchase. On the terms and subject to the conditions set forth
in this Agreement, the Company agrees to sell to the Investor, and the Investor
agrees to purchase from the Company, at the Closing (as hereinafter defined),
the Purchased Securities for the price set forth on Schedule A (the "Purchase
Price").
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1.2 Closing.
(a) On the terms and subject to the conditions set forth in this
Agreement, the closing of the Purchase (the "Closing") will take place at the
location specified in Schedule A, at the time and on the date set forth in
Schedule A or as soon as practicable thereafter, or at such other place, time
and date as shall be agreed between the Company and the Investor. The time and
date on which the Closing occurs is referred to in this Agreement as the
"Closing Date".
(b) Subject to the fulfillment or waiver of the conditions to the
Closing in this Section 1.2, at the Closing the Company will deliver the
Preferred Shares and the Warrant, in each case as evidenced by one or more
certificates dated the Closing Date and bearing appropriate legends as
hereinafter provided for, in exchange for payment in full of the Purchase Price
by wire transfer of immediately available United States funds to a bank account
designated by the Company on Schedule A.
(c) The respective obligations of each of the Investor and the Company
to consummate the Purchase are subject to the fulfillment (or waiver by the
Investor and the Company, as applicable) prior to the Closing of the conditions
that (i) any approvals or authorizations of all United States and other
governmental, regulatory or judicial authorities (collectively, "Governmental
Entities") required for the consummation of the Purchase shall have been
obtained or made in form and substance reasonably satisfactory to each party and
shall be in full force and effect and all waiting periods required by United
States and other applicable law, if any, shall have expired and (ii) no
provision of any applicable United States or other law and no judgment,
injunction, order or decree of any Governmental Entity shall prohibit the
purchase and sale of the Purchased Securities as contemplated by this Agreement.
(d) The obligation of the Investor to consummate the Purchase is also
subject to the fulfillment (or waiver by the Investor) at or prior to the
Closing of each of the following conditions:
(i) (A) the representations and warranties of the Company set
forth in (x) Section 2.2(g) of this Agreement shall be true and correct
in all respects as though made on and as of the Closing Date, (y)
Sections 2.2(a) through (f) shall be true and correct in all material
respects as though made on and as of the Closing Date (other than
representations and warranties that by their terms speak as of another
date, which representations and warranties shall be true and correct in
all material respects as of such other date) and (z) Sections 2.2(h)
through (v) (disregarding all qualifications or limitations set forth
in such representations and warranties as to "materiality", "Company
Material Adverse Effect" and words of similar import) shall be true and
correct as though made on and as of the Closing Date (other than
representations and warranties that by their terms speak as of another
date, which representations and warranties shall be true and correct as
of such other date), except to the extent that the failure of such
representations and warranties referred to in this Section
1.2(d)(i)(A)(z) to be so true and correct, individually or in the
2
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 amendment to its certificate or
articles of incorporation, articles of association, or similar
organizational document ("Charter") in substantially the form attached
hereto as Annex A (the "Certificate of Designations") and such filing
shall have been accepted;
(iv) (A) the Company shall have effected such changes to its
compensation, bonus, incentive and other benefit plans, arrangements
and agreements (including golden parachute, severance and employment
agreements) (collectively, "Benefit Plans") with respect to its Senior
Executive Officers (and to the extent necessary for such changes to be
legally enforceable, each of its Senior Executive Officers shall have
duly consented in writing to such changes), as may be necessary, during
the period that the Investor owns any debt or equity securities of the
Company acquired pursuant to this Agreement or the Warrant, in order to
comply with Section 111(b) of the Emergency Economic Stabilization Act
of 2008 ("EESA") as implemented by guidance or regulation thereunder
that has been issued and is in effect as of the Closing Date, and (B)
the Investor shall have received a certificate signed on behalf of the
Company by a senior executive officer certifying to the effect that the
condition set forth in Section 1.2(d)(iv)(A) has been satisfied;
(v) each of the Company's Senior Executive Officers shall have
delivered to the Investor a written waiver in the form attached hereto
as Annex B releasing the Investor from any claims that such Senior
Executive Officers may otherwise have as a result of the issuance, on
or prior to the Closing Date, of any regulations which require the
modification of, and the agreement of the Company hereunder to modify,
the terms of any Benefit Plans with respect to its Senior Executive
Officers to eliminate any provisions of such Benefit Plans that would
not be in compliance with the requirements of Section 111(b) of the
EESA as implemented by guidance or regulation thereunder that has been
issued and is in effect as of the Closing Date;
(vi) the Company shall have delivered to the Investor a
written opinion from counsel to the Company (which may be internal
counsel), addressed to the Investor and dated as of the Closing Date,
in substantially the form attached hereto as Annex C;
(vii) the Company shall have delivered certificates in proper
form or, with the prior consent of the Investor, evidence of shares in
book-entry form, evidencing the Preferred Shares to Investor or its
designee(s); and
3
(viii) the Company shall have duly executed the Warrant in
substantially the form attached hereto as Annex D and delivered such
executed Warrant to the Investor or its designees(s).
1.3 Interpretation. When a reference is made in this Agreement to
"Recitals," "Articles," "Sections," or "Annexes" such reference shall be to a
Recital, Article or Section of, or Annex to, this Securities Purchase Agreement
- - Standard Terms, and a reference to "Schedules" shall be to a Schedule to the
Letter Agreement, in each case, unless otherwise indicated. The terms defined in
the singular have a comparable meaning when used in the plural, and vice versa.
References to "herein", "hereof", "hereunder" and the like refer to this
Agreement as a whole and not to any particular section or provision, unless the
context requires otherwise. The table of contents and headings contained in this
Agreement are for reference purposes only and are not part of this Agreement.
Whenever the words "include," "includes" or "including" are used in this
Agreement, they shall be deemed followed by the words "without limitation." No
rule of construction against the draftsperson shall be applied in connection
with the interpretation or enforcement of this Agreement, as this Agreement is
the product of negotiation between sophisticated parties advised by counsel. All
references to "$" or "dollars" mean the lawful currency of the United States of
America. Except as expressly stated in this Agreement, all references to any
statute, rule or regulation are to the statute, rule or regulation as amended,
modified, supplemented or replaced from time to time (and, in the case of
statutes, include any rules and regulations promulgated under the statute) and
to any section of any statute, rule or regulation include any successor to the
section. References to a "business day" shall mean any day except Saturday,
Sunday and any day on which banking institutions in the State of New York
generally are authorized or required by law or other governmental actions to
close.
Article II
Representations and Warranties
2.1 Disclosure.
(a) "Company Material Adverse Effect" means a material adverse
effect on (i) the business, results of operation or financial condition of the
Company and its consolidated subsidiaries taken as a whole; provided, however,
that Company Material Adverse Effect shall not be deemed to include the effects
of (A) changes after the date of the Letter Agreement (the "Signing Date") in
general business, economic or market conditions (including changes generally in
prevailing interest rates, credit availability and liquidity, currency exchange
rates and price levels or trading volumes in the United States or foreign
securities or credit markets), or any outbreak or escalation of hostilities,
declared or undeclared acts of war or terrorism, in each case generally
affecting the industries in which the Company and its subsidiaries operate, (B)
changes or proposed changes after the Signing Date in generally accepted
accounting principles in the United States ("GAAP") or regulatory accounting
requirements, or authoritative interpretations thereof, (C) changes or proposed
changes after the Signing Date in securities, banking and other laws of general
applicability or related policies or interpretations of Governmental Entities
(in the case of each of these clauses (A), (B) and (C), other than changes or
occurrences to the extent that such changes or occurrences have or would
4
reasonably be expected to have a materially disproportionate adverse effect on
the Company and its consolidated subsidiaries taken as a whole relative to
comparable U.S. banking or financial services organizations), or (D) changes in
the market price or trading volume of the Common Stock or any other equity,
equity-related or debt securities of the Company or its consolidated
subsidiaries (it being understood and agreed that the exception set forth in
this clause (D) does not apply to the underlying reason giving rise to or
contributing to any such change); or (ii) the ability of the Company to
consummate the Purchase and the other transactions contemplated by this
Agreement and the Warrant and perform its obligations hereunder or thereunder on
a timely basis.
(b) "Previously Disclosed" means information set forth or
incorporated in the Company's Annual Report on Form 10-K for the most recently
completed fiscal year of the Company filed with the Securities and Exchange
Commission (the "SEC") prior to the Signing Date (the "Last Fiscal Year") or in
its other reports and forms filed with or furnished to the SEC under Sections
13(a), 14(a) or 15(d) of the Securities Exchange Act of 1934 (the "Exchange
Act") on or after the last day of the Last Fiscal Year and prior to the Signing
Date.
2.2 Representations and Warranties of the Company. Except as
Previously Disclosed, the Company represents and warrants to the Investor that
as of the Signing Date and as of the Closing Date (or such other date specified
herein):
(a) Organization, Authority and Significant Subsidiaries. The
Company has been duly incorporated and is validly existing and in good standing
under the laws of its jurisdiction of organization, with the necessary power and
authority to own its properties and conduct its business in all material
respects as currently conducted, and except as has not, individually or in the
aggregate, had and would not reasonably be expected to have a Company Material
Adverse Effect, has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts any business so
as to require such qualification; each subsidiary of the Company that is a
"significant subsidiary" within the meaning of Rule 1-02(w) of Regulation S-X
under the Securities Act of 1933 (the "Securities Act") has been duly organized
and is validly existing in good standing under the laws of its jurisdiction of
organization. The Charter and bylaws of the Company, copies of which have been
provided to the Investor prior to the Signing Date, are true, complete and
correct copies of such documents as in full force and effect as of the Signing
Date.
(b) Capitalization. The authorized capital stock of the Company,
and the outstanding capital stock of the Company (including securities
convertible into, or exercisable or exchangeable for, capital stock of the
Company) as of the most recent fiscal month-end preceding the Signing Date (the
"Capitalization Date") is set forth on Schedule B. The outstanding shares of
capital stock of the Company have been duly authorized and are validly issued
and outstanding, fully paid and nonassessable, and subject to no preemptive
rights (and were not issued in violation of any preemptive rights). Except as
provided in the Warrant, as of the Signing Date, the Company does not have
outstanding any securities or other obligations providing the holder the right
to acquire Common Stock that is not reserved for issuance as 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
5
any shares of Common Stock, other than (i) shares issued upon the exercise of
stock options or delivered under other equity-based awards or other convertible
securities or warrants which were issued and outstanding on the Capitalization
Date and disclosed on Schedule B and (ii) shares disclosed on Schedule B.
