Exhibit 10.1
UNITED STATES DEPARTMENT OF THE TREASURY
1500 PENNSYLVANIA AVENUE, NW
WASHINGTON, D.C. 20220
Dear Ladies and Gentlemen:
The company set forth on the signature page hereto (the "Company") intends
to issue in a private placement the number of shares of a series of its
preferred stock set forth on Schedule A hereto (the "Preferred Shares") and a
warrant to purchase the number of shares of a series of its preferred stock set
forth on Schedule A hereto (the "Warrant" and, together with the Preferred
Shares, the "Purchased Securities") and the United States Department of the
Treasury (the "Investor") intends to purchase from the Company the Purchased
Securities.
The purpose of this letter agreement is to confirm the terms and
conditions of the purchase by the Investor of the Purchased Securities. Except
to the extent supplemented or superseded by the terms set forth herein or in the
Schedules hereto, the provisions contained in the Securities Purchase Agreement
- - Standard Terms attached hereto as Exhibit A (the "Securities Purchase
Agreement") are incorporated by reference herein. Terms that are defined in the
Securities Purchase Agreement are used in this letter agreement as so defined.
In the event of any inconsistency between this letter agreement and the
Securities Purchase Agreement, the terms of this letter agreement shall govern.
Each of the Company and the Investor hereby confirms its agreement with
the other party with respect to the issuance by the Company of the Purchased
Securities and the purchase by the Investor of the Purchased Securities pursuant
to this letter agreement and the Securities Purchase Agreement on the terms
specified on Schedule A hereto.
This letter agreement (including the Schedules hereto), the Securities
Purchase Agreement (including the Annexes thereto), the Disclosure Schedules and
the Warrant constitute the entire agreement, and supersede all other prior
agreements, understandings, representations and warranties, both written and
oral, between the parties, with respect to the subject matter hereof. This
letter agreement constitutes the "Letter Agreement" referred to in the
Securities Purchase Agreement.
This letter agreement may be executed in any number of separate
counterparts, each such counterpart being deemed to be an original instrument,
and all such counterparts will together constitute the same agreement. Executed
signature pages to this letter agreement may be delivered by facsimile and such
facsimiles will be deemed as sufficient as if actual signature pages had been
delivered.
* * *
UST #446
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
/s/ Neel Kashkari
By:____________________________________________
Name: Neel Kashkari
Title: Interim Assistant Secretary For
Financial Stability
FIRST BANKS, INC.
By:/s/ Terrance M. McCarthy
____________________________________________
Name: Terrance M. McCarthy
Title: Chief Executive Officer and President
Date: December 31, 2008
UST #446
EXHIBIT A
(Non-Exchange-Traded QFIs, excluding S Corps
and Mutual Organizations)
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SECURITIES PURCHASE AGREEMENT
STANDARD TERMS
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TABLE OF CONTENTS
Page
Article I
Purchase; Closing
1.1 Purchase .............................................................. 3
1.2 Closing ............................................................... 3
1.3 Interpretation ........................................................ 8
Article II
Representations and Warranties
2.1 Disclosure ............................................................ 9
2.2 Representations and Warranties of the Company ......................... 11
Article III
Covenants
3.1 Commercially Reasonable Efforts ....................................... 29
3.2 Expenses .............................................................. 30
3.3 Sufficiency of Authorized Warrant Preferred Stock; Exchange Listing ... 30
3.4 Certain Notifications Until Closing ................................... 30
3.5 Access, Information and Confidentiality ............................... 31
Article IV
Additional Agreements
4.1 Purchase for Investment ............................................... 34
4.2 Legends ............................................................... 35
4.3 Certain Transactions .................................................. 39
4.4 Transfer of Purchased Securities and Warrant Shares; Restrictions
on Exercise of the Warrant .......................................... 39
4.5 Registration Rights ................................................... 40
4.6 Depositary Shares ..................................................... 68
4.7 Restriction on Dividends and Repurchases .............................. 68
4.8 Executive Compensation ................................................ 73
4.9 Related Party Transactions ............................................ 74
4.10 Bank and Thrift Holding Company Status ................................ 74
4.11 Predominantly Financial ............................................... 75
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Article V
Miscellaneous
5.1 Termination ........................................................... 75
5.2 Survival of Representations and Warranties ............................ 77
5.3 Amendment ............................................................. 77
5.4 Waiver of Conditions .................................................. 77
5.5 Governing Law: Submission to Jurisdiction, Etc. ....................... 78
5.6 Notices ............................................................... 78
5.7 Definitions ........................................................... 79
5.8 Assignment ............................................................ 80
5.9 Severability .......................................................... 81
5.10 No Third Party Beneficiaries .......................................... 81
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LIST OF ANNEXES
ANNEX A: FORM OF CERTIFICATE OF DESIGNATIONS FOR PREFERRED STOCK
ANNEX B: FORM OF CERTIFICATE OF DESIGNATIONS FOR WARRANT
PREFERRED STOCK
ANNEX C: FORM OF WAIVER
ANNEX D: FORM OF OPINION
ANNEX E: FORM OF WARRANT
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INDEX OF DEFINED TERMS
Location of
Term Definition
- ------------------------------------------------------- -------------------
Affiliate 5.7(b)
Agreement Recitals
Appropriate Federal Banking Agency 2.2(s)
Bank Holding Company 4.10
Bankruptcy Exceptions 2.2(d)
Benefit Plans 1.2(d)(iv)
Board of Directors 2.2(f)
Business Combination 5.8
business day 1.3
Capitalization Date 2.2(b)
Certificates of Designations 1.2(d)(iii)
Charter 1.2(d)(iii)
Closing 1.2(a)
Closing Date 1.2(a)
Code 2.2(n)
Common Stock 2.2(b)
Company Recitals
Company Financial Statements 2.2(h)
Company Material Adverse Effect 2.1(b)
Company Reports 2.2(i)(i)
Company Subsidiary; Company Subsidiaries 2.2(e)(ii)
control; controlled by; under common control with 5.7(b)
Controlled Group 2.2(n)
CPP Recitals
Disclosure Schedule 2.1(a)
EESA 1.2(d)(iv)
ERISA 2.2(n)
Exchange Act 4.4
Federal Reserve 4.10
GAAP 2.1(b)
Governmental Entities 1.2(c)
Holder 4.5(l)(i)
Holders' Counsel 4.5(l)(ii)
Indemnitee 4.5(h)(i)
Information 3.5(c)
Investor Recitals
Junior Stock 4.7(f)
knowledge of the Company; Company's knowledge 5.7(c)
Letter Agreement Recitals
officers 5.7(c)
Parity Stock 4.7(f)
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Location of
Term Definition
- ------------------------------------------------------- -------------------
Pending Underwritten Offering 4.5(m)
Permitted Repurchases 4.7(c)
Piggyback Registration 4.5(b)(iv)
Plan 2.2(n)
Preferred Shares Recitals
Preferred Stock Recitals
Previously Disclosed 2.1(c)
Proprietary Rights 2.2(u)
Purchase Recitals
Purchase Price 1.1
Purchased Securities Recitals
register; registered; registration 4.5(l)(iii)
Registrable Securities 4.5(l)(iv)
Registration Expenses 4.5(l)(v)
Regulatory Agreement 2.2(s)
Rule 144; Rule 144A; Rule 159A; Rule 405; Rule 415 4.5(l)(vi)
Savings and Loan Holding Company 4.10
Schedules Recitals
SEC 2.2(k)
Securities Act 2.2(a)
Selling Expenses 4.5(l)(vii)
Senior Executive Officers 4.8
Shelf Registration Statement 4.5(b)(ii)
Signing Date 2.1(b)
Special Registration 4.5(j)
subsidiary 5.7(a)
Tax; Taxes 2.2(o)
Transfer 4.4
Warrant Recitals
Warrant Preferred Stock Recitals
Warrant Shares 2.2(d)
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SECURITIES PURCHASE AGREEMENT - STANDARD TERMS
Recitals:
WHEREAS, the United States Department of the Treasury (the "Investor") may
from time to time agree to purchase shares of preferred stock and warrants from
eligible financial institutions which elect to participate in the Troubled Asset
Relief Program Capital Purchase Program ("CPP");
WHEREAS, an eligible financial institution electing to participate in the
CPP and issue securities to the Investor (referred to herein as the "Company")
shall enter into a letter agreement (the "Letter Agreement") with the Investor
which incorporates this Securities Purchase Agreement - Standard Terms;
WHEREAS, the Company agrees to expand the flow of credit to U.S. consumers
and businesses on competitive terms to promote the sustained growth and vitality
of the U.S. economy;
WHEREAS, the Company agrees to work diligently, under existing programs,
to modify the terms of residential mortgages as appropriate to strengthen the
health of the U.S. housing market;
WHEREAS, the Company intends to issue in a private placement the number of
shares of the series of its Preferred Stock ("Preferred Stock") set forth on
Schedule A to the Letter Agreement (the "Preferred Shares") and a warrant to
purchase the number of shares of the series of its Preferred Stock ("Warrant
Preferred Stock") set forth on Schedule A to the Letter Agreement (the "Warrant"
and, together with the Preferred Shares, the "Purchased Securities") and the
Investor intends to purchase (the "Purchase") from the Company the Purchased
Securities; and
WHEREAS, the Purchase will be governed by this Securities Purchase
Agreement - Standard Terms and the Letter Agreement, including the schedules
thereto (the "Schedules"), specifying additional terms of the Purchase. This
Securities Purchase Agreement - Standard Terms (including the Annexes hereto)
and the Letter Agreement (including the Schedules thereto) are together referred
to as this "Agreement". All references in this Securities Purchase Agreement -
Standard Terms to "Schedules" are to the Schedules attached to the Letter
Agreement.
NOW, THEREFORE, in consideration of the premises, and of the
representations, warranties, covenants and agreements set forth herein, the
parties agree as follows:
Article I
Purchase; Closing
1.1 Purchase. On the terms and subject to the conditions set forth in this
Agreement, the Company agrees to sell to the Investor, and the Investor agrees
to purchase from the Company, at the Closing (as hereinafter defined), the
Purchased Securities for the price set forth on Schedule A (the "Purchase
Price").
1.2 Closing.
(a) On the terms and subject to the conditions set forth in this
Agreement, the closing of the Purchase (the "Closing") will take place at the
location specified in Schedule A, at the time and on the date set forth in
Schedule A or as soon as practicable thereafter, or at such other place, time
and date as shall be agreed between the Company and the Investor. The time and
date on which the Closing occurs is referred to in this Agreement as the
"Closing Date".
(b) Subject to the fulfillment or waiver of the conditions to the Closing
in this Section 1.2, at the Closing the Company will deliver the Preferred
Shares and the Warrant, in each case as evidenced by one or more certificates
dated the Closing Date and bearing appropriate legends as hereinafter provided
for, in exchange for payment in full of the Purchase Price by wire transfer of
immediately available United States funds to a bank account designated by the
Company on Schedule A.
(c) The respective obligations of each of the Investor and the Company to
consummate the Purchase are subject to the fulfillment (or waiver by the
Investor and the Company, as applicable) prior to the Closing of the conditions
that (i) any approvals or authorizations of all United States and other
governmental, regulatory or judicial authorities (collectively, "Governmental
Entities") required for the consummation of the Purchase shall have been
obtained or made in form and substance reasonably satisfactory to each party and
shall be in full force and effect and all waiting periods required by United
States and other applicable law, if any, shall have expired and (ii) no
provision of any applicable United States or other law and no judgment,
injunction, order or decree of any Governmental Entity shall prohibit the
purchase and sale of the Purchased Securities as contemplated by this Agreement.
