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.
UST Seq. No. 315
(Letter Agreement)
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”).
(a)
On
the terms and subject to the conditions set forth in this
Agreement, the closing of the Purchase (the
“Closing”) will take place at the location
specified in Schedule A, at the time and on the date set
forth in Schedule A or as soon as practicable thereafter, or
at such other place, time and date as shall be agreed between the
Company and the Investor. The time and date on which the Closing
occurs is referred to in this Agreement as the “Closing
Date”.
(b)
Subject
to the fulfillment or waiver of the conditions to the Closing in
this Section 1.2, at the Closing the Company will deliver the
Preferred Shares and the Warrant, in each case as evidenced by one
or more certificates dated the Closing Date and bearing appropriate
legends as hereinafter provided for, in exchange for payment in
full of the Purchase Price by wire transfer of immediately
available United States funds to a bank account designated by the
Company on Schedule A.
(c)
The
respective obligations of each of the Investor and the Company to
consummate the Purchase are subject to the fulfillment (or waiver
by the Investor and the Company, as applicable) prior to the
Closing of the conditions that (i) any approvals or authorizations
of all United States and other governmental, regulatory or judicial
authorities (collectively, “Governmental
Entities”) required for the consummation of the Purchase
shall have been obtained or made in form and substance reasonably
satisfactory to each party and shall be in full force and effect
and all waiting periods required by United States and other
applicable law, if any, shall have expired and (ii) no provision of
any applicable United States or other law and no judgment,
injunction, order or decree of any Governmental Entity shall
prohibit the purchase and sale of the Purchased Securities as
contemplated by this Agreement.
(d)
The
obligation of the Investor to consummate the Purchase is also
subject to the fulfillment (or waiver by the Investor) at or prior
to the Closing of each of the following conditions:
(i) (A)
the representations and warranties of the Company set forth in (x)
Section 2.2(g) of this Agreement shall be true and correct in all
respects as though made on and as of the Closing Date, (y) Sections
2.2(a) through (f) shall be true and correct in all material
respects as though made on and as of the Closing Date (other than
representations and warranties that by their terms speak as of
another date, which representations and warranties shall be true
and correct in all material respects as of such other date) and (z)
Sections 2.2(h) through (v) (disregarding all qualifications or
limitations set forth in such representations and warranties as to
“materiality”, “Company Material Adverse
Effect” and words of similar import) shall be true and
correct as though made on and as of the Closing Date (other than
representations and warranties that by their terms speak as of
another date, which representations and warranties shall be true
and correct as of such other date), except to the extent that the
failure of such representations and warranties referred to in this
Section 1 .2(d)(i)(A)(z) to be so true and correct, individually or
in the aggregate, does not have and would not reasonably be
expected to have a Company Material Adverse Effect and (B) the
Company shall have
performed in all
material respects all obligations required to be performed by it
under this Agreement at or prior to the Closing;
(ii)
the
Investor shall have received a certificate signed on behalf of the
Company by a senior executive officer certifying to the effect that
the conditions set forth in Section 1 .2(d)(i) have been
satisfied;
(iii)
the
Company shall have duly adopted and filed with the Secretary of
State of its jurisdiction of organization or other applicable
Governmental Entity the amendments to its certificate or articles
of incorporation, articles of association, or similar
organizational document (“Charter”) in
substantially the forms attached hereto as Annex A and
Annex B (the “Certificates of
Designations”) and such filing shall have been
accepted;
(iv)
(A)
the Company shall have effected such changes to its compensation,
bonus, incentive and other benefit plans, arrangements and
agreements (including golden parachute, severance and employment
agreements) (collectively, “Benefit Plans”) with
respect to its Senior Executive Officers (and to the extent
necessary for such changes to be legally enforceable, each of its
Senior Executive Officers shall have duly consented in writing to
such changes), as may be necessary, during the period that the
Investor owns any debt or equity securities of the Company acquired
pursuant to this Agreement or the Warrant, in order to comply with
Section 111(b) of the Emergency Economic Stabilization Act of 2008
(“EESA”) as implemented by guidance or
regulation thereunder that has been issued and is in effect as of
the Closing Date, and (B) the Investor shall have received a
certificate signed on behalf of the Company by a senior executive