(c) Preferred Shares. The Preferred Shares have been duly and
validly authorized, and, when issued and delivered pursuant to this Agreement,
such Preferred Shares will be duly and validly issued and fully paid and
non-assessable, will not be issued in violation of any preemptive rights, and
will rank pari passu with or senior to all other series or classes of Preferred
Stock, whether or not issued or outstanding, with respect to the payment of
dividends and the distribution of assets in the event of any dissolution,
liquidation or winding up of the Company.
(d) The Warrant and Warrant Shares. The Warrant has been duly
authorized and, when executed and delivered as contemplated hereby, will
constitute a valid and legally binding obligation of the Company enforceable
against the Company in accordance with its terms, except as the same may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and
general equitable principles, regardless of whether such enforceability is
considered in a proceeding at law or in equity ("Bankruptcy Exceptions"). The
shares of Common Stock issuable upon exercise of the Warrant (the "Warrant
Shares") have been duly authorized and reserved for issuance upon exercise of
the Warrant and when so issued in accordance with the terms of the Warrant will
be validly issued, fully paid and non-assessable, subject, if applicable, to the
approvals of its stockholders set forth on Schedule C.
(e) Authorization, Enforceability.
(i) The Company has the corporate power and authority to
execute and deliver this Agreement and the Warrant and, subject, if
applicable, to the approvals of its stockholders set forth on Schedule
C, to carry out its obligations hereunder and thereunder (which
includes the issuance of the Preferred Shares, Warrant and Warrant
Shares). The execution, delivery and performance by the Company of this
Agreement and the Warrant and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by all
necessary corporate action on the part of the Company and its
stockholders, and no further approval or authorization is required on
the part of the Company, subject, in each case, if applicable, to the
approvals of its stockholders set forth on Schedule C. This Agreement
is a valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, subject to the Bankruptcy
Exceptions.
(ii) The execution, delivery and performance by the Company of
this Agreement and the Warrant and the consummation of the transactions
contemplated hereby and thereby and compliance by the Company with the
provisions hereof and thereof, will not (A) violate, conflict with, or
result in a breach of any provision of, or constitute a default (or an
event which, with notice or lapse of time or both, would constitute a
default) under, or result in the termination of, or accelerate the
performance required by, or result in a right of termination or
acceleration of, or result in the creation of, any lien, security
interest, charge or encumbrance upon any of the properties or assets of
the Company or any Company Subsidiary under any of the terms,
6
conditions or provisions of (i) subject, if applicable, to the
approvals of the Company's stockholders set forth on Schedule C, its
organizational documents or (ii) any note, bond, mortgage, indenture,
deed of trust, license, lease, agreement or other instrument or
obligation to which the Company or any Company Subsidiary is a party or
by which it or any Company Subsidiary may be bound, or to which the
Company or any Company Subsidiary or any of the properties or assets of
the Company or any Company Subsidiary may be subject, or (B) subject to
compliance with the statutes and regulations referred to in the next
paragraph, violate any statute, rule or regulation or any judgment,
ruling, order, writ, injunction or decree applicable to the Company or
any Company Subsidiary or any of their respective properties or assets
except, in the case of clauses (A)(ii) and (B), for those occurrences
that, individually or in the aggregate, have not had and would not
reasonably be expected to have a Company Material Adverse Effect.
(iii) Other than the filing of the Certificate of Designations
with the Secretary of State of its jurisdiction of organization or
other applicable Governmental Entity, any current report on Form 8-K
required to be filed with the SEC, such filings and approvals as are
required to be made or obtained under any state "blue sky" laws, the
filing of any proxy statement contemplated by Section 3.1 and such as
have been made or obtained, no notice to, filing with, exemption or
review by, or authorization, consent or approval of, any Governmental
Entity is required to be made or obtained by the Company in connection
with the consummation by the Company of the Purchase except for any
such notices, filings, exemptions, reviews, authorizations, consents
and approvals the failure of which to make or obtain would not,
individually or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect.
(f) Anti-takeover Provisions and Rights Plan. The Board of
Directors of the Company (the "Board of Directors") has taken all necessary
action to ensure that the transactions contemplated by this Agreement and the
Warrant and the consummation of the transactions contemplated hereby and
thereby, including the exercise of the Warrant in accordance with its terms,
will be exempt from any anti-takeover or similar provisions of the Company's
Charter and bylaws, and any other provisions of any applicable "moratorium",
"control share", "fair price", "interested stockholder" or other anti-takeover
laws and regulations of any jurisdiction. The Company has taken all actions
necessary to render any stockholders' rights plan of the Company inapplicable to
this Agreement and the Warrant and the consummation of the transactions
contemplated hereby and thereby, including the exercise of the Warrant by the
Investor in accordance with its terms.
(g) No Company Material Adverse Effect. Since the last day of the
last completed fiscal period for which the Company has filed a Quarterly Report
on Form 10-Q or an Annual Report on Form 10-K with the SEC prior to the Signing
Date, no fact, circumstance, event, change, occurrence, condition or development
has occurred that, individually or in the aggregate, has had or would reasonably
be expected to have a Company Material Adverse Effect.
7
(h) Company Financial Statements. Each of the consolidated
financial statements of the Company and its consolidated subsidiaries
(collectively the "Company Financial Statements") included or incorporated by
reference in the Company Reports filed with the SEC since December 31, 2006,
present fairly in all material respects the consolidated financial position of
the Company and its consolidated subsidiaries as of the dates indicated therein
(or if amended prior to the Signing Date, as of the date of such amendment) and
the consolidated results of their operations for the periods specified therein;
and except as stated therein, such financial statements (A) were prepared in
conformity with GAAP applied on a consistent basis (except as may be noted
therein), (B) have been prepared from, and are in accordance with, the books and
records of the Company and the Company Subsidiaries and (C) complied as to form,
as of their respective dates of filing with the SEC, in all material respects
with the applicable accounting requirements and with the published rules and
regulations of the SEC with respect thereto.
(i) Reports.
(i) Since December 31, 2006, the Company and each subsidiary
of the Company (each a "Company Subsidiary" and, collectively, the
"Company Subsidiaries") has timely filed all reports, registrations,
documents, filings, statements and submissions, together with any
amendments thereto, that it was required to file with any Governmental
Entity (the foregoing, collectively, the "Company Reports") and has
paid all fees and assessments due and payable in connection therewith,
except, in each case, as would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect. As of
their respective dates of filing, the Company Reports complied in all
material respects with all statutes and applicable rules and
regulations of the applicable Governmental Entities. In the case of
each such Company Report filed with or furnished to the SEC, such
Company Report (A) did not, as of its date or if amended prior to the
Signing Date, as of the date of such amendment, contain an untrue
statement of a material fact or omit to state a material fact necessary
in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading, and (B)
complied as to form in all material respects with the applicable
requirements of the Securities Act and the Exchange Act. With respect
to all other Company Reports, the Company Reports were complete and
accurate in all material respects as of their respective dates. No
executive officer of the Company or any Company Subsidiary has failed
in any respect to make the certifications required of him or her under
Section 302 or 906 of the Sarbanes-Oxley Act of 2002.
(ii) The records, systems, controls, data and information of
the Company and the Company Subsidiaries are recorded, stored,
maintained and operated under means (including any electronic,
mechanical or photographic process, whether computerized or not) that
are under the exclusive ownership and direct control of the Company or
the Company Subsidiaries or their accountants (including all means of
access thereto and therefrom), except for any non-exclusive ownership
and non-direct control that would not reasonably be expected to have a
material adverse effect on the system of internal accounting controls
described below in this Section 2.2(i)(ii). The Company (A) has
implemented and maintains disclosure controls and procedures (as
defined in Rule 13a-15(e) of the Exchange Act) to ensure that material
information relating to the Company, including the consolidated Company
Subsidiaries, is made known to the chief executive officer and the
chief financial officer of the Company by others within those entities,
and (B) has disclosed, based on its most recent evaluation prior to the
Signing Date, to the Company's outside auditors and the audit committee
of the Board of Directors (x) any significant deficiencies and material
weaknesses in the design or operation of internal controls over
financial reporting (as defined in Rule 13a-15(f) of the Exchange Act)
8
that are reasonably likely to adversely affect the Company's ability to
record, process, summarize and report financial information and (y) any
fraud, whether or not material, that involves management or other
employees who have a significant role in the Company's internal
controls over financial reporting.
(j) No Undisclosed Liabilities. Neither the Company nor any of the
Company Subsidiaries has any liabilities or obligations of any nature (absolute,
accrued, contingent or otherwise) which are not properly reflected or reserved
against in the Company Financial Statements to the extent required to be so
reflected or reserved against in accordance with GAAP, except for (A)
liabilities that have arisen since the last fiscal year end in the ordinary and
usual course of business and consistent with past practice and (B) liabilities
that, individually or in the aggregate, have not had and would not reasonably be
expected to have a Company Material Adverse Effect.
(k) Offering of Securities. Neither the Company nor any person
acting on its behalf has taken any action (including any offering of any
securities of the Company under circumstances which would require the
integration of such offering with the offering of any of the Purchased
Securities under the Securities Act, and the rules and regulations of the SEC
promulgated thereunder), which might subject the offering, issuance or sale of
any of the Purchased Securities to Investor pursuant to this Agreement to the
registration requirements of the Securities Act.
(l) Litigation and Other Proceedings. Except (i) as set forth on
Schedule D or (ii) as would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect, there is no (A) pending or,
to the knowledge of the Company, threatened, claim, action, suit, investigation
or proceeding, against the Company or any Company Subsidiary or to which any of
their assets are subject nor is the Company or any Company Subsidiary subject to
any order, judgment or decree or (B) unresolved violation, criticism or
exception by any Governmental Entity with respect to any report or relating to
any examinations or inspections of the Company or any Company Subsidiaries.