(d) The obligation of the Investor to consummate the Purchase is also
subject to the fulfillment (or waiver by the Investor) at or prior to the
Closing of each of the following conditions:
(i) (A) the representations and warranties of the Company set forth
in (x) Section 2.2(g) of this Agreement shall be true and correct in all
respects as though made on and as of the Closing Date, (y) Sections 2.2(a)
through (f) shall be true and correct in all material respects as though
made on and as of the Closing Date (other than representations and
warranties that by their terms speak as of another date, which
representations and warranties shall be true and correct in all material
respects as of such other date) and (z) Sections 2.2(h) through (v)
(disregarding all qualifications or limitations set forth in such
representations and warranties as to "materiality", "Company Material
Adverse Effect" and words of similar import) shall be true and correct as
though made on and as of the Closing Date (other than representations and
warranties that by their terms speak as of another date, which
representations and warranties shall be true and correct as of such other
date), except to the extent that the failure of such representations and
warranties referred to in this Section 1.2(d)(i)(A)(z) to be so true and
correct, individually or in the aggregate, does not have and would not
reasonably be expected to have a Company Material Adverse Effect and (B)
the Company shall have
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performed in all material respects all obligations required to be
performed by it under this Agreement at or prior to the Closing;
(ii) the Investor shall have received a certificate signed on behalf
of the Company by a senior executive officer certifying to the effect that
the conditions set forth in Section 1.2(d)(i) have been satisfied;
(iii) the Company shall have duly adopted and filed with the
Secretary of State of its jurisdiction of organization or other applicable
Governmental Entity the amendments to its certificate or articles of
incorporation, articles of association, or similar organizational document
("Charter") in substantially the forms attached hereto as Annex A and
Annex B (the "Certificates of Designations") and such filing shall have
been accepted;
(iv) (A) the Company shall have effected such changes to its
compensation, bonus, incentive and other benefit plans, arrangements and
agreements (including golden parachute, severance and employment
agreements) (collectively, "Benefit Plans") with respect to its Senior
Executive Officers (and to the extent necessary for such changes to be
legally enforceable, each of its Senior Executive Officers shall have duly
consented in writing to such changes), as may be necessary, during the
period that the Investor owns any debt or equity securities of the Company
acquired pursuant to this Agreement or the Warrant, in order to comply
with Section 111(b) of the Emergency Economic Stabilization Act of 2008
("EESA") as implemented by guidance or regulation thereunder that has been
issued and is in effect as of the Closing Date, and (B) the Investor shall
have received a certificate signed on behalf of the Company by a senior
executive officer certifying to the effect that the condition set forth in
Section 1.2(d)(iv)(A) has been satisfied;
(v) each of the Company's Senior Executive Officers shall have
delivered to the Investor a written waiver in the form attached hereto as
Annex C releasing the Investor from any claims that such Senior Executive
Officers may otherwise have as a result of the issuance, on or prior to
the Closing Date, of any regulations which require the modification of,
and the agreement of the Company hereunder to modify, the terms of any
Benefit Plans with respect to its Senior Executive Officers to eliminate
any provisions of such Benefit Plans that would not be in compliance with
the requirements of Section 111(b) of the EESA as implemented by guidance
or regulation thereunder that has been issued and is in effect as of the
Closing Date;
(vi) the Company shall have delivered to the Investor a written
opinion from counsel to the Company (which may be internal counsel),
addressed to the Investor and dated as of the Closing Date, in
substantially the form attached hereto as Annex D;
(vii) the Company shall have delivered certificates in proper form
or, with the prior consent of the Investor, evidence of shares in
book-entry form, evidencing the Preferred Shares to Investor or its
designee(s); and
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(viii) the Company shall have duly executed the Warrant in
substantially the form attached hereto as Annex E and delivered such
executed Warrant to the Investor or its designee(s).
1.3 Interpretation. When a reference is made in this Agreement to
"Recitals," "Articles," "Sections," or "Annexes" such reference shall be to a
Recital, Article or Section of, or Annex to, this Securities Purchase Agreement
- - Standard Terms, and a reference to "Schedules" shall be to a Schedule to the
Letter Agreement, in each case, unless otherwise indicated. The terms defined in
the singular have a comparable meaning when used in the plural, and vice versa.
References to "herein", "hereof", "hereunder" and the like refer to this
Agreement as a whole and not to any particular section or provision, unless the
context requires otherwise. The table of contents and headings contained in this
Agreement are for reference purposes only and are not part of this Agreement.
Whenever the words "include," "includes" or "including" are used in this
Agreement, they shall be deemed followed by the words "without limitation." No
rule of construction against the draftsperson shall be applied in connection
with the interpretation or enforcement of this Agreement, as this Agreement is
the product of negotiation between sophisticated parties advised by counsel. All
references to "$" or "dollars" mean the lawful currency of the United States of
America. Except as expressly stated in this Agreement, all references to any
statute, rule or regulation are to the statute, rule or regulation as amended,
modified, supplemented or replaced from time to time (and, in the case of
statutes, include any rules and regulations promulgated under the statute) and
to any section of any statute, rule or regulation include any successor to the
section. References to a "business day" shall mean any day except Saturday,
Sunday and any day on which banking institutions in the State of New York
generally are authorized or required by law or other governmental actions to
close.
Article II
Representations and Warranties
2.1 Disclosure.
(a) On or prior to the Signing Date, the Company delivered to the Investor
a schedule ("Disclosure Schedule") setting forth, among other things, items the
disclosure of which is necessary or appropriate either in response to an express
disclosure requirement contained in a provision hereof or as an exception to one
or more representations or warranties contained in Section 2.2.
(b) "Company Material Adverse Effect" means a material adverse effect on
(i) the business, results of operation or financial condition of the Company and
its 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
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each case generally affecting the industries in which the Company and its
subsidiaries operate, (B) changes or proposed changes after the Signing Date in
generally accepted accounting principles in the United States ("GAAP") or
regulatory accounting requirements, or authoritative interpretations thereof, or
(C) changes or proposed changes after the Signing Date in securities, banking
and other laws of general applicability or related policies or interpretations
of Governmental Entities (in the case of each of these clauses (A), (B) and (C),
other than changes or occurrences to the extent that such changes or occurrences
have or would reasonably be expected to have a materially disproportionate
adverse effect on the Company and its consolidated subsidiaries taken as a whole
relative to comparable U.S. banking or financial services organizations); or
(ii) the ability of the Company to consummate the Purchase and other
transactions contemplated by this Agreement and the Warrant and perform its
obligations hereunder or thereunder on a timely basis.
(c) "Previously Disclosed" means information set forth on the Disclosure
Schedule, provided, however, that disclosure in any section of such Disclosure
Schedule shall apply only to the indicated section of this Agreement except to
the extent that it is reasonably apparent from the face of such disclosure that
such disclosure is relevant to another section of this Agreement.
2.2 Representations and Warranties of the Company. Except as Previously
Disclosed, the Company represents and warrants to the Investor that as of the
Signing Date and as of the Closing Date (or such other date specified herein):
(a) Organization, Authority and Significant Subsidiaries. The Company has
been duly incorporated and is validly existing and in good standing under the
laws of its jurisdiction of organization, with the necessary power and authority
to own its properties and conduct its business in all material respects as
currently conducted, and except as has not, individually or in the aggregate,
had and would not reasonably be expected to have a Company Material Adverse
Effect, has been duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other jurisdiction in
which it owns or leases properties or conducts any business so as to require
such qualification; each subsidiary of the Company that would be considered a
"significant subsidiary" within the meaning of Rule 1-02(w) of Regulation S-X
under the Securities Act of 1933 (the "Securities Act"), has been duly organized
and is validly existing in good standing under the laws of its jurisdiction of
organization. The Charter and bylaws of the Company, copies of which have been
provided to the Investor prior to the Signing Date, are true, complete and
correct copies of such documents as in full force and effect as of the Signing
Date.
(b) Capitalization. The authorized capital stock of the Company, and the
outstanding capital stock of the Company (including securities convertible into,
or exercisable or exchangeable for, capital stock of the Company) as of the most
recent fiscal month-end preceding the Signing Date (the "Capitalization Date")
is set forth on Schedule B. The outstanding shares of capital stock of the
Company have been duly authorized and are validly issued and outstanding, fully
paid and nonassessable, and subject to no preemptive rights (and were not issued
in violation of any preemptive rights). As of the Signing Date, the Company does
not have outstanding any securities or other obligations providing the holder
the right to
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acquire its Common Stock ("Common Stock") that is not reserved for issuance as
specified on Schedule B, and the Company has not made any other commitment to
authorize, issue or sell any Common Stock. Since the Capitalization Date, the
Company has not issued any shares of Common Stock, other than (i) shares issued
upon the exercise of stock options or delivered under other equity-based awards
or other convertible securities or warrants which were issued and outstanding on
the Capitalization Date and disclosed on Schedule B and (ii) shares disclosed on
Schedule B. Each holder of 5% or more of any class of capital stock of the
Company and such holder's primary address are set forth on Schedule B.
(c) Preferred Shares. The Preferred Shares have been duly and validly
authorized, and, when issued and delivered pursuant to this Agreement, such
Preferred Shares will be duly and validly issued and fully paid and
non-assessable, will not be issued in violation of any preemptive rights, and
will rank pari passu with or senior to all other series or classes of Preferred
Stock, whether or not issued or outstanding, with respect to the payment of
dividends and the distribution of assets in the event of any dissolution,
liquidation or winding up of the Company.
(d) The Warrant and Warrant Shares. The Warrant has been duly authorized
and, when executed and delivered as contemplated hereby, will constitute a valid
and legally binding obligation of the Company enforceable against the Company in
accordance with its terms, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and general equitable principles,
regardless of whether such enforceability is considered in a proceeding at law
or in equity ("Bankruptcy Exceptions"). The shares of Warrant Preferred Stock
issuable upon exercise of the Warrant (the "Warrant Shares") have been duly
authorized and reserved for issuance upon exercise of the Warrant and when so
issued in accordance with the terms of the Warrant will be validly issued, fully
paid and non-assessable, and will rank pari passu with or senior to all other
series or classes of Preferred Stock, whether or not issued or outstanding, with
respect to the payment of dividends and the distribution of assets in the event
of any dissolution, liquidation or winding up of the Company.
(e) Authorization, Enforceability.
(i) The Company has the corporate power and authority to execute and
deliver this Agreement and the Warrant and to carry out its obligations
hereunder and thereunder (which includes the issuance of the Preferred
Shares, Warrant and Warrant Shares). The execution, delivery and
performance by the Company of this Agreement and the Warrant and the
consummation of the transactions contemplated hereby and thereby have been
duly authorized by all necessary corporate action on the part of the
Company and its stockholders, and no further approval or authorization is
required on the part of the Company. This Agreement is a valid and binding
obligation of the Company enforceable against the Company in accordance
with its terms, subject to the Bankruptcy Exceptions.