officer certifying to the effect that the condition set forth in
Section 1 .2(d)(iv)(A) has been satisfied;
(v)
each
of the Company’s Senior Executive Officers shall have
delivered to the Investor a written waiver in the form attached
hereto as Annex C releasing the Investor from any claims
that such Senior Executive Officers may otherwise have as a result
of the issuance, on or prior to the Closing Date, of any
regulations which require the modification of, and the agreement of
the Company hereunder to modify, the terms of any Benefit Plans
with respect to its Senior Executive Officers to eliminate any
provisions of such Benefit Plans that would not be in compliance
with the requirements of Section 111(b) of the EESA as implemented
by guidance or regulation thereunder that has been issued and is in
effect as of the Closing Date;
(vi)
the
Company shall have delivered to the Investor a written opinion from
counsel to the Company (which may be internal counsel), addressed
to the Investor and dated as of the Closing Date, in substantially
the form attached hereto as Annex D;
(vii)
the Company
shall have delivered certificates in proper form or, with the prior
consent of the Investor, evidence of shares in book-entry form,
evidencing the Preferred Shares to Investor or its designee(s);
and
(viii) the Company
shall have duly executed the Warrant in substantially the form
attached hereto as Annex E and delivered such executed
Warrant to the Investor or its designee(s).
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
(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 Efect” means a
material adverse effect on (i) the business, results of operation
or financial condition of the Company and its consolidated
subsidiaries taken as a whole; provided, however, that
Company Material Adverse Effect shall not be deemed to include the
effects of (A) changes after the date of the Letter Agreement (the
“Signing Date”) in general business, economic or
market conditions (including changes generally in prevailing
interest rates, credit availability and liquidity, currency
exchange rates and price levels or trading volumes in the United
States or foreign securities or credit markets), or any outbreak or
escalation of hostilities, declared or undeclared acts of war or
terrorism, in
each case generally
affecting the industries in which the Company and its subsidiaries
operate, (B) changes or proposed changes after the Signing Date in
generally accepted accounting principles in the United States
(“GAAP”) or regulatory accounting requirements,
or authoritative interpretations thereof, or (C) changes or
proposed changes after the Signing Date in securities, banking and
other laws of general applicability or related policies or
interpretations of Governmental Entities (in the case of each of
these clauses (A), (B) and (C), other than changes or occurrences
to the extent that such changes or occurrences have or would
reasonably be expected to have a materially disproportionate
adverse effect on the Company and its consolidated subsidiaries
taken as a whole relative to comparable U.S. banking or financial
services organizations); or (ii) the ability of the Company to
consummate the Purchase and other transactions contemplated by this
Agreement and the Warrant and perform its obligations hereunder or
thereunder on a timely basis.
(c)
“Previously Disclosed” means information set
forth on the Disclosure Schedule, provided, however, that
disclosure in any section of such Disclosure Schedule shall apply
only to the indicated section of this Agreement except to the
extent that it is reasonably apparent from the face of such
disclosure that such disclosure is relevant to another section of
this Agreement.
2.2
Representations and Warranties of the Company. Except as
Previously Disclosed, the Company represents and warrants to the
Investor that as of the Signing Date and as of the Closing Date (or
such other date specified herein):
(a)
Organization, Authority and Significant Subsidiaries. The
Company has been duly incorporated and is validly existing and in
good standing under the laws of its jurisdiction of organization,
with the necessary power and authority to own its properties and
conduct its business in all material respects as currently
conducted, and except as has not, individually or in the aggregate,
had and would not reasonably be expected to have a Company Material
Adverse Effect, has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the
laws of each other jurisdiction in which it owns or leases
properties or conducts any business so as to require such
qualification; each subsidiary of the Company that would be
considered a “significant subsidiary” within the
meaning of Rule 1-02(w) of Regulation S-X under the Securities Act
of 1933 (the “Securities Act”), has been duly
organized and is validly existing in good standing under the laws
of its jurisdiction of organization. The Charter and bylaws of the
Company, copies of which have been provided to the Investor prior
to the Signing Date, are true, complete and correct copies of such
documents as in full force and effect as of the Signing Date.