(m) Compliance with Laws. Except as would not, individually or in
the aggregate, reasonably be expected to have a Company Material Adverse Effect,
the Company and the Company Subsidiaries have all permits, licenses, franchises,
authorizations, orders and approvals of, and have made all filings, applications
and registrations with, Governmental Entities that are required in order to
permit them to own or lease their properties and assets and to carry on their
business as presently conducted and that are material to the business of the
Company or such Company Subsidiary. Except as set forth on Schedule E, the
9
Company and the Company Subsidiaries have complied in all respects and are not
in default or violation of, and none of them is, to the knowledge of the
Company, under investigation with respect to or, to the knowledge of the
Company, have been threatened to be charged with or given notice of any
violation of, any applicable domestic (federal, state or local) or foreign law,
statute, ordinance, license, rule, regulation, policy or guideline, order,
demand, writ, injunction, decree or judgment of any Governmental Entity, other
than such noncompliance, defaults or violations that would not, individually or
in the aggregate, reasonably be expected to have a Company Material Adverse
Effect. Except for statutory or regulatory restrictions of general application
or as set forth on Schedule E, no Governmental Entity has placed any restriction
on the business or properties of the Company or any Company Subsidiary that
would, individually or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect.
(n) Employee Benefit Matters. Except as would not reasonably be
expected to have, either individually or in the aggregate, a Company Material
Adverse Effect: (A) each "employee benefit plan" (within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) providing benefits to any current or former employee, officer or
director of the Company or any member of its "Controlled Group" (defined as any
organization which is a member of a controlled group of corporations within the
meaning of Section 414 of the Internal Revenue Code of 1986, as amended (the
"Code")) that is sponsored, maintained or contributed to by the Company or any
member of its Controlled Group and for which the Company or any member of its
Controlled Group would have any liability, whether actual or contingent (each, a
"Plan") has been maintained in compliance with its terms and with the
requirements of all applicable statutes, rules and regulations, including ERISA
and the Code; (B) with respect to each Plan subject to Title IV of ERISA
(including, for purposes of this clause (B), any plan subject to Title IV of
ERISA that the Company or any member of its Controlled Group previously
maintained or contributed to in the six years prior to the Signing Date), (1) no
"reportable event" (within the meaning of Section 4043(c) of ERISA), other than
a reportable event for which the notice period referred to in Section 4043(c) of
ERISA has been waived, has occurred in the three years prior to the Signing Date
or is reasonably expected to occur, (2) no "accumulated funding deficiency"
(within the meaning of Section 302 of ERISA or Section 412 of the Code), whether
or not waived, has occurred in the three years prior to the Signing Date or is
reasonably expected to occur, (3) the fair market value of the assets under each
Plan exceeds the present value of all benefits accrued under such Plan
(determined based on the assumptions used to fund such Plan) and (4) neither the
Company nor any member of its Controlled Group has incurred in the six years
prior to the Signing Date, or reasonably expects to incur, any liability under
Title IV of ERISA (other than contributions to the Plan or premiums to the PBGC
in the ordinary course and without default) in respect of a Plan (including any
Plan that is a "multiemployer plan", within the meaning of Section 4001(c)(3) of
ERISA); and (C) each Plan that is intended to be qualified under Section 401(a)
of the Code has received a favorable 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
10
foreign income and franchise Tax returns required to be filed through the
Signing Date, subject to permitted extensions, and have paid all Taxes due
thereon, and (ii) no Tax deficiency has been determined adversely to the Company
or any of the Company Subsidiaries, nor does the Company have any knowledge of
any Tax deficiencies. "Tax" or "Taxes" means any federal, state, local or
foreign income, gross receipts, property, sales, use, license, excise,
franchise, employment, payroll, withholding, alternative or add on minimum, ad
valorem, transfer or excise tax, or any other tax, custom, duty, governmental
fee or other like assessment or charge of any kind whatsoever, together with any
interest or penalty, imposed by any Governmental Entity.
(p) Properties and Leases. Except as would not, individually or in
the aggregate, reasonably be expected to have a Company Material Adverse Effect,
the Company and the Company Subsidiaries have good and marketable title to all
real properties and all other properties and assets owned by them, in each case
free from liens, encumbrances, claims and defects that would affect the value
thereof or interfere with the use made or to be made thereof by them. Except as
would not, individually or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect, the Company and the Company Subsidiaries hold
all leased real or personal property under valid and enforceable leases with no
exceptions that would interfere with the use made or to be made thereof by them.
(q) Environmental Liability. Except as would not, individually or
in the aggregate, reasonably be expected to have a Company Material Adverse
Effect:
(i) there is no legal, administrative, or other proceeding,
claim or action of any nature seeking to impose, or that would
reasonably be expected to result in the imposition of, on the Company
or any Company Subsidiary, any liability relating to the release of
hazardous substances as defined under any local, state or federal
environmental statute, regulation or ordinance, including the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, pending or, to the Company's knowledge, threatened against the
Company or any Company Subsidiary;
(ii) to the Company's knowledge, there is no reasonable basis
for any such proceeding, claim or action; and
iii) neither the Company nor any Company Subsidiary is subject
to any agreement, order, judgment or decree by or with any court,
Governmental Entity or third party imposing any such environmental
liability.
(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
11
other party thereto, is in breach of any of its obligations under any such
agreement or arrangement other than such breaches that would not, individually
or in the aggregate, reasonably be expected to have a Company Material Adverse
Effect.
(s) Agreements with Regulatory Agencies. Except as set forth on
Schedule F, neither the Company nor any Company Subsidiary is subject to any
material cease-and-desist or other similar order or enforcement action issued
by, or is a party to any material written agreement, consent agreement or
memorandum of understanding with, or is a party to any commitment letter or
similar undertaking to, or is subject to any capital directive by, or since
December 31, 2006, has adopted any board resolutions at the request of, any
Governmental Entity (other than the Appropriate Federal Banking Agencies with
jurisdiction over the Company and the Company Subsidiaries) that currently
restricts in any material respect the conduct of its business or that in any
material manner relates to its capital adequacy, its liquidity and funding
policies and practices, its ability to pay dividends, its credit, risk
management or compliance policies or procedures, its internal controls, its
management or its operations or business (each item in this sentence, a
"Regulatory Agreement"), nor has the Company or any Company Subsidiary been
advised since December 31, 2006 by any such Governmental Entity that it is
considering issuing, initiating, ordering, or requesting any such Regulatory
Agreement. The Company and each Company Subsidiary are in compliance in all
material respects with each Regulatory Agreement to which it is party or
subject, and neither the Company nor any Company Subsidiary has received any
notice from any Governmental Entity indicating that either the Company or any
Company Subsidiary is not in compliance in all material respects with any such
Regulatory Agreement. "Appropriate Federal Banking Agency" means the
"appropriate Federal banking agency" with respect to the Company or such Company
Subsidiaries, as applicable, as defined in Section 3(q) of the Federal Deposit
Insurance Act (12 U.S.C. Section 1813(q)).
(t) Insurance. The Company and the Company Subsidiaries are
insured with reputable insurers against such risks and in such amounts as the
management of the Company reasonably has determined to be prudent and consistent
with industry practice. The Company and the Company Subsidiaries are in material
compliance with their insurance policies and are not in default under any of the
material terms thereof, each such policy is outstanding and in full force and
effect, all premiums and other payments due under any material policy have been
paid, and all claims thereunder have been filed in due and timely fashion,
except, in each case, as would not, individually or in the aggregate, reasonably
be expected to have a Company Material Adverse Effect.
(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
12
or violating, nor has the Company or any or the Company Subsidiaries received
any written (or, to the knowledge of the Company, oral) communications alleging
that any of them has materially infringed, diluted, misappropriated or violated,
any of the Proprietary Rights owned by any other person. Except as would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect, to the Company's knowledge, no other person is
infringing, diluting, misappropriating or violating, nor has the Company or any
or the Company Subsidiaries sent any written communications since January 1,
2006 alleging that any person has infringed, diluted, misappropriated or
violated, any of the Proprietary Rights owned by the Company and the Company
Subsidiaries.
(v) Brokers and Finders. No broker, finder or investment banker is
entitled to any financial advisory, brokerage, finder's or other fee or
commission in connection with this Agreement or the Warrant or the transactions
contemplated hereby or thereby based upon arrangements made by or on behalf of
the Company or any Company Subsidiary for which the Investor could have any
liability.
Article III
Covenants
3.1 Commercially Reasonable Efforts.
(a) Subject to the terms and conditions of this Agreement, each of
the parties will use its commercially reasonable efforts in good faith to take,
or cause to be taken, all actions, and to do, or cause to be done, all things
necessary, proper or desirable, or advisable under applicable laws, so as to
permit consummation of the Purchase as promptly as practicable and otherwise to
enable consummation of the transactions contemplated hereby and shall use
commercially reasonable efforts to cooperate with the other party to that end.
(b) If the Company is required to obtain any stockholder approvals
set forth on Schedule C, then the Company shall comply with this Section 3.1(b)
and Section 3.1(c). The Company shall call a special meeting of its
stockholders, as promptly as practicable following the Closing, to vote on
proposals (collectively, the "Stockholder Proposals") to (i) approve the
exercise of the Warrant for Common Stock for purposes of the rules of the
national security exchange on which the Common Stock is listed and/or (ii) amend
the Company's Charter to increase the number of authorized shares of Common
Stock to at least such number as shall be sufficient to permit the full exercise
of the Warrant for Common Stock and comply with the other provisions of this
Section 3.1(b) and Section 3.1(c). The Board of Directors shall recommend to the
Company's stockholders that such stockholders vote in favor of the Stockholder
Proposals. In connection with such meeting, the Company shall prepare (and the
Investor will reasonably cooperate with the Company to prepare) and file with
the SEC as promptly as practicable (but in no event more than ten business days
after the Closing) a preliminary proxy statement, shall use its reasonable best
efforts to respond to any comments of the SEC or its staff thereon and to cause
13
a definitive proxy statement related to such stockholders' meeting to be mailed
to the Company's stockholders not more than five business days after clearance
thereof by the SEC, and shall use its reasonable best efforts to solicit proxies
for such stockholder approval of the Stockholder Proposals. The Company shall
notify the Investor promptly of the receipt of any comments from the SEC or its
staff with respect to the proxy statement and of any request by the SEC or its
staff for amendments or supplements to such proxy statement or for additional
information and will supply the Investor with copies of all correspondence
between the Company or any of its representatives, on the one hand, and the SEC
or its staff, on the other hand, with respect to such proxy statement. If at any
time prior to such stockholders' meeting there shall occur any event that is
required to be set forth in an amendment or supplement to the proxy statement,
the Company shall as promptly as practicable prepare and mail to its
stockholders such an amendment or supplement. Each of the Investor and the
Company agrees promptly to correct any information provided by it or on its
behalf for use in the proxy statement if and to the extent that such information
shall have become false or misleading in any material respect, and the Company
shall as promptly as practicable prepare and mail to its stockholders an
amendment or supplement to correct such information to the extent required by
applicable laws and regulations. The Company shall consult with the Investor
prior to filing any proxy statement, or any amendment or supplement thereto, and
provide the Investor with a reasonable opportunity to comment thereon. In the
event that the approval of any of the Stockholder Proposals is not obtained at
such special stockholders meeting, the Company shall include a proposal to
approve (and the Board of Directors shall recommend approval of) each such
proposal at a meeting of its stockholders no less than once in each subsequent
six-month period beginning on January 1, 2009 until all such approvals are
obtained or made.