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(ii) The execution, delivery and performance by the Company of this
Agreement and the Warrant and the consummation of the transactions
contemplated hereby and thereby and compliance by the Company with the
provisions hereof and thereof, will not (A) violate, conflict with, or
result in a breach of any provision of, or constitute a default (or an
event which, with notice or lapse of time or both, would constitute a
default) under, or result in the termination of, or accelerate the
performance required by, or result in a right of termination or
acceleration of, or result in the creation of, any lien, security
interest, charge or encumbrance upon any of the properties or assets of
the Company or any subsidiary of the Company (each a "Company Subsidiary"
and, collectively, the "Company Subsidiaries") under any of the terms,
conditions or provisions of (i) its organizational documents or (ii) any
note, bond, mortgage, indenture, deed of trust, license, lease, agreement
or other instrument or obligation to which the Company or any Company
Subsidiary is a party or by which it or any Company Subsidiary may be
bound, or to which the Company or any Company Subsidiary or any of the
properties or assets of the Company or any Company Subsidiary may be
subject, or (B) subject to compliance with the statutes and regulations
referred to in the next paragraph, violate any statute, rule or regulation
or any judgment, ruling, order, writ, injunction or decree applicable to
the Company or any Company Subsidiary or any of their respective
properties or assets except, in the case of clauses (A)(ii) and (B), for
those occurrences that, individually or in the aggregate, have not had and
would not reasonably be expected to have a Company Material Adverse
Effect.
(iii) Other than the filing of the Certificates of Designations with
the Secretary of State of its jurisdiction of organization or other
applicable Governmental Entity, such filings and approvals as are required
to be made or obtained under any state "blue sky" laws and such as have
been made or obtained, no notice to, filing with, exemption or review by,
or authorization, consent or approval of, any Governmental Entity is
required to be made or obtained by the Company in connection with the
consummation by the Company of the Purchase except for any such notices,
filings, exemptions, reviews, authorizations, consents and approvals the
failure of which to make or obtain would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse
Effect.
(f) Anti-takeover Provisions and Rights Plan. The Board of Directors of
the Company (the "Board of Directors") has taken all necessary action to ensure
that the transactions contemplated by this Agreement and the Warrant and the
consummation of the transactions contemplated hereby and thereby, including the
exercise of the Warrant in accordance with its terms, will be exempt from any
anti-takeover or similar provisions of the Company's Charter and bylaws, and any
other provisions of any applicable "moratorium", "control share", "fair price",
"interested stockholder" or other anti-takeover laws and regulations of any
jurisdiction.
(g) No Company Material Adverse Effect. Since the last day of the last
completed fiscal period for which financial statements are included in the
Company Financial Statements (as defined below), no fact, circumstance, event,
change, occurrence, condition or development
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has occurred that, individually or in the aggregate, has had or would reasonably
be expected to have a Company Material Adverse Effect.
(h) Company Financial Statements. The Company has Previously Disclosed
each of the consolidated financial statements of the Company and its
consolidated subsidiaries for each of the last three completed fiscal years of
the Company (which shall be audited to the extent audited financial statements
are available prior to the Signing Date) and each completed quarterly period
since the last completed fiscal year (collectively the "Company Financial
Statements"). The Company Financial Statements present fairly in all material
respects the consolidated financial position of the Company and its consolidated
subsidiaries as of the dates indicated therein and the consolidated results of
their operations for the periods specified therein; and except as stated
therein, such financial statements (A) were prepared in conformity with GAAP
applied on a consistent basis (except as may be noted therein) and (B) have been
prepared from, and are in accordance with, the books and records of the Company
and the Company Subsidiaries.
(i) Reports.
(i) Since December 31, 2006, the Company and each Company Subsidiary
has filed all reports, registrations, documents, filings, statements and
submissions, together with any amendments thereto, that it was required to
file with any Governmental Entity (the foregoing, collectively, the
"Company Reports") and has paid all fees and assessments due and payable
in connection therewith, except, in each case, as would not, individually
or in the aggregate, reasonably be expected to have a Company Material
Adverse Effect. As of their respective dates of filing, the Company
Reports complied in all material respects with all statutes and applicable
rules and regulations of the applicable Governmental Entities.
(ii) The records, systems, controls, data and information of the
Company and the Company Subsidiaries are recorded, stored, maintained and
operated under means (including any electronic, mechanical or photographic
process, whether computerized or not) that are under the exclusive
ownership and direct control of the Company or the Company Subsidiaries or
their accountants (including all means of access thereto and therefrom),
except for any non-exclusive ownership and non-direct control that would
not reasonably be expected to have a material adverse effect on the system
of internal accounting controls described below in this Section
2.2(i)(ii). The Company (A) has implemented and maintains adequate
disclosure controls and procedures to ensure that material information
relating to the Company, including the consolidated Company Subsidiaries,
is made known to the chief executive officer and the chief financial
officer of the Company by others within those entities, and (B) has
disclosed, based on its most recent evaluation prior to the Signing Date,
to the Company's outside auditors and the audit committee of the Board of
Directors (x) any significant deficiencies and material weaknesses in the
design or operation of internal controls that are reasonably likely to
adversely affect the Company's ability to record, process, summarize and
report financial information and (y) any fraud, whether or not material,
that involves management or
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other employees who have a significant role in the Company's internal
controls over financial reporting.
(j) No Undisclosed Liabilities. Neither the Company nor any of the Company
Subsidiaries has any liabilities or obligations of any nature (absolute,
accrued, contingent or otherwise) which are not properly reflected or reserved
against in the Company Financial Statements to the extent required to be so
reflected or reserved against in accordance with GAAP, except for (A)
liabilities that have arisen since the last fiscal year end in the ordinary and
usual course of business and consistent with past practice and (B) liabilities
that, individually or in the aggregate, have not had and would not reasonably be
expected to have a Company Material Adverse Effect.
(k) Offering of Securities. Neither the Company nor any person acting on
its behalf has taken any action (including any offering of any securities of the
Company under circumstances which would require the integration of such offering
with the offering of any of the Purchased Securities under the Securities Act,
and the rules and regulations of the Securities and Exchange Commission (the
"SEC") promulgated thereunder), which might subject the offering, issuance or
sale of any of the Purchased Securities to Investor pursuant to this Agreement
to the registration requirements of the Securities Act.
(l) Litigation and Other Proceedings. Except (i) as set forth on Schedule
C or (ii) as would not, individually or in the aggregate, reasonably be expected
to have a Company Material Adverse Effect, there is no (A) pending or, to the
knowledge of the Company, threatened, claim, action, suit, investigation or
proceeding, against the Company or any Company Subsidiary or to which any of
their assets are subject nor is the Company or any Company Subsidiary subject to
any order, judgment or decree or (B) unresolved violation, criticism or
exception by any Governmental Entity with respect to any report or relating to
any examinations or inspections of the Company or any Company Subsidiaries.
(m) Compliance with Laws. Except as would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect, the
Company and the Company Subsidiaries have all permits, licenses, franchises,
authorizations, orders and approvals of, and have made all filings, applications
and registrations with, Governmental Entities that are required in order to
permit them to own or lease their properties and assets and to carry on their
business as presently conducted and that are material to the business of the
Company or such Company Subsidiary. Except as set forth on Schedule D, the
Company and the Company Subsidiaries have complied in all respects and are not
in default or violation of, and none of them is, to the knowledge of the
Company, under investigation with respect to or, to the knowledge of the
Company, have been threatened to be charged with or given notice of any
violation of, any applicable domestic (federal, state or local) or foreign law,
statute, ordinance, license, rule, regulation, policy or guideline, order,
demand, writ, injunction, decree or judgment of any Governmental Entity, other
than such noncompliance, defaults or violations that would not, individually or
in the aggregate, reasonably be expected to have a Company Material Adverse
Effect. Except for statutory or regulatory restrictions of general application
or as set forth on Schedule D, no Governmental Entity has placed any restriction
on the business or properties of
-9-
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
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,
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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
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.
-11-
(s) Agreements with Regulatory Agencies. Except as set forth on Schedule
E, neither the Company nor any Company Subsidiary is subject to any material
cease-and-desist or other similar order or enforcement action issued by, or is a
party to any material written agreement, consent agreement or memorandum of
understanding with, or is a party to any commitment letter or similar
undertaking to, or is subject to any capital directive by, or since December 31,
2006, has adopted any board resolutions at the request of, any Governmental
Entity (other than the Appropriate Federal Banking Agencies with jurisdiction
over the Company and the Company Subsidiaries) that currently restricts in any
material respect the conduct of its business or that in any material manner
relates to its capital adequacy, its liquidity and funding policies and
practices, its ability to pay dividends, its credit, risk management or
compliance policies or procedures, its internal controls, its management or its
operations or business (each item in this sentence, a "Regulatory Agreement"),
nor has the Company or any Company Subsidiary been advised since December 31,
2006 by any such Governmental Entity that it is considering issuing, initiating,
ordering, or requesting any such Regulatory Agreement. The Company and each
Company Subsidiary are in compliance in all material respects with each
Regulatory Agreement to which it is party or subject, and neither the Company
nor any Company Subsidiary has received any notice from any Governmental Entity
indicating that either the Company or any Company Subsidiary is not in
compliance in all material respects with any such Regulatory Agreement.
"Appropriate Federal Banking Agency" means the "appropriate Federal banking
agency" with respect to the Company or such Company Subsidiaries, as applicable,
as defined in Section 3(q) of the Federal Deposit Insurance Act (12 U.S.C.
Section 1813(q)).
(t) Insurance. The Company and the Company Subsidiaries are insured with
reputable insurers against such risks and in such amounts as the management of
the Company reasonably has determined to be prudent and consistent with industry
practice. The Company and the Company Subsidiaries are in material compliance
with their insurance policies and are not in default under any of the material
terms thereof, each such policy is outstanding and in full force and effect, all
premiums and other payments due under any material policy have been paid, and
all claims thereunder have been filed in due and timely fashion, except, in each
case, as would not, individually or in the aggregate, reasonably be expected to
have a Company Material Adverse Effect.
(u) Intellectual Property. Except as would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect, (i)
the Company and each Company Subsidiary owns or otherwise has the right to use,
all intellectual property rights, including all trademarks, trade dress, trade
names, service marks, domain names, patents, inventions, trade secrets,
know-how, works of authorship and copyrights therein, that are used in the
conduct of their existing businesses and all rights relating to the plans,
design and specifications of any of its branch facilities ("Proprietary Rights")
free and clear of all liens and any claims of ownership by current or former
employees, contractors, designers or others and (ii) neither the Company nor any
of the Company Subsidiaries is materially infringing, diluting, misappropriating
or violating, nor has the Company or any or the Company Subsidiaries received
any written (or, to the knowledge of the Company, oral) communications alleging
that any of them has materially infringed, diluted, misappropriated or violated,
any of the Proprietary Rights owned by any other person. Except as would not,
individually or in the aggregate, reasonably be
-12-
expected to have a Company Material Adverse Effect, to the Company's knowledge,
no other person is infringing, diluting, misappropriating or violating, nor has
the Company or any or the Company Subsidiaries sent any written communications
since January 1, 2006 alleging that any person has infringed, diluted,
misappropriated or violated, any of the Proprietary Rights owned by the Company
and the Company Subsidiaries.
(v) Brokers and Finders. No broker, finder or investment banker is
entitled to any financial advisory, brokerage, finder's or other fee or
commission in connection with this Agreement or the Warrant or the transactions
contemplated hereby or thereby based upon arrangements made by or on behalf of
the Company or any Company Subsidiary for which the Investor could have any
liability.