(b)
Capitalization. The authorized capital stock of the Company,
and the outstanding capital stock of the Company (including
securities convertible into, or exercisable or exchangeable for,
capital stock of the Company) as of the most recent fiscal
month-end preceding the Signing Date (the “Capitalization
Date”) is set forth on Schedule B. The outstanding
shares of capital stock of the Company have been duly authorized
and are validly issued and outstanding, fully paid and
nonassessable, and subject to no preemptive rights (and were not
issued in violation of any preemptive rights). As of the Signing
Date, the Company does not have outstanding any securities or other
obligations providing the holder the right to
acquire its Common
Stock (“Common Stock”) that is not reserved for
issuance as specified on Schedule B, and the Company has not
made any other commitment to authorize, issue or sell any Common
Stock. Since the Capitalization Date, the Company has not issued
any shares of Common Stock, other than (i) shares issued upon the
exercise of stock options or delivered under other equity-based
awards or other convertible securities or warrants which were
issued and outstanding on the Capitalization Date and disclosed on
Schedule B and (ii) shares disclosed on Schedule B.
Each holder of 5% or more of any class of capital stock of the
Company and such holder’s primary address are set forth on
Schedule B.
(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.
(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
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)
Since
December 31, 2006, the Company and each Company Subsidiary has
filed all reports, registrations, documents, filings, statements
and submissions, together with any amendments thereto, that it was
required to file with any Governmental Entity (the foregoing,
collectively, the “Company Reports”) and has
paid all fees and assessments due and payable in connection
therewith, except, in each case, as would not, individually or in
the aggregate, reasonably be expected to have a Company Material
Adverse Effect. As of their respective dates of filing, the Company
Reports complied in all material respects with all statutes and
applicable rules and regulations of the applicable Governmental
Entities.
(ii)
The
records, systems, controls, data and information of the Company and
the Company Subsidiaries are recorded, stored, maintained and
operated under means (including any electronic, mechanical or
photographic process, whether computerized or not) that are under
the exclusive ownership and direct control of the Company or the
Company Subsidiaries or their accountants (including all means of
access thereto and therefrom), except for any non-exclusive
ownership and non-direct control that would not reasonably be
expected to have a material adverse effect on the system of
internal accounting controls described below in this Section
2.2(i)(ii). The Company (A) has implemented and maintains adequate
disclosure controls and procedures to ensure that material
information relating to the Company, including the consolidated
Company Subsidiaries, is made known to the chief executive officer
and the chief financial officer of the Company by others within
those entities, and (B) has disclosed, based on its most recent
evaluation prior to the Signing Date, to the Company’s
outside auditors and the audit committee of the Board of Directors
(x) any significant deficiencies and material weaknesses in the
design or operation of internal controls that are reasonably likely
to adversely affect the Company’s ability to record, process,
summarize and report financial information and (y) any fraud,
whether or not material, that involves management or
other employees who
have a significant role in the Company’s internal controls
over financial reporting.
(j)
No Undisclosed Liabilities. Neither the Company nor any of
the Company Subsidiaries has any liabilities or obligations of any
nature (absolute, accrued, contingent or otherwise) which are not
properly reflected or reserved against in the Company Financial
Statements to the extent required to be so reflected or reserved
against in accordance with GAAP, except for (A) liabilities that
have arisen since the last fiscal year end in the ordinary and
usual course of business and consistent with past practice and (B)
liabilities that, individually or in the aggregate, have not had
and would not reasonably be expected to have a Company Material
Adverse Effect.
(k)
Offering of Securities. Neither the Company nor any person
acting on its behalf has taken any action (including any offering
of any securities of the Company under circumstances which would
require the integration of such offering with the offering of any
of the Purchased Securities under the Securities Act, and the rules
and regulations of the Securities and Exchange Commission (the
“SEC”) promulgated thereunder), which might
subject the offering, issuance or sale of any of the Purchased
Securities to Investor pursuant to this Agreement to the
registration requirements of the Securities Act.
(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
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,
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.
(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
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
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 Ma