(c) None of the information supplied by the Company or any of the
Company Subsidiaries for inclusion in any proxy statement in connection with any
such stockholders meeting of the Company will, at the date it is filed with the
SEC, when first mailed to the Company's stockholders and at the time of any
stockholders meeting, and at the time of any amendment or supplement thereof,
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading.
3.2 Expenses. Unless otherwise provided in this Agreement or the
Warrant, each of the parties hereto will bear and pay all costs and expenses
incurred by it or on its behalf in connection with the transactions contemplated
under this Agreement and the Warrant, including fees and expenses of its own
financial or other consultants, investment bankers, accountants and counsel.
3.3 Sufficiency of Authorized Common Stock; Exchange Listing.
(a) During the period from the Closing Date (or, if the approval
of the Stockholder Proposals is required, the date of such approval) until the
date on which the Warrant has been fully exercised, the Company shall at all
times have reserved for issuance, free of preemptive or similar rights, a
sufficient number of authorized and unissued Warrant Shares to effectuate such
exercise. Nothing in this Section 3.3 shall preclude the Company from satisfying
its obligations in respect of the exercise of the Warrant by delivery of shares
of Common Stock which are held in the treasury of the Company. As soon as
reasonably practicable following the Closing, the Company shall, at its expense,
cause the Warrant Shares to be listed on the same national securities exchange
on which the Common Stock is listed, subject to official notice of issuance, and
shall maintain such listing for so long as any Common Stock is listed on such
exchange.
14
(b) If requested by the Investor, the Company shall promptly use
its reasonable best efforts to cause the Preferred Shares to be approved for
listing on a national securities exchange as promptly as practicable following
such request.
3.4 Certain Notifications Until Closing. From the Signing Date
until the Closing, the Company shall promptly notify the Investor of (i) any
fact, event or circumstance of which it is aware and which would reasonably be
expected to cause any representation or warranty of the Company contained in
this Agreement to be untrue or inaccurate in any material respect or to cause
any covenant or agreement of the Company contained in this Agreement not to be
complied with or satisfied in any material respect and (ii) except as Previously
Disclosed, any fact, circumstance, event, change, occurrence, condition or
development of which the Company is aware and which, individually or in the
aggregate, has had or would reasonably be expected to have a Company Material
Adverse Effect; provided, however, that delivery of any notice pursuant to this
Section 3.4 shall not limit or affect any rights of or remedies available to the
Investor; provided, further, that a failure to comply with this Section 3.4
shall not constitute a breach of this Agreement or the failure of any condition
set forth in Section 1.2 to be satisfied unless the underlying Company Material
Adverse Effect or material breach would independently result in the failure of a
condition set forth in Section 1.2 to be satisfied.
3.5 Access, Information and Confidentiality.
(a) From the Signing Date until the date when the Investor holds
an amount of Preferred Shares having an aggregate liquidation value of less than
10% of the Purchase Price, the Company will permit the Investor and its agents,
consultants, contractors and advisors (x) acting through the Appropriate Federal
Banking Agency, to examine the corporate books and make copies thereof and to
discuss the affairs, finances and accounts of the Company and the Company
Subsidiaries with the principal officers of the Company, all upon reasonable
notice and at such reasonable times and as often as the Investor may reasonably
request and (y) to review any information material to the Investor's investment
in the Company provided by the Company to its Appropriate Federal Banking
Agency. Any investigation pursuant to this Section 3.5 shall be conducted during
normal business hours and in such manner as not to interfere unreasonably with
the conduct of the business of the Company, and nothing herein shall require the
Company or any Company Subsidiary to disclose any information to the Investor to
the extent (i) prohibited by applicable law or regulation, or (ii) that such
disclosure would reasonably be expected to cause a violation of any agreement to
which the Company or any Company Subsidiary is a party or would cause a risk of
a loss of privilege to the Company or any Company Subsidiary (provided that the
Company shall use commercially reasonable efforts to make appropriate substitute
disclosure arrangements under circumstances where the restrictions in this
clause (ii) apply).
(b) The Investor will use reasonable best efforts to hold, and
will use reasonable best efforts to cause its agents, consultants, contractors
and advisors to hold, in confidence all non-public records, books, contracts,
instruments, computer data and other data and information (collectively,
"Information") concerning the Company furnished or made available to it by the
Company or its representatives pursuant to this Agreement (except to the extent
that such information can be shown to have been (i) previously known by such
party on a non-confidential basis, (ii) in the public domain through no fault of
15
such party or (iii) later lawfully acquired from other sources by the party to
which it was furnished (and without violation of any other confidentiality
obligation)); provided that nothing herein shall prevent the Investor from
disclosing any Information to the extent required by applicable laws or
regulations or by any subpoena or similar legal process.
Article IV
Additional Agreements
4.1 Purchase for Investment. The Investor acknowledges that the
Purchased Securities and the Warrant Shares have not been registered under the
Securities Act or under any state securities laws. The Investor (a) is acquiring
the Purchased Securities pursuant to an exemption from registration under the
Securities Act solely for investment with no present intention to distribute
them to any person in violation of the Securities Act or any applicable U.S.
state securities laws, (b) will not sell or otherwise dispose of any of the
Purchased Securities or the Warrant Shares, except in compliance with the
registration requirements or exemption provisions of the Securities Act and any
applicable U.S. state securities laws, and (c) has such knowledge and experience
in financial and business matters and in investments of this type that it is
capable of evaluating the merits and risks of the Purchase and of making an
informed investment decision.
4.2 Legends.
(a) The Investor agrees that all certificates or other instruments
representing the Warrant and the Warrant Shares will bear a legend substantially
to the following effect:
"THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF
ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF
EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT
UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS."
(b) The Investor agrees that all certificates or other instruments
representing the Warrant will also bear a legend substantially to the following
effect:
"THIS INSTRUMENT IS ISSUED SUBJECT TO THE RESTRICTIONS ON TRANSFER AND
OTHER PROVISIONS OF A SECURITIES PURCHASE AGREEMENT BETWEEN THE ISSUER
OF THESE SECURITIES AND THE INVESTOR REFERRED TO THEREIN, A COPY OF
WHICH IS ON FILE WITH THE ISSUER. THE SECURITIES REPRESENTED BY THIS
INSTRUMENT MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT IN
COMPLIANCE WITH SAID AGREEMENT. ANY SALE OR OTHER TRANSFER NOT IN
COMPLIANCE WITH SAID AGREEMENT WILL BE VOID."
16
(c) In addition, the Investor agrees that all certificates or
other instruments representing the Preferred Shares will bear a legend
substantially to the following effect:
"THE SECURITIES REPRESENTED BY THIS INSTRUMENT ARE NOT SAVINGS
ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF A BANK AND ARE NOT INSURED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL
AGENCY.
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR
OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING
THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES
LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR
SUCH LAWS. EACH PURCHASER OF THE SECURITIES REPRESENTED BY THIS
INSTRUMENT IS NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION
FROM SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
ANY TRANSFEREE OF THE SECURITIES REPRESENTED BY THIS INSTRUMENT BY ITS
ACCEPTANCE HEREOF (1) REPRESENTS THAT IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (2) AGREES
THAT IT WILL NOT OFFER, SELL OR OTHERWISE TRANSFER THE SECURITIES
REPRESENTED BY THIS INSTRUMENT EXCEPT (A) PURSUANT TO A REGISTRATION
STATEMENT WHICH IS THEN EFFECTIVE UNDER THE SECURITIES ACT, (B) FOR SO
LONG AS THE SECURITIES REPRESENTED BY THIS INSTRUMENT ARE ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF
A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) TO THE ISSUER OR
(D) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO
EACH PERSON TO WHOM THE SECURITIES REPRESENTED BY THIS INSTRUMENT ARE
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND."
(d) In the event that any Purchased Securities or Warrant Shares
(i) become registered under the Securities Act or (ii) are eligible to be
transferred without restriction in accordance with Rule 144 or another exemption
from registration under the Securities Act (other than Rule 144A), the Company
shall issue new certificates or other instruments representing such Purchased
Securities or Warrant Shares, which shall not contain the applicable legends in
Sections 4.2(a) and (c) above; provided that the Investor surrenders to the
17
Company the previously issued certificates or other instruments. Upon Transfer
of all or a portion of the Warrant in compliance with Section 4.4, the Company
shall issue new certificates or other instruments representing the Warrant,
which shall not contain the applicable legend in Section 4.2(b) above; provided
that the Investor surrenders to the Company the previously issued certificates
or other instruments.
4.3 Certain Transactions. The Company will not merge or
consolidate with, or sell, transfer or lease all or substantially all of its
property or assets to, any other party unless the successor, transferee or
lessee party (or its ultimate parent entity), as the case may be (if not the
Company), expressly assumes the due and punctual performance and observance of
each and every covenant, agreement and condition of this Agreement to be
performed and observed by the Company.