Article III
Covenants
3.1 Commercially Reasonable Efforts. Subject to the terms and conditions
of this Agreement, each of the parties will use its commercially reasonable
efforts in good faith to take, or cause to be taken, all actions, and to do, or
cause to be done, all things necessary, proper or desirable, or advisable under
applicable laws, so as to permit consummation of the Purchase as promptly as
practicable and otherwise to enable consummation of the transactions
contemplated hereby and shall use commercially reasonable efforts to cooperate
with the other party to that end.
3.2 Expenses. Unless otherwise provided in this Agreement or the Warrant,
each of the parties hereto will bear and pay all costs and expenses incurred by
it or on its behalf in connection with the transactions contemplated under this
Agreement and the Warrant, including fees and expenses of its own financial or
other consultants, investment bankers, accountants and counsel.
3.3 Sufficiency of Authorized Warrant Preferred Stock; Exchange Listing.
(a) During the period from the Closing Date until the date on which the
Warrant has been fully exercised, the Company shall at all times have reserved
for issuance, free of preemptive or similar rights, a sufficient number of
authorized and unissued Warrant Shares to effectuate such exercise.
(b) If the Company lists its Common Stock on any national securities
exchange, the Company shall, if requested by the Investor, promptly use its
reasonable best efforts to cause the Preferred Shares and Warrant Shares to be
approved for listing on a national securities exchange as promptly as
practicable following such request.
3.4 Certain Notifications Until Closing. From the Signing Date until the
Closing, the Company shall promptly notify the Investor of (i) any fact, event
or circumstance of which it is aware and which would reasonably be expected to
cause any representation or warranty of the Company contained in this Agreement
to be untrue or inaccurate in any material respect or to
-13-
cause any covenant or agreement of the Company contained in this Agreement not
to be complied with or satisfied in any material respect and (ii) except as
Previously Disclosed, any fact, circumstance, event, change, occurrence,
condition or development of which the Company is aware and which, individually
or in the aggregate, has had or would reasonably be expected to have a Company
Material Adverse Effect; provided, however, that delivery of any notice pursuant
to this Section 3.4 shall not limit or affect any rights of or remedies
available to the Investor; provided, further, that a failure to comply with this
Section 3.4 shall not constitute a breach of this Agreement or the failure of
any condition set forth in Section 1.2 to be satisfied unless the underlying
Company Material Adverse Effect or material breach would independently result in
the failure of a condition set forth in Section 1.2 to be satisfied.
3.5 Access, Information and Confidentiality.
(a) From the Signing Date until the date when the Investor holds an amount
of Preferred Shares having an aggregate liquidation value of less than 10% of
the Purchase Price, the Company will permit the Investor and its agents,
consultants, contractors and advisors (x) acting through the Appropriate Federal
Banking Agency, or otherwise to the extent necessary to evaluate, manage, or
transfer its investment in the Company, to examine the corporate books and make
copies thereof and to discuss the affairs, finances and accounts of the Company
and the Company Subsidiaries with the principal officers of the Company, all
upon reasonable notice and at such reasonable times and as often as the Investor
may reasonably request and (y) to review any information material to the
Investor's investment in the Company provided by the Company to its Appropriate
Federal Banking Agency. Any investigation pursuant to this Section 3.5 shall be
conducted during normal business hours and in such manner as not to interfere
unreasonably with the conduct of the business of the Company, and nothing herein
shall require the Company or any Company Subsidiary to disclose any information
to the Investor to the extent (i) prohibited by applicable law or regulation, or
(ii) that such disclosure would reasonably be expected to cause a violation of
any agreement to which the Company or any Company Subsidiary is a party or would
cause a risk of a loss of privilege to the Company or any Company Subsidiary
(provided that the Company shall use commercially reasonable efforts to make
appropriate substitute disclosure arrangements under circumstances where the
restrictions in this clause (ii) apply).
(b) From the Signing Date until the date on which all of the Preferred
Shares and Warrant Shares have been redeemed in whole, the Company will deliver,
or will cause to be delivered, to the Investor:
(i) as soon as available after the end of each fiscal year of the
Company, and in any event within 90 days thereafter, a consolidated
balance sheet of the Company as of the end of such fiscal year, and
consolidated statements of income, retained earnings and cash flows of the
Company for such year, in each case prepared in accordance with GAAP and
setting forth in each case in comparative form the figures for the
previous fiscal year of the Company, and which shall be audited to the
extent audited financial statements are available; and
-14-
(ii) as soon as available after the end of the first, second and
third quarterly periods in each fiscal year of the Company, a copy of any
quarterly reports provided to other stockholders of the Company or Company
management.
(c) The Investor will use reasonable best efforts to hold, and will use
reasonable best efforts to cause its agents, consultants, contractors and
advisors to hold, in confidence all non-public records, books, contracts,
instruments, computer data and other data and information (collectively,
"Information") concerning the Company furnished or made available to it by the
Company or its representatives pursuant to this Agreement (except to the extent
that such information can be shown to have been (i) previously known by such
party on a non-confidential basis, (ii) in the public domain through no fault of
such party or (iii) later lawfully acquired from other sources by the party to
which it was furnished (and without violation of any other confidentiality
obligation)); provided that nothing herein shall prevent the Investor from
disclosing any Information to the extent required by applicable laws or
regulations or by any subpoena or similar legal process.
(d) The Investor's information rights pursuant to Section 3.5(b) may be
assigned by the Investor to a transferee or assignee of the Purchased Securities
or the Warrant Shares or with a liquidation preference or, in the case of the
Warrant, the liquidation preference of the underlying shares of Warrant
Preferred Stock, no less than an amount equal to 2% of the initial aggregate
liquidation preference of the Preferred Shares.
Article IV
Additional Agreements
4.1 Purchase for Investment. The Investor acknowledges that the Purchased
Securities and the Warrant Shares have not been registered under the Securities
Act or under any state securities laws. The Investor (a) is acquiring the
Purchased Securities pursuant to an exemption from registration under the
Securities Act solely for investment with no present intention to distribute
them to any person in violation of the Securities Act or any applicable U.S.
state securities laws, (b) will not sell or otherwise dispose of any of the
Purchased Securities or the Warrant Shares, except in compliance with the
registration requirements or exemption provisions of the Securities Act and any
applicable U.S. state securities laws, and (c) has such knowledge and experience
in financial and business matters and in investments of this type that it is
capable of evaluating the merits and risks of the Purchase and of making an
informed investment decision.
4.2 Legends.
(a) The Investor agrees that all certificates or other instruments
representing the Warrant will bear a legend substantially to the following
effect:
"THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF
ANY STATE AND MAY NOT BE TRANSFERRED, SOLD
-15-
OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING
THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS
OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS.
THIS INSTRUMENT IS ISSUED SUBJECT TO THE RESTRICTIONS ON TRANSFER AND
OTHER PROVISIONS OF A SECURITIES PURCHASE AGREEMENT BETWEEN THE ISSUER OF
THESE SECURITIES AND THE INVESTOR REFERRED TO THEREIN, A COPY OF WHICH IS
ON FILE WITH THE ISSUER. THE SECURITIES REPRESENTED BY THIS INSTRUMENT MAY
NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH SAID
AGREEMENT. ANY SALE OR OTHER TRANSFER NOT IN COMPLIANCE WITH SAID
AGREEMENT WILL BE VOID."
(b) In addition, the Investor agrees that all certificates or other
instruments representing the Preferred Shares and the Warrant Shares will bear a
legend substantially to the following effect:
"THE SECURITIES REPRESENTED BY THIS INSTRUMENT ARE NOT SAVINGS ACCOUNTS,
DEPOSITS OR OTHER OBLIGATIONS OF A BANK AND ARE NOT INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR
OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING
THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS
OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS.
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
-16-
TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (C) TO THE ISSUER OR (D) PURSUANT TO ANY OTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (3)
AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THE SECURITIES REPRESENTED
BY THIS INSTRUMENT ARE TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND.
THIS INSTRUMENT IS ISSUED SUBJECT TO THE RESTRICTIONS ON TRANSFER AND
OTHER PROVISIONS OF A SECURITIES PURCHASE AGREEMENT BETWEEN THE ISSUER OF
THESE SECURITIES AND THE INVESTOR REFERRED TO THEREIN, A COPY OF WHICH IS
ON FILE WITH THE ISSUER. THE SECURITIES REPRESENTED BY THIS INSTRUMENT MAY
NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH SAID
AGREEMENT. ANY SALE OR OTHER TRANSFER NOT IN COMPLIANCE WITH SAID
AGREEMENT WILL BE VOID."
(c) In the event that any Purchased Securities or Warrant Shares (i)
become registered under the Securities Act or (ii) are eligible to be
transferred without restriction in accordance with Rule 144 or another exemption
from registration under the Securities Act (other than Rule 144A), the Company
shall issue new certificates or other instruments representing such Purchased
Securities or Warrant Shares, which shall not contain the applicable legends in
Sections 4.2(a) and (b) above; provided that the Investor surrenders to the
Company the previously issued certificates or other instruments.
4.3 Certain Transactions. The Company will not merge or consolidate with,
or sell, transfer or lease all or substantially all of its property or assets
to, any other party unless the successor, transferee or lessee party (or its
ultimate parent entity), as the case may be (if not the Company), expressly
assumes the due and punctual performance and observance of each and every
covenant, agreement and condition of this Agreement to be performed and observed
by the Company.
4.4 Transfer of Purchased Securities and Warrant Shares; Restrictions on
Exercise of the Warrant. Subject to compliance with applicable securities laws,
the Investor shall be permitted to transfer, sell, assign or otherwise dispose
of ("Transfer") all or a portion of the Purchased Securities or Warrant Shares
at any time, and the Company shall take all steps as may be reasonably requested
by the Investor to facilitate the Transfer of the Purchased Securities and the
Warrant Shares; provided that the Investor shall not Transfer any Purchased
Securities or Warrant Shares if such transfer would require the Company to be
subject to the periodic reporting requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934 (the "Exchange Act"). In furtherance of the
foregoing, the Company shall provide reasonable cooperation to facilitate any
Transfers of the Purchased Securities or Warrant Shares, including, as is
reasonable under the circumstances, by furnishing such information concerning
the Company and its business as a proposed transferee may reasonably request
(including such information as is required by Section 4.5(k)) and making
management of the Company
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reasonably available to respond to questions of a proposed transferee in
accordance with customary practice, subject in all cases to the proposed
transferee agreeing to a customary confidentiality agreement.
4.5 Registration Rights.
(a) Unless and until the Company becomes subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, the Company shall have
no obligation to comply with the provisions of this Section 4.5 (other than
Section 4.5(b)(iv)-(vi)); provided that the Company covenants and agrees that it
shall comply with this Section 4.5 as soon as practicable after the date that it
becomes subject to such reporting requirements.
(b) Registration.
(i) Subject to the terms and conditions of this Agreement, the
Company covenants and agrees that as promptly as practicable after the
date that the Company becomes subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act (and in any event no later than 30
days thereafter), the Company shall prepare and file with the SEC a Shelf
Registration Statement covering all Registrable Securities (or otherwise
designate an existing Shelf Registration Statement filed with the SEC to
cover the Registrable Securities), and, to the extent the Shelf
Registration Statement has not theretofore been declared effective or is
not automatically effective upon such filing, the Company shall use
reasonable best efforts to cause such Shelf Registration Statement to be
declared or become effective and to keep such Shelf Registration Statement
continuously effective and in compliance with the Securities Act and
usable for resale of such Registrable Securities for a period from the
date of its initial effectiveness until such time as there are no
Registrable Securities remaining (including by refiling such Shelf
Registration Statement (or a new Shelf Registration Statement) if the
initial Shelf Registration Statement expires). Notwithstanding the
foregoing, if the Company is not eligible to file a registration statement
on Form S-3, then the Company shall not be obligated to file a Shelf
Registration Statement unless and until requested to do so in writing by
the Investor.
(ii) Any registration pursuant to Section 4.5(b)(i) shall be
effected by means of a shelf registration on an appropriate form under
Rule 415 under the Securities Act (a "Shelf Registration Statement"). If
the Investor or any other Holder intends to distribute any Registrable
Securities by means of an underwritten offering it shall promptly so
advise the Company and the Company shall take all reasonable steps to
facilitate such distribution, including the actions required pursuant to
Section 4.5(d); 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
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of the Registrable Securities to be distributed; provided that to the
extent appropriate and permitted under applicable law, such Holders shall
consider the qualifications of any broker-dealer Affiliate of the Company
in selecting the lead underwriters in any such distribution.
(iii) The Company shall not be required to effect a registration
(including a resale of Registrable Securities from an effective Shelf
Registration Statement) or an underwritten offering pursuant to Section
4.5(b): (A) with respect to securities that are not Registrable
Securities; or (B) if the Company has notified the Investor and all other
Holders that in the good faith judgment of the Board of Directors, it
would be materially detrimental to the Company or its securityholders for
such registration or underwritten offering to be effected at such time, in
which event the Company shall have the right to defer such registration
for a period of not more than 45 days after receipt of the request of the
Investor or any other Holder; provided that such right to delay a
registration or underwritten offering shall be exercised by the Company
(1) only if the Company has generally exercised (or is concurrently
exercising) similar black-out rights against holders of similar securities
that have registration rights and (2) not more than three times in any
12-month period and not more than 90 days in the aggregate in any 12-month
period.
(iv) If during any period when an effective Shelf Registration
Statement is not available, the Company proposes to register any of its
equity securities, other than a registration pursuant to Section 4.5(b)(i)
or a Special Registration, and the registration form to be filed may be
used for the registration or qualification for distribution of Registrable
Securities, the Company will give prompt written notice to the Investor
and all other Holders of its intention to effect such a registration (but
in no event less than ten days prior to the anticipated filing date) and
will include in such registration all Registrable Securities with respect
to which the Company has received written requests for inclusion therein
within ten business days after the date of the Company's notice (a
"Piggyback Registration"). Any such person that has made such a written
request may withdraw its Registrable Securities from such Piggyback
Registration by giving written notice to the Company and the managing
underwriter, if any, on or before the fifth business day prior to the
planned effective date of such Piggyback Registration. The Company may
terminate or withdraw any registration under this Section 4.5(b)(iv) prior
to the effectiveness of such registration, whether or not Investor or any
other Holders have elected to include Registrable Securities in such
registration.
(v) If the registration referred to in Section 4.5(b)(iv) is
proposed to be underwritten, the Company will so advise Investor and all
other Holders as a part of the written notice given pursuant to Section
4.5(b)(iv). In such event, the right of Investor and all other Holders to
registration pursuant to Section 4.5(b) will be conditioned upon such
persons' participation in such underwriting and the inclusion of such
person's Registrable Securities in the underwriting if such securities are
of the same class of securities as the securities to be offered in the
underwritten offering, and each such person will (together with the
Company and the other persons distributing their securities through such
underwriting) enter into an underwriting agreement in customary form with
-19-
the underwriter or underwriters selected for such underwriting by the
Company; provided that the Investor (as opposed to other Holders) shall
not be required to indemnify any person in connection with any
registration. If any participating person disapproves of the terms of the
underwriting, such person may elect to withdraw therefrom by written
notice to the Company, the managing underwriters and the Investor (if the
Investor is participating in the underwriting).
(vi) If either (x) the Company grants "piggyback" registration
rights to one or more third parties to include their securities in an
underwritten offering under the Shelf Registration Statement pursuant to
Section 4.5(b)(ii) or (y) a Piggyback Registration under Section
4.5(b)(iv) relates to an underwritten offering on behalf of the Company,
and in either case the managing underwriters advise the Company that in
their reasonable opinion the number of securities requested to be included
in such offering exceeds the number which can be sold without adversely
affecting the marketability of such offering (including an adverse effect
on the per share offering price), the Company will include in such
offering only such number of securities that in the reasonable opinion of
such managing underwriters can be sold without adversely affecting the
marketability of the offering (including an adverse effect on the per
share offering price), which securities will be so included in the
following order of priority: (A) first, in the case of a Piggyback
Registration under Section 4.5(b)(iv), the securities the Company proposes
to sell, (B) then the Registrable Securities of the Investor and all other
Holders who have requested inclusion of Registrable Securities pursuant to
Section 4.5(b)(ii) or Section 4.5(b)(iv), as applicable, pro rata on the
basis of the aggregate number of such securities or shares owned by each
such person and (C) lastly, any other securities of the Company that have
been requested to be so included, subject to the terms of this Agreement;
provided, however, that if the Company has, prior to the Signing Date,
entered into an agreement with respect to its securities that is
inconsistent with the order of priority contemplated hereby then it shall
apply the order of priority in such conflicting agreement to the extent
that it would otherwise result in a breach under such agreement.
(c) Expenses of Registration. All Registration Expenses incurred in
connection with any registration, qualification or compliance hereunder shall be
borne by the Company. All Selling Expenses incurred in connection with any
registrations hereunder shall be borne by the holders of the securities so
registered pro rata on the basis of the aggregate offering or sale price of the
securities so registered.
(d) Obligations of the Company. Whenever required to effect the
registration of any Registrable Securities or facilitate the distribution of
Registrable Securities pursuant to an effective Shelf Registration Statement,
the Company shall, as expeditiously as reasonably practicable:
(i) Prepare and file with the SEC a prospectus supplement or
post-effective amendment with respect to a proposed offering of
Registrable Securities pursuant to an effective registration statement,
subject to Section 4.5(d), keep such registration
-20-
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.
(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;
-21-
(C) of the issuance by the SEC of any stop order suspending
the effectiveness of any registration statement or the initiation of
any proceedings for that purpose;
(D) of the receipt by the Company or its legal counsel of any
notification with respect to the suspension of the qualification of
the applicable Registrable Securities for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose;
(E) of the happening of any event that requires the Company to
make changes in any effective registration statement or the
prospectus related to the registration statement in order to make
the statements therein not misleading (which notice shall be
accompanied by an instruction to suspend the use of the prospectus
until the requisite changes have been made); and
(F) if at any time the representations and warranties of the
Company contained in any underwriting agreement contemplated by
Section 4.5(d)(x) cease to be true and correct.
(vii) Use its reasonable best efforts to prevent the issuance or
obtain the withdrawal of any order suspending the effectiveness of any
registration statement referred to in Section 4.5(d)(vi)(C) at the
earliest practicable time.
(viii) Upon the occurrence of any event contemplated by Section
4.5(d)(v) or 4.5(d)(vi)(E), promptly prepare a post-effective amendment to
such registration statement or a supplement to the related prospectus or
file any other required document so that, as thereafter delivered to the
Holders and any underwriters, the prospectus will not contain an untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein, in light of the circumstances under which
they were made, not misleading. If the Company notifies the Holders in
accordance with Section 4.5(d)(vi)(E) to suspend the use of the prospectus
until the requisite changes to the prospectus have been made, then the
Holders and any underwriters shall suspend use of such prospectus and use
their reasonable best efforts to return to the Company all copies of such
prospectus (at the Company's expense) other than permanent file copies
then in such Holders' or underwriters' possession. The total number of
days that any such suspension may be in effect in any 12-month period
shall not exceed 90 days.
(ix) Use reasonable best efforts to procure the cooperation of the
Company's transfer agent in settling any offering or sale of Registrable
Securities, including with respect to the transfer of physical stock
certificates into book-entry form in accordance with any procedures
reasonably requested by the Holders or any managing underwriter(s).
(x) If an underwritten offering is requested pursuant to Section
4.5(b)(ii), enter into an underwriting agreement in customary form, scope
and substance and take all
-22-
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" 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
-23-
Registrable Securities to be listed on such securities exchange as the
Investor may designate.
(xiii) If requested by Holders of a majority of the Registrable
Securities being registered and/or sold in connection therewith, or the
managing underwriter(s), if any, promptly include in a prospectus
supplement or amendment such information as the Holders of a majority of
the Registrable Securities being registered and/or sold in connection
therewith or managing underwriter(s), if any, may reasonably request in
order to permit the intended method of distribution of such securities and
make all required filings of such prospectus supplement or such amendment
as soon as practicable after the Company has received such request.
(xiv) Timely provide to its security holders earning statements
satisfying the provisions of Section 11(a) of the Securities Act and Rule
158 thereunder.
(e) Suspension of Sales. Upon receipt of written notice from the Company
that a registration statement, prospectus or prospectus supplement contains or
may contain an untrue statement of a material fact or omits or may omit to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading or that circumstances exist that make
inadvisable use of such registration statement, prospectus or prospectus
supplement, the Investor and each Holder of Registrable Securities shall
forthwith discontinue disposition of Registrable Securities until the Investor
and/or Holder has received copies of a supplemented or amended prospectus or
prospectus supplement, or until the Investor and/or such Holder is advised in
writing by the Company that the use of the prospectus and, if applicable,
prospectus supplement may be resumed, and, if so directed by the Company, the
Investor and/or such Holder shall deliver to the Company (at the Company's
expense) all copies, other than permanent file copies then in the Investor
and/or such Holder's possession, of the prospectus and, if applicable,
prospectus supplement covering such Registrable Securities current at the time
of receipt of such notice. The total number of days that any such suspension may
be in effect in any 12-month period shall not exceed 90 days.
(f) Termination of Registration Rights. A Holder's registration rights as
to any securities held by such Holder (and its Affiliates, partners, members and
former members) shall not be available unless such securities are Registrable
Securities.
(g) Furnishing Information.
(i) Neither the Investor nor any Holder shall use any free writing
prospectus (as defined in Rule 405) in connection with the sale of
Registrable Securities without the prior written consent of the Company.
(ii) It shall be a condition precedent to the obligations of the
Company to take any action pursuant to Section 4.5(d) that Investor and/or
the selling Holders and the underwriters, if any, shall furnish to the
Company such information regarding themselves, the Registrable Securities
held by them and the intended method of
-24-
disposition of such securities as shall be required to effect the
registered offering of their Registrable Securities.
(h) Indemnification.