4.4 Transfer of Purchased Securities and Warrant Shares;
Restrictions on Exercise of the Warrant. Subject to compliance with applicable
securities laws, the Investor shall be permitted to transfer, sell, assign or
otherwise dispose of ("Transfer") all or a portion of the Purchased Securities
or Warrant Shares at any time, and the Company shall take all steps as may be
reasonably requested by the Investor to facilitate the Transfer of the Purchased
Securities and the Warrant Shares; provided that the Investor shall not Transfer
a portion or portions of the Warrant with respect to, and/or exercise the
Warrant for, more than one-half of the Initial Warrant Shares (as such number
may be adjusted from time to time pursuant to Section 13 thereof) in the
aggregate until the earlier of (a) the date on which the Company (or any
successor by Business Combination) has received aggregate gross proceeds of not
less than the Purchase Price (and the purchase price paid by the Investor to any
such successor for securities of such successor purchased under the CPP) from
one or more Qualified Equity Offerings (including Qualified Equity Offerings of
such successor) and (b) December 31, 2009. "Qualified Equity Offering" means the
sale and issuance for cash by the Company to persons other than the Company or
any of the Company Subsidiaries after the Closing Date of shares of perpetual
Preferred Stock, Common Stock or any combination of such stock, that, in each
case, qualify as and may be included in Tier 1 capital of the Company at the
time of issuance under the applicable risk-based capital guidelines of the
Company's Appropriate Federal Banking Agency (other than any such sales and
issuances made pursuant to agreements or arrangements entered into, or pursuant
to financing plans which were publicly announced, on or prior to October 13,
2008). "Business Combination" means a merger, consolidation, statutory share
exchange or similar transaction that requires the approval of the Company's
stockholders.
4.5 Registration Rights.
(a) Registration.
(i) Subject to the terms and conditions of this Agreement, the
Company covenants and agrees that as promptly as practicable after the
Closing Date (and in any event no later than 30 days after the Closing
Date), the Company shall prepare and file with the SEC a Shelf
Registration Statement covering all Registrable Securities (or
otherwise designate an existing Shelf Registration Statement filed with
the SEC to cover the Registrable Securities), and, to the extent the
Shelf Registration Statement has not theretofore been declared
18
effective or is not automatically effective upon such filing, the
Company shall use reasonable best efforts to cause such Shelf
Registration Statement to be declared or become effective and to keep
such Shelf Registration Statement continuously effective and in
compliance with the Securities Act and usable for resale of such
Registrable Securities for a period from the date of its initial
effectiveness until such time as there are no Registrable Securities
remaining (including by refiling such Shelf Registration Statement (or
a new Shelf Registration Statement) if the initial Shelf Registration
Statement expires). So long as the Company is a well-known seasoned
issuer (as defined in Rule 405 under the Securities Act) at the time of
filing of the Shelf Registration Statement with the SEC, such Shelf
Registration Statement shall be designated by the Company as an
automatic Shelf Registration Statement. Notwithstanding the foregoing,
if on the Signing Date the Company is not eligible to file a
registration statement on Form S-3, then the Company shall not be
obligated to file a Shelf Registration Statement unless and until
requested to do so in writing by the Investor.
(ii) Any registration pursuant to Section 4.5(a)(i) shall be
effected by means of a shelf registration on an appropriate form under
Rule 415 under the Securities Act (a "Shelf Registration Statement").
If the Investor or any other Holder intends to distribute any
Registrable Securities by means of an underwritten offering it shall
promptly so advise the Company and the Company shall take all
reasonable steps to facilitate such distribution, including the actions
required pursuant to Section 4.5(c); provided that the Company shall
not be required to facilitate an underwritten offering of Registrable
Securities unless the expected gross proceeds from such offering exceed
(i) 2% of the initial aggregate liquidation preference of the Preferred
Shares if such initial aggregate liquidation preference is less than $2
billion and (ii) $200 million if the initial aggregate liquidation
preference of the Preferred Shares is equal to or greater than $2
billion. The lead underwriters in any such distribution shall be
selected by the Holders of a majority of the Registrable Securities to
be distributed; provided that to the extent appropriate and permitted
under applicable law, such Holders shall consider the qualifications of
any broker-dealer Affiliate of the Company in selecting the lead
underwriters in any such distribution.
(iii) The Company shall not be required to effect a
registration (including a resale of Registrable Securities from an
effective Shelf Registration Statement) or an underwritten offering
pursuant to Section 4.5(a): (A) with respect to securities that are not
Registrable Securities; or (B) if the Company has notified the Investor
and all other Holders that in the good faith judgment of the Board of
Directors, it would be materially detrimental to the Company or its
securityholders for such registration or underwritten offering to be
effected at such time, in which event the Company shall have the right
to defer such registration for a period of not more than 45 days after
receipt of the request of the Investor or any other Holder; provided
that such right to delay a registration or underwritten offering shall
be exercised by the Company (1) only if the Company has generally
exercised (or is concurrently exercising) similar black-out rights
against holders of similar securities that have registration rights and
(2) not more than three times in any 12-month period and not more than
90 days in the aggregate in any 12-month period.
19
(iv) If during any period when an effective Shelf Registration
Statement is not available, the Company proposes to register any of its
equity securities, other than a registration pursuant to Section
4.5(a)(i) or a Special Registration, and the registration form to be
filed may be used for the registration or qualification for
distribution of Registrable Securities, the Company will give prompt
written notice to the Investor and all other Holders of its intention
to effect such a registration (but in no event less than ten days prior
to the anticipated filing date) and will include in such registration
all Registrable Securities with respect to which the Company has
received written requests for inclusion therein within ten business
days after the date of the Company's notice (a "Piggyback
Registration"). Any such person that has made such a written request
may withdraw its Registrable Securities from such Piggyback
Registration by giving written notice to the Company and the managing
underwriter, if any, on or before the fifth business day prior to the
planned effective date of such Piggyback Registration. The Company may
terminate or withdraw any registration under this Section 4.5(a)(iv)
prior to the effectiveness of such registration, whether or not
Investor or any other Holders have elected to include Registrable
Securities in such registration.
(v) If the registration referred to in Section 4.5(a)(iv) is
proposed to be underwritten, the Company will so advise Investor and
all other Holders as a part of the written notice given pursuant to
Section 4.5(a)(iv). In such event, the right of Investor and all other
Holders to registration pursuant to Section 4.5(a) will be conditioned
upon such persons' participation in such underwriting and the inclusion
of such person's Registrable Securities in the underwriting if such
securities are of the same class of securities as the securities to be
offered in the underwritten offering, and each such person will
(together with the Company and the other persons distributing their
securities through such underwriting) enter into an underwriting
agreement in customary form with the underwriter or underwriters
selected for such underwriting by the Company; provided that the
Investor (as opposed to other Holders) shall not be required to
indemnify any person in connection with any registration. If any
participating person disapproves of the terms of the underwriting, such
person may elect to withdraw therefrom by written notice to the
Company, the managing underwriters and the Investor (if the Investor is
participating in the underwriting).
(vi) If either (x) the Company grants "piggyback" registration
rights to one or more third parties to include their securities in an
underwritten offering under the Shelf Registration Statement pursuant
to Section 4.5(a)(ii) or (y) a Piggyback Registration under Section
4.5(a)(iv) relates to an underwritten offering on behalf of the
Company, and in either case the managing underwriters advise the
Company that in their reasonable opinion the number of securities
requested to be included in such offering exceeds the number which can
be sold without adversely affecting the marketability of such offering
(including an adverse effect on the per share offering price), the
Company will include in such offering only such number of securities
that in the reasonable opinion of such managing underwriters can be
sold without adversely affecting the marketability of the offering
(including an adverse effect on the per share offering price), which
securities will be so included in the following order of priority: (A)
first, in the case of a Piggyback Registration under Section
4.5(a)(iv), the securities the Company proposes to sell, (B) then the
Registrable Securities of the Investor and all other Holders who have
requested inclusion of Registrable Securities pursuant to Section
4.5(a)(ii) or Section 4.5(a)(iv), as applicable, pro rata on the basis
of the aggregate number of such securities or shares owned by each such
person and (C) lastly, any other securities of the Company that have
20
been requested to be so included, subject to the terms of this
Agreement; provided, however, that if the Company has, prior to the
Signing Date, entered into an agreement with respect to its securities
that is inconsistent with the order of priority contemplated hereby
then it shall apply the order of priority in such conflicting agreement
to the extent that it would otherwise result in a breach under such
agreement.
(b) Expenses of Registration. All Registration Expenses incurred
in connection with any registration, qualification or compliance hereunder shall
be borne by the Company. All Selling Expenses incurred in connection with any
registrations hereunder shall be borne by the holders of the securities so
registered pro rata on the basis of the aggregate offering or sale price of the
securities so registered.
(c) Obligations of the Company. The Company shall use its
reasonable best efforts, for so long as there are Registrable Securities
outstanding, to take such actions as are under its control to not become an
ineligible issuer (as defined in Rule 405 under the Securities Act) and to
remain a well-known seasoned issuer (as defined in Rule 405 under the Securities
Act) if it has such status on the Signing Date or becomes eligible for such
status in the future. In addition, whenever required to effect the registration
of any Registrable Securities or facilitate the distribution of Registrable
Securities pursuant to an effective Shelf Registration Statement, the Company
shall, as expeditiously as reasonably practicable:
(i) Prepare and file with the SEC a prospectus supplement with
respect to a proposed offering of Registrable Securities pursuant to an
effective registration statement, subject to Section 4.5(d), keep such
registration statement effective and keep such prospectus supplement
current until the securities described therein are no longer
Registrable Securities.
(ii) Prepare and file with the SEC such amendments and
supplements to the applicable registration statement and the prospectus
or prospectus supplement used in connection with such registration
statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities
covered by such registration statement.
(iii) Furnish to the Holders and any underwriters such number
of copies of the applicable registration statement and each such
amendment and supplement thereto (including in each case all exhibits)
and of a prospectus, including a preliminary prospectus, in conformity
with the requirements of the Securities Act, and such other documents
as they may reasonably request in order to facilitate the disposition
of Registrable Securities owned or to be distributed by them.