(i) The Company agrees to indemnify each Holder and, if a Holder is
a person other than an individual, such Holder's officers, directors,
employees, agents, representatives and Affiliates, and each Person, if
any, that controls a Holder within the meaning of the Securities Act
(each, an "Indemnitee"), against any and all losses, claims, damages,
actions, liabilities, costs and expenses (including reasonable fees,
expenses and disbursements of attorneys and other professionals incurred
in connection with investigating, defending, settling, compromising or
paying any such losses, claims, damages, actions, liabilities, costs and
expenses), joint or several, arising out of or based upon any untrue
statement or alleged untrue statement of material fact contained in any
registration statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements thereto or
any documents incorporated therein by reference or contained in any free
writing prospectus (as such term is defined in Rule 405) prepared by the
Company or authorized by it in writing for use by such Holder (or any
amendment or supplement thereto); or any omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading; provided, that the Company shall not be liable to
such Indemnitee in any such case to the extent that any such loss, claim,
damage, liability (or action or proceeding in respect thereof) or expense
arises out of or is based upon (A) an untrue statement or omission made in
such registration statement, including any such preliminary prospectus or
final prospectus contained therein or any such amendments or supplements
thereto or contained in any free writing prospectus (as such term is
defined in Rule 405) prepared by the Company or authorized by it in
writing for use by such Holder (or any amendment or supplement thereto),
in reliance upon and in conformity with information regarding such
Indemnitee or its plan of distribution or ownership interests which was
furnished in writing to the Company by such Indemnitee for use in
connection with such registration statement, including any such
preliminary prospectus or final prospectus contained therein or any such
amendments or supplements thereto, or (B) offers or sales effected by or
on behalf of such Indemnitee "by means of" (as defined in Rule 159A) a
"free writing prospectus" (as defined in Rule 405) that was not authorized
in writing by the Company.
(ii) If the indemnification provided for in Section 4.5(h)(i) is
unavailable to an Indemnitee with respect to any losses, claims, damages,
actions, liabilities, costs or expenses referred to therein or is
insufficient to hold the Indemnitee harmless as contemplated therein, then
the Company, in lieu of indemnifying such Indemnitee, shall contribute to
the amount paid or payable by such Indemnitee as a result of such losses,
claims, damages, actions, liabilities, costs or expenses in such
proportion as is appropriate to reflect the relative fault of the
Indemnitee, on the one hand, and the Company, on the other hand, in
connection with the statements or omissions which resulted in such losses,
claims, damages, actions, liabilities, costs or expenses as well as any
other relevant
-25-
equitable considerations. The relative fault of the Company, on the one
hand, and of the Indemnitee, on the other hand, shall be determined by
reference to, among other factors, whether the untrue statement of a
material fact or omission to state a material fact relates to information
supplied by the Company or by the Indemnitee and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission; the Company and each Holder agree that
it would not be just and equitable if contribution pursuant to this
Section 4.5(h)(ii) were determined by pro rata allocation or by any other
method of allocation that does not take account of the equitable
considerations referred to in Section 4.5(h)(i). No Indemnitee guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from the Company if the
Company was not guilty of such fraudulent misrepresentation.
(i) Assignment of Registration Rights. The rights of the Investor to
registration of Registrable Securities pursuant to Section 4.5(b) may be
assigned by the Investor to a transferee or assignee of Registrable Securities
with a liquidation preference or, in the case of the Warrant, the liquidation
preference of the underlying shares of Warrant Preferred Stock, no less than an
amount equal to (i) 2% of the initial aggregate liquidation preference of the
Preferred Shares if such initial aggregate liquidation preference is less than
$2 billion and (ii) $200 million if the initial aggregate liquidation preference
of the Preferred Shares is equal to or greater than $2 billion; provided,
however, the transferor shall, within ten days after such transfer, furnish to
the Company written notice of the name and address of such transferee or
assignee and the number and type of Registrable Securities that are being
assigned.
(j) Clear Market. With respect to any underwritten offering of Registrable
Securities by the Investor or other Holders pursuant to this Section 4.5, the
Company agrees not to effect (other than pursuant to such registration or
pursuant to a Special Registration) any public sale or distribution, or to file
any Shelf Registration Statement (other than such registration or a Special
Registration) covering any preferred stock of the Company or any securities
convertible into or exchangeable or exercisable for preferred stock of the
Company, during the period not to exceed ten days prior and 60 days following
the effective date of such offering or such longer period up to 90 days as may
be requested by the managing underwriter for such underwritten offering. The
Company also agrees to cause such of its directors and senior executive officers
to execute and deliver customary lock-up agreements in such form and for such
time period up to 90 days as may be requested by the managing underwriter.
"Special Registration" means the registration of (A) equity securities and/or
options or other rights in respect thereof solely registered on Form S-4 or Form
S-8 (or successor form) or (B) shares of equity securities and/or options or
other rights in respect thereof to be offered to directors, members of
management, employees, consultants, customers, lenders or vendors of the Company
or Company Subsidiaries or in connection with dividend reinvestment plans.
(k) 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:
-26-
(i) make and keep public information available, as those terms are
understood and defined in Rule 144(c)(1) or any similar or analogous rule
promulgated under the Securities Act, at all times after the Signing Date;
(ii) (A) file with the SEC, in a timely manner, all reports and
other documents required of the Company under the Exchange Act, and (B) if
at any time the Company is not required to file such reports, make
available, upon the request of any Holder, such information necessary to
permit sales pursuant to Rule 144A (including the information required by
Rule 144A(d)(4) under the Securities Act);
(iii) so long as the Investor or a Holder owns any Registrable
Securities, furnish to the Investor or such Holder forthwith upon request:
a written statement by the Company as to its compliance with the reporting
requirements of Rule 144 under the Securities Act, and of the Exchange
Act; a copy of the most recent annual or quarterly report of the Company;
and such other reports and documents as the Investor or Holder may
reasonably request in availing itself of any rule or regulation of the SEC
allowing it to sell any such securities to the public without
registration; and
(iv) take such further action as any Holder may reasonably request,
all to the extent required from time to time to enable such Holder to sell
Registrable Securities without registration under the Securities Act.
(l) As used in this Section 4.5, the following terms shall have the
following respective meanings:
(i) "Holder" means the Investor and any other holder of Registrable
Securities to whom the registration rights conferred by this Agreement
have been transferred in compliance with Section 4.5(h) hereof.
(ii) "Holders' Counsel" means one counsel for the selling Holders
chosen by Holders holding a majority interest in the Registrable
Securities being registered.
(iii) "Register," "registered," and "registration" shall refer to a
registration effected by preparing and (A) filing a registration statement
or amendment thereto in compliance with the Securities Act and applicable
rules and regulations thereunder, and the declaration or ordering of
effectiveness of such registration statement or amendment thereto or (B)
filing a prospectus and/or prospectus supplement in respect of an
appropriate effective registration statement on Form S-3.
(iv) "Registrable Securities" means (A) all Preferred Shares, (B)
the Warrant (subject to Section 4.5(q)) and (C) any equity securities
issued or issuable directly or indirectly with respect to the securities
referred to in the foregoing clauses (A) or (B) by way of conversion,
exercise or exchange thereof, including the Warrant Shares, or share
dividend or share split or in connection with a combination of shares,
recapitalization, reclassification, merger, amalgamation, arrangement,
consolidation or other
-27-
reorganization, provided that, once issued, such securities will not be
Registrable Securities when (1) they are sold pursuant to an effective
registration statement under the Securities Act, (2) except as provided
below in Section 4.5(p), they may be sold pursuant to Rule 144 without
limitation thereunder on volume or manner of sale, (3) they shall have
ceased to be outstanding or (4) they have been sold in a private
transaction in which the transferor's rights under this Agreement are not
assigned to the transferee of the securities. No Registrable Securities
may be registered under more than one registration statement at any one
time.
(v) "Registration Expenses" mean all expenses incurred by the
Company in effecting any registration pursuant to this Agreement (whether
or not any registration or prospectus becomes effective or final) or
otherwise complying with its obligations under this Section 4.5, including
all registration, filing and listing fees, printing expenses, fees and
disbursements of counsel for the Company, blue sky fees and expenses,
expenses incurred in connection with any "road show", the reasonable fees
and disbursements of Holders' Counsel, and expenses of the Company's
independent accountants in connection with any regular or special reviews
or audits incident to or required by any such registration, but shall not
include Selling Expenses.
(vi) "Rule 144", "Rule 144A", "Rule 159A", "Rule 405" and "Rule 415"
mean, in each case, such rule promulgated under the Securities Act (or any
successor provision), as the same shall be amended from time to time.
(vii) "Selling Expenses" mean all discounts, selling commissions and
stock transfer taxes applicable to the sale of Registrable Securities and
fees and disbursements of counsel for any Holder (other than the fees and
disbursements of Holders' Counsel included in Registration Expenses).
(m) At any time, any holder of Securities (including any Holder) may elect
to forfeit its rights set forth in this Section 4.5 from that date forward;
provided, that a Holder forfeiting such rights shall nonetheless be entitled to
participate under Section 4.5(b)(iv) - (vi) in any Pending Underwritten Offering
to the same extent that such Holder would have been entitled to if the holder
had not withdrawn; and provided, further, that no such forfeiture shall
terminate a Holder's rights or obligations under Section 4.5(g) with respect to
any prior registration or Pending Underwritten Offering. "Pending Underwritten
Offering" means, with respect to any Holder forfeiting its rights pursuant to
this Section 4.5(m), any underwritten offering of Registrable Securities in
which such Holder has advised the Company of its intent to register its
Registrable Securities either pursuant to Section 4.5(b)(ii) or 4.5(b)(iv) prior
to the date of such Holder's forfeiture.
(n) Specific Performance. The parties hereto acknowledge that there would
be no adequate remedy at law if the Company fails to perform any of its
obligations under this Section 4.5 and that the Investor and the Holders from
time to time may be irreparably harmed by any such failure, and accordingly
agree that the Investor and such Holders, in addition to any other remedy to
which they may be entitled at law or in equity, to the fullest extent permitted
and
-28-
enforceable under applicable law shall be entitled to compel specific
performance of the obligations of the Company under this Section 4.5 in
accordance with the terms and conditions of this Section 4.5.
(o) No Inconsistent Agreements. The Company shall not, on or after the
Signing Date, enter into any agreement with respect to its securities that may
impair the rights granted to the Investor and the Holders under this Section 4.5
or that otherwise conflicts with the provisions hereof in any manner that may
impair the rights granted to the Investor and the Holders under this Section
4.5. In the event the Company has, prior to the Signing Date, entered into any
agreement with respect to its securities that is inconsistent with the rights
granted to the Investor and the Holders under this Section 4.5 (including
agreements that are inconsistent with the order of priority contemplated by
Section 4.5(b)(vi)) or that may otherwise conflict with the provisions hereof,
the Company shall use its reasonable best efforts to amend such agreements to
ensure they are consistent with the provisions of this Section 4.5.
(p) Certain Offerings by the Investor. In the case of any securities held
by the Investor that cease to be Registrable Securities solely by reason of
clause (2) in the definition of "Registrable Securities," the provisions of
Sections 4.5(b)(ii), clauses (iv), (ix) and (x)-(xii) of Section 4.5(d), Section
4.5(h) and Section 4.5(j) shall continue to apply until such securities
otherwise cease to be Registrable Securities. In any such case, an
"underwritten" offering or other disposition shall include any distribution of
such securities on behalf of the Investor by one or more broker-dealers, an
"underwriting agreement" shall include any purchase agreement entered into by
such broker-dealers, and any "registration statement" or "prospectus" shall
include any offering document approved by the Company and used in connection
with such distribution.
(q) Registered Sales of the Warrant. The Holders agree to sell the Warrant
or any portion thereof under the Shelf Registration Statement only beginning 30
days after notifying the Company of any such sale, during which 30-day period
the Investor and all Holders of the Warrant shall take reasonable steps to agree
to revisions to the Warrant to permit a public distribution of the Warrant,
including entering into a warrant agreement and appointing a warrant agent.