21
(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 Common Stock for sale in any
jurisdiction or the initiation or threatening of any
proceeding for such purpose;
(E) of the happening of any event that requires the
Company to make changes in any effective registration
statement or the prospectus related to the registration
statement in order to make the statements therein not
misleading (which notice shall be accompanied by an
instruction to suspend the use of the prospectus until the
requisite changes have been made); and
(F) if at any time the representations and warranties
of the Company contained in any underwriting agreement
contemplated by Section 4.5(c)(x) cease to be true and
correct.
22
(vii) Use its reasonable best efforts to prevent the issuance
or obtain the withdrawal of any order suspending the effectiveness of
any registration statement referred to in Section 4.5(c)(vi)(C) at the
earliest practicable time.
(viii) Upon the occurrence of any event contemplated by
Section 4.5(c)(v) or 4.5(c)(vi)(E), promptly prepare a post-effective
amendment to such registration statement or a supplement to the related
prospectus or file any other required document so that, as thereafter
delivered to the Holders and any underwriters, the prospectus will not
contain an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. If the
Company notifies the Holders in accordance with Section 4.5(c)(vi)(E)
to suspend the use of the prospectus until the requisite changes to the
prospectus have been made, then the Holders and any underwriters shall
suspend use of such prospectus and use their reasonable best efforts to
return to the Company all copies of such prospectus (at the Company's
expense) other than permanent file copies then in such Holders' or
underwriters' possession. The total number of days that any such
suspension may be in effect in any 12-month period shall not exceed 90
days.
(ix) Use reasonable best efforts to procure the cooperation of
the Company's transfer agent in settling any offering or sale of
Registrable Securities, including with respect to the transfer of
physical stock certificates into book-entry form in accordance with any
procedures reasonably requested by the Holders or any managing
underwriter(s).
(x) If an underwritten offering is requested pursuant to
Section 4.5(a)(ii), enter into an underwriting agreement in customary
form, scope and substance and take all such other actions reasonably
requested by the Holders of a majority of the Registrable Securities
being sold in connection therewith or by the managing underwriter(s),
if any, to expedite or facilitate the underwritten disposition of such
Registrable Securities, and in connection therewith in any underwritten
offering (including making members of management and executives of the
Company available to participate in "road shows", similar sales events
and other marketing activities), (A) make such representations and
warranties to the Holders that are selling stockholders and the
managing underwriter(s), if any, with respect to the business of the
Company and its subsidiaries, and the Shelf Registration Statement,
prospectus and documents, if any, incorporated or deemed to be
incorporated by reference therein, in each case, in customary form,
substance and scope, and, if true, confirm the same if and when
requested, (B) use its reasonable best efforts to furnish the
underwriters with opinions of counsel to the Company, addressed to the
managing underwriter(s), if any, covering the matters customarily
covered in such opinions requested in underwritten offerings, (C) use
its reasonable best efforts to obtain "cold comfort" letters from the
independent certified public accountants of the Company (and, if
necessary, any other independent certified public accountants of any
business acquired by the Company for which financial statements and
financial data are included in the Shelf Registration Statement) who
have certified the financial statements included in such Shelf
Registration Statement, addressed to each of the managing
underwriter(s), if any, such letters to be in customary form and
covering matters of the type customarily covered in "cold comfort"
23
letters, (D) if an underwriting agreement is entered into, the same
shall contain indemnification provisions and procedures customary in
underwritten offerings (provided that the Investor shall not be
obligated to provide any indemnity), and (E) deliver such documents and
certificates as may be reasonably requested by the Holders of a
majority of the Registrable Securities being sold in connection
therewith, their counsel and the managing underwriter(s), if any, to
evidence the continued validity of the representations and warranties
made pursuant to clause (i) above and to evidence compliance with any
customary conditions contained in the underwriting agreement or other
agreement entered into by the Company.
(xi) Make available for inspection by a representative of
Holders that are selling stockholders, the managing underwriter(s), if
any, and any attorneys or accountants retained by such Holders or
managing underwriter(s), at the offices where normally kept, during
reasonable business hours, financial and other records, pertinent
corporate documents and properties of the Company, and cause the
officers, directors and employees of the Company to supply all
information in each case reasonably requested (and of the type
customarily provided in connection with due diligence conducted in
connection with a registered public offering of securities) by any such
representative, managing underwriter(s), attorney or accountant in
connection with such Shelf Registration Statement.
(xii) Use reasonable best efforts to cause all such
Registrable Securities to be listed on each national securities
exchange on which similar securities issued by the Company are then
listed or, if no similar securities issued by the Company are then
listed on any national securities exchange, use its reasonable best
efforts to cause all such Registrable Securities to be listed on such
securities exchange as the Investor may designate.
(xiii) If requested by Holders of a majority of the
Registrable Securities being registered and/or sold in connection
therewith, or the managing underwriter(s), if any, promptly include in
a prospectus supplement or amendment such information as the Holders of
a majority of the Registrable Securities being registered and/or sold
in connection therewith or managing underwriter(s), if any, may
reasonably request in order to permit the intended method of
distribution of such securities and make all required filings of such
prospectus supplement or such amendment as soon as practicable after
the Company has received such request.
(xiv) Timely provide to its security holders earning
statements satisfying the provisions of Section 11(a) of the Securities
Act and Rule 158 thereunder.
(d) Suspension of Sales. Upon receipt of written notice from the
Company that a registration statement, prospectus or prospectus supplement
contains or may contain an untrue statement of a material fact or omits or may
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading or that circumstances exist that make
24
inadvisable use of such registration statement, prospectus or prospectus
supplement, the Investor and each Holder of Registrable Securities shall
forthwith discontinue disposition of Registrable Securities until the Investor
and/or Holder has received copies of a supplemented or amended prospectus or
prospectus supplement, or until the Investor and/or such Holder is advised in
writing by the Company that the use of the prospectus and, if applicable,
prospectus supplement may be resumed, and, if so directed by the Company, the
Investor and/or such Holder shall deliver to the Company (at the Company's
expense) all copies, other than permanent file copies then in the Investor
and/or such Holder's possession, of the prospectus and, if applicable,
prospectus supplement covering such Registrable Securities current at the time
of receipt of such notice. The total number of days that any such suspension may
be in effect in any 12-month period shall not exceed 90 days.
(e) Termination of Registration Rights. A Holder's registration
rights as to any securities held by such Holder (and its Affiliates, partners,
members and former members) shall not be available unless such securities are
Registrable Securities.
(f) Furnishing Information.
(i) Neither the Investor nor any Holder shall use any free
writing prospectus (as defined in Rule 405) in connection with the sale
of Registrable Securities without the prior written consent of the
Company.
(ii) It shall be It shall be a condition precedent to the
obligations of the Company to take any action pursuant to Section
4.5(c) that Investor and/or the selling Holders and the underwriters,
if any, shall furnish to the Company such information regarding
themselves, the Registrable Securities held by them and the intended
method of disposition of such securities as shall be required to effect
the registered offering of their Registrable Securities.
(g) Indemnification.
(i) The Company agrees to indemnify each Holder and, if a
Holder is a person other than an individual, such Holder's officers,
directors, employees, agents, representatives and Affiliates, and each
Person, if any, that controls a Holder within the meaning of the
Securities Act (each, an "Indemnitee"), against any and all losses,
claims, damages, actions, liabilities, costs and expenses (including
reasonable fees, expenses and disbursements of attorneys and other
professionals incurred in connection with investigating, defending,
settling, compromising or paying any such losses, claims, damages,
actions, liabilities, costs and expenses), joint or several, arising
out of or based upon any untrue statement or alleged untrue statement
of material fact contained in any registration statement, including any
preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto or any documents incorporated therein
by reference or contained in any free writing prospectus (as such term
is defined in Rule 405) prepared by the Company or authorized by it in
writing for use by such Holder (or any amendment or supplement
thereto); or any omission to state therein a material fact required to
be stated therein or necessary to make the statements therein, in light
25
of the circumstances under which they were made, not misleading;
provided, that the Company shall not be liable to such Indemnitee in
any such case to the extent that any such loss, claim, damage,
liability (or action or proceeding in respect thereof) or expense
arises out of or is based upon (A) an untrue statement or omission made
in such registration statement, including any such preliminary
prospectus or final prospectus contained therein or any such amendments
or supplements thereto or contained in any free writing prospectus (as
such term is defined in Rule 405) prepared by the Company or authorized
by it in writing for use by such Holder (or any amendment or supplement
thereto), in reliance upon and in conformity with information regarding
such Indemnitee or its plan of distribution or ownership interests
which was furnished in writing to the Company by such Indemnitee for
use in connection with such registration statement, including any such
preliminary prospectus or final prospectus contained therein or any
such amendments or supplements thereto, or (B) offers or sales effected
by or on behalf of such Indemnitee "by means of" (as defined in Rule
159A) a "free writing prospectus" (as defined in Rule 405) that was not
authorized in writing by the Company.
(ii) If the indemnification provided for in Section 4.5(g)(i)
is unavailable to an Indemnitee with respect to any losses, claims,
damages, actions, liabilities, costs or expenses referred to therein or
is insufficient to hold the Indemnitee harmless as contemplated
therein, then the Company, in lieu of indemnifying such Indemnitee,
shall contribute to the amount paid or payable by such Indemnitee as a
result of such losses, claims, damages, actions, liabilities, costs or
expenses in such proportion as is appropriate to reflect the relative
fault of the Indemnitee, on the one hand, and the Company, on the other
hand, in connection with the statements or omissions which resulted in
such losses, claims, damages, actions, liabilities, costs or expenses
as well as any other relevant equitable considerations. The relative
fault of the Company, on the one hand, and of the Indemnitee, on the
other hand, shall be determined by reference to, among other factors,
whether the untrue statement of a material fact or omission to state a
material fact relates to information supplied by the Company or by the
Indemnitee and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission; the Company and each Holder agree that it would not be just
and equitable if contribution pursuant to this Section 4.5(g)(ii) were
determined by pro rata allocation or by any other method of allocation
that does not take account of the equitable considerations referred to
in Section 4.5(g)(i). No Indemnitee guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from the Company if
the Company was not guilty of such fraudulent misrepresentation.