4.6 Depositary Shares. Upon request by the Investor at any time following
the Closing Date, the Company shall promptly enter into a depositary
arrangement, pursuant to customary agreements reasonably satisfactory to the
Investor and with a depositary reasonably acceptable to the Investor, pursuant
to which the Preferred Shares or the Warrant Shares may be deposited and
depositary shares, each representing a fraction of a Preferred Share or Warrant
Share, as applicable, as specified by the Investor, may be issued. From and
after the execution of any such depositary arrangement, and the deposit of any
Preferred Shares or Warrant Shares, as applicable, pursuant thereto, the
depositary shares issued pursuant thereto shall be deemed "Preferred Shares",
"Warrant Shares" and, as applicable, "Registrable Securities" for purposes of
this Agreement.
4.7 Restriction on Dividends and Repurchases.
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(a) Prior to the earlier of (x) the third anniversary of the Closing Date
and (y) the date on which all of the Preferred Shares and Warrant Shares have
been redeemed in whole or the Investor has transferred all of the Preferred
Shares and Warrant Shares to third parties which are not Affiliates of the
Investor, neither the Company nor any Company Subsidiary shall, without the
consent of the Investor, declare or pay any dividend or make any distribution on
capital stock or other equity securities of any kind of the Company or any
Company Subsidiary (other than (i) regular quarterly cash dividends of not more
than the amount of the last quarterly cash dividend per share declared or, if
lower, announced to its holders of Common Stock an intention to declare, on the
Common Stock prior to November 17, 2008, as adjusted for any stock split, stock
dividend, reverse stock split, reclassification or similar transaction, (ii)
dividends payable solely in shares of Common Stock, (iii) regular dividends on
shares of preferred stock in accordance with the terms thereof and which are
permitted under the terms of the Preferred Shares and the Warrant Shares, (iv)
dividends or distributions by any wholly-owned Company Subsidiary or (v)
dividends or distributions by any Company Subsidiary required pursuant to
binding contractual agreements entered into prior to November 17, 2008).
(b) During the period beginning on the third anniversary of the Closing
Date and ending on the earlier of (i) the tenth anniversary of the Closing Date
and (ii) the date on which all of the Preferred Shares and Warrant Shares have
been redeemed in whole or the Investor has transferred all of the Preferred
Shares and Warrant Shares to third parties which are not Affiliates of the
Investor, neither the Company nor any Company Subsidiary shall, without the
consent of the Investor, (A) pay any per share dividend or distribution on
capital stock or other equity securities of any kind of the Company at a per
annum rate that is in excess of 103% of the aggregate per share dividends and
distributions for the immediately prior fiscal year (other than regular
dividends on shares of preferred stock in accordance with the terms thereof and
which are permitted under the terms of the Preferred Shares and the Warrant
Shares); provided that no increase in the aggregate amount of dividends or
distributions on Common Stock shall be permitted as a result of any dividends or
distributions paid in shares of Common Stock, any stock split or any similar
transaction or (B) pay aggregate dividends or distributions on capital stock or
other equity securities of any kind of any Company Subsidiary that is in excess
of 103% of the aggregate dividends and distributions paid for the immediately
prior fiscal year (other than in the case of this clause (B), (1) regular
dividends on shares of preferred stock in accordance with the terms thereof and
which are permitted under the terms of the Preferred Shares and the Warrant
Shares, (2) dividends or distributions by any wholly-owned Company Subsidiary,
(3) dividends or distributions by any Company Subsidiary required pursuant to
binding contractual agreements entered into prior to November 17, 2008) or (4)
dividends or distributions on newly issued shares of capital stock for cash or
other property.
(c) Prior to the earlier of (x) the tenth anniversary of the Closing Date
and (y) the date on which all of the Preferred Shares and Warrant Shares have
been redeemed in whole or the Investor has transferred all of the Preferred
Shares and Warrant Shares to third parties which are not Affiliates of the
Investor, neither the Company nor any Company Subsidiary shall, without the
consent of the Investor, redeem, purchase or acquire any shares of Common Stock
or other capital stock or other equity securities of any kind of the Company or
any Company Subsidiary, or any trust preferred securities issued by the Company
or any Affiliate of the Company, other
-30-
than (i) redemptions, purchases or other acquisitions of the Preferred Shares
and Warrant Shares, (ii) in connection with the administration of any employee
benefit plan in the ordinary course of business and consistent with past
practice, (iii) the acquisition by the Company or any of the Company
Subsidiaries of record ownership in Junior Stock or Parity Stock for the
beneficial ownership of any other persons (other than the Company or any other
Company Subsidiary), including as trustees or custodians, (iv) the exchange or
conversion of Junior Stock for or into other Junior Stock or of Parity Stock or
trust preferred securities for or into other Parity Stock (with the same or
lesser aggregate liquidation amount) or Junior Stock, in each case set forth in
this clause (iv), solely to the extent required pursuant to binding contractual
agreements entered into prior to the Signing Date or any subsequent agreement
for the accelerated exercise, settlement or exchange thereof for Common Stock
(clauses (ii) and (iii), collectively, the "Permitted Repurchases"), (v)
redemptions of securities held by the Company or any wholly-owned Company
Subsidiary or (vi) redemptions, purchases or other acquisitions of capital stock
or other equity securities of any kind of any Company Subsidiary required
pursuant to binding contractual agreements entered into prior to November 17,
2008.
(d) Until such time as the Investor ceases to own any Preferred Shares or
Warrant Shares, the Company shall not repurchase any Preferred Shares or Warrant
Shares from any holder thereof, whether by means of open market purchase,
negotiated transaction, or otherwise, other than Permitted Repurchases, unless
it offers to repurchase a ratable portion of the Preferred Shares or Warrant
Shares, as the case may be, then held by the Investor on the same terms and
conditions.
(e) During the period beginning on the tenth anniversary of the Closing
and ending on the date on which all of the Preferred Shares and Warrant Shares
have been redeemed in whole or the Investor has transferred all of the Preferred
Shares and Warrant Shares to third parties which are not Affiliates of the
Investor, neither the Company nor any Company Subsidiary shall, without the
consent of the Investor, (i) declare or pay any dividend or make any
distribution on capital stock or other equity securities of any kind of the
Company or any Company Subsidiary; or (ii) redeem, purchase or acquire any
shares of Common Stock or other capital stock or other equity securities of any
kind of the Company or any Company Subsidiary, or any trust preferred securities
issued by the Company or any Affiliate of the Company, other than (A)
redemptions, purchases or other acquisitions of the Preferred Shares and Warrant
Shares, (B) regular dividends on shares of preferred stock in accordance with
the terms thereof and which are permitted under the terms of the Preferred
Shares and the Warrant Shares, or (C) dividends or distributions by any
wholly-owned Company Subsidiary.
(f) "Junior Stock" means Common Stock and any other class or series of
stock of the Company the terms of which expressly provide that it ranks junior
to the Preferred Shares as to dividend rights and/or as to rights on
liquidation, dissolution or winding up of the Company. "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-
4.8 Executive Compensation. Until such time as the Investor ceases to own
any debt or equity securities of the Company acquired pursuant to this Agreement
or the Warrant, the Company shall take all necessary action to ensure that its
Benefit Plans with respect to its Senior Executive Officers comply in all
respects with Section 111(b) of the EESA as implemented by any guidance or
regulation thereunder that has been issued and is in effect as of the Closing
Date, and shall not adopt any new Benefit Plan with respect to its Senior
Executive Officers that does not comply therewith. "Senior Executive Officers"
means the Company's "senior executive officers" as defined in subsection
111(b)(3) of the EESA and regulations issued thereunder, including the rules set
forth in 31 C.F.R. Part 30.
4.9 Related Party Transactions. Until such time as the Investor ceases to
own any Purchased Securities or Warrant Shares, the Company and the Company
Subsidiaries shall not enter into transactions with Affiliates or related
persons (within the meaning of Item 404 under the SEC's Regulation S-K) unless
(i) such transactions are on terms no less favorable to the Company and the
Company Subsidiaries than could be obtained from an unaffiliated third party,
and (ii) have been approved by the audit committee of the Board of Directors or
comparable body of independent directors of the Company.
4.10 Bank and Thrift Holding Company Status. If the Company is a Bank
Holding Company or a Savings and Loan Holding Company on the Signing Date, then
the Company shall maintain its status as a Bank Holding Company or Savings and
Loan Holding Company, as the case may be, for as long as the Investor owns any
Purchased Securities or Warrant Shares. The Company shall redeem all Purchased
Securities and Warrant Shares held by the Investor prior to terminating its
status as a Bank Holding Company or Savings and Loan Holding Company, as
applicable. "Bank Holding Company" means a company registered as such with the
Board of Governors of the Federal Reserve System (the "Federal Reserve")
pursuant to 12 U.S.C. ss.1842 and the regulations of the Federal Reserve
promulgated thereunder. "Savings and Loan Holding Company" means a company
registered as such with the Office of Thrift Supervision pursuant to 12 U.S.C.
ss.1467(a) and the regulations of the Office of Thrift Supervision promulgated
thereunder.
4.11 Predominantly Financial. For as long as the Investor owns any
Purchased Securities or Warrant Shares, the Company, to the extent it is not
itself an insured depository institution, agrees to remain predominantly engaged
in financial activities. A company is predominantly engaged in financial
activities if the annual gross revenues derived by the company and all
subsidiaries of the company (excluding revenues derived from subsidiary
depository institutions), on a consolidated basis, from engaging in activities
that are financial in nature or are incidental to a financial activity under
subsection (k) of Section 4 of the Bank Holding Company Act of 1956 (12 U.S.C.
1843(k)) represent at least 85 percent of the consolidated annual gross revenues
of the company.
Article V
Miscellaneous
5.1 Termination. This Agreement may be terminated at any time prior to the
Closing:
-32-
(a) by either the Investor or the Company if the Closing shall not have
occurred by the 30th calendar day following the Signing Date; provided, however,
that in the event the Closing has not occurred by such 30th calendar day, the
parties will consult in good faith to determine whether to extend the term of
this Agreement, it being understood that the parties shall be required to
consult only until the fifth day after such 30th calendar day and not be under
any obligation to extend the term of this Agreement thereafter; provided,
further, that the right to terminate this Agreement under this Section 5.1(a)
shall not be available to any party whose breach of any representation or
warranty or failure to perform any obligation under this Agreement shall have
caused or resulted in the failure of the Closing to occur on or prior to such
date; or
(b) by either the Investor or the Company in the event that any
Governmental Entity shall have issued an order, decree or ruling or taken any
other action restraining, enjoining or otherwise prohibiting the transactions
contemplated by this Agreement and such order, decree, ruling or other action
shall have become final and nonappealable; or
(c) by the mutual written consent of the Investor and the Company.
In the event of termination of this Agreement as provided in this Section 5.1,
this Agreement shall forthwith become void and there shall be no liability on
the part of either party hereto except that nothing herein shall relieve either
party from liability for any breach of this Agreement.
5.2 Survival of Representations and Warranties. All covenants and
agreements, other than those which by their terms apply in whole or in part
after the Closing, shall terminate as of the Closing. The representations and
warranties of the Company made herein or in any certificates delivered in
connection with the Closing shall survive the Closing without limitation.
5.3 Amendment. No amendment of any provision of this Agreement will be
effective unless made in writing and signed by an officer or a duly authorized
representative of each party; provided that the Investor may unilaterally amend
any provision of this Agreement to the extent required to comply with any
changes after the Signing Date in applicable federal statutes. No failure or
delay by any party in exercising any right, power or privilege hereunder shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise of any other right, power or privilege.