(h) Assignment of Registration Rights. The rights of the Investor
to registration of Registrable Securities pursuant to Section 4.5(a) may be
assigned by the Investor to a transferee or assignee of Registrable Securities
with a liquidation preference or, in the case of Registrable Securities other
than Preferred Shares, a market value, no less than an amount equal to (i) 2% of
the initial aggregate liquidation preference of the Preferred Shares if such
initial aggregate liquidation preference is less than $2 billion and (ii) $200
26
million if the initial aggregate liquidation preference of the Preferred Shares
is equal to or greater than $2 billion; provided, however, the transferor shall,
within ten days after such transfer, furnish to the Company written notice of
the name and address of such transferee or assignee and the number and type of
Registrable Securities that are being assigned. For purposes of this Section
4.5(h), "market value" per share of Common Stock shall be the last reported sale
price of the Common Stock on the national securities exchange on which the
Common Stock is listed or admitted to trading on the last trading day prior to
the proposed transfer, and the "market value" for the Warrant (or any portion
thereof) shall be the market value per share of Common Stock into which the
Warrant (or such portion) is exercisable less the exercise price per share.
(i) Clear Market. With respect to any underwritten offering of
Registrable Securities by the Investor or other Holders pursuant to this Section
4.5, the Company agrees not to effect (other than pursuant to such registration
or pursuant to a Special Registration) any public sale or distribution, or to
file any Shelf Registration Statement (other than such registration or a Special
Registration) covering, in the case of an underwritten offering of Common Stock
or Warrants, any of its equity securities or, in the case of an underwritten
offering of Preferred Shares, any Preferred Stock of the Company, or, in each
case, any securities convertible into or exchangeable or exercisable for such
securities, during the period not to exceed ten days prior and 60 days following
the effective date of such offering or such longer period up to 90 days as may
be requested by the managing underwriter for such underwritten offering. The
Company also agrees to cause such of its directors and senior executive officers
to execute and deliver customary lock-up agreements in such form and for such
time period up to 90 days as may be requested by the managing underwriter.
"Special Registration" means the registration of (A) equity securities and/or
options or other rights in respect thereof solely registered on Form S-4 or Form
S-8 (or successor form) or (B) shares of equity securities and/or options or
other rights in respect thereof to be offered to directors, members of
management, employees, consultants, customers, lenders or vendors of the Company
or Company Subsidiaries or in connection with dividend reinvestment plans.
(j) Rule 144; Rule 144A. With a view to making available to the
Investor and Holders the benefits of certain rules and regulations of the SEC
which may permit the sale of the Registrable Securities to the public without
registration, the Company agrees to use its reasonable best efforts to:
(i) make and keep public information available, as those terms
are understood and defined in Rule 144(c)(1) or any similar or
analogous rule promulgated under the Securities Act, at all times after
the Signing Date;
(ii) (A) file with the SEC, in a timely manner, all reports
and other documents required of the Company under the Exchange Act, and
(B) if at any time the Company is not required to file such reports,
make available, upon the request of any Holder, such information
necessary to permit sales pursuant to Rule 144A (including the
information required by Rule 144A(d)(4) under the Securities Act);
(iii) so long as the Investor or a Holder owns any Registrable
Securities, furnish to the Investor or such Holder forthwith upon
request: a written statement by the Company as to its compliance with
the reporting requirements of Rule 144 under the Securities Act, and of
27
the Exchange Act; a copy of the most recent annual or quarterly report
of the Company; and such other reports and documents as the Investor or
Holder may reasonably request in availing itself of any rule or
regulation of the SEC allowing it to sell any such securities to the
public without registration; and
(iv) take such further action as any Holder may reasonably
request, all to the extent required from time to time to enable such
Holder to sell Registrable Securities without registration under the
Securities Act.
(k) As used in this Section 4.5, the following terms shall have
the following respective meanings:
(i) "Holder" means the Investor and any other holder of
Registrable Securities to whom the registration rights conferred by
this Agreement have been transferred in compliance with Section 4.5(h)
hereof.
(ii) "Holders' Counsel" means one counsel for the selling
Holders chosen by Holders holding a majority interest in the
Registrable Securities being registered.
(iii) "Register," "registered," and "registration" shall refer
to a registration effected by preparing and (A) filing a registration
statement in compliance with the Securities Act and applicable rules
and regulations thereunder, and the declaration or ordering of
effectiveness of such registration statement or (B) filing a prospectus
and/or prospectus supplement in respect of an appropriate effective
registration statement on Form S-3.
(iv) "Registrable Securities" means (A) all Preferred Shares,
(B) the Warrant (subject to Section 4.5(p)) and (C) any equity
securities issued or issuable directly or indirectly with respect to
the securities referred to in the foregoing clauses (A) or (B) by way
of conversion, exercise or exchange thereof, including the Warrant
Shares, or share dividend or share split or in connection with a
combination of shares, recapitalization, reclassification, merger,
amalgamation, arrangement, consolidation or other reorganization,
provided that, once issued, such securities will not be Registrable
Securities when (1) they are sold pursuant to an effective registration
statement under the Securities Act, (2) except as provided below in
Section 4.5(o), they may be sold pursuant to Rule 144 without
limitation thereunder on volume or manner of sale, (3) they shall have
ceased to be outstanding or (4) they have been sold in a private
transaction in which the transferor's rights under this Agreement are
not assigned to the transferee of the securities. No Registrable
Securities may be registered under more than one registration statement
at any one time.
(v) "Registration Expenses" mean all expenses incurred by the
Company in effecting any registration pursuant to this Agreement
(whether or not any registration or prospectus becomes effective or
final) or otherwise complying with its obligations under this Section
4.5, including all registration, filing and listing fees, printing
expenses, fees and disbursements of counsel for the Company, blue sky
28
fees and expenses, expenses incurred in connection with any "road
show", the reasonable fees and disbursements of Holders' Counsel, and
expenses of the Company's independent accountants in connection with
any regular or special reviews or audits incident to or required by any
such registration, but shall not include Selling Expenses.
(vi) "Rule 144", "Rule 144A", "Rule 159A", "Rule 405" and
"Rule 415" mean, in each case, such rule promulgated under the
Securities Act (or any successor provision), as the same shall be
amended from time to time.
(vii) "Selling Expenses" mean all discounts, selling
commissions and stock transfer taxes applicable to the sale of
Registrable Securities and fees and disbursements of counsel for any
Holder (other than the fees and disbursements of Holders' Counsel
included in Registration Expenses).
(l) At any time, any holder of Securities (including any Holder)
may elect to forfeit its rights set forth in this Section 4.5 from that date
forward; provided, that a Holder forfeiting such rights shall nonetheless be
entitled to participate under Section 4.5(a)(iv) - (vi) in any Pending
Underwritten Offering to the same extent that such Holder would have been
entitled to if the holder had not withdrawn; and provided, further, that no such
forfeiture shall terminate a Holder's rights or obligations under Section 4.5(f)
with respect to any prior registration or Pending Underwritten Offering.
"Pending Underwritten Offering" means, with respect to any Holder forfeiting its
rights pursuant to this Section 4.5(l), 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(a)(ii) or
4.5(a)(iv) prior to the date of such Holder's forfeiture.
(m) Specific Performance. The parties hereto acknowledge that
there would be no adequate remedy at law if the Company fails to perform any of
its obligations under this Section 4.5 and that the Investor and the Holders
from time to time may be irreparably harmed by any such failure, and accordingly
agree that the Investor and such Holders, in addition to any other remedy to
which they may be entitled at law or in equity, to the fullest extent permitted
and enforceable under applicable law shall be entitled to compel specific
performance of the obligations of the Company under this Section 4.5 in
accordance with the terms and conditions of this Section 4.5.
(n) No Inconsistent Agreements. The Company shall not, on or after
the Signing Date, enter into any agreement with respect to its securities that
may impair the rights granted to the Investor and the Holders under this Section
4.5 or that otherwise conflicts with the provisions hereof in any manner that
may impair the rights granted to the Investor and the Holders under this Section
4.5. In the event the Company has, prior to the Signing Date, entered into any
agreement with respect to its securities that is inconsistent with the rights
granted to the Investor and the Holders under this Section 4.5 (including
agreements that are inconsistent with the order of priority contemplated by
Section 4.5(a)(vi)) or that may otherwise conflict with the provisions hereof,
the Company shall use its reasonable best efforts to amend such agreements to
ensure they are consistent with the provisions of this Section 4.5.
(o) Certain Offerings by the Investor. In the case of any
securities held by the Investor that cease to be Registrable Securities solely
by reason of clause (2) in the definition of "Registrable Securities," the
29
provisions of Sections 4.5(a)(ii), clauses (iv), (ix) and (x)-(xii) of Section
4.5(c), Section 4.5(g) and Section 4.5(i) shall continue to apply until such
securities otherwise cease to be Registrable Securities. In any such case, an
"underwritten" offering or other disposition shall include any distribution of
such securities on behalf of the Investor by one or more broker-dealers, an
"underwriting agreement" shall include any purchase agreement entered into by
such broker-dealers, and any "registration statement" or "prospectus" shall
include any offering document approved by the Company and used in connection
with such distribution.
(p) Registered Sales of the Warrant. The Holders agree to sell the
Warrant or any portion thereof under the Shelf Registration Statement only
beginning 30 days after notifying the Company of any such sale, during which
30-day period the Investor and all Holders of the Warrant shall take reasonable
steps to agree to revisions to the Warrant to permit a public distribution of
the Warrant, including entering into a warrant agreement and appointing a
warrant agent.
4.6 Voting of Warrant Shares. Notwithstanding anything in this
Agreement to the contrary, the Investor shall not exercise any voting rights
with respect to the Warrant Shares.
4.7 Depositary Shares. Upon request by the Investor at any time
following the Closing Date, the Company shall promptly enter into a depositary
arrangement, pursuant to customary agreements reasonably satisfactory to the
Investor and with a depositary reasonably acceptable to the Investor, pursuant
to which the Preferred Shares may be deposited and depositary shares, each
representing a fraction of a Preferred Share as specified by the Investor, may
be issued. From and after the execution of any such depositary arrangement, and
the deposit of any Preferred Shares pursuant thereto, the depositary shares
issued pursuant thereto shall be deemed "Preferred Shares" and, as applicable,
"Registrable Securities" for purposes of this Agreement.
4.8 Restriction on Dividends and Repurchases.
(a) Prior to the earlier of (x) the third anniversary of the
Closing Date and (y) the date on which the Preferred Shares have been redeemed
in whole or the Investor has transferred all of the Preferred Shares to third
parties which are not Affiliates of the Investor, neither the Company nor any
Company Subsidiary shall, without the consent of the Investor:
(i) declare or pay any dividend or make any distribution on
the Common Stock (other than (A) regular quarterly cash dividends of
not more than the amount of the last quarterly cash dividend per share
declared or, if lower, publicly announced an intention to declare, on
the Common Stock prior to October 14, 2008, as adjusted for any stock
split, stock dividend, reverse stock split, reclassification or similar
transaction, (B) dividends payable solely in shares of Common Stock and
(C) dividends or distributions of rights or Junior Stock in connection
with a stockholders' rights plan); or
(ii) redeem, purchase or acquire any shares of Common Stock or
other capital stock or other equity securities of any kind of the
30
Company, or any trust preferred securities issued by the Company or any
Affiliate of the Company, other than (A) redemptions, purchases or
other acquisitions of the Preferred Shares, (B) redemptions, purchases
or other acquisitions of shares of Common Stock or other Junior Stock,
in each case in this clause (B) in connection with the administration
of any employee benefit plan in the ordinary course of business
(including purchases to offset the Share Dilution Amount (as defined
below) pursuant to a publicly announced repurchase plan) and consistent
with past practice; provided that any purchases to offset the Share
Dilution Amount shall in no event exceed the Share Dilution Amount, (C)
purchases or other acquisitions by a broker-dealer subsidiary of the
Company solely for the purpose of market-making, stabilization or
customer facilitation transactions in Junior Stock or Parity Stock in
the ordinary course of its business, (D) purchases by a broker-dealer
subsidiary of the Company of capital stock of the Company for resale
pursuant to an offering by the Company of such capital stock
underwritten by such broker-dealer subsidiary, (E) any redemption or
repurchase of rights pursuant to any stockholders' rights plan, (F) the
acquisition by the Company or any of the Company Subsidiaries of record
ownership in Junior Stock or Parity Stock for the beneficial ownership
of any other persons (other than the Company or any other Company
Subsidiary), including as trustees or custodians, and (G) the exchange
or conversion of Junior Stock for or into other Junior Stock or of
Parity Stock or trust preferred securities for or into other Parity
(with the same or lesser aggregate liquidation amount) or Junior Stock,
in each case set forth in this clause (G), solely to the extent
required pursuant to binding contractual agreements entered into prior
to the Signing Date or any subsequent agreement for the accelerated
exercise, settlement or exchange thereof for Common Stock (clauses (C)
and (F), collectively, the "Permitted Repurchases"). "Share Dilution
Amount" means the increase in the number of diluted shares outstanding
(determined in accordance with GAAP, and as measured from the date of
the Company's most recently filed Company Financial Statements prior to
the Closing Date) resulting from the grant, vesting or exercise of
equity-based compensation to employees and equitably adjusted for any
stock split, stock dividend, reverse stock split, reclassification or
similar transaction.
(b) Until such time as the Investor ceases to own any Preferred
Shares, the Company shall not repurchase any Preferred Shares from any holder
thereof, whether by means of open market purchase, negotiated transaction, or
otherwise, other than Permitted Repurchases, unless it offers to repurchase a
ratable portion of the Preferred Shares then held by the Investor on the same
terms and conditions.
(c) "Junior Stock" means Common Stock and any other class or
series of stock of the Company the terms of which expressly provide that it
ranks junior to the Preferred Shares as to dividend rights and/or as to rights
on liquidation, dissolution or winding up of the Company. "Parity Stock" means
any class or series of stock of the Company the terms of which do not expressly
provide that such class or series will rank senior or junior to the Preferred
Shares as to dividend rights and/or as to rights on liquidation, dissolution or
winding up of the Company (in each case without regard to whether dividends
accrue cumulatively or non-cumulatively).
31
4.9 Repurchase of Investor Securities.
(a) Following the redemption in whole of the Preferred Shares held
by the Investor or the Transfer by the Investor of all of the Preferred Shares
to one or more third parties not affiliated with the Investor, the Company may
repurchase, in whole or in part, at any time any other equity securities of the
Company purchased by the Investor pursuant to this Agreement or the Warrant and
then held by the Investor, upon notice given as provided in clause (b) below, at
the Fair Market Value of the equity security.
(b) Notice of every repurchase of equity securities of the Company
held by the Investor shall be given at the address and in the manner set forth
for such party in Section 5.6. Each notice of repurchase given to the Investor
shall state: (i) the number and type of securities to be repurchased, (ii) the
Board of Director's determination of Fair Market Value of such securities and
(iii) the place or places where certificates representing such securities are to
be surrendered for payment of the repurchase price. The repurchase of the
securities specified in the notice shall occur as soon as practicable following
the determination of the Fair Market Value of the securities.
(c) As used in this Section 4.9, the following terms shall have
the following respective meanings:
(i) "Appraisal Procedure" means a procedure whereby two
independent appraisers, one chosen by the Company and one by the
Investor, shall mutually agree upon the Fair Market Value. Each party
shall deliver a notice to the other appointing its appraiser within 10
days after the Appraisal Procedure is invoked. If within 30 days after
appointment of the two appraisers they are unable to agree upon the
Fair Market Value, a third independent appraiser shall be chosen within
10 days thereafter by the mutual consent of such first two appraisers.
The decision of the third appraiser so appointed and chosen shall be
given within 30 days after the selection of such third appraiser. If
three appraisers shall be appointed and the determination of one
appraiser is disparate from the middle determination by more than twice
the amount by which the other determination is disparate from the
middle determination, then the determination of such appraiser shall be
excluded, the remaining two determinations shall be averaged and such
average shall be binding and conclusive upon the Company and the
Investor; otherwise, the average of all three determinations shall be
binding upon the Company and the Investor. The costs of conducting any
Appraisal Procedure shall be borne by the Company.
(ii) "Fair Market Value" means, with respect to any security, the fair
market value of such security as determined by the Board of Directors,
acting in good faith in reliance on an opinion of a nationally
recognized independent investment banking firm retained by the Company
for this purpose and certified in a resolution to the Investor. If the
Investor does not agree with the Board of Director's determination, it
may object in writing within 10 days of receipt of the Board of
Director's determination. In the event of such an objection, an
authorized representative of the Investor and the chief executive
officer of the Company shall promptly meet to resolve the objection and
to agree upon the Fair Market Value. If the chief executive officer and
the authorized representative are unable to agree on the Fair Market
32
Value during the 10-day period following the delivery of the Investor's
objection, the Appraisal Procedure may be invoked by either party to
determine the Fair Market Value by delivery of a written notification
thereof not later than the 30th day after delivery of the Investor's
objection.
4.10 Executive Compensation. Until such time as the Investor ceases
to own any debt or equity securities of the Company acquired pursuant to this
Agreement or the Warrant, the Company shall take all necessary action to ensure
that its Benefit Plans with respect to its Senior Executive Officers comply in
all respects with Section 111(b) of the EESA as implemented by any guidance or
regulation thereunder that has been issued and is in effect as of the Closing
Date, and shall not adopt any new Benefit Plan with respect to its Senior
Executive Officers that does not comply therewith. "Senior Executive Officers"
means the Company's "senior executive officers" as defined in subsection
111(b)(3) of the EESA and regulations issued thereunder, including the rules set
forth in 31 C.F.R. Part 30.
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
33
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.
5.5 Governing Law: Submission to Jurisdiction, Etc. This Agreement
will be governed by and construed in accordance with the federal law of the
United States if and to the extent such law is applicable, and otherwise in
accordance with the laws of the State of New York applicable to contracts made
and to be performed entirely within such State. Each of the parties hereto
agrees (a) to submit to the exclusive jurisdiction and venue of the United
States District Court for the District of Columbia and the United States Court
of Federal Claims for any and all civil actions, suits or proceedings arising
out of or relating to this Agreement or the Warrant or the transactions
contemplated hereby or thereby, and (b) that notice may be served upon (i) the
Company at the address and in the manner set forth for notices to the Company in
Section 5.6 and (ii) the Investor in accordance with federal law. To the extent
permitted by applicable law, each of the parties hereto hereby unconditionally
waives trial by jury in any civil legal action or proceeding relating to this
Agreement or the Warrant or the transactions contemplated hereby or thereby.
5.6 Notices. Any notice, request, instruction or other document to
be given hereunder by any party to the other will be in writing and will be
deemed to have been duly given (a) on the date of delivery if delivered
personally, or by facsimile, upon confirmation of receipt, or (b) on the second
business day following the date of dispatch if delivered by a recognized next
day courier service. All notices to the Company shall be delivered as set forth
in Schedule A, or pursuant to such other instruction as may be designated in
writing by the Company to the Investor. All notices to the Investor shall be
delivered as set forth below, or pursuant to such other instructions as may be
designated in writing by the Investor to the Company.
34
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 "controlled by" and "under common control
with") when used with respect to any person, means the possession, directly or
indirectly, of the power to cause the direction of management and/or policies of
such person, whether through the ownership of voting securities by contract or
otherwise.
(c) The terms "knowledge of the Company" or "Company's knowledge"
mean the actual knowledge after reasonable and due inquiry of the "officers" (as
such term is defined in Rule 3b-2 under the Exchange Act, but excluding any Vice
President or Secretary) of the Company.
5.8 Assignment. Neither this Agreement nor any right, remedy,
obligation nor liability arising hereunder or by reason hereof shall be
assignable by any party hereto without the prior written consent of the other
party, and any attempt to assign any right, remedy, obligation or liability
hereunder without such consent shall be void, except (a) an assignment, in the
case of a Business Combination where such party is not the surviving entity, or
a sale of substantially all of its assets, to the entity which is the survivor
of such Business Combination or the purchaser in such sale and (b) as provided
in Section 4.5.
5.9 Severability. If any provision of this Agreement or the
Warrant, or the application thereof to any person or circumstance, is determined
by a court of competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions hereof, or the application of such provision to persons or
circumstances other than those as to which it has been held invalid or
35
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.
* * *