The rights and remedies herein provided shall be cumulative of any rights or
remedies provided by law.
5.4 Waiver of Conditions. The conditions to each party's obligation to
consummate the Purchase are for the sole benefit of such party and may be waived
by such party in whole or in part to the extent permitted by applicable law. No
waiver will be effective unless it is in a writing signed by a duly authorized
officer of the waiving party that makes express reference to the provision or
provisions subject to such waiver.
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
-33-
the extent such law is applicable, and otherwise in accordance with the laws of
the State of New York applicable to contracts made and to be performed entirely
within such State. Each of the parties hereto agrees (a) to submit to the
exclusive jurisdiction and venue of the United States District Court for the
District of Columbia and the United States Court of Federal Claims for any and
all civil actions, suits or proceedings arising out of or relating to this
Agreement or the Warrant or the transactions contemplated hereby or thereby, and
(b) that notice may be served upon (i) the Company at the address and in the
manner set forth for notices to the Company in Section 5.6 and (ii) the Investor
in accordance with federal law. To the extent permitted by applicable law, each
of the parties hereto hereby unconditionally waives trial by jury in any civil
legal action or proceeding relating to this Agreement or the Warrant or the
transactions contemplated hereby or thereby.
5.6 Notices. Any notice, request, instruction or other document to be
given hereunder by any party to the other will be in writing and will be deemed
to have been duly given (a) on the date of delivery if delivered personally, or
by facsimile, upon confirmation of receipt, or (b) on the second business day
following the date of dispatch if delivered by a recognized next day courier
service. All notices to the Company shall be delivered as set forth in Schedule
A, or pursuant to such other instruction as may be designated in writing by the
Company to the Investor. All notices to the Investor shall be delivered as set
forth below, or pursuant to such other instructions as may be designated in
writing by the Investor to the Company.
If to the Investor:
United States Department of the Treasury
1500 Pennsylvania Avenue, NW, Room 2312
Washington, D.C. 20220
Attention: Assistant General Counsel (Banking and Finance)
Facsimile: (202) 622-1974
5.7 Definitions
(a) When a reference is made in this Agreement to a subsidiary of a
person, the term "subsidiary" means any corporation, partnership, joint venture,
limited liability company or other entity (x) of which such person or a
subsidiary of such person is a general partner or (y) of which a majority of the
voting securities or other voting interests, or a majority of the securities or
other interests of which having by their terms ordinary voting power to elect a
majority of the board of directors or persons performing similar functions with
respect to such entity, is directly or indirectly owned by such person and/or
one or more subsidiaries thereof.
(b) The term "Affiliate" means, with respect to any person, any person
directly or indirectly controlling, controlled by or under common control with,
such other person. For purposes of this definition, "control" (including, with
correlative meanings, the terms "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
-34-
policies of such person, whether through the ownership of voting securities by
contract or otherwise.
(c) The terms "knowledge of the Company" or "Company's knowledge" mean the
actual knowledge after reasonable and due inquiry of the "officers" (as such
term is defined in Rule 3b-2 under the Exchange Act, but excluding any Vice
President or Secretary) of the Company.
5.8 Assignment. Neither this Agreement nor any right, remedy, obligation
nor liability arising hereunder or by reason hereof shall be assignable by any
party hereto without the prior written consent of the other party, and any
attempt to assign any right, remedy, obligation or liability hereunder without
such consent shall be void, except (a) an assignment, in the case of a merger,
consolidation, statutory share exchange or similar transaction that requires the
approval of the Company's stockholders (a "Business Combination") where such
party is not the surviving entity, or a sale of substantially all of its assets,
to the entity which is the survivor of such Business Combination or the
purchaser in such sale and (b) as provided in Sections 3.5 and 4.5.
5.9 Severability. If any provision of this Agreement or the Warrant, or
the application thereof to any person or circumstance, is determined by a court
of competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions hereof, or the application of such provision to persons or
circumstances other than those as to which it has been held invalid or
unenforceable, will remain in full force and effect and shall in no way be
affected, impaired or invalidated thereby, so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination, the parties shall
negotiate in good faith in an effort to agree upon a suitable and equitable
substitute provision to effect the original intent of the parties.
5.10 No Third Party Beneficiaries. Nothing contained in this Agreement,
expressed or implied, is intended to confer upon any person or entity other than
the Company and the Investor any benefit, right or remedies, except that the
provisions of Section 4.5 shall inure to the benefit of the persons referred to
in that Section.
* * *
-35-
ANNEX A
FORM OF CERTIFICATE OF DESIGNATIONS FOR PREFERRED STOCK
[SEE ATTACHED]
ANNEX B
FORM OF CERTIFICATE OF DESIGNATIONS
FOR WARRANT PREFERRED STOCK
[SEE ATTACHED]
ANNEX C
FORM OF WAIVER
In consideration for the benefits I will receive as a result of my employer's
participation in the United States Department of the Treasury's TARP Capital
Purchase Program, I hereby voluntarily waive any claim against the United States
or my employer for any changes to my compensation or benefits that are required
to comply with the regulation issued by the Department of the Treasury as
published in the Federal Register on October 20, 2008.
I acknowledge that this regulation may require modification of the compensation,
bonus, incentive and other benefit plans, arrangements, policies and agreements
(including so-called "golden parachute" agreements) that I have with my employer
or in which I participate as they relate to the period the United States holds
any equity or debt securities of my employer acquired through the TARP Capital
Purchase Program.
This waiver includes all claims I may have under the laws of the United States
or any state related to the requirements imposed by the aforementioned
regulation, including without limitation a claim for any compensation or other
payments I would otherwise receive, any challenge to the process by which this
regulation was adopted and any tort or constitutional claim about the effect of
these regulations on my employment relationship.
ANNEX D
FORM OF OPINION
(a) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the state of its incorporation.
(b) The Preferred Shares have been duly and validly authorized, and, when
issued and delivered pursuant to the Agreement, the Preferred Shares will be
duly and validly issued and fully paid and non-assessable, will not be issued in
violation of any preemptive rights, and will rank pari passu with or senior to
all other series or classes of Preferred Stock issued on the Closing Date with
respect to the payment of dividends and the distribution of assets in the event
of any dissolution, liquidation or winding up of the Company.
(c) The Warrant has been duly authorized and, when executed and delivered
as contemplated by the Agreement, will constitute a valid and legally binding
obligation of the Company enforceable against the Company in accordance with its
terms, except as the same may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and general equitable principles, regardless of
whether such enforceability is considered in a proceeding at law or in equity.
(d) The shares of Warrant Preferred Stock issuable upon exercise of the
Warrant have been duly authorized and reserved for issuance upon exercise of the
Warrant and when so issued in accordance with the terms of the Warrant will be
validly issued, fully paid and non-assessable, and will rank pari passu with or
senior to all other series or classes of Preferred Stock, whether or not issued
or outstanding, with respect to the payment of dividends and the distribution of
assets in the event of any dissolution, liquidation or winding up of the
Company.
(e) The Company has the corporate power and authority to execute and
deliver the Agreement and the Warrant and to carry out its obligations
thereunder (which includes the issuance of the Preferred Shares, Warrant and
Warrant Shares).
(f) The execution, delivery and performance by the Company of the
Agreement and the Warrant and the consummation of the transactions contemplated
thereby have been duly authorized by all necessary corporate action on the part
of the Company and its stockholders, and no further approval or authorization is
required on the part of the Company.
(g) The Agreement is a valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as the same
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the enforcement of creditors' rights generally and
general equitable principles, regardless of whether such enforceability is
considered in a proceeding at law or in equity; provided, however, such counsel
need express no opinion with respect to Section 4.5(h) or the severability
provisions of the Agreement insofar as Section 4.5(h) is concerned.
ANNEX E
FORM OF WARRANT
[SEE ATTACHED]
SCHEDULE A
ADDITIONAL TERMS AND CONDITIONS
-------------------------------
Company Information:
- --------------------
Name of the Company: First Banks, Inc.
Corporate or other organizational form: C-Corporation
Jurisdiction of Organization: Missouri
Appropriate Federal Banking Agency: Federal Reserve Bank of St. Louis
Notice Information: Peter D. Wimmer
SVP and General Counsel
135 N. Meramec Avenue, Suite 410
Clayton, Missouri 63105
Telephone - (314) 854-4614
Facsimile - (314) 854-4617
Terms of the Purchase:
- ----------------------
Series of Preferred Stock Purchased: Fixed Rate Cumulative Perpetual
Preferred Stock, Series C
Per Share Liquidation Preference of Preferred Stock: $1,000.00
Number of Shares of Preferred Stock Purchased: 295,400
Dividend Payment Dates on the Preferred Stock: February 15, May 15, August 15 and
November 15 of each year
Series of Warrant Preferred Stock: Fixed Rate Cumulative Perpetual
Preferred Stock, Series D
Number of Warrant Shares: 14,784.78478
Number of Net Warrant Shares (after net settlement): 14,770
Exercise Price of the Warrant: Per Share Exercise Price = $1.00
Purchase Price: $295,400,000
UST #446
Closing:
- --------
Location of Closing: Hughes Hubbard & Reed, LLP
One Battery Park Plaza
New York, New York 10004-1482
Time of Closing: 9:00 a.m.
Date of Closing: December 31, 2008
Wire Information for Closing: ABA Number: 081009428
Bank: First Bank
Account Name: First Banks, Inc.
Account Number: [Redacted]
Beneficiary: First Banks, Inc.
UST #446
SCHEDULE B
CAPITALIZATION
--------------
Capitalization Date: November 30, 2008
Common Stock
- ------------
Par value: $250.00
Total Authorized: 25,000
Total Outstanding: 23,661
Subject to warrants, options, convertible securities, etc.: None
Reserved for benefit plans and other issuances: None
Remaining authorized but unissued: 1,339
Shares issued after Capitalization Date (other than pursuant to warrants,
options, convertible securities, etc. as set forth above): None
Preferred Stock
- ---------------
Par value: $1.00
Total Authorized: 5,000,000
Outstanding (by series): None
Reserved for issuance: 2,200,000 (1)
Remaining authorized but unissued: 5,000,000
Preferred Stock - Class A Convertible, Adjustable Rate
- ------------------------------------------------------
Par value: $20.00
Total Authorized: 750,000
Outstanding (by series): 641,082
Reserved for issuance: None
Remaining authorized but unissued: 108,918
- ----------------------------------
(1) None as of December 30, 2008.
UST #446
Preferred Stock - Class B Adjustable Rate
- -----------------------------------------
Par value: $1.50
Total Authorized: 200,000
Outstanding (by series): 160,505
Reserved for issuance: None
Remaining authorized but unissued: 39,495
Holders of 5% or more of any class of capital stock Primary Address
- --------------------------------------------------- ---------------
James F. Dierberg, Trustee of the James F. Dierberg Living Trust 135 N. Meramec
(100% Class A and Class B Preferred Stock) Clayton, Missouri 63105
James F. Dierberg II Family Trust 135 N. Meramec
(32.605% Common Stock) Clayton, Missouri 63105
Ellen C. Dierberg Family Trust 135 N. Meramec
(32.605% Common Stock) Clayton, Missouri 63105
Michael J. Dierberg Family Trust 135 N. Meramec
(17.985% Common Stock) Clayton, Missouri 63105
Michael J. Dierberg Irrevocable Trust 135 N. Meramec
(14.621% Common Stock) Clayton, Missouri 63105
UST #446